THE CINCINNATI GAS &
ELECTRIC COMPANY
DEFERRED
COMPENSATION
AND
INVESTMENT
PLAN
As Amended and Restated Effective January 1, 1995
TABLE OF CONTENTS
ARTICLE PAGE
1: INTRODUCTION 1
2: DEFINITIONS 3
3: PARTICIPATION 6
4: CONTRIBUTIONS 18
5: INVESTMENTS 32
6: ACCOUNTS 40
7: VESTING AND FORFEITURES 43
8: DISTRIBUTIONS 49
9: WITHDRAWALS DURING EMPLOYMENT 67
10: LOANS 78
11: DOMESTIC RELATIONS ORDERS AND ALTERNATE PAYEES 90
12: FIDUCIARIES: AUTHORITY & RESPONSIBILITY 100
13: ADMINISTRATIVE PROVISIONS 109
14: MISCELLANEOUS PROVISIONS 119
15: DISCRIMINATION TESTING 122
16: LIMITATION ON ANNUAL ADDITIONS 137
17: AMENDMENT AND TERMINATION OF THE PLAN 143
18: TOP-HEAVY PROVISIONS 146
INDEX 154
INTRODUCTION
ARTICLE
I. : INTRODUCTION
A. History. The Cincinnati Gas & Electric
Company (CG&E) instituted the Employee Incentive
Thrift Plan in 1967. CG&E amended the plan on
October 1, 1983 for executive, supervisory,
administrative and professional employees to enable
those employees to delay the payment of some income
taxes and to choose from a wider variety of
investment options. As a result of the extensive
amendments, the plan was renamed The Cincinnati Gas &
Electric Company Deferred Compensation and Investment
Plan.
A. Purpose. The plan is designed to provide
retirement income to the executive, supervisory,
administrative and professional paid employees of
CG&E and certain death benefits to their
beneficiaries. The plan is designed to supplement
the participants' Management Retirement Plan benefits
which in turn are to be supplemented by the benefits
payable under the Social Security Act, and their
personal savings for retirement.
A. Plan Qualification. CG&E has designed this
plan to comply with the provisions of Internal Reve-
nue Code 401(a), 401(k), and 501 as a qualified
pension plan and to conform to the provisions of the
Employee Retirement Income Security Act of 1974, as
amended (ERISA). All plan provisions are subject to
change at any time to the extent necessary to retain
the qualified status of the plan or to bring it into
compliance with ERISA. The plan and trust agreement
shall be construed and interpreted in a manner that
gives effect to the intent of retaining the qualified
status of the plan.
A. Effective Date. Except as otherwise noted
with respect to a particular provision, the effective
date of the amendment and restatement of this plan is
January 1, 1995. Earlier or later amendments to this
plan become effective on the date specifically
designated in the plan document.
ADMINISTRATIVE NOTES
DEFINITIONS
ARTICLE
I. : DEFINITIONS
A. Scope of this Article. Definitions of terms
relevant to more than one article of the plan are
generally included in this Article. Definitions of
terms which are used primarily in a single article
are defined in that article.
B. List of Defined Terms. This section contains
a complete list of all defined terms used in this
plan. Each defined term is followed by a reference
to the section in which it is defined.
account
ACP
ADP
aggregation group
alternate payee
annual addition
base pay
beneficial owner
beneficiary
board of directors
break in service
CG&E
CINergy
Committee
company
company-matched contributions , ,
company-matched stock incentive contributions , ,
company stock fund
compensation
DCIP
deferred compensation contribution
defined benefit fraction
defined benefit plan
defined contribution fraction
defined contribution plan
determination date
distribution
distribution valuation date
DRO
eligible employee , ,
eligible retirement plan
employee
entry date ,
ERISA
excess aggregate contribution
excess amount
excess contribution
Fidelity Equity-Income Fund
Fidelity Intermediate Bond Fund
Fidelity Magellan Fund
Fidelity Retirement Money Market Fund
fiduciary
flipover provision ,
forfeiture ,
hardship
hardship withdrawals
highly compensated employee ,
hour of service
IRC
key employee
loan fund
mandatory distribution year ,
military leaves
money market fund ,
non-eligible employee
optional contributions
parental leaves
participant
plan
plan participation forms
plan year
present value
projected annual benefit
quarterly account statements
rollover contributions
SIP
sub-account ,
terminated participant
the PNC fund
top heavy
top heavy group
trust
trust agreement
trustee
vesting
VIR Line
window cashouts
withdrawal
year of service
year of vesting service
1% owner
5% owner
A. Board of Directors. The board of directors is
the board of directors of The Cincinnati Gas &
Electric Company.
A. CG&E. CG&E is The Cincinnati Gas & Electric
Company, the plan's sponsor, and any related company
which has adopted the plan and has employees
participating in the plan.
A. CINergy. CINergy is CINergy Corp., the name
of the parent holding company of CG&E.
A. DCIP. The DCIP is the CG&E Deferred
Compensation and Investment Plan.
A. ERISA. ERISA is the Employee Retirement
Income Security Act of 1974, as amended.
A. IRC. IRC is the Internal Revenue Code of
1986, as amended.
A. MRP. The MRP is the CG&E Management
Retirement Plan.
A. Plan. The plan is the CG&E Deferred
Compensation and Investment Plan, as set forth in
this document.
A. Plan Year. The plan year is the calendar
year.
A. SIP. The CG&E Savings Incentive Plan.
A. Related Company. A related company is any
entity which is:
1. A member of a controlled group of
corporations, as defined in IRC 1563(a),
ignoring IRC 1563(e)(C)(3), and, solely for the
purpose of , modifying the IRC 1563 (a) phrase
"at least 80%" to read "more than 50%", and
1. An unincorporated trade or business which is
under common control with The Cincinnati Gas &
Electric Company, as determined under IRC
414(c), and
1. A member of an affiliated service group as
defined in IRC 414(m), and
1. Any entity required to be aggregated with
The Cincinnati Gas & Electric Company under IRC
414(o), and
1. Any other subsidiary or affiliate of The
Cincinnati Gas & Electric Company designated by
its board of directors to be a related company.
PARTICIPATION
ARTICLE
I. : PARTICIPATION
A. Employee. An employee is any person earning a
wage or salary from CG&E, including leased
employees.
A. Participation.
1. Eligible Employee. An eligible employee is
any full-time employee on the CG&E executive,
supervisory, administrative or professional
(ESA&P) payroll who has completed a year of
service pursuant to 3.8. The term eligible
employee shall include employees who have
completed a year of service with a related
company. A year of service performed for a
related company prior to the date the
relationship with The Cincinnati Gas & Electric
Company began is included for the purpose of
determining eligibility to participate in this
plan. The term eligible employee shall include
an individual who is a citizen of the United
States and is an employee of a related company,
if that company has entered into an agreement
under IRC 3121(l).
[This sub-section should be deleted effective 08-01-
95.]
1. Eligible Employee. An eligible employee is
any full-time employee who works 30 or more hours
per week on a regular work schedule, or part-time
employee who works less than 30 hours per week on
a regular work schedule, on the CG&E executive,
supervisory, administrative or professional
(ESA&P) payroll who has completed a year of
service pursuant to 3.8. The term eligible
employee shall include employees who have
completed a year of service with a related
company. A year of service performed for a
related company prior to the date the
relationship with The Cincinnati Gas & Electric
Company began is included for the purpose of
determining eligibility to participate in this
plan. The term eligible employee shall include an
individual who is a citizen of the United States
and is an employee of a related company, if that
company has entered into an agreement under IRC
3121(l).
[This sub-section becomes effective on 08-01-95 and
should be deleted effective 01-01-96.]
1. Eligible Employee. An eligible employee is
any full-time employee who works 30 or more hours
per week on a regular work schedule, or part-time
employee who works less than 30 hours per week on
a regular work schedule, on the CG&E executive,
supervisory, administrative or professional
(ESA&P) payroll. The term eligible employee
shall include an individual who is a citizen of
the United States and is an employee of a related
company, if that company has entered into an
agreement under IRC 3121(l).
[This sub-section becomes effective on 01-01-96.]
1. Non-Eligible Employees. The following
defined classes of employees are excluded from
plan participation.
a) Co-op Employees. Co-op employees are
students working for CG&E through a
recognized cooperative education program.
a) Summer Employees. Summer employees are
students employed by CG&E during the summer.
a) Temporary Employees. Temporary
employees are employees of an employment
agency who perform services for CG&E on
specific tasks and/or for a specified time
period. Generally, temporary employees are
directly supervised by CG&E employees.
a) Part-time Employees. Part-time
employees are employees whose regular work
schedule is limited to less than 1,000 hours
in any given calendar year.
[This sub-section 4) should be deleted effective
08-01-95.]
a) Leased Employees. Leased employees are
any persons who are not on CG&E's payroll and
who have performed services for CG&E pursuant
to an agreement between CG&E and any other
person on a substantially full time basis for
a period of at least one year. The period
for which these employees are leased
employees under the terms of this plan is
limited to the term of service for which they
are assigned to CG&E.
a) Hourly-Paid Employees. Hourly paid
employees are full-time CG&E employees whose
compensation for a given payroll period is
calculated based on the number of hours
worked during the period, times an hourly
rate.
a) Weekly-Paid Employees. Weekly paid
employees are full-time CG&E employees whose
compensation for a weekly payroll period is
predetermined.
a) Independent Contractors. Independent
contractors are persons or entities with whom
CG&E contracts to complete specific tasks
without supervision by CG&E employees.
Employees of entities which are independent
contractors regarding tasks performed for
CG&E may be classified as leased employees if
they fall within the definition in above.
a) Participants in Other 401(k) Plans.
Employees who are eligible to participate in
a qualified plan which includes IRC 401(k)
features sponsored by any related company are
not eligible to participate in this plan.
1. Fail-Safe Provision. In the event that any
co-op employee, summer employee, or part-time
employee completes a year of service, that
employee shall be permitted to participate in
this plan.
[This sub-section should be deleted effective 08-
01-95.]
1. Fail-Safe Provision. In the event that any
co-op employee or summer employee completes a
year of service, that employee shall be permitted
to participate in this plan.
[This sub-section becomes effective on 08-01-95.]
A. Participant. A participant is any eligible
employee who has assets in the plan. (See also )
A. Terminated Participant. A terminated
participant is a participant who has terminated
employment with CG&E by reason of death, disability,
discharge, retirement, or resignation, but who has
assets remaining in the plan.
A. Determining Participation and Vesting. An
hour of service is the basic unit of measurement used
to determine an employee's participation and vesting
in the plan.
A. Hour of Service.
1. Current Pay. An employee earns an hour of
service for each hour for which s/he is directly
or indirectly paid or entitled to payment by CG&E
during the applicable computation period. These
hours are for either the performance of duties or
on account of a period of time during which no
duties are performed (irrespective of whether the
employment relationship is terminated) due to
vacation, holiday, jury duty, personal days,
incapacity (including disability) and lay-off. In
these cases participants will be credited with 8
hours of service for each normally scheduled
working day during which no duties are performed.
An hour of service for which no duties are
performed shall be calculated pursuant to
2530.200b-2 of the U.S. Department of Labor
regulations, which are incorporated herein by
reference.
1. Back Pay. A participant earns an hour of
service for each hour for which back pay,
irrespective of mitigation of damages, has been
either awarded or agreed to by CG&E. The same
hours of service shall not be credited under both
sub-section above and under this sub-section.
These hours will be credited to the employee for
the computation period or periods to which the
award or agreement pertains, rather than the
computation period in which the award, agreement,
or payment is made.
1. Salaried Employees. Salaried employees are
employees whose pay is not determined on the
basis of certain amounts for each hour worked
during a given period and whose hours are not
required to be counted and recorded by any
federal law. Salaried employees shall be
credited with 8 hours of service per day in which
the employee would be credited with an hour of
service pursuant to and above, provided that
the employee is credited with no less than 1,000
hours of service per computation period.
1. Effect of Leaves of Absence. Generally, an
employee will not earn hours of service while
s/he is on a leave of absence. However, hours of
service credited during certain military leaves
and parental leaves under the provisions of
also apply for purposes of determining
eligibility to participate in the plan.
1. Consistent Personnel Practices. All leaves
of absence affecting accreditation of service
under this plan shall be authorized by CG&E in
accordance with standard personnel policies
applied in a nondiscriminatory manner to all
employees similarly situated.
A. Limitation Upon Earning Hours of Service.
Hours of service earned by CG&E employees generally
not eligible to participate in the plan shall be
credited, but only for determining the vesting rights
of these employees upon their change of status to
plan participants. The provisions of and govern-
ing transfers of participants and plan assets to and
from the SIP are an exception to the general rule.
A. Year of Service. A year of service is 12
consecutive months of employment with CG&E, beginning
with the first hour of service, during which the
employee completes at least 1,000 hours of service.
Eligible employees who do not complete a year of
service by the first anniversary of their employment
commencement date shall be credited with a year of
service if they complete at least 1,000 hours of
service during a period of 12 consecutive months
beginning with the first, and, if necessary, any
subsequent anniversary of their employment
commencement date.
[This section should be deleted effective 01-01-96.]
A. Year of Service. A year of service is 12
consecutive months of employment with CG&E, beginning
with the first hour of service, during which a co-op
employee or summer employee completes at least 1,000
hours of service. Co-op employees or summer
employees who do not complete a year of service by
the first anniversary of their employment
commencement date shall be credited with a year of
service if they complete at least 1,000 hours of
service during a period of 12 consecutive months
beginning with the first, and, if necessary, any
subsequent anniversary of their employment
commencement date.
[This section becomes effective on 01-01-96.]
A. Break in Service. A break in service is any
period of 12 consecutive months beginning on the
employee's employment commencement date, and on any
subsequent anniversary of that date, during which the
employee completes less than 501 hours of service.
A. Commencement of Participation. Except with
respect to the company-matched stock incentive
contributions (see ), an eligible employee must file
a completed set of plan participation forms with the
Committee to become a participant. See also .
[This section should be deleted effective 01-01-96.]
A. Commencement of Participation. An eligible
employee must notify the Committee of his or her
intent to participate in the plan, except with
respect to the company-matched stock incentive
contributions (see and ), through the use of the
voice or other electronic response system or other
media authorized by CG&E.
[This section becomes effective on 01-01-96.]
A. Entry Date. The entry date is the date an
eligible employee becomes a participant in the plan.
The entry date is the first monthly or semi-monthly
pay date of the month that is at least 30 days
following the date the Committee receives the plan
participation forms from the eligible employee.
[This section should be deleted effective 01-01-96.]
A. Entry Date. The entry date is the date an
eligible employee becomes a participant in the plan.
The entry date is the date an eligible employee first
completes an hour of service.
[This section becomes effective on 01-01-96.]
A. Plan Participation Forms. Plan participation
forms are the set of documents which the eligible
employee must file with the Committee in order to
participate in the plan, except with respect to the
company-matched stock incentive contributions. (See
). The forms are:
1. The plan participation agreement ; and
1. The beneficiary form.
[This section should be deleted effective 01-01-96.]
