ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN
Effective Date: January 1, 1989
ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN
WHEREAS ELIZABETHTOWN WATER COMPANY, hereinafter known as
"Employer" or "Plan Sponsor," adopted the Elizabethtown Water Company
Savings and Investment Plan for the benefit of its Employees
effective January 1, 1988; and
WHEREAS Article XII, Section 12.1 of the Plan authorizes the Plan
Sponsor to amend the Plan in whole or in part at any time; and
WHEREAS the Plan Sponsor wishes to amend the Plan to conform with the
Tax Reform Act of 1986;
NOW, THEREFORE, said Plan is hereby amended and restated in its
entirety effective as of January 1, 1989.
This Plan shall be known as the
ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN.
Table of Contents
Section
Contents
Page
1 DEFINITIONS 1
MEMBERSHIP IN THE PLAN 10
2.1
Current Members. . . . . . . . . 10
2.2
New or Reemployed Members. . . . 10
2.3
Union Employees Excluded . . . . 10
2.4
Changes in Category. . . . . . . 10
3 CONTRIBUTIONS 11
3.1
Basic Contributions. . . . . . . 11
3.2
Matching Contributions . . . . . 11
3.3
Adjustments to Contribution Limits 11
3.4
Adjustments to Contributions . . 11
3.5
Distribution of "Excess Elective Deferral" Amounts 11
3.6
Overall Limits on Contributions. 12
3.7
Permitted Employer Refunds . . . 14
3.8
Timing of Deposits . . . . . . . 15
3.9
Deduction Limits . . . . . . . . 15
4 MEMBER ACCOUNTS 16
4.1
Establishment of Accounts. . . . 16
4.2
Valuation of Accounts. . . . . . 16
4.3
Adjustment to Accounts . . . . . 16
4.4
Directed Investments . . . . . . 16
4.5
Administration of Investments. . 16
4.6
Investments For Terminated Members 17
4.7
Stock Rights . . . . . . . . . . 17
4.8
Stock Valuation. . . . . . . . . 17
5 ESTING AND FORFEITURES 18
5.1
Vesting Schedule . . . . . . . . 18
5.2
Forfeitures. . . . . . . . . . . 18
5.3
Change in Vesting Schedule . . . 18
6 DISTRIBUTIONS 20
6.1
Distribution of Benefit. . . . . 20
6.2
Election of Benefits . . . . . . 20
6.3
Rehire Prior To Incurring Five Consecutive Breaks
in Service . . . . . . . . . . 20
6.4
Death Prior to Distribution. . . 20
6.5
Distribution Limitation. . . . . 21
Table of Contents
Section
Contents
Page
6.6
Mandatory Distributions. . . . . 21
6.7
Earnings on Undistributed Benefits 21
6.8
Rollovers Into the Plan. . . . . 21
6.9
Evidence in Writing. . . . . . . 21
6.10
Hardship Withdrawal. . . . . . . 21
6.11
Withdrawals Permitted After Age 59-1/2 23
6.12
Conditions For Withdrawals . . . 23
6.13
Direct Rollover
Requirements . . . . . . . . . . . . . . . . . . . . 23
7 ACTUAL DEFERRAL AND ACTUAL CONTRIBUTION
PERCENTAGE TESTING 25
7.1
Actual Deferral Percentage Test. 25
7.2
ADP Formula. . . . . . . . . . . 25
7.3
Calculations of Excess Contributions 26
7.4
Distribution of Excess Contributions 26
7.5
Additional Basic and Matching Contributions 26
7.6
Matching Contributions . . . . . 27
7.7
Actual Contribution Percentage Test 27
7.8
ACP Formula. . . . . . . . . . . 27
7.9
Calculation of Excess Aggregate Contributions 28
7.10
Distribution of Excess Aggregate Contribution 29
7.11
Additional Contributions . . . . 29
7.12
Forfeitures. . . . . . . . . . . 29
7.13
Aggregate Limit. . . . . . . . . 29
7.14
Special Rules. . . . . . . . . . 30
8 TOP-HEAVY PROVISIONS 31
8.1
Top-Heavy Preemption . . . . . . 31
8.2
Top-Heavy Definitions. . . . . . 31
8.3
Aggregation of Plans . . . . . . 33
8.4
Minimum Contribution Rate. . . . 33
8.5
Deposit of Minimum Contribution. 33
8.6
Top-Heavy Vesting Schedule . . . 33
8.7
Combined Defined Benefit and Defined Contribution
Plans. . . . . . . . . . . . . 34
9 DESIGNATION OF BENEFICIARY 35
9.1
Named Beneficiary. . . . . . . . 35
9.2
No Named Beneficiary . . . . . . 35
10 MANAGEMENT OF THE FUND 36
10.1
Contributions Deposited To Trust 36
10.2
No Reversion to Participating Employer
36
Table of Contents
Section
Contents
Page
11 DISCONTINUANCE AND LIABILITIES 37
11.1
Termination. . . . . . . . . . . 37
11.2
No Liability For Participating Employer 37
11.3
Administrative Expenses. . . . . 37
11.4
Nonforfeitability Due to Termination(s) 37
11.5
Exclusive Benefit Rule . . . . . 37
11.6
Mergers. . . . . . . . . . . . . 37
11.7
Non-allocated Trust Assets . . . 38
12 ADMINISTRATION 39
12.1
Appointment of Plan Administrator 39
12.2
Responsibilities and Duties. . . 39
12.3
Claims Procedure . . . . . . . . 39
12.4
Trustee Has Authority to Invest. 40
12.5
Indemnification. . . . . . . . . 40
12.6
Removal For Personal Involvement 40
13 AMENDMENTS 41
13.1
Amendment Restrictions . . . . . 41
13.2
Amending the Plan. . . . . . . . 41
13.3
Retroactive Amendments . . . . . 41
14 LOANS 42
14.1
Permitted Loans. . . . . . . . . 42
14.2
Collateral Required . . . . . . . . 42
14.3
Repayment. . . . . . . . . . . . 42
14.4
Interest Charges . . . . . . . . 42
14.5
Failure to Make Timely Payment . 42
14.6
Termination of Employment. . . . 43
14.7
Loans to Non-Employees . . . . . 43
14.8
General Administration . . . . . 43
15 MISCELLANEOUS 44
15.1
"Spendthrift" Provision. . . . . 44
15.2
QDRO Exception . . . . . . . . . 44
15.3
Plan Loans . . . . . . . . . . . 44
15.4
No Guarantee of Employment . . . 44
15.5
Controlling Law. . . . . . . . . 44
SECTION 1
DEFINITIONS
The following words and phrases as used herein shall have the following
meanings, unless a different meaning is plainly required by the context;
and the following rules of interpretation shall apply in reading this
instrument. Pronouns shall be interpreted so that the masculine pronoun
shall include the feminine and the singular shall include the plural.
The words "hereof," "herein" and other singular compounds shall refer to
the Plan in its entirety and not to any particular provision or section,
unless so limited by the text. All references herein to specific sections
shall mean sections of this document unless otherwise qualified.
2. Accrued Benefit means the sum of the balance in the Member's Basic
Contribution Account, Top-Heavy Contribution Account, and Matching
Contribution Account.
2..1 Actual Contribution Ratio (ACR), with respect to any Member for a
Plan Year, means a fraction the numerator of which equals the
Matching Contributions paid to the Trust for a Plan Year on behalf
of such Member and the denominator of which equals the Member's
Compensation (as defined in Section 1.13B.) for the Plan Year.
2..2 Actual Deferral Ratio (ADR), with respect to any Member for a Plan
Year, means a fraction the numerator of which equals the Basic
Contributions paid to the Trust for the Plan Year on behalf of such
Member and the denominator of which equals the Member's
Compensation (as defined in Section 1.13B.) for the Plan Year.
2..3 Additional Basic Contribution means a qualified nonelective
contribution as defined in Treasury regulation 1.401(k)-1(g)(13)(ii).
2..4 Affiliated Company means the Participating Employer and:
A. any corporation which is a member of a controlled group of
corporations within the meaning of section 1563(a) of the
Code, determined without regard to sections 1563(a)(4) and
(e)(3)(C);
B. any organization under common control with a Participating
Employer within the meaning of section 414(c) of the Code;
C. any organization which is included with a Participating
Employer in an affiliated service group within the meaning of
Section 414(m) of the Code; or
D. any other entity required to be aggregated with a Participating
Employer pursuant to regulations under section 414(o) of the
Code.
2..5 Annual Addition means the total for the Limitation Year of the items
listed below allocated to the account of an Employee under all
defined contribution plans sponsored by an Affiliated Company
except that, for the purposes of this Section, "more than 50%" shall
be substituted for "80%" each place it appears in section 1563(a)(1)
of the Code):
A. employer contributions;
B. forfeitures;
C. employee contributions (other than rollovers);
D. amounts described in sections 415(l)(1) and 419A(d)(2) of the
Code;
E. except that, the Annual Addition for any Limitation Year
beginning before January 1, 1987, shall not be recomputed to
treat Employee contributions as an Annual Addition.
2..6 Basic Contribution means an elective deferral made by a Member
pursuant to Section 3.1 of the Plan.
2..7 Basic Contribution Account means an account established and
maintained on behalf of a Member to which his Basic Contributions
are allocated.
2..8 Beneficiary means the person, persons, or trust designated by
written, revocable designation filed with the Plan Administrator by
the Member to receive payments in the event of such Member's
death.
2..9 Board means the Board of Directors of the Plan Sponsor.
2..10 Break in Service means a twelve- consecutive month period measured
from the date an Employee terminates employment, or any
anniversary thereof, during which the Employee does not perform an
Hour of Service. An Employee shall not incur a Break in Service
during an Eligibility Computation Period. In the case of an
individual who is absent from work for maternity or paternity
reasons, the twelve- consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a
Break in Service or a Period of Service. The Break in Service shall
begin to be measured from the second anniversary of the date such
maternity or paternity leave began. For purposes of this paragraph,
an absence from work for maternity or paternity reasons means an
absence (A) by reason of the pregnancy of the individual, (B) by
reason of the birth of a child of the individual, (C) by reason of
the placement of a child with the individual in connection with the
adoption of such child by such individual, or (D) for purposes of
caring for such child for a period beginning immediately following
such birth or placement.
2..11 Code means the Internal Revenue Code of 1986, and the same as may
be amended from time to time.
2..12 Compensation means,
A. except as hereafter specified, salary and wages, overtime pay,
fees, tips, profit, bonuses and commissions paid by a
Participating Employer to an Employee, including the Basic
Contribution made hereunder during the Plan Year and
elective deferrals made pursuant to a Code section 125 of the
Code, and all other earnings reportable under sections 6041
and 6051 of the Code on Form W-2 received by an Employee
from the Employer during the portion of the Plan Year in
which the Employee is eligible to make contributions under
Section 3.1 or 3.2, but excluding all other Participating
Employer contributions to benefit plans and all other forms of
compensation. Notwithstanding the preceding sentence, for
any Plan Year, Compensation shall exclude any remuneration
received by a Member in excess of $200,000, as adjusted by
the Secretary of the Treasury at the same time and in the same
manner as under section 415(d) of the Code. In determining
the Compensation of a Member for purposes of the $200,000
limitation, the rules of Code section 414(q)(6), pertaining to
Family Members, shall apply; except, however, that the term
"Family Member" shall, for the purpose of this Section,
include only the Spouse of the Member and any lineal
descendants of the Member who have not attained age 19
before the close of the year. Any Compensation in excess of
that amount shall be prorated among Family Members in
accordance with Code section 401(a)(17).
In addition to other applicable limitations set forth in the Plan,
and notwithstanding any other provision of the Plan to the
contrary, for Plan Years beginning on or after January 1,
1994, the annual Compensation of each Employee taken into
account under the Plan shall not exceed the OBRA '93 annual
Compensation limit. The OBRA '93 annual Compensation
limit is $150,000, as adjusted by the Commissioner for
increases in the cost-of-living in accordance with section
401(a)(17)(B) of the Code. The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding
12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the
OBRA '93 annual Compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in
the determination period, and the denominator of which is 12.
