EXHIBIT 4.1
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BAY STATE GAS COMPANY
SAVINGS PLAN FOR OPERATING
EMPLOYEES AND TRUST
Amended and Restated effective January 1,1998
First Amendment
to the
Bay State Gas Company Savings Plan for Operating Employees and Trust
WHEREAS, Bay State Gas Company (the "Company"), approved and
adopted the Bay State Gas Company Savings Plan for Operating Employees
(the "Plan") and Trust Agreement (the "Trust") which were originally
effective January 1, 1988, and most recently restated January 1, 1998;
WHEREAS, Section 19.1 of the Plan and Trust provides that the
Company reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that the Plan is amended as follows:
EFFECTIVE JANUARY 9, 2000:
1. The Appendices are amended to amend Appendix D to add (k) as
follows:
(k) Springfield Division, United Steelworkers of America, AFL-
CIO-CLC, Local 12026 Clerical Technical Unit ("Local 12026-
Springfield Employees-Clerical Technical Unit") -
2. The Schedules are amended to add Schedule K as follows:
SCHEDULE K - LOCAL 12026 SPRINGFIELD CLERICAL TECHNICAL UNIT
Employee Pre-Tax Contributions Eligibility:
First day of the month following the completion of a 60 day
Period of Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a Period of
Employment consisting of twelve consecutive months in which he or
she is credited with at least 1,000 Hours of Service. For each
period for which Participant Contributions are made, the Employer
shall make Employer Contributions, as set forth below, on behalf
of each Participant who is a Local 1202 SpringfieId Employee-
Clerical Technical Unit Employee.
Amount of Employer Contributions:
The Employer Contribution for each period shall total 50% of each
eligible Participant's Employee Pre-Tax Contributions for the
period, provided that no Employer Contribution shall be made
based upon a Participant's Contributions in excess of 5% of his
or her Pay. Notwithstanding the foregoing, "100% of each eligible
Participant's Employee Pre-Tax Contributions for the period up to
2.5% of his or her Pay and 50% of each eligible Participant's
1
Employee Pre-Tax Contributions for the period on the next 5% of
his or her Pay" shall be substituted for the formula as stated in
the preceding sentence with regard to an eligible Participant
who:
(1) became an Employee before September 1, 1990 and was
under age 45 on January 1, 1992; or
(2) became an Employee on or after September 1, 1990; or
(3) became an Employee before September 1, 1990, was at
least age 45 on January 1, 1992 and irrevocably elected
to waive eligibility for post-retiree medical coverage
no later than September 1, 1992.
3. The Table of Contents is amended to amend APPENDIX D EL1GIBLE
EMPLOYEE to add SCHEDULE K as follows:
SCHEDULE K - LOCAL 12026 - SPRINGFIELD EMPLOYEES - CLERICAL
TECHNICAL UNIT
4. Section 5.1(a) is amended by deleting the phrase "Schedules A
through J" and substituting "Schedules A through K" therefor.
5. Section 5.1(b) is amended by deleting the phrase "Schedules A
through J" and substituting "Schedules A through K" therefor.
Date:_______________, 2000 Bay State Gas Company
By:___________________________________
Title:________________________________
The provisions of the above amendment that relate to the Trustee are
hereby approved and executed.
Date:_______________, 2000 Merrill Lynch Trust Company, FSB
By:___________________________________
Title:________________________________
2
Bay State Gas Company Savings Plan for Operating Employees and Trust
As Amended and Restated Effective January 1, 1998
Bay State Gas Company (the "Company"), having originally adopted and
established the Bay State Gas Company Savings Plan for Operating
Employees (the "Plan") and Trust Agreement (the "Trust") effective
January 1, 1988, for the exclusive benefit of eligible employees of
the Company and its participating affiliates, last amended and
restated the Plan and Trust effective April 1, 995. The Plan is
intended to constitute a qualified profit sharing plan, as described
in Code section 401(a), which includes a qualified cash or deferred
arrangement, as described in Code section 401(k).
The provisions of the Plan and Trust relating to the Trustee
constitute the trust agreement which is entered into by and between
the Company and Merrill Lynch Trust Company, FSB (the "Trustee"). The
Trust is intended to be tax exempt, as described in Code section
501(a).
The Plan is intended to comply with the qualification requirements as
amended by the Uniformed Services Employment and Reemployment Rights
Act of 1994 (USERRA), the Uruguay Round Agreements Act (GATT), the
Small Business Job Protection Act of 1996 (SBJPA), the Taxpayer Relief
Act of 1997 (TRA '97), and the Restructuring and Reform Act of 1998
(RRA '98), and is intended to comply in operation therewith. To the
extent that the Plan, as set forth below, is subsequently determined
to be insufficient to comply with such requirements and any
regulations issued under these qualification requirements, the Plan
shall later be amended to so comply.
The Bay State Gas Company Savings Plan for Operating Employees and
Trust, as set forth in this document, is hereby amended and restated
effective as of January 1, 1998 (except as otherwise indicated
herein).
Date:_______________, 2000 Bay State Gas Company
By: /s/ Barbara McKay
------------------------------------
Title:_________________________________
The trust agreement set forth in those provisions of the Plan and
Trust which relate to the Trustee is hereby executed.
Date:_______________, 2000 Merrill Lynch Trust Company,
FSB
By:____________________________________
Title:_________________________________
TABLE OF CONTENTS
PAGE
1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
2 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . 12
2.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . 12
2.2 Ineligible Employees . . . . . . . . . . . . . . . . . 13
2.3 Ineligible, Terminated or Former Participants . . . . . 13
3 PARTICIPANT CONTRIBUTIONS . . . . . . . . . . . . . . . . . 14
3. 1 Employee Pre-Tax Contribution Election . . . . . . . . 14
3.2 Changing a Contribution Election . . . . . . . . . . . 14
3.3 Revoking and Resuming a Contribution Election . . . . . 14
3.4 Contribution Percentage Limits . . . . . . . . . . . . 14
3.5 Refunds When Contribution Dollar Limit Exceeded . . . . 15
3.6 Timing, Posting and Tax Considerations . . . . . . . . 15
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER
QUALIFIED PLANS . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Rollover Contributions . . . . . . . . . . . . . . . . 16
4.2 Transfers From and To Other Qualified Plans . . . . . . 17
5 EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 17
5.1 Employer Contributions . . . . . . . . . . . . . . . . 17
5.2 Plan Expenses Contributions . . . . . . . . . . . . . . 18
6 ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.1 Individual Participant Accounting . . . . . . . . . . . 18
6.2 Sweep Account is Transaction Account . . . . . . . . . 18
6.3 Trade Date Accounting and lnvestment Cycle . . . . . . 19
6.4 Accounting for Investment Funds . . . . . . . . . . . . 19
6.5 Payment of Fees and Expenses . . . . . . . . . . . . . 19
6.6 Accounting for Participant Loans . . . . . . . . . . . 20
6.7 Error Correction . . . . . . . . . . . . . . . . . . . 20
6.8 Participant Statements . . . . . . . . . . . . . . . . 20
6.9 Special Accounting During Conversion Period . . . . . . 21
6.10 Accounts for Alternate Payees . . . . . . . . . . . . . 21
7 INVESTMENT FUNDS AND ELECTIONS . . . . . . . . . . . . . . . 22
7.1 Investment Funds . . . . . . . . . . . . . . . . . . . 22
7.2 Responsibility for Investment Choice . . . . . . . . . 22
7.3 Investment Fund Elections . . . . . . . . . . . . . . . 23
7.4 Default if No Valid Investment Election . . . . . . . . 23
7.5 Investment Fund Election Change Fees . . . . . . . . . 23
8 VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Fully Vested Accounts . . . . . . . . . . . . . . . . . 23
9 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . . . 23
9.1 Participant Loans Permitted . . . . . . . . . . . . . . 23
i
9.2 Loan Application, Note and Security . . . . . . . . . . 24
9.3 Spousal Consent . . . . . . . . . . . . . . . . . . . . 24
9.4 Loan Approval . . . . . . . . . . . . . . . . . . . . . 24
9.5 Loan Funding Limits, Account Sources and Funding Order 24
9.6 Maximum Number of Loans . . . . . . . . . . . . . . . . 25
9.7 Source and Timing of Loan Funding . . . . . . . . . . . 25
9.8 Interest Rate . . . . . . . . . . . . . . . . . . . . . 25
9.9 Loan Payment . . . . . . . . . . . . . . . . . . . . . 25
9.10 Loan Payment Hierarchy . . . . . . . . . . . . . . . . 25
9.11 Repayment Suspension . . . . . . . . . . . . . . . . . 26
9.12 Loan Default . . . . . . . . . . . . . . . . . . . . . 26
9.13 Call Feature . . . . . . . . . . . . . . . . . . . . . 26
10 IN-SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . . . 26
10.1 In-Service Withdrawals Permitted . . . . . . . . . . . 26
10.2 In-Service Withdrawal Application and Notice . . . . . 27
10.3 Spousal Consent . . . . . . . . . . . . . . . . . . . . 27
10.4 In-Service Withdrawal Approval . . . . . . . . . . . . 27
10.5 Payment Form and Medium . . . . . . . . . . . . . . . . 28
10.6 Source and Timing of In-Service Withdrawal Funding . . 28
10.7 Hardship Withdrawals . . . . . . . . . . . . . . . . . 28
10.8 Prior After-Tax Account Withdrawals . . . . . . . . . . 30
10.9 Rollover Account Withdrawals . . . . . . . . . . . . . 30
10.10 Prior Company Account Plus Withdrawals . . . . . . 31
10.11 Over Age 59 1/2 Withdrawals . . . . . . . . . . . 31
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A
PARTICIPANT'S REQUIRED BEGINNING DATE . . . . . . . . . . . 32
11.1 Benefit Information, Notices and Election . . . . . . . 32
11.2 Spousal Consent . . . . . . . . . . . . . . . . . . . . 33
11.3 Payment Form and Medium . . . . . . . . . . . . . . . . 33
11.4 Distribution of Small Amounts . . . . . . . . . . . . . 33
11.5 Source and Timing of Distribution Funding . . . . . . . 34
11.6 Latest Commencement Permitted . . . . . . . . . . . . . 34
11.7 Payment Within Life Expectancy . . . . . . . . . . . . 35
11.8 Incidental Benefit Rule . . . . . . . . . . . . . . . . 35
11.9 Payment to Beneficiary . . . . . . . . . . . . . . . . 36
11.10 Beneficiary Designation . . . . . . . . . . . . . 36
12 ADP AND ACP TESTS . . . . . . . . . . . . . . . . . . . . . 37
12.1 Contribution Limitation Definitions . . . . . . . . . . 37
12.2 ADP and ACP Tests . . . . . . . . . . . . . . . . . . . 41
12.3 Connection of ADP and ACP Tests for Plan Years
Commencing Before January 1, 1997 . . . . . . . . . . . 42
12.4 Connection of ADP and ACP Tests for Plan Years
Commencing After December 31, 1996 . . . . . . . . . . 43
12.5 Multiple Use Test . . . . . . . . . . . . . . . . . . . 45
12.6 Connection of Multiple Use Test . . . . . . . . . . . . 45
12.7 Adjustment for Investment Gain on Loss . . . . . . . . 45
12.8 Testing Responsibilities and Required Records . . . . . 46
12.9 Separate Testing . . . . . . . . . . . . . . . . . . . 46
ii
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS . . . . . . . . 46
13.1 "Annual Addition" Defined . . . . . . . . . . . . . . . 46
13.2 Maximum Annual Addition . . . . . . . . . . . . . . . . 47
13.3 Avoiding an Excess Annual Addition . . . . . . . . . . 47
13.4 Correcting an Excess Annual Addition . . . . . . . . . 47
13.5 Correcting a Multiple Plan Excess . . . . . . . . . . . 47
13.6 "Defined Benefit Fraction" Defined . . . . . . . . . . 48
13.7 "Defined Contribution Fraction" Defined . . . . . . . . 48
13.8 Combined Plan Limits and Correction . . . . . . . . . . 48
14 TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . . . 49
14.1 Top Heavy Definitions . . . . . . . . . . . . . . . . . 49
14.2 Special Contributions . . . . . . . . . . . . . . . . . 51
14.3 Adjustment to Combined Limits for Different Plans . . . 51
15 PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 51
15.1 Plan Delineates Authority and Responsibility . . . . . 51
15.2 Fiduciary Standards . . . . . . . . . . . . . . . . . . 52
15.3 Company's Benefits Committee is ERISA Plan
Administrator . . . . . . . . . . . . . . . . . . . . . 52
15.5 Advisors May be Retained . . . . . . . . . . . . . . . 53
15.6 Delegation of Administrator Duties . . . . . . . . . . 54
15.7 Committee Operating Rules . . . . . . . . . . . . . . . 54
15.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . 55
15.9 Company Not A Fiduciary . . . . . . . . . . . . . . . . 55
16 MANAGEMENT OF INVESTMENTS . . . . . . . . . . . . . . . . . 55
16.1 Trust Agreement . . . . . . . . . . . . . . . . . . . . 55
16.2 Investment Funds . . . . . . . . . . . . . . . . . . . 55
16.3 Authority to Hold Cash . . . . . . . . . . . . . . . . 56
16.4 Trustee to Act Upon Instructions . . . . . . . . . . . 56
16.5 Administrator Has Right to Vote Registered Investment
Company Shares . . . . . . . . . . . . . . . . . . . . 57
16.6 Custom Fund Investment Management . . . . . . . . . . . 57
16.7 Master Custom Fund . . . . . . . . . . . . . . . . . . 58
16.8 Authority to Segregate Assets . . . . . . . . . . . . . 58
16.10 Participants Have Right to Vote and Tender Company
Stock . . . . . . . . . . . . . . . . . . . . . . 59
16. 11 Registration and Disclosure for Company Stock . . 59
17 TRUST ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 59
17.1 Trustee to Construe Trust . . . . . . . . . . . . . . . 59
17.2 Trustee To Act As Owner of Trust Assets . . . . . . . . 60
17.3 United States Indicia of Ownership . . . . . . . . . . 60
17.4 Tax Withholding and Payment . . . . . . . . . . . . . . 60
17.5 Trust Accounting . . . . . . . . . . . . . . . . . . . 61
17.6 Valuation of Certain Assets . . . . . . . . . . . . . . 61
17.7 Legal Counsel . . . . . . . . . . . . . . . . . . . . . 61
17.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . 62
17.9 Trustee Duties and Limitations . . . . . . . . . . . . 62
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION . . . . . 62
iii
18.1 Plan Does Not Affect Employment Rights . . . . . . . . 62
18.2 Compliance With USERRA . . . . . . . . . . . . . . . . 62
18.3 Limited Return of Contributions . . . . . . . . . . . . 63
18.4 Assignment and Alienation . . . . . . . . . . . . . . . 63
18.5 Facility of Payment . . . . . . . . . . . . . . . . . . 64
18.6 Reallocation of Lost Participant's Accounts . . . . . . 64
18.7 Suspension of Certain Plan Provisions During Conversion
Period . . . . . . . . . . . . . . . . . . . . . . . . 64
18.8 Suspension of Certain Plan Provisions During Other
Periods . . . . . . . . . . . . . . . . . . . . . . . . 64
18.9 Claims Procedure . . . . . . . . . . . . . . . . . . . 65
18.10 Construction . . . . . . . . . . . . . . . . . . . 66
18.11 Jurisdiction and Severability . . . . . . . . . . 66
18.12 Indemnification by Employer . . . . . . . . . . . 66
18.13 Effect of Collectively Bargained Schedules . . . . 67
18.14 Release by Participants and Beneficiaries . . . . 67
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION . . . . . . 67
19.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . 67
19.2 Merger . . . . . . . . . . . . . . . . . . . . . . . . 68
19.3 Divestitures . . . . . . . . . . . . . . . . . . . . . 68
19.4 Plan Termination and Complete Discontinuance of
Contributions . . . . . . . . . . . . . . . . . . . . . 69
19.5 Amendment and Termination Procedures . . . . . . . . . 69
19.6 Termination of Employer's Participation . . . . . . . . 70
19.7 Replacement of the Trustee . . . . . . . . . . . . . . 70
19.8 Final Settlement and Accounting of Trustee . . . . . . 70
APPENDIX A - INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . 72
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES . . . . . . . . . 73
APPENDIX C - LOAN INTEREST RATE . . . . . . . . . . . . . . . . . 74
APPENDIX D - ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . . . 75
SCHEDULE A - LOCAL 326 LAWRENCE EMPLOYEES . . . . . . . . . . . . 76
SCHEDULE B - LOCAL 273 BROCKTON OPERATING EMPLOYEES . . . . . . . 77
SCHEDULE C - LOCAL 273 BROCKTON CLERICAL/TECHNICAL EMPLOYEES . . 78
SCHEDULE D - LOCAL 341PORTLAND EMPLOYEES . . . . . . . . . . . . 79
SCHEDULE E - LOCAL 341 GRANITE STATE EMPLOYEES . . . . . . . . . 80
SCHEDULE F - LOCAL 12026 SPRINGFIELD EMPLOYEES . . . . . . . . . 81
SCHEDULE G - LOCAL 486 SPRINGFIELD EMPLOYEES . . . . . . . . . . 82
SCHEDULE H - LOCAL 12012-6 PORTSMOUTH EMPLOYEES . . . . . . . . . 83
iv
SCHEDULE I - LOCAL 8-366 ENERGYUSA BROCKTON PROPANE EMPLOYEES . . 84
SCHEDULE J - LOCAL 12012-8 ENERGYUSA NORTHERN PROPANE EMPLOYEES . 85
v
1 DEFINITIONS
When capitalized, the words and phrases below have the following
meanings unless different meanings are clearly required by the
context:
1.1 "Account". The records maintained by the Administrator for
purposes of accounting for a Participant's interest in the
Plan. "Account" may refer to one or all of the following
accounts which have been created on behalf of a Participant
to hold amounts attributable to specific types of
Contributions under the Plan, contributions previously
permitted under the Plan and amounts transferred from the
Bay State Gas Company Employee Stock Ownership Plan (the
"ESOP") and/or the Bay State Gas Company Employee Savings
Plan (the "Salaried Plan") in accordance with Section 4.2:
(a) "Employee Pre-Tax Account". An account created to hold
amounts attributable to Employee Pre-Tax Contributions
and amounts transferred from the Salaried Plan
designated as "Employee Pre-Tax Account" amounts
thereunder.