A. Beneficiary. The beneficiary is the person or
entity designated in writing by a participant to
receive plan benefits after the participant's death.
(See and )
A. Beneficial Owner. The beneficial owner is the
owner or beneficiary of an account with the plan. A
beneficial owner may be a participant, a terminated
participant, a participant's spouse, or an alternate
payee.
A. Beneficiary Designation. A participant must
designate a beneficiary. Married participants must
designate their spouse as beneficiary, unless the
participant's spouse consents to someone else being
named as beneficiary. The consent must be in writing
on the form approved by the Committee and the
spouse's signature must be notarized. The form must
be filed with the Committee to become effective. A
consenting spouse may withdraw consent by written
notice to the Committee, notarized in the same manner
as the consent. Once the retraction of consent has
been filed with and accepted by the Committee, the
spouse is reinstated by plan operation as the
participant's beneficiary.
A. Transfer to Weekly or Hourly Payroll. A
participant who transfers to the weekly or hourly
payroll is no longer eligible to participate in the
plan. All of the participant's contributions to the
plan shall cease, effective with his or her last pay
date as an employee on the executive, supervisory,
administrative and professional payroll.
A. Transfers From The Weekly or Hourly Payroll.
1. Transfers of SIP Accounts. The trustee
shall transfer to this plan the SIP account of
any employee who becomes eligible for
participation. The transfer shall be made as
soon as possible following the date that the
employee becomes eligible. The transferred
account shall be allocated to the sub-accounts
and the investment funds in the manner most
similar to the participant's SIP sub-accounts.
1. Continuing Contributions. The contribution
percentages and investment directions of any SIP
participant who becomes eligible for
participation in this plan will continue as
contributions and investment directions to this
plan.
A. Participatory Restrictions on the Activities
of Terminated Participants. Subject to the
limitations of , and of this plan, a terminated
participant's account will remain in this plan until
s/he takes a distribution. A terminated participant
may not contribute to the plan, withdraw from an
optional sub-account, or obtain hardship withdrawals
or loans. A terminated participant may not
reallocate past contributions except in conjunction
with a distribution.
[This section should be deleted effective 08-01-95.]
A. Participatory Restrictions on the Activities
of Terminated Participants. Subject to the
limitations of , , , , and of this plan, a
terminated participant's account will remain in this
plan until s/he takes a distribution. A terminated
participant may not contribute to the plan, withdraw
from an optional sub-account, or obtain hardship
withdrawals or loans.
[This section becomes effective on 08-01-95.]
A. Participation of Rehired Participants.
1. Non-Vested Participants.
a) 5 or Fewer Breaks in Service. Any
terminated participant in this plan or in the
SIP, who is not yet vested in company-matched
contributions or company-matched stock
incentive contributions under this plan or
the SIP and who is subsequently rehired on
the executive, supervisory, administrative
and professional payroll before the
completion of 5 consecutive breaks in
service, becomes an eligible employee on his
or her date of rehire. See regarding
restoration of the company-matched sub-
account.
a) More than 5 Breaks in Service. If the
individual described in sub-section above is
rehired after incurring 5 consecutive breaks
in service, eligibility will be subject to
the requirements of and of this plan,
beginning with the date of rehire.
1. Vested Participants. Any terminated
participant in this plan or in the SIP, who is
vested in company-matched contributions or
company-matched stock incentive contributions
under this plan or the SIP and who is
subsequently rehired on the executive,
supervisory, administrative and professional
payroll becomes an eligible employee on his or
her reemployment date.
[This section should be deleted effective 01-01-96.]
A. Participation of Rehired Participants. Any
terminated participant in this plan or the SIP who is
subsequently rehired on or after January 1, 1996, on
the executive, supervisory, administrative and
professional payroll becomes an eligible employee on
his or her reemployment date.
[This section becomes effective on 01-01-96.]
CONTRIBUTIONS
ARTICLE
I. : CONTRIBUTIONS
A. Base Pay.
1. Definition. Base pay is the annual salary
paid by CG&E to a participant determined as of
each pay period. Base pay excludes bonuses,
shift differentials, overtime, incentive pay,
moving allowances, living and similar allowances,
and imputed income. Base pay includes the amount
of all elective contributions made by CG&E on
behalf of the participant pursuant to salary
reduction agreements, if the amount is not
included in the gross income of the participant
under IRC 125. Base pay includes deferred
compensation contributions made under this plan.
[This sub-section should be deleted effective 07-01-
96.]
1. Definition. Base pay is the annual salary
paid by CG&E to a participant determined as of
each pay period. Base pay excludes bonuses,
shift differentials, incentive pay, moving
allowances, living and similar allowances, and
imputed income. Base pay includes the amount of
all elective contributions made by CG&E on behalf
of the participant pursuant to salary reduction
agreements, if the amount is not included in the
gross income of the participant under IRC 125.
Base pay includes deferred compensation
contributions made under this plan. For purposes
of determining deferred compensation and optional
contributions, base pay includes overtime. For
purposes of determining company-matched
contributions and company-matched stock incentive
contributions, base pay excludes overtime.
[This sub-section becomes effective on 07-01-96 and
should be deleted effective 01-01-97.]
1. Definition. Base pay is the annual salary
paid by CG&E to a participant determined as of
each pay period. Base pay excludes shift
differentials, incentive pay, moving allowances,
living and similar allowances, and imputed
income. Base pay includes the amount of all
elective contributions made by CG&E on behalf of
the participant pursuant to salary reduction
agreements, if the amount is not included in the
gross income of the participant under IRC 125.
Base pay includes deferred compensation
contributions made under this plan. For purposes
of determining deferred compensation and optional
contributions, base pay includes overtime and
bonuses. For purposes of determining company-
matched contributions and company-matched stock
incentive contributions, base pay excludes
overtime, but includes bonuses.
[This sub-section becomes effective on 01-01-97.]
1. Use of Base Pay. Base pay shall be taken
into account only while an employee is a
participant in the plan.
1. Limitation on Base Pay. Base pay taken into
account for determining contributions under the
plan shall not exceed $150,000, as adjusted by
the Commissioner of the Internal Revenue Service
for increases in the cost of living in accordance
with IRC 401(a)(17)(B).
1. Use of Base Pay Limitation. In determining
the base pay of a participant for the purpose of
determining the participant's accruals under this
plan, the rules of IRC 414(q)(6) shall generally
apply. However, the term "family" shall include
only the spouse of the participant and any lineal
descendants of the participant who have not
attained age 19 prior to the close of the plan
year. If, as a result of this application, the
adjusted $150,000 limitation is exceeded, then
the limitation shall be prorated among the
affected individuals in proportion to each such
individual's base pay prior to the application of
the limitation.
[This sub-section should be deleted effective 01-01-
97.]
A. Contributions. The plan will accept four
types of contributions:
1. Deferred Compensation Contributions. A
deferred compensation contribution is the amount
by which a participant directs CG&E to reduce his
or her base pay and which CG&E is obligated to
contribute to the plan. Participants may elect to
have their base pay reduced by executing a plan
participation agreement. CG&E will then make a
contribution to the plan in an amount equal to
the participant's selected reduction each pay
period. The amount reduced, expressed in 1/2%
increments, shall not exceed 15% of the
participant's base pay.
1. Optional Contributions. An optional
contribution is the participant's voluntary
contribution made to the plan through payroll
deduction after taxes have been withheld.
Participants may choose to make contributions to
the plan each pay period through payroll
deduction. These optional contributions,
expressed in 1/2% increments, are deducted after
taxes have been withheld. The amount of the
optional contribution together with the deferred
compensation contribution, shall not exceed 15%
of the participant's base pay.
1. Company-Matched Contributions. The company-
matched contribution is the amount contributed by
CG&E to the participant's plan account from its
earnings based upon the participant's deferred
compensation contributions and/or optional
contributions, as applicable. For each pay
period of the participant, CG&E will contribute
out of its accumulated earnings an amount,
together with forfeitures, equal to 55% of each
participant's deferred compensation and optional
contributions up to and including 5% of the
participant's base pay. Participants'
contributions exceeding 5% of base pay will not
be matched.
1. Company-Matched Stock Incentive
Contributions. The company-matched stock
incentive contribution is the amount of CINergy
stock contributed by CG&E in addition to the
company-matched contribution. Depending on the
performance of CINergy for the year, CG&E will
contribute, if at all, an amount of CINergy stock
equal in value to between $0.10 and $0.30 for
each dollar of a participant's deferred
compensation and optional contributions up to and
including 4% of the participant's base pay for
that year. Participants' contributions exceeding
4% of base pay will not be matched. If a
participant did not make any deferred
compensation or optional contributions during the
year, s/he may still receive a company-matched
stock incentive contribution based on the
hypothetical assumption that s/he made deferred
compensation or optional contributions of 1% of
his or her base pay for that year.
[This section should be deleted effective 01-01-96.]
A. Contributions. The plan will accept five types
of contributions:
1. Deferred Compensation Contributions. A
deferred compensation contribution is the amount
by which a participant directs CG&E to reduce his
or her base pay and which CG&E is obligated to
contribute to the plan. Participants may elect to
have their base pay reduced by informing the
Committee through the voice or electronic
response system or other media authorized by
CG&E. CG&E will then make a contribution to the
plan in an amount equal to the participant's
selected reduction each pay period. The amount
reduced, expressed in 1/2% increments, shall not
exceed 15% of the participant's base pay.
1. Optional Contributions. An optional
contribution is the participant's voluntary
contribution made to the plan through payroll
deduction after taxes have been withheld.
Participants may choose to make contributions to
the plan each pay period through payroll
deduction. These optional contributions,
expressed in 1/2% increments, are deducted after
taxes have been withheld. The amount of the
optional contribution together with the deferred
compensation contribution, shall not exceed 15%
of the participant's base pay.
1. Company-Matched Contributions. The company-
matched contribution is the amount contributed by
CG&E to the participant's plan account from its
earnings based upon the participant's deferred
compensation contributions and/or optional
contributions, as applicable. For each pay
period of the participant, CG&E will contribute
out of its accumulated earnings an amount,
together with forfeitures, equal to 55% of each
participant's deferred compensation and optional
contributions up to and including 5% of the
participant's base pay. Participants'
contributions exceeding 5% of base pay will not
be matched.
[This sub-section should be deleted effective 01-01-
97.]
1. Company-Matched Contributions. The company-
matched contribution is the amount contributed by
CG&E to the participant's plan account from its
earnings based upon the participant's deferred
compensation contributions. For each pay period
of the participant, CG&E will contribute out of
its accumulated earnings an amount, together with
forfeitures, equal to 60% of each participant's
deferred compensation contributions up to and
including 5% of the participant's base pay.
Participants' contributions exceeding 5% of base
pay will not be matched.
[This sub-section becomes effective on 01-01-97.]
1. Company-Matched Stock Incentive
Contributions. The company-matched stock
incentive contribution is the amount of CINergy
stock contributed by CG&E in addition to the
company-matched contribution. Depending on the
performance of CINergy for the year, CG&E will
contribute, if at all, an amount of CINergy stock
between $0.10 and $0.30 for each dollar of a
participant's deferred compensation and optional
contributions up to and including 4% of the
participant's base pay for that year.
Participants' contributions exceeding 4% of base
pay will not be matched. If a participant did
not make any deferred compensation or optional
contributions during the year, s/he may still
receive a company-matched stock incentive
contribution based on the hypothetical assumption
that s/he made deferred compensation or optional
contributions of 1% of his or her base pay for
that year.
[This sub-section should be deleted effective 01-01-
97.]
1. Company-Matched Stock Incentive
Contributions. The company-matched stock
incentive contribution is the amount of CINergy
stock contributed by CG&E in addition to the
company-matched contribution. Depending on the
performance of CINergy for the year, CG&E will
contribute, if at all, an amount of CINergy stock
between $0.20 and $0.40 for each dollar of a
participant's deferred compensation contributions
up to and including 5% of the participant's base
pay for that year. Participants' deferred
compensation contributions exceeding 5% of base
pay will not be matched. If a participant did
not make any deferred compensation contributions
during the year, s/he may still receive a
company-matched stock incentive contribution
based on the hypothetical assumption that s/he
made deferred compensation contributions of 1% of
his or her base pay for that year.
[This sub-section becomes effective on 01-01-97.]
1. Rollover Contributions. A rollover
contribution is the amount contributed by a
participant to his or her plan account
attributable to a distribution from a retirement
plan of a former employer. A participant must
make a written request to the Committee to make a
rollover contribution. The request must include
a statement detailing the type of property to be
rolled over and that such property is an eligible
rollover contribution. If the Committee so
permits, the participant may transfer the amount
of the rollover contribution to the trustee.
[This section becomes effective on 01-01-96.]
A. Contributions Due to Military Leave.
Notwithstanding any provision of this plan to the
contrary, contributions with respect to qualified
military service will be provided in accordance with
IRC 414(u).
A. Contributions from Sources other than Base Pay.
1. Settlement of Disputes. Prior to the time a
participant becomes entitled to receive a lump
sum payment of wages in settlement of a dispute
with CG&E, the participant may direct
contributions to this plan from the lump sum
payment in the same percentages and allocation to
funds as are in effect at the time when the lump
sum amount is paid. CG&E may also make
company-matched contributions and/or company-
matched stock incentive contributions on the
settlement amount.
1. Lump Sum Payment in Lieu of Salary. If a
class of participants is designated by CG&E to
receive certain pay in the form of a lump sum,
the determination of whether that special pay may
be used as base pay for making contributions to
this plan shall be determined by CG&E. CG&E may
also make a determination whether it will make
company-matched contributions and/or company-
matched stock incentive contributions for each
payment of a special lump sum. In the event that
the special pay is permitted to be used as base
pay for plan contributions, those contributions
must be in the same percentages designated by the
participant and in effect at the time when the
lump sum amount is paid.
A. Changing the Percentage of Contributions.
1. Participants. A participant may change the
percentage of deferred compensation
contributions or optional contributions four
times per year.
[This sub-section should be deleted effective
01-01-96.]
1. Participants. A participant may change the
percentage of deferred compensation contributions
and/or optional contributions at anytime through
the voice or other electronic response system or
other media authorized by CG&E.
[This sub-section becomes effective on 01-01-96.]
1. Other Beneficial Owners. Terminated
participants, beneficiaries and alternate payees
may not contribute to this plan.
A. Limitation on Deferred Compensation
Contributions.
1. Maximum Amount. A participant's deferred
compensation contributions shall not exceed the
maximum deferred amount in effect for that tax
year pursuant to IRC 402(g) . The maximum
amount for 1995 is $9,240 and is adjusted
annually as announced by the Internal Revenue
Service.
1. Flipover Provision. At the time the IRC
402(g) limit is reached for the amount being
deferred by a participant, the same percentage
contribution shall be continued as an optional
contribution for that participant for the
remainder of the year. These optional
contributions will be allocated to investment
funds in accordance with the most recent
directions filed by the participant regarding
optional contributions. If the participant has
never filed an Allocation of Future Contributions
form including directions for optional
contributions, the contributions will be invested
in the money market fund until the directions for
optional contributions are filed with the
Committee.
