PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
EMPLOYEE SAVINGS PLAN
Amended and Restated, Effective January 1, 2002
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
Page
Article I. Amendment - Purpose.............................................. 1
Article II. Definitions..................................................... 2
Article III. Participation.................................................. 12
Article IV. Deposits........................................................ 14
Article V. Employer Contributions........................................... 22
Article VI. Savings Account Investments..................................... 24
Article VII. Savings Account Funds.......................................... 28
Article VIII. Savings Accounts.............................................. 31
Article IX. Frozen ESOP Accounts............................................ 32
Article X. Vesting.......................................................... 34
Article XI. Account Distributions And Withdrawals........................... 35
Article XII. Limits On Benefits And Contributions Under Qualified Plans..... 47
Article XIII. Beneficiary In Event of Death................................. 51
Article XIV. Administration................................................. 52
Article XV. Claims Procedure................................................ 54
Article XVI. Merger or Consolidation........................................ 54
Article XVII. Non-Alienation of Benefits.................................... 54
Article XVIII. Amendments................................................... 55
Article XIX. Termination.................................................... 55
Article XX. Plan Confers No Right To Employment............................. 55
Article XXI. Alternate Payees............................................... 56
Article XXII. Construction.................................................. 56
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
EMPLOYEE SAVINGS PLAN
ARTICLE I
AMENDMENT - PURPOSE
Section 1.1. Amendment of the Plan. Public Service Electric and Gas Company
previously established and currently maintains the Employee Savings Plan, a
savings, profit-sharing and tax-credit employee stock ownership plan. Effective
December 13, 1999, Public Service Electric and Gas Company transferred
sponsorship of the plan to Public Service Enterprise Group Incorporated and the
plan was renamed "Public Service Enterprise Group Incorporated Employee Savings
Plan" (the "Plan"). Effective as of January 1, 2000, the Plan was amended and
restated .
Effective as of March 1, 2001, certain assets from the Fluidics, Inc.
Retirement and 401(k) Plan were transferred to this Plan. Furthermore, the Plan
was amended and restated effective as of January 1, 2001, or with respect to
certain Plan provisions, such date as may be specifically provided therein, to
reflect such transfer of assets as well as the participation the Plan of certain
individuals who became employees of the Company as a result of certain corporate
acquisitions.
Effective as of January 1, 2002, this Plan is hereby amended to reflect
certain legislative changes allowed by the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA") as set forth in further detail herein.
This amendment is intended as good faith compliance with the requirements of
EGTRRA and is to be construed in accordance with EGTRRA and guidance issued
thereunder. In addition, effective as of March 1, 2002, the portion of the Plan
that represents amounts invested in the Company Common Stock Fund (but not
amounts that are transferred from the Company Common Stock Fund into other
Investment Funds) is intended to be a stock bonus plan that qualifies as an
employee stock ownership plan under Code section 4975(e)(7).
The Plan is intended to constitute a plan described in section 404(c) of
the Employee Retirement Income Security Act of 1974, as amended, and Department
of Labor regulations section 2550.404(c)-1. As a result, fiduciaries of the Plan
may be relieved of liability for any losses that are the direct and necessary
result of investment instructions given by Participants and beneficiaries.
Section 1.2. Purpose. The purpose of the Plan is to encourage and assist
thrift and savings by eligible bargaining unit employees of Public Service
Enterprise Group Incorporated and its Affiliates through tax-sheltered forms of
investment. The Plan and its related Trust Fund are intended to meet the
requirements applicable to qualified profit-sharing plans under sections 401(a),
401(k), 401(m) and 501(a) of the Code and the requirements applicable to
employee stock ownership plans under section 4975(e)(7) of the Code.
ARTICLE II
DEFINITIONS
When used herein, the words and phrases hereinafter defined shall have the
following meanings unless a different meaning is clearly required by the context
of the Plan:
Section 2.1. "Account" shall mean the separate account maintained in the
Plan for each Participant which consists of the Participant's Savings Account
(including, for some Participants, the Fluidics Account) and/or the
Participant's Frozen ESOP Account.
Section 2.2. "Active Participant" shall mean a Participant who is an
Eligible Employee presently making Nondeferred Deposits or for whom Deferred
Deposits are presently being made.
Section 2.3. "Additional Lump Sum Deposits" shall mean that amount which is
contributed to the Plan by a Participant on a lump sum basis. Additional Lump
Sum Deposits shall not be entitled to be matched by Employer Contributions.
Section 2.4. "Affiliate" shall mean any organization which is a member of a
controlled group of corporations (as defined in Code section 414(b) as modified
by Code section 415(h)) which includes the Company, or any trades or businesses
(whether or not incorporated) which are under common control (as defined in Code
section 414(c) as modified by Code section 415(h)) with the Company, or a member
of an affiliated service group (as defined in Code section 414(m)) which
includes the Company, or any other entity required to be aggregated with the
Company pursuant to regulations promulgated pursuant to Code section 414(o).
Section 2.5. "Balanced Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(f).
Section 2.6. "Basic Deposits" shall mean that amount, not less than 1%, nor
more than 7%, except that Participants who are Employees of CEA Newark Bay
Services, Inc. shall be entitled to elect maximum Basic Deposits of 8%, of a
Participant's Compensation, contributed to the Plan through payroll deduction by
or on behalf of a Participant which is entitled to be matched by Employer
Contributions.
Section 2.7. "Board of Directors" shall mean the Board of Directors of the
Company.
Section 2.8. "Bond Fund" shall mean the Fund or Funds established pursuant
to Section 7.1(g).
Section 2.9. "Cash Balance Plan" shall mean the Cash Balance Pension Plan
for Represented Employees of Public Service Enterprise Group Incorporated
(formerly known as the "Cash Balance Pension Plan for Represented Employees of
Public Service Electric and Gas Company") or the Public Service Enterprise Group
Incorporated Cash Balance Pension Plan (formerly known as the "Public Service
Electric and Gas Company Cash Balance Pension Plan").
Section 2.10. "Code" shall mean the Internal Revenue Code of 1986, as
amended, or as it may be amended from time to time.
Section 2.11. "Commissioner" mean the Commissioner of Internal Revenue.
Section 2.12. "Committee" or "Employee Benefits Committee" shall mean the
Employee Benefits Committee of the Company appointed by the Board of Directors.
Section 2.13. "Company" shall mean Public Service Enterprise Group
Incorporated.
Section 2.14. "Company Common Stock" shall mean the Common Stock, without
nominal or par value, of the Company.
Section 2.15. "Company Common Stock Fund" shall mean the Fund established
pursuant to Section 7.1(c). The Company Common Stock Fund is intended to qualify
as an employee stock ownership plan under Code section 4975(e)(7).
Section 2.16. "Compensation" shall mean the total remuneration paid to a
Participant for services rendered to an Employer excluding the Employer's cost
for any public or private employee benefit plan, but including all Deferred
Basic and Supplemental Deposits made by a Participant or on a Participant's
behalf to this Plan and all elective contributions that are made by an Employer
on behalf of a Participant which are not includible in income under Code section
125, under rules adopted by the Committee which are uniformly applicable to all
Participants similarly situated. However, Compensation shall not include the
following:
(a) any amounts which are deferred under any deferred compensation plan of
the Company or any Affiliate and any payments from any such plans of
any previously deferred amount;
(b) any amounts which constitute a reimbursement of expenses;
(c) the following miscellaneous payments:
(1) Separation pay;
(2) Gratuity Payments upon death;
(3) Payment for vacation due at time of death;
(4) Worker's Compensation for permanent partial disability;
(5) Employer contributions for social security, unemployment
compensation or other taxes;
(6) Employer payments toward reimbursement of adoption expenses; and
(7) Payments made expressly for the purpose of satisfying withholding
tax liabilities on awards earned pursuant to any employee
suggestion program of any Employer;
(d) the following special international payments:
(1) International service premium;
(2) Commodities and services allowance;
(3) Equalization Pay;
(4) Transportation allowance;
(5) Foreign service pay; and
(6) Hardship allowance; and
(e) any amounts received by a Participant as a result of the sale of
vacation entitlements.
In any case, however, Compensation of each Participant taken into account
for any Plan Year shall not exceed the applicable compensation limit for such
year determined under Code Section 401(a)(17). The compensation limit for a Plan
Year beginning on or after January 1, 1997 is $160,000 (as indexed), and the
family aggregation rules of Code section 414(q)(6) shall no longer apply as of
such date. The compensation for a Plan Year beginning on or after January 1,
2002 is $200,000. This limit on annual compensation shall be adjusted for
cost-of-living increases in accordance with Code section 401(a)(17)(B).
Section 2.17. "Deferred" in reference to Deposits shall mean that such
Deposits are deferred from current Federal income taxation under Code section
401(k).
Section 2.18. "Deposits" shall mean the aggregate of Additional Lump Sum
Deposits, Basic Deposits and Supplemental Deposits made by or on behalf of a
Participant to his or her Savings Account. The total of all Deposits made by or
on behalf of a Participant in any Plan Year shall not exceed 25% of the
Participant's Compensation for such Plan Year. Effective as of January 1, 2002,
the total of all Deposits made by or on behalf of a Participant in any Plan Year
shall not exceed 50% of the Participant's Compensation for such Plan Year.
Deposits shall include "Employee Pre-Tax Basic Contributions" credited to the
Participant under the Fluidics, Inc. Retirement and 401(k) Plan.
Section 2.19. "Disability" shall mean any physical or mental condition
which renders a Participant incapable of performing further work for his or her
Employer, as certified in writing by a Doctor of Medicine designated and
approved by the Committee.
Section 2.20. "Eligible Employee" shall mean any individual included in a
unit of employees covered by a collective bargaining agreement who is an
Employee of the Company or a Participating Affiliate and who is receiving
remuneration for personal services rendered to the Company or Participating
Affiliate other than (1) solely as a director of the Company or a Participating
Affiliate, (2) as a consultant (3) as an independent contractor, (4) as an
individual who is a "leased employee" within the meaning of Code section 414(n),
or (5) any other individual engaged by the Company or Participating Affiliate in
a relationship that the Company characterizes as other than an employment
relationship or who has waived his rights to coverage as an employee (regardless
of whether a determination is made by the Internal Revenue Service or other
governmental agency or court after the individual is engaged to perform such
services that the individual is an employee of the Company or Participating
Affiliate for the purposes of the Code or otherwise).
Section 2.21. "Employee" shall mean any individual employed by the Company
or an Affiliate.
Section 2.22. "Employer" shall mean the Company and any Participating
Affiliate.
Section 2.23. "Employer Contributions" shall mean the amounts contributed
to the Plan on behalf of Participants by an Employer in accordance with Article
V. Employer Contributions shall include "Employer Matching Contributions" and
"Employer Nonelective Contributions" credited to the Participant under the
Fluidics, Inc. Retirement and 401(k) Plan.
Section 2.24. "Equities Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(a).
Section 2.25. "Equities Index Fund" shall mean the Fund or Funds
established pursuant to Section 7.1(d).
Section 2.26. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, or as it may be amended from time to time.
Section 2.27. "Fixed Income Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(b).
Section 2.28. "Fluidics Account" shall mean that separate portion of an
Account which evidences the assets transferred to the Plan for the Account of a
Participant, pursuant to the transfer of assets from the Fluidics, Inc.
Retirement and 401(k) Plan to this Plan, and which consists of the sum of the
following subaccounts of such Participant:
(a) Fluidics Deposit Subaccount shall mean the portion of a Participant's
Fluidics Account which evidences the value of "Employee Pre-Tax Basic
Contributions" credited to the Participant under the Fluidics, Inc. Retirement
and 401(k) Plan, including the net worth of the Trust Fund attributable thereto.
(b) Fluidics Employer Contribution Subaccount shall mean the portion of a
Participant's Fluidics Account which evidences the value of "Employer Matching
Contributions" and "Employer Nonelective Contributions" credited to the
Participant under the Fluidics, Inc. Retirement and 401(k) Plan, including the
net worth of the Trust Fund attributable thereto.
(c ) Fluidics Rollover Contribution Subaccount shall mean the portion of a
Participant's Fluidics Account which evidences the value of "Rollover
Contributions" credited to the Participant under Fluidics, Inc. Retirement and
401(k) Plan, including the net worth of the Trust Fund attributable thereto."
Section 2.29. "Frozen ESOP Account" shall mean that separate portion of an
Account established pursuant to Section 9.1 which evidences the shares of
Company Common Stock transferred to the Plan for the Account of a Participant,
pursuant to the merger with this Plan with the Public Service Electric and Gas
Company Tax Reduction Act Employee Stock Ownership Plan (TRASOP) and/or the
Public Service Electric and Gas Company Payroll-Based Employee Stock Ownership
Plan (PAYSOP), including the net worth of the Trust Fund attributable thereto.
Section 2.30. "Funds" shall mean the several investment Funds established
pursuant to Section 7.1. As used in the singular, "Fund" shall mean one of such
Funds.
Section 2.31. "General Manager" shall mean the Director, Performance and
Rewards of PSEG Services Corporation.
Section 2.32. "Government Obligations Fund" shall mean the Fund or Funds
established pursuant to Section 7.1(e).
Section 2.33. "Highly Compensated Employee" shall mean:
(a) For any Plan Year, any Employee who:
(1) during the Plan Year or the preceding Plan Year was at any time a
5% owner;
(2) for the preceding Plan Year, received Compensation from the
Company or an Affiliate in excess of $80,000 (as adjusted for
cost of living increases); and
(3) if the Company or an Affiliate elects, was in the top-paid group
of Employees for the preceding Plan Year.
(b) For purposes of this Section, an Employee shall be treated as a 5%
owner for any Plan Year if at any time during such Plan Year such
Employee was a 5% owner (as defined in Code section 416(i)(1)) of the
Company or an Affiliate.
(c) For purposes of this Section, an Employee shall be considered as being
in the top-paid group of Employees for any Plan Year if such Employee
is in the group consisting of the top 20% of Employees when ranked on
the basis of Compensation paid during such Plan Year.
(d) For purposes of determining the top-paid group under paragraph (c),
the following Employees shall be excluded:
(1) Employees who have not completed six months of service;
(2) Employees who normally work less than 17 1/2 hours per week;
(3) Employees who normally work not more than six months during any
year;
(4) Employees who have not attained age 21; and
(5) Employees who are nonresident aliens and who receive no earned
income (within the meaning of Code section 911(d)(2)) from the
Company or an Affiliate which constitutes income from sources
within the United States (within the meaning of Code section
861(a)(3)).
(e) For purposes of this Section, the term "Compensation" shall mean
Compensation within the meaning of Section 12.1; provided, however,
that for Plan Years beginning prior to January 1, 1998, the term
"Compensation" for purposes of determining Highly Compensated
Employees also included salary reduction contributions to a cafeteria
plan, a 401(k) plan and a simplified employee pension.
Section 2.34. "Hour of Service" shall mean:
(a) Each hour for which an Employee is directly or indirectly paid
remuneration or entitled to such payment by an Employer for the
performance of duties.
(b) Each hour for which an Employee is paid or entitled to payment by the
Company on account of a period of time during which no duties are
performed (whether or not the employment relationship has terminated)
due to vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military service, or leave of absence; provided,
however, that an Employee shall not be credited with more than 501
Hours of Service under this sentence for any continuous period during
which he or she performs no duties for the Company. Notwithstanding
the preceding provisions of this item (b) no credit will be given:
(1) for an Hour of Service for which the individual is directly or
indirectly paid, or entitled to payment, on account of a period
during which no duties are performed if such payment is made or
due under a plan maintained solely for the purpose of complying
with applicable worker's compensation, unemployment compensation,
or disability insurance laws; or
(2) for an Hour of Service for which a payment is made, which solely
reimburses the individual for medical or medically related
expenses incurred.
(c) Each hour not otherwise credited under the Plan for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to
by an Employer. No more than 501 Hours of Service shall be credited
under this item (c) for a period of time during which the Employee did
not or would not have performed duties.
(d) Hours of Service will be credited for employment with an Affiliate.