For Plan Years beginning on and after January 1, 1994, any
reference in this Plan to the limitation under section 401(a)(17)
of the Code shall mean the OBRA '93 annual Compensation
limit set forth in this provision.
If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing
in the current Plan Year, the Compensation for that prior
determination period is subject to the OBRA '93 annual
Compensation limit in effect for that prior determination
period. For this purpose, the determination periods beginning
before the first day of the first Plan Year beginning on or after
January 1, 1994, the OBRA '93 annual Compensation limit is
$150,000.
B. for purposes of the nondiscrimination tests set forth in Section
7, and except as provided in Code section 414(s),
Compensation means any income received by the Employee
from a Participating Employer in accordance with Code
section 415(c)(3), including deferrals made pursuant to section
414(s)(2) of the Code, for the Plan Year for which compliance
with the tests is being measured; and to the extent permitted
in guidance issued by the Internal Revenue Service,
Compensation shall mean only that portion of income received
by an Employee from the Employer for the portion of the Plan
Year during which the Employee was a Member of the Plan.
C. for purposes of the limitations and requirements of section 415
of the Code as set forth in Section 3.6, Compensation means
the amounts described in Section 1.13A. received by the
Employee for the entire Plan Year, but specifically excluding
the following:
(1) contributions made by an Affiliated Company to a deferred
compensation plan which are not includible in the Employee's
gross income for the taxable year in which contributed;
(2) Affiliated Company contributions made on behalf of an
Employee to a SEP (to the extent deductible by the Employee
under section 219(b)(2) of the Code);
(3) distributions from a deferred compensation plan (other than
from an unfunded nonqualified plan when includible in gross
income);
(4) amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
(5) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(6) other amounts which receive special tax benefits, such as
premiums for group term life insurance (to the extent
excludable from gross income); Affiliated Company
contributions applied towards the purchase of an annuity
contract described in section 403(b) of the Code; or any
amount which is contributed by the Affiliated Company
pursuant to a salary reduction agreement and which is not
includible in the gross income of the Employee pursuant to
section 125 of the Code.
2..13 Disability means that the Member has applied and qualifies for
disability benefits under the Social Security Act of 1939, as amended.
2..14 Dollar Limit means the dollar limitation under section 402(g) of the
Code in effect for a calendar year.
2..15 Early Retirement Date means the date on which a Member has
attained age 55.
2..16 Effective Date of this restated Plan means January 1, 1989.
2..17 Eligible Employee means any Employee of a Participating Employer
who satisfies the following conditions:
A. he has been employed by a Participating Employer for an
Eligibility Computation Period during which he is credited
with at least 250 Hours of Service;
B. he is employed as a nonexempt or exempt Employee;
C. he is not an Employee covered under a collective bargaining
agreement with respect to which retirement benefits were the
subject of good faith negotiations, unless the collective
bargaining agreement otherwise provides;
D. he is not a leased employee within the meaning of section
414(n)(2) of the Code.
2..18 Eligibility Computation Period means the three consecutive month
period commencing with an Employee's date of hire or rehire and
each three month anniversary thereof.
2..19 Employee means an individual in the employ of an Affiliated
Company and a leased employee within the meaning of section
414(n)(2) of the Code, except as provided below. The term "leased
employee" means any person (other than an Employee of an
Affiliated Company) who, pursuant to an agreement between the
Affiliated Company and any other person ("leasing organization"),
has performed services for the Affiliated Company (or for the
Affiliated Company and related persons determined in accordance
with section 414(n)(6) of the Code) on a substantially full-time basis
for a period of at least one year, and such services are of a type
historically performed by Employees in the business field of the
Affiliated Company. Contributions or benefits provided a leased
employee by the leasing organization which are attributable to
services performed for the Affiliated Company shall be treated as
provided by the Affiliated Company.
A leased employee shall not be considered an Employee of the
Affiliated Company if: (i) such individual is covered by a money
purchase pension plan providing: (1) a nonintegrated employer
contribution rate of at least 10% of compensation, as defined in
section 415(c)(3) of the Code, but including amounts contributed by
the Affiliated Company pursuant to a salary reduction agreement
which are excludable from the leased employee's gross income under
section 125, 402(a)(8), 402(h) or 403(b) of the Code; (2) immediate
participation, and (3) full and immediate vesting; and (ii) leased
employees do not constitute more than 20% of the Affiliated
Company's Non-Highly Compensated workforce.
2..20 Employer means Elizabethtown Water Company and any other
business organization which succeeds to its business and elects to
continue this Plan.
2..21 Employer Securities means common stock of the Plan Sponsor's
parent company or a corporation which is an Affiliated Company,
and which is readily tradeable on an established securities market.
If there is no such stock, then common stock issued by the parent
company of the Plan Sponsor or an Affiliated Company may be used
provided it has a combination of voting power and dividend rights at
least as great as the voting power and dividend rights of any other
such class of stock. Noncallable preferred stock shall be treated as
Employer Securities if the stock is convertible at any time into
common stock of the Employer which is readily tradeable on an
established securities market and if the conversion price is
reasonable.
2..22 Entry Date means each January 1 and July 1.
2..23 ERISA means the Employee Retirement Income Security Act of 1974,
and the same as may be amended from time to time.
2..24 Family Member means an individual who is the spouse, lineal
ascendant or lineal descendant of an Employee or former Employee,
or the spouse of such lineal ascendant or descendant.
2..25 Fund means all assets of the Trust.
2..26 Highly Compensated Employee means any active or former
Employee, who performs service during the determination year and
is described in one or more of the following groups:
A. an Employee who is a 5% owner, as defined in section
416(i)(1)(B)(i) of the Code, at any time during the
determination year or the look-back year;
B. an Employee who receives Compensation (as defined in
Section 1.13C.) in excess of $75,000 during the look-back
year;
C. an Employee who receives Compensation (as defined in
Section 1.13C.) in excess of $50,000 during the look-back
year and is a member of the top-paid group, as defined in
section 414(q)(4) of the Code, for the look-back year;
D. an Employee who is an officer, within the meaning of section
416(i) of the Code, during the look-back year and who
receives Compensation (as defined in Section 1.13C.) in the
look-back year greater than 50% of the dollar limitation in
effect under section 415(b)(1)(A) of the Code for the calendar
year in which the look-back year begins; or
E. an Employee who is both described in paragraph B., C. or D.
above when these paragraphs are modified to substitute the
determination year for the look-back year and one of the 100
Employees who receive the most Compensation (as defined in
Section 1.13C.) from the Employer during the determination
year.
F. The terms "determination year" and "look-back year" shall
mean, respectively, the Plan Year and the twelve-month
period immediately preceding the determination year.
G. The $75,000 and $50,000 amounts set forth in paragraphs B.
and C. above shall be indexed for changes in the cost of living
in accordance with section 415(d) of the Code.
If no officer satisfies the requirements of paragraph D. above
during either a determination or look-back year, then the
highest paid officer for such year shall be treated as a Highly
Compensated Employee.
I. If the Employee is, during a determination or look-back year,
a Family Member of either an active or former 5% owner-
Employee or one of the ten most Highly Compensated
Employees during such year, then the Compensation of the
Family Member and that Employee shall be aggregated. The
Family Member and Employee shall be treated as a single
Employee receiving Compensation and Plan contributions or
benefits equal to the sum of such Compensation and
contributions or benefits of the Family Member and
Employee.
J. A Highly Compensated former Employee includes any
Employee who separated or was deemed to have separated
from service prior to the determination year, performs no
service for a Participating Employer during the determination
year, and was an active Highly Compensated Employee for
either the separation year or any determination year ending on
or after the Employee's 55th birthday.
K. The determination of who is a Highly Compensated Employee
shall be made in accordance with section 414(q) of the Code
and the regulations thereunder.
2..27 Hour of Service means each hour for which an Employee is directly
or indirectly paid or entitled to be paid by an Affiliated Company for
the performance of employment duties and each hour for which back
pay, irrespective of mitigation of damages, has been either awarded
or agreed to by the Affiliated Company. These hours shall be
credited to an Employee for the computation period during which his
employment duties were performed or to which a back pay agreement
or award pertains irrespective of when payment is made. No
Employee shall be credited with duplicate Hours of Service as a
result of a back pay agreement or award. An Employee shall also be
credited with one Hour of Service for each hour for which the
Employee is directly or indirectly paid, or entitled to payment, by an
Affiliated Company on account of a period during which no duties
are performed due to vacation, holiday, illness, incapacity, disability
layoff, jury duty or Leave of Absence; provided, however, that not
more than 501 Hours of Service shall be credited to an Employee
under this sentence on account of any single, continuous period
during which the Employee performs no duties, and provided further
that no credit shall be given if payment is made or due under a plan
maintained solely for the purpose of complying with applicable
workers' compensation, unemployment compensation or disability
insurance laws, or is made solely to reimburse an Employee for
medical or medically related expenses incurred by the Employee.
A. For purposes of determining the number of Hours of Service
completed in any applicable computation period, the Plan
Administrator may maintain accurate records of actual hours
completed for all Employees. The number of Hours of Service
to be credited to an Employee for periods during which no
employment duties are performed shall be determined in
accordance with sections 2530.200b-2(b) and 2530.200b-2(c)
of the Department of Labor regulations in Title 29 of the Code
of Federal Regulations.
B. If the Plan Administrator does not maintain records of actual
Hours of Service, an Employee shall be credited with 45
Hours of Service for each week in which such Employee
would otherwise be credited with at least one Hour of Service.
C. Solely for the purpose of preventing a Break in Service, an
Employee shall be credited with Hours of Service during an
absence by reason of:
(1) the pregnancy of the Employee;
(2) the birth of a child of the Employee;
(3) the placement of a child with the Employee in connection
with the adoption of such child by the Employee; or
(4) for purposes of caring for a child beginning immediately
after such birth or placement;
provided the Employee shall, during the period of his absence,
be credited with the number of Hours of Service which would
have been credited to him at his normal work rate but for such
absence, or, if the number of Hours of Service based on a
normal rate is indeterminable, the Employee shall be credited
with eight Hours of Service per day of such absence. The
"Severance from Service" date of an Employee/Member who
is absent from work due to "maternity or paternity leave"
reasons for more than one year is the second anniversary of
the first date of such absence. The period between the first
and second anniversary of the first date of such absence is
neither a Period of Service nor a period of severance.=
These hours shall be credited to the Break in Service
computation period in which the absence began if necessary to
avoid a Break in Service or, if not necessary, then to the
following computation period.
D. An Employee who is absent by reason of service in the armed
forces of the United States and who returns to service within
the time that his reemployment rights are protected by federal
law shall be granted credit for Hours of Service during his
period of military service.
2..28 Leave of Absence means any temporary absence from employment
authorized by the Employer based on its normal practices. An
Employee's Period of Service shall continue uninterrupted during
such leave.
2..29 Limitation Year means the Plan Year.
2..30 Matching Contribution means a contribution made by the Employer
pursuant to Section 3.2 of the Plan.
2..31 Matching Contribution Account means an account established and
maintained on behalf of a Member to which his Matching
Contributions are allocated.
2..32 Member means any Eligible Employee included in the membership
of the Plan as provided in Section 2 hereof. A Member shall
continue to be a Member as long as he has an Accrued Benefit
hereunder.
2..33 Non-Highly Compensated Employee means any Employee who is
neither a Highly Compensated Employee nor a Family Member of a
Highly Compensated Employee.
2..34 Normal Retirement Date means the Member's 65th birthday.
2..35 Participating Employer means any Affiliated Company which adopts
this Plan with the consent of the Plan Sponsor. As of the Effective
Date, the Employer, The Mount Holly Water Company, E'town
Corporation and E'town Properties are the only Participating
Employers.
2..36 Period of Service means the period between an Employee's date of
hire or rehire, as applicable, and the date on which he ceases to be
an Employee.
2..37 Plan means Elizabethtown Water Company Savings and Investment
Plan, as set forth herein and the same as may be amended from time
to time.
2..38 Plan Administrator means the individual or entity appointed under
Section 12.1 hereof.
2..39 Plan Sponsor means Elizabethtown Water Company or its successor.
2..40 Plan Year means the period from January 1 through December 31.