(b) "Prior After-Tax. Account". An account created to hold
amounts attributable to amounts transferred from the
Salaried Plan designated as "Prior After-Tax Account"
amounts thereunder.
(c) "Rollover Account". An account created to hold amounts
attributable to Rollover Contributions and amounts
transferred from the Salaried Plan designated as
"Rollover Account" amounts thereunder.
(d) "Employer Account". An account created to hold amounts
attributable to Employer Contributions and amounts
transferred from the Salaried Plan designated as
"Employer Match Account" amounts thereunder.
(e) "Plan Expense Account". An account created to hold
amounts attributable to Plan Expenses Contributions.
(f) "Prior Company Account". An account created to hold
amounts transferred from the Salaried Plan designated
as "Prior Company Account" amounts thereunder.
1.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
1.3 "Administrator". The Bay State Gas Company Benefits
Committee, which may delegate all or a portion of the duties
1
of the Administrator under the Plan to a Committee in
accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage
calculated in accordance with Section 12.1.
1.5 "Alternate Payee". Any spouse, former spouse, child or other
dependent (as defined in Code section 152) of a Participant
who is recognized by a qualified domestic relations order
("ODRO") as having a right to receive all, or a portion, of
the Participant's Account under the Plan.
1.6 "Beneficiary". The person(s) entitled to receive benefits
under the Plan after the death of either the Participant
pursuant to the "Beneficiary Designation" paragraph in
Section 11 or the Alternate Payee pursuant to Section 6.10.
1.7 "Code". The Internal Revenue Code of 1986, as amended.
Reference to any specific Code section shall include such
section, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation amending,
supplementing or superseding such section.
1.8 "Committee". If applicable, the committee which has been
appointed by the Administrator to administer the Plan in
accordance with Section 15.6.
1.9 "Company". Bay State Gas Company or any successor by
merger, purchase or otherwise.
1.10 "Company Stock". Shares of common stock of the Company, its
predecessor(s), or its successors or assigns, or any
corporation with or into which said Company may be merged,
consolidated or reorganized, or to which a majority of its
assets may be sold.
1.11 "Compensation". The sum of a Participant's Taxable Income
and salary reductions, if any, pursuant to Code section 125,
402(e)(3), 402(g), 402(h)(1)(B), 403(b), 408(p)(2)(A)(i) or
457.
For purposes of determining benefits under the Plan,
Compensation is limited to $150,000 per Plan Year (as
adjusted for cost of living increases pursuant to Code
sections 401(a)(17) and 415(d)). For Plan Years commencing
before January 1, 1997, for purposes of the preceding
sentence, in the case of an HCE who is a 5% Owner or one of
the 10 most highly compensated Employees, (i) such HCE and
such HCE"s family group (as defined below) shall be treated
as a single employee and the Compensation of each family
group member shall be aggregated with the Compensation of
such HCE, and (ii) the limitation on Compensation shall be
2
allocated among such HCE and his or her family group members
in proportion to each individual's Compensation before the
application of this sentence. For purposes of this Section,
the term "family group" shall mean an Employee's spouse and
lineal descendants who have not attained age 19 before the
close of the year in question.
For purposes of determining HCEs and key employees and for
Plan Years commencing after December 31, 1997, for purposes
of Sections 13.2 and 14.2, Compensation for the entire Plan
Year shall be used. For purposes of determining ADP and ACP,
Compensation shall be limited to amounts paid to an Eligible
Employee while a Participant.
1.12 "Contribution". An amount contributed to the Plan by the
Employer or an Eligible Employee, and allocated by
contribution type to Participants" Accounts, as described in
Section 1.1. Specific types of contribution include:
(a) "Employee Pre-Tax Contribution". An amount contributed
by an eligible Participant in conjunction with his or
her Code section 401(k) salary deferral election which
shall be treated as made by the Employer on the
eligible Participant's behalf.
(b) "Rollover Contribution". An amount contributed by an
Eligible Employee which originated from another
employer's or the Employer's qualified plan.
(c) "Employer Contribution". An amount contributed by the
Employer on an eligible Participant's behalf based upon
the amount contributed by the eligible Participant.
(d) "Plan Expenses Contribution". An amount contributed by
the Employer, at its discretion, for the payment of
expenses of the Plan and Trust.
1.13 "Contribution Dollar Limit". The annual limit placed on each
Participant's Employee Pre-Tax Contributions, which shall be
$7,000 per calendar year (as adjusted for cost of living
increases pursuant to Code sections 402(g)(5) and 415(d)).
For purposes of this Section, a Participant's Employee Pre-
Tax Contributions shall include (i) any employer
contribution under a qualified cash or deferred arrangement
(as defined in Code section 401(k)) to the extent not
includible in gross income for the taxable year under Code
section 402(e)(3) (determined without regard to Code section
402(g)), (ii) any employer contribution to the extent not
includible in gross income for the taxable year under Code
section 402(h)(1)(B) (determined without regard to Code
section 402(g)), (iii) any employer contribution to purchase
an annuity contract under Code section 403(b) under a salary
reduction agreement (within the meaning of Code section
3
3121(a)(5)(D)) and (iv) for calendar years commencing after
December 31, 1996, any elective employer contribution under
Code section 408(p) (2) (A) (i).
1.14 "Conversion Period". The period of converting the prior
accounting system of any plan and trust which is merged, in
whole or in part, into the Plan and Trust, to the accounting
system described in Section 6.
1.15 "Direct Rollover". An Eligible Rollover Distribution that
is paid by the Plan directly to an Eligible Retirement Plan
for the benefit of a Distributee.
1.16 "Disability". A Participant's total and permanent, mental or
physical disability resulting in termination of employment
as evidenced by presentation of medical evidence
satisfactory to the Administrator.
1.17 "Distributee". A Participant, a Beneficiary (if he or she
is the surviving spouse of a Participant) or an Alternate
Payee under a ODRO (if he or she is the spouse or former
spouse of a Participant).
1.18 "Effective Date". The date upon which the provisions of
this document become effective. This date is January 1,
1998, unless stated otherwise. In general, the provisions of
this document only apply to Participants who are Employees
on or after the Effective Date. However, investment and
distribution provisions apply to all Participants with
Account balances to be invested or distributed after the
Effective Date.
1.19 "Eligible Employee". An Employee of the Employer, whose
compensation, conditions of employment, or position are
covered by a collective bargaining agreement to which the
Employer is a party, which agreement calls for the
Employee's participation in the Plan, which collective
bargaining units as of the Effective Date are set forth in
Appendix D.
1.20 "Eligible Retirement Plan". 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 a
Distributee's Eligible Rollover Distribution, except that,
if the Distributee is the surviving spouse of a Participant,
an Eligible Retirement Plan is an individual retirement
account or individual retirement annuity.
1.21 "Eligible Rollover Distribution". A distribution of all or
any portion of the balance to the credit of a Distributee,
4
excluding (i) a distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies)
of the Distributee and the Distributee's designated
Beneficiary, or for a specified period often years or more;
(ii) a distribution to the extent such distribution is
required under Code section 401(a)(9); (iii) the portion of
a distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to Employer
securities); and effective January 1, 1999, (iv) Hardship
Withdrawal amounts withdrawn from a Participant's Pre-Tax
Account.
As regards (iv) above, for the 1999 calendar year, the
Distributee may determine a distribution to be an Eligible
Rollover Distribution using the definition prior to 1999.
1.22 "Employee". An individual who is directly employed by the
Employer in a position that the Company determines to be
subject to federal and/or state employment income or social
security taxes and for whom such taxes are regularly
withheld from such employment income by the Employer.
5
1.23 "Employer". The Company and any other Related Company which
adopts the Plan with the approval of the Company.
1.24 "ERISA". The Employee Retirement Income Security Act of
1974, as amended. Reference to any specific ERISA section
shall include such section, any valid regulation promulgated
thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding such
section.
1.25 "Former Participant". The Plan status of an individual after
he or she is determined to be a Terminated Participant and
his or her Account is distributed or forfeited.
1.26 "HCF" or "Highly Compensated Employee". An Employee
described as a Highly Compensated Employee in Section 12.
1.27 "Hour of Service". Each hour for which an Employee is
entitled to:
(a) payment for the performance of duties for any Related
Company;
(b) payment from any Related Company on account of a period
of time during which no duties are performed
(irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty,
military duty or leave of absence;
(c) back pay, irrespective of mitigation of damages, by
award or agreement with any Related Company (and these
hours shall be credited to the period to which the
award or agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these
hours shall be based upon his or her normally scheduled
hours per week or a 40 hour week if there is no regular
schedule).
The crediting of Hours of Service for which no duties are
performed shall be in accordance with the U.S. Department of
Labor regulation sections 2530.200b- 2(b) and (c). Actual
hours shall be used whenever an accurate record of hours are
maintained for an Employee. Otherwise, an equivalent number
of hours shall be credited for each payroll period in which
the Employee would be credited with at least 1Hour of
Service. The payroll period equivalencies are 45 hours
weekly, 90 hours biweekly, 95 hours semimonthly and 190
hours monthly.
6
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her
Hours of Service for eligibility and/or vesting purposes if
(1) the Company directs that credit for such service be
granted, or (2) a qualified plan of the predecessor or
acquired company is subsequently maintained by any Related
Company.
1.28 "Ineligible". The Plan status of an individual who is (1)
an Employee of a Related Company which is not then an
Employer, (2) an Employee of an Employer, but not an
Eligible Employee, or (3) not an Employee.
1.29 "Ineligible Participant". The Plan status of a Participant
who is (1) an Employee of a Related Company which is not
then an Employer, or (2) an Employee of an Employer, but not
an Eligible Employee.
1.30 "Investment Fund". An investment fund as described in
Section 16.2. The Investment Funds authorized by the
Administrator to be offered under the Plan as of the
Effective Date are set forth in Appendix A.
1.31 "Leave of Absence". A period during which an individual is
deemed to be an Employee, but is absent-from active
employment, provided that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed
forces and the individual returns to active employment
within the period during which he or she retains
employment rights under federal law.
1.32 "Loan Account". The record maintained for purposes of
accounting for a Participant's loan and payments of
principal and interest thereon.
1.33 "NHCE" or "Non-Highly Compensated Employee". An Employee
described as a Non-Highly Compensated Employee in Section
12.
1.34 "Normal Retirement Date". The date of a Participant's 65th
birthday.
1.35 "Owner". A person with an ownership interest in the
capital, profits, outstanding stock or voting power of a
Related Company within the meaning of Code section 318 or
416 (which exclude indirect ownership through a qualified
plan).
7
1.36 "Parental Leave". The period of absence from work by reason
of the pregnancy of an Employee, the birth of the Employee's
child, the placement of a child with the Employee in
connection with the child's adoption, or the caring for such
child immediately after birth or placement as described in
Code section 410(a)(5)(F).
1.37 "Participant". The Plan status of an Eligible Employee after
he or she completes the eligibility requirements and enters
the Plan as described in Section 2. 1 and any individual for
whom assets have been transferred from a predecessor plan
merged, in whole or in part, with the Plan. An Eligible
Employee who makes a Rollover Contribution prior to
completing the eligibility requirements as described in
Section 2.1 shall also be considered a Participant, except
that he or she shall not be considered a Participant for
purposes of Plan provisions related to Contributions, other
than a Rollover Contribution, until he or she completes the
eligibility requirements and enters the Plan as described in
Section 2.1. A Participant's participation continues until
his or her employment with all Related Companies ends and
his or her Account is distributed or forfeited.
1.38 "Pay". The straight time wages, exclusive of all daily or
weekly overtime, bonuses, supplementary compensation
payments, retirement benefits and other forms of non-
recurring compensation, but inclusive of shift
differentials, Saturday/Sunday premiums, compensation paid
at an alternative rate (not including compensation paid at
an alternative rate to a salesperson) and seventy-five
percent of sales commissions paid to an Eligible Employee by
an Employer while he or she is a Participant during the
current period. Notwithstanding the foregoing sentence, one-
hundred percent of sales commissions paid to an Eligible
Employee of Energy USA while he or she is a Participant
during the period beginning on or after the date he first
performs an Hour of Service for Energy USA shall be included
in Pay.
Pay is neither increased by any salary credit or decreased
by any salary reduction pursuant to Code sections 125 or
402(e)(3). Pay is limited to $150,000 per Plan Year (as
adjusted for cost of living increases pursuant to Code
sections 401(a)(17) and 415(d)).
1.39 "Period of Employment". The period beginning on the date an
Employee first performs an hour of service and ending on the
date his or her employment ends. Employment ends on the date
the Employee quits, is discharged, retires or dies or (if
earlier) the first anniversary of his or her absence for any
other reason. The period of absence starting with the date
an Employee's employment ends and ending on the date he or
8
she next performs an hour of service is (1) included in his
or her Period of Employment if the period of absence does
not exceed one year, and (2) excluded if such period exceeds
one year.
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her
Period of Employment for eligibility and/or vesting purposes
if (1) the Company directs that credit for such service be
granted, or (2) a qualified plan of the predecessor or
acquired company is subsequently maintained by any Related
Company.
1.40 "Plan". The Bay State Gas Company Savings Plan for
Operating Employees set forth in this document, as from time
to time amended.
1.41 "Plan Year". The annual accounting period of the Plan and
Trust which ends on each December 31.
1.42 "ODRO". A domestic relations order which the Administrator
has determined to be a qualified domestic relations order
within the meaning of Code section 414(p).
1.43 "Reduction in Force". An Employer sponsored program
developed to reduce its workforce on a permanent basis.
1.44 "Related Company". With respect to any Employer, that
Employer and any corporation, trade or business which is,
together with that Employer, a member of the same controlled
group of corporations, a trade or business under common
control, or an affiliated service group within the meaning
of Code sections 414(b), (c), (IN) or (o), except that for
purposes of Section 13 "within the meaning of Code sections
414(b), (c), (IN) or (o), as modified by Code section
415(h)" shall be substituted for the preceding reference to
"within the meaning of Code sections 414(b), (c), (IN) or
(o)".
1.45 "Required Beginning Date". The latest date benefit payments
shall commence to a Participant.
(a) For calendar years commencing before January 1, 1997,
such date shall mean:
(1) with regard to a Participant who attained age 70
1/2 in 1996, did not terminate employment with all
Related Companies before January 1, 1997, and is
or was not a 5% Owner, the April 1 that next
follows (i) the calendar year in which the
Participant attained age 70 1/2, or (ii) if the
Participant elects to apply this clause (ii), the
9
calendar year in which the Participant terminates
employment with all Related Companies and any such
election must be made prior to January 1, 1998);
and
(2) with regard to a Participant who attained age 70
1/2 after December 31, 1987 and before January 1,
1996 or, in 1996 if he or she terminated
employment with all Related Companies before
January 1, 1997 or is or was a 5% Owner, the April
1 that next follows the calendar year in which the
Participant attains age 70 1/2; and
(3) with regard to a Participant who attained age 70
1/2 before January 1, 1988 and who is not a 5%
Owner, the April 1 that next follows the later of
(i) the calendar year in which the Participant
attained age 70 1/2, or (ii) the calendar year in
which the Participant terminates employment with
all Related Companies; and
(4) with regard to a Participant who attained age 70
1/2 before January 1, 1988 and who is a 5% Owner,
the April 1 that next follows the later of (i) the
calendar year in which the Participant attained
age 70 1/2, or (ii) the earlier of the calendar
year in which or within which ends the Plan Year
in which the Participant becomes a 5% Owner or the
calendar year in which he or she terminates
employment with all Related Companies.
A Participant shall be considered a 5% Owner for this
purpose if such Participant is a 5% Owner as defined in
Code section 416(i) (determined in accordance with Code
section 416 but without regard to whether the Plan is
top-heavy) at any time during the Plan Year ending with
or within the calendar year in which the Participant
attains age 661/2 or in any subsequent Plan Year.
(b) For calendar years commencing after December 31, 1996
and before January 1, 1999, such date shall mean:
(1) with regard to a Participant who attained age 70
1/2 in 1997 or 1998, the April 1 that next follows
the calendar year in which he or she attained age
70 1/2, except that if the Participant did not
terminate employment with all Related Companies
before January 1 of the calendar year following
the calendar year in which he or she attained age
70 1/2, is not a 5% Owner, such date shall instead
mean the April 1 that next follows (i) the
calendar year in which the Participant attained
10
age 70 1/2, or (ii) if the Participant elects to
apply this clause (ii), the calendar year in which
the Participant terminates employment with all
Related Companies (and any such election must be
made prior to the April 1 of the calendar year
following the calendar year in which he or she
attained age 70 1/2); and
(2) with regard to a Participant who is a 5% Owner,
the April 1 that next follows the calendar year in
which the Participant attains age 70 1/2.
A Participant shall be considered a 5% Owner for this
purpose if such Participant is a 5% Owner with respect to
the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2.
(c) For calendar years commencing after December 31, 1998,
such date shall mean:
(1) with regard to a Participant who is not a 5%
Owner, the April 1 that next follows the later of
(i) the calendar year in which the Participant
attained age 70 1/2, or (ii) the calendar year in
which the Participant terminates employment with
all Related Companies; and
(2) with regard to a Participant who is a 5% Owner,
the April 1 that next follows the calendar year in
which the Participant attains age 70 1/2.
A Participant shall be considered a 5% Owner for this
purpose if such Participant is a 5% Owner with respect to
the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2.
1.46 "Settlement Date". For each Trade Date, the Trustee's next
business day.
1.47 "Spousal Consent". The written consent given by a spouse to
a Participant's Beneficiary designation.- The spouse's
consent must acknowledge the effect on the spouse of the
Participant's designation, and be duly witnessed by a Plan
representative or notary public. Spousal Consent shall be
valid only with respect to the spouse who signs the Spousal
Consent and only for the particular choice made by the
Participant which requires Spousal Consent. A Participant
may revoke (without Spousal Consent) a prior designation
that required Spousal Consent at any time before payments
begin. Spousal Consent also means a determination by the
Administrator that there is no spouse, the spouse cannot be
11
located, or such other circumstances as may be established
under Code section 417(a)(2)(B).