(e) Hours of Service will be credited for employment as a "leased
employee" as that term is defined in Code section 414(n), if such
leased employee participates in the Plan as a result of subsequent
employment with the Company or an Affiliate.
(f) An Employee shall be credited with an Hour of Service for each month
during any period the Employee is absent from work with the Company or
an Affiliate for qualified military service in accordance with Code
section 414(u). Notwithstanding the foregoing, if the Employee fails
to report to work before reemployment rights expire, the Employee
shall not receive credit for Hours of Service during such military
leave.
(g) The number of Hours of Service to be credited an Employee shall be on
the basis of months of employment under which an Employee is credited
with 190 Hours of Service for each month for which such Employee would
be required to be credited with at least one Hour of Service.
(h) The crediting of Hours of Service under this Plan will be applied
under the rules of paragraph (c) and (c) of the Department of Labor
Regulation 2530.200b-2, which, by this reference, will be specifically
incorporated in full with this Plan.
Section 2.35. "Investment Manager" shall mean an investment manager as
defined in ERISA section 3(38).
Section 2.36. "Lay Off" or "Laid Off" shall mean a Participant's
involuntary separation from service with an Employer because of a reduction in
work force at a time when there is no further work available with an Employer
for which the Participant is qualified.
Section 2.37. "Matured" in reference to Deposits and Employer Contributions
shall mean that the respective amount has been held in the Plan for at least
twenty-four months. The twenty-four month period will include periods during
which Deposits and Employer Contributions held in the Participant's Fluidics
Account were held in the Fluidics, Inc. Retirement and 401(k) Plan.
Section 2.38. "Nondeferred" in reference to Deposits shall mean that such
Deposits are not deferred from current federal income taxation under Code
section 401(k).
Section 2.39. "Non-ESOP Company Common Stock Fund" shall mean the Fund
established pursuant to Section 7.01(c)
Section 2.40. "Participant" shall mean any person who has an interest in
the Trust Fund.
Section 2.41. "Participating Affiliate" shall mean any Affiliate of the
Company which: (a) adopts the Plan with the approval of the Board of Directors;
(b) authorizes the Board of Directors and the Employee Benefits Committee to act
for it in all matters arising under or with respect to the Plan; and (c)
complies with such other terms and conditions relating to the Plan as may be
imposed by the Board of Directors.
Section 2.42. "Personal Choice Retirement Account Fund" shall mean the Fund
or Funds established pursuant to Section 7.1(h).
Section 2.43. "Plan" shall mean this Public Service Enterprise Group
Incorporated Employee Savings Plan (formerly known as the "Public Service
Electric and Gas Company Employee Savings Plan"), including all amendments
hereto which may hereafter be made.
Section 2.44. "Plan Year" shall mean the calendar year.
Section 2.45. "Qualified Domestic Relations Order" or "QDRO" shall mean any
judgment, decree or order pursuant to a state domestic relations or community
property law which relates to the provision of child support or marital property
rights, which creates or recognizes the existence of an alternate payee's right
to (or assigns to an alternate payee the right to) receive all or part of a
Participant's Account, and which meets the requirements of (a) and (b) below, as
interpreted in accordance with Code section 414(p):
(a) such order specifies:
(1) the name and last known mailing address of the Participant and
each alternate payee;
(2) the amount or the percentage of the Participant's Account to be
paid to each alternate payee, or the manner in which such amount
or percentage is to be determined;
(3) the number of payments or the period to which the order applies;
and
(4) each plan to which such order applies; and
(b) such order does not require the Plan to:
(1) provide any type or form of benefit or option not otherwise
provided under the Plan;
(2) provide increased benefits; or
(3) pay to an alternate payee amounts required to be paid to another
alternate payee under a prior QDRO.
Section 2.46. "Record Keeper" shall mean the person(s) or entity(ies)
designated by the Committee to maintain the records of the Plan and Plan
Accounts and to perform such other functions as may be designated by the
Committee.
Section 2.47. "Required Beginning Date" shall mean with respect to
distributions to any Participant, no later than the April 1 of the calendar year
following the calendar year in which the Participant attains age 70 1/2;
provided, however, that with respect to distributions to any Participant who
attained age 70 before July 1, 1987 and who was not a "5% owner", the Required
Beginning Date for such Participant shall be April 1 of the calendar year
following the calendar year in which (1) the Participant attains age 70 1/2 or
(2) the Participant retires, whichever is later. For purposes of this Section
2.47, a "5% owner" shall mean any person owning (or considered as owning within
the meaning of Code section 318) more than 5% of the outstanding stock of an
Employer or stock possessing more than 5% of the total combined voting power of
such stock.
Section 2.48. "Retirement" shall mean the termination of employment by a
Participant other than by reason of his or her death:
(a) under circumstances entitling the Participant to an immediately
payable periodic retirement benefit under the Pension Plan of Public
Service Enterprise Group Incorporated, or the Cash Balance Plans; and
(b) at or after age 65.
Section 2.49. "Retirement Choice Program" shall mean the Retirement Choice
Program for Represented Employees of Public Service Enterprise Group
Incorporated (formerly known as the "Retirement Choice Program for Represented
Employees of Public Service Electric and Gas Company") or the Public Service
Enterprise Group Incorporated Retirement Choice Program (formerly known as the
"Public Service Electric and Gas Company Retirement Choice Program").
Section 2.50. "Rollover Contributions" shall mean Eligible Employee
contributions transferred to the Plan, in accordance with Section 4.13, from a
trust under another corporate plan, each qualified under Code sections 501(a)
and 401(a), respectively. Rollover Contributions shall also include "Rollover
Contributions" credited to the Participant under the Fluidics, Inc. Retirement
and 401(k) Plan. Effective as of January 1, 2002, Rollover Contributions shall
also include Eligible Employee contributions transferred to the Plan, in
accordance with Section 4.14, from the following:
(a) a qualified plan described in both Code sections 401(a) and 403(b),
including after-tax employee contributions;
(b) an annuity contract described in Code section 403(b);
(c) an eligible plan under Code section 457(b) which is maintained by a
state, political subdivision of a state, or any agency or
instrumentality of a state or political subdivision of a state; and
(d) an individual retirement account or annuity described in Code sections
408(a) or 408(b) that is eligible to be rolled over.
Section 2.51. "Savings Account" shall mean that separate portion of an
Account established pursuant to Section 8.1 and which consists of the sum of the
following subaccounts of such Participant:
(a) Basic Deposit Subaccount shall mean that portion of a Participant's
Savings Account which evidences the value of Basic Deposits by or on
behalf of a Participant under the Plan, including the net worth of the
Trust Fund attributable thereto.
(b) Supplemental Deposit Subaccount shall mean that portion of a
Participant's Savings Account which evidences the value of
Supplemental Deposits and Additional Lump Sum Deposits under the Plan,
assets transferred by the Participant from his or her Frozen ESOP
Account, and Rollover Contributions to the Plan by or on behalf of a
Participant, including the net worth of the Trust Fund attributable
thereto, and his or her Fluidics Deposit Subaccount and Rollover
Subaccount.
(c) Employer Contribution Subaccount shall mean that portion of a
Participant's Savings Account which evidences the value of Employer
Contributions which have been credited to a Participant's Account
under Section 5.1 of the Plan (less any forfeitures), including the
net worth of the Trust Fund attributable thereto, and his or her
Fluidics Employer Contribution Subaccount.
(d) Retirement Choice Program Allocation Subaccount shall mean that
portion of a Participant's Savings Account which evidences the value
of certain service and age points allocated to this Plan pursuant to
the Cash Balance Plan and the Retirement Choice Plan and in accordance
with Section 5.6 herein, including the net worth of the Trust Fund
attributable thereto.
Section 2.52. "Supplemental Deposits" shall mean the amount, if any, of
Compensation contributed to the Plan through payroll deduction by or on behalf
of a Participant which is more than the maximum permitted Basic Deposit.
Supplemental Deposits shall include "Employee Pre-Tax Basic Contributions"
credited to the Participant under the Fluidics, Inc. Retirement and 401(k) Plan.
Section 2.53. "Thrift Plan" shall mean the Public Service Enterprise Group
Incorporated Thrift and Tax-Deferred Savings Plan (formerly known as the "Public
Service Electric and Gas Company Thrift and Tax-Deferred Savings Plan").
Section 2.54. "Trust Agreement" shall mean the agreement between the
Company and the Trustee which provides for the management of the Trust Fund and
the investment of Deposits, Employer Contributions and Rollover Contributions to
the Plan and investment of the assets of Frozen ESOP Accounts and Fluidics
Accounts.
Section 2.55. "Trust Fund" shall mean the aggregate of Additional Lump Sum
Deposits, Basic and Supplemental Deposits made by or on behalf of Participants,
Rollover Contributions and Employer Contributions, together with Frozen ESOP
Accounts and Fluidics Accounts, increased by any profits or income thereon, and
decreased by any losses thereon and by any payments made therefrom.
Section 2.56. "Trustee" shall mean any individual(s) or corporation(s) by
whom any assets of the Plan are held under the Trust Agreement.
Section 2.57. "Year of Service" shall mean the twelve consecutive month
period beginning on the first day of the month in which an Employee commences
employment with an Employer and each succeeding twelve consecutive month period
beginning on the yearly anniversary of such day, during which the Employee
completes not less than 1,000 Hours of Service; and the determination of whether
an Employee shall have completed not less than 1,000 Hours of Service during any
such period shall be made by crediting such Employee with 190 Hours of Service
for each calendar month during such period in which the Employee is entitled to
be credited with at least one Hour of Service for such month. For the purposes
of this Section, there shall be included service with the Company or an
Affiliate as an Employee. In addition, any Employee with a Fluidics Account
shall, for purposes of determining Year of Service hereunder, be credited with
service with Fluidics, Inc. in accordance with this Section 2.57.
Furthermore, for purposes of determining Year of Service hereunder, any
Employee who as of January 11, 1998 was an employee of Fluidics, Inc., who,
effective as of January 12, 1998 became an Employee of the Company or an
Affiliate, and who is a member of one of the following units of Employees
covered by a collective bargaining agreement, shall for purposes of this Section
2.57 only, be deemed to have commenced employment as of January 12, 1998. The
foregoing sentence shall not apply with respect to any Employee with a Fluidics
Account.
(a) Bristol Myers Squibb (NJ) Local 9 Plumbers and Pipefitters Union
(b) Local 9 Plumbers and Pipefitters
(c) Local 107 (PA) Teamsters
ARTICLE III
PARTICIPATION
Section 3.1. Participation. Each Eligible Employee may become a Participant
by applying with the Record Keeper to establish a Savings Account or accept a
Rollover Contribution on such Eligible Employee's behalf, when an Frozen ESOP
Account was established on his or her behalf or when the Eligible Employee
elects to make transfers of age and service credits pursuant to the terms of the
Cash Balance Plan and the Retirement Choice Program. An Eligible Employee who,
at the time he/she becomes employed by the Company or a Participating Affiliate
is a participant in the Thrift Plan shall be automatically enrolled in the Plan
and account balances held in that plan shall be transferred to this Plan.
By contacting the Record Keeper and using its automatic voice response
system or such other method as approved by the Committee, the Eligible Employee
can (a) arrange for the payment of an Additional Lump Sum Deposit to the Plan,
(b) authorize his or her Employer to withhold an amount in a specified
percentage of his or her Compensation, (c) authorize establishing an Account to
accept transfers of age and service credits pursuant to the terms of the Cash
Balance Plan and the Retirement Choice Program, (d) authorize his or her
Employer to accept a Rollover Contribution from another qualified corporate plan
in accordance with Section 4.11 and (e) authorize the Record Keeper and/or
Employer to pay any such amount to the Trustee for investment in a Savings
Account under the Plan in accordance with the Eligible Employee's instructions.
Notwithstanding the foregoing, any Eligible Employee who as of January 11,
1998 was an employee of Fluidics Inc, and who, effective as of January 12, 1998,
became an Eligible Employee of the Company may become a Participant under any of
the methods set forth in this Section 3.1, but in no event shall any such
Eligible Employee become a Participant prior to the dates set forth below, the
applicable date dependent upon the collective bargaining unit in which he or she
is a member:
(a) Bristol Myers Squibb (NJ) Local 9 Plumbers and Pipefitters Union:
February 1, 2001
(b) Local 9 Plumbers and Pipefitters: February 1, 2001
(c) Local 107 (PA) Teamsters: January 1, 2001
Notwithstanding the foregoing, any Eligible Employee who has a Fluidics
Account established on his or her behalf shall become a Participant with respect
to such Fluidics Account as of such date the Fluidics Account was established.
Participation in the Plan is entirely voluntary.
Section 3.2. Effective Date of Participation. The effective date of
participation shall be the earliest of the following (a) participation in the
Plan shall be effective for an Eligible Employee and payroll deductions shall
commence, as soon as practicable after the Eligible Employee has applied to the
Record Keeper for participation; (b) participation in the Plan for an Eligible
Employee whose account is transferred from the Thrift Plan to this Plan shall be
effective as of the date such individual became an Eligible Employee under the
terms of this Plan; (c) participation in the Plan for an Eligible Employee
making a Rollover Contribution or a transfer of age and service credits pursuant
to the terms of the Cash Balance Plan and the Retirement Choice Program shall be
effective as soon as practicable after such Eligible Employee's Rollover
Contribution or transferred age and service credits are accepted for transfer;
(d) participation of an Eligible Employee in the Plan with respect to the Frozen
ESOP Account became effective upon receipt by the Plan of the assets credited to
the account of such Eligible Employee in the Public Service Electric and Gas
Company's TRASOP and/or PAYSOP pursuant to a merger of such plan or plans with
this Plan; (e) participation of an Eligible Employee in the Plan with a Fluidics
Account shall be effective as of the date such Fluidics Account is established,
or, subject to Section 3.2, if earlier, the date as determined under (a) through
(d) herein.
ARTICLE IV
DEPOSITS
Section 4.1. Basic Deposits (a) An Eligible Employee who is not employed by
CEA Newark Bay Services, Inc. may elect:
(1) to make Basic Nondeferred Deposits to the Plan in an amount equal to
any integral multiple of 1% of his or her Compensation up to a total
of 7% each pay period; or
(2) to have Basic Deferred Deposits made to the Plan by the Company on his
or her behalf in an amount equal to any integral multiple of 1% of his
or her Compensation up to a total of 7% each pay period; or
(3) to make, or have made by the Company on his or her behalf, any
combination of Deposits under (1) or (2) above, totaling up to 7% of
his or her Compensation each pay period;
(b) An Eligible Employee who is employed by CEA Newark Bay Services, Inc.
may elect:
(1) to make Basic Nondeferred Deposits to the Plan in an amount equal
to any integral multiple of 1%, up to 8%, of his or her
Compensation each pay period; or
(2) to have Basic Deferred Deposits made to the Plan by his or her
Employer on his or her behalf in an amount equal to any integral
multiple of 1%, up to 8%, of his or her Compensation each pay
period; or
(3) to make, or have made by his or her Employer on his or her
behalf, any combination of Deposits under (1) or (2) above,
totaling up to 8% of his or her Compensation each pay period;
subject to the limitations of Sections 4.5 and 5.4. Basic Deposits made by
or on behalf of a Participant shall be paid over by an Employer to the Trustee
and deposited in the Trust Fund as soon as practicable after deduction and, in
any event, within 15 business days after the end of the month in which such
deduction is made. Such Basic Deposits shall be credited as soon as practicable
to such Participant's Basic Deposit Subaccount in the Plan.
Section 4.2. Supplemental Deposits. Each Participant
(a) who is not employed by CEA Newark Bay Services, Inc. and who is
electing the maximum permitted Basic Deposit to the Plan may also
elect:
(1) to make Supplemental Nondeferred Deposits to the Plan in an
amount equal to any integral multiple of 1% of his or her
Compensation up to a total of 18% of his or her Compensation each
pay period. Effective as of January 1, 2002, such total amount of
Compensation that may be contributed to the Plan as Supplemental
Nondeferred Deposits is increased to 43% of Compensation each pay
period; or
(2) to have Supplemental Deferred Deposits made by the Company on his
or her behalf in an amount equal to any integral multiple of 1%
up to a total of 18%, of his or her Compensation each pay period.