2..41 Prior Plan means this Plan as in effect through December 31, 1988.
2..42 Retirement means the termination of a Member's employment with
a Participating Employer on or after his Early or Normal Retirement
Date or such later date on which he actually terminates employment.
2..43 Rollover Contribution means the amount contributed by an Employee
to the Plan pursuant to Section 6.8 of the Plan.
2..44 Spouse means the husband or wife of a Member on the date benefits
under the Plan commence. However, if the Member should die prior
to the date benefits under the Plan would have commenced to him,
then the Spouse shall be the husband or wife to whom the Member
had been married throughout the one-year period preceding the date
of his death.
2..45 Top-Heavy Contribution means a contribution made by a
Participating Employer pursuant to Section 8 of the Plan.
2..46 Top-Heavy Contribution Account means an account established and
maintained on behalf of a Member to which his Top-Heavy
Contributions, if any, are allocated.
2..47 Trust means a trust, intended to qualify under section 501(a) of the
Code, which constitutes the legal agreement between the Plan
Sponsor and the Trustee, fixing the rights and liabilities with respect
to managing and controlling the Fund for the purposes of the Plan.
2..48 Trustee means the individual or entity designated by the Board as
trustee(s) of the Trust.
2..49 Valuation Date means June 30 and December 31, and such other
dates as may be selected by the Plan Administrator. Effective
January 1, 1993, Valuation Date shall mean each March 31, June 30,
September 30 and December 31.
2..50 Year of Service means the period of service with an Affiliated
Company used to determine vesting pursuant to Section 5 of the Plan
as follows:
A. except as provided in paragraph B. of this Section, a twelve-
month consecutive period, included within a Period of Service
and measured from the later of the date of hire or rehire or
January 1, 1989 as applicable, provided that the following
rules apply:
(1) if an Employee is credited with an Hour of Service within
twelve consecutive months after the date on which he
terminates employment, his Years of Service shall be
computed as though his service had not been severed;
(2) Years of Service shall be determined as if all Affiliated
Companies were a single employer, excluding, however,
employment during periods when the Participating Employer
was not an Affiliated Company.
(3) In addition, if the Participating Employer maintains the
plan of a predecessor employer, service with such employer
will be treated as service for the Participating Employer.
B. if a Member incurs a Break in Service, his Years of Service
before that Break in Service (and not disregarded by reason of
any prior Break in Service) shall be taken into account only if
(1) following the Break in Service the Member completes one
Year of Service, and before the Break in Service the Member
had a vested interest in his Accrued Benefit; or
(2) the aggregate number of the Member's consecutive Breaks
in Service is less than five.
SECTION 2
MEMBERSHIP IN THE PLAN
2.1 Current Members. Each Employee who was participating in the
Prior Plan on December 31, 1988 shall automatically continue as a
Member hereunder. Each other Employee who is an Eligible
Employee as of the Effective Date shall become a Member of the
Plan on such date.
2.2 New or Reemployed Members. Each other Employee shall become
a Member on the Entry Date coincident with or next following the
date he qualifies as an Eligible Employee. A reemployed Employee
shall become a Member on the next Entry Date following his date of
reemployment if he had become eligible prior to his reemployment
but had not yet become a Member. A reemployed Employee who
was previously a Member shall be eligible to participate in the Plan
as of the date of his reemployment.
2.3 Union Employees Excluded. An Eligible Employee whose terms and
conditions of employment become subject to the terms of a collective
bargaining agreement shall not become ineligible during the period
between the selection of the union and the execution of the first
collective bargaining agreement which covers him. However, an
Eligible Employee covered by a collective bargaining agreement
wherein retirement benefits, whether or not provided, were the
subject of good faith bargaining between the representative of such
Eligible Employee and the Participating Employer, shall not be
eligible for continued participation unless the collective bargaining
agreement provides for continued participation.
2.4 Changes in Category. If an ineligible Employee's status changes to
a category of eligibility, he shall become a Member on the date his
status changes or, if later, the Entry Date on which he has satisfied
the requirements of Section 1.18. If a Member's status changes to a
category of ineligibility, he shall cease to participate in contributions
under Section 3 as of the date of the change.
SECTION 3
CONTRIBUTIONS
3.1 Basic Contributions. Each Member may authorize a Participating
Employer to reduce his Compensation by any whole percentage up
to 10% of such Compensation, subject to the Dollar Limit and limits
of Section 3.6.
Such amount shall be allocated as Basic Contributions hereunder to
the Member's Basic Contribution Account. Each Eligible Employee
shall file a written election form with the Plan Administrator
specifying the portion of his Compensation that is to be contributed
to the Plan as a Basic Contribution. The election of the Member
shall remain in effect until the Member files a new election with the
Plan Administrator.
3.2 Matching Contributions. The Participating Employer shall make a
Matching Contribution for each Member which shall equal $.50 for
each $1.00 deposited to such Member's Basic Contribution Account.
The Matching Contribution shall be credited to the Member's
Matching Contribution Account. Notwithstanding the preceding, no
Matching Contributions shall be made with respect to a Member's
Basic Contributions in excess of 6% of his Compensation. The
amount of Employer Matching Contributions may be increased or
decreased at the discretion of the Board, provided that reasonable
notice is provided to Members giving them the opportunity to change
their elective deferral percentages.
3.3 Adjustments to Contribution Limits. Notwithstanding Section 3.1, the
Plan Administrator may limit the maximum Basic Contribution
percentage for all or a class of Highly Compensated Employees as it
determines is necessary or desirable to assure that the Plan satisfies
the requirements of Section 7.1.
3.4 Adjustments to Contributions. A Member may increase or decrease
the rate of Basic Contributions effective as of any Entry Date by
submitting a new election to the Plan Administrator. A Member may
suspend Basic Contributions at any time by submitting written notice
to the Plan Administrator. Suspensions during the Plan Year shall be
effective as soon as practicable after the election to suspend is filed
with the Plan Administrator. A Member may recommence Basic
Contributions to the Plan effective as of any Entry Date by
submitting a new written election to the Plan Administrator, prior to
such Entry Date but in no event may a Member recommence Basic
Contributions to the Plan prior to the second Entry Date following
the suspension of such Contributions.
3.5 Distribution of "Excess Elective Deferral" Amounts. Notwithstanding
any other provision of the Plan, Excess Elective Deferrals as adjusted
for income or losses thereon shall be distributed to Members who
request a distribution in accordance with this Section.
A. For purposes of this Section, the following definitions shall
have the following meanings:
(1) "Elective Deferrals" for a taxable year means the sum of all
Employer contributions made on behalf of a Member pursuant
to an election to defer under any qualified CODA as described
in section 401(k) of the Code, any simplified employee
pension cash or deferred arrangement as described in section
402(h)(1)(B) of the Code, any eligible deferred compensation
plan under section 457 of the Code, any plan as described
under section 501(c)(18) of the Code, and any Employer
contributions made on the behalf of a Member for the
purchase of an annuity contract under section 403(b) of the
Code pursuant to a salary reduction agreement.
(2) "Excess Elective Deferrals" means those Elective Deferrals
that are includible in a Member's gross income under section
402(g) of the Code, because they exceed the Dollar Limit.
Excess Elective Deferrals shall be treated as Annual Additions
under the Plan.
B. A Member may assign to this Plan any Excess Elective
Deferrals made during the taxable year of the Member by
filing a claim in writing with the Plan Administrator no later
than March 1 following the year in which the Excess Elective
Deferral was made. Said claim shall specify the Member's
Excess Elective Deferral amount for the preceding calendar
year; and shall be accompanied by the Member's written
statement that if such amounts are not distributed, such Excess
Elective Deferral amount, when added to amounts deferred
under other plans or arrangements described in section 401(k),
408(k), 457, 501(c)(18) or 403(b) of the Code shall exceed the
Dollar Limit for the year in which the deferral occurred. A
Member shall be deemed to have given notification described
above if the Excess Elective Deferral results from Elective
Deferrals to this Plan or other plans of the Employer or
Affiliated Companies.
C. A Member who has an Excess Elective Deferral during a
taxable year may receive a corrective distribution during the
same year. Such a corrective distribution shall be made if:
(1) the Member designates the distribution as an Excess
Elective Deferral or is deemed to make the designation under
paragraph B., above;
(2) the corrective distribution is made after the date on which
the Plan received the Excess Elective Deferral; and
(3) the Plan Administrator designates the distribution as a
distribution of an Excess Elective Deferral.
D. The Excess Elective Deferral distributed to a Member with
respect to a calendar year shall be adjusted to reflect income
or loss in the Member's Basic Contribution Account for the
taxable year allocable thereto. The income or loss allocable
to such Excess Elective Deferral amount shall be determined
by the method generally used under the Plan to allocate
income or loss to a Member's account.
E. Excess Elective Deferral amounts, as adjusted for income and
losses, shall be distributed to a Member no later than April 15
of the year following the calendar year in which such Excess
Elective Deferral was made.
3.6 Overall Limits on Contributions. Contributions made on behalf of
any Member during any Plan Year shall be subject to the following:
A. In no event shall the Annual Addition for a Member exceed
the lesser of:
(1) 25% of the Member's Compensation, under Section
1.13C., for the Limitation Year; or
(2) the "defined contribution dollar limitation," which shall
mean $30,000 or, if greater, one fourth of the defined benefit
dollar limitation under section 415(b)(1) of the Code for the
Limitation Year.
B. Basic Contributions made on behalf of a Member during a
payroll period which begins in one Plan Year but ends in the
next succeeding Plan Year shall be deemed an Annual
Addition for the next succeeding Plan Year.
C. If the excess Annual Addition results from a contribution
made under Section 3.1, the excess shall be distributed to the
contributing Member to the extent permitted by Treasury
regulation 1.415-6(b)(6).
D. If the Annual Addition must be limited for any Member after
application of paragraph C. in order to comply with section
415 of the Code, the excess amounts in the Member's account
will be used to reduce Employer contributions for the next
Limitation Year (and succeeding Limitation Years, as
necessary) for that Member if that Member is covered by the
Plan as of the end of the Limitation Year. However, if that
Member is not covered by the Plan as of the end of the
Limitation Year, then the excess amounts will be held
unallocated in a suspense account for the Limitation Year and
allocated and reallocated in the next Limitation Year to all of
the remaining Members in the Plan. Furthermore, the excess
amounts will be used to reduce Employer contributions for the
next Limitation Year (and succeeding Limitation Years, as
necessary) for all of the remaining Members in the Plan.
Excess amounts may not be distributed to Members or former
Members except as provided in paragraph C.
E. (1) If an Employee is or was a Member in one or more defined
benefit plans and one or more defined contribution plans
maintained or ever maintained by the Employer, the sum of
the defined benefit plan fraction and the defined contribution
plan fraction for any Limitation Year may not exceed 1.0.
The "defined benefit plan fraction" for any year is a fraction
the numerator of which equals the projected annual benefit of
the Member under the Plan (determined as of the close of the
Plan Year), and the denominator of which equals the lesser of:
(2) the product of 1.25 multiplied by $90,000 adjusted in
accordance with section 415(d)(1)(A) of the Code; or
(3) the product of 1.4 multiplied by 100% of the Member's
average Compensation for his high three consecutive calendar
years of active participation.
Notwithstanding the above, if the Employee was a participant
as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans
maintained by the Employer in existence on May 6, 1986, the
denominator of this fraction shall not be less than 125% of the
sum of the annual benefits under such plans which the
Member had accrued as of the close of the last Limitation
Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the Plan after May 5,
1986. The preceding sentence applies only if the defined
benefit plans individually and in the aggregate satisfied the
requirements of section 415 of the Code for all Limitation
Years beginning before January 1, 1987.
(4) The defined contribution plan fraction for any year is a
fraction the numerator of which equals the sum of the Annual
Addition to the Member's Accounts as of the close of the Plan
Year, and the denominator of which equals the sum of the
lesser of the following amounts determined for such year and
for each prior year:
(5) the product of 1.25 multiplied by $30,000 or the applicable
dollar limit which is in effect for such plan year; or
(6) the product of 1.4 multiplied by 25% of the Member's
Compensation.