1.48 "Sweep Account". The subsidiary Account for each
Participant through which all transactions are processed,
which is invested in interest bearing deposits (which may
include interest bearing deposits of the Trustee) and/or
money market type assets or funds.
1.49 "Sweep Date". The cut off date and time for receiving
instructions for transactions to be processed on the next
Trade Date.
1.50 "Taxable Income". Compensation in the amount reported by
the Employer or a Related Company as "Wages, tips, other
compensation" on Form W-2, or any successor method of
reporting under Code section 6041(d).
1.51 "Terminated Participant". The Plan status of a Participant
who is not an Employee and with respect to whom the
Administrator has reported to the Trustee that the
Participant's employment has terminated with all Related
Companies.
1.52 "Trade Date". Each day the Investment Funds are valued,
which is normally every day the assets of such Investment
Funds are traded.
1.53 "Trust". The legal entity created by those provisions of
this document which relate to the Trustee. The Trust is part
of the Plan and holds the Plan assets which are comprised of
the aggregate of Participants" Accounts, any unallocated
funds invested in interest bearing deposits (which may
include interest bearing deposits of the Trustee) and/or
money market type assets or funds, pending allocation to
Participants" Accounts or disbursement to pay Plan fees and
expenses.
1.54 "Trustee". Merrill Lynch Trust Company, FSB, a federal
savings bank, chartered under the laws of the United States.
1.55 "USERRA". The Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended.
2 ELIGIBILITY
2.1 Eligibility
Except as otherwise provided in the Schedules attached to
this Plan, eligibility to participate in the Plan and to
receive benefits under the Plan, shall be determined by
reference to this Article 2. In the event of any conflict
12
between the terms of this Article 2, and one or more of the
Schedule(s), the terms of the Schedules shall govern with
respect to the Participants covered by the affected
Schedule(s).
All Participants as of January 1, 1998 shall continue their
eligibility to participate.
Each other Eligible Employee shall become a Participant on
the first day of the next month after the date he or she
completes a Period of Employment consisting of twelve
consecutive months during which he or she is credited with
at least 1,000 Hours of Service. The initial twelve
consecutive month Period of Employment used to determine
whether an otherwise Eligible Employee may become-a
Participant begins on the date an Employee first performs an
Hour of Service. Subsequent measuring periods for this
purpose begin with the first day of each Plan Year beginning
after the first Hour of Service is performed.
Notwithstanding the foregoing, if so provided by the
Employee's governing collective bargaining agreement, for
purposes of Employee Pre-Tax Contributions only, such
Eligible Employee shall become a Participant on the first
day of the next month after the date he or she completes a
60 day Period of Employment but in no event later than the
date he or she would have otherwise become a Participant in
accordance with the preceding paragraph. The eligibility
period begins on the date an Employee's Period of Employment
commences.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements,
but is Ineligible at the time participation would otherwise
begin (if he or she were not Ineligible), he or she shall
become a Participant on the first subsequent date on which
he or she is an Eligible Employee.
2.3 Ineligible, Terminated or Former Participants
An Ineligible, Terminated or Former Participant may not make
or share in any Contributions, other than such Contributions
due to be made on his or her behalf after the date he or she
became an Ineligible, Terminated or Former participant for
periods prior to such date, nor may an Ineligible or
Terminated Participant be eligible for a new Plan loan
(except as described in Section 9.1), during the period he
or she is an Ineligible or Terminated Participant, but he or
she shall continue to participate for all other purposes. An
Ineligible, Terminated or Former Participant shall
13
automatically become an active Participant on the date he or
she again becomes an Eligible Employee.
3 PARTICIPANT CONTRIBUTIONS
3. 1 Employee Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect
to reduce his or her Pay by an amount which does not exceed
the Contribution Dollar Limit or the limits described in the
Contribution Percentage Limits paragraph of this Section 3,
and have such amount contributed to the Plan by the Employer
as a Employee Pre-Tax Contribution. The election shall be
made in such manner and with such advance notice as
prescribed by the Administrator and may be limited to a
whole percentage of Pay. In no event shall an Employee's
Employee Pre-Tax Contributions under the Plan and comparable
contributions to all other plans, contracts or arrangements
of all Related Companies exceed the Contribution Dollar
Limit for the Employee's taxable year beginning in the Plan
Year.
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or
her Employee Pre-Tax Contribution election as of the first
day of any month in such manner and with such advance notice
as prescribed by the Administrator, and such election change
shall be effective with the first payroll paid after such
date. A Participant's Contribution election made as a
percentage of Pay shall automatically apply to Pay increases
or decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Employee Pre-Tax
Contribution election at any time in such manner and with
such advance notice as prescribed by the Administrator, and
such revocation shall be effective with the first payroll
paid after such date.
A Participant who is an Eligible Employee may resume
Employee Pre-Tax Contributions by making a new election at
the same time in which a Participant may change his or her
election in such manner and WITH SUCH ADVANCE NOTICE as
prescribed by the Administrator, and such election shall be
effective with the first payroll paid after such date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to
time, in writing, without the necessity of amending the Plan
14
and Trust, the minimum, if applicable, and maximum Employee
Pre-Tax Contribution percentages, prospectively or
retrospectively (for the current Plan Year), for all
Participants. In addition, the Administrator may establish
any lower percentage limits for Highly Compensated Employees
as it deems necessary to satisfy the tests described in
Section 12. As of the Effective Date, the Employee Pre-Tax
Contribution maximum percentage is 15%.
Irrespective of the limits that may be established by the
Administrator in accordance with the paragraph above, in no
event shall the Contributions made by or on behalf of a
Participant for a Plan Year exceed the maximum allowable
under Code section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Employee Pre-Tax Contributions for a
calendar year to the Plan and comparable contributions to
any other qualified defined contribution plan in excess of
the Contribution Dollar Limit may notify the Administrator
in writing by the following March 1(or as late as April 14
if allowed by the Administrator) that an excess has
occurred. in this event, the amount of the excess specified
by the Participant, adjusted for investment gain or loss,
shall be refunded to him or her by the April 15 following
the year of deferral and shall not be included as an Annual
Addition (as defined in Section 13.1) under Code section 415
for the year contributed. The excess amounts shall first be
taken from unmatched Employee Pre-Tax Contributions and then
from matched Employee Pre-Tax Contributions. Any Employer
Contributions attributable to refunded excess Employee Pre-
Tax Contributions as described in this Section, adjusted for
investment gain or loss, shall be forfeited and used to
reduce future Contributions to be made by an Employer as
soon as administratively feasible. Refunds shall not include
investment gain or loss for the period between the end of
the applicable calendar year and the date of distribution.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover
Contributions, may only be made through payroll deduction.
Such amounts shall be paid to the Trustee in cash and posted
to each Participant's Account(s) as soon as such amounts can
reasonably be separated from the Employer's general assets
and balanced against the specific amount made on behalf of
each Participant. In no event, however, shall such amounts
be paid to the Trustee more than 90 days after the date
amounts are deducted from a Participant's Pay, except that
effective February 3, 1997, "15 business days following the
end of the month that includes the date amounts are deducted
15
from a Participant's Pay (or as that maximum period may be
otherwise extended by ERISA)" shall be substituted for the
preceding reference to "90 days after the date amounts are
deducted from a Participant's Pay". Employee Pre-Tax
Contributions shall be treated as Contributions made by an
Employer in determining tax deductions under Code section
404(a).
4 ROLLOVER CONTRIBUTIONS AND TRANSFERS FROM AND TO OTHER QUALIFIED
PLANS
4.1 Rollover Contributions
The Administrator may authorize the Trustee to accept a
Rollover Contribution in cash, directly from an Eligible
Employee or as a Direct Rollover from another qualified plan
on behalf of the Eligible Employee, even if he or she is not
yet a Participant. The Employee shall be responsible for
providing satisfactory evidence, in such manner as
prescribed by the Administrator, that such Rollover
Contribution qualifies as a rollover contribution, within
the meaning of Code section 402(c) or 408(d)(3)(A)(ii). Such
amounts received directly from an Eligible Employee must be
paid to the Trustee in cash within 60 days after the date
received by the Eligible Employee from a qualified plan or
conduit individual retirement account. Notwithstanding the
foregoing, Rollover Contributions may be made in cash and/or
solely to an outstanding plan loan to the Participant which
qualifies for exemption from ERISA's prohibited transaction
rules under section 408(b)( 1) of ERISA and its applicable
regulations and authority (including any successors
thereto), provided that as the time of such Rollover
Contribution loans are generally available to Participants
under the terms of the Plan and provided further that any
such receivable shall, as of the date the Rollover
Contribution is received by the Plan, be subject to the same
terms and conditions then in effect for loans granted under
the Plan.
If the Administrator later determines that an amount
contributed pursuant to the above paragraph did not in fact
qualify as a rollover contribution, within the meaning of
Code section 402(c) or 408 (d)(3) (A)(ii), the balance
credited to the Participant's Rollover Account shall
immediately be (1) segregated from all other Plan assets,
(2) treated as a nonqualified trust established by and for
the benefit of the Participant, and (3) distributed to the
Participant. Any such amount shall be deemed never to have
been a part of the Plan.
16
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets
in cash or in kind directly from another qualified plan or
to transfer assets in cash or in kind directly to another
qualified plan; provided that receipt of a transfer shall
not be directed if:
(a) any amounts are not exempted by Code section
401(a)(11)(B) from the annuity requirements of Code
section 417 unless the Plan complies with such
requirements; or
(b) any amounts include benefits protected by Code section
411(d)(6) which would not be preserved under applicable
Plan provisions.
The Trustee may refuse to receive any such transfer if:
(a) the Trustee finds the in kind assets unacceptable; or
(b) instructions for posting amounts to Participants'
Accounts are incomplete.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee. To the
extent a receipt of a transfer includes Participant loans,
such loans shall continue in effect subject to the terms and
conditions in effect as of the date of the transfer or as
otherwise agreed to by the Administrator.
5 EMPLOYER CONTRIBUTIONS
5.1 Employer Contributions
(a) Frequency and Eligibility. For each period for which
Participants" Contributions are made, the Employer
shall make Employer Contributions on behalf of each
Participant who contributed during the period, met the
eligibility requirements of Section 2.1and who is
eligible for Employer Contributions under his or her
governing collective bargaining agreement as set forth
in Schedules A through J.
(b) Allocation Method. The Employer Contributions for each
period shall be in an amount determined by and
allocated in accordance with the governing collective
bargaining agreement as set forth in Schedules A
through J.
(c) Timing, Medium and Posting. The Employer shall make
each period's Employer Contribution in cash as soon as
administratively feasible, and for purposes of
17
deducting such Contribution, not later than the
Employer's federal tax filing date, including
extensions, for the Employer's taxable year that ends
with or within the Plan Year for which the Employer
Contribution is made. Such amounts shall be paid to the
Trustee and posted to each Participant's Employer
Account once the total Employer Contribution received
has been balanced against the specific amount to be
credited to each Participant's Employer Account.
5.2 Plan Expenses Contributions
Notwithstanding any other provision of the Plan to the
contrary, expenses of the Plan and/or Trust (including,
without limitation, administrative expenses for activities
such as auditing the Plan, preparing and filing annual
reports, preparing benefits statements and calculating
accrued benefits, and providing notices to the Plan
Participants and Beneficiaries) shall be paid from the
assets of the Trust; provided, however, that the Employer,
in its discretion, may elect to pay such expenses, in whole
or in part, at any time and from time to time, and such
payments, if any, by the Employer may be made by means of
Employer Contributions to the Plan and or/direct payment to
third parties, or otherwise; and provided, further, that no
such election shall be deemed to be irrevocable or of
continuing effect unless designated as such in writing by
the Employer.
6 ACCOUNTING
6.1 Individual Participant Accounting
The Administrator shall take such action as it deems
appropriate with respect to accounting for individual
Participants' interests in the Plan. Such actions may, but
need not necessarily, include maintenance of an individual
set of Accounts for each Participant in order to reflect
transactions both by type of Account and investment medium;
accounting for financial transactions at the individual
Account level by posting each transaction to the appropriate
Account of each affected Participant; maintenance of
Participant Account values in shares for the Investment
Funds and in dollars for the Sweep and Loan Accounts. At any
point in time, the Account value shall be determined except
where impracticable using the most recent Trade Date values
provided by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
18
Participant's Sweep Account. Any amount held in the Sweep
Account shall be credited with interest up until the date on
which it is removed from the Sweep Account.
6.3 Trade Date Accounting and lnvestment Cycle
Participant Account values shall be determined as of each
Trade Date. For any transaction to be processed as of a
Trade Date, the Trustee must receive instructions for the
transaction by the Sweep Date. Such instructions shall apply
to amounts held in the Account on that Sweep Date. Financial
transactions of the Investment Funds shall be posted to
Participants" Accounts as of the Trade Date, based upon the
Trade Date values provided by the Trustee, and settled on
the Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in
shares. The Trustee is responsible for determining the share
values of each Investment Fund as of each Trade Date. To the
extent an Investment Fund is comprised of collective
investment funds offered by the Trustee or any other entity
authorized to offer collective investment funds, the share
values shall be determined in accordance with the rules
governing such collective investment funds, which are
incorporated herein by reference. All other share values
shall be determined by the Trustee. The share value of each
Investment Fund shall be based on the fair market value of
its underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to
Account maintenance, transaction and Investment Fund
management and maintenance, set forth below, are paid by the
Employer directly, such fees and expenses shall be paid as
set forth below.
(a) Account Maintenance: Account maintenance fees and
expenses, may include but are not limited to,
administrative, Trustee, government annual report
preparation, audit, legal, nondiscrimination testing
and fees for any other special services. Account
maintenance fees shall be charged to Participants on a
per Participant basis provided that no fee shall reduce
a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may include
but are not limited to, periodic installment payment,
and Investment Fund election change and loan fees.
Transaction fees shall be charged to the Participant's
19
Account involved in the transaction provided that no
fee shall reduce a Participant's Account balance below
zero.
(c) Investment Fund Management and Maintenance: Management
and maintenance fees and expenses related to the
Investment Funds shall be charged at the Investment
Fund level and reflected in the net gain or loss of
each Investment Fund.
The Company may determine that the Employers pay a lower
portion of the fees and expenses allocable to the Accounts
of Participants who are no longer Employees or who are not
Beneficiaries, unless doing so would result in
discrimination prohibited under Code section 401(a)(4) or a
significant detriment prohibited by Code section 411(a)(11).
As of the Effective Date, a breakdown of which Plan fees and
expenses shall generally be borne by the Trust (and charged
to individual Participants' Accounts or charged at the
Investment Fund level and reflected in the net gain or loss
of each Investment Fund) and those that shall be paid by the
Employer is set forth in Appendix B, which may be changed
from time to time by the Company, in writing, without the
necessity of amending the Plan and Trust.
The Trustee shall have the authority to pay any such fees
and expenses, which remain unpaid by the Employer for 60
days, from the Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account
of the Participant and accounted for in dollars as an
earmarked asset of the borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's
Account balance with the amount that would be credited to
the Account had no error or omission been made. Funds
necessary for any such restoration shall be provided through
payment made by the Employer, or by the Trustee to the
extent the error or omission is attributable to actions or
inactions of the Trustee.
6.8 Participant Statements
The Administrator shall provide Participants with statements
of their Accounts as soon after the end of each quarter of
the Plan Year as administratively feasible.
20
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable
accounting methods in performing their respective duties
during any Conversion Period. This includes, but is not
limited to, the method for allocating net investment gains
or losses and the extent, if any, to which contributions
received by and distributions paid from the Trust during
this period share in such allocation.
6.10 Accounts for Alternate Payees
A separate Account shall be established for an Alternate
Payee entitled to any portion of a Participant's Account
under a ODRO as of the date and in accordance with the
directions specified in the ODRO. In addition, a separate
Account may be established during the period of time the
Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic
relations order qualifies as a ODRO. Such a separate Account
shall be valued and accounted for in the same manner as any
other Account.
(a) Distributions Pursuant to ODROs. If a ODRO so provides,
the portion of a Participant's Account payable to an
Alternate Payee may be distributed, in a form
permissible under Section 11, to the Alternate Payee at
any time beginning as soon as practicable after the
ODRO determination is made, regardless of whether the
Participant is entitled to a distribution from the Plan
at such time. The Alternate Payee shall be provided the
notice prescribed by Code section 402(f).
(b) Participant Loans. Except to the extent required by
law, an Alternate Payee, on whose behalf a separate
Account has been established, shall not be entitled to
borrow from such Account. If a ODRO specifies that the
Alternate Payee is entitled to any portion of the
Account of a Participant who has an outstanding loan
balance, all outstanding loans shall generally continue
to be held in the Participant's Account and shall not
be divided between the Participant's and Alternate
Payee's Accounts.
(c) Investment Direction. Where a separate Account has been
established on behalf of an Alternate Payee and has not
yet been distributed, the Alternate Payee may direct
the investment of such Account in the same manner as if
he or she were a Participant.
(d) Alternate Payee's Death. In the event the Alternate
Payee dies before his or her entire interest under the
Plan has been distributed, the remaining portion of
such interest will be distributed in a single lump sum
21
cash payment to the beneficiary designated by the
Alternate Payee. For this purpose, the term
"beneficiary" means any individual or entity named by
the Alternate Payee in a written notice filed with the
Administrator, or in the absence of any such notice,
the Alternate Payee's estate.
7 INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
Except for Participants" Sweep and Loan Accounts and any
unallocated funds invested in interest bearing deposits
(which may include interest bearing deposits of the Trustee)
and/or money market type assets or funds, pending allocation
to Participants" Accounts or disbursement to pay Plan fees
and expenses, the Trust shall be maintained in various
Investment Funds. The Administrator shall select the
Investment Funds offered to Participants and may change the
number or composition of the Investment Funds, subject to
the terms and conditions agreed to with the Trustee. As of
the Effective Date, a list of the Investment Funds offered
under the Plan is set forth in Appendix A, which may be
changed from time to time by the Administrator, in writing,
and as agreed to by the Trustee, without the necessity of
amending the Plan and Trust.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific
Investment Fund, which maximum, if any, as of the Effective
Date is set forth in Appendix A, which may be changed from
time to time by the Administrator, in writing, without the
necessity of amending the Plan and Trust.