Effective as of January 1, 2002, such total amount of
Compensation that may be contributed to the Plan as Supplemental
Deferred Deposits is increased to 43% of Compensation each pay
period; or
(3) to make, or have made by the Company on his or her behalf, any
combination of the Deposits specified in (1) or (2) above,
totaling up to 18% of his or her Compensation each pay period.
Effective as of January 1, 2002, the total amount of Deposits
that can be made under (1) or (2) above is increased to 43% of
Compensation each pay period;
(b) who is employed by CEA Newark Bay Services, Inc. and who is electing
the maximum permitted Basic Deposit to the Plan may also elect:
(1) to make Supplemental Nondeferred Deposits to the Plan in an
amount equal to any integral multiple of 1% of his or her
Compensation to a total of 17% of his or her Compensation
each pay period. Effective as of January 1, 2002, such total
amount of Compensation that may be contributed to the Plan
as Supplemental Nondeferred Deposits is increased to 43% of
Compensation each pay period; or
(2) to have Supplemental Deferred Deposits made by an Employer
on his or her behalf in an amount equal to any integral
multiple of 1% of his or her Compensation up to a total of
17% of his or her Compensation each pay period. Effective as
of January 1, 2002, such total amount of Compensation that
may be contributed to the Plan as Supplemental Deferred
Deposits is increased to 43% of Compensation each pay
period; or
(3) to make, or have made by an Employer on his or her behalf,
any combination of the amounts specified in (1) or (2)
above, totaling up to 17% of his or her Compensation each
pay period. Effective as of January 1, 2002, the total
amount of Deposits that can be made under (1) or (2) above
is increased to 43% of Compensation each pay period;
subject to limitations of Sections 4.5 and 5.4. Supplemental Deposits made
by or on behalf of a Participant shall be paid over by an Employer to the
Trustee and deposited in the Trust Fund as soon as practicable after deduction
and, in any event, within 15 business days after the end of the month in which
such deduction is made. Such Supplemental Deposits shall be credited as soon as
practicable to such Participant's Supplemental Deposit Subaccount in the Plan.
Section 4.3. Additional Lump Sum Deposits. Within any Plan Year, each
Participant may make one or more Additional Lump Sum Deposits on a Nondeferred
basis in the minimum amount of $250.00 and in such total amounts which, when
aggregated with such Participant's Basic Deposits and Supplemental Deposits, do
not exceed 25% (effective as of January 1, 2002, 50%) of his or her Compensation
for that Plan Year and subject to the limitations of Sections 4.5, 4.11 and 5.4.
Additional Lump Sum Deposits made by a Participant shall be paid over by the
Record Keeper to the Trustee and deposited in the Trust Fund as soon as
practicable, but no later than 15 business days after the end of the month in
which such Additional Lump Sum Deposit is received. Such Additional Lump Sum
Deposits shall be credited as soon as practicable to such Participant's
Supplemental Deposit Subaccount in the Plan.
Section 4.4. Method of Deposits. Basic Deposits and Supplemental Deposits
by or on behalf of Active Participants shall be made by means of payroll
deduction. For convenience of administration, if the percentage of Compensation
elected to be contributed to the Plan by an Active Participant is not equal to a
whole dollar amount, such amount will be increased to the next whole dollar
amount in establishing the deduction to be made from such Active Participant's
pay. In addition, if an Active Participant's Compensation is changed, the
resulting change in deduction shall be made as soon as practicable after such
change in Compensation.
Additional Lump Sum Deposits shall be paid directly by Participants to the
Record Keeper who shall forward them to the Trustee for investment in the
Participant's Savings Account in accordance with his or her then current
investment direction.
Section 4.5. Limit on Deferred Deposits.
(a) In no event may the sum of a Participant's Deferred Deposits
(including all other deferrals under other plans, contracts, or
arrangements maintained by the Company or an Affiliate on such
Participant's behalf) attributable to any taxable year of such
Participant (presumably the calendar year) exceed the amount permitted
by Code section 402(g) in effect for such taxable year, except to the
extent permitted under Section 4.5(b) of the Plan below, effective as
of January 1, 2002. Where a Participant elects under Section 4.1 to
have Deferred Deposits made by an Employer to the Plan which would
otherwise exceed the limit of this Section 4.5(a) and 4.5(b) below, if
applicable, such excessive Deferred Deposits shall be deemed to be
Nondeferred Deposits to the Plan ("Deemed Nondeferred Deposits")
rather than Deferred Deposits to the Plan; provided, however, that
such Deemed Nondeferred Deposits shall be subject to the limits and
rules of Sections 4.1 and 4.2; and provided further, that such Deemed
Nondeferred Deposits shall be deemed to be Basic Nondeferred Deposits
(and, therefore, matched by Employer Contributions as set forth in
Article V) to the extent possible under the limits of Sections 2.6 and
4.1, taking into account other Basic Deferred and Nondeferred Deposits
of the Participant.
(b) Effective January 1, 2002, in addition to the Deposits allowed by this
Article IV, Eligible Employees who have attained age 50 before the
close of a Plan Year shall be eligible to make catch-up contributions
in accordance with, and subject to the limitations of, Code section
414(v) (and in the amount of allowable catch-up contributions for the
Plan Year as set forth in Code section 414(v)). Such catch-up
contributions shall not be taken into account for purposes of Section
4.5(a) and Article XII of the Plan. The Plan shall not be treated as
failing to satisfy the provisions of the Plan implementing the
requirements of Code sections 401(k)(3), 401(k)(11), 401(k)(12),
410(b), or 416, as applicable, by reason of such catch-up
contributions. Unless otherwise determined by the Employee Benefits
Committee, no election shall be required for the making of catch-up
contributions. To the extend that a Participant has Deferred Deposits
which would otherwise exceed the limit of Section 4.5(a) above, such
excess Deferred Deposit shall first be deemed a catch-up contribution
if allowed under the provisions of this Section 4.5(b). Any remaining
excess Deferred Deposit after the application of this Section 4.5(b)
shall be treated in accordance with Section 4.5(a) above.
Section 4.6. Distribution of Excess Deferral Amounts
(a) Notwithstanding any other provision of the Plan to the contrary, an
Employer shall distribute any Excess Deferral Amount (as defined
below), adjusted according to Section 4.6(d), to Participants who
claim such allocable Excess Deferral Amounts for a calendar year. Such
distribution shall be made no later than the April 15th next following
the end of the calendar year for which such claim is made.
(b) For purposes of this Section 4.6, "Excess Deferral Amount" shall mean
the amount of Deferred Deposits for a calendar year that the
Participant allocates to this Plan and claims pursuant to the election
procedure set forth in Section 4.6(c) below; provided, however, that
the "Excess Deferral Amount" to be distributed for a taxable year will
be reduced by excess Deferred Deposits previously distributed to the
Participant during the Plan Year beginning in such taxable year of the
Participant.
(c) A Participant's election to claim an Excess Deferral Amount for a
calendar year shall be in writing, shall be submitted to the Committee
no later than the March 1st next following the end of such calendar
year, shall specify the Excess Deferral Amount and shall state that if
such amount is not distributed, such Excess Deferral Amount, when
added to amounts deferred under other plans or arrangements described
in Code sections 401(k), 408(k) or 403(b), exceeds the limit imposed
on the Participant by Code section 402(g) for the taxable year
(calendar year) in which the deferral occurred.
(d) The amount distributed to a Participant pursuant to this Section 4.6
with respect to a calendar year shall be increased or decreased, as
applicable, by investment income or losses attributable thereto. If a
loss is allocable to the Excess Deferral Amount, the amount
distributed shall not be less than the lesser of (1) the Participant's
Deferred Deposit Subaccount or (2) the Participant's Deferred Deposits
for the Plan Year during which the Excess Deferral Amount occurred.
Section 4.7. Code Section 401(k) Limits on Deferred Deposits
(a) Effective January 1, 1997, Deferred Deposits for any Plan Year shall
not result in the actual deferral percentage of the group of Highly
Compensated Employees eligible to participate in the Plan for such
Plan Year exceeding the actual deferral percentage of the group of all
other Eligible Employees for the current Plan Year by more than the
greater of: (1) one and one-quarter times; or (2) the lesser of (A)
two times or (B) two percentage points.
However, notwithstanding the above, the Committee may use the actual
deferral percentage for the prior Plan Year for the group of Eligible
Employees who are not Highly Compensated Employees by making an
election at a time, and in a manner, prescribed by the Secretary of
the Treasury. Such election may be revoked for a following Plan Year
only in accordance with rules prescribed by the Secretary of the
Treasury.
(b) The actual deferral percentage of each group of Eligible Employees
shall be the average of the ratios (calculated separately for each
Eligible Employee in each group) of (i) the Deferred Deposits made on
behalf of each Eligible Employee for the relevant Plan Year to (ii)
such Eligible Employee's Compensation for the relevant Plan Year (or
in the discretion of the Committee, for the portion of the Plan Year
during which the Employee was an Eligible Employee, provided this
alternative is applied uniformly to all Employees for the Plan Year on
a reasonably consistent basis from Plan Year to Plan Year).
(c) "Compensation" for purposes of this Section 4.7 only shall mean an
Eligible Employee's compensation as determined in any manner that
satisfies the requirements of Code section 414(s).
(d) The Committee shall, consistent with regulations under the Code,
establish nondiscriminatory rules to meet the requirements of this
Section 4.7; provided, however, that effective January 1, 1997, any
distribution to Highly Compensated Employees of Deferred Deposits to
meet the requirements of this Section 4.7 shall be made on the basis
of the dollar amount of Deferred Deposits on behalf of each such
Highly Compensated Employee. Any distribution of Deferred Deposits
made in accordance with this Section 4.7 shall occur no later than the
last day of the Plan Year following the Plan Year for which such
Deferred Deposit was made.
(e) The amount of Deferred Deposits which must be distributed to any
Highly Compensated Employee under this section for a Plan Year shall
be reduced by "Excess Deferral Amounts" previously distributed to the
Highly Compensated Employee for the taxable year of such Highly
Compensated Employee ending during the Plan Year. Furthermore, the
amount of any Deferred Deposit distributed under this section must
include the income attributable thereto, but in no event shall the
distribution include income attributable to any period after the end
of the Plan Year for which the Deferred Deposit was made.
(f) Should the Committee determine during the course of any Plan Year that
the nondiscrimination test of Code section 401(k) might not be met for
such Plan Year, the Committee may reduce, at any time, the percentage
of Deferred Deposits that a Highly Compensated Employee may elect have
contributed to the Plan in accordance with this Article IV to a
percentage that the Committee determines appropriate to ensure that
the test shall be met for the Plan Year.
(g) Notwithstanding any provision above, in running the actual deferral
percentage test under this Section 4.7, the Committee may utilize any
of the testing alternatives permitted under Code section 401(k) and
Treasury Regulation section 1.401(k)-1(b).
(h) Effective for Plan Years beginning on or after January 1, 1997, the
family aggregation rules of Code section 414(q)(6) shall no longer
apply for all purposes under this Plan.
(i) Special Testing Provisions:
(1) For purposes of this Section 4.7, the actual deferral percentage
of a Highly Compensated Employee who is eligible for Deferred
Deposits or similar employer contributions under two or more
plans described in Code section 401(k) that are maintained by the
Company or an Affiliate shall be determined as if all such
contributions were made under a single Plan, except as otherwise
provided in regulations under Code section 401(k).
(2) For purposes of this Section 4.7, actual deferral percentages
shall be determined by considering all applicable contributions
made under any other plans that are aggregated with this Plan for
purposes of Code sections 401(a)(4) and 410(b). If other plans
are permissively aggregated with this Plan for purposes of Code
section 401(k), the aggregated plans must satisfy Code sections
401(a)(4) and 410(b) as if they constituted a single plan.
Section 4.8. Unmatched Employer Contributions. If, as the result of the
operation of Sections 4.5, 4.6 and/or 4.7, the combined Deposits of a
Participant are adjusted in such a way that Employer Contributions previously
made on behalf of a Participant for a Plan Year are no longer matched by such
Participant's Basic Deposits, then the matching Employer Contributions allocated
to such Participant's Account for such Plan Year shall be reduced, under
nondiscriminatory rules established by the Committee, to the extent necessary to
equal the percentage of Employer Contributions (as set forth in Article V) with
respect to the Participant's remaining Basic Deposits for such Plan Year. The
amount, if any, of previously allocated Employer Contributions in excess of the
percentage of Employer Contributions (as set forth in Article V) of the
Participant's remaining Basic Deposits shall be forfeited and applied to reduce
future Employer Contributions to the Plan.
Section 4.9. Changing Deposit Percentages. The percentage of Compensation
deposited in the Plan by or on behalf of an Active Participant shall continue in
effect until such Active Participant shall change the rate of such Deposits. An
Active Participant may change the rate of Deposits to a higher or lower
percentage of Compensation within the limitations of Sections 4.1, 4.2 and 4.5
by arranging for such change with the Record Keeper or as otherwise prescribed
by the Committee. Any such change shall become effective as soon as practicable
after receipt of the notice of change by the Record Keeper.
Section 4.10. Suspension of Deposits
(a) An Active Participant may suspend all of the Deposits to the Plan
made by such Participant or on his or her behalf at any time by
arranging for such suspension with the Record Keeper or as
otherwise prescribed by the Committee. Such suspension shall be
effective as soon as practicable after receipt of the notice of
suspension by the Record Keeper, and shall continue until such
Participant elects to have Deposits resumed by arranging therefor
with the Record Keeper. Payroll deductions under the Plan shall
begin again as soon as practicable after such notice is received
by the Record Keeper.
(b) If, after other required and authorized deductions from an Active
Participant's pay, there is not sufficient money available in any
pay period to make the entire authorized payroll deduction for
such Participant's Nondeferred Deposits, no payroll deduction
shall be made therefor for that pay period.
(c) In case of any such total suspension of Deposits, pursuant to
Section 4.10(a), Employer Contributions on behalf of such
Participant shall be automatically suspended for a like period.
Section 4.11. Limit on Additional Lump Sum Deposits.. No further Additional
Lump Sum Deposits may be made by any Participant in any Plan Year in which the
aggregate amount of all of such Participant's Deposits under the Plan exceeds
25% (effective as of January 1, 2002, 50%) of such Participant's Compensation
for that Plan Year. Any Additional Lump Sum Deposits inadvertently received in
excess of this limitation shall be refunded to that Participant as soon as
practicable following determination of such excess.
Section 4.12. Elections. All elections under this Article IV shall be made
at the time, in the manner and subject to the conditions as are specified by the
Committee. Elections of Deferred Deposits shall in all cases be irrevocably made
prior to the beginning of the payroll period for which such elections shall
apply. In any year in which the Committee deems it necessary to do so to meet
the requirements of Section 4.5, 4.7, or 5.4 or the Code and the regulations
thereunder, the Committee may reduce, for that Plan Year, the permissible amount
of Deposits by or on behalf of any or all Active Participants.
Section 4.13. Rollover Contributions.
(a) Subject to such rules as may be established by the Committee, an
Eligible Employee may transfer Rollover Contributions to the
Plan, to be deposited in his or her Supplemental Deposit Account.
The Eligible Employee must certify that such amount to be
transferred as a Rollover Contribution qualifies for such
transfer under the Code and regulations thereunder and must
submit such information or evidence, satisfactory to the
Committee, that it may require in order to approve such transfer.
Rollover Contributions shall then be subject to all terms and
conditions of this Plan and the Trust Agreement and shall be
treated in the same manner as Supplemental Deposits, unless the
context of the Plan or Trust requires otherwise.
(b) In the event that the Plan accepts a Rollover Contribution from
an Eligible Employee that includes an amount that the Committee
later determines is an "invalid rollover contribution" (as
defined below), the amount of the invalid rollover contribution,
plus any earnings attributable thereto, shall be distributed to
the Eligible Employee as soon as practicable after such
determination.