Notwithstanding the above, if the Employee was a participant
as of the end of the first day of the first Limitation Year
beginning after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction shall
be adjusted if the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the terms of this
Plan. Under the adjustment, an amount equal to the product
of (i) the excess of the sum of the fractions over 1.0 times (ii)
the denominator of this fraction, will be permanently
subtracted from the numerator of this fraction. The
adjustment is calculated using the fractions as they would be
computed as of the end of the last Limitation Year beginning
before January 1, 1987, and disregarding any changes in the
terms and conditions of the Plan made after May 6, 1986, but
using the limitation of section 415 of the Code applicable to
the first Limitation Year beginning on or after January 1,
1987.
The Annual Addition for any Limitation Year beginning
before January 1, 1987, shall not be recomputed to treat all
employee contributions as Annual Additions.
F. The limitations of this Section 3.6 shall be applied to this Plan
before they are applied to any other defined contribution plan
of any Affiliated Company. This Section 3.6 shall be satisfied
prior to satisfying the ADP test.
G. If an Affiliated Company maintains or maintained a defined
benefit plan and the amount contributed to the Trust in respect
of any Plan Year would cause the amount allocated to any
Member under all defined contribution plans maintained by an
Affiliated Company to exceed the maximum allocation as
determined in paragraph D., then the allocation with respect
to such Member shall be reduced by the amount of such
excess. To the extent administratively feasible, the limitation
of this paragraph shall be applied to the Member's benefit
payable from the defined benefit plan prior to reduction of the
Member's Annual Addition under this Plan. The excess
allocation shall be treated in accordance with paragraph C. or
D., as applicable.
3.7 Permitted Employer Refunds. Employer contributions hereunder
shall be refunded to the Employer under the limited circumstances
listed below.
A. If initial qualification of the Plan under section 401 of the
Code is denied by the Internal Revenue Service, Employer
contributions shall be returned to the Employer within one
year after the denial occurs provided the Employer has filed
the application for the determination of qualification of this
Plan with the Internal Revenue Service by the time prescribed
by law for filing the Employer's federal income tax return for
the taxable year in which this Plan was adopted, or by such
later date as the Secretary of the Treasury may prescribe.
B. Any contribution made by the Employer due to a mistake of
fact shall be refunded to the Employer within one year of such
contribution.
C. Employer contributions are expressly conditioned on
deductibility under section 404 of the Code. Any contribution
that is disallowed as a deduction shall be refunded to the
Employer within one year of such disallowance.
D. Refunds of contributions due to a failure to initially qualify,
disallowance of deduction or mistake of fact shall be governed
by the following requirements:
(1) earnings attributable to the amount being refunded due to
disallowance or mistake shall remain in the Plan, but losses
thereto must reduce the amount to be refunded; and
(2) in no event may a refund be made that would cause the
Accrued Benefit of any Member to be less than it would have
been had a mistaken or disallowed amount not been
contributed.
3.8 Timing of Deposits. The Employer shall make payment of the Basic
Contribution to the Trust no later than the time period permitted by
ERISA. All other Employer contributions under the Plan shall be
deposited to the Trust on or before the due date for filing the
Employer's federal income tax return for its taxable year in which
the Plan Year ends, including any extension thereto.
3.9 Deduction Limits. No Employer contribution shall be made which
exceeds the limitations of section 404(a) of the Code. The limitation
of this Section shall apply before limiting contributions under any
other qualified retirement plan sponsored by the Employer.
SECTION 4
MEMBER ACCOUNTS
4.1 Establishment of Accounts. A Basic Contribution Account, Top-
Heavy Contribution Account, and Matching Contribution Account,
shall be established for each Member in accordance with Sections 3,
6 and 8, as applicable. All contributions by or on behalf of a
Member shall be deposited to the appropriate account.
4.2 Valuation of Accounts. As of each Valuation Date, the accounts of
each Member shall be adjusted to reflect any realized and unrealized
gains or losses and income or expense of the Fund according to
nondiscriminatory procedures uniformly applied based on the value
of the Member's accounts as of the preceding Valuation Date,
adjusted in accordance with Section 4.3. The fair market value of the
Fund shall be determined by the Trustee and communicated to the
Plan Administrator in writing. The Trustee's determination shall be
final and conclusive for all purposes of this Plan. The valuation
process shall be performed separately for each investment fund.
Each Member shall be furnished with a statement as soon as
practicable after each Valuation Date setting forth the value of his
Accrued Benefit.
4.3 Adjustment to Accounts. When determining the value of a Member's
account, any deposits due which have not been deposited to the Fund
on behalf of the Member shall be added to his accounts; and any
withdrawals or distributions made which have not been paid out shall
be subtracted from the accounts according to nondiscriminatory
procedures uniformly applied. Similarly, adjustment of accounts for
appreciation or depreciation of an investment fund shall be deemed
to have been made as of the Valuation Date on which the adjustment
relates, notwithstanding that they are actually made as of a later date.
4.4 Directed Investments. A Member's Basic Contribution Account and
Top Heavy Contribution Account shall be invested as directed by
each Member in one or more investment funds as selected by the
Trustee.
Notwithstanding the foregoing, Matching Contributions and earnings
thereon shall not be subject to investment direction by the Member,
but shall be invested in assets chosen by the Employer in its sole
discretion including, but not limited to, Employer Securities.
A Member shall submit to the Plan Administrator in writing his
investment selection. The Member may select one or more
investment fund in multiples of 5%. The investment selection of a
Member shall apply uniformly to all of his accounts with the
exception of his Matching Contribution Account.
4.5 Administration of Investments. Contributions made by or on behalf
of a Member shall be invested in the investment fund or funds
selected by the Member until the effective date of a new designation
which has been properly completed and filed with the Plan
Administrator. A Member may change his investment option for
future deposits effective as of any January 1, April 1, July 1 or
October 1 by providing written notice to the Plan Administrator at
least 30 days prior to the Entry Date on which the change is to occur.
A Member may change his investment option pertaining to amounts
already accumulated in his accounts only each Plan Year, to be
effective January 1 and July 1.
Notwithstanding the foregoing, if a Member files a designation with
the Plan Administrator which changes his investment selection with
regard to amounts already accumulated in his accounts, the Plan
Administrator shall effectuate the investment change as soon as
practicable after the valuation of Plan assets for the period ending on
the Valuation Date is completed. The Valuation Date referred to in
the preceding sentence refers to the Valuation Date which is the
effective date of the Member's investment designation.
4.6 Investments For Terminated Members. Any Member who ceases to
be an Employee shall continue to have the authority to direct the
investment of his accounts in accordance with the provisions of
Sections 4.4 and 4.5.
4.7 Stock Rights. The Trustee shall allocate any Employer Securities
received as a stock dividend, or a stock split, or as the result of a
reorganization of the Employer, in the same manner as the Employer
Securities to which it is attributable. The Trustee shall have the right
to exercise rights, warrants or options issued on Employer Securities
held in the Trust to the extent cash is then available. Any such
rights, warrants or options which cannot be exercised due to lack of
cash then available shall be sold by the Trustee and the proceeds
treated as cash dividends received on Employer Securities.
4.8 Stock Valuation. Unless otherwise provided by applicable law,
whenever Employer Securities are contributed to the Plan, such
Employer Securities shall be valued at a price or prices which, in the
judgment of the Plan Administrator, do not exceed the fair market of
such Employer Securities. The determination of fair market value
shall be made in good faith by the Plan Administrator in accordance
with the Plan and in accordance with such laws and regulations as
may be promulgated from time to time in connection with plans of
this type. Such valuation shall be made as of the end of each Plan
Year and at such other times as is designated by the Plan
Administrator.
SECTION 5
VESTING AND FORFEITURES
5.1 Vesting Schedule. A Member shall have a fully vested interest in his
Basic Contribution Account at all times. A Member's vested interest
in his Matching Contribution Account shall be determined by the
occurrence of the following events:
A. Full vesting shall occur upon the death or Disability of a
Member;
B. Full vesting shall occur when a Member attains his Normal
Retirement Date or his Early Retirement Date; and
C. Except as otherwise stated above, the Member's vested
percentage in his Matching Contribution Account shall be
determined based on his Years of Service in accordance with
the following schedule:
Years of Service Vested
as of Termination Date Percentage
Less than 2 years 0%
After 2 years but less than 3 25%
After 3 years but less than 4 50%
After 4 years but less than 5 75%
After 5 or more years 100%
D. Notwithstanding the vesting schedule above, the vested
percentage of a Member's Account shall not be less than the
vested percentage attained as of the later of the Effective Date
or adoption date of this amendment and restatement.
5.2 Forfeitures. A Member's vested Accrued Benefit shall be determined
in accordance with Section 5.1 as of the date he terminates
employment. The nonvested portion shall be forfeited on the earlier
of the date on which the Member:
A. receives a distribution of his vested Accrued Benefit, if any
provided that such distribution is made no later than the close
of the second Plan Year following the year in which the
Member terminates participation in the Plan; or
B. has five consecutive Breaks in Service measured from the
Member's date of termination.
Said Forfeiture shall be applied to reduce future Matching
Contributions.
For purposes of this Section, if the value of a Member's vested
Accrued Benefit is zero, the Member shall be deemed to have
received a distribution of such vested Accrued Benefit on termination
of employment. A Member's vested Accrued Benefit shall not
include accumulated deductible Employee contributions within the
meaning of section 72(o)(5)(B) of the Code for Plan Years beginning
prior to January 1, 1989.
5.3 Change in Vesting Schedule. A Member with at least three Years of
Service as of the expiration date of the election period (as set forth
below) may elect to have his nonforfeitable percentage computed
under the Plan without regard to an amendment or restatement of the
Plan which affects the vesting schedule. The Member's election
period shall commence on the adoption date of the amendment and
shall end 60 days after the latest of:
A. the adoption date of the amendment;
B. the effective date of the amendment; or
C. the date the Member receives written notice of the amendment
from the Employer or Plan Administrator.
Any amendment to the vesting schedule shall be subject to the
restrictions of Section 13.1.
For purposes of this Section, a Member shall be considered to have
completed three Years of Service whether or not consecutive, without
regard to the exceptions of section 411(a)(4) of the Code.
SECTION 6
DISTRIBUTIONS
6.1 Distribution of Benefit. A Member who ceases to be an Employee
for any reason other than death shall be entitled to receive his vested
Accrued Benefit. A Member with a vested Accrued Benefit of
$3,500 or less shall be paid under Option A. below. A Member with
a vested Accrued Benefit over $3,500 who is entitled to payment
under this Section may elect either Option A. or B.:
Option A. A lump sum payment equal to the value of the
Member's vested Accrued Benefit determined as of the Valuation
Date coincident with or immediately following the date he ceases
to be an Employee.
Option B. A Member may request a distribution on any
subsequent date, but no later than the later of Retirement or age
70-1/2. The amount payable shall be equal to the Member's
vested Accrued Benefit determined as of the Valuation Date
immediately following the date payment is requested.
Notwithstanding the foregoing, any assets invested in the investment
fund can be independently valued by the Plan Administrator as of the
date of distribution, if there has been an increase or decrease in the
Standard and Poor's composite index of 20% or more since the
Valuation Date chosen by the Member in any of the options set forth
above.
All distributions required under this Section 6 shall be determined
and made in accordance with the regulations under section 401(a)(9)
of the Code, including the minimum distribution incidental benefit
requirement of Treasury regulations 1.401(a)(9)-2.
6.2 Election of Benefits. The Member shall notify the Plan
Administrator, in writing, of the timing of benefit option elected. An
election may be revoked and a new written election may be filed with
the Plan Administrator any time prior to the payment of benefits.
Payment of benefits shall be made as soon as practicable after the
next Valuation Date under the option the Member has elected.
6.3 Rehire Prior To Incurring Five Consecutive Breaks in Service. If the
Member terminates his employment and is rehired by a Participating
Employer prior to the date that he would incur his fifth consecutive
Break in Service, any amounts previously forfeited shall be restored
by the Participating Employer if the Member repays the entire
amount which was distributed on or before the earlier of five years
after the first date on which the Member is subsequently reemployed
by a Participating Employer, or the close of the first period of five
consecutive one-year Breaks in Service after the distribution. The
Member's vested interest in such an instance shall be determined
thereafter as if he did not have a break in employment. If the
Member does not repay the amount which was distributed to him,
new accounts shall be established upon his reentry into the Plan and
the amount forfeited shall not be recovered.