7.2 Responsibility for Investment Choice
Each Participant shall direct the investment of all of his
or her Accounts.
Each Participant shall be solely responsible for the
selection of his or her Investment Fund choices. No
fiduciary with respect to the Plan is empowered to advise a
Participant as to the manner in which his or her Accounts
are to be invested, and the fact that an Investment Fund is
offered shall not be construed to be a recommendation for
investment.
During any Conversion Period, Trust assets may be held in
any investment vehicle permitted by the Plan, as directed by
the Administrator, irrespective of prior Participant
investment elections.
22
7.3 Investment Fund Elections
A Participant shall provide his or her initial investment
election upon becoming a Participant and may change his or
her investment election at any time in accordance with
procedures established by the Administrator and the Trustee.
A Participant shall make his or her investment election in
any combination of one or any number of the Investment Funds
offered in accordance with the procedures established by the
Administrator and Trustee. Investment elections received by
the Trustee by the Sweep Date shall be effective on the
following Trade Date.
7.4 Default if No Valid Investment Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which
is not yet held in an Investment Fund and for which no valid
investment election is on file. The Investment Fund
specified as of the Effective Date is set forth in Appendix
A, which may be changed from time to time by the
Administrator, in writing, without the necessity of amending
the Plan and Trust.
7.5 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes
in excess of a specified number per year as determined by
the Administrator.
8 VESTING
8.1 Fully Vested Accounts
A Participant shall be fully vested in all Accounts at all
times.
9 PARTICIPANT LOANS
9.1 Participant Loans Permitted
Loans to Participants and Beneficiaries are permitted
pursuant to the terms and conditions set forth in this
Section, except that a loan shall not be permitted to a
Participant who is no longer an Employee or to a
Beneficiary, unless such Participant on Beneficiary is
otherwise a party in interest (as defined in ERISA section
3(14)).
23
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and
with such advance notice as prescribed by the Administrator.
Each loan shall be evidenced by a promissory note, secured
only by the portion of the Participant's Account from which
the loan is made, and the Plan shall have a lien on this
portion of his on hen Account.
9.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to borrow from his or her Account under the Plan.
9.4 Loan Approval
The Administrator, on the Trustee, if otherwise authorized
by the Administrator and agreed to by the Trustee, is
responsible for determining that a loan request conforms to
the requirements described in this Section and granting such
request.
9.5 Loan Funding Limits, Account Sources and Funding Order
The loan amount must meet all of the following limits as
determined as of the Sweep Date the loan is processed and
shall be funded from the Participant's Accounts as follows:
(a) Plan Minimum Limit. The minimum amount for any loan is
$1,000.
(b) Plan Maximum Limit, Account Sources and Funding Order.
Subject to the legal limit described in (c) below, the
maximum a Participant may borrow, including the
aggregate outstanding balances of existing Plan loans,
is 100% of the following of the Participant's Accounts
in the priority order as follows:
Employee Pre-Tax Account
Employer Account
Prior Company Account
Rollover Account
Prior After-Tax Account
(c) Legal Maximum Limit. The maximum a Participant may
borrow, including the aggregate outstanding balances of
existing Plan loans, is 50% of his on her vested
Account balance, not to exceed $50,000. However, the
$50,000 maximum is reduced by the Participant's highest
aggregate outstanding Plan loan balance during the 12-
month period ending on the day before the Sweep Date as
of which the loan is made. For purposes of this
24
paragraph, the qualified plans of all Related Companies
shall be treated as though they are pant of the Plan to
the extent it would decrease the maximum loan amount.
9.6 Maximum Number of Loans
A Participant may have a maximum of two loans outstanding at
any given time.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets
of his or her own Account. The available assets shall be
determined first by Account and then within each Account
used for funding a loan, amounts shall first be taken from
the Sweep Account and then taken by Investment Fund in
direct proportion to the market value of the Participant's
interest in each Investment Fund as of the Trade Date on
which the loan is processed.
The loan shall be funded on the Settlement Date following
the Trade Date as of which the loan is processed. The
Trustee shall make payment to the Participant as soon
thereafter as administratively feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall be a
fixed reasonable rate of interest, determined from time to
time by the Administrator, which provides the Plan with a
return commensurate with the prevailing interest rate
changed by persons in the business of lending money for
loans which would be made under similar circumstances. As of
the Effective Date, the interest rate is determined as set
forth in Appendix C, which may be changed from time to time
by the Administrator, in writing, without the necessity of
amending the Plan and Trust.
9.9 Loan Payment
Substantially level amortization shall be required of each
loan with payments made at least monthly, generally through
payroll deduction. Loans may be prepaid in full on in part
at any time. The Participant may choose the loan repayment
period, not to exceed 5 years.
9.10 Loan Payment Hierarchy
Loan principal payments shall be credited to the
Participant's Accounts in the inverse of the order used to
fund the loan. Loan interest shall be credited to the
Participant's Accounts in direct proportion to the principal
25
payment. Loan payments are credited to the Investment Funds
based upon the Participant's current investment election for
new Contributions.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan payments
for up to 12 months for a Participant who is on a Leave of
Absence without pay. During the suspension period, interest
shall continue to accrue on the outstanding loan balance. At
the expiration of the suspension period all outstanding loan
payments and accrued interest thereon shall be due unless
otherwise agreed upon by the Administrator.
9.12 Loan Default
A loan is treated as in default if a scheduled loan payment
is not made at the time required. A Participant shall then
have a grace period to cure the default before it becomes
final. Such grace period shall be for a period that does not
extend, beyond the last day of the calendar quarter
following the calendar quarter in which the scheduled loan
payment was due on such lessen on greater maximum period as
may later be authorized by Code section 72(p).
In the event a default is not cured within the grace period,
the Administrator may direct the Trustee to report the
outstanding principal balance of the loan and accrued
interest thereon as a taxable distribution to the
Participant. As soon as a Plan withdrawal or distribution to
such Participant would otherwise be permitted, the
Administrator may instruct the Trustee to execute upon its
security interest in the Participant's Account by
distributing the note to the Participant.
9.13 Call Feature
The Administrator shall have the night to call any
Participant loan once a Participant's employment with all
Related Companies has terminated, unless he on she is
otherwise a party in interest (as defined in ERISA section
3(14)), or if the Plan is terminated.
10 IN-SERVICE WITHDRAWALS
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee
are permitted pursuant to the terms and conditions set forth
in this Section and pursuant to the terms and conditions set
forth in Section 11 with regard to an in-service withdrawal
26
made in accordance with a Participant's Required Beginning
Date.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for any in-service withdrawal in
such manner and with such advance notice as prescribed by
the Administrator. The Participant shall be provided the
notice prescribed by Code section 402(f).
Code sections 401(a)(11) and 417 do not apply to in-service
withdrawals under the Plan. An in-service withdrawal may
commence less than 30 days after the aforementioned notice
is provided, if:
(a) the Participant is clearly informed that he or she has
the right to a period of at least 30 days after receipt
of such notice to consider his or her option to elect
or not elect a Direct Rollover for all or a portion, if
any, of his or her in-service withdrawal which
constitutes an Eligible Rollover Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a Direct Rollover for all or a
portion, if any, of his or her in-service withdrawal
which constitutes an Eligible Rollover Distribution or
alternatively elects to have all or a portion made
payable directly to him or her, thereby not electing a
Direct Rollover for all or a portion thereof.
Notwithstanding the foregoing, effective for hardship
withdrawals made after January 1, 1999, that portion of
a Participant's hardship withdrawal attributable to
Employee Pre-Tax Contributions shall not constitute an
Eligible Rollover Distribution.
10.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to receive an in-service withdrawal under the Plan.
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee, if otherwise authorized
by the Administrator and agreed to by the Trustee, is
responsible for determining whether an in- service
withdrawal request conforms to the requirements described in
this Section and granting such request.
27
10.5 Payment Form and Medium
The form of payment for an in-service withdrawal shall be a
single lump sum and payment shall be made in cash. With
regard to the portion of an in-service withdrawal
representing an Eligible Rollover Distribution, a
Participant may elect a Direct Rollover for all or a portion
of such amount.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made
solely from the assets of his or her own Account and shall
be based on the Account values as of the Trade Date the in-
service withdrawal is processed. The available assets shall
be determined first by Account and then within each Account
used for funding an in-service withdrawal, amounts shall
first be taken from the Sweep Account and then taken by
Investment Fund in direct proportion to the market value of
the Participant's interest in each Investment Fund (which
excludes his or her Loan Account balance) as of the Trade
Date on which the in-service withdrawal is processed.
The in-service withdrawal shall be funded on the Settlement
Date following the Trade Date as of which the in-service
withdrawal is processed. The Trustee shall make payment to
the Participant or on behalf of the Participant as soon
thereafter as administratively feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may
request the withdrawal of up to the amount necessary to
satisfy a financial need including amounts necessary to
pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the
withdrawal. Only requests for withdrawals (1) on
account of a Participant's "Deemed Financial Need", and
(2) which are "Deemed Necessary" to satisfy the
financial need shall be approved.
(b) "Deemed Financial Need". An immediate and heavy
financial need relating to:
(1) the payment of unreimbursed medical care expenses
(described under Code section 213(d)) incurred (or
to be incurred) by the Employee, his or her spouse
or dependents (as defined in Code section 152);
(2) the purchase (excluding mortgage payments) of the
Employee's principal residence;
28
(3) the payment of unreimbursed tuition, related
educational fees and room and board for up to the
next 12 months of post-secondary education for the
Employee, his or her spouse or dependents (as
defined in Code section 152);
(4) the payment of amounts necessary for the Employee
to prevent losing his or her principal residence
through eviction or foreclosure on the mortgage;
or
(5) any other circumstance specifically permitted
under Code section 401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "Deemed Necessary"
to satisfy the financial need only if the withdrawal
amount does not exceed the financial need and all of
these conditions are met:
(1) the Employee has obtained all possible withdrawals
(other than hardship withdrawals) and nontaxable
loans available from the Plan and all other plans
maintained by Related Companies;
(2) the Administrator shall suspend the Employee from
making any contributions to the Plan and all other
qualified and nonqualified plans of deferred
compensation and all stock option or stock
purchase plans maintained by Related Companies for
12 months from the date the withdrawal payment is
made; and
(3) the Administrator shall reduce the Contribution
Dollar Limit for the Employee with regard to the
Plan and all other plans maintained by Related
Companies, for the calendar year next following
the calendar year of the withdrawal by the amount
of the Employee's Employee Pre-Tax Contributions
for the calendar year of the withdrawal
(d) Account Sources and Funding Order. All available
amounts must first be withdrawn from a Participant's
Prior After-Tax Account. The remaining withdrawal shall
come from the following of the Participant's Accounts,
in the priority order as follows:
Rollover Account
Employer Account
Prior Company Account
Employee Pre-Tax Account
29
The amount that may be withdrawn from a Participant's
Pre-Tax Account shall not include any amounts
attributable to earnings after the start of the first
Plan Year beginning after December 31, 1988.
(e) Minimum Amount. There is no minimum amount for a
hardship withdrawal.
(f) Permitted Frequency. There is no restriction on the
number of hardship withdrawals permitted to a
Participant.
(g) Suspension from Further Contributions. Upon making a
hardship withdrawal, a Participant may not make
additional Employee Pre-Tax Contributions (or
additional contributions to all other qualified and
nonqualified plans of deferred compensation and all
stock option or stock purchase plans maintained by
Related Companies), for a period of 12 months from the
date the withdrawal payment is made.
10.8 Prior After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may
make a Prior After-Tax Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall
come from a Participant's Prior After-Tax Account.
(c) Minimum Amount. There is no minimum amount for an Prior
After-Tax Account withdrawal.
(d) Permitted Frequency. The maximum number of Prior After-
Tax Account withdrawals permitted to a Participant in
any 12-month period is one.
(e) Suspension from Further Contributions. A Prior After-
Tax Account withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
10.9 Rollover Account Withdrawals
(a) Requirements. A Participant who is an Employee may make
a Rollover Account withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall
come from a Participant's Rollover Account.
(c) Minimum Amount. There is no minimum amount for a
Rollover Account withdrawal.
30
(d) Permitted Frequency. The maximum number of Rollover
Account withdrawals permitted to a Participant in any
12 month period is one.
(e) Suspension from Further Contributions. A Rollover
Account withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
10.10 Prior Company Account Plus Withdrawals
(a) Requirements. A Participant who is an Employee may make
a Prior Company Account Plus withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall
come from the Participant's Accounts, in the priority
order as follows, except that the Participant may
instead choose to have amounts taken from his or her
Prior After-Tax Account first:
Rollover Account
Prior Company Account
Prior After-Tax Account
(c) Minimum Amount. There is no minimum amount for a Prior
Company Account Plus withdrawal.
(d) Permitted Frequency. The maximum number of Prior
Company Account Plus withdrawals permitted to a
Participant in any 12-month period is one.
(e) Suspension from Further Contributions. A Prior Company
Account Plus withdrawal shall not affect a
Participant's ability to make or be eligible to receive
further Contributions.
10.11 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and over
age 59 1/2 may make an Over Age 59 1/2 withdrawal.
(b) Account Sources and Funding Order. The withdrawal shall
come from the following of the Participant's Accounts,
in the priority order as follows, except that the
Participant may instead choose to have amounts taken
from his on hen Prior After-Tax Account first:
Rollover Account
Employee Pre-Tax Account
Employer Account
Prior Company Account
Prior After-Tax Account
31
(c) Minimum Amount. There is no minimum amount for an Over
Age 59 1/2 withdrawal.
(d) Permitted Frequency. The maximum number of Oven Age 59
1/2 withdrawals permitted to a Participant in any 12-
month period is one.
(e) Suspension from Further Contributions. An Over Age 59
1/2 withdrawal shall not affect a Participant's ability
to make or be eligible to receive further
Contributions.
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR BY REASON OF A
PARTICIPANT'S REQUIRED BEGINNING DATE
11.1 Benefit Information, Notices and Election
A Participant, on his on her Beneficiary in the case of his
on her death, shall be provided with information regarding
all optional times and forms of distribution available under
the Plan, including the notices prescribed by Code sections
402(f) and 411(a)(11). Subject to the other requirements of
this Section, a Participant, or his or her Beneficiary in
the case of his on her death, may elect, in such manner and
with such advance notice as prescribed by the Administrator,
to have his or her vested Account balance distributed
beginning upon any Settlement Date following the
Participant's termination of employment with all Related
Companies and a reasonable period of time during which the
Administrator shall process, and inform the Trustee of, the
Participant's termination or, if earlier, at the time of the
Participant's Required Beginning Date.
Notwithstanding the foregoing, if a Participant's
termination of employment with all Related Companies does
not constitute a separation from service for purposes of
Code section 401(k)(2)(B)(i)(l) or otherwise constitute an
event set forth under Code section 401(k)(10)(A)(ii) or
(iii) as described in Section 19.3, the portion of a
Participant's Account subject to the distribution rules of
Code section 401(k) may not be distributed until such time
as he or she separates from service for purposes of Code
section 401(k)(2)(B)(i)(l) or, if earlier, upon such other
event as described in Code section 401(k)(2)(B) and as
provided for in the Plan.
Code sections 401(a)(11) and 417 do not apply to
distributions under the Plan. A distribution may commence
less than 30 days after the aforementioned notices are
provided, if:
32
(a) the Participant is clearly informed that he or she has
the right to a period of at least 30 days after receipt
of such notices to consider the decision as to whether
to elect a distribution and if so to elect a particular
form of distribution and to elect on not elect a Direct
Rollover for all on a portion, if any, of his or her
distribution which constitutes an Eligible Rollover
Distribution; and
(b) the Participant after receiving such notices,
affirmatively elects a distribution and a Direct
Rollover for all on a portion, if any, of his or her
distribution which constitutes an Eligible Rollover
Distribution or alternatively elects to have all on a
portion made payable directly to him or her, thereby
not electing a Direct Rollover for all or a portion
thereof.
11.2 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to receive a distribution under the Plan.
11.3 Payment Form and Medium
Except to the extent otherwise provided by Section 11.4, a
Participant may elect to be paid in any of these forms:
(a) a single lump sum;
(b) a portion paid in a lump sum, and the remainder paid
later (partial payment); or
(c) periodic installments over a period not to exceed the
life expectancy of the Participant and his on her
Beneficiary.
Distributions shall be made in cash, except to the extent a
distribution consists of a loan call as described in Section
9. Alternatively, a Participant may elect that a
distribution in the form of a lump sum payment be made in
the form of whole shares of Company Stock and cash in lieu
of fractional shares (to the extent the distribution
consists of amounts from the Company Stock Fund). With
regard to the portion of a distribution representing an
Eligible Rollover Distribution, a Distributee may elect a
Direct Rollover for all or a portion of such amount.
11.4 Distribution of Small Amounts
If, after a Participant's employment with all Related
Companies ends, the Participant's vested Account balance is
33
$5,000 or less, the Participant's benefit shall be paid as a
single lump sum as soon as administratively feasible in
accordance with procedures prescribed by the Administrator.
11.5 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from
the assets of his or hen own Account and shall be based on
the Account values as of the Trade Date the distribution is
processed. The available assets shall be determined first by
Account and then within each Account used for funding a
distribution, amounts shall first be taken from the Sweep
Account and then taken by Investment Fund in direct
proportion to the market value of the Participant's interest
in each Investment Fund as of the Trade Date on which the
distribution is processed.
The distribution shall be funded on the Settlement Date
following the Trade Date as of which the distribution is
processed. The Trustee shall make payment to the Participant
or on behalf of the Participant as soon thereafter as
administratively feasible.
11.6 Latest Commencement Permitted
In addition to any other Plan requirements and unless a
Participant elects otherwise, his on her benefit payments
shall begin not later than 60 days after the end of the Plan
Year in which he or she attains his or her Normal Retirement
Date or retires, whichever is later. However, if the amount
of the payment or the location of the Participant (after a
reasonable search) cannot be ascertained by that deadline,
payment shall be made no later than 60 days after the
earliest date on which such amount on location is
ascertained but in no event later than the Participant's
Required Beginning Date. A Participant's failure to elect in
such manner as prescribed by the Administrator to have his
or her vested Account balance distributed, shall be deemed
an election by the Participant to defer his on her
distribution but in no event shall his on her benefit
payments commence later than his on hen Required Beginning
Date.