(c) An "invalid rollover contribution" is an amount that is not an
eligible Rollover Contribution, as described in subsection (a)
above, or that does not satisfy the other requirements of Code
section 401(a)(31), Code section 402(c), or Code section
408(d)(3) for treatment as a rollover or a rollover contribution.
Section 4.14. Transfers from the Thrift Plan. Any Eligible Employee who, at
the time he/she becomes employed by the Company or a Participating Affiliate, is
a participant in the Thrift Plan, shall automatically be enrolled in the Plan
and all balances in the Thrift Plan shall be transferred to the Plan and all
contribution and investment elections in effect for the Thrift Plan shall remain
in effect, subject to change pursuant to the operation of Sections 4.9, 4.10 and
6.2 hereof.
Section 4.15. Qualifying Military Service. Notwithstanding any provision in
this Plan to the contrary, effective December 12, 1994, a Participant who is or
was engaged in "qualified military service," as that term is defined in Code
section 414(u), shall be permitted to make additional Basic Deposits,
Supplemental Deposits, and Additional Lump Sum Deposits in accordance with this
Article 4 and in an amount as determined under Code section 414(u). Under no
circumstances shall the Deposits provided for in this Section 4.15 exceed the
amount the Participant would have been permitted to contribute had such
Participant remained continuously employed by the Employer throughout the period
of qualified military service.
ARTICLE V
EMPLOYER CONTRIBUTIONS
Section 5.1. Amount and Payment of Employer Contributions. Each Employer
shall contribute to the Plan on behalf of Participants who are Eligible
Employees, who have completed a Year of Service and who are making or having
Basic Deposits to the Plan made on their behalf, an amount equal to 50% of the
aggregate of such Basic Deposits, except to the extent that such Basic Deposits
are reduced or distributed as provided in Sections 4.5 through 4.8, and except
as provided in this Article V and in Section 11.4.
Employer Contributions with respect to a Plan Year shall be paid to the
Trustee not later than the due date (including extensions of time) for filing
the Company's consolidated Federal income tax return for such year. All Employer
Contributions may be made without regard to current or accumulated earnings of
the Employer. Notwithstanding the foregoing, the Plan shall be designated a
profit sharing plan for purposes of Code sections 401(a), 402, 412 and 417.
Section 5.2. Employer Contributions in Company Common Stock. Employer
Contributions with respect to Basic Deposits in excess of 5% of Compensation for
Participants who are employed by an Employer other than CEA Newark Bay Services,
Inc. shall be made in shares of Company Common Stock. Employer Contributions
with respect to Basic Deposits in excess of 6% of Compensation for Participants
who are employed by CEA Newark Bay Services, Inc. shall be made in shares of
Company Common Stock. Any such shares credited to a Participant's account shall
be acquired in the same manner as shares acquired for the Company Common Stock
Fund established pursuant to Section 7.2, be invested in that Fund and not be
available for transfer to any other Fund or withdrawal from the Plan prior to
the Participant's termination of employment with the Company or any Affiliate.
Notwithstanding the foregoing, any portion of a Participant's Account invested
in the Company Common Stock Fund that is apportioned for an alternate payee
under a QDRO in accordance with Article XXI may be transferred out of such Fund
or withdrawn from the Plan at any time. Effective as of February 1, 2002, this
Section 5.2 shall no longer apply and Employer Contributions shall be made
solely in accordance with Section 5.1 above. In addition, effective as of
February 1, 2002, with respect to Employer Contributions made in shares of
Company Common Stock prior to February 1, 2002 and in accordance with this
Section 5.2, such shares may be transferred to any of the available Funds
established pursuant to Section 7.1, and effective April 1, 2002, may be
withdrawn from the Plan under the same Plan provisions applicable to Employer
Contributions made in accordance with Section 5.1.
Section 5.3. Reduction of Employer Contributions by Forfeitures. The amount
of an Employer's Contribution shall be reduced by the amount of the reduction of
an unmatched Employer Contribution allocable to a Highly Compensated Employee as
provided in Sections 4.7 and 4.8,by the amount of any forfeiture as a result of
termination of the employment of an Active Participant as provided in Section
11.2 or as a result of the Employer's inability to locate a Participant or
beneficiary to whom a benefit hereunder is due as provided in Section 11.14.
Section 5.4. Maximum Annual Additions. The maximum Annual Addition, as
defined in Section 12.1, for any Plan Year to any Participant's Account may not
exceed the amount provided for by Code section 415(c). The rules governing the
application of this Section 5.4 and other limitations imposed by Code section
415 are more fully set forth in Article XII.
Section 5.5. Return of Employer Contributions.
(a) Notwithstanding any provision of the Plan to the contrary, any
Employer Contribution made to the Plan by reason of mistake of
fact may be returned to the Employer making such Employer
Contribution, provided the return of such Employer Contribution
is made within one year from the date the mistaken payment was
made and any amount so returned shall be disposed of as the
Committee shall direct.
(b) If the Internal Revenue Service determines that any contribution
by an Employer to the Plan is not deductible under Code section
404, such Employer shall have the option, which it may exercise
within one year after the date of the disallowance of such
deduction, to have such contribution returned to the Employer and
any amount so returned shall be disposed of as the Committee
shall direct.
Section 5.6. Allocation from Cash Balance Plan. Pursuant to the Cash
Balance Plan and the Retirement Choice Program, Participants who so elect may
have certain service and age points otherwise allocated to them under the Cash
Balance Plan made as an Employer Contribution to their Savings Accounts under
this Plan. All amounts so elected shall be accepted by the Trustee and invested
in accordance with Section 6.1. No amounts attributable to Employer
Contributions resulting from Participant elections made pursuant to the Cash
Balance Plan and the Retirement Choice Program shall be available for withdrawal
from the Plan until the Participant's termination of employment by the Company
or any Affiliate.
Section 5.7. Qualified Military Service. Notwithstanding any provision in
this Plan to the contrary, effective December 12, 1994, the Employer shall
contribute to the Plan on behalf of a Participant who is or was engaged in
"qualified military service," as that term is defined in Code section 414(u),
and who makes or is having made additional Basic Deposits to the Plan under
Section 4.16 on his or her behalf, the amount of Employer Contributions as
required under this Article 5 and Code section 414(u) with respect to such
additional Basic Deposits. In addition, a Participant who is or was engaged in
qualified military service shall be entitled to make the election provided for
in Section 5.6 of this Plan, if applicable, for the period set forth in Code
section 414(u).
ARTICLE VI
SAVINGS ACCOUNT INVESTMENTS
Section 6.1. Investment of Deposits, Rollover Contributions and Employer
Contributions. Deposits, Rollover Contributions and Employer Contributions to
the Plan shall be invested by the Trustee under the Trust Agreement in the Funds
established pursuant to Section 7.1. Upon enrolling in the Plan, each
Participant shall specify, in such form as shall be prescribed by the Committee,
the percentage (which shall be an integral multiple of 1% including 0% but not
exceeding 100% in the aggregate) of Deposits to his or her Savings Account which
shall be invested in each of such Funds. Employer Contributions with respect to
Basic Deposits shall be invested by the Trustee for the Account of the Active
Participant in the same Funds and in the same percentages as directed by such
Participant with respect to the Basic Deposits to his or her Savings Account.
Rollover Contributions may be invested in Funds under the Plan in such dollar
amounts as shall be designated by the Participant. Notwithstanding anything to
the contrary herein, a Participant who, at the time he/she becomes an Eligible
Employee, is a participant in the Thrift Plan, shall continue the same
investment elections as he/she maintained in the Thrift Plan until a change in
investment direction is made in conformity with Section 6.2 hereof. Each
Participant with a Fluidics Account shall specify, in such form as shall be
prescribed by the Committee, the percentage (which shall be an integral multiple
of 1% - including 0% but not exceeding 100% in the aggregate) of his Fluidics
Account which shall be invested in each of the Funds established pursuant to
Section 7.1; provided, however, that if the Participant fails to so specify, the
Fluidics Account shall be invested in the Fixed Income Fund.
Section 6.2. Change in Investment Direction. Any investment direction given
by a Participant under Section 6.1 shall continue in effect until changed by the
Participant. A Participant may change any such direction by giving notice of
such change in the form prescribed by the Committee. Any such change shall
become effective as soon as practicable after receipt of the notice of change by
the Record Keeper. A change in investment direction under this Section 6.2 shall
not automatically cause a transfer of investments under Section 6.3.
Section 6.3. Transfer/ Reallocation of Investments. Subject to Section 6.6
regarding transfers into and out of the Personal Choice Retirement Account Fund
and Section 9.3 regarding transfers out of the Frozen ESOP Account, a
Participant may:
(a) direct that all or any part (in integral multiples of 1%) of his
or her interest in any one or more of the Funds be transferred to
any one or more of the other Funds, except that no transfer may
be made into a Participant's Frozen ESOP Account. A Participant
may also transfer his or her Frozen ESOP Account assets (in
integral multiples of 1%, but not exceeding 100% in the
aggregate) into any one or several of the Funds. However, any
transfer from a Fund shall be subject to such contractual
limitations regarding transfers from such Fund as may exist from
time to time under the contracts governing investments held in
such Fund. A direction to transfer all or a portion of a
Participant's interest in a Fund shall be made by giving notice
in the form prescribed by the Committee. Subject to any
contractual limitations that may be applicable, any such transfer
shall be made as soon as practicable after receipt of the notice
of such transfer by the Record Keeper; or
(b) reallocate all or any part (in integral multiples of 1%) of his
or her interest among the Funds, except that no funds may be
reallocated into or out of a Participant's Frozen ESOP Account.
Any such reallocation shall be subject to such contractual
limitations as may exist from time to time under the contracts
governing investments held in such Funds. A direction to
reallocate a portion of a Participant's interest in a Fund shall
be made by giving notice in the form prescribed by the Committee.
Subject to any contractual limitations that may be applicable,
any such reallocation shall be made as soon as practicable after
receipt of the notice of such reallocation by the Record Keeper;
Effective February 1, 2002, Section 6.3(a) and (b) shall apply to all
Employer Contributions in a Participant's Account, including those made in
shares of Company Common Stock prior to February 1, 2002.
Section 6.4. Quarterly Automatic Rebalancing. Excluding investments in the
Participant's Frozen ESOP Account and in the Personal Choice Retirement Account
Fund, a Participant may elect to automatically rebalance his or her Account
among some or all of the Funds at the end of each calendar quarter. Any such
rebalancing shall also be subject to those contractual limitations regarding
transfers from certain Funds as may exist from time to time under the contracts
governing investments held in such Funds. A direction to elect quarterly
automatic rebalancing of a Participant's Account shall be made by giving notice
in the form prescribed by the Committee and shall be in effect until an election
is made to discontinue such rebalancing. Subject to any applicable contractual
limitations, such rebalancing shall commence as soon as practicable after the
Record Keeper's receipt of the notice of such election and shall occur on, or as
soon as practicable following, the end of each subsequent calendar quarter.
Effective February 1, 2002, quarterly automatic rebalancing of a Participant's
Account shall include all Employer Contributions in a Participant's Account,
including those made in shares of Company Common Stock prior to February 1,
2002.
Section 6.5. Loans.
(a) Participants may receive loans from their Savings Accounts under the
provisions of Section 11.13. A loan to a Participant shall be
considered an investment of such Participant's Savings Account and the
principal amount of the loan shall be treated as a separate investment
within the various subaccounts. Repayments of the principal amount of
the loan shall reduce such corresponding investments of each such
subaccount in the inverse order of such investment and repayments of
such principal along with any accrued interest thereon shall be
invested in the Funds in accordance with the Participant's then
current investment direction. Loan amounts shall be taken from
subaccounts in the following order:
(i) Deferred Deposits;
(ii) Unmatured vested Employer Contributions;
(iii) Matured vested Employer Contributions;
(iv) Rollover Contributions;
(v) Unmatured Post-1986 Nondeferred Deposits;
(vi) Matured Post-1986 Nondeferred Deposits;
(vii) Pre-1987 Nondeferred Deposits.
(b) Notwithstanding the foregoing, loan proceeds shall not be taken from a
Participant's Frozen ESOP Account, from assets invested in the
Personal Choice Retirement Account Fund, or from the Retirement Choice
Program Allocation Subaccount of a Participant's Savings Account.
Effective April 1, 2002, that portion of a Participant's Thrift
Account attributable to Employer Contributions made in shares of
Company Common Stock prior to February 1, 2002 shall be available for
loan proceeds.
(c) Each outstanding loan under the Fluidics, Inc. Retirement and 401(k)
Plan at the time of merger of each such plan into this Plan shall
continue to be in effect in accordance with the original terms and
conditions of such loan; provided, however, that the loan amortization
amounts, and corresponding payroll deductions amounts, shall be
modified to the extent necessary to conform to payroll periods in use
under this Plan.
Section 6.6. Special Rules for Investment in the Personal Choice Retirement
Account Fund. Notwithstanding any provision of this Plan to the contrary, the
investment in the Personal Choice Retirement Account Fund shall be subject to
the following restrictions and limitations:
(a) only vested amounts in a Participant's Account may be transferred
into the Personal Choice Retirement Account Fund;
(b) investments shall be in minimum amounts of $1,000 and shall be
accomplished only through Fund transfers in accordance with
Section 6.3 (therefore, no Basic Deposits, Supplemental Deposits,
Additional Lump Sum Deposits or Employer Contributions may be
made directly into the Personal Choice Retirement Account Fund);
(c) for the period 10/1/99 through 9/30/00, investments shall be
limited to 50% of the vested balance in the Participant's
Account; therefore, the vested balance of the Participant's
Account shall be no less than $2,000 to be able to make an
initial investment in the Personal Choice Retirement Account
Fund;
(d) for the period 10/1/00 through 9/30/01, investments shall be
limited to 75% of the vested balance in the Participant's
Account;
(e) for the period 10/1/01 and beyond, any Participant maintaining a
balance in the Personal Choice Retirement Account Fund must
maintain a minimum $500 vested balance in the Plan's other Funds;
(f) transfers into and out of the Personal Choice Retirement Account
Fund shall be in whole dollar amounts only, with the exception of
a 100% transfer out of the Personal Choice Retirement Account
Fund, or a supplemental transfer out of a residual amount after
the Personal Choice Retirement Account Fund is closed.
(g) with respect to transfers out of the Personal Choice Retirement
Account Fund, the Participant must designate the specific
investment(s) which is (are) to be liquidated in order to effect
the requested transfer;
(h) participation shall be subject to an annual participation fee,
initially $50.00, which may be changed by the Committee at any
time and from time to time;
(i) the annual participation fee shall be deducted on the day the
Participant first invests in the Personal Choice Retirement
Account Fund, and first business day of January thereafter, pro
rata from the portion of the Participant's Account which is
nonforfeitable and not invested in the Personal Choice Retirement
Account Fund;
(j) all fees related to specific transactions in the Personal Choice
Retirement Account Fund will be deducted directly from the
Participant's Account (first, from the Personal Choice Retirement
Account Fund Balance and then from the balance in the
Participant's other Funds);
(k) all transactions within and from the Personal Choice Retirement
Account Fund shall be in settled cash only and, to the extent
that a transaction has not settled, further transactions and
withdrawals from the Personal Choice Retirement Account Fund will
not be available;
(l) no transfer may be made directly from the Stable Value Fund into
the Personal Choice Retirement Account Fund and any amounts
transferred from the Stable Value Fund must be invested in one of
the Plan's other equity funds for at least 90 days (or such other
applicable time requirement that may be imposed from time to
time) before they may be transferred into the Personal Choice
Retirement Account Fund; and
(m) the Record Keeper may take administrative control of the
Participant's Personal Choice Retirement Account Fund solely for
purposes of settling transfers to a Participant's beneficiary and
for apportioning the Participant's Account with respect to a
Qualified Domestic Relations Order in accordance with Article XXI
herein.