6.4 Death Prior to Distribution. If a Member dies before his Accrued
Benefit has been distributed to him, his Accrued Benefit shall be
distributed in a lump sum as soon as practicable after the Valuation
Date coincident with or next following his date of death.
6.5 Distribution Limitation. Unless a Member elects otherwise, his
vested Accrued Benefit shall be distributed to him as of the Valuation
Date next following the date of his termination of employment, but
no later than 60 days after the close of the Plan Year in which occurs
the latest of his Normal Retirement Date, the tenth anniversary of the
year in which he commenced participation in the Plan or the date of
his termination of employment. Notwithstanding the foregoing, the
failure of a Member to consent to a distribution while a benefit is
immediately distributable within the meaning of this Section shall be
deemed to be an election to defer commencement of payment of any
benefit sufficient to satisfy this Section.
6.6 Mandatory Distributions. A Member's benefits shall be partially
distributed to him not later than April 1 of the calendar year
following the calendar year in which the Member attains age 70-1/2.
Notwithstanding the foregoing, if a Member had attained age 70-1/2
before January 1, 1988 and was not a "5% owner" at any time during
the Plan Year ending with or within the calendar year in which the
Member attained age 66-1/2 or any subsequent Plan Year, his
benefits shall be distributed to him not later than April 1 of the
calendar year following the later of (i) the calendar year in which the
Member attains age 70-1/2, or (ii) the calendar year in which the
Member retires. The Member shall be required to withdraw during
any Plan Year only the minimum amount required to satisfy the
Code. The Member who has not terminated service with the
Employer shall be required to withdraw during any Plan Year only
the minimum amount required to satisfy section 401(a)(9) of the
Code.
6.7 Earnings on Undistributed Benefits. A Member's Accrued Benefit
shall share in investment experience in accordance with the
provisions of Section 4 until the Valuation Date coincident with or
immediately preceding distribution.
6.8 Rollovers Into the Plan. Subject to approval of the Plan
Administrator, an Employee may roll over to the Trust amounts
accumulated for the Employee under any other qualified retirement
plan or plans. The amount rolled over shall become subject to all of
the terms and conditions of this Plan and Trust Agreement after it is
rolled over, except that it shall be fully vested and nonforfeitable at
all times. The amounts rolled over shall be deposited in the Basic
Contribution Account. An Employee who makes a rollover
contribution to this Plan shall not otherwise participate in the Plan
until he qualifies as an Eligible Employee hereunder.
6.9 Evidence in Writing. The Plan Administrator may require an
Employee to furnish such evidence as it deems appropriate to assure
itself that the acceptance of the rollover will not affect the tax
qualified status of the Plan.
6.10 Hardship Withdrawal. A Member may apply in writing to the Plan
Administrator for a hardship withdrawal from his Basic Contribution
Account. The withdrawal must satisfy the criteria set forth below,
the applicable provisions of Section 6.12 and may be approved or
disapproved at the discretion of the Plan Administrator under
nondiscriminatory standards uniformly applied. Hardship
withdrawals from a Member's Basic Contribution Account are not
permitted from income on a Member's Basic Contribution, except to
the extent of earnings on or before December 31, 1988, nor are such
withdrawals permitted to include Participating Employer
contributions which were treated as Basic Contributions as a result of
the application of the special nondiscrimination requirements under
rules prescribed by the Secretary of the Treasury for Participating
Employer contributions that are used to meet the vesting and
withdrawal restrictions for Basic Contributions.
A. General Rule. A hardship distribution may only be made on
account of an immediate and heavy financial need of the
Member and in an amount not to exceed the sum necessary to
satisfy such financial need.
B. Immediate and Heavy Financial Need. The determination of
whether a Member has an immediate and heavy financial need
shall be made on the basis of whether a request satisfies the
definition of "immediate and heavy financial need" including
those deemed needs as set forth below. A financial need shall
not fail to qualify as immediate and heavy merely because
such need was reasonably foreseeable or voluntarily incurred
by the Member.
C. Deemed Immediate and Heavy Financial Need. A distribution
shall be deemed to be made on account of an immediate and
heavy financial need of the Member if the distribution is on
account of:
(1) expenses for medical care described in section 213(d) of the
Code previously incurred by the Member, the Member's
spouse, or any dependents of the Member (as defined in
section 152 of the Code) or amounts necessary to obtain
medical services, which constitute medical expenses described
in section 213(d) of the Code;
(2) costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Member;
(3) payment of tuition and related educational fees for the next
twelve months of post-secondary education for the Member,
the Member's spouse, children or dependents;
(4) the need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the
Member's principal residence; or
(5) such other events set forth by the Commissioner of the
Internal Revenue Service through the publication of revenue
rulings, notices, and other documents of general applicability.
D. Distribution Deemed Necessary to Satisfy Financial Need
(Suspension Method). A distribution shall be deemed to be
necessary to satisfy an immediate and heavy financial need of
a Member if all of the following requirements are satisfied:
(1) the distribution is not in excess of the amount of the
immediate and heavy financial need of the Member plus
anticipated federal, state and local income taxes and penalties
on distribution;
(2) the Member has obtained all distributions, other than
hardship distributions, and all nontaxable (at the time of the
loan) loans currently available under all plans maintained by
an Affiliated Company;
(3) the Member's elective and after-tax contributions under this
Plan (and any other qualified or nonqualified plan of deferred
compensation maintained by an Affiliated Company) are
suspended under a legally enforceable arrangement for at least
twelve months after receipt of the hardship distribution; and
(4) the Member may not make elective contributions for the
Member's taxable year immediately following the taxable year
of the hardship distribution in excess of the Dollar Limit for
such next taxable year less the amount of such Member's
elective contributions for the taxable year of the hardship
distribution.
E. The determination of the existence of financial hardship and
the amount required to be distributed to meet the need created
by the hardship must be made in a uniform and
nondiscriminatory manner.
6.11 Withdrawals Permitted After Age 59-1/2. A Member may apply in
writing to the Plan Administrator for a withdrawal from all or a
portion of his vested Accrued Benefit any time after attaining age 59-
1/2. Such withdrawals shall not be subject to the requirements set
forth in Section 6.10 but are subject to the conditions set forth in
Section 6.12.
6.12 Conditions For Withdrawals. The following conditions apply to
withdrawals made under Sections 6.10 and 6.11:
A. a Member may make only one hardship withdrawal and one
age 59-1/2 withdrawal in any twelve-month period;
B. all withdrawals shall be based on the value of the Member's
applicable accounts and vested Accrued Benefit as of the
Valuation Date immediately preceding or next following the
withdrawal request at the Member's request. All withdrawals
which are based on the value of the Member's applicable
accounts as of the Valuation Date immediately preceding the
withdrawal request will be limited to 75% of the Member's
vested Accrued Benefit. Notwithstanding the foregoing, the
Plan Administrator, in its sole discretion, may base a
withdrawal under this Section on the value of a Member's
vested Accrued Benefit as of the date of the withdrawal.
6.13 Direct Rollover Requirements
A. 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, at the time and in
the manner 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.
B. Definitions
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not
less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of
the Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section
403(a) of the Code, or a qualified trust described in section
401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
(3) Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the
spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the Plan
to the eligible retirement plan specified by the distributee.
SECTION 7
ACTUAL DEFERRAL AND ACTUAL CONTRIBUTION
PERCENTAGE TESTING
7 Actual Deferral Percentage Test. The actual deferral percentage
(ADP) of Basic Contributions allocated to Members who are Highly
Compensated Employees shall not exceed the greater of A. or B. as
follows:
A. the ADP of Members who are Non-Highly Compensated
Employees times 1.25; or
B. the ADP of Members who are Non-Highly Compensated
Employees times 2.0, but not to exceed the ADP of Members
who are Non-Highly Compensated Employees by more than
two percentage points.
7.1 ADP Formula.
A. The ADP for a specified group of Members for a Plan Year
shall be the average of the Actual Deferral Ratios (ADR)
calculated separately for each Member in such group.
For purposes of determining the ADR of a Highly
Compensated Employee as defined in section 414(q)(1)(A) of
the Code or a Highly Compensated Employee in the group
consisting of the ten Highly Compensated Employees paid the
greatest Compensation during the Plan Year, the Employee's
Basic Contributions shall include the Basic Contributions of
Family Members; and such Family Members shall be
disregarded as separate Employees in determining the ADP
both for Members who are Non-Highly Compensated
Employees and for Members who are Highly Compensated
Employees.
The Plan Administrator shall determine as soon as practicable
after the end of the Plan Year whether the ADP for Highly
Compensated Employees satisfies either of the tests contained
in Section 7.1. In the event neither test is satisfied, the
Employer may elect either of the following:
(1) to reduce the allowable Basic Contribution for Highly
Compensated Employees as provided in Sections 7.3 and 7.4;
or
(2) to make an Additional Basic Contribution (subject to the
requirements of Section 7.5) for all or a portion of Non-
Highly Compensated Employees eligible to make contributions
under Section 3.1 in a level dollar amount or a uniform
percentage of Compensation, as the Employer shall elect,
within the time period required by any applicable law or
regulation.
B. The Plan shall take into account the ACRs of all Eligible
Employees for purposes of the ADP test. For this purpose, an
Eligible Employee is any Employee who is directly or
indirectly eligible to make a Basic Contribution under the Plan
for all or a portion of a Plan Year, including an Employee
who would be eligible but for his failure to make required
contributions and an Employee whose eligibility to make Basic
Contributions has been suspended because of an election to
take a hardship distribution. In the case of an Eligible
Employee who makes no elective contributions, the ADR that
is to be included in determining the ADP is zero.
C. A Basic Contribution shall be taken into account under the
ADP test for a Plan Year only if it relates to Compensation
that either would have been received by the Employee in the
Plan Year (but for the deferral election) or is 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).
D. A Basic Contribution shall be taken into account under the
ADP test for a Plan Year only if it is contributed to the Trust
before the last day of the twelve-month period immediately
following the Plan Year to which the contribution relates and
is allocated within the Plan Year to which the contribution
relates. A Basic Contribution is considered allocated as of a
date within a Plan Year if the allocation is not contingent on
participation or performance of services after such date.
E. The ADR and ADP shall be calculated to the nearest .01%.
7.2 Calculations of Excess Contributions.
A. The amount of contributions for a Highly Compensated
Employee in excess of that permitted under Section 7.1
(hereinafter, Excess Contributions) shall be determined in the
following manner. First, the Actual Deferral Ratio of the
Highly Compensated Employee with the highest ADR is
reduced to the extent necessary to satisfy the ADP test or
cause such ADR to equal the ADR of the Highly Compensated
Employee with the next highest ADR. This process is
repeated until the ADP test is satisfied. The amount of Excess
Contributions for a Highly Compensated Employee is the
difference between the total of Basic and other contributions
(if any) taken into account for the ADP test, and the product
of the Employee's ADR at the time the ADP test is satisfied,
as determined above, multiplied by the Employee's
Compensation.
B. In the case of a Highly Compensated Employee whose ADR
is determined under the family aggregation rules, the amount
of Excess Contributions shall be determined as provided in
Section 7.3A. The Excess Contributions for the family unit
are allocated among the Family Members in proportion to the
contributions of each Family Member that have been
combined.
7.3 Distribution of Excess Contributions. Excess Contributions shall be
distributed to Members on whose behalf such Excess Contributions
were made no later than the last day of the Plan Year following the
Plan Year for which they were made. Excess Contributions shall be
adjusted in the manner utilized under Sections 4.2 and 4.3 to reflect
income earned and losses incurred for the Plan Year on the
Member's Basic Contributions Account.