With regard to a Participant who is an Employee and who
commenced benefit payments in accordance with Code section
401(a)(9) as in effect prior to January 1, 1997, and who is
not a 5% Owner, he on she may, but is not required to,
discontinue such benefit payments until he on she is
otherwise required to again commence benefit payments in
accordance with Code section 401(a)(9) as in effect for
calendar years commencing after December 31, 1996. A
Participant who elects to discontinue such benefit payments
34
in accordance with the preceding sentence shall thereby
render his or hen existing payment election and, if
applicable, any Spousal Consent to such election, as void
and a new election including, if applicable, Spousal Consent
to such new election, shall be required subject to the
provisions of Section 11 at the time he or she is required
to again commence benefit payments in accordance with Code
section 401(a)(9) as in effect for calendar years commencing
after December 31, 1996.
Notwithstanding any provision of the Plan to the contrary,
distributions may be made pursuant to the terms of any
method of distribution elected by an Employee who was a
Participant prior to January 1, 1984, in accordance with the
terms of the Plan as in effect immediately prior to that
date, provided that the election shall remain in effect only
until revoked and (if revoked) may not later be reinstated.
If benefit payments cannot begin at the time required
because the location of the Participant cannot be
ascertained (after a reasonable search), the Administrator
may, at any time thereafter, treat such person's Account as
forfeited subject to the provisions of Section 18.6.
11.7 Payment Within Life Expectancy
The Participant's payment election must be consistent with
the requirement of Code section 401(a)(9) that all payments
are to be completed within a period not to exceed the lives
or the joint and last survivor life expectancy of the
Participant and his or her Beneficiary. The life
expectancies of a Participant and his or hen Beneficiary, if
such Beneficiary is his or her spouse, may be recomputed
annually.
11.8 Incidental Benefit Rule
The Participant's payment election must be consistent with
the requirement that, if the Participant's spouse is not his
on hen sole primary Beneficiary, the minimum annual
distribution for each calendar year, beginning with the
calendar year preceding the calendar year that includes the
Participant's Required Beginning Date, shall not be less
than the quotient obtained by dividing (a) the Participant's
vested Account balance as of the last Trade Date of the
preceding year by (b) the applicable divisor as determined
under the incidental benefit requirements of Code section
401(a)(9).
35
11.9 Payment to Beneficiary
Payment to a Beneficiary must either (i) be completed by the
end of the calendar year that contains the fifth anniversary
of the Participant's death or (ii) begin by the end of the
calendar year that contains the first anniversary of the
Participant's death and be completed within the period of
the Beneficiary's life on life expectancy, except that:
(a) If the Participant dies after his on hen Required
Beginning Date, payment to his or her Beneficiary must
be made at least as rapidly as provided in the
Participant's distribution election;
(b) If the surviving spouse is the Beneficiary, payments
need not begin until the later of (i) the end of the
calendar year that includes the first anniversary of
the Participant's death, or (ii) the end of the
calendar year in which the Participant would have
attained age 70 1/2 and must be completed within the
spouse's life or life expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (i) before the Participant's Required
Beginning Date and (ii) before payments have begun to
the spouse, the spouse shall be treated as the
Participant in applying these rules.
11.10 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the
Participant's remaining Plan interest at the time of his on
her death and such designation may be changed at any time.
However, a Participant's spouse shall be the sole primary
Beneficiary unless the designation includes Spousal Consent
for another Beneficiary. If no proper designation is in
effect at the time of a Participant's death or if the
Beneficiary does not survive the Participant, the
Beneficiary shall be, in the order listed, the:
(a) Participant's surviving spouse;
(b) Participant's children, in equal shares, (or if a child
does not survive the Participant, and that child leaves
issue, the issue shall be entitled to that child's
share, by night of representation); or
(c) Participant's estate.
36
12 ADP AND ACP TESTS
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12
(where a definition is contained in both Sections 1 and 12,
for purposes of Section 12 the Section 12 definition shall
be controlling):
(a) "ACP" on "Average Contribution Percentage". The
Average Percentage calculated using Contributions
allocated to Participants as of a date within the Plan
Year.
(b) "ACP Test". The determination of whether the ACP is in
compliance with the Basic or Alternative Limitation for
a Plan Year (as defined in Section 12.2).
(c) "AD P" or "Average Deferral Percentage". The Average
Percentage calculated using Deferrals allocated to
Participants as of a date within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is in
compliance with the Basic or Alternative Limitation for
a Plan Year (as defined in Section 12.2).
(e) "Average Percentage". The average of the calculated
percentages for Participants within the specified
group. The calculated percentage refers to either the
"Deferrals" on "Contributions" (as defined in this
Section) made on each Participant's behalf for the Plan
Year, divided by his or her Compensation. (Employee
Pre-Tax Contributions to the Plan on comparable
contributions to plans of Related Companies which must
be refunded solely because they exceed the Contribution
Dollar Limit are included in the percentage for the HCE
Group but not for the NHCE Group.)
(f) "Contributions" (i) shall include Employer
Contributions and (ii) may include Employee Pre-Tax
Contributions, but with regard to (ii), only to the
extent that (1) the Administrator elects to use them,
(2) they are not used or counted in the ADP Test, and
(3) they otherwise satisfy the requirements as
prescribed under Code section 401(IN) permitting
treatment as Contributions for purposes of the ACP
Test.
(g) "Current Year Testing Method". The use of the Plan
Year's ADP for the Plan Year's NHCE Group for purposes
of performing the Plan Year's ADP Test and/on the use
37
of the Plan Year's ACP for the Plan Year's NHCF Group
for purposes of performing the Plan Year's ACP Test.
(h) "Deferrals" shall include Employee Pre-Tax
Contributions.
(i) "Family Member". For Plan Years commencing before
January 1, 1997, an Employee who is, at any time during
the Plan Year or Lookback Year, a spouse, lineal
ascendant or descendant, or spouse of a lineal
ascendant or descendant of (1) an active or former
Employee who at any time during the Plan Year or
Lookback Year is a 5% Owner (within the meaning of Code
section 414(q)(3)), or (2) an HCE who is among the 10
Employees with the highest Compensation for such Year.
(j) "HCE" or "Highly Compensated Employee". For Plan Years
commencing before January 1, 1997, with respect to all
Related Companies, an Employee who (in accordance with
Code section 414(q)):
(1) Was a 5% Owner (within the meaning of Code section
414(q)(3)) at any time during the Lookback Year or
Plan Year;
(2) Received Compensation during the Lookback Year (on
in the Plan Year if among the 100 Employees with
the highest Compensation for such year) in excess
of (i) $75,000 (as adjusted for such year pursuant
to Code sections 414(q)(1) and 415(d)), or (ii)
$50,000 (as adjusted for such year pursuant to
Code sections 414(q)(1) and 415(d)) in the case of
a member of the "top-paid group" (within the
meaning of Code section 414(q)(4)) for such year,
provided, however, that if the conditions of Code
section 414(q)(12)(B)(ii) are met, the Company may
elect for any Plan Year to apply clause (i) by
substituting $50,000 for $75,000 and not to apply
clause (ii);
(3) Was an officer of a Related Company and received
Compensation during the Lookback Year (or in the
Plan Year if among the 100 Employees with the
highest Compensation for such year) that is
greater than 50% of the dollar limitation in
effect under Code section 415(b)(1)(A) and (d) for
such year (or if no officer has Compensation in
excess of that threshold, the officer with the
highest Compensation), provided that the number of
officers shall be limited to 50 Employees (or, if
less, the greater of three Employees or 10% of the
Employees); or
38
(4) Was a Family Member at any time during the
Lookback Year or Plan Year, in which case the
Deferrals, Contributions and Compensation of the
HCE and his or hen Family Members shall be
aggregated and they shall be treated as a single
HCE.
A former Employee shall be treated as an HCE if (1)
such former Employee was an HCE when he or she
separated from service, or (2) such former Employee was
an HCE in service at any time after attaining age 55.
The determination of who is an HCE, including the
determinations of the number and identity of Employees
in the top-paid group, the top 100 Employees and the
number of Employees treated as officers shall be made
in accordance with Code section 414(q).
For Plan Years commencing after December 31, 1996, with
respect to all Related Companies, an Employee who (in
accordance with Code section 414(q)):
(1) Was a 5% Owner (within the meaning of Code section
414(q)(2)) at any time during the Plan Year or the
preceding Plan Year; on
(2) Received Compensation during the preceding Plan
Year in excess of $80,000 (as adjusted for such
Year pursuant to Code sections 414(q)(1) and
415(d)):
A former Employee shall be treated as an HCE if (1)
such former Employee was an HCE when he or she
separated from service, or (2) such former Employee was
an HCE in service at any time after attaining age 55.
The determination of who is an HCE and the
determination of the number and identity of Employees
in the top-paid group shall be made in accordance with
Code section 414(q).
(k) "HCE Group" and "NHCE Group". With respect to all
Related Companies, the respective group of HCEs and
NHCEs who are eligible to have amounts contributed on
their behalf for the respective Plan Year, including
Employees who would be eligible but for their election
not to participate or to contribute, or because their
Pay is greater than zero but does not exceed a stated
minimum.
(1) If the Related Companies maintain two or more
plans which are subject to the ADP or ACP Test and
39
are considered as one plan for purposes of Code
sections 401(a)(4) on 410(b), all such plans shall
be aggregated and treated as one plan for purposes
of meeting the ADP and ACP Tests, provided that
the plans may only be aggregated if they have the
same plan year.
(2) If an HCE is covered by more than one cash or
deferred arrangement, on more than one arrangement
permitting employee or employer matching
contributions, maintained by the Related
Companies, all such plans shall be aggregated and
treated as one plan (other than those plans that
may not be permissively aggregated) for purposes
of calculating the separate percentage for the HCE
which is used in the determination of the Average
Percentage. For purposes of the preceding
sentence, if such plans have different plan years,
the plans are aggregated with respect to the plan
years ending with or within the same calendar
year.
(3) For Plan Years commencing before January 1, 1997,
if an HCE, who is one of the top 10 paid Employees
or a 5% Owner, has any Family Members, the
Deferrals, Contributions and Compensation of such
HCE and his on her Family Members shall be
combined and treated as a single HCE. Such amounts
for all other Family Members shall be removed from
the NHCE Group percentage calculation and be
combined with the HCE"s.
(I) "Lookback Year". For each Plan Year commencing before
January 1, 1997, pursuant to Code section 414(q), the
Company elects as the Lookback Year the calendar year
immediately preceding such Plan Year.
(m) "Multiple Use Test". The test described in Section
12.5 which a Plan must meet where the Alternative
Limitation (described in Section 12.2) is used to meet
both the ADP and ACP Tests.
(n) "N H CE" on "Non-Highly Compensated Employee". An
Employee who is not a HCE.
(o) "Prior Year Testing Method". The use of the preceding
Plan Year's ADP for the preceding Plan Year's NHCE
Group for purposes of performing the Plan Year's ADP
Test and/or the use of the preceding Plan Year's ACP
for the preceding Plan Year's NHCE Group for purposes
of performing the Plan Year's ACP Test.
40
12.2 ADP and ACP Tests
For Plan Years commencing before January 1, 1997, for each
Plan Year, the Current Year Testing Method shall be used and
the ADP and ACP for the HCE Group must meet either the Basic
or Alternative Limitation when compared to the respective
ADP and ACP for the NHCE Group, defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may
not exceed 1.25 times the NHCE Group Average
Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE Group
Average Percentage as follows:
THEN THE MAXIMUM HCE
IF THE NHCE GROUP GROUP AVERAGE
AVERAGE PERCENTAGE IS: PERCENTAGE IS:
Less than 2% 2 times NHCE Group
Average %
2% to 8% NHCE Group Average %
pIus 2%
More than 8% NA - Basic Limitation
applies
For Plan Years commencing after December 31, 1996, for each
Plan Year, the Prior Year Testing Method shall be used and
the ADP and ACP for the HCE Group must meet either the Basic
or Alternative Limitation when compared to the respective
preceding Plan Year's ADP and ACP for the preceding Plan
Year's NHCE Group, defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may
not exceed 1.25 times the NHCE Group Average
Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE Group
Average Percentage as follows:
41
THEN THE MAXIMUM HCE
IF THE NHCE GROUP GROUP AVERAGE
AVERAGE PERCENTAGE IS: PERCENTAGE IS:
Less than 2% 2 times NHCE Group
Average %
2% to 8% NHCE Group Average %
pIus 2%
More than 8% NA - Basic Limitation
applies
Alternatively, the Company may elect to use the Current Year
Testing Method and the ADP and/or ACP for the HCE Group must
meet either the Basic or Alternative Limitation as defined
above when compared to the respective Plan Year's ADP and/on
ACP for the Plan Year's NHCE Group. If a Current Year
Testing Method election is made, such election may not be
changed except as provided by the Code.
12.3 Connection of ADP and ACP Tests for Plan Years Commencing
Before January 1, 1997
For Plan Years commencing before January 1, 1997, for each
Plan Year, if the ADP or ACP Tests are not met, the
Administrator shall determine, no later than the end of the
next Plan Year, a maximum percentage to be used in place of
the calculated percentage for all HCEs that would reduce the
ADP and/or ACP for the HCE Group by a sufficient amount to
meet the ADP and ACP Tests. ADP and/or ACP corrections shall
be made in accordance with the leveling method as described
below.
(a) ADP Correction. The HCE with the highest Deferral
percentage shall have his or her Deferral percentage
reduced to the lesser of the extent required to meet
the ADP Test on to cause his or her Deferral percentage
to equal that of the HCE with the next highest Deferral
percentage. The process shall be repeated until the ADP
Test is met.
To the extent an HCE"s Deferrals were determined to be
reduced as described in the paragraph above, Employee
Pre-Tax Contributions shall, by the end of the next
Plan Year, be refunded to the HCE in an amount equal to
the actual Deferrals minus the product of the maximum
percentage and the HCE's Compensation, except that such
amount to be refunded shall be reduced by Employee Pre-
Tax Contributions previously refunded because they
exceeded the Contribution Dollar Limit. The excess
amounts shall first be taken from unmatched Employee
42
Pre-Tax Contributions and then from matched Employee
Pre-Tax Contributions. Any Employer Contributions
attributable to refunded excess Employee Pre-Tax
Contributions as described in this Section, adjusted
for investment gain on loss for the Plan Year to which
the excess Pre-Tax Contributions relate, shall be
forfeited and used as described in Section 8 on to
reduce future Contributions to be made by an Employer
as soon as administratively feasible.
(b) ACP Correction. The HCE with the highest Contribution
percentage shall have his or her Contribution
percentage reduced to the lesser of the extent required
to meet the ACP Test on to cause his or her
Contribution percentage to equal that of the HCE with
the next highest Contribution percentage. The process
shall be repeated until the ACP Test is met.
To the extent an HCE's Contributions were determined to
be reduced as described in the paragraph above,
Employer Contributions shall, by the end of the next
Plan Year, be refunded to the HCE.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined, amounts
shall first be taken from the Sweep Account and then
taken by Investment Fund in direct proportion to the
market value of the Participant's interest in each
Investment Fund (which excludes his or her Loan Account
balance) as of the Trade Date on which the correction
is processed.
(d) Family Member Correction. To the extent any reduction
is necessary with respect to an HCE and his on her
Family Members that have been combined and treated for
testing purposes as a single Employee, the excess
Deferrals and Contributions from the ADP and/or ACP
Test shall be prorated among each such Participant in
direct proportion to his or hen Deferrals or
Contributions included in each Test.
12.4 Connection of ADP and ACP Tests for Plan Years Commencing
After December 31, 1996
For Plan Years commencing after December 31, 1996, for each
Plan Year, if the ADP or ACP Test are not met, the
Administrator shall determine, no later than the end of the
next Plan Year, a maximum percentage to be used in place of
the calculated percentage for all HCES that would reduce the
ADP and/or ACP for the HCE Group by a sufficient amount to
meet the ADP and ACP Tests.
43
With regard to each HCE whose Deferral percentage and/or
Contribution percentage is in excess of the maximum
percentage, a dollar amount of excess Deferrals and/or
excess Contributions shall then be determined by (i)
subtracting the product of such maximum percentage for the
ADP and the HCE's Compensation from the HCE's actual
Deferrals and (ii) subtracting the product of such maximum
percentage for the ACP and the HCE's Compensation from the
HCE's actual Contributions. Such amounts shall then be
aggregated to determine the total dollar amount of excess
Deferrals and/on excess Contributions. ADP and/or ACP
corrections shall be made in accordance with the leveling
method as described below.
(a) ADP Connection. The HCE with the highest Deferral
dollar amount shall have his on her Deferral dollar
amount reduced in an amount equal to the lesser of the
dollar amount of excess Deferrals for all HCES on the
dollar amount that would cause his or her Deferral
dollar amount to equal that of the HCE with the next
highest Deferral dollar amount. The process shall be
repeated until the total of the Deferral dollar amount
reductions equals the dollar amount of excess Deferrals
for all HCES.
To the extent an HCE's Deferrals were determined to be
reduced as described in the paragraph above, Employee
Pre-Tax Contributions shall, by the end of the next
Plan Year, be refunded to the HCE, except that such
amount to be refunded shall be reduced by Employee Pre-
Tax Contributions previously refunded because they
exceeded the Contribution Dollar Limit. The excess
amounts shall first be taken from unmatched Employee
Pre-Tax Contributions and then from matched Employee
Pre-Tax Contributions. Any Employer Contributions
attributable to refunded excess Employee Pre-Tax
Contributions as described in this Section, adjusted
for investment gain or loss for the Plan Year to which
the excess Employee Pre-Tax Contributions relate, shall
be forfeited and used to reduce future Contributions to
be made by an Employer as soon as administratively
feasible.
(b) ACP Correction. The HCE with the highest Contribution
dollar amount shall have his or her Contribution dollar
amount reduced in an amount equal to the lesser of the
dollar amount of excess Contributions for all HCES or
the dollar amount that would cause his or her
Contribution dollar amount to equal that of the HCE
with the next highest Contribution dollar amount. The
process shall be repeated until the total of the
44
Contribution dollar amount reductions equals the dollar
amount of excess Contributions for all HCES.