Section 6.7. Election to Reinvest or Distribute Cash Dividends. Effective
February 1, 2002, in accordance with the procedures established by the
Committee, a Participant (or the Participant's beneficiary) may elect, with
respect to dividends on shares of Company Common Stock allocated to the
Participant's Account and invested in the Company Common Stock Fund, to have
such dividends: (a) paid directly to the Participant (or beneficiary) in cash;
or (b) paid to the Participant's Account and reinvested in the Company Common
Stock Fund. If dividends are paid directly to the Participant (or beneficiary)
under this Section 6.7, the dividends must be paid no later than 90 days after
the close of the Plan Year in which such dividends were paid to shareholders.
Where a Participant fails to make an election in accordance with the procedures
established by the Committee, the dividends paid with respect to that portion of
a Participant's Account invested in the Company Common Stock Fund shall be
automatically reinvested in accordance with subsection (b) herein. A Participant
shall have a 100% vested interest in all dividends reinvested in accordance with
subsection (b) herein. The provisions of this Section 6.7 do not apply with
respect to Company Common Stock held in a Participant's Frozen ESOP Account or
allocated to a Participant's Account and invested in the Non-ESOP Company Common
Stock Fund.
ARTICLE VII
SAVINGS ACCOUNT FUNDS
Section 7.1. Establishment of Funds. Except as provided in subparagraph
7.1(b), the following Funds shall be established exclusively for the collective
investment of Trust Fund assets attributable to Participant Savings Accounts, as
directed by Participants:
(a) One or more "Equities Funds," the assets of which shall
principally be invested, directly or indirectly, in common stocks
of domestic or foreign corporations. To the extent practicable,
no Equities Fund shall invest in Company Common Stock.
(b) One or more `Fixed Income Funds' the assets of which shall be (1)
held by an insurance company, banking institution or other
corporate entity pursuant to an agreement containing provisions
for the repayment in full of the amounts transferred to the
insurance company, banking institution or other corporate entity
plus interest at a fixed annual rate for a specified period, or
(2) invested in direct obligations of the United States
Government or agencies thereof, or in obligations guaranteed as
to the payment of principal and interest by the United States
Government or agencies thereof, or in fully insured bank
deposits, or fixed income private or public securities or (3)
invested in assets that meet the criteria in (1) and (2) whose
benefit responsiveness, liquidity and/or maturity date is
provided for by a third party, or (4) invested in short-term
investments, including, in all cases, a commingled fund or common
trust and excluding, in all cases, securities issued by any
Employer, except that this limitation shall not apply to
securities held by any commingled fund or common trust in which
any portion of a `Fixed Income Fund' shall be invested. The terms
of such agreements and the identity of such insurance companies,
banking institutions, other corporate entities and/or third
parties shall be determined by the Committee from time to time.
At the election of the Committee, any Fixed Income Fund
established hereunder may be merged or combined with the
fixed income fund maintained by the Company pursuant to the
Employee Savings Plan.
(c) A "Company Common Stock Fund" and a "Non-ESOP Company Common
Stock Fund" the assets of which shall principally be invested in
Company Common Stock as described in further detail under Section
7.2 below. The Company Common Stock Fund is intended to qualify
as an employee stock ownership plan under Code section
4975(e)(7).
(d) One or more "Equities Index Funds," the assets of which shall
principally be invested, directly or indirectly, in common stocks
substantially comprising the Standard and Poor's 500 Index.
(e) One or more "Government Obligations Funds," the assets of which
shall principally be invested, directly or indirectly, in debt
obligations issued or guaranteed by the U. S. Government, its
agencies or instrumentalities.
(f) One or more "Balanced Funds," the assets of which shall be
principally invested, directly or indirectly, in a combination of
the common stocks and fixed-income securities of domestic
corporations.
(g) One or more "Bond Funds," the assets of which shall principally
be invested, directly or indirectly, in U.S. taxable,
investment-grade debt obligations.
(h) One or more "Personal Choice Retirement Account Funds," the
assets of which will be invested in individual stocks, bonds and
mutual funds as directed by the Participant.
Notwithstanding the foregoing, any or all of the above Funds may be
temporarily maintained in cash, or may be invested directly or indirectly in
certain short-term obligations as permitted by the Trust Agreement. Dividends,
interest and other income in respect of any Fund shall be reinvested in the same
Fund to the extent not used to pay expenses of the Plan. Except as otherwise
limited by the provisions of this Plan, withdrawals, distributions and
forfeitures, except as otherwise specified in the Plan, shall be charged pro
rata against the various Funds in which the subaccounts from which such
withdrawals, distributions or forfeitures are then invested.
Section 7.2. Company Common Stock Fund and Non-ESOP Company Common Stock
Fund.
(a) A Participant's election to invest in the Company Common Stock
Fund pursuant to Article VI of this Plan shall be treated as an
initial election to invest in the Non-ESOP Company Common Stock
Fund. Notwithstanding the foregoing, prior to each quarterly
ex-dividend date with respect to the Company Common Stock,
amounts invested in the Non-ESOP Company Common Stock Fund shall
be transferred to the Company Common Stock Fund. Any election
made by a Participant to transfer, reallocate or rebalance his or
her interest in the Company Common Stock Fund pursuant to
Sections 6.3 or 6.4 shall also apply with respect to his or her
interest in the Non-ESOP Company Common Stock Fund.
Notwithstanding the foregoing, the Participant's election
pursuant to Section 6.2. regarding dividends paid on Company
Common Stock shall apply solely to the Participant's interest in
the Company Common Stock Fund and any dividend reinvested
pursuant to such election (or as a result of a failure to so
elect) shall be reinvested in the Company Common Stock Fund for
the Account of such Participant.
(b) Company Common Stock purchased for the Company Common Stock Fund
and the Non-ESOP Company Stock Fund shall be purchased by the
Trustee on the open market or directly from the Company should
the Company elect to make such sales.
(c) If the Company shall elect to sell shares of Company Common Stock
directly to the Plan, the price to be paid by the Trustee for any
such purchases shall be the average of the high and low sales
prices of Company Common Stock as reported by the New York Stock
Exchange Inc. on the date of purchase.
(d) All voting discretion, including the power to decide whether or
not to tender Company Common Stock in connection with a tender
offer, with respect to the shares of Company Common Stock held
under the Company Common Stock Fund and the Non-ESOP Company
Common Stock Fund for the Account of a Participant (whether
vested or not vested) shall be vested in the Trustee. However,
the Trustee shall vote all such shares (including fractional
shares or fractional rights to shares) in accordance with the
directions of such Participant. Within a reasonable time before
voting rights are to be exercised, the Employer or the Trustee
shall cause to be sent to each Participant entitled to give
voting instructions all information that the Company has or will
distribute to shareholders of Company Common Stock regarding the
exercise of such voting rights. Shares with respect to which no
voting instructions are received shall not be voted by the
Trustee.
(e) If, during the course of the Plan, the Company should grant to
the holders of Company Common Stock rights to subscribe to an
issue or issues of securities of the Company, any such rights
attaching to the shares of Company Common Stock held by the
Trustee under the Company Common Stock Fund and the Non-ESOP
Company Common Stock Fund shall be sold by the Trustee and the
net proceeds applied by the Trustee to the purchase of Company
Common Stock on the open market for such Funds. Stock dividends
on shares held by the Company Common Stock Fund and the Non-ESOP
Company Common Stock Fund, and stock issued upon any split of
such shares, shall be credited to such Company Common Stock Fund
or Non-ESOP Company Common Stock Fund, as applicable.
ARTICLE VIII
SAVINGS ACCOUNTS
Section 8.1. Establishment of Savings Accounts. The Committee shall
maintain or cause to be maintained a Savings Account for each Participant which
shall consist of the following subaccounts: Basic Deposit Subaccount,
Supplemental Deposit Subaccount and Employer Contribution Subaccount, the assets
of which shall be invested pursuant to the direction of the Participant as
provided in Article VI. The assets of each such subaccount of the Savings
Account shall be identified as to Nondeferred or Deferred.
Section 8.2. Measure of Savings Accounts.
(a) The interests of Participants in the Funds shall be measured by
participating units in the particular Fund, the number and value
of which shall be determined as of each business day as provided
in the next paragraph. Each participating unit shall have an
equal beneficial interest in the Fund, and none shall have
priority or preference over any other.
(b) As soon as practicable at the end of each business day, the
Trustee shall determine the value of each such Fund as of such
business day in the manner prescribed in Section 8.3. The value
so determined shall be divided by the total number of
participating units allocated to the Accounts of Participants
participating in such Fund in accordance with subsection (a) as
of the prior business day. The resulting quotient shall be the
value of a participating unit as of such business day and
participating units shall be allocated, as such value, to and
from the Fund subaccounts of Participants for all transactions by
them or on their behalf with respect to the current business day.
The value of all participating units allocated to Participants'
Fund subaccounts shall be redetermined in a similar manner each
succeeding business day and participating units shall be
allocated to and from the Accounts of Participants participating
in such Fund at such value for all transactions with respect to
such business day. Fractional units shall be calculated to such
number of decimal places as shall be determined by the Committee
from time to time.
(c) If a Participant shall direct pursuant to Section 6.3 that his or
her interest in a Fund or any part thereof shall be transferred
to another Fund or Funds, or if such Participant's interest in a
Fund or any part thereof is distributed, withdrawn, borrowed or
forfeited under Articles IV or XI, the number of participating
units representing such interest or portion thereof as of the
applicable business day shall be canceled for purposes of any
subsequent determination of the number of and value of the
participating units in such Fund.
Section 8.3. Valuation of Funds. The value of a Fund as of any business day
shall be the market value of all assets (including any uninvested cash) held by
the Fund as determined by the Trustee, reduced by the amount of any accrued
liabilities of the Fund on such business day and increased by Deposits, Rollover
Contributions and Employer Contributions with respect to such business day. The
Trustee's determination of market value shall be binding and conclusive upon all
parties.
Section 8.4. Valuation of Savings Accounts. The value of a Participant's
subaccount for any Fund as of any business day shall be the value of the
participating units allocated to the Participant's subaccount for such Fund as
of such business day. The value of a Participant's Account as of any business
day shall be the aggregate of the values of such subaccounts, determined as
provided in the preceding Sections of this Article VIII.
Section 8.5. Separate Accounting. The amounts of Deferred Deposits in a
Participant's Savings Account shall at all times be separately accounted for
from other amounts in such Savings Account, by allocating investment gains and
losses on Deferred Deposit amounts on a reasonable pro rata basis and by
adjusting the Deferred and other portions of the subaccounts of a Participant's
Savings Account for withdrawals, distributions, borrowings and contributions.
Gains, losses, withdrawals, distributions, borrowings, forfeitures and other
credits or charges shall be separately allocated between such Deferred Deposit
amounts and other portions of the subaccounts on a reasonable and consistent
basis.
ARTICLE IX
FROZEN ESOP ACCOUNTS
Section 9.1. Maintenance of Separate Accounts. Each Frozen ESOP Account
shall be maintained on the basis of shares of Company Common Stock allocated to
such Frozen ESOP Account, with each Frozen ESOP Account being credited with the
number of full and fractional shares of Company Common Stock so allocated.
Section 9.2. Allocation of Distributions. Any distributions received by the
Plan with respect to Company Common Stock allocated to a Participant's Frozen
ESOP Account shall be allocated to such Frozen ESOP Account.
Section 9.3. Withdrawals or Transfers
(a) Notwithstanding any provision in the Plan to the contrary, a
Participant may withdraw in accordance with Section 11.3 or 11.4
or transfer in accordance with Section 6.3, the shares of Company
Common Stock allocated to the Participant's Frozen ESOP Account
or the cash value thereof, subject to the provisions set forth in
this Section 9.3.
(b) With respect to an election of a Participant to withdraw Company
Common Stock from such Participant's Frozen ESOP Account, the
shares of Company Common Stock, or the cash value at the election
of the Participant, shall be distributed in accordance with
Article XI, provided that such Participant elects to withdraw all
full and fractional shares of Company Common Stock allocated to
such Frozen ESOP Account or the cash value thereof. Such
distribution shall be made as soon as practicable after receipt
by the Record Keeper of the Participant's election to withdraw.
(c) With respect to an election of a Participant to transfer the
Company Common Stock held in the Participant's Frozen ESOP
Account to the Participant's Savings Account, such election must
be with respect to the cash value only of all full and fractional
shares of Company Common Stock allocated to the Participant's
Frozen ESOP Account. Such transfer shall be made as soon as
practicable after receipt by the Record Keeper of the
Participant's election to transfer, shall be deposited in the
Participant's Savings Account, shall be invested in one or more
(in multiples of 1% up to an aggregate of 100%) of the Savings
Account Funds as such Participant shall designate and thereafter
shall be deemed a Rollover Contribution and treated accordingly.
The cash value of each share of Company Common Stock so
transferred shall be equal to the price of a share of Company
Common Stock actually received by the Trustee.
(d) A Participant may not borrow from his or her Frozen ESOP Account.
Section 9.4. Dividends and Other Income. Unless otherwise directed as
hereinafter provided, dividends paid in cash with respect to Company Common
Stock allocated to a Participant's Frozen ESOP Account shall be distributed to
the Participant as soon thereafter as practicable and, in any event, not later
than 90 days after the close of the Plan Year in which paid. Company Common
Stock delivered to the Trustee pursuant to a stock dividend, stock split or
reorganization, shall be allocated to the Frozen ESOP Account of Participants in
that proportion which the shares of each Participant's Frozen ESOP Account bears
to the total shares of all Participants' Frozen ESOP Accounts.
Section 9.5. Voting of Frozen ESOP Account Common Stock. As provided in
Section 7.2 with respect to the Company Common Stock Fund, all voting discretion
with respect to stock held in a Participant's Frozen ESOP Account, including the
power to decide whether or not to tender Company Common Stock in connection with
a tender offer, shall be vested in the Trustee. Each Participant shall be
entitled to direct the Trustee as to the manner in which voting rights
attributable to Company Common Stock (including fractional shares or fractional
rights to shares) allocated to such Participant's Frozen ESOP Account are to be
exercised. Within a reasonable time before voting rights are to be exercised,
the Trustee or the Employer shall cause to be sent to each Participant entitled
to give voting instructions all information that the Company has or will
distribute to shareholders of Company Common Stock regarding the exercise of
such voting rights. Such voting rights shall be exercised by the Trustee but
only to the extent directed by a Participant. Shares with respect to which no
voting instructions are received shall not be voted by the Trustee.
ARTICLE X
VESTING
Section 10.1. Vesting of Employer Contributions. Upon completion of five
Years of Service, a Participant shall have a 100% vested interest in his or her
Savings Account attributable to Employer Contributions made on behalf of such
Participant during any Plan Year. In addition, if a Participant is eligible for
Retirement, suffers a Disability, is Laid Off or dies, such Participant shall
have a 100% vested interest in his or her Savings Account attributable to
Employer Contributions for all Plan Years. Furthermore, a Participant with a
Fluidics Account shall have a 100% vested interest in his or her Fluidics
Employer Contribution Subaccount effective as of March 1, 2001.
Section 10.2. Vesting of Retirement Choice Program Allocation Subaccount.
Notwithstanding the foregoing, amounts held in the Retirement Choice Program
Allocation Subaccount of a Participant's Account shall vest in accordance with
Section 5.5 of the Cash Balance Plan, which provides in pertinent part that a
Participant who terminates employment with the Company prior to Retirement but
after he or she has completed five or more Years of Service shall have a 100%
vested interest in his or her Retirement Choice Program Allocation Subaccount.
In addition, if a Participant is eligible for Retirement, suffers a Disability,
is Laid Off or dies, such Participant shall have a 100% vested interest in his
or her Retirement Choice Program Allocation Subaccount.
Section 10.3. Qualified Military Service. Effective December 12, 1994, for
purposes of determining Years of Service for vesting under this Article X, a
Participant shall be credited with any period of absence from employment as a
result of such Participant's qualified military service in accordance with Code
section 414(u).
Section 10.4. Vesting of Deposits, Rollover Contributions and the Frozen
ESOP Account. A Participant's interest in his or her Savings Account and/or
Fluidics Account attributable to Deposits and Rollover Contributions for all
Plan Years and in his or her Frozen ESOP Account shall be 100% vested at all
times.