7.4 Additional Basic and Matching Contributions. Additional Basic
Contributions and Matching Contributions may be treated as Basic
Contributions for purposes of the ADP test only if such contributions
are nonforfeitable when made and subject to the same distribution
restrictions that apply to elective contributions. Additional Basic
Contributions and Matching Contributions which may be treated as
Basic Contributions must satisfy these requirements without regard
to whether they are actually taken into account as Basic Contributions
for purposes of satisfying the ADP tests.
Additional Basic Contributions and/or Matching Contributions may
be treated as Basic Contributions only if the conditions described in
section 1.401(k)-1(b)(5) of the Treasury regulations are satisfied.
The amount of the Additional Basic Contribution for Non-Highly
Compensated Employees, or the reduction in the allowable Basic
Contribution deferral percentage for Highly Compensated Employees
shall be such that at least one of the tests contained in Section 7.1 is
satisfied.
7.5 Matching Contributions. Any Matching Contributions made on
account of an Excess Contribution or deferral in excess of the Dollar
Limit shall be forfeited and shall be used to reduce Matching
Contributions for the year of forfeiture.
7.6 Actual Contribution Percentage Test. The actual contribution
percentage (ACP) of contributions deposited to the Plan for Members
who are Highly Compensated Employees shall not exceed the greater
of A. or B. as follows:
A. the ACP of Members who are Non-Highly Compensated
Employees times 1.25; or
B. the ACP of Members who are Non-Highly Compensated
Employees times 2.0, but not to exceed the ACP of Members
who are Non-Highly Compensated Employees by more than
two percentage points.
7.7 ACP Formula.
A. The ACP for a specified group of Members for a Plan Year
shall be the average of the Actual Contribution Ratios (ACR)
calculated separately for each Member in such group.
For purposes of determining the ACR of a Highly
Compensated Employee as defined in section 414(q)(1)(A) of
the Code or a Highly Compensated Employee in the group
consisting of the ten Highly Compensated Employees paid the
greatest Compensation during the Plan Year, the Employee's
Matching Contributions shall include the Matching
Contributions of Family Members; and such Family Members
shall be disregarded as separate Employees in determining the
ACP both for Members who are Non-Highly Compensated
Employees and for Members who are Highly Compensated
Employees.
The Plan Administrator shall determine as soon as practicable
after the end of the Plan Year whether the ACP for Highly
Compensated Employees satisfies either of the tests contained
in Section 7.7. In the event neither test is satisfied, the
Employer may elect either of the following:
(1) to reduce the allowable Matching Contribution for Highly
Compensated Employees as provided in Sections 7.9 and 7.10;
or
(2) to make an additional contribution for all or a portion of
Non-Highly Compensated Employees eligible to make
contributions under Section 3.1 in a level dollar amount or a
uniform percentage of Compensation, as the Employer shall
elect, within the time period required by any applicable law or
regulation.
B. The Plan shall take into account the ACRs of all Eligible
Employees for purposes of the ACP test. For this purpose, an
Eligible Employee is any Employee who is directly or
indirectly eligible to receive an allocation of Matching
Contributions, including an Employee who would be eligible
but for his failure to make required contributions and an
Employee whose right to receive Matching Contributions has
been suspended because of an election not to participate. In
the case of an Eligible Employee who receives no Matching
Contributions, the ACR that is to be included in determining
the ACP is zero.
C. A Matching Contribution shall be taken into account under the
ACP test for a Plan Year only if it is made on account of the
Eligible Employee's Basic Contributions for the Plan Year
contributed to the Trust before the last day of the twelve-
month period immediately following the Plan Year to which
the contributions relate and is allocated within the Plan Year
to which the contributions relate. Qualified Matching
Contributions which are used to meet the requirements of
section 401(k)(3)(A) of the Code are not taken into account.
D. The ACR and ACP shall be calculated to the nearest .01%.
E. Additional Basic Contributions may be treated as Matching
Contributions for purposes of the ACP test of section 401(m) of
the Code only if such contributions are nonforfeitable when
made and distributable only under the following
circumstances:
(1) the Employee's Retirement, death, Disability or separation
from service;
(2) the termination of the Plan without establishment of a
successor plan;
(3) the Employee's attainment of age 59-1/2;
(4) the sale or other disposition by a corporation to an
unrelated corporation, which does not maintain the Plan, of
substantially all of the assets used in a trade or business, but
only with respect to Employees who continue employment
with the acquiring corporation; and
(5) the sale or other disposition by a corporation of its interest
in a subsidiary to an unrelated entity which does not maintain
the Plan, but only with respect to Employees who continue
employment with the subsidiary. Additional Basic
Contributions which may be treated as Matching Contributions
must satisfy these requirements without regard to whether they
are actually taken into account as Matching Contributions.
7.8 Calculation of Excess Aggregate Contributions.
A. The amount of contributions for a Highly Compensated
Employee in excess of that permitted under Section 7.7
(hereinafter, Excess Aggregate Contributions) shall be
determined in the following manner. First, the ACR of the
Highly Compensated Employee with the highest ACR is
reduced, (first as to after-tax contributions, if any, then as to
Matching Contributions) to the extent necessary to satisfy the
ACP test or cause such ACR to equal the ACR of the Highly
Compensated Employee with the next highest ACR. This
process is repeated until the ACP test is satisfied. The amount
of Excess Aggregate Contribution for a Highly Compensated
Employee is the difference between the total of Matching and
other contributions taken into account for the ACP test, and
the product of the Employee's ACR at the time the ACP test
is satisfied, as determined above, multiplied by the
Employee's Compensation.
B. In the case of a Highly Compensated Employee whose ACR
is determined under the family aggregation rules, the amount
of Excess Aggregate Contributions shall be determined as
provided in Section 7.9A. The Excess Aggregate
Contributions for the family unit are allocated among the
Family Members in proportion to the contributions of each
Family Member that have been combined.
C. The amount of Excess Aggregate Contributions for a Plan
Year shall be determined only after first determining the
excess contributions that are treated as Employee after-tax
contributions (if any) due to recharacterization of such
contributions made to another plan, aggregated with this Plan
under Section 7.14, for the Plan Year.
7.9 Distribution of Excess Aggregate Contribution. Excess Aggregate
Contributions shall be distributed to Members on whose behalf such
Excess Aggregate Contributions were made, to the extent vested, no
later than the last day of the Plan Year following the Plan Year for
which they were made. Nonvested Excess Aggregate Contributions
shall be applied as provided in Section 7.12. Excess Aggregate
Contributions shall be adjusted in the manner utilized under Sections
4.2 and 4.3 to reflect income earned or loss as incurred for the Plan
Year on the Member's Matching Contribution Account.
7.10 Additional Contributions. Basic Contributions and/or Additional
Basic Contributions may be treated as Matching Contributions only
if the conditions described in Treasury regulation 1.401(m)-1(b)(5)
are satisfied.
7.11 Forfeitures. Amounts forfeited by Highly Compensated Employees
under Section 7.10 shall be treated as an Annual Addition under the
Plan and shall be applied to reduce future Employer Matching
Contributions. No forfeiture arising under this Section shall be
allocated to the account of any Highly Compensated Employee.
7.12 Aggregate Limit. The sum of the ADP and ACP for Highly
Compensated Employees, determined after any corrections required
to meet the ADP test or ACP test, shall not exceed the Aggregate
Limit as defined herein. If the limit is exceeded, then either the ADR
or ACR, as the Plan Administrator shall elect, for all affected Highly
Compensated Employees, shall be reduced in accordance with
Section 7.3A. or 7.9A. as applicable. The amounts of the reduction
for each Highly Compensated Employee shall be treated as an Excess
Contribution or Excess Aggregate Contribution, as appropriate.
"Aggregate Limit" means the greater of A. or B. below:
A. the sum of
(1) 125% of the greater of the ADP for eligible Non-Highly
Compensated Employees or the ACP for eligible Non-Highly
Compensated Employees for the Plan Year; and
(2) two plus the lesser of such ADP or ACP, but not greater
than 200% of the lesser amount; or
B. the sum of
(1) 125% of the lesser of the ADP for the eligible Non-Highly
Compensated Employees or the ACP for the eligible Non-
Highly Compensated Employees for the Plan Year; and
(2) two plus the greater of such ADP or ACP, but not greater
than 200% of the greater amount.
7.13 Special Rules.
A. The ADR and ACR for any Member who is a Highly
Compensated Employee for the Plan Year and who is eligible
to make Basic Contributions, or to have Matching
Contributions allocated to his account, or to make after-tax
contributions under two or more plans that are maintained by
an Affiliated Company shall be determined as if all such
contributions were made under a single plan.
B. In the event that this Plan satisfies the requirements of sections
410(b) and 401(a)(4) of the Code only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of sections 410(b) and 401(a)(4) of the Code
only if aggregated with this Plan, then the contribution
percentages and deferral percentages of Members shall be
determined as if all such plans were a single plan.
C. The determination and treatment of the contribution
percentage of any Member shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
SECTION 8
TOP-HEAVY PROVISIONS
8.1 Top-Heavy Preemption. During any Plan Year in which this Plan is
Top-Heavy, as defined in Section 8.2 below, the Plan shall be
governed in accordance with this Section, which shall control over
other provisions.
8.2 Top-Heavy Definitions. For purposes of this Section, the following
definitions shall apply:
A. "Compensation" means Compensation as defined in Section
1.13C. for an entire Plan Year but including amounts
contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross
income under section 125, 402(a)(8), 402(h) or 403(b) of the
Code.
B. "Contribution Rate" means the sum of contributions made by
the Employer under this Plan, excluding salary deferral
contributions made under this or any other plan maintained by
the Employer, plus forfeitures allocated to the Member's
accounts for the Plan Year, divided by his Compensation for
the Plan Year. To determine the Contribution Rate, the Plan
Administrator shall consider all qualified defined contribution
plans (within the meaning of the Code) maintained by the
Employer as a single plan.
C. "Determination Date" means the last day of the preceding
Plan Year, except that in the initial Plan Year, Determination
Date means the last day of such Plan Year. For purposes of
testing the Top-Heavy status of Required and Permissive
Aggregation Groups, Determination Date means the last day
of each respective plan's Plan Year which occurs in the
calendar year coincident with the Determination Date of this
Plan.
D. "Key Employee" means any Employee or former Employee
(and the Beneficiaries of such Employee) who at any time
during the "Determination Period" was an officer of the
Employer if such individual's annual Compensation exceeds
50% of the dollar limitation under section 415(b)(1)(A) of the
Code, an owner (or considered an owner under section 318 of
the Code) of one of the ten largest interests in the employer if
such individual's compensation exceeds 100% of the dollar
limitation under section 415(c)(1)(A) of the Code, a 5% owner
of the Employer, or a 1% owner of the Employer who has an
annual compensation of more than $150,000. The
"Determination Period" is the Plan Year containing the
determination date and the four preceding Plan Years.
The determination of who is a Key Employee will be made in
accordance with section 416(i)(1) of the Code and the
regulations thereunder.
E. "Non-Key Employee" means any Employee currently eligible
to participate in the Plan who is not a Key Employee.
F. "Permissive Aggregation Group" means the Required
Aggregation Group plus any other qualified plans maintained
by the Affiliated Companies, but only if such resultant group
would satisfy, in the aggregate, the requirements of sections
401(a)(4) and 410 of the Code. The Plan Administrator shall
determine which plans to take into account in determining the
Permissive Aggregation Group.
G. "Required Aggregation Group" means:
(1) each qualified plan of the Affiliated Companies (including
any terminated plan that covered a Key Employee and was
maintained within the five-year period ending on the
Determination Date) in which at least one Key Employee
participates during the Plan Year containing the Determination
Date or any of the four preceding Plan Years; and
(2) any other qualified plan of the Affiliated Companies which
enables a plan described in (1) above, to meet the
requirements of sections 401(a)(4) or 410 of the Code.
H. "Top-Heavy" shall describe the status of the Plan in any Plan
Year if the "Top- Heavy Ratio" as of the Determination Date
exceeds 60%.
(1) "Top-Heavy Ratio" is a fraction as of the Determination
Date, as follows:
Accrued Benefit of all Key Employees
Accrued Benefits of all Employees
(2) Notwithstanding (1) above, the Top-Heavy Ratio shall be
computed pursuant to section 416(g) of the Code, and any
regulations issued thereunder.