[This sub-section should be deleted effective 01-01-96.]
1. Flipover Provision. At the time the IRC
402(g) limit is reached for the amount being
deferred by a participant, the same percentage
contribution shall be continued as an optional
contribution for that participant for the
remainder of the year. These optional
contributions will be allocated to investment
funds in accordance with the most recent
directions given by the participant through the
voice or other electronic response system or
other media authorized by CG&E regarding optional
contributions. If the participant never
furnished such directions, the contributions will
be invested in the money market fund until the
directions for optional contributions are
provided by the participant to the Committee.
[This sub-section becomes effective on 01-01-96.]
1. Suspended Participants. When a participant
affected by this section is under suspension of
optional contributions under below, the or
flipover provisions will not be effective.
When the limit is reached, all contributions by
the suspended participant shall stop.
1. Excess Deferred Compensation Contributions.
If a participant files a plan participation
agreement which causes CG&E to inadvertently
defer more than is permitted in above, the
excess deferred compensation contribution shall
be returned to the participant.
[This sub-section should be deleted effective 01-01-
96.]
1. Excess Deferred Compensation Contributions.
If a participant informs the Committee through
the voice or other electronic response system or
other media authorized by CG&E which causes CG&E
to inadvertently defer more than is permitted in
above, the excess deferred compensation
contribution shall be returned to the
participant.
[This sub-section becomes effective on 01-01-96.]
A. Voluntary Suspension of Contributions.
1. General Rule. Participants may suspend
either their deferred compensation or optional
contributions, or both by filing an application
to suspend contributions with the Committee.
1. Effective Date. Voluntary suspensions shall
become effective on a pay date no later than 30
days after the application to suspend
contributions was filed with the Committee.
1. Period of Suspension. Participants may not
make the suspended type of contributions to the
plan for at least 12 months from the effective
date of the suspension.
1. Makeup of Contributions. Participants may
not make up suspended contributions.
[This section should be deleted effective 01-01-96.]
A. Involuntary Suspension of Contributions.
1. Hardship Withdrawals. Participants who have
obtained a hardship withdrawal shall be
automatically suspended from making deferred or
optional contributions for a period of 12 months
beginning from the date of the distribution of
the hardship withdrawal.
1. Leaves of Absence. Contributions to the
plan are automatically suspended during a
participant's leave of absence, because the
participant earns no base pay from which to
contribute. When the participant returns to work
for CG&E, contributions shall automatically
resume with the first pay check in accordance
with the terms of the most recent plan
participation agreement.
[This sub-section should be deleted effective 01-01-
96.]
1. Leaves of Absence. Contributions to the
plan are automatically suspended during a
participant's leave of absence, because the
participant earns no base pay from which to
contribute. When the participant returns to work
for CG&E, contributions shall automatically
resume with the first pay check in accordance
with the terms most recently provided by the
participant on the voice or other electronic
response system or other media authorized by
CG&E.
[This sub-section becomes effective on 01-01-96.]
A. Resumption of Contributions. Upon the
expiration of the required period of suspension,
participants may resume making contributions to the
plan by filing a resumption of contributions form
with the Committee. The resumption will be effective
on the first pay date of the month no later than 30
days after the date the resumption of contributions
form was filed with the Committee. Contributions
will resume at the same percentages of base pay as
were in effect at suspension. If the resumption of
contributions form was filed during the period of
suspension, it will become effective on the first pay
date of the month following the period of suspension.
[This section should be deleted effective 01-01-96.]
A. Resumption of Contributions. Upon the
expiration of the required period of suspension,
participants may resume making contributions to the
plan by informing the Committee through the voice or
other electronic response system or other media
authorized by CG&E. The resumption will be effective
on the first pay date of the month no later than 30
days after the date the participant informs the
Committee of his or her intent to resume
contributions. Contributions will resume at the same
percentages of base pay as were in effect at
suspension. If the participant informs the Committee
during his or her suspension, the resumption of
contributions will become effective on the first pay
date of the month following the period of suspension.
[This section becomes effective on 01-01-96.]
A. Remittance of Contributions. CG&E will
generally forward all deferred compensation,
optional, and company-matched contributions to the
trustee on the pay date for which the contributions
are effective. In any event, CG&E must transmit
these contributions promptly after the end of the
month in which the contributions are taken.
A. Return of Company-Matched Contributions and
Company-Matched Stock Incentive Contributions.
1. General Rule. Except as provided in , , ,
and , and in this section, the assets of the plan
shall never revert to or be used by CG&E.
a) Mistaken Contributions. Company-matched
contributions and company-matched stock
incentive contributions made to the trust by
reason of a mistake of fact may be returned
to CG&E within one year after the payment of
the contribution.
a) Non-deductible Contributions.
Company-matched contributions and company-
matched stock incentive contributions made to
the plan which are deemed non-deductible
pursuant to IRC 404 shall be returned to
CG&E within one year after the disallowance
of the deduction. If any portion of the
non-deductible amount is from a participant's
deferred compensation contribution, that
amount shall be returned to the participant.
INVESTMENTS
ARTICLE
I. : INVESTMENTS
A. Principles of Investment Fund Selection. The
Committee will establish and direct the trustee to
maintain in the trust at least three investment
funds, which collectively are intended to comply
with ERISA 404 c) and the regulations thereunder.
A. Selection of Investment Funds. One of the
investment funds will be the company stock fund. The
Committee will select the other investment funds,
following the principles of . If a fund is added or
deleted, beneficial owners will be given the
opportunity to reallocate their past contributions
and redirect their sub-accounts among the authorized
investment funds.
A. Investment Funds in the Plan. The following
are the investment funds maintained in the plan
trust:
1. Company Stock Fund. The company stock fund
is a unitized fund which consists largely of
shares of CINergy common stock, and a
proportionately small amount of cash. It has
been available (formerly with CG&E common stock)
since the plan was established on October 1,
1983. The stock will be purchased at fair market
value on the open market or from CINergy through
the issuance of authorized but previously
unissued shares at the option of CINergy. The
stock may also be obtained through the exercise
of stock rights. Stock received by the trustee
as a stock dividend distribution or right is
reflected by an increase in the unit value.
1. Fidelity Magellan Fund. The Fidelity
Magellan Fund seeks capital appreciation by in-
vesting primarily in common stock and securities
convertible into common stock. It was added as
an additional investment option on 10-01-92.
1. Fidelity Equity-Income Fund. The Fidelity
Equity- Income Fund seeks reasonable income by
investing primarily in income-producing equity
securities. It has been available since the
plan was established on October 1, 1983.
1. Fidelity Intermediate Bond Fund. The
Fidelity Intermediate Bond Fund seeks to obtain a
high level of current income by investing
primarily in high and upper-medium grade
fixed-income obligations. It has been available
since the plan was established on October 1,
1983.
1. The PNC Fund (Sower Money Market Fund -
Money Market Portfolio). The investment
objective of this portfolio is to provide as high
a level of current interest income as is
consistent with maintaining liquidity and
stability of principal. This fund is called
the money market fund throughout this plan. A
money market fund, but not necessarily this
particular fund, has been available since the
plan was established on October 1, 1983.
[This sub-section should be deleted effective 01-01-96.]
1. Fidelity Retirement Money Market Fund. The
investment objective of this portfolio is to
provide as high a level of current interest
income as is consistent with maintaining
liquidity and stability of principal. This fund
is called the money market fund throughout this
plan. A money market fund, but not necessarily
this particular fund, has been available since
the plan was established on October 1, 1983.
[T
hi
s
su
b-
se
ct
io
n
be
co
me
s
ef
fe
ct
iv
e
on
01
- -
01
- -
96
.]
1. Loan Fund. The loan fund consists of all
promissory notes securing plan loans to
participants. The loan fund is administered as
described in Article .
A. Vested Interest Response Line (VIR Line). The
vested interest response line is the telephone line
established and maintained by the trustee for use by
participants to access their account information and
to effectuate certain transactions affecting their
accounts. The Vested Interest Response Line is
referred to as the VIR Line throughout this plan.
A. Participant Investment Elections. A
participant selects investment funds for his or her
future contributions by using the investment election
menu on the VIR Line. Investments must be made in
whole percentage increments.
A. Investment of Contributions. The trustee
shall invest the participants' contributions from
CG&E in the participants' current designated
investment selections. If the trustee has no record
of a current investment selection for a participant's
contribution, it shall invest the contribution in the
money market fund. The trustee shall invest all
company-matched contributions and company-matched
stock incentive contributions in the company stock
fund.
[This section should be deleted effective 01-01-96.]
A. Investment of Contributions. The trustee shall
invest the participants' contributions from CG&E in
the participants' current designated investment
selections. If the trustee has no record of a
current investment selection for a participant's
contribution, it shall invest the contribution in the
money market fund. The trustee shall invest all
company-matched contributions and company-matched
stock incentive contributions in the company stock
fund. However, a participant who has reached age
50 may elect to invest his or her company-matched
contributions and company-matched stock incentive
contributions in any one or more of the investment
funds as s/he directs by informing the Committee
through the voice or other electronic response system
or other media authorized by CG&E. Allocations must
be made in whole percentages.
[This section becomes effective on 01-01-96.]
A. Initial Allocation of Deferred and Optional
Contributions. A participant's deferred compensation
and/or optional contributions will be allocated to
any one or more of the investment funds as s/he
directs by filing an allocation of future
contributions form with the Committee. Allocations
must be made in any whole percentage. Allocations
will apply to all contributions made on or after the
entry date (see ). Participants' contributions will
be invested in the investment funds as of the
valuation date coinciding with or next following the
date on which they are received by the trustee. If
the allocation form is not yet received by the
trustee when it must allocate contributions, the
contributions will be invested in the money market
fund, until the directions for allocations are filed
with the Committee.
[This section should be deleted effective 01-01-96.]
A. Initial Allocation of Deferred and Optional
Contributions. A participant's deferred compensation
and/or optional contributions, collectively, will be
allocated to any one or more of the investment funds
as s/he directs by informing the Committee through
the voice or other electronic response system or
other media authorized by CG&E. Allocations must be
made in any whole percentage. Allocations will apply
to all contributions made on or after the entry date
(see ). Participants' contributions will be
invested in the investment funds as of the valuation
date coinciding with or next following the date on
which they are received by the trustee. If the
trustee has not yet received the participant's
investment directions when it must allocate
contributions, the contributions will be invested in
the money market fund, until the directions for
allocations are provided by the participant to the
Committee.
[This section becomes effective on 01-01-96.]
A. Investment Fund Transfers of Current Balances.
A participant can select reallocation of his or her
current account balance in different investment funds
and/or different percentages of allocation by using
the fund transfers menu on the VIR Line.
Investments must be made in whole percentage
increments. A participant may elect or change
investment funds and/or the percentages in which
contributions will be allocated once per quarter.
[This section should be deleted effective 08-01-95.]
A. Investment Fund Transfers of Current Balances.
Except for participants or terminated participants
whose accounts are frozen due to pending domestic
relations orders, any participant or terminated
participant with an account balance under the plan
can select reallocation of his or her current account
balance in different investment funds and/or
different percentages of allocation by using the fund
transfers menu on the VIR Line. Investments must
be made in whole percentage increments. A
participant or terminated participant may elect or
change investment funds and/or the percentages in
which allocation will be allocated once per quarter.
[This section becomes effective on 08-01-95 and should be
deleted effective 01-01-96.]
A. Investment Fund Transfers of Current Balances.
Except for participants or terminated participants
whose accounts are frozen due to pending domestic
relations orders, any participant or terminated
participant with an account balance under the plan
can select reallocation of his or her current account
balance in different investment funds and/or
different percentages of allocation by using the fund
transfers menu on the VIR Line. Investments must
be made in whole percentage increments. A
participant or terminated participant may elect or
change investment funds and/or the percentages in
which allocations will be allocated at anytime.
[This section becomes effective on 01-01-96.]
A. Risk of Loss. The participant (or terminated
participant) bears the effect for all gain or loss in
market value of the investments selected for his or
her plan assets. The participant (or terminated
participant) also bears the effect of any market
fluctuations which occur between the time his or her
instructions are delivered to the Committee or the
trustee and the time that the instructions are
effectuated. The trustee, the Committee, the
individual Committee members, and CG&E will not be
responsible or liable to participants (or terminated
participants) for the negative or positive effect of
market fluctuations or reasonable delay in processing
transactions upon their accounts.
A. Voting CINergy Stock.
1. Participation Instructions. The trustee
shall vote the shares of CINergy stock credited
to the accounts of beneficial owners in
accordance with the instructions given by the
beneficial owner. If the instructions are not
received by the trustee by a date the trustee
designates prior to any meeting of shareholders
of CINergy, the trustee shall vote such
uninstructed shares at its discretion.
1. Trustee Discretion. The trustee shall vote
at its discretion the CINergy stock held in the
company stock fund which have not been allocated
to beneficial owners' accounts as of the record
date of any meeting of shareholders of CINergy.
ACCOUNTS
ARTICLE
I. : ACCOUNTS
A. Accounts and Sub-accounts.
1. Account. Each beneficial owner's total
assets in the plan shall be maintained in a
separate account. The account shall reflect all
transactions regarding the beneficial owner's
assets. The assets in an account shall be
allocated among sub-accounts.
1. Sub-account. Each account must include one
or more of the following sub-accounts:
a) a deferred compensation sub-account ;
a) an optional sub-account; and
a) a company-matched sub-account.
[This sub-section should be deleted effective 01-01-96.]
1. Sub-account. Each account must include one
or more of the following sub accounts:
1) a deferred compensation sub-account;
2) an optional sub-account;
3) a company-matched sub-account; and
4) a rollover sub-account.
[Thi
s
sub-
sect
ion
beco
mes
effe
ctiv
e on
01-
01-
96.]
1. A
ccoun
t
Value
.
Each
parti
cipan
t's
accou
nt is
value
d
daily
.
The
value
of an
accou
nt
refle
cts
the
numbe
r of
units
of
each
inves
tment
fund
owned
by
the
parti
cipan
t and
is
based
upon
the
unit
price
of
each
fund.
Both
the
units
owned
and
the
price
refle
ct a
close
of
busin
ess
valua
tion.
2. Investment Ownership. The trustee owns
all plan assets as a fiduciary on behalf of the
beneficial owners .
A. Quarterly Statements. The trustee shall
prepare an individual statement of account for each
beneficial owner on a quarterly basis. The
statements will reflect the status of the account and
sub-accounts of the beneficial owner. The trustee
shall mail the statements to the beneficial owners as
soon as practical after each quarter end.
VESTING AND FORFEITURES
ARTICLE
I. : VESTING AND FORFEITURES
A. Vesting. The process by which an employee
becomes entitled to a nonforfeitable benefit under
this plan.
A. Year of Vesting Service. Each period of 12
consecutive months of employment, beginning with the
date on which the employee first performed an hour of
service for CG&E or any related company, during which
he or she completes at least 1,000 hours of service.