ARTICLE XI
ACCOUNT DISTRIBUTIONS AND WITHDRAWALS
Section 11.1. Distribution Upon Retirement, Disability, Lay Off or Death.
If a Participant terminates employment on account of Retirement or Disability,
is Laid Off or dies, then, in that event, the Participant's Savings Account,
determined as of the business day coinciding with or next following the date of
the last Deposit made by or which would have been made on behalf of such
Participant, together with the Participant's Frozen ESOP Account, shall:
(a) if the value of such Accounts as so determined is $5,000 (or such
other amount established by law) or less, be distributed, subject
to the provisions of Section 11.10(c), as soon as practicable to
the Participant, or in the case of death of the Participant, to
the Participant's beneficiary as determined in accordance with
Article XIII or, if none, to the Participant's estate. The
Committee or its designee shall review the Participants' Accounts
at least once every 6 months and distribute, as allowed by
applicable law, those Accounts not exceeding $5,000 (or such
other amount established by law) regardless if the vested balance
in the Participant's Accounts at the time of any previous
distribution exceeded $5,000. Effective on and after January 1,
2002, in determining whether the value of the Participant's
Accounts exceed $5,000, the portion of the Accounts attributable
to the Participant's Rollover Contributions (and earnings
allocable thereto) shall be disregarded; or
(b) if the value of such Accounts as so determined shall exceed
$5,000 (or such other amount established by law), be distributed
upon the earliest of the Participant's Required Beginning Date,
the death of such Participant or the receipt by the Record Keeper
of an application for distribution (which may be for less than
all of the Participant's Account balance provided, however, that
the amount of distribution shall be at least $200, unless such
distribution is of 100% of the remaining value of such
Participant's Account) in a form prescribed by the Committee.
Section 11.2. Distribution Upon Other Termination of Employment. Upon a
Participant's severance from employment with an Employer or for reasons other
than Retirement, Disability, Lay Off or death, the vested portion of the
Participant's Account, determined as of the business day coinciding with or next
following the date of the last Deposit made by or which would have been made on
behalf of such Participant, or, if none, the date coinciding with or next
following the date of such severance, shall:
(a) if the value of the vested portion of such Account as so
determined is $5,000 (or such other amount established by law) or
less, be distributed, subject to the provisions of Section
11.9(c), as soon as practicable to the Participant, or, in the
case of death of the Participant after termination of employment
but prior to such distribution, to the Participant's beneficiary,
or, if none, to the Participant's estate. The Committee or its
designee shall review the Participants' Accounts at least once
every 6 months and distribute, as allowed by applicable law,
those Accounts not exceeding $5,000 (or such other amount
established by law) regardless if the vested balance in the
Participant's Accounts at the time of any previous distribution
exceeded $5,000; or
(b) if the value of the vested portion of such Account as so
determined shall exceed $5,000 (or such other amount established
by law) be distributed upon the earliest of the Participant's
Required Beginning Date, the death of the Participant or the
receipt by the Record Keeper of an application for distribution
(which may be for less than all of the Participant's Account
balance provided, however, that the amount of distribution shall
be at least $200, unless such distribution is of 100% of the
remaining value of such Participant's Account) in a form
prescribed by the Committee.
Any nonvested portion of the Participant's Account, determined as of the
date of severance from employment, shall be forfeited and shall be applied
thereafter to reduce a subsequent contribution or contributions of the Employer
as provided in Section 5.2. If such former Participant is rehired by an Employer
on or before the end of and is employed by an Employer at the end of the fifth
Plan Year after the Plan Year in which such severance occurred, then such
nonvested portion of the Participant's Account shall be reinstated by the
Employer and the Participant's right thereto shall be determined as if the
Participant had not terminated employment, provided that the Participant repays
to the Plan the amount of any distribution paid to him or her on account of the
severance from employment.
The nonvested portion of the Participant's Account, determined as of the
date of severance from employment, shall be forfeited as of the earlier of (i)
the date the Participant receives a cash-out distribution as described in
Treasury Regulation section 1.411(a)-7(d) or (ii) the time at which the
terminated Participant experiences five consecutive one-year Breaks in Service
(as defined below), and shall be applied thereafter to reduce a subsequent
contribution or contributions of the Employer as provided in Section 5.2.
For purposes of this Section 11.2, a Break in Service shall mean a
consecutive twelve-month period described in Section 2.57 in which an Employee
is not credited with at least 501 Hours of Service, which shall be treated as
commencing on the date of severance from employment with the Company or an
Affiliate. Notwithstanding any provision in this Plan to the contrary, effective
December 12, 1994, a Participant shall not incur a Break in Service for any
period during which the Participant is or was engaged in "qualified military
service," in accordance with Code section 414(u).
Any Participant who receives a distribution under this Section 11.2 shall
be prohibited from participating in the Plan for the period of three months
following such distribution.
Section 11.3. Partial Distributions Following Termination of Employment. A
Participant who elects pursuant to Section 11.1(b) or 11.2(b) to continue
participation in the Plan following severance from employment may, subsequent to
such Participant's severance from employment but prior to his or her Required
Beginning Date, upon application to the Committee in such format as it may
determine, withdraw all or part of such Participant's Account in minimum amounts
of $200.00 per withdrawal. . Effective as of January 1, 2002, a Participant may,
at any time subsequent to such Participant's severance from employment, request
a partial distribution (in minimum amounts of $200.00 per withdrawal) in
accordance with this Section 11.3. A Participant must specifically request a
withdrawal from such Participant's Frozen ESOP Account, and such withdrawal must
be of 100% of the full and fractional shares of Company Common Stock allocated
to such Frozen ESOP Account or the cash value thereof, in accordance with
Section 9.3 of the Plan. Otherwise, withdrawals shall be taken from a
Participant's Plan subaccounts in the following order, except as may be
necessitated by a Participant election pursuant to Section 11.9(b):
(a) If the request is limited to After-tax withdrawals, as it may be,
then:
(1) Pre-87 Nondeferred Deposits;
(2) Post-86 Nondeferred Deposits and earnings thereon;
(3) Earnings on pre-87 Nondeferred Deposits.
(b) For all other partial withdrawals:
(1) Pre-1987 Nondeferred Deposits;
(2) Post-1986 Nondeferred Deposits and earnings thereon;
(3) Rollover Contributions and earnings thereon;
(4) Earnings on pre-1987 Nondeferred Deposits;
(5) Matured vested Employer cash contributions and earnings
thereon;
(6) Matured vested Employer stock contributions and earnings
thereon;
(7) Matured vested Employer Cash Balance Contributions and
earnings thereon;
(8) Deferred Deposits and earnings thereon.
Section 11.4. Withdrawal of Nondeferred Deposits and Employer Contributions
During Employment.
(a) A Participant may, by application to the Record Keeper in the
form prescribed by the Committee, request to withdraw from the
Plan any or all of his or her Nondeferred Deposits and earnings
thereon, Rollover Contributions and earnings thereon and Vested
Employer Contributions (except for Employer Contributions
resulting from Participant elections made pursuant to the Cash
Balance Plan and the Retirement Choice Program) as well as
earnings thereon; provided, however, that the amount withdrawn
shall be at least $200, unless such withdrawal is of 100% of the
value of such Participant's Savings Account.
(b) If a withdrawal includes Deposits that are not Matured, Employer
Contributions with respect to such Participant shall be suspended
for a period of three months.
(c) A Participant must specifically request a withdrawal from such
Participant's Frozen ESOP Account, and such withdrawal must be of
100% of the full and fractional shares of Company Common Stock
allocated to such Frozen ESOP Account or the cash value thereof,
in accordance with Section 9.3 of the Plan; otherwise,
withdrawals shall be taken from a Participant's Savings Plan
subaccounts in the following order, except as may be necessitated
by a Participant election pursuant to Section 11.9(b):
(1) Pre-1987 Nondeferred Deposits;
(2) Matured Post-1986 Nondeferred Deposits and earnings thereon;
(3) Unmatured Post-1986 Nondeferred Deposits and earnings
thereon;
(4) Rollover Contributions and earnings thereon;
(5) Earnings on pre-1987 Nondeferred Deposits;
(6) Matured vested Employer Contributions and earnings thereon;
(d) Any withdrawal made by a Participant pursuant to this Section
11.4 shall be made from all Funds in which the Nondeferred
Deposits, Rollover Contributions and Employer Contributions by or
on behalf of such Participant are invested and shall be charged
pro rata against such subaccounts in the Participant's Savings
Account, except as may be necessitated by a Participant election
pursuant to Section 11.9(b). Notwithstanding the foregoing, there
shall be no withdrawal from the Personal Choice Retirement
Account Fund.
(e) The amount of any withdrawal made by a Participant pursuant to
this Section 11.4 shall be determined as of the close of the
business day on which the notice of withdrawal is received by the
Record Keeper.
(f) Notwithstanding any of the foregoing, no withdrawals resulting
from participant elections made pursuant to the Cash Balance Plan
and the Retirement Choice Program shall be permitted prior to the
date that the Participant terminates his or her employment.
Effective April 1, 2002, that portion of a Participant's Thrift
Account attributable to Employer Contributions made in shares of
Company Common Stock on or prior to February 1, 2002 shall be
available for withdrawal under this Section 11.4.
Section 11.5. Withdrawals of Deferred Deposits During Employment After Age
59 1/2. A Participant over the age 59 1/2 may withdraw all or a portion of the
value of his or her Savings Account attributable to Deferred Deposits. The value
of such Deferred Deposits for the purpose of such withdrawal shall be determined
as of the close of the business day in which the notice of withdrawal is
received by the Record Keeper. The minimum withdrawal permitted shall be $200,
unless such withdrawal is 100% of the current value of the Deferred portion of a
Participant's Savings Account.
Section 11.6. Hardship Withdrawals.
(a) Upon the application of any Participant, or his or her legal
representative, the Committee, in accordance with a uniform
nondiscriminatory policy, shall permit such Participant to
withdraw such portion of the value of his or her vested Savings
Account as deemed to be necessary for the purpose of:
(1) Expenses for medical care described in Code section 213(d)
previously incurred by the Participant, the Participant's
spouse or any dependents (as defined in Code section 152) of
the Participant or necessary for these persons to obtain
medical care described in Code section 213(d);
(2) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;
(3) Payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant,
the Participant's spouse, children or any dependents (as
defined in Code section 152) of the Participant; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on
the mortgage of the Participant's principal residence.
(b) A Participant or legal representative making application under
this Section 11.6 shall have the burden of presenting to the
Committee satisfactory proof of such need. The Committee shall
not permit withdrawal under this Section without first receiving
such proof as it shall deem necessary to demonstrate such
hardship.
(c) The amount which may be withdrawn shall be withdrawn in the
following order, except as may be necessitated by a Participant
election pursuant to Section 11.9(b):
(1) Nondeferred Deposits together with vested Employer
Contributions, in the order prescribed by Section 11.4, but
without regard to the limitations on withdrawals of Section
11.4;
(2) Deferred Supplemental Deposits; and
(3) Deferred Basic Deposits.
(d) A withdrawal will be deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant if all of the
following requirements are satisfied:
(1) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the Participant,
(2) The Participant has obtained all distributions, other than
hardship withdrawals, and all nontaxable loans currently
available under all plans maintained by the Company or an
Affiliate,
(3) The Participant is prohibited under the terms of the Plan or
an otherwise legally enforceable agreement from making
elective contributions and employee contributions to the
Plan and all other plans maintained by the Company or an
Affiliate for at least 12 months after receipt of the
hardship withdrawal. Effective with respect to Participant
withdrawals taken pursuant to this Section 11.6 on or after
January 1, 2002, a Participant shall be prohibited from
making elective contributions and employee contributions to
the Plan and all other plans maintained by the Company or an
Affiliate for at least 6 months after receipt of the
hardship withdrawal, and
(4) The Plan and all other plans maintained by the Employer,
provide that the Participant may not make elective
contributions for the Participant's taxable year immediately
following the taxable year of the hardship withdrawal in
excess of the applicable limit under Code section 402(g) for
such next taxable year less the amount of such Participant's
elective contributions for the taxable year of the hardship
withdrawal. A Participant shall not fail to be treated as an
eligible Participant for purposes of paragraph (b) of this
Section merely because he is suspended in accordance with
this provision. Effective with respect to Participant
withdrawals taken pursuant to this Section 11.6 on or after
January 1, 2002, this Section 11.6(d)(4) shall no longer
apply.
(e) If a Participant shall make a withdrawal pursuant to this Section
11.6, then
(1) the Participant shall not be permitted to make Deposits
(including Additional Lump Sum Deposits) to the Plan during
the one year period (effective as of January 1, 2002, the
six month period) beginning on the date of receipt of such
withdrawal and
(2) a Participant's Deferred Deposits for the Participant's
taxable year next following the taxable year of the hardship
withdrawal may not exceed the limit established under Code
section 402(g) less the amount of Deferred Deposits made by
the Participant in the year of such withdrawal. Effective
with respect to Participant withdrawals taken pursuant to
this Section 11.6 on or after January 1, 2002, this Section
11.6(e)(2) shall no longer apply.
(f) Amounts available for hardship withdrawals with respect to
Deferred Deposits will be limited to the amount of a
Participant's Deferred Deposits, plus earnings allocable thereto
which were credited to Participant's Accounts as of December 31,
1988, less the amount of any previous hardship withdrawals.
(g) A hardship withdrawal from the Savings Account shall not be
permitted unless and until a Participant has withdrawn, pursuant
to Section 9.3, all Company Common Stock from his or her Frozen
ESOP Account.
(h) The hardship withdrawal shall be paid to the Participant in the
amount approved as soon as practicable after his or her
application is approved by the Committee.
(i) Notwithstanding any of the foregoing, no withdrawals resulting
from Participant elections made pursuant to the Cash Balance Plan
and the Retirement Choice Program shall be permitted prior to the
date that the Participant terminates his or her employment.
Effective April 1, 2002, that portion of a Participant's Thrift
Account attributable to Employer Contributions made in shares of
Company Common Stock on or prior to February 1, 2002 shall be
available for withdrawal under this Section 11.6.
Section 11.7. Suspension of Participation. If a Participant shall cease to
be an Eligible Employee, Deposits and Employer Contributions to his or her
Savings Account shall be suspended and no Additional Lump Sum Deposits shall be
permitted to be made during the period of ineligibility. Distribution of such
Participant's Account shall be deferred until such Participant's termination of
employment with an Employer, whereupon the Participant's Savings Account shall
be distributed in accordance with the applicable provisions of this Article XI.
Such Participant shall continue to be deemed a Participant for all purposes
other than for Articles IV and V during such period of ineligibility.
Section 11.8. Transfer of Employment. If a Participant shall be transferred
to the employ of an Affiliate of the Company, distribution of such Participant's
Account shall be deferred until the Participant is no longer in the employ of
the Company or any Affiliate, whereupon the Participant's Account shall be
distributed in accordance with the applicable provisions of this Article XI.
Such transferred Participant shall continue to be deemed a Participant for all
purposes other than for Articles IV and V during such period of deferral of
distribution.
Section 11.9. Form of Distributions.
(a) All distributions from the Plan shall be made in money by check,
except that in the case of a lump sum distribution only, other
than a hardship withdrawal in accordance with Section 11.6, a
Participant may, by notice to the Record Keeper in the form
prescribed by the Committee, elect to have any whole shares of
Company Common Stock held for such Participant's Frozen ESOP
Account distributed in shares of Company Common Stock. (the value
of any fractional shares shall be paid in money by check) In
addition, should the Participant elect not to liquidate the
particular assets held in the Personal Choice Retirement Account
Fund upon a distribution, such assets shall be transferred
in-kind to an individual retirement account with the vendor
administering the Personal Choice Retirement Account Fund. Any
such election may be made at any time prior to the distribution
under Section 11.1 and 11.2 or prior to receipt by the Record
Keeper of the notice of withdrawal in the case of a distribution
under Sections 11.3 or 11.4. If no such election is made, the
entire value of the amount of the Participant's Account being
distributed shall be distributed in money by check.