(3) Solely for the purpose of determining if the Plan, or any
other plan included in a Required Aggregation Group of which
this Plan is a part, is Top-Heavy (within the meaning of
section 416(g) of the Code), the accrued benefit of an
Employee other than a Key Employee (within the meaning of
section 416(i)(1) of the Code) shall be determined (a) under
the method, if any, that uniformly applies for accrual purposes
under all plans maintained by Affiliated Companies or, if there
is no such method, then (b) as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under the
fractional accrual rule of section 411(b)(1)(C) of the Code.
(4) For purposes of this Section only, "Accrued Benefit" shall
include or exclude rollovers pursuant to Treasury regulation
1.416-1,T-32.
(5) If an individual is not a Key Employee but was a Key
Employee in a prior year or if any individual has not
performed services for the Employer at any time during the
five-year period ending on the Determination Date, any
Accrued Benefit for such individual shall not be taken into
account in determining the Top-Heavy status of the Plan.
(6) The value of account balances and the present value of
Accrued Benefits will be determined as of the most recent
Valuation Date that falls within or ends with the twelve-month
period ending on the Determination Date, except as provided
in section 416 of the Code and the regulations thereunder for
the first and second plan years of a defined benefit plan.
(7) The Accrued Benefit shall include any part of any account
balance distributed in the five-year period ending on the
Determination Date.
(8) The present value shall be based only on the interest rate
and mortality rates specified in the defined benefit plan.
8.3 Aggregation of Plans. All Required Aggregation Groups shall be
considered (pursuant to section 416(g) of the Code) with this Plan in
determining whether this Plan is Top- Heavy.
A. If such aggregation constitutes a Top-Heavy group, each plan
so aggregated shall be considered Top-Heavy.
B. If such aggregation does not constitute a Top-Heavy group,
none of the plans so aggregated shall be considered Top-
Heavy.
At the direction of the Plan Administrator and subject to the
restrictions of sections 401(a)(4) and 410 of the Code, Permissive
Aggregation Groups may be considered with this Plan plus any
Required Aggregation Groups to determine whether such group is
Top-Heavy. If such aggregation does not constitute a Top-Heavy
group, none of the plans so aggregated shall be considered Top-
Heavy.
8.4 Minimum Contribution Rate. Subject to Section 8.7 below, for any
Plan Year in which this Plan is Top-Heavy, a minimum contribution
shall be made for each Non-Key Employee as of the last day of the
Plan Year which shall equal the lesser of:
A. 3% of Compensation; or
B. the highest Contribution Rate received by a Key Employee in
that Plan Year.
This Top-Heavy Contribution shall be made irrespective of such
Non-Key Employee's Hours of Service, Compensation or failure to
make contributions, as applicable hereunder.
8.5 Deposit of Minimum Contribution. The Plan Administrator shall
deposit any minimum contribution made under this Section to a
"Top-Heavy Contribution Account" for each Non-Key Employee.
Such account shall become part of his Accrued Benefit and shall vest
pursuant to Section 8.6 hereof.
8.6 Top-Heavy Vesting Schedule. In any Plan Year in which this Plan is
Top-Heavy, any Member who is credited with at least one Hour of
Service during such Plan Year shall vest in accordance with Section
5.1 or the following schedule, whichever produces the greater
benefit:
Years of Vested Service Percentage
Less than 2 years 0%
After 2 years but less than 3 20%
After 3 years but less than 4 40%
After 4 years but less than 5 60%
After 5 years but less than 6 80%
After 6 or more years 100%
During any Plan Year in which this Plan is not Top-Heavy, vesting
shall be determined pursuant to Section 5, except that nonforfeitable
rights obtained under the Top-Heavy vesting schedule shall continue
as such.
8.7 Combined Defined Benefit and Defined Contribution Plans. In the
event that the Employer maintains a defined benefit and a defined
contribution plan,
A. and the defined benefit plan benefits a Key Employee and
depends on this Plan to satisfy sections 401(a)(4) and 410 of
the Code, the minimum Contribution Rate for Non-Key
Employees hereunder shall be 5% irrespective of the
Contribution Rate for Key Employees (unless the Employee
provides for the minimum required Top Heavy benefit accrual
for the Plan Year under the defined benefit plan); and
B. the figure "1.0" shall be substituted for the figure "1.25" as it
applies in Section 3.6 if:
(1) the Top-Heavy Ratio exceeds 90%, or
(2) the Plan is Top-Heavy for the Plan Year, and the
Contribution Rate under Section 8.4 is less than 7-1/2%
(unless the Employer provides for the minimum required Top
Heavy benefit accrual for the Plan Year under the defined
benefit plan).
SECTION 9
DESIGNATION OF BENEFICIARY
9.1 Named Beneficiary. Each Member may designate on a form filed
with the Plan Administrator, a Beneficiary to whom, in the event of
the Member's death, all benefits or any unpaid balance of benefits
shall be payable. However, each married Member who designates
a Beneficiary other than his Spouse must provide the Plan
Administrator with a spousal consent to the designation of such other
Beneficiary. Such spousal consent shall set forth the effects of such
waiver and must be notarized. Subject to such spousal consent, the
Beneficiary so designated may be changed by the Member at any
time. The facts as shown by the records of the Plan Administrator
at the time of death shall be conclusive as to the identity of the proper
payee and the amount properly payable, and payment made in
accordance with such facts shall constitute a complete discharge of
any and all obligations hereunder.
9.2 No Named Beneficiary. If no Beneficiary designation is on file with
the Plan Administrator at the time of death of the Member, or if such
designation is not effective for any reason, then such death benefit
shall be payable to the deceased Member's Spouse, if living. If such
Spouse is not living, payment shall be made to the deceased
Member's estate.
SECTION 10
MANAGEMENT OF THE FUND
101.1 Contributions Deposited To Trust. All contributions to the Plan by
the Participating Employers and Employees shall be committed in
trust to the Trustee selected by the Plan Sponsor subject to the terms
of the Trust created in Section 1 of the Trust Agreement, to be held,
managed, and disposed of by the Trustee in accordance with the
terms of the Trust and this Plan. The Trustee selected may be
changed from time to time by the Plan Sponsor.
101.2No Reversion to Participating Employer. The Trust shall contain
such provisions as shall render it impossible, except as is provided
under Sections 3.7 and 11.3, for any part of the corpus of the Trust
or income thereon to be at any time used for, or diverted to, purposes
other than for the exclusive benefit of Members or their
Beneficiaries.
SECTION 11
DISCONTINUANCE AND LIABILITIES
111.1 Termination. The Plan may be terminated at any time by the Plan
Sponsor, but only upon condition that such action is taken under the
Trust Agreement or otherwise, as shall render it impossible at any
time under the Trust for any part of the corpus of the Trust or
income thereon to be at any time used for, or diverted to purposes
other than for the exclusive benefit of, active and retired employees,
except as is provided under Sections 3.7 and 11.3. If the Plan is
terminated the Fund shall be held for distribution by the Trustee, who
shall distribute to the Members then participating in the Fund the full
amount standing to their credit on the date of such termination, less
the administrative costs to the Trustee for such distribution, in
accordance with the methods specified under Section 6.
In the event that a Participating Employer sponsors any other defined
contribution plan, if a Member does not consent to a distribution
upon termination of this Plan, that Member's Accrued Benefit shall
be transferred to the other aforesaid defined contribution plan.
Notwithstanding the foregoing, if the Participating Employer
sponsors any other defined contribution plan all salary deferral
contributions will be transferred to said plan upon the termination of
this Plan.
111.2 No Liability For Participating Employer. The Participating
Employer shall have no liability with respect to the payment of
benefits or otherwise under the Plan, except to pay over to the
Trustee as provided in the Plan such contributions as are made by the
Participating Employers and any and all contributions made by the
Members. Further, the Participating Employers shall have no
liability with respect to the administration of the Trust or of the Fund
held by the Trustee, and each Member and/or Beneficiary shall look
solely to the Fund for any payments or benefits under the Plan.
111.3 Administrative Expenses. A Participating Employer may elect to pay
all administrative expenses of the Plan, including compensation of the
Trustee, consultants, auditor and counsel, but the Participating
Employer shall not be obliged to pay such expenses. If Participating
Employers elect not to pay such expenses, they shall be paid from the
Trust. Any expenses directly relating to the investments of the Trust,
such as taxes, commissions, and registration charges, shall be paid
from the Trust.
111.4 Nonforfeitability Due to Termination(s). Upon termination, partial
termination or upon complete discontinuance of contributions under
the Plan, the rights of all affected Employees to their Accrued
Benefits accrued to the date of such termination, partial termination
or discontinuance, shall become nonforfeitable.
111.5 Exclusive Benefit Rule. This Plan and Trust are for the exclusive
benefits of the Members and their Beneficiaries. This Plan shall be
interpreted in a manner consistent with this intent and with the
intention of the Employer that the Trust satisfy those provisions of
the Code relating to employees' trusts.
111.6 Mergers. In the case of any merger or consolidation of the Plan
with, or transfer of Plan assets or liabilities to, any other plan,
provisions shall be made so that each Member in the Plan on the date
thereof (if the Plan then terminated) would receive a benefit
immediately after the merger, consolidation or transfer which is
equal to or greater than the benefit he would have been entitled to
receive immediately prior to the merger, consolidation or transfer (if
the Plan had then terminated).
111.7 Non-allocated Trust Assets. Any portion of the Fund which is
unallocated at the time of termination of the Plan shall be allocated
among Members of the Plan in a nondiscriminatory manner selected
by the Plan Administrator.
SECTION 12
ADMINISTRATION 22
Appointment of Plan Administrator. The Board may appoint an
individual or committee to act as Plan Administrator. The Plan
Administrator may be removed by the Board at any time and may
resign at any time by submitting a written resignation to the Board.
A new Plan Administrator shall be appointed as soon as practicable
in the event that the Plan Administrator is removed or resigns from
his position. If no Plan Administrator is appointed, the Plan Sponsor
shall act as Plan Administrator through its officers and employees.
22.1 Responsibilities and Duties. The Plan Administrator shall:
A. be responsible for the day to day administration of the Plan.
He may appoint other persons or entities to perform any of his
fiduciary functions. Such appointment shall be made and
accepted by the appointee in writing. The Plan Administrator
and any such appointee may employ advisors and other
persons necessary or convenient to help him carry out his
duties including his fiduciary duties. The Plan Administrator
shall have the right to remove any such appointee from his
position. Any person, group of persons or entity may serve
in more than one fiduciary capacity.
B. maintain or cause to be maintained accurate and detailed
records and accounts of employees and of their rights under
the Plan and of all investments, receipts, disbursements and
other transactions. Such accounts, books and records relating
thereto shall be open at all reasonable times to inspection and
audit by the Board and by persons designated thereby.
22.2 Claims Procedure. Each Member or Beneficiary must claim any
benefit to which he believes he is entitled under this Plan by a written
notification to the Plan Administrator.
The Plan Administrator shall decide a claim within 90 days of the
date on which the claim is filed, unless special circumstances require
a longer period for adjudication and the claimant is notified in
writing of the reasons for an extension of time; provided, however,
that no extensions shall be permitted beyond 90 days after the date on
which the claimant received notice of the extension of time from the
Plan Administrator. If the Plan Administrator fails to notify the
claimant of his decision to grant or deny such claim within the time
specified by this paragraph, such claim shall be deemed to have been
denied by the Plan Administrator and the review procedure described
below shall become available to the claimant.
If a claim is denied, it must be denied within a reasonable period of
time, and be contained in a written notice stating the following:
A. the specific reason for the denial;
B. a specific reference to the Plan provision on which the denial
is based;
C. a description of additional information necessary for the
claimant to perfect his claim, if any, and an explanation of
why such material is necessary; and
D. an explanation of the Plan's claim review procedure.
The claimant shall have 60 days to request a review of the denial of
his claim by the Plan Administrator, who shall provide a full and fair
review. The request for review must be written and submitted to the
same person who handles initial claims. The claimant may review
pertinent documents, and he may submit issues and comments in
writing. The decision by the Plan Administrator with respect to the
review must be given within 60 days after receipt of the request,
unless special circumstances require an extension (such as for a
hearing). In no event shall the decision be delayed beyond 120 days
after receipt of the request for review. The decision shall be written
in a manner calculated to be understood by the claimant, and it shall
include specific reasons and refer to specific Plan provisions as to its
effect.