The calculation period begins on the date (and
subsequent anniversaries of that date) the employee
first performed an hour of service for CG&E or a
related company. Hours of service prior to the date
on which the relationship to the Cincinnati Gas &
Electric Company began are not included for the
purpose of vesting under this plan. The hours of
service of non-participating employees, leased
employees and co-ops are included in determining
their years of vesting service.
[This section should be deleted effective 01-01-96.]
A. Vested Benefits.
1. Vested Accrued Benefit. The portion of a
participant's account available for distribution
to the participant upon termination of employment
with CG&E.
1. Deferred Compensation Sub-account and
Optional
Sub-account. Participants are immediately vested
in their deferred compensation sub-accounts and
optional sub-accounts.
[This sub-section should be deleted effective 01-01-
96.]
1. Deferred Compensation Sub-account, Optional
Sub-account and Rollover Sub-account.
Participants are immediately vested in their
deferred compensation sub-accounts, optional sub-
accounts and rollover sub-accounts.
[This sub-section becomes effective on 01-01-96.]
1. Company-Matched Sub-account. Participants
are vested in their company-matched sub-accounts
upon occurrence of any of the following:
a) termination of this plan,
a) partial termination of this plan with
respect to affected participants,
a) the participant attains 5 years of
vesting service,
a) the participant dies,
a) the participant becomes disabled,
a) the participant retires under the
MRP,
a) the participant is permanently laid
off for lack of work,
a) the participant attains age 65.
[This sub-section should be deleted effective 01-01-96.]
1. C
omp
any
- -
Mat
che
d
Sub
- -
acc
oun
t.
Par
tic
ipa
nts
who
are
cre
dit
ed
wit
h
one
hou
r
of
ser
vic
e
on
or
aft
er
Jan
uar
y 1
,
199
6
are
imm
edi
ate
ly
ves
ted
in
the
ir
com
pan
y-
mat
che
d
sub
- -
acc
oun
ts.
[This sub-section becomes effective on 01-01-96.]
A. Vesting of Former Employees.
1. Impact of Breaks in Service. Non-vested
former employees who resume employment will be
credited for vesting purposes with their prior
years of service so long as the number of
consecutive breaks in service (see ) incurred by
the employees do not exceed five.
[This sub-section should be deleted effective 01-01-2001.]
1. Impact of Breaks in Service. Terminated
participants who are credited with an hour of
service on or after January 1, 1996 are not
subject to the break in service rules provided in
.
[This sub-section becomes effective on 01-01-96.]
1. Immediate Vesting. Former employees or
participants who were vested in SIP or DCIP prior
to termination of employment will retain or
immediately obtain vested status in this plan.
A. Special Vesting Rules.
1. Parental Leaves. For the purpose of deter-
mining a participant's years of vesting service,
a non-vested participant who is granted a leave
of absence for the purpose of giving birth to
and/or nurturing a newborn, or adopting a child,
will be granted credit for 190 hours of vesting
service per month, not to exceed a total of 501
hours, during that leave of absence. Hours of
vesting service will be granted in the year in
which the absence commences to the extent
necessary to prevent the employee from incurring
a break in service for vesting purposes. To the
extent the hours of vesting service are not
needed to prevent a break in vesting service, the
employee will be credited with the hours of
vesting service in the immediately following year
to prevent the occurrence of a break in vesting
service during that year.
1. Military Leaves. Notwithstanding any
provision of this plan to the contrary, credit
for vesting service with respect to qualified
military service will be provided in accordance
with IRC 414(u) .
A. Forfeitures and Restorations.
1. Forfeiture. A participant who terminates
employment with CG&E and is not vested in his or
her company-matched sub-account will forfeit the
amount in the company-matched sub-account. The
participant shall be deemed to have received a
distribution of zero for the company-matched
account. The forfeiture will occur upon the
participant's termination of employment with
CG&E. This forfeiture may be restored in
accordance with below.
[This sub-section should be deleted effective 01-01-2001.]
1. Forfeiture. A participant's benefit will be
forfeited only in accordance with if the
participant is credited with an hour of service
on or after
January 1, 1996.
[This sub-section becomes effective on 01-01-96.]
1. Use of Forfeitures. Forfeitures shall be
used to reduce the company-matched contributions
which are to be made in accordance with , and
.
1. Restoration of Forfeitures. A terminated
participant, described in above, who resumes
employment with CG&E before incurring 5
consecutive breaks in service shall have his or
her company-matched sub-account restored, without
dividends earned in the interim.
[This sub-section should be deleted effective 01-01-96.]
1. Restoration of Forfeitures. A terminated
participant who is credited with an hour of
service on or after January 1, 1996, shall have
his or her benefit restored in accordance with .
[This sub-section becomes effective on 01-01-96.]
1. Source of Restorations. Restorations of
the company-matched sub-account shall be made
from forfeitures during the plan year of the
restoration. If there are insufficient
forfeitures to cover restorations in any given
plan year, CG&E shall make additional
contributions to cover the deficit.
DISTRIBUTIONS
ARTICLE
I. : DISTRIBUTIONS
A. Distribution. A distribution is the delivery
of all of the vested assets in a plan account to its
beneficial owner.
A. Eligibility for Distribution.
1. Termination. Terminated participants are
eligible to receive distribution upon termination
of employment for any reason .
1. Disability. Participants and terminated
participants are eligible to receive distribution
as of the dates on which they become eligible to
receive disability benefits under the MRP if
they:
a) have been granted disability benefits
by the Social Security Administration, or
a) are determined to be disabled by
CG&E's medical director.
[This sub-section should be deleted effective 01-01-
97.]
1. Death. Beneficiaries are eligible to
receive distribution upon the death of the
participant from whom their interests are
derived.
1. Acceptance of a DRO. An alternate payee
under a DRO which has been accepted by the plan
is given a window opportunity to elect
distribution. See .
1. Plan Termination. The Committee shall make
a distribution to all participants if the plan is
terminated without the establishment of a
successor plan.
[This sub-section should be deleted effective 01-01-
96.]
1. Plan Termination. The Benefits Manager
shall make a distribution to all participants if
the plan is terminated without the establishment
of a successor plan.
[This sub-section becomes effective on 01-01-96.]
1. Sale of CG&E. The Committee shall make a
distribution to all participants if substantially
all of CG&E's assets are sold.
[This sub-section should be deleted effective 01-01-
96.]
1. Sale of CG&E. The Benefits Manager shall
make a distribution to all participants if
substantially all of CG&E's assets are sold.
[This sub-section becomes effective on 01-01-96.]
1. Sale of a Subsidiary. The Committee shall
make a distribution to participants who are
employed by a CG&E subsidiary if the subsidiary
is sold and the participants are no longer
employed by CG&E. If CG&E sells a subsidiary,
but retains the employees who formerly worked for
that subsidiary, those employees will not qualify
for a distribution as a result of the sale.
[This sub-section should be deleted effective 01-01-
96.]
1. Sale of a Subsidiary. The Benefits
Manager shall make a distribution to participants
who are employed by a CG&E subsidiary if the
subsidiary is sold and the participants are no
longer employed by CG&E. If CG&E sells a
subsidiary, but retains the employees who
formerly worked for that subsidiary, those
employees will not qualify for a distribution as
a result of the sale.
[This sub-section becomes effective on 01-01-96.]
A. Distribution Valuation Date. The distribution
valuation date for a beneficial owner is the business
day on which the beneficial owner's units in the
funds are sold for the purpose of disbursing funds
for a loan, a withdrawal or a distribution.
A. Valuing a Distribution. The value of an
account for the purpose of distribution shall be
based upon the value of the units in the CINergy
stock funds and the mutual funds, determined as of
the distribution valuation date .
A. Events Triggering Distribution. As used in
this Article, an event consists of a participant's
termination, retirement, permanent layoff for lack of
work, disability, or death.
1. Vested Benefit of $3,500 or Less. If the
vested benefit is $3,500 or less, the Committee
shall make a distribution in a lump sum.
[This sub-section should be deleted effective 01-01-
96.]
1. Vested Benefit of $3,500 or Less. If the
vested benefit is $3,500 or less, the Benefits
Manager shall make a distribution in a lump sum.
[This sub-section becomes effective on 01-01-96.]
1. Vested Benefit Over $3,500. If the vested
benefit is over $3,500, the participant or
beneficiary shall elect to receive or delay the
distribution. The election must be filed with
the Committee within 60 days of the event. A
participant or beneficiary who has elected to
delay the distribution can elect a distribution
at a later time by filing an application for
distribution with the Committee.
[This sub-section should be deleted effective 01-01-96.]
1. Vested Benefit Over $3,500. If the vested
benefit is over $3,500, the participant or
beneficiary shall elect to receive or delay the
distribution. The election must be received by
the Benefits Manager within 60 days of the event.
A participant or beneficiary who has elected to
delay the distribution can elect a distribution
at a later time by informing the Benefits Manager
through the voice or other electronic response
system or other media authorized by CG&E.
[Thi
s
sub-
sect
ion
beco
mes
effe
ctiv
e on
01-
01-
96.]
1. Mandatory Distribution After an Event. The
Committee shall disburse a distribution no later
than the 60th day after the close of the calendar
year in which the terminated participant who has
been affected by an event attains or would have
attained age 65. If the terminated employee is
age 65 or older on the date of the event, the
distribution shall be made within 60 days of the
year end during which the event occurred.
[This sub-section should be deleted effective 01-
01-96.]
1. Mandatory Distribution After an Event. The
Benefits Manager shall disburse a distribution no
later than the 60th day after the close of the
calendar year in which the terminated participant
who has been affected by an event attains or
would have attained age 65. If the terminated
employee is age 65 or older on the date of the
event, the distribution shall be made within 60
days of the year end during which the event
occurred.
[This sub-section becomes effective on 01-01-96.]
A. Participant's Mandatory Distribution Year.
The following rules shall apply regardless of any
other distribution provision in the plan.
1. Definition. A participant's mandatory
distribution year is the year in which s/he
attains age 70 1/2.
1. Lump Sum Distribution. The Committee shall
make a distribution of all vested benefits
accrued as of the September 30 of a participant's
mandatory distribution year. The distribution
shall be in a lump sum. The distribution shall
be disbursed by April 1 following the end of the
participant's mandatory distribution year.
[This sub-section should be deleted effective 01-01-
96.]
1. Lump Sum Distribution. The Benefits Manager
shall make a distribution of all vested benefits
accrued as of the September 30 of a participant's
mandatory distribution year. The distribution
shall be in a lump sum. The distribution shall
be disbursed by April 1 following the end of the
participant's mandatory distribution year.
[This sub-section becomes effective on 01-01-96.]
1. Subsequent Annual Distributions. If the
participant has assets in the plan after the
mandatory distribution year, the Committee shall
distribute all vested benefits accrued as of
September 30 each subsequent year, by December
31st of that year.
[This sub-section should be deleted effective 01-01-
96.]
1. Subsequent Annual Distributions. If the
participant has assets in the plan after the
mandatory distribution year, the Benefits Manager
shall distribute all vested benefits accrued as
of September 30 each subsequent year, by December
31st of that year.
[This sub-section becomes effective on 01-01-96.]
1. Continuing Contributions. Participants
may continue to contribute to the plan after
their mandatory distribution year.
[This section should be deleted effective 01-01-97 for all
participants, except 5% owners.]
A. Participant's (Other than 5% Owner's)
Mandatory Distribution Year. The following rules
shall apply regardless of any other distribution
provision in the plan.
1. Definition. A participant's (other than a
5% owner's) mandatory distribution year is the
later of the year in which s/he attains age 70
1/2 or retires. A 5% owner's mandatory
distribution year is the year in which s/he
attains age 70 1/2. See above for details.
1. Lump Sum Distribution. The Benefits Manager
shall make a distribution of all vested benefits
accrued as of the September 30 of a participant's
(other than a 5% owner's) mandatory distribution
year. The distribution shall be in a lump sum.
The distribution shall be disbursed by April 1
following the end of the participant's (other
than a 5% owner's) mandatory distribution year.
1. Subsequent Annual Distributions. If the
participant (other than a 5% owner) has assets in
the plan after the mandatory distribution year,
the Benefits Manager shall distribute all vested
benefits accrued as of September 30 each
subsequent year, by December 31st of that year.
[This section becomes effective on 01-01-97 for all
participants, except 5% owners.]
A. Filing Forms for Distribution or Delay.
1. General Rule. A beneficial owner
generally must file an application for
distribution 90 days in advance of disbursement
of a distribution from the plan.
[This sub-section should be deleted effective 01-01-
96.]
1. General Rule. A beneficial owner generally
must apply for distribution by the voice or other
electronic response system or other media
authorized by CG&E 90 days in advance of
disbursement of a distribution from the plan.
[This sub-section becomes effective on 01-01-96.]
1. Timing A Distribution. A beneficial owner
must file an application for distribution with
the Committee at least 15 business days before
disbursement of a distribution from the plan.
[This sub-section should be deleted effective 01-01-
96.]
1. Timing A Distribution. A beneficial owner
must apply for distribution with the Benefits
Manager through the voice or other electronic
response system or other media authorized by CG&E
at least 15 business days before disbursement of
a distribution from the plan.
[This sub-section becomes effective on 01-01-96.]
1. Required Elections. If a beneficial owner
fails to make a required election to immediately
receive distribution or to delay distribution,
the plan may process an election to delay
distribution filed by the Committee on behalf of
the beneficial owner.
[This sub-section should be deleted effective 01-01-
96.]
1. Required Elections. If a beneficial owner
fails to make a required election to immediately
receive distribution or to delay distribution,
the plan may process an election to delay
distribution as requested by the Benefits Manager
on behalf of the beneficial owner.
[This sub-section becomes effective on 01-01-96.]
1. Mandatory Distributions. Any mandatory
distribution required by the plan or the Internal
Revenue Code may be made under the authority of
an application for distribution filed by the
Committee on behalf of the beneficial owner.
[This sub-section should be deleted effective 01-01-96.]
1. Mandatory Distributions. Any mandatory
distribution required by the plan or the Internal
Revenue Code may be made under the authority of a
request for distribution made by the Benefits
Manager on behalf of the beneficial owner.
[This sub-section becomes effective on 01-01-96.]
A. Timing of Distributions. The Committee will
disburse distributions as a lump sum or in 5 annual
installments.
1. Lump Sum Distributions. The trustee shall
mail a lump sum payment to the beneficial owner
approximately 15 business days following the day
on which the application for distribution was
filed with the Committee.
1. Five Annual Installments. A participant
whose employment is terminated by reason of
retirement under the terms of the MRP,
disability, or permanent layoff for lack of work,
may irrevocably elect to receive his or her
account in five annual installments.
Installment distributions are not available to
beneficiaries or to participants terminated for
other reasons.