To the extent an HCE's Contributions were determined to
be reduced as described in the paragraph above,
Employer Contributions shall, by the end of the next
Plan Year, be refunded to the HCE as of the end of the
Plan Year being tested.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined, amounts
shall first be taken from the Sweep Account and then
taken by Investment Fund in direct proportion to the
market value of the Participant's interest in each
Investment Fund (which excludes his or hen Loan Account
balance) as of the Trade Date on which the connection
is processed.
12.5 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is
used to meet both the ADP and ACP Tests, the ADP and ACP for
the HCE Group must also comply with the requirements of Code
section 401(m)(9). Such Code section requires that the sum
of the ADP and ACP for the HCE Group (as determined after
any corrections needed to meet the ADP and ACP Tests have
been made) not exceed the sum (which produces the most
favorable result) of:
(a) the Basic Limitation (defined in Section 12.2) applied
to either the ADP or ACP for the NHCE Group, and
(b) the Alternative Limitation applied to the other NHCE
Group percentage.
12.6 Connection of Multiple Use Test
If the multiple use limit is exceeded, the Administrator
shall determine a maximum percentage to be used in place of
the calculated percentage for all HCES that would reduce
either or both the ADP or ACP for the HCE Group by a
sufficient amount to meet the multiple use limit. Any excess
shall be corrected in the same manner that excess Deferrals
or Contributions are corrected.
12.7 Adjustment for Investment Gain on Loss
Any excess Deferrals or Contributions to be refunded to a
Participant in accordance with this Section 12 shall be
adjusted for investment gain on loss. Refunds shall not
include investment gain or loss for the period between the
45
end of the applicable Plan Year and the date of
distribution.
12.8 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the
Plan meets the ADP Test, and if applicable, the ACP Test and
the Multiple Use Test, and that the Contribution Dollar
Limit is not exceeded. The Administrator shall maintain
records which are sufficient to demonstrate that the ADP
Test, and if applicable, the ACP Test and the Multiple Use
Test, have been met for each Plan Year for at least as long
as the Employer's corresponding tax year is open to audit.
12.9 Separate Testing
(a) Multiple Employers: The determination of HCES, NHCEs,
and the performance of the ADP Test, and if applicable,
the ACP Test and the Multiple Use Test, and any
corrective action resulting therefrom, shall be
conducted separately with regard to the Employees of
each Employer (and its Related Companies) that is not a
Related Company with respect to the other Employer(s):
(b) Collective Bargaining Units: The performance of the ADP
Test, and if applicable, the ACP Test and the Multiple
Use Test, and any corrective action resulting
therefrom, shall be conducted separately with regard to
Employees who are eligible to participate in the Plan
as a result of a collective bargaining agreement.
In addition, testing may be conducted separately, at the
discretion of the Administrator and to the extent permitted
under Treasury regulations, with regard to any group of
Employees for whom separate testing is permissible under
such regulations.
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
13.1 "Annual Addition" Defined
The sum for a Plan Year of all (i) contributions (excluding
rollover contributions) allocated to the Participant's
Account and his or her account in all other defined
contribution plans maintained by any Related Company, (ii)
amounts allocated to the Participant's individual medical
account (within the meaning of Code section 415(l)(2)) which
is part of a defined benefit plan maintained by any Related
Company, and (iii) if the Participant is a key employee
(within the meaning of Code section 419A(d)(3)) for the
applicable or any prior Plan Year, amounts attributable to
post-retirement medical benefits allocated to his or hen
46
separate account under a welfare benefit fund (within the
meaning of Code section 419(e)) maintained by any Related
Company. The Plan Year refers to the year to which the
allocation pertains, regardless of when it was allocated.
The Plan Year shall be the Code section 415 limitation year.
13.2 Maximum Annual Addition
A Participant's Annual Addition for any Plan Year shall not
exceed the lesser of (i) 25% of his or her Compensation or
(ii) $30,000 (as adjusted for cost of living increases
pursuant to Code section 415(d)); provided, however, that
clause (i) shall not apply to Annual Additions described in
clauses (ii) and (iii) of Section 13.1.
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual
Addition for such year, Contributions to be made for the
remainder of the Plan Year shall be limited to the amount
needed for each affected Participant to receive the maximum
Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a
Participant's Account (resulting from a reasonable error in
determining a Participant's compensation or the maximum
permissible amount of his or her elective deferrals (within
the meaning of Code section 402(g)(3)), or other facts and
circumstances acceptable to the Internal Revenue Service),
the excess amount (adjusted to reflect investment gains)
shall first be returned to the Participant to the extent of
his or her Employee Pre-Tax Contributions (however to the
extent Employee Pre-Tax Contributions were matched, the
applicable Employer Contributions shall be forfeited in
proportion to the returned matched Employee Pre-Tax
Contributions) and the remaining excess, if any, shall be
forfeited by the Participant and used to reduce future
Contributions to be made by an Employer as soon as
administratively feasible.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess
Annual Addition, received allocations to more than one
defined contribution plan, the excess shall be corrected by
reducing the Annual Addition to the Plan only after all
possible reductions have been made to the other defined
contribution plans.
47
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the
greater of 125% of the "protected current accrued benefit"
or the normal limit which is the lesser of (i) 125% of the
dollar limitation in effect under Code section 415(b)(1)(A)
for the Plan Year or (ii) 140% of the amount which may be
taken into account under Code section 415(b)(1)(B) for the
Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit
provided by the plan determined pursuant to Code
section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined
benefit plan in existence (1) on July 1, 1982, shall be
the accrued annual benefit provided for under Public
Law 9 7-248, section 235(g)(4), as amended, or (2) on
May 6, 1986, shall be the accrued annual benefit
provided for under Public Law 99-514, section
1106(i)(3).
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the
Participant's Annual Addition for each Plan Year to date and
the denominator is the sum of the "annual amounts"' for each
year in which the Participant has performed service with a
Related Company. The "annual amount" for any Plan Year is
the lesser of (i) 125% of the dollar limitation in effect
under Code section 415(c)(1)(A) (determined without regard
to subsection (c)(6)) for the Plan Year or (ii) 140% of the
amount which may be taken into account under Code section
415(c)(1)(B) for the Plan Year, where:
(a) each Annual Addition is determined pursuant to the Code
section 415 rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-
248, section 235(g)(3), as amended, or Public Law 99-
514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
The sum of a Participant's Defined Benefit Fraction and
Defined Contribution Fraction for any Plan Year may not
exceed 1.0. If the combined fraction exceeds 1.0 for any
Plan Year, the Participant's benefit under any defined
benefit plan (to the extent it has not been distributed or
used to purchase an annuity contract) shall be limited so
48
that the combined fraction does not exceed 1.0 before any
defined contribution limits shall be enforced.
For Plan Years commencing after December 31, 1999, the
provisions of the preceding paragraph shall no longer be
effective.
14 TOP HEAVY RULES
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each
qualified plan of the Related Companies (1) in which a
Key Employee is a participant or was a participant
during the determination period (regardless of whether
such plan has terminated), or (2) which enables another
plan in the group to meet the requirements of Code
sections 401(a)(4) or 410(b). The Administrator may
also treat any other qualified plan of the Related
Companies as part of the group if the resulting group
would continue to meet the requirements of Code
sections 401(a)(4) and 410(b) with such plan being
taken into account.
(b) "Determination Date". For any Plan Year, the last Trade
Date of the preceding Plan Year or, in the case of the
Plan's first Plan Year, the last Trade Date of that
Plan Year.
(c) "Key Employee"'. A current or former Employee (or his
or her Beneficiary) who at any time during the five
year period ending on the Determination Date was:
(1) an officer of a Related Company whose Compensation
(i) exceeds 50% of the amount in effect under Code
section 415(b)(1)(A) and (ii) places him or her
within the following highest paid group of
officers:
49
NUMBER OF EMPLOYEES
NOT EXCLUDED UNDER
CODE SECTION NUMBER OF
41414(Q)(5) HIGHEST PAID
OFFICERS INCLUDED
Less than 30 3
30 to 500 10% of the number of
Employees not
excluded under Code
section 414(q)(5)
More than 500 50
(2) a 5% Owner,
(3) a 1% Owner whose Compensation exceeds $150,000, or
(4) a 0.5% Owner who is among the 10 Employees owning
the largest interest in a Related Company and
whose Compensation exceeds the amount in effect
under Code section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date
of (1) an Employee's Account, (2) the present value of
his or her other accrued benefits provided by all
qualified plans within the Aggregation Group, and (3)
the aggregate distributions made within the five year
period ending on such Date. For this purpose, the
present value of the Employee's accrued benefit in a
defined benefit plan shall be determined by the method
that is used for benefit accrual purposes under all
such plans maintained by the Related Companies or, if
there is no such single method used under all such
plans, as if the benefit accrues no more rapidly than
the slowest rate permitted by the fractional accrual
rule in Code section 411(b)(1)(C). Plan Benefits shall
exclude rollover contributions and similar transfers
made after December 31; 1983 as provided in Code
section 416(g)(4)(A).
(e) "Top Heavy". The Plan's status when the Plan Benefits
of Key Employees account for more than 60% of the Plan
Benefits of all Employees who have performed services
at any time during the five year period ending on the
Determination Date. The Plan Benefits of Employees who
were, but are no longer, Key Employees (because they
have not been an officer or Owner during the five year
period), are excluded in the determination.
50
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in
which the Plan is Top Heavy, the Employer shall not
allow any contributions (other than a Rollover
Contribution from a plan maintained by a non Related
Company) to be made by or on behalf of any Key Employee
unless the Employer makes a contribution (other than
contributions made by an Employer in accordance with a
Participant's salary deferral election or contributions
made by an Employer based upon the amount contributed
by a Participant) on behalf of all Participants who
were Eligible Employees as of the last day of the Plan
Year in an amount equal to at least 3% of each such
Participant's Taxable Income.
(b) Overriding Minimum Benefit. Notwithstanding the
preceding paragraph, contributions shall be permitted
on behalf of Key Employees if the Employer also
maintains a defined benefit plan which automatically
provides a benefit which satisfies the Code section
416(c)(1) minimum benefit requirements, including the
adjustment provided in Code section 416(h)(2)(A), if
applicable. If the Plan is part of an Aggregation Group
under which a Key Employee is receiving a benefit and
no minimum contribution is provided under any other
plan, a minimum contribution of at least 3% of Taxable
Income shall be provided to the Participants specified
in the preceding paragraph. In addition, the Employer
may offset a defined benefit minimum by contributions
(other than contributions made by an Employer in
accordance with a Participant's salary deferral
election or contributions made by an Employer based
upon the amount contributed by a Participant) made to
the Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100%
shall be substituted for 125% in determining the Defined
Benefit Fraction and the Defined Contribution Fraction. For
Plan Years commencing after December 31, 1999, the
provisions of the preceding sentence shall no longer be
effective.
15 PLAN ADMINISTRATION
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Administrator, the Committee
and/or the Trustee, as applicable, whose specific duties are
delineated in the Plan and Trust. In addition, Plan
51
fiduciaries also include any other person to whom fiduciary
duties or responsibilities are delegated by the
Administrator, Committee, or Trustee, provided however that
no such delegation shall be effective unless made in writing
and signed by the fiduciary whose duties or responsibilities
are being delegated. Any person or group may serve in more
than one fiduciary capacity with respect to the Plan. To the
extent permitted under ERISA section 405, no fiduciary shall
be liable for a breach by another fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with the Plan
and Trust to the extent they are consistent with ERISA;
(b) use that degree of care, skill, prudence and diligence
that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying
reasonable expenses of administering the Plan;
(d) diversify Plan investments, to the extent such
fiduciary is responsible for directing the investment
of Plan assets, so as to minimize the risk of large
losses, unless under the circumstances it is clearly
prudent not to do so; and
(e) treat similarly situated Participants and Beneficiaries
in a uniform and nondiscriminatory manner.
15.3 Company's Benefits Committee is ERISA Plan Administrator
The Benefits Committee maintained by the Company is the
Administrator of the Plan (within the meaning of ERISA
section 3(16)) and is responsible for compliance with all
reporting and disclosure requirements, except those that are
explicitly the responsibility of the Trustee under
applicable law. The Administrator and/or Committee shall
have any necessary authority to carry out such functions
through the actions of the Administrator, its authorized
representatives and/or the Committee.
15.4 Administrator Duties
The Administrator shall have the discretionary authority to
construe the Plan and Trust, other than the provisions that
govern the rights and responsibilities of the Trustee and to
52
do all things necessary or convenient to effect the intent
and purposes thereof, whether or not such powers are
specifically set forth in the Plan and Trust. Actions taken
in good faith by the Administrator shall be conclusive and
binding on all interested parties, and shall be given the
maximum possible deference allowed by law. In addition to
the duties listed elsewhere in the Plan and Trust, the
Administrator's authority shall include, but not be limited
to, the discretionary authority to:
(a) determine who is eligible to participate, if a
contribution qualifies as a rollover contribution, the
allocation of Contributions, and the eligibility for
loans, in-service withdrawals and distributions;
(b) provide each Participant with a summary plan
description no later than 90 days after he or she has
become a Participant (or such other period permitted
under ERlSA section 104(b)(1)), as well as informing
each Participant of any material modification to the
Plan in a timely manner;
(c) make a copy of the following documents available to
Participants during normal work hours: the Plan and
Trust (including subsequent amendments), all annual and
interim reports of the Trustee related to the entire
Plan, the latest annual report and the summary plan
description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased
Participant's interest based upon such proof and
evidence as it deems necessary;
(e) establish and review at least annually a funding policy
bearing in mind both the short-run and long-run needs
and goals of the Plan and, to the extent Participants
may direct their own investments, the funding policy
shall focus on which Investment Funds are available for
Participants to use; and
(f) adjudicate claims pursuant to the claims procedure
described in Section 18.9.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors
(including attorneys, accountants, actuaries, consultants,
record keepers, investment counsel and administrative
assistants) as it considers necessary to assist it in the
performance of its duties. The Administrator shall also
comply with the bonding requirements of ERISA section 412.
53
15.6 Delegation of Administrator Duties
The Administrator may appoint a Committee to administer the
Plan on its behalf. In the event that such a Committee is
appointed, the Administrator shall provide the Trustee with
the names and specimen signatures of any persons authorized
to serve as Committee members and act as or on its behalf.
Any Committee member appointed by the Administrator shall
serve at the pleasure of the Administrator, but may resign
by written notice to the Administrator. Committee members
shall serve without compensation from the Plan for such
services provided however, that members' reasonable expenses
may be reimbursed in accordance with Section 15.8. Except to
the extent that the Administrator otherwise provides, any
delegation of duties to the Committee shall carry with it
the full discretionary authority of the Administrator to
complete such duties. Except for instances in which a
Committee has been duly appointed and its member(s) is/are
available for the performance of duties delegated to the
Committee by the Administrator all references to "Committee"
in this Plan and Trust shall be deemed to refer to the
Administrator.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the
Administrator to the Committee may be done by a
majority of its members. The majority may be expressed
by a vote at a meeting or in writing without a meeting,
and a majority action shall be equivalent to an action
of all Committee members.
(b) Meetings. The Committee shall hold meetings upon such
notice, place and times as it determines necessary to
conduct its functions properly.
(c) Reliance by Trustee. The Committee may authorize one or
more of its members to execute documents on its behalf
and may authorize one or more of its members or other
individuals who are not members to give written
direction to the Trustee in the performance of its
duties. The Committee shall provide such authorization
in writing to the Trustee with the name and specimen
signatures of any person authorized to act on its
behalf. The Trustee shall accept such direction and
rely upon it until notified in writing that the
Committee has revoked the authorization to give such
direction. The Trustee shall not be deemed to be on
notice of any change in the membership of the
Committee, parties authorized to direct the Trustee in
the performance of its duties, on the duties delegated
to and by the Committee until notified in writing.
54
(d) Modification of Operating Rules. The Administrator may
modify or terminate, in whole or in part, the foregoing
operating rules at any time and from time to time. Any
such modification or termination shall not constitute
or require an amendment of the Plan and Trust.
15.8 Fees and Expenses
The Administrator will establish and maintain (or cause to
be established and maintained) for the Plan one or more Plan
Expense Account(s) for the purpose of paying, and/or
reimbursing the Administrator and/or the Committee, the
Company and any other third party as the Administator or
Committee may deem appropriate, for payment of, expenses
reasonably incurred in the administration and operation of
the Plan.
15.9 Company Not A Fiduciary
The Company is the settlor of the Plan and is not, nor shall
it be deemed to be, a fiduciary of the Plan except to the
extent, if any, that it (i) exercises discretionary
authority or discretionary control respecting management of
the Plan, (ii) exercises any authority or control respecting
management or disposition of the Plan's assets, or (iii)
otherwise satisfies the definition of fiduciary with respect
to the Plan for purposes of Section 3(21)(A) of ERISA.
Without limiting the foregoing, the Company shall retain all
rights, powers and privileges of settlor with respect to the
Plan (and any underlying trust), including without
limitation, the right expressly conferred upon the Company
under the terms of this Plan.
16 MANAGEMENT OF INVESTMENTS
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of the Plan and Trust which
relate to the Trustee, for use in providing Plan benefits
and paying Plan fees and expenses not paid directly by the
Employer. Plan benefits shall be drawn solely from the Trust
and paid by the Trustee as directed by the Administrator.
Notwithstanding the foregoing, the Company may appoint, with
the approval of the Trustee, another trustee to hold and
administer Plan assets which do not meet the requirements of
Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted authority to direct the
Trustee to invest Trust assets in one or more Investment
55
Funds. The number and composition of Investment Funds may be
changed from time to time, without the necessity of amending
the Plan and Trust. The Trustee may establish reasonable
limits on the number of Investment Funds as well as the
acceptable assets for any such Investment Fund. Each of the
Investment Funds may be comprised of any of the following:
(a) shares of a registered investment company, whether or
not the Trustee or any of its affiliates is an advisor
to, or other service provider to, such company;
(b) collective investment funds maintained by the Trustee,
or any other fiduciary to the Plan, which are available
for investment by trusts which are qualified under Code
sections 401(a) and 501(a);
(c) individual equity and fixed income securities which are
readily tradable on the open market;
(d) synthetic guaranteed investment contracts and
guaranteed investment contracts issued by an insurance
company and/or synthetic guaranteed investment
contracts and bank investment contracts issued by a
bank;
(e) interest bearing deposits (which may include interest
bearing deposits of the Trustee); and
(f) Company Stock.