22.3 Trustee Has Authority to Invest. All Funds of the Plan shall be
invested by the Trustee in accordance with the provisions of the Plan
and Trust Agreement. To the extent that individual Members are
permitted to direct investment of their account balances, and to the
extent a Member exercises such right to direct investment, the
Trustee shall be relieved from any liability therefor.
22.4 Indemnification. The Plan Sponsor shall indemnify any individual
who is serving as Plan Administrator or who is acting on behalf of
the Plan Sponsor in this capacity from any and all liability that may
arise by reason of his action or failure to act concerning this Plan,
excepting any wilful misconduct or criminal acts.
22.5 Removal For Personal Involvement. No individual may participate
in the consideration of any matter of or question concerning the Plan
which specifically and uniquely relates to him because of his
participation under the Plan.
SECTION 13
AMENDMENTS 23
Amendment Restrictions. The provisions of this Plan may be
amended at any time and from time to time provided that:
A. no such amendment shall be effective unless this Plan, as so
amended, shall be for the exclusive benefit of persons in, or
formerly in, the employ of a Participating Employer, or their
Beneficiaries;
B. no such amendment shall operate to deprive a Member of any
rights or benefits irrevocably vested in him under the Plan
prior to the later of the date such amendment is adopted or
becomes effective;
C. no such amendment shall be effective to the extent that it
decreases a Member's Accrued Benefit. For purposes of this
Section 13, a Plan amendment which has the effect of
decreasing a Member's Accrued Benefit or eliminating an
optional form of benefit, with respect to benefits attributable
to service before the amendment, shall be treated as reducing
an Accrued Benefit.
If any amendment shall be necessary or desirable to conform to the
provisions and requirements of the Code or any amendment thereto,
or any regulation issued pursuant thereto, no such amendment shall
be considered prejudicial to the interest of a Member or his
Beneficiary, or a diversion of any part of Fund to a purpose other
than for their exclusive benefit.
23.1 Amending the Plan. The Board may amend the Plan at any time by
resolution or by such other action permitted by the Plan Sponsor's
charter, by-laws, or such other method permitted by the laws of the
state of incorporation of the Plan Sponsor. A copy of any such
amendment shall be provided to the Trustee and the Plan
Administrator.
23.2 Retroactive Amendments. Any modification or amendment of the
Plan may be made retroactive if such retroactivity is deemed to be
necessary in order for the Plan to conform to or satisfy the conditions
of any law, governmental regulations or ruling, or to meet the
requirements of applicable sections of the Code or the corresponding
regulations.
SECTION 14
LOANS 24
Permitted Loans. A Member may make application to the Plan
Administrator to borrow from his vested Accrued Benefit. That
application must be made in writing, and must specify the amount
and term requested. The Plan Administrator shall determine whether
the application for a loan is to be approved after an evaluation of all
necessary documentation regarding the credit-worthiness of the
applicant. All applications for loans shall be evaluated in a uniform
and nondiscriminatory manner, and loans shall not be made available
to Highly Compensated Employees in an amount greater than that for
other Employees. Loans that are granted shall be subject to the
following conditions:
A. the aggregate amount of all such loans to a Member shall not
exceed the lesser of:
(1) $50,000, reduced by the greatest value of any outstanding
loan balance owed by the Member during the one-year period
ending on the day before the loan is made, or
(2) 50% of his vested Accrued Benefit;
B. the minimum amount of any loan made hereunder shall be
$1,000;
C. no more than one loan per twelve-month period shall be
granted to a Member.
24.1 Collateral Required. A note shall be signed by the Member pledging
as collateral an amount equal to 50% of his vested Accrued Benefit
and such other collateral as may be necessary to adequately secure
the loan.
24.2 Repayment. The loan shall be amortized by substantially equal
installments payments withheld from the borrower's regular pay
during the term of the loan; except that any loan made to a non-
Employee shall be repaid by that non-Employee in substantially equal
monthly installments. The term of the loan may not exceed five
years unless the loan is used to buy or build the Member's principal
residence. Principal residence status shall be determined at the time
the loan is made.
24.3 Interest Charges. Interest shall be charged on a loan that exceeds
five (5) years at a rate equal to the rate in force for residential
mortgages in the community, determined by the Plan Administrator
or Committee. Interest shall be charged on a loan that is for less than
five (5) years based upon the Prime Commercial Lending Rate plus
two percentage points in force in the community on the date of the
loan. Interest rates shall be established once each quarter and shall
apply to all loans made during the quarter.
24.4 Failure to Make Timely Payment. In the event an installment
payment is not paid within 60 days following the due date of an
installment, the Plan Administrator shall give written notice to the
Member sent to his last known address. If such installment payment
is not made within 30 days thereafter, the Plan Administrator shall
have the right to accelerate the loan and to reduce the Member's
Accrued Benefit by the amount of the unpaid loan balance including
interest then due but not before the time at which the Member may
first receive a distribution under Section 6. If the Member's Accrued
Benefit must be used to pay any Plan loan which is in default, the
Member's various accounts shall be reduced in the following order:
A. Matching Contribution Account, to the extent vested
B. Basic Contribution Account.
24.5 Termination of Employment. In the event of the termination of a
Member's employment before the loan is repaid in full, the unpaid
balance thereof, together with interest immediately due thereon, shall
become due and payable; and the Trustee shall first satisfy the
indebtedness from the amount payable to the Member or to the
Member's Beneficiary before making any payments to the Member
or to the Member's Beneficiary.
24.6 No Loans to Non-Employees. There will be no loans to individuals
who are no longer Employees. Any Member who ceases to be an
active Employee who is a "party in interest" as that term is defined
in ERISA section 3(14) may be eligible to borrow from the Plan
under terms and conditions reflecting valid economic differences
between active Members and other Members which would be
considered in a normal commercial setting, such as the unavailability
of payroll deductions for repayment. In addition, there will be an
annual fee for the administration of each of such loans of $100.
24.7 General Administration. The Trustee and the Plan Administrator
shall have the right to establish such procedures as may be
reasonable, necessary or desirable to carry out the provisions of this
Section 14.
SECTION 15
MISCELLANEOUS 25
"Spendthrift" Provision. Subject to Section 15.2 and 15.3 below, no
benefit under the Plan shall be subject in any manner to anticipation,
pledge, encumbrance, alienation, levy or assignment, nor to seizure,
attachment or other legal process for the debts of any Employee,
Member or Beneficiary, unless required by law.
25.1 QDRO Exception. In the event that a Qualified Domestic Relations
Order ("QDRO") (as defined by section 414(p) of the Code) is issued
with respect to any Member, the Plan Administrator shall notify the
Member and the alternate payee(s) of the order received and
segregate and conservatively invest the portion of the Member's
Accrued Benefit which would be payable to the alternate payee(s) as
if the order received were a QDRO. Within 18 months of the order,
the Plan Administrator shall proceed with either A. or B. as follows:
A. if the order is determined to be a QDRO, the Plan
Administrator shall pay the alternate payee(s), notwithstanding
Section 6, (i) at the time specified in such order or, if the
order permits, (ii) as soon after the Plan Administrator
approves the order as is administratively feasible provided
such distribution is permitted under applicable provisions of
the Code; or
B. if the order is determined not to be a QDRO, or the issue
remains undetermined, the Plan Administrator shall pay the
portions of the Member's Accrued Benefit segregated in
accordance with the above to the Member or Beneficiary(ies)
who are otherwise entitled to such benefit.
If, 18 months after issuance of the order, a determination is made
that the order is a QDRO, the determination shall be applied
prospectively only.
25.2 Plan Loans. A pledge made in accordance with Section 14 which is
permitted by Treasury regulation 1.401(a)-13(d) shall not be subject
to Section 15.1.
25.3 No Guarantee of Employment. Nothing contained in this Plan or the
Trust shall be held or construed to create any liability upon the
Employer to retain any Employee in its employ. The Participating
Employers reserve the right to discontinue the services of any
Employee without any liability except for salary or wages that may
be due and unpaid whenever, in their judgment, their best interests
so require.
25.4 Controlling Law. The Plan shall be construed, administered and
governed in all respects in accordance with the laws of the State of
New Jersey to the extent such laws are not superseded by federal
law. If any provision herein is held by a court of competent
jurisdiction to be invalid or unenforceable, the remaining provisions
hereof shall continue to be fully effective.
ELIZABETHTOWN WATER
COMPANY
ATTEST: DATE: June 16, 1994
/s/ Walter M. Braswell /s/ Gail P. Brady
----------------------- By:-----------------
Secretary Authorized Officer
AMENDMENT NO. 1 TO THE
ELIZABETHTOWN WATER COMPANY
SAVINGS AND INVESTMENT PLAN
WHEREAS, ELIZABETHTOWN WATER COMPANY,
(the "Employer") adopted the Elizabethtown Water Company Savings and
Investment Plan (the "Plan"), effective January 1, 1988, and restated
in its entirety, effective as of January 1, 1989; and
WHEREAS, Section 13 permits the Employer to amend
the Plan at any time; and
WHEREAS, the Employer wishes to amend the Plan in
certain particulars;
NOW, THEREFORE, BE IT RESOLVED that, effective
January 1, 1995, the Plan is amended as follows:
1. Section 1.8 is hereby amended with the addition of a new
subsection E., as follows:
E. Effective January 1, 1995, Employees who are
covered under a collective bargaining agreement
with the Employer or any Participating Employer
are eligible to participate in the Plan, subject to
the restrictions set forth therein.
2. Section 3.1 is hereby amended by deleting the first
paragraph thereof and replacing it with the following:
3.1 Basic Contributions. Each non-union Member
may authorize a Participating Employer to reduce
his Compensation by any whole percentage up to
10% of such Compensation, subject to the Dollar
Limit and limits of Section 3.6. Each Member
who is covered under a collective bargaining
agreement with the Employer may authorize a
Participating Employer to reduce his
Compensation by any whole percentage up to 6%
of such Compensation, subject to the Dollar Limit
and limits of Section 3.6.
3. Section 3.2 is hereby deleted in its entirety and replaced
with the following:
3.2 Matching Contributions. The Participating
Employer shall make a Matching Contribution to
each non-union Member which shall equal $.50
for each $1.00 deposited to such Member's Basic
Contribution Account. The Matching
Contribution shall be credited to the Member's
Matching Contribution Account.
Notwithstanding the preceding, no Matching
Contributions shall be made with respect to a
non-union Member's Basic Contributions in
excess of 6% of his Compensation. The amount
of Employer Matching Contributions may be
increased or decreased at the discretion of the
Board, provided that reasonable notice is
provided to Members giving them the opportunity
to change their elective deferral percentages.
Members who are covered by a collective
bargaining agreement with the Employer or any
Participating Employer are not eligible for a
Matching Contribution under the Plan.
4. Section 14.1 is hereby amended by deleting the first
paragraph thereof and replacing it with the following:
14.1 Permitted Loans. A non-union Member may
make application to the Plan Administrator to
borrow from his vested Accrued Benefit.
Members who are covered under a collective
bargaining agreement with the Employer or any
Participating Employer are not permitted to take
a loan from the Plan. The application for a loan
must be made in writing, and must specify the
amount and term requested. The Plan
Administrator shall determine whether the
application for a loan is to be approved after an
evaluation of all necessary documentation
regarding the credit-worthiness of the applicant.
All applications for loans shall be evaluated in a
uniform and nondiscriminatory manner, and loans
shall not be made available to Highly
Compensated Employees in an amount greater
than that for other Employees. Loans that are
granted shall be subject to the following
conditions:
IN WITNESS WHEREOF, the parties hereunto set our
hands this 15th day of December, 1994.
ELIZABETHTOWN WATER COMPANY
Thomas J. Cawley
ATTEST: ------------------------
President
Thomas J. Cawley
/s/ Walter M. Braswell
----------------------
Secretary
Walter M. Braswell