1. Timing of Installments. The eligible
participant may elect to receive the first
installment as soon as practical after the end of
the month that the event occurs, or as soon as
practical after the end of the year in which the
event occurs. The trustee shall disburse the
first installment no later than March 1
following the calendar year when the event
occurred which triggered the distribution.
a) Amount of Each Installment. Those
who have elected 5 annual installments shall
receive their accounts as follows: 1/5 of the
account in the first installment, 1/4 of the
account at the time of the second install-
ment, 1/3 of the account at the time of the
third installment, 1/2 of the account at the
time of the fourth installment, and the
balance of the account at the time of the
last installment.
a) Subsequent Installments. The payment
date for each subsequent installment shall be
as soon as is practicable within each plan
year following the anniversary date of the
initial payment. The balance of the account
shall be revalued in accordance with and
any CINergy stock will continue to be voted
by such a participant in accordance with .
If a participant dies prior to receiving all
installments, the remainder in his or her
account will be paid in a lump sum to the
beneficiary or, if none, in accordance with
.
[This section should be deleted effective 01-01-96.]
A. Timing of Distributions. The Benefits Manager
will disburse distributions as a lump sum or in 5
annual installments.
1. Lump Sum Distributions. The trustee shall
mail a lump sum payment to the beneficial owner
approximately 15 business days following the day
on which the Benefits Manager was informed of the
participant's request for distribution through
the voice or other electronic response system or
other media authorized by CG&E.
1. Five Annual Installments. A participant
whose employment is terminated by reason of
retirement under the terms of the MRP,
disability, or permanent layoff for lack of work,
may irrevocably elect to receive his or her
account in five annual installments.
Installment distributions are not available to
beneficiaries or to participants terminated for
other reasons.
1. Timing of Installments. The eligible
participant may elect to receive the first
installment as soon as practical after the end of
the month that the event occurs, or as soon as
practical after the end of the year in which the
event occurs. The trustee shall disburse the
first installment no later than March 1
following the calendar year when the event
occurred which triggered the distribution.
a) Amount of Each Installment. Those
who have elected 5 annual installments shall
receive their accounts as follows: 1/5 of the
account in the first installment, 1/4 of the
account at the time of the second install-
ment, 1/3 of the account at the time of the
third installment, 1/2 of the account at the
time of the fourth installment, and the
balance of the account at the time of the
last installment.
a) Subsequent Installments. The payment
date for each subsequent installment shall be
as soon as is practicable within each plan
year following the anniversary date of the
initial payment. The balance of the account
shall be revalued in accordance with and
any CINergy stock will continue to be voted
by such a participant in accordance with .
If a participant dies prior to receiving all
installments, the remainder in his or her
account will be paid in a lump sum to the
beneficiary or, if none, in accordance with
.
[This section becomes effective on 01-01-96.]
A. In Kind Distribution.
1. General Rule. Distributions generally
consist of a CINergy stock certificate reflecting
the value of the units of the CINergy stock fund
in the account as of the distribution valuation
date, plus cash from the sale of all other plan
investments and incidental cash from the CINergy
stock fund.
1. Company Stock Fund. To the extent that a
beneficial owner's account includes units of the
CINergy stock fund as of the distribution
valuation date, s/he may elect to receive cash in
lieu of a CINergy stock certificate.
1. Fidelity Funds. The beneficial owner can
direct the trustee to transfer his or her
Fidelity Equity Income, Intermediate Bond and/or
Magellan funds, upon distribution, to an
individual account at Fidelity by submitting an
application to the Committee.
[This sub-section should be deleted effective 01-01-96.]
1. Fidelity Funds. The beneficial owner can
direct the trustee to transfer his or her
Fidelity Equity Income, Intermediate Bond and/or
Magellan funds, upon distribution, to an
individual account at Fidelity by informing the
Benefits Manager through the voice or other
electronic response system or other media
authorized by CG&E.
[This sub-section becomes effective on 01-01-96.]
A. Direct Rollovers to Other Plans.
1. Election.
a) Who May Elect. Participants,
terminated participants, their beneficiaries
who are surviving spouses, and alternate
payees who are former spouses of
participants, may elect to have any portion
of an eligible rollover distribution paid
directly to their designated eligible
retirement plan. Those making this
election must be entitled to distribution or
withdrawal of their plan assets, under the
terms of this plan. The only plan assets
subject to direct rollover are those acquired
by reason of being a participant, a surviving
spouse or a former spouse alternate payee.
a) Manner of Election. This election must
be made at the time and in the manner
prescribed by the Committee.
1. Distributions Eligible for Rollover. An
eligible rollover distribution is any
distribution or withdrawal, except as stated in
below, of all or any portion of the account of
one of the persons listed in above.
1. Distributions Not Eligible for Rollover.
a) Portions of Mandatory Distributions.
The portion of a mandatory distribution under
which is required to be distributed under IRC
401(a)(9) is not eligible for direct
rollover.
[This sub-section should be deleted effective 01-
01-97 for all participants, except 5% owners.]
a) Portions of Mandatory Distributions.
The portion of a mandatory distribution under
which is required to be distributed under IRC
401(a)(9) is not eligible for direct
rollover.
[This sub-section becomes effective on 01-01-97
for all participants, except 5% owners.]
a) Portions Excluded from Gross Income.
The portion of any distribution which is not
able to be included in the gross income of
the beneficial owner is not eligible for
direct rollover. For this purpose, gross
income can include any unrealized
appreciation of CINergy stock.
a) Optional Contributions. Optional
contributions are not eligible for direct
rollover. However, interest and earnings
attributable to optional contributions are
eligible for direct rollover.
a) Deemed Distributions. A deemed
distribution which has occurred because of a
participant's failure to make one or more
loan payments is not eligible for direct
rollover.
a) Loan Offsets. The portion of a
distribution due to termination of the
participant's employment with CG&E which
offsets the unpaid portion of a plan loan
will not be eligible for direct rollover.
a) Periodic Distributions. Any
distribution that is one of a series of
substantially equal periodic payments, made
at least annually, to be paid over the life
of the beneficial owner or the joint lives of
the beneficial owner and his or her
designated beneficiary, or to be paid for a
specified period of at least 10 years is not
eligible for direct rollover.
a) Other. Returns of elective deferrals
and corrective distributions of excess
contributions and attributable net income are
not eligible for direct rollover. Returns
of deferrals in excess of the IRC 402(g)
limits or in excess of the 415 limits are
not eligible for direct rollover.
1. Eligible Retirement Plan. The definition
of an eligible retirement plan for the purpose of
accepting direct rollovers varies with the class
of the person electing the direct rollover. The
eligible retirement plan must be willing to
accept the rollover distribution.
a) Participants and Former Spouse
Alternate Payees. Participants and former
spouse alternate payees may direct rollovers
to an individual retirement account , an
individual retirement annuity , an annuity
plan or a qualified trust.
b) Surviving Spouses. Surviving spouses
may direct rollovers only to an individual
retirement account, or an individual
retirement annuity.
A. Settlement Statement. The trustee shall
furnish a settlement statement with every
distribution.
A. Distribution Upon Death of a Participant or
Beneficiary. In the event that the participant dies
with assets remaining in the plan, the assets will be
distributed to the participant's beneficiary. If
there is no beneficiary, the assets will be
distributed to the participant's surviving spouse.
If the participant has no beneficiary or surviving
spouse at the time of the participant's death, assets
will be distributed to the participant's estate. If
the beneficiary of a deceased participant dies while
assets remain in the plan, the assets will be
distributed to the estate of the beneficiary. In the
event an alternate payee dies with assets remaining
in the plan, the assets will be paid to the estate of
the alternate payee. In each case, the assets will
be distributed no later than the close of the plan
year which contains the fifth anniversary of the
participant's death. If the spouse of a participant
or terminated participant is the beneficiary of the
plan account, the spouse may delay distribution until
the end of the calendar year in which the participant
or terminated participant would have attained age 65.
See and .
A. Plan Hierchary for Distributions. Any sale of a
participant's plan assets, which is necessary to
generate cash for the purpose of disbursing cash in
the amount of after-tax contributions, will be made
using the plan hierarchy.
WITHDRAWALS DURING EMPLOYMENT
ARTICLE
I. : WITHDRAWALS DURING EMPLOYMENT
A. Withdrawal. A withdrawal is disbursement of
any part of the vested assets of a participant to
that participant. Distribution installments are not
withdrawals. Only participants are eligible to take
withdrawals. All other beneficial owners are
eligible only for distributions.
A. Withdrawals from Company-Matched Sub-Accounts.
A participant may not withdraw from the
company-matched sub-account during the period s/he is
employed by CG&E.
A. Withdrawals from Optional Sub-Accounts.
Participants may withdraw from their optional
sub-accounts plan by filing an application for
withdrawal with the Committee. The trustee will
disburse the withdrawal directly to the
participant , or to another plan if the participant
elects and the withdrawal qualifies for direct
rollover. See .
[This section should be deleted effective 01-01-96.]
A. Withdrawals from Optional Sub-Accounts.
Participants may withdraw from their optional
sub-accounts by the voice or other electronic
response system or other media authorized by CG&E.
The trustee will disburse the withdrawal directly to
the participant , or to another plan if the
participant elects and the withdrawal qualifies for
direct rollover. See .
[This section becomes effective on 01-01-96.]
A. Amount Available for Optional Withdrawal.
Participants may withdraw either a specific whole
dollar amount or the entire balance from their
optional sub-accounts. If the participant withdraws
less than 100% of his or her optional sub-account
balance and requests a second withdrawal within a 12
month period, s/he will be required to withdraw the
remaining balance.
B. Plan Hierarchy For Withdrawals. If the
portion of the participant's account which is to be
withdrawn is invested in more than one fund, the
withdrawal amount will be deducted from the
investment funds using the plan hierarchy. Each
fund will be exhausted before the withdrawal draws
upon the next fund in the hierarchy.
A. Form of Withdrawals. Withdrawals generally
consist of a CINergy stock certificate for the units
of the CINergy stock fund in the sub-account as of
the distribution valuation date, plus cash from the
sale of all other plan investments and incidental
cash from the CINergy stock fund.
A. Cash In Lieu of Stock. A participant may
elect to receive cash in lieu of a CINergy stock
certificate for his or her assets in the company
stock fund.
A. Hardship. A hardship is an immediate and
heavy financial need of a participant which cannot be
met except through a withdrawal from the
participant's deferred compensation sub-account in
the plan.
A. Hardship Withdrawals. A participant may apply
to the Committee for a withdrawal of all or a portion
of his or her deferred compensation sub-account. The
Committee shall not grant the request unless it
qualifies under the criteria listed in .
[This section should be deleted effective 01-01-96.]
A. Hardship Withdrawals. A participant may apply
to the Benefits Manager for a withdrawal of all or a
portion of his or her deferred compensation
sub-account. The Benefits Manager shall not grant
the request unless it qualifies under the criteria
listed in .
[This section becomes effective on 01-01-96.]
A. Amount Available for Hardship Withdrawals.
The amount available for a hardship withdrawal
includes all deferred compensation contributions made
in years prior to 1989, including any earnings and
losses thereon, and deferred compensation
contributions made on or after 01-01-89, excluding
earnings and losses thereon. Hardship withdrawals
are limited to the actual amount in the participant's
account.
A. Criteria for Granting a Hardship Withdrawal.
The Committee shall use the following criteria when
considering an application for a hardship withdrawal:
1. Immediate and Heavy Financial Need. The
request must be to satisfy an immediate and heavy
financial need for one of the following reasons:
a) Medical Expenses. Unreimbursed
medical expenses, as described in IRC
213(d), incurred by the participant, the
participant's spouse, or any dependents of
the participant, as defined in IRC 152, or
necessary for those persons to obtain medical
care as described in IRC 213(d).
a) Purchase of a Principal Residence.
Purchase, excluding mortgage payments, of a
principal residence of the participant.
a) Tuition. Payment of tuition, related
educational fees, and room and board for the
next 12 months of post-secondary education
for the participant, the participant's
spouse, children, or dependents.
a) Prevention of Foreclosure. Prevention
of eviction from, or foreclosure of the
mortgage upon, the principal residence of the
participant.
a) Funeral Expenses. Payment of the
funeral expenses of the participant's spouse,
children or dependents.
a) Other Expenses. Any other expense
identified by the Internal Revenue
Commissioner as an immediate and heavy
financial need.
1. Amount Necessary to Satisfy the Need. The
hardship withdrawal is limited to the amount
necessary to satisfy the need, plus any amounts
necessary to pay federal, state or local income
taxes or penalties reasonably anticipated to
result from the hardship withdrawal. The
participant must submit reasonable documentation
of the existence and amount of the need. There
must be no other resources reasonably available
to satisfy the need. The participant must first
take all available non-hardship
distributions/loans from all of CG&E's other
plans: RIP, SIP, MRP . This includes a
withdrawal of available funds from the optional
sub-account. If a plan loan is either
unavailable to the participant, or the available
loan is insufficient to meet the need of a
participant, and the other criteria of this
section are met, the Committee may grant a
hardship withdrawal.
[This section should be deleted effective 01-01-96.]
A. Criteria for Granting a Hardship Withdrawal.
The Benefits Manager shall use the following
criteria when considering a request for a hardship
withdrawal:
1. Immediate and Heavy Financial Need. The
request must be to satisfy an immediate and heavy
financial need for one of the following reasons:
a) Medical Expenses. Unreimbursed
medical expenses, as described in IRC
213(d), incurred by the participant, the
participant's spouse, or any dependents of
the participant, as defined in IRC 152, or
necessary for those persons to obtain medical
care as described in IRC 213(d).
a) Purchase of a Principal Residence.
Purchase, excluding mortgage payments, of a
principal residence of the participant.
a) Tuition. Payment of tuition, related
educational fees, and room and board for the
next 12 months of post-secondary education
for the participant, the participant's
spouse, children, or dependents.
a) Prevention of Foreclosure. Prevention
of eviction from, or foreclosure of the
mortgage upon, the principal residence of the
participant.
a) Funeral Expenses. Payment of the
funeral expenses of the participant's spouse,
children or dependents.
a) Other Expenses. Any other expense
identified by the Internal Revenue
Commissioner as an immediate and heavy
financial need.
1. Amount Necessary to Satisfy the Need. The
hardship withdrawal is limited to the amount
necessary to satisfy the need, plus any amounts
necessary to pay federal, state or local income
taxes or penalties reasonably anticipated to
result from the hardship withdrawal. The
participant must submit reasonable documentation
of the existence and amount of the need. There
must be no other resources reasonably available
to satisfy the need. The participant must first
take all available non-hardship
distributions/loans from all of CG&E's other
plans: RIP, SIP, MRP . This includes a
withdrawal of available funds from the optional
sub-account. If a plan loan is either
unavailable to the participant, or the available
loan is insufficient to meet the need of a
participant, and the other criteria of this
section are met, the Benefits Manager may grant a
hardship withdrawal.
[This section becomes effective on 01-01-96.]
A. Required Documentation for Hardship
Withdrawals. The participant must file the following
documents with the Committee for consideration of a
hardship withdrawal:
1. Application. The participant must complete
an application for hardship withdrawal, including
the spouse's signature acknowledging notice of
the application, if the participant is married.
1. Documentation. The participant must attach
photocopies of all papers which document the
existence and the amount of the need.