(b) Effective March 1, 2002, and notwithstanding the foregoing, a
Participant may by notice to the Record Keeper in the form
prescribed by the Committee, with respect to a distribution
pursuant to Sections 11.1, 11.2 and 11.3 or a withdrawal pursuant
to Sections 11.4, 11.5 and 11.6, elect to have any whole shares
of Company Common Stock held for such Participant's Company
Common Stock Fund subaccount distributed in shares of Company
Common Stock (the value of any fractional shares shall be paid in
money by check). If no such election is made, the entire value of
the amount of the Participant's Account being distributed shall
be distributed in money by check.
(c) All distributions from the Plan shall be made in one lump sum,
except that, in the case of a distribution from a Participant's
Account on account of a Participant's Retirement, such
Participant may elect to have his or her Account, including the
Frozen ESOP Account, which is to be transferred into one of the
Savings Account Funds, and the Fluidics Account, if applicable,
distributed in annual or quarterly payments in money by check (or
in shares pursuant to paragraph (b) above) by the Trustee in
amounts as nearly equal as possible for a specified number of
years up to ten years. Each payment shall be an amount equal to
the Participant's Savings Account as of the applicable date
divided by the number of payments remaining. If a Participant
shall die prior to complete distribution of his or her Savings
Account pursuant to this subparagraph (c)(1), the value of the
Participant's Savings Account shall be distributed as soon as
practicable in a lump sum to the Participant's beneficiary, or,
if none, to the Participant's estate. The amount so distributed
after a Participant's death shall be the remaining value of
Participant's Savings Account determined as of the business day
coinciding with or next following the date of the Participant's
death.
(d) If no election is made under subparagraph (c) above, and the
value of a Participant's Savings Account, when aggregated with
the value of any Frozen ESOP Account or Fluidicis Account of the
Participant, determined in accordance with Article IX, exceeds
$5,000, a distribution will be made in one lump sum at the time
provided for in Section 11.1, Section 11.2, or Section 11.6.
Section 11.10. Time of Distributions.
(a) All distributions from the Plan shall commence as soon as
practicable, and in any event no later than 60 days after the
later of the close of the Plan Year in which the Participant
terminates employment, reaches his or her Required Beginning
Date, dies, or, if applicable, requests distribution under
Section 11.1 and 11.2, or 60 days after the close of the Plan
Year in which the Participant elects to withdraw funds from the
Plan in the case of distributions under Sections 9.3, 9.4, 11.4,
and 11.5.
(b) In the case of a distribution over a period of years under
subparagraph (c) of Section 11.9, the initial payment shall be
made at a time determined in accordance with subparagraph (a) of
this Section 11.10. In the case of annual distributions, the
remaining annual payments shall be made in successive calendar
years on such date each year as shall be determined by the
Committee, subject to the provisions of subparagraph (c) of
Section 11.9 in the case of the Participant's death. In the case
of quarterly distributions, the remaining payments shall be made
each successive three month period on such day during the period
as may be established by the Committee, subject to the provisions
of subparagraph (c) of Section 11.9 in the case of the
Participant's death.
(c) In the case of a distribution on account of a Participant's
Retirement, subject to the provisions of subsection 11.11, the
Participant may elect to have his or her Account distributed as a
lump sum during (1) the Plan Year next following the Plan Year of
his or her Retirement or (2) the next succeeding Plan Year
thereafter or (3) if the Account value exceeds $5,000 at any time
up to the Participant's Required Beginning Date. If no such
election is made, distribution shall commence in accordance with
Section 11.1 and subparagraph (a) above.
Section 11.11. Limitation on Post Age 701/2Distributions.
Notwithstanding the provisions of Sections 11.9 and 11.10:
(a) the entire interest of a Participant must:
(1) be distributed not later than the Participant's Required
Beginning Date, or,
(2) commence no later than such Required Beginning Date and be
payable in accordance with regulations under the Code over a
period not extending beyond the life expectancy of such
Participant.
(b) If a Participant dies before his or her entire interest has been
distributed, then such entire interest (or the remaining part of
such interest if distribution thereof has commenced) shall be
distributed within five years after the Participant's death, and,
if distribution has commenced prior to death, shall be
distributed at least as rapidly as the method of distribution
being used as of the date of such Participant's death.
(c) The amount of the distribution required by this Section 11.11 is
to be determined by Treasury Regulations Section 1.72-9, Table V
using the attained age of the Participant as provided in
regulations without recalculation of the life expectancy;
provided, however, that the amount of the distribution required
by this Section 11.11 with respect to a Participant's Fluidics
Account, if any, is to be determined by Treasury Regulations
Section 1.72-9 using the attained age or ages of the Participant
and his designated beneficiary as provided in regulations with
recalculation of the life expectancies as the Participant may
elect. Distribution will be made in accordance with the
regulations under Code section 401(a)(9), including the minimum
distribution incidental death benefit requirement of section
1.401(a)(9)-2, and such regulations shall override any
inconsistent Plan provisions. With respect to distributions made
under this Section 11.11 of the Plan for calendar years beginning
on or after January 1, 2002, the Plan will apply the minimum
distribution requirements of Code section 401(a)(9) in accordance
with the regulations under Code section 401(a)(9) that were
proposed in January, 2001. This amendment shall continue in
effect until the end of the last calendar year beginning before
the effective date of final regulations under Code section
401(a)(9) or such other date as may be specified in guidance
published by the Internal Revenue Service.
Section 11.12. Distribution in the Case of Certain Disabilities. In the
event that the Committee shall find that any person entitled to a distribution
under the Plan is unable to care for his or her affairs because of illness or
accident or because the person is a minor or has died, the Committee may direct
that any distribution due such person, unless claim shall have been made
therefor by a duly appointed legal representative, be paid or applied to or for
the benefit of such person, or his or her spouse, any child of such person
(including an adopted child), any parent or other blood relative of such person,
or a person with whom the person resides, or any of them, and any such payment
or application so made shall be a complete discharge of the liabilities of the
Plan therefor.
Section 11.13. Loans.
(a) The Committee shall have complete authority to establish and
administer a loan program to provide loans to Participants. The
loan program shall include the following:
(1) A procedure for applying for loans;
(2) The basis on which loans will be approved or denied;
(3) Limitations (if any) on the types and amounts of loans
offered;
(4) The procedure under the loan program for determining a
reasonable rate of interest;
(5) The types of collateral which may secure a loan; and
(6) The events constituting default and the steps that will be
taken to preserve plan assets in the event of such default.
The rules and applicable limitations established by the
loan program shall be such as to prevent any loan from
constituting a prohibited transaction under Code section
4975 and ERISA section 406, or a Plan distribution under
Code section 72(p).
(b) The Trustee shall, subject to the approval of the General
Manager, subject to compliance with the written loan program and
the provisions of the Code, lend a Participant, who is employed
by an Employer, an amount up to 50% of the vested portion of his
or her Account, including the Frozen ESOP Account, but not more
than $50,000 in the aggregate as of the date on which the loan is
approved reduced by the highest outstanding loan balance during
the preceding twelve months. However, no amount may be loaned
directly from any Frozen ESOP Account, from Employer
Contributions resulting from Participant elections made pursuant
to the Cash Balance Plan and the Retirement Choice Program or
from investments held in the Personal Choice Retirement Account
Fund. Effective as of April 1, 2002, Employer Contributions made
in shares of Company Common Stock prior to February 1, 2002,
pursuant to Section 5.2, shall be an available source for loan
proceeds. The Director shall review each application for a loan
in a nondiscriminatory manner and in accordance with such rules
as may be prescribed by the Committee. Loans, if approved, shall
be made as soon thereafter as practicable.
(c) In addition to such rules and regulations as the Committee may
adopt, all loans shall comply with the following terms and
conditions:
(1) An application for a loan by an eligible Participant shall
be made by making application therefor to the Record Keeper
on a form prescribed by the Committee.
(2) An eligible Participant may not apply for more than one loan
in any calendar year nor for a loan with an initial
principal amount of less than $1,000 and, in any event, may
not have more than two (2) loans outstanding at any one
time.
(3) All loans, including interest thereon, shall be repaid by
payroll deduction in equal monthly installments over a
period of 12 to 60 months as selected by the Participant.
Nothing herein, however, shall prohibit a Participant from
prepaying such loan in whole or in part in a lump sum in
accordance with such rules as may be established from time
to time by the Committee. (4) Each loan shall be secured by
an assignment of the Participant's entire right, title and
interest in and to the Trust Fund to the extent of the loan
and accrued interest thereon and shall be evidenced by the
Participant's promissory note for the amount of the loan,
including interest, payable to the order of the Trustee. (5)
Each loan shall bear interest at a reasonable rate (which
rate may be a variable rate) to be established from time to
time by the Committee, not in violation of any applicable
usury laws. In determining the interest rate, the Committee
shall take into consideration interest rates being charged
by other lenders at the time of such determination.
(d) No distribution shall be made to any Participant or
beneficiary thereof unless and until all unpaid loans,
including interest thereon, have been repaid.
Section 11.14. Inability to Locate Payee. Any benefit payable to a
Participant or beneficiary shall be forfeited if the Employer, after reasonable
effort, is unable to locate such Participant or beneficiary to whom payment is
due. The amount of any such forfeited benefit shall be applied to reduce the
amount of Employer Contributions required under the Plan as provided in Section
5.3. However, any such forfeited benefit shall be reinstated and become payable
if a claim therefor is made by such Participant or beneficiary.
Section 11.15. Federal Income Tax Withholding on Distributions and
Withdrawals. Distributions and withdrawals under this Plan shall be subject to
Federal income tax withholding as prescribed by Code section 3405 and the
regulations thereunder.
Section 11.16. Direct Rollover to Another Plan or IRA. On or after January
1, 1993, at the election of a Participant or his spouse or former spouse
entitled to a distribution under Section 21.1 or the foregoing provisions of
this Article XI, the Committee shall direct the Trustee to make a direct
rollover to the trustee or other custodian of an "eligible retirement plan" by
any reasonable means (including providing the Participant or spouse or former
spouse with a check made payable only to the trustee or custodian) of all, or a
specified portion, of an "eligible rollover distribution," subject to the
following restrictions:
(a) An "eligible rollover distribution" is any distribution of all or
any portion of the Participant's Account, except that an
"eligible rollover distribution" does not include
(1) any distribution that is one of a series of substantially
equal periodic payments (made not less frequently than
annually) made for the life (or life expectancy) of the
recipient or the joint lives (or joint life expectancies) of
the recipient and the recipient's designated beneficiary, or
for a specified period of at least ten years;
(2) any distribution made pursuant to Code section 401(a)(9); or
(3) any portion of a hardship distribution made to such
Participant in accordance with Section 11.6 of the Plan that
represents a distribution of Deferred Deposits.
Effective January 1, 2002, an "eligible rollover
distribution" shall also consist of that portion of the
Participant's Account which consists of Nondeferred Deposits that
are not includable in gross income, so long as such portion is
transferred only to an individual retirement account or annuity
described in Code sections 408(a) or (b), or to a qualified
defined contribution plan described in Code sections 401(a) or
403(b), that agrees to separately account for amounts so
transferred, including separately accounting for the portion of
such distribution which is includible in gross income and the
portion of such distribution which is not so includible.
(b) An "eligible retirement plan" is an individual retirement account
described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust described
in Code section 401(a), that accepts the recipient's "eligible
rollover distribution." Effective as of January 1, 2002, an
"eligible retirement plan" shall also mean an annuity contract
described in Code section 403(b) and an eligible plan under Code
section 457(b) which is maintained by a state, political
subdivision of a state, or any agency or instrumentality of a
state or political subdivision of a state and which agrees to
separately account for amounts transferred into such plan from
this Plan. In addition, effective as of January 1, 2002, this
amended definition of "eligible retirement plan" shall apply in
the case of a distribution to a Participant's surviving spouse or
to an alternate payee under a Qualified Domestic Relations Order
as defined in Code section 414(p).
(c) The Participant, his or her spouse or former spouse, or the
alternate payee must specify, in such form and at such time as
the Committee may prescribe, the "eligible retirement plan" to
which the distribution is to be paid and may specify more than
one "eligible retirement plan."
(d) The Participant, his or her spouse or former spouse, or the
alternate payee must provide to the Committee in a timely manner
adequate information regarding the designated "eligible
retirement plan."
ARTICLE XII
LIMITS ON BENEFITS AND CONTRIBUTIONS UNDER QUALIFIED PLANS
Section 12.1. Definitions. For purposes of this Article XII, the following
definitions and rules of interpretation shall apply:
(a) "Annual Additions" to a participant's account under a defined
benefit plan or a defined contribution plan is the sum, credited
to a participant's account for any Limitation Year, of:
(1) Company contributions,
(2) Forfeitures, if any,
(3) Employee contributions and
(4) Amounts, if any, attributable to medical benefits allocated
to an account established under Code section 419A(d)(2) on
behalf of such Participant.
(b) "Company" shall mean the Company, as described in Section 2.13
and any Affiliate as defined in Section 2.4.
(c) "Compensation" with respect to a Limitation Year -
(1) includes amounts paid to a Participant (regardless of
whether he or she was such during the entire Limitation
Year);
(i) as wages, salaries, fees for professional services and
other amounts received (without regard to whether or
not an amount is paid in cash) for personal services
actually rendered in the course of employment with any
Company including but not limited to commissions,
compensation for services on the basis of a percentage
of profits, fringe benefits, reimbursements and other
expense allowances under nonaccountable plans (as
described in Treasury Regulation 1.b2-2(c)) and
bonuses;
(ii) for purposes of (i) above, earned income from sources
from outside the United States (as defined in Code
section 911(b)), whether or not excludable from gross
income under Code section 911 or deductible under Code
sections 931 and 933;
(iii)amounts described in Code sections 104(a)(3), 105(a)
and 105(h) but only to the extent that these amounts
are includible in the gross income of the Participant;
(iv) in the case of an employee within the meaning of Code
section 401(c)(1) and the regulations thereunder, the
Participant's earned income (as described in Code
section 401(c)(2) and the regulations thereunder);
(v) amounts paid or reimbursed by the Company for moving
expenses incurred by the Participant, but only to the
extent that these amounts are not deductible by the
Participant under Code section 217.
(vi) the value of a nonqualified stock option granted to a
Participant by a Company, but only to the extent that
the value of the option is includible in the gross
income of the Participant for the taxable year in which
granted.
(vii)the amount includible in the gross income of a
Participant upon making the election described in Code
section 83(b).
(viii) effective for limitation years beginning on or after
January 1, 2001, elective amounts that are not
includible in the gross income of the employee by
reason of Code section 132(f)(4).
(2) Compensation does not include -
(i) notwithstanding subsection (1)(i) of this Section
12.1(c), for Plan Years prior to January 1, 1998 there
shall be excluded from Compensation amounts contributed
to a plan qualified under section 401(k) of the Code as
salary reduction contributions (and not recharacterized
as employee contributions thereunder);
(ii) other contributions made by the Company to a plan of
deferred compensation to the extent that, before the
application of the Code section 415 limitations to the
plan, the contributions are not includible in the gross
income of the Participant for the taxable year in which
contributed. In addition, Company contributions made on
behalf of a Participant to a simplified Participant
pension described in Code section 408(k) are not
considered as Compensation for the taxable year in
which contributed to the extent such contributions are
deductible by the Participant under Code section
219(b)(7). Additionally, any distributions from a plan
of deferred compensation are not considered as
Compensation, regardless of whether such amounts are
includible in the gross income of the Participant when
distributed. However, any amounts received by a
Participant pursuant to an unfunded nonqualified plan
shall be considered as Compensation in the year such
amounts are includible in the gross income of the
Participant;
(iii)amounts realized from the exercise of a nonqualified
stock option or when restricted stock (or property)
held by a Participant either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture (see Code section 83 and the
regulations thereunder);
(iv) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option;
(v) other amounts which receive special tax benefits, such
as premiums for group term life insurance (but only to
the extent that the premiums are not includible in the
gross income of the Participant);
(d) "Limitation Year" - the Plan Year;
(e) "Maximum Permissible Defined Contribution Amount" - for a
Limitation Year the Maximum Permissible Defined Contribution
Amount with respect to any Participant shall, effective January
1, 2002, be the lesser of:
(1) $40,000, as adjusted for increases in the cost-of-living
under Code section 415(d); or
(2) 100% of the Participant's Compensation for the Limitation
year.