Any Investment Fund assets invested in a collective
investment fund shall be subject to all the provisions of
the instruments establishing and governing such fund. These
instruments, including any subsequent amendments, are
incorporated herein by reference.
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient
deposit or money market type assets in each Investment Fund
to handle the lnvestment Fund's liquidity and disbursement
needs. Each Participant's and Beneficiary's Sweep Account,
which is used to hold assets pending investment or
disbursement, shall consist of interest bearing deposits
(which may include interest bearing deposits of the Trustee)
and/or money market type assets or funds.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in
the Investment Funds as soon as practicable after such
56
instructions are received from the Administrator,
Participants or Beneficiaries. Such instructions shall
remain in effect until changed by the Administrator,
Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment
Company Shares
The Administrator shall be entitled to vote proxies or
exercise any shareholder rights relating to shares held on
behalf of the Plan in a registered investment company.
Notwithstanding the foregoing sentence, the authority to
vote proxies and exercise shareholder rights related to such
shares held in a Custom Fund is vested as provided otherwise
in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the
Trustee, an investment manager for any Investment Fund
established by the Trustee solely for Participants of the
Plan and, subject to Section 16.7, any other qualified plan
of the Company or a Related Company (a "Custom Fund"). The
investment manager may be the Administrator, Trustee or an
investment manager pursuant to ERISA section 3(38). The
Administrator shall advise the Trustee in writing of the
appointment of an investment manager and shall cause the
investment manager to acknowledge to the Trustee in writing
that the investment manager is a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the
Trustee, shall be established for a Custom Fund. If a
Custom Fund consists solely of collective investment
funds or shares of a registered investment company (and
sufficient deposit or money market type assets to
handle the Custom Fund's liquidity and disbursement
needs), its underlying instruments shall constitute the
guidelines.
(b) Authority of Investment Manager. The investment manager
of a Custom Fund shall have the authority to vote or
execute proxies, exercise shareholder rights, manage,
acquire, and dispose of Trust assets. Notwithstanding
the foregoing, if the Company provides for a Company
Stock Fund, the authority to vote proxies and exercise
shareholder rights related to shares of Company Stock
held in the Company Stock Fund is vested as provided
otherwise in Section 16.
57
(c) Custody and Trade Settlement. Unless otherwise agreed
to by the Trustee, the Trustee shall maintain custody
of all Custom Fund assets and be responsible for the
settlement of all Custom Fund trades. For purposes of
this Section, shares of a collective investment fund,
shares of a registered investment company and synthetic
guaranteed investment contracts and guaranteed
investment contracts issued by an insurance company
and/or synthetic guaranteed investment contracts and
bank investment contracts issued by a bank, shall be
regarded as the Custom Fund assets instead of the
underlying assets of such instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated to
invest or otherwise manage any Custom Fund assets for
which the Trustee or Administrator is not the
investment manager nor shall the Administrator or
Trustee be liable for acts or omissions with regard to
the investment of such assets except to the extent
required by ERISA.
16.7 Master Custom Fund
The Trustee may establish, at the direction of the
Administrator, a single Custom Fund (the "Master Custom
Fund"), for the benefit of the Plan and any other qualified
plan of the Company or a Related Company for which the
Trustee acts as trustee pursuant to a plan and trust
document that contains a provision substantially identical
to this provision. The assets of the Plan, to the extent
invested in the Master Custom Fund, shall consist only of
that percentage of the assets of the Master Custom Fund
represented by the shares held by the Plan.
16.8 Authority to Segregate Assets
The Administrator may direct the Trustee to split an
Investment Fund into two or more funds in the event any
assets in the Investment Fund are illiquid or the value is
not readily determinable. In the event of such segregation,
the Administrator shall give instructions to the Trustee on
what value to use for the split-off assets, and the Trustee
shall not be responsible for confirming such value.
16.9 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund, the
Company Stock Fund shall be comprised of Company Stock and
sufficient deposit or money market type assets to handle the
Company Stock Fund's liquidity and disbursement needs. The
58
Company Stock Fund may be as large as necessary to comply
with Participants' and Beneficiaries' investment elections.
16.10 Participants Have Right to Vote and Tender Company
Stock
Each Participant or Beneficiary shall be entitled to
instruct the Trustee as to the voting or tendering of any
full or partial shares of Company Stock held on his or her
behalf in the Company Stock Fund. Prior to such voting or
tendering of Company Stock, each Participant or Beneficiary
shall receive a copy of the proxy solicitation or other
material relating to such vote or tender decision and a form
for the Participant or Beneficiary to complete which
confidentially instructs the Trustee to vote or tender such
shares in the manner indicated by the Participant or
Beneficiary. Upon receipt of such instructions, the Trustee
shall act with respect to such shares as instructed.
With regard to shares for which the Trustee receives no
voting or tendering instructions from Participants or
Beneficiaries, the Administrator shall instruct the Trustee
with respect to how to vote or tender such shares and the
Trustee shall act with respect to such shares as instructed.
16. 11 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining the
applicability (and, if applicable, complying with) the
requirements of the Securities Act of 1933, as amended, the
California Corporate Securities Law of 1968, as amended, and
any other applicable blue sky law. The Administrator shall
also specify what restrictive legend or transfer
restriction, if any, is required to be set forth on the
certificates for the securities and the procedure to be
followed by the Trustee to effectuate a resale of such
securities.
17 TRUST ADMINISTRATION
17.1 Trustee to Construe Trust
The Trustee shall have the discretionary authority to
construe those provisions of the Plan and Trust that govern
the rights and responsibilities of the Trustee and to do all
things necessary or convenient to the administration of the
Trust, whether or not such powers are specifically set forth
in the Plan and Trust. Actions taken in good faith by the
Trustee shall be conclusive and binding on all interested
parties, and shall be given the maximum possible deference
allowed by law.
59
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth
in the Plan and Trust, the Trustee shall have all the power,
authority, rights and privileges of an absolute owner of the
Trust assets and, not in limitation but in amplification of
the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell,
tender, exchange, dispose of, encumber, hypothecate,
pledge, mortgage, lease, grant options respecting,
repair, alter, insure, or distribute any and all
property in the Trust;
(b) borrow money, participate in reorganizations, pay calls
and assessments, vote or execute proxies, exercise
subscription or conversion privileges, exercise options
and register any securities in the Trust in the name of
the nominee, in federal book entry form or in any other
form as shall permit title thereto to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate,
adjust, settle, enforce or foreclose, by judicial
proceedings or otherwise, or defend against the same,
any obligations or claims in favor of or against the
Trust; and
(d) lend, through a collective investment fund, any
securities held in such collective investment fund to
brokers, dealers or other borrowers and to permit such
securities to be transferred into the name and custody
and be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of
any Trust assets outside the jurisdiction of the United
States, except as authorized under ERISA section 404(b).
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes with
regard to any Eligible Rollover Distribution that is
not paid as a Direct Rollover in accordance with the
Participant's withholding election on as required by
law if no election is made or the election is less than
the amount required by law. With regard to any taxable
distribution that is not an Eligible Rollover
Distribution, the Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes in
60
accordance with the Participant's withholding election
or as required by law if no election is made.
(b) Taxes Due From Investment Funds. The Trustee shall pay
from the Investment Fund any taxes or assessments
imposed by any taxing or governmental authority on such
Investment Fund or its income, including related
interest and penalties.
17.5 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable
period) following the close of the Plan Year, the
Trustee shall provide the Administrator with an annual
accounting of Trust assets and information to assist
the Administrator in meeting ERISA's annual reporting
and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records
and provide sufficient reporting-to allow the
Administrator to properly monitor the Trust's assets
and activity.
(c) Administrator Approval. Approval of any Trustee
accounting shall automatically occur 90 days after such
accounting has been received by the Administrator,
unless the Administrator files a written objection with
the Trustee within such time period. Such approval
shall be final as to all matters and transactions
stated or shown therein and binding upon the
Administrator.
17.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is
not readily tradable and listed on a national securities
exchange registered under the Securities Exchange Act of
1934, as amended, the Trustee may engage a qualified
independent appraiser to determine the fair market value of
such property, and the appraisal fees shall be paid from the
Investment Fund containing the asset.
17.7 Legal Counsel
The Trustee may consult with legal counsel of its choice,
including counsel for the Employer or counsel of the
Trustee, upon any question or matter arising under the Plan
and Trust. When relied upon by the Trustee, the opinion of
such counsel shall be evidence that the Trustee has acted in
good faith.
61
17.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such
as may be mutually agreed upon by the Company and the
Trustee. Trustee fees and all reasonable expenses of counsel
and advisors retained by the Trustee shall be paid in
accordance with Section 6.
17.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the
Trustee, shall be confined to construing the terms of the
Plan and Trust as they relate to the Trustee, receiving
funds on behalf of and making payments from the Trust,
safeguarding and valuing Trust assets, investing and
reinvesting Trust assets in the Investment Funds as directed
by the Administrator, Participants or Beneficiaries, and
those duties as described in this Section 17.
The Trustee shall have no duty or authority to ascertain
whether Contributions are in compliance with the Plan, to
enforce collection or to compute or verify the accuracy or
adequacy of any amount to be paid to it by the Employer. The
Trustee shall not be liable f-or the proper application of
any part of the Trust with respect to any disbursement made
at the direction of the Administrator.
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any
Employee. The Employer expressly reserves the right to
discharge an Employee at any time, with or without cause,
without regard to the effect such discharge would have upon
the Employee's interest in the Plan.
18.2 Compliance With USERRA
Notwithstanding any provision of the Plan to the contrary,
effective October 13, 1996, with regard to an Employee who
after serving in the uniformed services is employed on or
after December 12, 1994, within the time required by USERRA,
contributions shall be made and benefits and service credit
shall be provided under the Plan with respect to his or her
qualified military service (as defined in Code section
414(u)(5)) in accordance with Code section 414(u).
Furthermore, notwithstanding any provision of the Plan to
the contrary, Participant loan payments may be suspended
during a period of qualified military service, provided,
however, that the Administrator may direct that interest
62
shall continue to accrue on outstanding loan balances,
subject to any applicable restrictions imposed by USERRA.
18.3 Limited Return of Contributions
Except as provided in this Section 18.3, (i) Plan assets
shall not revert to the Employer nor be diverted for any
purpose other than the exclusive benefit of Participants and
Beneficiaries and defraying reasonable expenses of
administering the Plan; and (ii) a Participant's vested
interest shall not be subject to divestment. As provided in
ERISA section 403(c)(2), the actual amount of a Contribution
or portion thereof made by the Employer (or the current
value of such if a net loss has occurred) may revert to the
Employer if:
(a) such Contribution or portion thereof is made by reason
of a mistake of fact;
(b) a determination with respect to the initial
qualification of the Plan under Code section 401(a) is
not received and a request for such determination is
made within the time prescribed under Code section
401(b) (the existence of and Contributions under the
Plan are hereby conditioned upon such initial
qualification); or
(c) such Contribution or portion thereof is not deductible
under Code section 404 (such Contributions are hereby
conditioned upon such deductibility) in the taxable
year of the Employer for which the Contribution is
made.
The reversion to the Employer must be made (if at all)
within one year of the mistaken payment, the date of denial
of qualification, or the date of disallowance of deduction,
as the case may be. A Participant shall have no rights under
the Plan with respect to any such reversion.
18.4 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan
may be anticipated, assigned or alienated, except to create,
assign or recognize a right to any benefit with respect to a
Participant pursuant to a ODRO, or to use Participant's
vested Account Balance as security for a loan from the Plan,
pursuant to Code section 4975.
63
18.5 Facility of Payment
If a Plan benefit is due to be paid to a minor on if the
Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any
payment due him or her, the Administrator shall have the
payment of the benefit, or any part thereof, made to the
person (or persons or institution) whom it reasonably
believes is caring for or supporting the payee, unless it
has received due notice of claim therefore from a duly
appointed guardian or conservator of the payee. Any payment
shall to the extent thereof, be a complete discharge of any
liability under the Plan to the payee.
18.6 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to
payment of a Plan benefit after a reasonable search, the
Administrator may at any time thereafter treat such person's
Account as forfeited and use such amount to reduce future
Contributions to be made by an Employer as soon as
administratively feasible. If such person subsequently
presents the Administrator with a valid claim for the
benefit, such person shall be paid the amount treated as
forfeited, plus the interest that would have been earned in
the Sweep Account to the date of determination. The
Administrator shall pay the amount through an additional
amount contributed by the Employer.
18.7 Suspension of Certain Plan Provisions During Conversion
Period
Notwithstanding any provision of the Plan to the contrary,
during any Conversion Period, in accordance with procedures
established by the Administrator and the Trustee, the
Administrator may temporarily suspend, in whole or in part,
certain provisions under the Plan, which may include, but
are not limited to, a Participant's right to change his or
hen Contribution election, a Participant's right to change
his or her investment election and a Participant's right to
borrow or withdraw from his or her Account or obtain a
distribution from his or her Account.
18.8 Suspension of Certain Plan Provisions During Other Periods
Notwithstanding any provision of the Plan to the contrary,
in accordance with procedures established by the
Administrator and the Trustee, the Administrator may
temporarily suspend a Participant's right to borrow or
withdraw from his or her Account or obtain a distribution
from his or her Account, if (i) the Administrator receives a
domestic relations order and the Participant's Account is a
64
source of the payment for such domestic relations order, or
(ii) if the Administrator receives notice that a domestic
relations order is being sought by the Participant, his or
her spouse, former spouse, child or other dependent (as
defined in Code section 152) and the Participant's Account
is a source of the payment for such domestic relations
order. Such suspension may continue for a reasonable period
of time (as determined by the Administrator) which may
include the period of time the Administrator, a court of
competent jurisdiction or other appropriate person is
determining whether the domestic relations order qualifies
as a ODRO.
18.9 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees
with the Administrator's determination of his on her
right to Plan benefits must submit a written claim and
exhaust this claim procedure before legal recourse of
any type is sought. The claim must include the
important issues the - interested party believes
support the claim. The Administrator, pursuant to the
authority provided in the Plan, shall either approve or
deny the claim.
(b) Process for Denying a Claim. The Administrator's
partial or complete denial of an initial claim must
include an understandable, written response covering
(1) the specific reasons why the claim is being denied
(with reference to the pertinent Plan provisions) and
(2) the steps necessary to perfect the claim and obtain
a final review.
(c) Appeal of Denial and Final Review. The interested party
may make a written appeal of the Administrator's
initial decision, and the Administrator shall respond
in the same manner and form as prescribed for denying a
claim initially.
(d) Time Frame. The initial claim, its review, appeal and
final review shall be made in a timely fashion, subject
to the following time table:
65
DAYS TO
ACTION RESPOND
FROM LAST
ACTION
Administrator determines NA
benefit 60 days
Interested party files initial 90 days
request 60 days
Administrator's initial 60 days
decision
Interested party requests
final review
Administrator's final decision
However, the Administrator may take up to twice the
maximum response time for its initial and final review
if it provides an explanation within the normal period
of why an extension is needed and when its decision
shall be forthcoming.
18.10 Construction
Headings are included for reading convenience. The text
shall control if any ambiguity or inconsistency exists
between the headings and the text. The singular and plural
shall be interchanged wherever appropriate. References to
Participant shall include Alternate Payee and/or Beneficiary
when appropriate and even if not otherwise already expressly
stated.
18.11 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and
administered under ERISA and other applicable federal laws
and, where not otherwise preempted, by the laws of the State
of-New Jersey with respect to issues affecting the Trustee's
responsibilities and by the laws of the Commonwealth of
Massachusetts with respect to all other matters. If any
provision of the Plan and Trust is or becomes invalid or
otherwise unenforceable, that fact shall not affect the
validity or enforceability of any other provision of the
Plan and Trust. All provisions of the Plan and Trust shall
be so construed as to render them valid and enforceable in
accordance with their intent.
18.12 Indemnification by Employer
The Employers hereby agree to indemnify all Plan fiduciaries
against any and all liabilities resulting from any action or
inaction, (including a Plan termination in which the Company
66
fails to apply for a favorable determination from the
Internal Revenue Service with respect to the qualification
of the Plan upon its termination), in relation to the Plan
or Trust (i) including (without limitation) expenses
reasonably incurred in the defense of any claim relating to
the Plan or its assets, and amounts paid in any settlement
relating to the Plan or its assets, but (ii) excluding
liability resulting from actions or inactions made in bad
faith, or resulting from the negligence or willful
misconduct of the Trustee. The Company shall have the right,
but not the obligation, to conduct the defense of any action
to which this Section applies. The Plan fiduciaries are not
entitled to indemnity from the Plan assets relating to any
such action.
18.13 Effect of Collectively Bargained Schedules
Notwithstanding anything contained herein to the contrary,
in the event that any conflict arises between the terms of
the Articles of this Plan, and the terms of one or more
Schedules to this Plan, then the terms of the Schedule(s)
shall govern with respect to the Participants covered by the
affected Schedule(s), and their Beneficiaries, provided
however, that no terms of any Schedule shall be enforced to
the extent that such enforcement would adversely affect the
qualified status of the Plan or Trust under sections 401(a)
and 501(a) of the Code, respectively.
18.14 Release by Participants and Beneficiaries
Except to the extent that it relieves the Administrator, the
Committee or the Trustee from responsibility or liability
for any responsibility, obligation or duty owing to the Plan
or any Participant on Beneficiary, any payment to any
Participant or to any person entitled to a benefit under the
Plan, made in accordance with the provisions of the Plan,
shall to the extent thereof be in full satisfaction of all
claims against the Trustee and the Administrator, the
Committee, any or all of whom may require such Participant
or person, as a condition precedent to such payment, to
execute a receipt and release therefor in such form as shall
be determined by the Trustee, the Administrator or the
Committee, as the case may be.