1. Written Explanation. The participant must
provide a clear and concise explanation, in his
or her own words, of how the funds are to be
used.
1. Quarterly Statement. The Committee will
provide a copy of the participant's most recent
quarterly statement indicating the amount of
funds that are available to the participant.
1. Personal Financial Statement. A personal
financial statement of the participant's assets
and liabilities, including the spouse's notarized
signature, if the participant is married.
[This section should be deleted effective 01-01-96.]
A. Required Substantiation for Hardship
Withdrawals. The participant must provide the
following information to the Benefits Manager for
consideration of a hardship withdrawal:
a) Request. The participant must make a request
to the Benefits Manager for a hardship withdrawal
through the voice or other electronic response
system or other media authorized by CG&E. If the
participant is married, the participant must
furnish the Benefits Manager with the signature
of the participant's spouse acknowledging notice
by the spouse of the request.
b) Documentation. The participant must furnish
photocopies of all papers which document the
existence and the amount of the need.
c) Explanation. The participant must provide a
clear and concise explanation, in his or her own
words, of how the funds are to be used through
the voice or other electronic response system or
other media authorized by CG&E.
d) Quarterly Statement. The Benefits Manager
will provide a copy of the participant's most
recent quarterly statement indicating the amount
of funds that are available to the participant.
e) Personal Financial Statement. A personal
financial statement of the participant's assets
and liabilities, including the spouse's notarized
signature, if the participant is married.
[This section becomes effective on 01-01-96.]
A. Disbursement of Hardship Withdrawals. The
trustee will disburse a hardship withdrawal which
has been accepted by the Committee directly to the
participant.
[This section should be deleted effective 01-01-96.]
A. Disbursement of Hardship Withdrawals. The
trustee will disburse a hardship withdrawal which
has been accepted by the Benefits Manager directly to
the participant.
[This section becomes effective on 01-01-96.]
A. Settlement Statement. The trustee shall
furnish a settlement statement with every
distribution.
A. Suspension Following Withdrawal.
1. Optional Sub-Account Withdrawal.
Participants who have withdrawn from their
optional sub-accounts will not be permitted to
make optional contributions to the plan until at
least 12 months from the date of disbursement of
the withdrawal.
1. Hardship Withdrawal. A participant who is
granted a hardship withdrawal shall not be
permitted to make deferred compensation or
optional contributions to the plan until at
least 12 months from the date of the hardship
withdrawal disbursement. The IRC 402(g) limit
on a participant's deferred compensation
contributions for the taxable year of the
participant following the taxable year in which
the hardship withdrawal occurred shall be reduced
by the amount of the participant's deferred
compensation contributions during the taxable
year in which the hardship withdrawal occurred.
LOANS
ARTICLE
I. : LOANS
A. Eligibility for Loans . Participants currently
receiving pay from CG&E may apply for and receive a
loan from their deferred compensation sub-accounts.
No other beneficial owners are eligible for loans.
Specifically, participants on leaves of absence,
terminated participants, beneficiaries and alternate
payees are not eligible to receive loans.
A. Loan Requests. Participants may request loans
through the current process established by the
Committee. The participant must complete and
return the promissory note to the trustee. Upon
receipt of the completed promissory note, the trustee
will send a check for the loan amount to the
participant.
[This section should be deleted effective 01-01-96.]
A. Loan Requests. Participants may request loans
through the current process established by the
Committee. The participant must execute the
promissory note. The promissory note, at the sole
discretion of the Committee, may be provided on the
back of the check which is issued to the participant
for the loan amount. The promissory note will be
properly executed and legally enforceable once the
participant endorses the back of the check. The
participant's endorsement evidences that s/he agrees
to the repayment terms.
[This section becomes effective on 01-01-96.]
A. Limitation of Two Loans at any Given Time. A
participant may apply for and obtain a second loan
while the first loan remains outstanding. The second
loan will be granted at the then prevailing rate of
interest and for an entirely separate term of five
years or less. The outstanding balance in the
participant's loan account will reflect the total of
the two loans, although the loans will remain
separate and distinct on the trustee's records. The
dollar limitation imposed by the plan for one loan
will apply to the total outstanding balance for two
loans for any given participant. A participant is
limited to two outstanding loans at any given time.
A. Granting Loans. Loans will be granted from the
plan for any reason.
A. Loan Amount.
1. 50% of Vested Account Limited by Deferred
Compensation Sub-Account. The loaned amount
cannot exceed the lesser of $50,000 or 50% of the
balance of the participant's vested accrued
benefit (company-matched, deferred compensation
and optional sub-accounts) and will be further
limited by the actual amount in the deferred
compensation contribution sub-account on the
distribution valuation date for the loan.
[This sub-section should be deleted effective 01-01-
96.]
1. 50% of Vested Account Limited by Deferred
Compensation Sub-Account and Rollover Sub-
Account. The loaned amount cannot exceed the
lesser of $50,000 or 50% of the balance of the
participant's vested accrued benefit (company-
matched, deferred compensation, optional and
rollover sub-accounts) and will be further
limited by the actual amount in the deferred
compensation contribution sub-account and
rollover sub-account on the distribution
valuation date for the loan.
[This sub-section becomes effective on 01-01-96.]
1. Reduction of $50,000 Maximum. The $50,000
maximum loan amount is reduced by the excess (if
any) of the highest outstanding balance of loans
to that participant during the one-year period
ending on the day before the date the loan is
made, over the outstanding balances of loans to
that participant made under all qualified plans
sponsored by CG&E on the date the loan is made.
A. Denial of Loans. The trustee shall not loan
funds to a participant if granting the loan would
result in a violation of any federal or state
statute or regulation regarding loans.
A. Plan Hierarchy For Loans. If the participant's
deferred compensation sub-account is invested in more
than one fund, the loan amount will be deducted from
the investments funds using the plan hierarchy.
Each fund will be exhausted before the loan draws
upon the next fund in the hierarchy.
[This section should be deleted effective 01-01-96.]
A. Pro-rata Liquidation for Loans. The trustee
shall liquidate the participant's deferred
compensation sub-account investments and rollover
sub-account investments in the same proportion that
each investment bears to the entire deferred
compensation contribution sub-account and rollover
sub-account except for the loan fund. The trustee
will disburse the cash produced to the participant
minus any administrative fee.
[This section becomes effective on 01-01-96.]
A. Valuing an Account For A Loan. The trustee
shall use the value of the account as of the opening
of the business day on which it writes the check for
the loan to the participant to determine the amount
available for the loan.
A. Collateral for Loans.
1. Assignment and Restriction of Withdrawals.
The participant shall assign 50% of his or her
vested accrued account, and shall sign a
promissory note for the amount of the loan,
including interest, payable to the order of the
trustee. No collateral other than the
participant's interest in the plan will be
accepted as security for a plan loan. If a
participant's optional sub-account becomes
collateral for his or her loan, s/he will only be
able to withdraw from the optional sub-account
the difference between its total value and the
portion of the balance of the optional
sub-account necessary as collateral for the
unpaid loan balance.
1. Effect of a DRO Upon Loan Collateral. If
there are insufficient assets in the deferred
compensation sub-account of a participant to
satisfy the terms of a DRO because of one or more
outstanding loans, the trustee will first take
additional assets from the participant's optional
sub-account, second from the company-matched sub-
account, and finally from the loan account
portion of the deferred compensation sub-account,
in order to satisfy the DRO.
[This sub-section should be deleted effective 01-01-
96.]
1. Effect of a DRO Upon Loan Collateral. If
there are insufficient assets in the deferred
compensation sub-account, or next in the rollover
sub-account, if any, of a participant to satisfy
the terms of a DRO because of one or more
outstanding loans, the trustee will first take
additional assets from the participant's optional
sub-account, second from the company-matched sub-
account, third, from the loan account portion of
the deferred compensation sub-account, and
finally from the loan account portion of the
rollover sub-account, if any, in order to satisfy
the DRO.
[This sub-section becomes effective on 01-01-96.]
A. Interest Rate for Loans. The rate of interest
charged on loans will be 1/2 of 1% above the prime
rate charged by the trustee in its banking business
on the first business day of the month during which
the application is received by the trustee.
[This section should be deleted effective 01-01-96.]
A. Interest Rate for Loans. The rate of interest
charged on loans will be a reasonable rate based on
commercial standards in the lending industry.
[This section becomes effective on 01-01-96.]
A. Payment of Loans. A participant who applies for
a loan must authorize CG&E to deduct loan payments
from his or her pay. CG&E will remit loan
deductions to the trustee concurrent with
disbursements of the payroll.
A. Minimum and Maximum Term of Loans. The
participant shall specify the number of months for
payment of the loan, with 12 months being the minimum
term, and 60 months the maximum term.
[This section should be deleted effective 01-01-96.]
A. Minimum and Maximum Term of Loans. The
participant shall specify the number of months for
payment of the loan, with 12 months being the minimum
term, and 54 months the maximum term.
[This section becomes effective on 01-01-96.]
A. Investment of Loan Payments. The trustee will
direct loan payments to the investment funds
according to the participant's most recent allocation
of future contributions form that is on file.
[This section should be deleted effective 01-01-96.]
A. Investment of Loan Payments. The trustee will
direct loan payments to the investment funds
according to the most recently provided directions
given by the participant through the voice or other
electronic response system or other media authorized
by CG&E.
[This section becomes effective on 01-01-96.]
A. Outstanding Loans for Terminated Participants.
Upon termination of employment, any outstanding loan
of a terminated participant is due immediately or the
outstanding amount of the loan will be in default
pursuant to or and reclassified as a partial
distribution.
[This section becomes effective on 01-01-96.]
A. Outstanding Loans for Participants on Military
Leave. Subject to the Committee's approval of such a
policy, loan repayments will be suspended under this
plan as permitted under IRC 414(u)(4).
A. Prepayment of Loans. A participant may pay the
remaining loan balance at any time without any
pre-payment penalties by check or money order made
payable to the trustee. The prepayment should be sent
or delivered to the Committee.
A. Loan Default. A participant's loan will go into
default upon failure to make one or more payments
during a calendar year, violation of any term of the
promissory note signed by the participant, or upon
declaration of the Committee at its discretion
under the terms of the promissory note.
[This section should be deleted effective ___________.]
A. Loan Default. A participant's loan will go into
default upon failure to timely make any payment
during a calendar year or violation of any term of
the promissory note signed by the participant.
[This section becomes effective on __________.]
A. Tax Effects of Loan Default. The participant
shall pay the tax incurred for any events which arise
out of any loan transaction with the plan or any
failure to make payments under plan and promissory
note requirements.
A. Curing Loan Default. A participant who has
missed one or more loan payments during a plan year
may make those payments up by direct payment to the
Committee with a check or money order made payable to
the order of the trustee in the amount of the
payment, plus interest, on or before the final
valuation date of the plan year to cure the default
without tax or recharacterization consequences.
[This section should be deleted effective _________.]
A. Curing Loan Default. A participant who misses
any loan payment may make up the missed payment by
direct payment to the Committee with a check or money
order made payable to the order of the trustee in the
amount of the payment, plus interest, on or before
the last day of the calendar quarter following the
calendar quarter in which the required payment was
due to cure the default without tax consequences.
[This section becomes effective on __________.]
A. Reamortization of Loans. A participant may
reamortize a loan so long as the total time for
repayment of the loan does not exceed 60 months.
Loan reamortizations will be under the plan terms and
conditions in effect at the time of the
reamortization.
[This section should be deleted effective 01-01-96.]
A. Reamortization of Loans. A participant who is
on a leave of absence (other than military leave) for
not longer than one year may reamortize a loan so
long as the total time for repayment of the loan does
not exceed 54 months and the loan payments due after
the leave expires (or, if earlier, after the first
year of the leave) are not less than those required
under the original terms of the loan. Loan
reamortizations will be under the plan terms and
conditions in effect at the time of the
reamortization.
[This section becomes effective on 01-01-96.]
A. Recharacterization of Sub-accounts . Effective
as of the final valuation date of each plan year, the
trustee shall recharacterize all or any portion of
the optional and/or company-matched sub-accounts of a
participant who has failed to make any loan
payment(s) during the year, if those missed payments
are still outstanding at the final valuation date.
The amount recharacterized shall be limited to the
amount of the missed payments. The amount rechar-
acterized will be credited to the participant's
deferred compensation sub-account as a loan payment.
The trustee will notify the participant of the
taxable amount of the distribution. The Committee
does not waive its ability to determine that a loan
is in default, or to foreclose upon a loan, by
exercising its right to recharacterize the
participant's sub-accounts under this provision.
[This section should be deleted effective ___________.]
A. Loan Fund Administration.
1. Single Loans. The promissory notes securing
payment of loans from plan assets will be
reflected on participants' quarterly statements
under the loan fund assets. When participants
receive plan loans, their investment allocations
will reflect credits to their loan funds in an
amount equal to the principal amount of the loan.
Their other sub-accounts will reflect a total
reduction in value equivalent to the principal
amount of the loan. As participants make loan
payments, the value of the participants' loan
funds will be reduced by the amount of the
payments attributable to the principal of the
loans. Principal and interest, as they are paid,
will be allocated to investments per the most
recent directions given by the participant. Once
the loan is completely repaid, the participant's
quarterly statement will reflect no investment in
the loan fund.
1. Multiple Loans. The trustee shall maintain
separate records of principal, interest, and
payment schedule for each loan that a participant
has outstanding at any given time. The
participant's statement will not reflect each
separate loan. The loan fund segment of the
quarterly statements distributed to participants
will reflect the total of all current loans
outstanding to the participant.
1. Loans and DROs. The trustee will allocate
as much of the participant's loan fund to the
alternate payee as is necessary to satisfy the
terms of the DRO if there are insufficient other
assets in the participant's account due to the
amount of the participant's assets on loan. To
the extent possible, loans extended prior to the
Committee's receipt of the DRO will be allocated
to the alternate payee. However, loans extended
after receipt of the DRO will be allocated, if
necessary to meet the terms of the DRO. The
participant will remain solely responsible for
loan payments, even if some portion of a loan or
loans has been allocated to an alternate payee to
satisfy the terms of a DRO.
DOMESTIC RELATIONS ORDERS
AND ALTERNATE PAYEES
ARTICLE
I. : DOMESTIC RELATIONS ORDERS AND ALTERNATE PAYEES
A. Domestic Relations Order (DRO). A domestic
relations order is any judgment, decree or order,
made pursuant to a state domestic relations law,
which provides that child support, alimony,
maintenance payments or marital property allocation
will be made from the plan assets of a participant.
A domestic relations order is referred to as a DRO
throughout the plan.
A. General Rule. The benefits due or to become due
to any participant are subject to a domestic
relations order accepted by the Committee.
A. Qualification and Acceptance of a DRO.
1. Initial Order. The DRO must meet the
requirements of IRC 414(p) and use the sample
DRO language that has been approved by the
Committee to be considered as qualified and to
be accepted by the plan. The Committee shall
determine whether or not a DRO is qualified. A
court order which contains language presuming
that it is qualified shall not be binding upon
the plan.