Notwithstanding the foregoing, or anything herein to the contrary, the
percentage of compensation limitation of this Section 12.1(g)(2) shall not apply
to any Annual Additions pursuant to Section 12.1(a)(4) above.
Section 12.2. Annual Addition Limits. The amount of the Annual Addition
which may be credited under this Plan to any Participant's Account as of any
allocation date shall not exceed the Maximum Permissible Defined Contribution
Amount (based upon his or her Compensation up to such allocation date) reduced
by the sum of any credits of Annual Additions made to the Participant's Account
under all defined contribution plans as of any preceding allocation date within
the Limitation Year. If an allocation date of this Plan coincides with an
allocation date of any other qualified defined contribution plan maintained by
the Company, the amount of the Annual Additions which may be credited under this
Plan to any Participant's Account as of such date shall be an amount equal to
the product of the amount to be credited under this Plan without regard to this
Section 12.2 multiplied by the lesser of one or a fraction, the numerator of
which is the amount described in this Section 12.2 during the Limitation Year
and the denominator of which is the amount that would be otherwise credited on
this allocation date under all defined contribution plans without regard to this
Section 12.2. However, if a security is not allocated to a Participant's Account
under any other qualified tax credit employee stock ownership plan of the
Company because of the operation of the limitations of Code section 415 and the
provisions of this Section 12.2, no other amount may be allocated to the
Participant's Account under this Plan after the allocation date for such other
qualified tax credit employee stock ownership plan's plan year, until all such
unallocated securities have been allocated in accordance with the provisions of
such other qualified tax credit employee stock ownership plan. If contributions
to this Plan on behalf of a Participant are to be reduced as a result of this
Section 12.2, such reduction shall be effected by reducing contributions in the
following order: Supplemental Nondeferred Deposits, Basic Nondeferred Deposits
and corresponding matching Company Contributions, Supplemental Deferred Deposits
and finally, if necessary, Basic Deferred Deposits and corresponding remaining
matching Company Contributions. If, as a result of a reasonable error in
estimating a Participant's Compensation, or under the limited facts and
circumstances which the Commissioner finds justify the availability of the rules
set forth in paragraphs (a)-(c) of this Section 12.2, the allocation of Annual
Additions under the terms of the Plan for a particular Participant would cause
the limitations of Code section 415 applicable to that Participant for the
Limitation Year to be exceeded, the excess amounts shall not be deemed to be
Annual Additions in that Limitation Year if they are treated as follows:
(a) To the extent necessary, Deferred Deposits to the Plan shall be
recharacterized as Nondeferred Deposits and the Participant's
Nondeferred Deposits to the Plan (including Deferred Deposits
recharacterized as Nondeferred Deposits hereunder) and earnings
thereon shall be returned to the Participant.
(b) The excess amounts in the Participant's Account consisting of
Company Contributions shall be used to reduce Company
Contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for all Participants in the Plan.
For purposes of this subdivision, except as provided in (a) of
this Section 12.2, excess amounts may not be distributed to
Participants or former Participants.
(c) In the event of a termination of the Plan, the suspense account
described in (b) of this Section 12.2 shall revert to the Company
to the extent it may not then be allocated to any Participant's
Account.
(d) Notwithstanding any other provision in this Section 12.2, the
Company shall not contribute any amount that would cause an
allocation to the suspense account as of the date the
contribution is allocated. If the contribution is made prior to
the date as of which it is to be allocated, then such
contribution shall not exceed an amount that would cause an
allocation to the suspense account if the date of contribution
were an allocation date.
Section 12.3 Overall Limit. Notwithstanding any provision of this Plan to
the contrary, effective for Limitations Years beginning on or after January 1,
2000, the requirements contained in Code section 415(e) shall no longer apply.
ARTICLE XIII
BENEFICIARY IN EVENT OF DEATH
Section 13.1. Designation and Change of Beneficiary. Upon the death of a
married Participant, the spouse of the Participant shall be deemed the
designated beneficiary of the Participant, unless such spouse has consented, in
writing, to the designation of another beneficiary or beneficiaries (which may
include the estate of the Participant) or any change thereof. If such other
designated beneficiary or beneficiaries predecease a married Participant, such
Participant's spouse shall be deemed the designated beneficiary of the
Participant. If, in such case, the Participant's spouse has also predeceased the
Participant, the value of the Participant's Account shall be paid to his or her
estate.
Each unmarried Participant shall have the right to designate a beneficiary
or beneficiaries to receive any distributions to be made under Article XI upon
the death of such Participant. An unmarried Participant may from time to time,
without the consent of any beneficiary, change or cancel any such designation.
If no beneficiary has been named by a deceased unmarried Participant, or the
designated beneficiary has predeceased such Participant, the value of the
Participant's Account shall be paid to his or her estate as beneficiary.
Any spousal consent, beneficiary designation and any change therein shall
be made in the form and manner prescribed by the Committee and shall be filed
with the General Manager. Any distribution made to a beneficiary of a deceased
Participant under the Plan shall be made to the beneficiary as soon as
practicable after such Participant's death and shall be in the form of a lump
sum payment, regardless of the form of benefit selected by the deceased
Participant. The beneficiary may elect to have such payment made in money by
check, or may elect to have any whole shares of Company Common Stock held for
the deceased Participant's Company Common Stock Fund subaccount, Non-ESOP
Company Common Stock Fund subaccount, and Frozen ESOP Account distributed in
shares of Company Common Stock and the balance of the deceased Participant's
Account (including the value of any fractional shares of Company Common Stock)
paid in money by check. If no election is made, the entire distribution to the
beneficiary shall be made in money by check.
ARTICLE XIV
ADMINISTRATION
Section 14.1. Named Fiduciary. The Committee (and each member of the
Committee acting as such) shall be the named fiduciary of the Plan with
authority to control and manage the operation and administration of the Plan.
Section 14.2. Administration.
(a) The Committee shall have full discretionary authority to
interpret the Plan and to answer all questions which arise
concerning the application, administration and interpretation of
the Plan. The Committee shall adopt such rules and procedures as
in its opinion are necessary and advisable to administer the Plan
and to transact its business. Subject to the other requirements
of this Article XIV, the Committee may --
(1) Employ agents to carry out non-fiduciary responsibilities;
(2) Employ agents to carry out fiduciary responsibilities (other
than trustee responsibilities as defined in ERISA Section
405(c)(3));
(3) Consult with counsel, who may be of counsel to the Company
or an Affiliate; and
(4) Provide for the allocation of fiduciary responsibilities
(other than trustee responsibilities as defined in ERISA
Section 405(c)(3)) among its members. However, any action
described in subparagraphs (2) or (4) of this subparagraph
(a) and any modification or rescission of any such action,
may be effected by the Committee only by a resolution
approved by a majority of the Committee.
(b) The Committee shall keep written minutes of all its proceedings,
which shall be open to inspection by the Board of Directors. In
the case of any decision by the Committee with respect to a claim
for benefits under the Plan, the Committee shall include in its
minutes a brief explanation of the grounds upon which such
decision was based.
(c) In performing their duties, the members of the Committee shall
act solely in the interest of the Participants in the Plan and
their beneficiaries and:
(1) for the exclusive purpose of providing benefits to the
Participants and their beneficiaries;
(2) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man or woman
acting in like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and
with like aims; and
(3) in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are
consistent with the provisions of Title I of ERISA. In
addition to any other duties the Committee may have, the
Committee shall periodically review the performance of the
Trustee and any Investment Managers and the performance of
all other persons to whom fiduciary duties have been
delegated or allocated pursuant to the provisions of this
Article XIV.
(d) The Company agrees to indemnify and reimburse, to the fullest
extent permitted by law, members of the Committee, directors and
Employees of an Employer and all such former members, directors
and Employees, for any and all expenses, liabilities or losses
arising out of any act or omission relating to the rendition of
services for or the management and administration of the Plan.
(e) No member of the Committee nor any of its delegates shall be
personally liable by virtue of any contract, agreement or other
instrument made or executed by him or her or on his or her behalf
in such capacity.
Section 14.3. Control and Management of Assets. The assets of the Plan
shall be held by the Trustee, in trust, and shall be managed by the Trustee
and/or one or more Investment Managers appointed from time to time by the
Committee; provided, however, that the Committee shall have investment authority
with respect to loans approved pursuant to Section 11.13, and may, from time to
time, determine that the Trustee shall be subject to the direction of the
Committee with respect to certain other investments, in which case the Trustee
shall be subject to proper directions of the Committee which are in accordance
with the terms of the Plan and which are not contrary to applicable law.
Section 14.4. Benefits to be Paid from Trust. Benefits under the Plan shall
be payable only from the Trust Fund and only to the extent that such Trust Fund
shall suffice therefore and each Participant assumes all risk connected with any
decrease in market price of any securities in the respective Funds. Neither the
Company nor any Affiliate shall have any liability to make or continue from its
own funds the payment of any benefits under the Plan.
Section 14.5. Expenses. There shall be paid from the Trust Fund all
expenses incurred in connection with the administration of the Plan, including
but not limited to the compensation of the Trustee, record keeping fees, the
reasonable fees of counsel for the Trustee for legal services rendered to the
Trustee and the fees of Investment Managers appointed with respect to the
investment and reinvestment of the Trust Fund, except to the extent that such
expenses and fees are paid by the Employer. There shall be paid from the Trust
Fund all taxes of any and all kinds whatsoever that may be levied or assessed
under existing or future laws upon or in respect of the Trust Fund or any
property of any kind forming a part thereof, and all expenses including
brokerage costs and transfer taxes incurred in connection with the investment
and reinvestment of the Trust Fund.
Section 14.6. Overpayments. Any overpayment made to a Participant may be
withheld from subsequent payments made to such Participant or from payments made
to his/her surviving spouse or beneficiary until the overpayment has been
recouped.
ARTICLE XV
CLAIMS PROCEDURE
Section 15.1. Filing of Claims. Claims for benefits under the Plan shall be
filed in writing on such form or forms as may be prescribed by the Committee
with the General Manager.
Section 15.2. Appeal of Claims. Written notice shall be given to the
claiming Participant or beneficiary of the disposition of such claim, setting
forth specific reasons for any denial of such claim in whole or in part. If a
claim is denied in whole or in part, the notice shall state that such
Participant or beneficiary may, within sixty days of the receipt of such denial,
request in writing that the decision denying the claim be reviewed by the
Committee and provide the Committee with information in support of his or her
position by submitting such information in writing to the Secretary of the
Committee.
Section 15.3. Review of Appeals. The Committee shall review each claim for
benefits which has been denied in whole or in part and for which such review has
been requested and shall notify, in writing, the affected Participant or
beneficiary of its decision and of the reasons therefor. All decisions of the
Committee shall be final and binding upon all of the parties involved.
ARTICLE XVI
MERGER OR CONSOLIDATION
Section 16.1. Merger or Consolidation. In the case of any merger or
consolidation of the Plan with, or transfer of assets or liabilities to, any
other plan, each Participant or beneficiary shall be entitled to receive a
benefit immediately after the merger, consolidation or transfer (if the Plan had
been terminated) which is equal to or greater than the benefit he or she would
have been entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated). A merger or consolidation of the
Plan with, or transfer of assets or liabilities to, any other plan shall not be
deemed to be a termination or discontinuance of deposits and contributions
having the effect of such termination of the Plan.
ARTICLE XVII
NON-ALIENATION OF BENEFITS
Section 17.1. Non-Alienation of Benefits. Except as provided under Sections
11.13 and 21.1, no benefit or right under the Plan shall in any manner or to any
extent be assigned, alienated or transferred by any Participant or beneficiary
under the Plan or be subject to attachment, garnishment or other legal process.
Notwithstanding the foregoing, a Participant's benefit under the Plan may be
offset by any amount such Participant is ordered or required to pay as a result
of crimes involving the Plan, or a breach of a fiduciary duty owed by the
Participant with respect to the Plan, as set forth in Code section 401(a)(13),
on or after August 5, 1997.
ARTICLE XVIII
AMENDMENTS
Section 18.1. Amendment Process. The Company reserves the right, by action
of the Board of Directors, but subject to applicable law, at any time and from
time to time, to modify, suspend or amend in whole or in part any or all of the
provisions of the Plan, provided that no modification, suspension or amendment
shall make it possible to deprive any Participant or beneficiary of a previously
acquired right; and provided further that no such modification, suspension or
amendment shall make it possible for any part of the assets of the Plan to be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their beneficiaries under the Plan and for the payment of
expenses of the Plan.
ARTICLE XIX
TERMINATION
Section 19.1. Authority to Terminate. The Plan may, subject to collective
bargaining, be terminated in whole or in part at any time by the Board of
Directors, but only upon condition that such action is taken as shall render it
impossible for any part of the corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive benefit of the Participants
or their beneficiaries and for the payment of expenses of the Plan.
Section 19.2. Distribution Upon Termination. Upon termination or partial
termination of the Plan or upon the complete discontinuance of Deposits and
Employer Contributions under the Plan, the assets of the Trust Fund shall be
administered and distributed to the Participants or their beneficiaries at such
time or times and in such nondiscriminatory manner as is determined by the
Committee. Upon termination or partial termination of the Plan or upon the
complete discontinuance of Deposits and Employer Contributions under the Plan,
the rights of all affected Participants as of the date of such termination,
partial termination or discontinuance of Deposits and Employer Contributions
shall be nonforfeitable.
ARTICLE XX
PLAN CONFERS NO RIGHT TO EMPLOYMENT
Section 20.1. No Right to Employment. Nothing contained in the Plan shall
be construed as conferring any legal rights upon any Employee for a continuation
of employment or shall interfere with the rights of the Company or an Affiliate
to discharge any Employee or otherwise to treat him or her without regard to the
effect which such treatment might have upon such Employee with respect to the
Plan, except as may be limited by applicable law.
ARTICLE XXI
ALTERNATE PAYEES
Section 21.1. Alternate Payees Under QDROs. In the event that a domestic
relations order of any State is received by the Plan and thereafter determined
to be a Qualified Domestic Relations Order (QDRO) within the meaning of Code
section 414(p), the vested portion of the Account of the Participant to which
such QDRO is directed shall be apportioned as specified in such QDRO, valued as
of the accounting period preceding the date specified in such QDRO. Upon notice
to the Committee that a QDRO is being sought with respect to a Participant's
Account, no distribution or loan shall be made to a Participant until such time
as the status of the QDRO is determined. The alternate payee of the
Participant's Account shall thereafter participate in the Plan in accordance
with its terms, except such person shall not have the rights or benefits
provided in Article IV, Article V and in Section 11.13. If a QDRO is issued and
the amount awarded the alternate payee exceeds the value of the Participant's
Account less the outstanding loan balance, if any, such loan shall be deemed to
be in default and the Participant shall immediately repay the loan.
Notwithstanding the provisions of this Article, the Plan may, without the
consent of any such alternate payee, pay to such alternate payee the value of
his or her respective share of the apportioned Account of the Participant, if
the value thereof as so determined is $5,000 or less. If a QDRO so provides,
benefits may be paid to an alternate payee before they would otherwise be
distributable under the Plan, and no such distribution to an alternate payee
shall be treated as a withdrawal by the Participant for purposes of Article XI.
ARTICLE XXII
CONSTRUCTION
Section 22.1. Governing Law. The Plan shall be governed by and construed
and administered under the laws of the State of New Jersey, except to the extent
superseded by ERISA.
Section 22.2. Headings. The headings are for reference only. In the event
of a conflict between a heading and the content of an Article or Section, the
content shall control.