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
19.1 Amendment
The Company reserves the right to amend the Plan and Trust
at any time, to any extent and in any manner it may deem
necessary or appropriate. The Company (and not the Trustee)
shall be responsible for adopting any amendments necessary
67
to maintain the qualified status of the Plan and Trust under
Code sections 401(a) and 501(a). If the Committee is acting
as the Administrator in accordance with Section 1.5.6, it
shall have the authority to adopt Plan and Trust amendments
which have no substantial adverse financial impact upon any
Employer or the Plan. All interested parties shall be bound
by any amendment, provided that no amendment shall:
(a) become effective unless it has been adopted in
accordance with the procedures set forth in Section
19.5;
(b) except to the extent permissible under ERISA and the
Code, make it possible for any portion of the Trust
assets to revert to an Employer or to be used for, or
diverted to, any purpose other than for the exclusive
benefit of Participants and Beneficiaries entitled to
Plan benefits and to defray reasonable expenses of
administering the Plan;
(c) decrease the rights of any Participant to benefits
accrued (including the elimination of optional forms of
benefits) to the date on which the amendment is
adopted, or if later, the date upon which the amendment
becomes effective, except to the extent permitted under
ERISA and the Code; nor
(d) permit a Participant to be paid any portion of his or
her Account subject to the distribution rules of Code
section 401(k) unless the payment would otherwise be
permitted under Code section 401(k).
19.2 Merger
The Plan and Trust may not be merged or consolidated with,
nor may its assets or liabilities be transferred to, another
plan unless each Participant and Beneficiary would, if the
resulting plan were then terminated, receive a benefit just
after the merger, consolidation or transfer which is at
least equal to the benefit which would be received if either
plan had terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation
of: (i) substantially all of the Employer's assets used in a
trade or business to an unrelated corporation, or (ii) a
sale of such Employer's interest in a subsidiary to an
unrelated entity or individual, lump sum distributions shall
be permitted from the Plan, except as provided below, to
Participants with respect to Employees who continue
68
employment with the corporation acquiring such assets or who
continue employment with such subsidiary, as applicable.
Notwithstanding the preceding paragraph, distributions shall
not be permitted if the purchaser agrees, in connection with
the sale, to be substituted as the Company as the sponsor of
the Plan onto accept a transfer in a transaction subject to
Code section 414(l)(1) of the assets and liabilities
representing the Participants' benefits into a plan of the
purchaser or a plan to be established by the purchaser.
19.4 Plan Termination and Complete Discontinuance of
Contributions
The Company may, at any time and for any reason, terminate
the Plan in accordance with the procedures set forth in
Section 19.5, or completely discontinue contributions.
In the event of the Plan's termination, if no successor plan
is established or maintained, lump sum distributions shall
be made in accordance with the terms of the Plan as in
effect at the time of the Plan's termination or as
thereafter amended, provided that a post-termination
amendment shall not be effective to the extent that it
violates Section 19.1unless it is required in order to
maintain the qualified status of the Plan upon its
termination. The Trustee's and Employer's authority shall
continue beyond the Plan's termination date until all Trust
assets have been-liquidated and distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the
adoption of any amendment or termination (a "Change") of the
Plan and Trust:
(a) The Company may adopt any Change by action of its board
of directors in accordance with its normal procedures.
(b) The Committee, if acting as Administrator in accordance
with Section 15.6, may adopt any Change within the
scope of its authority provided under Section 19.1and
in the manner specified in Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and (2)
signed and dated by an executive officer of the Company
or, in the case of a Change adopted by the Committee,
at least one of its members.
(d) If the effective date of any Change is not specified in
the document setting forth the Change, it shall be
effective as of the date it is signed by the last
69
person whose signature is required under clause (2) of
paragraph (c) above, except to the extent that another
effective date is necessary to maintain the qualified
status of the Plan and Trust under Code sections 401(a)
and 501(a).
(e) No Change shall become effective until it is accepted
and signed by the Trustee (which acceptance shall not
unreasonably be withheld).
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate
its Plan participation by action of its board of directors
in accordance with its normal procedures. Written notice of
such action shall be signed and dated by an executive
officer of the Employer and delivered to the Company. If the
effective date of such action is not specified, it shall be
effective on, or as soon as reasonably practicable after,
the date of delivery. Upon the Employer's request, the
Company may instruct the Trustee and Administrator to spin
off all affected Accounts and underlying assets into a
separate qualified plan under which the Employer shall
assume the powers and duties of the Company. Alternatively,
the Company may continue to maintain the Accounts under the
Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under the Plan and Trust
or may be removed by the Company at any time upon at least
90 days written notice (on less if agreed to by both
parties). In such event, the Company shall appoint a
successor trustee by the end of the notice period. The
successor trustee shall then succeed to all the powers and
duties of the Trustee under the Plan and Trust. If no
successor trustee has been named by the end of the notice
period, the Company's chief executive officer shall become
the trustee, or if he or she declines, the Trustee may
petition the count for the appointment of a successor
trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively feasible
after its resignation or removal as Trustee, the
Trustee shall transfer to the successor trustee all
property currently held by the Trust. However, the
Trustee is authorized to reserve such sum of money as
it may deem advisable for payment of its accounts and
expenses in connection with the settlement of its
accounts or other fees or expenses payable by the
70
Trust. Any balance remaining after payment of such fees
and expenses shall be paid to the successor trustee.
(b) Final Accounting. The Trustee shall provide a final
accounting to the Administrator within 90 days of the
date Trust assets are transferred to the successor
trustee.
(c) Administrator Approval. Approval of the final
accounting shall automatically occur 90 days after such
accounting has been received by the Administrator,
unless the Administrator files a written objection with
the Trustee within such time period. Such approval
shall be final as to all matters and transactions
stated or shown therein and binding upon the
Administrator.
71
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan as of the Effective
Date include this set of daily valued funds:
Stable Value
Company Stock
S&P 500 Stock
AIM Constellation
Templeton Foreign
LifePath Series
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the
Stable Value Fund.
Ill. Maximum Percentage Restrictions Applicable to Certain Investment
Funds
As of the Effective Date, there are no maximum percentage
restrictions applicable to any Investment Funds.
72
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be
as follows:
I. Investment Management Fees: These are paid by Participants in
that management fees reduce the investment return reported and
credited to Participants.
II. Recordkeeping Fees: These are paid by Participants and are
assessed monthly and billed/collected from Accounts quarterly.
III. Loan Fees: A $3.50 per month fee is assessed and billed/collected
quarterly from the Account of each Participant who has an
outstanding loan balance for loans entered into on or after April
1, 1995, but that are set-up prior to migration to MLII., For
loans entered into prior to April 1, 1995, these are paid by the
Employer on a quarterly basis. For loans set-up after the
migration to MLII, a one time $40.00 fee will be assessed and
billed/collected from the Participant's Account at the time of
the loan set-up.
IV. Investment Fund Election Changes: Prior to the migration to MLII,
for each investment fund election change by a Participant in
excess of 10 changes per year, a $10 fee shall be assessed and
billed/collected quarterly from the Participant's Account. On and
after the migration to MLII there will be no limit and no fees
assessed on the number of investment fund election changes by a
Participant.
V. Periodic Installment Payment Fees: A $3.00 per check fee shall be
assessed and billed/collected quarterly -from the Account of each
Participant for whom a check representing a periodic installment
payment is issued.
VI. Additional Fees Paid by Employer: All other Plan related fees and
expenses shall be paid by the Employer. To the extent that the
Administrator later elects that any such fees shall be borne by
Participants, the fees shall be assessed against Participants'
Accounts, and estimates of the fees shall be determined and
reconciled, at least annually.
73
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant
loans shall be equal to the prime rate published in The Wall Street
Journal at the time the loan is processed, plus 1%. If multiple prime
rates are published in The Wall Street Journal, the prime rate
selected shall be the rate closest to the last prime rate used for
this purpose.
The rate may be determined once for all loans made in a month, and the
maturity may be determined to the nearest year.
On and after the migration to MLII, the interest rate charged on
Participant loans shall be provided by Merrill Lynch, shall be
reviewed once each quarter and shall be equal to the prime rate
published in the Wall Street Journal (Citibank Prime) on the last
business day of each quarter, plus 1%.
74
APPENDIX D - ELIGIBLE EMPLOYEE
As of the Effective Date, the collective bargaining units are:
(a) Lawrence Division, International Brotherhood of Electrical
Workers, Local No. 326 ("Local 326-Lawrence Employees")
(b) Brockton Division, Utility Workers' Union of America, AFL-CIO,
Local No. 273 ("Local 273-Brockton Operating Employees")
(c) Brockton Division, Utility Workers' Union of America, AFL-CIO,
Local No. 273 Clerical/Technical Unit ("Local 273-Brockton
Clerical/Technical Employees")
(d) Northern Utilities, Inc., Portland Division, Brotherhood of
Utility Workers of New England, Incorporated, Local No.
341("Local 341-Portland Employees")
(e) Granite State Gas Transmission, Inc., Brotherhood of Utility
Workers of New England, Incorporated, Local No. 341("Local 341-
Granite State Employees")
(f) Springfield Division, United Steelworkers of America, AFL-CIO,
Local No. 12026 ("Local 12026-Springfield Employees")
(g) Springfield Division, International Brotherhood of Electrical
Workers, Local No. 486 ("Local 486-Springfield Employees")
(h) Northern Utilities, Inc., Portsmouth Division, United
Steelworkers of America, AFLCIO-CLC, Local No. 12012-6 ("Local
12012-6-Portsmouth Employees")
(i) EnergyUSA Brockton Propane Division, Oil, Chemical and Atomic
Workers International Union AFL-CIO, Quincy Local 8-36 6 ("Local
8-366-EnergyUSA Employees")
(j) EnergyUSA Northern Propane Division, United Steelworkers of
America, AFL-CIOCLC, Amalgamated Local No. 12012-8 ("Local 12012-
8-EnergyUSA Employees")
75
SCHEDULE A - LOCAL 326 LAWRENCE EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the month following the completion of a 60 day
Period of Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a Period of
Employment consisting of twelve consecutive months in which he or
she is credited with at least 1,000 Hours of Service. For each
period for which Participant Contributions are made, the Employer
shall make Employer Contributions, as set forth below, on behalf
of each Participant who is a Local 326 Lawrence Employee and who
(a) is not eligible to receive medical insurance coverage upon
retirement or (b) would be otherwise eligible to receive medical
coverage upon retirement but who in accordance with procedures
prescribed by the Administrator made a one-time irrevocable
election to waive his or her right to receive medical insurance
coverage upon his or her retirement.
Amount of Employer Contributions:
07/01/96 to 06/30/99: The Employer Contribution for each period
shall total 100% of each Participant's Employee Pre-Tax
Contributions for the period, provided that no Employer
Contribution shall be made based upon a Participant's
Contributions in excess of 2.5% of his or her Pay.
07/01/99 to 06/30/2002: The Employer Contribution for each period
shall total 50% of each Participant's Employee Pre-Tax
Contributions for the period, provided that no Employer
Contribution shall be made based upon a Participant's
Contributions in excess of 5% of his or her Pay.
76
SCHEDULE B - LOCAL 273 BROCKTON OPERATING EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the next month after completing a Period of
Employment consisting of twelve consecutive months in which he or
she is credited with at least 1,000 Hours of Service.
Eligibility for Employer Contribution:
First day of the next month after completing a Period of
Employment consisting of twelve consecutive months in which he or
she is credited with at least 1,000 Hours of Service. For each
period for which Participant Contributions are made, the Employer
shall make Employer Contributions, as set forth below, on behalf
of each Participant who is a Local 273 Brockton Operating
Employee and who (a) is not eligible to receive medical insurance
coverage upon retirement or (b) would be otherwise eligible to
receive medical coverage upon retirement but who in accordance
with procedures prescribed by the Administrator made a one-time
irrevocable election to waive his or her right to receive medical
insurance coverage upon his or her retirement.
Amount of Employer Contributions:
The Employer Contribution for each period shall total 50% of each
Participant's Employee Pre-Tax Contributions for the period,
provided that no Employer Contribution shall be made based upon a
Participant's Contributions in excess of 5% of his or her Pay.
77
SCHEDULE C - LOCAL 273 BROCKTON CLERICAL/TECHNICAL EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the next month after completing a Period of
Employment consisting of twelve consecutive months in which he or
she is credited with at least 1,000 Hours of Service.
Eligibility for Employer Contribution:
First day of the next month after completing a Period of
Employment consisting of twelve consecutive months in which he or
she is credited with at least 1,000 Hours of Service. For each
period for which Participant Contributions are made, the Employer
shall make Employer Contributions, as set forth below, on behalf
of each Participant who is a Local 273 Brockton
Clerical/Technical Employee and who (a) is not eligible to
receive medical insurance coverage upon retirement or (b) would
be otherwise eligible to receive medical coverage upon retirement
but who in accordance with procedures prescribed by the
Administrator made a one-time irrevocable election to waive his
or her right to receive medical insurance coverage upon his or
her retirement.
Amount of Employer Contributions:
The Employer Contribution for each period shall equal 100% of
each Participant's Employee Pre-Tax Contributions for the period
up to 1% of his or her Pay and 50% of each Participant's Employee
Pre-Tax Contributions for the period on the next 5% of his or hen
Pay, provided that no Employer Contribution shall be made based
upon a Participant's Contributions in excess of 6% of his or her
Pay.
78
SCHEDULE D - LOCAL 341 PORTLAND EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 341-Portland Employee and who (a) is not eligible
to receive medical insurance coverage upon retirement or (b)
would be otherwise eligible to receive medical coverage upon
retirement but who in accordance with procedures prescribed by
the Administrator made a one-time irrevocable election to waive
his on her right to receive medical insurance coverage upon his
or her retirement.
Amount of Employer Contributions:
The Employer Contribution for each period shall total 50% of each
Participant's Employee Pre-Tax Contributions for the period,
provided that no Employer Contribution shall be made based upon a
Participant's Contributions in excess of 5% of his or her Pay.
79
SCHEDULE E - LOCAL 341 GRANITE STATE EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 341-Granite State Employee and who (a) is not
eligible to receive medical insurance coverage upon retirement or
(b) would be otherwise eligible to receive medical coverage upon
retirement but who in accordance with procedures prescribed by
the Administrator made a one-time irrevocable election to waive
his or her right to receive medical insurance coverage upon his
or her retirement.
Amount of Employer Contributions:.
The Employer Contribution for each period shall total 50% of each
Participant's Employee Pre-Tax Contributions for the period,
provided that no Employer Contribution shall be made based upon a
Participant's Contributions in excess of 5% of his or her Pay.
80
SCHEDULE F - LOCAL 12026 SPRINGFIELD EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
Prior to January 1, 2000: First day of the next month after
completing a Period of Employment consisting of twelve
consecutive months in which he or she is credited with at least
1,000 Hours of Service.
Effective January 1, 2000: First day of the next month after
completing a 60 day Period of Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 12026 Springfield Employee.
Amount of Employer Contributions:
Prior to January 1, 2000, a Participant who is a Local 12026-
Springfield Employee is not eligible for Employer Contributions.
Effective January 1, 2000, for each period in which Participant
Contributions are made, the Employer Contribution for each period
shall total 50% of each Participant's Employee Pre-Tax
Contribution for the period, provided that no Employer
Contribution sha!l be made based upon a Participant's
Contributions in excess of 5% of his or her Pay.
81
SCHEDULE G - LOCAL 486 SPRINGFIELD EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
Prior to January 1, 2000: First day of the next month after
completing a Period of Employment consisting of twelve
consecutive months in which he or she is credited with at least
1,000 Hours of Service.
Effective January 1, 2000: First day of the next month after
completing a 60 day Period of Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 486 Springfield Employee.
Amount of Employer Contributions:
Prior to January 1, 2000, a Participant who is a Local 486-
Springfield Employee is not eligible for Employer Contributions.
Effective January 1, 2000, for each period in which Participant
Contributions are made, the Employer Contribution for each period
shall total 50% of each Participant's Employee Pre-Tax
Contribution for the period, provided that no Employer
Contribution shall be made based upon a Participant's
Contributions in excess of 5% of his or her Pay.
82
SCHEDULE H - LOCAL 12012-6 PORTSMOUTH EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
Prior to January 1, 2000: First day of the next month after
completing a Period of Employment consisting of twelve
consecutive months in which he or she is credited with at least
1,000 Hours of Service.
Effective January 1, 2000: First day of the next month after
completing a 60 day Period of Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 12012-6 Portsmouth Employee.
Amount of Employer Contributions:
Prior to January 1, 2000, a Participant who is a Local 12012-6
Portsmouth Employee is not eligible for Employer Contributions.
Effective January 1, 2000, for each period in which Participant
Contributions are made, the Employer Contribution for each period
shall total 50% of each Participant's Employee Pre-Tax
Contributions for the period, provided that no Employer
Contribution shall be made based upon a Participant's
Contributions in excess of 5% of his or her Pay.
83
SCHEDULE I - LOCAL 8-366 ENERGYUSA BROCKTON PROPANE EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the next month after completing a 60 day Period of
Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 8-366 EnergyUSA Brockton Propane Employee.
Amount of Employer Contributions:
Prior to January 1, 1999, a Participant who is a Local 8-366-
EnergyUSA Brockton Propane Employee was not eligible for Employer
Contributions.
On or after January 1, 1999, the Employer Contribution for each
period shall total 100% of the Participant's Employee Pre-Tax
Contributions for the period up to 3.0% of his or her Pay and 50%
of the Participant's Employee Pre-Tax Contributions for the
period on the next 2.0% of his or her Pay, provided that no
Employer Contribution shall be made based upon a Participant's
Contributions in excess of 5% of his or her Pay.
84
SCHEDULE J - LOCAL 12012-8 ENERGYUSA NORTHERN PROPANE EMPLOYEES
Employee Pre-Tax Contributions Eligibility:
First day of the next month after completing a 60-day Period of
Employment.
Eligibility for Employer Contribution:
First day of the next month after completing a 12-month
eligibility period in which he or she is credited with at least
1,000 Hours of Service. For each period for which Participant
Contributions are made, the Employer shall make Employer
Contributions, as set forth below, on behalf of each Participant
who is a Local 12012-8 EnergyUSA Northern Propane Employee.
Amount of Employer Contributions:
The Employer Contribution for each period shall equal 100% of the
first 3% of each Participant's Employee Pre-Tax Contributions for
the period, and 50% of the next 2% of each Participant's Employee
Pre-Tax Contributions for the period, provided that no Employer
Contribution shall be made, based upon a Participant's
Contributions in excess of 5% of his or her Pay.
85