1. Amended Orders. A DRO which modifies the
terms of a previously qualified DRO may be
accepted by the Committee. The amended DRO must
meet the qualifications of above, and must be
filed with the Committee before any irrevocable
action has been taken on execution of the initial
DRO. Irrevocable actions include executed
cash-outs and any transaction which the Committee
decides is impossible or impractical to attempt
to reverse.
A. Special Conditions Applicable to DROs.
1. Prohibition of Allocating Identical Assets
Multiple Times. No DRO may allocate benefits
which have been allocated by a previously
qualified and accepted DRO. However, an amended
DRO which is accepted by the plan may reallocate
benefits previously allocated without violating
this provision.
1. Applicable Plan(s). The nature of benefits
allocated to an alternate payee will be
determined in accord with the terms of the plan
in effect on the date the DRO is entered onto the
records of the issuing court.
A. Alternate Payee. An alternate payee is a
participant's child, spouse, former spouse or other
dependent who is designated to receive benefits under
the plan by a DRO. The Committee may rely upon the
determination of the court which issues the DRO that
the designated alternate payee in the order is
entitled, under the law of the appropriate state, to
be so named.
A. Acknowledgment and Acceptance or Rejection of a
DRO. As soon as practical after the Committee
receives a DRO, it will send the participant and
designated alternate payee an acknowledgment of
receipt, notice of acceptance or rejection and a copy
of the plan procedures for acceptance or rejection of
DROs. The Committee will send a copy of the DRO
and notice of acceptance or rejection to the trustee.
The Committee shall accept or reject a DRO within 18
months of receiving it.
A. Division of Assets By the Trustee.
1. On Receipt of a DRO. The trustee shall
freeze the account of the participant upon
receiving notice from any plan agent that an
Order purporting to be a DRO has been received.
Participants with frozen accounts may not obtain
loans or withdrawals from the plan, and may not
reallocate among funds. Distributions on frozen
accounts are subject to delay, pending acceptance
of a DRO.
1. On Rejection of a DRO. If the order is
rejected, the trustee shall keep the account of
the participant frozen for a reasonable period of
time, pending receipt of an amended DRO which is
accepted by the Committee, or direction from the
Committee that the participant's account may
become active.
1. On Acceptance of a DRO. The trustee shall
segregate the plan assets into two or more
accounts as directed by the order as soon as it
receives notification that an order is accepted.
The trustee shall set up new accounts in the name
of each alternate payee under the order. The
assets in the sub-accounts of the alternate
payees shall be allocated among the investment
funds in the same proportions as allocated in the
sub-accounts of the participant from which they
originated.
1. Participant with Outstanding Loans. If a
participant has one or more loans outstanding and
insufficient liquid deferred compensation
sub-account assets to satisfy the terms of an
accepted DRO, the trustee shall avoid allocating
loan investment assets if possible. The trustee
shall first take the necessary additional assets
from the optional sub-account until it is
exhausted. Second, the trustee shall take the
necessary additional assets from the
company-matched sub-account until it is
exhausted. Finally, the trustee shall allocate
the remaining funds necessary to satisfy the DRO
from the loan investment portion of the deferred
sub-account. (See ).
[This sub-section should be deleted effective 01-01-
96.]
1. Participant with Outstanding Loans. If a
participant has one or more loans outstanding and
insufficient liquid deferred compensation
sub-account assets or next rollover sub-account
assets, if any, to satisfy the terms of an
accepted DRO, the trustee shall avoid allocating
loan investment assets if possible. The trustee
shall first take the necessary additional assets
from the optional sub-account until it is
exhausted. Second, the trustee shall take the
necessary additional assets from the
company-matched sub-account until it is
exhausted. Third, the trustee shall take the
necessary additional assets from the loan
investment portion of the deferred sub-account.
Finally, the trustee shall allocate the remaining
funds necessary to satisfy the DRO from the loan
investment portion of the rollover sub-account.
(See ).
[This sub-section becomes effective on 01-01-96.]
1. Denial of DRO within 18 Months. If within
18 months of the original receipt of a DRO it, or
a successor DRO, is determined to be not
qualified, and no amended DRO acceptable to the
plan has been submitted to the Committee, the
assets in the alternate payees' sub-accounts will
be restored to the sub-accounts of the partici-
pant. The trustee shall restore the
participant's account to active status.
A. Participatory Functions of Alternate Payees.
Alternate payees may not withdraw from any
sub-account, contribute to any sub-account, apply for
loans, apply for hardship withdrawals, or elect an
installment distribution. An alternate payee may not
change his or her investment direction of
sub-accounts, except in conjunction with a
distribution. The rights of an alternate payee are
limited to: receipt of a quarterly statement of his
or her account, receipt of the account proceeds in
accord with the terms of the DRO or the plan, a
change in the allocation of past contributions in
conjunction with a distribution , the right to all
claims procedures mandated by ERISA and the right to
obtain copies of the plan document and summary plan
description as mandated by ERISA. None of these
rights under the plan will be in effect until the
Committee certifies the pertinent DRO as qualified
and so notifies the alternate payee.
A. Distribution of Assets Valued at $3,500 or Less.
The Committee shall distribute any alternate payee's
account assets valued at $3,500 or less at any
valuation date. Upon the determination of the value
of the account, the alternate payee must file an
application for distribution. The Committee shall
file an application for distribution on behalf of the
alternate payee if s/he does not do so within 60 days
of the determination of the value of the account
pursuant to . If insufficient cash assets are
available to distribute because of loans allocated to
the account of the alternate payee, this mandatory
distribution will be delayed until there are
sufficient cash assets in the account.
[This section should be deleted effective 01-01-96.]
A. Distribution of Assets Valued at $3,500 or Less.
The Benefits Manager shall distribute any alternate
payee's account assets valued at $3,500 or less at
any valuation date. Upon the determination of the
value of the account, the alternate payee must apply
for distribution through the voice or other
electronic response system or other media authorized
by CG&E. The Benefits Manager shall apply for
distribution on behalf of the alternate payee if s/he
does not do so within 60 days of the determination of
the value of the account pursuant to . If
insufficient cash assets are available to distribute
because of loans allocated to the account of the
alternate payee, this mandatory distribution will be
delayed until there are sufficient cash assets in the
account.
[This section becomes effective on 01-01-96.]
A. Distribution of Assets Valued Over $3,500. If
an alternate payee's assets in the plan are valued
over $3,500, s/he is not eligible to receive a lump
sum distribution until the participant from whom
the account was derived reaches age 50, terminates
employment, or dies. An alternate payee who becomes
eligible for a distribution must file an application
for a lump sum distribution with the Committee no
later than the 90 days before the end of the year in
which the participant from whom the account was
derived becomes age 65. If the alternate payee does
not file the application for distribution in a timely
manner, the Committee shall file the application on
his or her behalf pursuant to .
[This section should be deleted effective 01-01-96.]
A. Distribution of Assets Valued Over $3,500. If
an alternate payee's assets in the plan are valued
over $3,500, s/he is not eligible to receive a lump
sum distribution until the participant from whom
the account was derived reaches age 50, terminates
employment, or dies. An alternate payee who becomes
eligible for a distribution must apply for a lump sum
distribution with the Benefits Manager through the
voice or other electronic response system or other
media authorized by CG&E no later than the 90 days
before the end of the year in which the participant
from whom the account was derived becomes age 65. If
the alternate payee does not apply for distribution
in a timely manner, the Benefits Manager shall apply
on his or her behalf pursuant to .
[This section becomes effective on 01-01-96.]
A. Window Cashouts for Alternate Payees.
1. Effective Date. Alternate payees who have
been awarded benefits from this plan shall be
given a one-time opportunity to receive a lump
sum payment of all their plan interest,
regardless of the amount of the present value of
the benefit.
1. Retroactivity of Provision. Alternate
payees who had been awarded plan benefits prior
to the effective date of this provision (April 1,
1991) shall also be given this one-time
opportunity to receive their total plan benefit.
1. Notification to Alternate Payees.
Notification to the alternate payee of this offer
shall allow a minimum of 30 days and a maximum of
90 days to make the irrevocable election to
receive the lump sum benefit.
1. Timing of Notification. The Committee shall
notify the alternate payee of the availability of
the window cashout as soon as practical after the
assets have been allocated to the account of the
alternate payee. Notice of the window
distribution shall be sent to alternate payee
with an account containing loan fund assets, but
shall indicate the delay in availability. See .
1. Effect of Failure to Elect Window Cashout.
The plan assets of an alternate payee who does
not elect a cashout under this section shall be
governed by the other plan rules regarding
distributions to alternate payees.
A. Death. In the event of an alternate payee's
death, his or her remaining plan assets will be
distributed to his or her estate.
A. Alternate Payees' Responsibilities. Alternate
payees must notify the Committee in writing of any
address changes, or the name and address of a
designated representative. The notification should
be signed and dated by the alternate payee and should
reference this plan, and the name of the participant
from whom the account derives.
A. Limitation on Distribution to Alternate Payees.
An alternate payee may not receive any mandatory or
elective distribution until the alternate payee's
account no longer includes loan fund assets, unless
the mandatory distribution is required by the IRC or
ERISA. An alternate payee may not receive any
elective distribution until all assets allocated to
the account of the alternate payee have become
vested.
FIDUCIARIES:
AUTHORITY & RESPONSIBILITY
ARTICLE
I. : FIDUCIARIES: AUTHORITY & RESPONSIBILITY
A. Fiduciary. Any person who exercises any
discretionary authority or discretionary control
respecting management or administration of the plan
or the trust pursuant to the provisions of ERISA.
A. Fiduciaries. The following are named as
fiduciaries:
1. the members of the Committee, and
1. the trustee.
A. Trustee.
1. Appointment. The board of directors shall
appoint a trustee for the plan. All assets of
the plan shall be held for use in accordance with
the plan in providing the benefits payable under
the plan and for such investment expenses as may
properly be incurred by the trustee.
1. Amendment. The trust agreement may be
amended and the trustee changed in the manner
provided in the trust agreement.
1. Responsibility. The responsibility for the
retention of the trust shall lie with the trustee
and not with the Committee.
1. Voting. The trustee shall vote the shares
of CINergy stock credited to the accounts of
beneficial owners in accordance with the
instructions given by the beneficial owner. If
the instructions are not received by the trustee
by the date it has designated prior to any annual
or special meeting of shareholders of CINergy,
the trustee shall vote the uninstructed shares at
its discretion. The trustee shall also vote at
its discretion the shares of CINergy stock held
in the company stock fund that have not been
allocated to participants' accounts as of the
record date of any annual or special meeting of
shareholders of CINergy.
A. Establishment of the Committee. The Committee
is the plan administrator, commonly referred to as
the DCIP Committee other than in this plan document.
The Committee shall consist of not more than five nor
less than three members, who shall be appointed by,
and serve at the pleasure of, the board of directors.
Members of the Committee may resign by delivering
written resignation to the board of directors.
Resignations shall become effective at delivery or at
any later date specified within the written
statement.
A. Organization of the Committee. The Committee
shall elect a chairperson from their number, and a
secretary and such other officers as the Committee
may designate, who may, but need not, be members of
the Committee, to serve at the pleasure of the
Committee. No member of the Committee who is also an
employee shall receive any compensation for services
as such member.
A. Powers of the Committee. The powers of the
Committee shall include, but not be limited to, the
following:
1. Appoint Committees. The Committee may ap-
point committees with any powers it deems neces-
sary, including an executive committee to
exercise all powers of the Committee between
meetings of the Committee.
1. Set Meetings. The Committee may determine
the times and places for holding meetings of the
Committee, and the notice to be given of the
meetings.
1. Establish a Quorum. The Committee shall
determine the number of members of the Committee
necessary to constitute a quorum for the
transaction of business. A quorum must be at
least a majority of the committee members.
1. Engage Assistants. The Committee may engage
agents and assistants, counsel, clerical,
medical, vocational, and accounting services as
required to carry out the provisions of the plan.
1. Establish an Agent. The Committee may
authorize one or more of their members or any
employee as its agent to make any payment, or to
execute or deliver any instrument on behalf of
the Committee or to perform any other function of
the Committee.
[This sub-section should be deleted effective 01-01-
96.]
1. Establish an Agent. The Committee may
authorize one or more of their members or any
employee as its agent to make any payment, or to
execute or deliver any instrument on behalf of
the Committee or to perform any other function of
the Committee. The Benefits Manager and the
General Manager of Human Resources Services shall
serve as agents of the Committee with respect to
the duties assigned to these persons under the
plan.
[This sub-section becomes effective on 01-01-96.]
1. Select Investment Funds. The Committee
shall establish, and change as appropriate, an
overall plan for providing a diversified group of
investments for the trust assets. The Committee
shall also select, and change as appropriate, the
various investment funds.
1. Litigate on Behalf of the Plan. The
Committee shall commence or defend litigation on
behalf of the plan and represent the plan in all
such proceedings before any court or other
tribunal.
1. Interpret the Plan. The Committee shall
interpret the
plan, resolve any ambiguities in the plan and
establish provisions for any circumstances not
provided for in the plan, in a manner fair to
plan participants in similar circumstances and
consistent with other plan provisions.
1. Determine Eligibility for Benefits. The
Committee shall determine eligibility for
benefits under the plan, including claims to
determine a participant's rights to benefits
under any former plan provision.
[This sub-section should be deleted effective 01-01-96.]
1. Determine Eligibility for Benefits. The
Benefits Manager, the General Manager of Human
Resources Services and the Committee shall
determine eligibility for benefits under the
plan, including claims to determine a
participant's rights to benefits under any former
plan provision.
[This sub-section becomes effective on 01-01-96.]
1. Approve or Deny Requests for Hardship
Withdrawals. The Committee shall approve or deny
requests for hardship withdrawals, subject to
the availability of monies, under the provisions
of the plan.
[This sub-section should be deleted effective 10-17-
95.]
1. Approve or Deny Requests for Hardship
Withdrawals. The Senior Manager of Human
Resource Strategy shall approve or deny requests
for hardship withdrawals, subject to the
availability of monies, under the provisions of
the plan.
[This sub-section becomes effective on 10-17-95 and
should be deleted effective 01-01-96.]
1. Approve or Deny Requests for Hardship
Withdrawals. The Benefits Manager shall approve
or deny requests for hardship withdrawals,
subject to the availability of monies, under the
provisions of the plan. If a request for a
hardship withdrawal is denied or a participant
does not receive a response within 30 days from
the day the request was made to the Benefits
Manager, then the participant may make a request
to the General Manager of Human Resources
Services for a hardship withdrawal. If a
participant's request is denied by the General
Manager of Human Resources Services, or a
participant does not receive a response within 60
days from the day the request was made to the
General Manager of Human Resources Services, then
the participant may petition the Committee to
receive a hardship withdrawal. The Committee's
decision as to a participant's hardship
withdrawal request shall be final. See .
[This sub-section becomes effective on 01-01-96.]
1. Accept or Reject DROs . The Committee
shall determine if a DRO which directs allocation
of plan benefits to one or more alternate payees
is qualified.
1. Adopt Procedures. The Committee may estab-
lish rules, regulations and procedures
necessary for the administration of the plan and
the transaction of its business.
1. Amend the Plan. The Committee may adopt any
amendment to ensure the continued qualification
of the plan and trust under IRC 401(a) and
501(a), to comply with the provisions of any
federal statute or regulation impacting pension
plans, to enhance the delivery of benefits to
participants and beneficiaries, to ease plan
administration, or to respond to the withdrawal
of CG&E or any of its subsidiaries from the plan.
No amendment shall substantially increase the
cost of the plan without the consent of the board
of directors.
1. Require Accounting. The Committee may
request accounting and other information from the
trustee.
1. Direct the Trustee. The Committee may
direct the trustee, by written instrument, to
take action consistent with plan administration
and the trust agreement.
1. Approve or Deny Requests for Rollover
Contributions. The Committee shall approve or
deny requests for rollover contributions to the
plan.
[This sub-section becomes effective on 01-01-96.]
A. Committee Actions. All resolutions or other
actions taken by the Committee at any meeting shall
be by the vote of a majority of the members of the
Committee attending the meeting. Any decision or
determination reduced to writing and signed by a
majority of the members of the Committee shall be as
fully effective as if it had been made by a majority
vote at a meeting.
A. Accounts and Reports. The Committee shall
maintain records of its actions and other data
necessary for the administration of the plan. The
Committee shall prepare and file any reports required
by ERISA or the IRC. A copy of these reports shall
be maintained in the office of the secretary of the
Committee.
A. Action Taken in Good Faith. CG&E, the board of
directors, officers and employees of CG&E shall be
entitled to rely upon all information furnished by
the accountant, trustee, and all opinions given by
legal counsel. CG&E, the board of directors,
officers and employees of CG&E, and any person acting
as a fiduciary under the plan shall be fully pro-
tected from liability for any action taken, or
permitted by them in good faith, in reliance upon any
such information furnished by the accountant,
trustee, or legal counsel.
A. Decisions Final and Binding. The decisions of
the Committee on any matter within its authority
shall be made in the sole discretion of the Committee
and shall be final and binding on all parties,
including, but not limited to, CG&E, participants,
terminated participants, beneficiaries and alternate
payees.
A. Insurance. CG&E may purchase insurance to cover
liability of one or more persons who serve in a
fiduciary capacity with regard to this plan.
A. Trust. The fund established under the trust
agreement to which all deferred contributions,
optional contributions, company-matched
contributions, and company-matched stock incentive
contributions are made and from which benefits are
solely paid under the terms of the plan. Neither
CG&E nor its subsidiaries shall be required to make
direct payment of any benefit under the plan.
[This section should be deleted effective 01-01-96.]
A. Trust. The fund established under the trust
agreement to which all deferred contributions,
optional contributions, company-matched
contributions, company-matched stock incentive
contributions, and rollover contributions are made
and from which benefits are solely paid under the
terms of the plan. Neither CG&E nor its subsidiaries
shall be required to make direct payment of any
benefit under the plan.
[This section becomes effective on 01-01-96.]
A. Trust Agreement. The trust agreement is the
contract between CG&E's board of directors and the
trustee governing the duties and rights of the
trustee with regard to plan funds. In accordance
with the trust agreement, the trustee shall invest
all deferred contributions, optional contributions,
company-matched contributions, and company-matched
stock incentive contributions, and earnings thereon,
in the various investment funds.
[This section should be deleted effective 01-01-96.]
A. Trust Agreement. The trust agreement is the
contract between CG&E's board of directors and the
trustee governing the duties and rights of the
trustee with regard to plan funds. In accordance
with the trust agreement, the trustee shall invest
all deferred contributions, optional contributions,
company-matched contributions, company-matched stock
incentive contributions, and rollover contributions,
and earnings thereon, in the various investment
funds.
[This section becomes effective on 01-01-96.]
A. Plan and Employer Identification Numbers. The
three-digit plan identification number is 004.
CG&E's employer identification number is 31-0240030.
The Committee's employer identification number is 31-
0910812.
ADMINISTRATIVE PROVISIONS
ARTICLE
I. : ADMINISTRATIVE PROVISIONS
A. Filing Documents with the Plan.
1. Filing Date. Generally, documents addressed
to the Committee or forms prepared for use by
plan participants will be considered to be filed
with the Committee or the plan on the day when
they are received by any employee benefits
coordinator within CG&E's Human Resources
Department or the monthly payroll administrator.
1. DROs. On the day a DRO is received by
CG&E's Legal Department, Human Resources
Department, or the secretary of the Committee, it
will be considered to be filed with the
Committee.
1. Forms. Forms prepared under the aegis of
the SIP Committee or the Committee for the plan
will be accepted for use under the plan unless
the particular form is inappropriate for use
under this plan or has been supplanted by a
revised form.
A. Benefit Claims Process.
1. Written Request. Any person who claims a
benefit under this plan must file the request in
writing with the Committee.
1. Denial of a Claim. If the Committee denies
the benefit in full or in part, it will send a
detailed written reply to the claimant within 90
days after the claim was filed. The written
reply will include the following:
a) the specific reason(s) for the denial,
referencing any specific plan provisions upon
which the decision depends; and
a) a request for any additional information
available to the claimant in support of his
or her position and an explanation, if any,
of why it would be of assistance in resolving
the claim; and
a) the procedures available for a further
review of the claim.
1. Automatic Denial. If the Committee has not
responded in writing to the participant within 90
days of the filing of the benefit claim, the
participant may consider the claim to have been
denied and pursue the request for
reconsideration.
1. Acceptance of a Claim. If the Committee
grants the claim, payment will commence within 90
days of receipt of the claim, or a notice of
acceptance will be sent to the claimant if
commencement of payment is not feasible within
that time frame.
1. Reconsideration of Denial. The claimant may
apply in writing to the Committee for
reconsideration of the claim. The claimant must
file for reconsideration within 60 days of
receiving the notice of denial. The claimant or
his or her authorized representative may request
the opportunity to review pertinent plan
documents and submit a written statement of
issues and comments, in conjunction with the
request for reconsideration.
1. Time-frame for Reconsideration. The
Committee will render a decision within 60 days
after it receives the request for
reconsideration. If special circumstances
require extension of time for processing the
request, the decision by the Committee will be
issued within 120 days after it receives the re-
quest for reconsideration.
1. Claimant's Representative. A claimant for
plan benefits may act on his or her own behalf,
or may use a representative who is authorized to
act on behalf of the claimant, throughout the
administrative claim process.
1. Exhaustion of Administrative Remedies. If
the claim for benefits is denied or ignored in
full or in part, the claimant may file suit in
federal court to pursue the claim.
[This section should be deleted effective 01-01-96.]
A. Benefit Claims Process.
a) Written Request. Any person who claims a
benefit under this plan must file the request in
writing with the Benefits Manager.
b) Denial of a Claim or Failure to Respond by
Benefits Manager. If the Benefits Manager denies
the benefit in full or in part or fails to
respond within 30 days from the day a claimant
files his or her written request, then the
claimant may petition the General Manager of
Human Resources Services to review the claim.
c) Denial of a Claim by the General Manager of
Human Resources Services. If the General Manager
of Human Resources Services denies the benefit in
full or in part, he or she will send a detailed
written reply to the claimant within 60 days
after the claim was filed with the General
Manager of Human Resources Services. The written
reply will include the following:
1) the specific reason(s) for the denial,
referencing any specific plan provisions upon
which the decision depends; and
2) a request for any additional information
available to the claimant in support of his
or her position and an explanation, if any,
of why it would be of assistance in resolving
the claim; and
3) the procedures available for a further
review of the claim by the Committee.
d) Automatic Denial. If the General Manager of
Human Resources Services has not responded in
writing to the claimant within 60 days of the
filing of the benefit claim with the General
Manager of Human Resources Services, the claimant
may consider the claim to have been denied and
pursue the request for reconsideration with the
Committee.
e) Acceptance of a Claim. If the General Manager
of Human Resources Services grants the claim,
payment will commence within 60 days of receipt
of the claim by the General Manager of Human
Resources Services, or a notice of acceptance
will be sent to the claimant if commencement of
payment is not feasible within that time frame.
f) Reconsideration of Denial by the Committee.
The claimant may apply in writing to the
Committee for reconsideration of the claim. The
claimant must file for reconsideration within 60
days of receiving the notice of denial from the
General Manager of Human Resources Services. The
claimant or his or her authorized representative
may request the opportunity to review pertinent
plan documents and submit a written statement of
issues and comments, in conjunction with the
request for reconsideration.
g) Time-frame for Reconsideration. The Committee
will render a decision within 60 days after it
receives the request for reconsideration. If
special circumstances require extension of time
for processing the request, the decision by the
Committee will be issued within 120 days after it
receives the request for reconsideration.
h) Claimant's Representative. A claimant for
plan benefits may act on his or her own behalf,
or may use a representative who is authorized to
act on behalf of the claimant, throughout the
administrative claim process.
i) Exhaustion of Administrative Remedies. If the
claim for benefits is denied or ignored in full
or in part upon reconsideration by the Committee,
the claimant may file suit in federal court to
pursue the claim.
[This section becomes effective on 01-01-96.]
A. Uniform Administration. Decisions or actions of
the Committee with respect to the eligibility for or
nature of benefits to be provided under this plan
shall be uniformly applied to all persons similarly
situated.
[This section should be deleted effective 01-01-96.]
A. Uniform Administration. Decisions or actions of
the Benefits Manager, the General Manager of Human
Resources Services, and the Committee with respect to
the eligibility for or nature of benefits to be
provided under this plan shall be uniformly applied
to all persons similarly situated.
[This section becomes effective on 01-01-96.]
A. Statutory Construction. The plan shall be
construed, enforced, and administered according to
the laws of the State of Ohio as to any matter not
preempted by ERISA. In any case that a provision of
the plan is held illegal or invalid for any reason,
it shall not affect the remaining provisions of the
plan. However, the plan shall be construed,
enforced, and administered as if the illegal
provision had not been included in the plan.
A. Limitation of Rights of the Employee. The plan
is strictly a voluntary undertaking on the part of
CG&E. The plan is not a contract between CG&E and
any employee. The plan does not constitute
consideration for, or an inducement or condition of,
the employment of any employee. Nothing contained in
the plan gives any employee the right to be retained
in the service of CG&E or to interfere with the right
of CG&E to discharge any employee at any time. A
participant does not have any right or claim to a
benefit under the plan except upon fulfilling all of
the conditions of eligibility and qualification. The
participant's right to receive the benefit must have
become fixed under the terms of the plan and there
must be funds available in the trust sufficient to
pay the benefit.
A. Alienation of Benefits. Benefits under the plan
shall not be subject in any manner to alienation or
assignment. Any attempt to assign or alienate plan
benefits shall be void, whether such sums remain with
the trustee or are in the course of transmission to
the person entitled to them. However, benefits are
subject to DROs accepted by the Committee.
A. Response to Attempted Alienation. If any
participant, pensioner, beneficiary, or alternate
payee under the plan becomes bankrupt or attempts to
alienate or assign any benefit under the plan, except
as specifically provided in the plan or by law, then
his or her benefit shall terminate. In that event
the Committee shall hold the assets of the affected
participant, pensioner, beneficiary, or alternate
payee for his or her benefit.
A. Correction of Inadvertent Error. The Committee
may, in its discretion, recoup any benefit payment,
or correct any loan, withdrawal, or other error made
in contravention of any plan provision, whether by
mistake, inadvertence or misrepresentation. Recovery
of overpayment may be accomplished by withholding
from future benefits due the individual who was
enriched by the overpayment, or may be pursued by any
other feasible and appropriate manner of collection.
Other corrections shall be made in the manner deemed
most feasible by the Committee.
A. Information from Beneficial Owners.
1. Each beneficial owner shall be required to
furnish the Committee, in the form prescribed by
it, such personal data, affidavits, authorization
to obtain information, and other information as
the Committee may deem appropriate for the proper
operation and administration of the plan.
1. Misrepresentations of fact by a beneficial
owner to the extent that affects their
participation or benefits hereunder shall be
handled in accordance with the rules of the
Committee. In no event shall CG&E, the
Committee, or the trustee have an obligation to
provide such a beneficial owner with benefits in
excess of those which would have been provided
under the plan if there had been no misstatement
or misrepresentation.
A. Facility of Payment. If the Committee
determines from evidence that a claimant entitled to
receive benefits under this plan is (at the time the
benefit is payable) physically, mentally, or legally
incompetent to receive such benefit and give valid
receipt therefore, and that another person or an
institution is then maintaining or has custody of
such incompetent individual, and that no guardian,
custodian or other representative of the estate of
such incompetent individual has been appointed, the
Committee may cause payment to be made to that person
or institution having custody or maintaining the
participant, former participant or beneficiary. The
payment, to the extent made, shall operate as a
complete discharge of the Committee, CG&E, and the
trustee.
[This section should be deleted effective 01-01-96.]
A. Facility of Payment. If the Benefits Manager
determines from evidence that a claimant entitled to
receive benefits under this plan is (at the time the
benefit is payable) physically, mentally, or legally
incompetent to receive such benefit and give valid
receipt therefore, and that another person or an
institution is then maintaining or has custody of
such incompetent individual, and that no guardian,
custodian or other representative of the estate of
such incompetent individual has been appointed, the
Benefits Manager may cause payment to be made to that
person or institution having custody or maintaining
the participant, former participant or beneficiary.
The payment, to the extent made, shall operate as a
complete discharge of the Committee, CG&E, and the
trustee.
[This section becomes effective on 01-01-96.]
A. Lost Beneficial Owner. Any benefit payment
under the plan shall be forfeited if the Committee,
after reasonable effort, is unable to locate the
person to whom payment is due. However, any
forfeited benefit shall be restored if a valid claim
is made for the forfeited benefit; first from
forfeitures, and then from company-matched
contributions and company-matched stock incentive
contributions.
[This section should be deleted effective 01-01-96.]
A. Lost Beneficial Owner. Any benefit payment
under the plan shall be forfeited if the Benefits
Manager, after reasonable effort, is unable to locate
the person to whom payment is due. However, any
forfeited benefit shall be restored if a valid claim
is made for the forfeited benefit; first from
forfeitures, and then from company-matched
contributions and company-matched stock incentive
contributions.
[This section becomes effective on 01-01-96.]
A. Vested Right. No person shall have any vested
rights under the plan except to the extent that
vested rights may accrue to him or her as provided
under the plan. Furthermore, any person with vested
rights under the plan shall look solely to the assets
of the plan for satisfaction of his or her vested
rights.
A. Satisfaction of Claims. Any payment to any
beneficial owner in accordance with the terms of the
plan shall, to the extent thereof, be in full
satisfaction of all claims hereunder, whether they be
against CG&E, the Committee, or the trustee, any of
whom may require the beneficial owner or his or her
legal representative, as a condition precedent to any
payment, to execute a release and receipt therefore.
A. Plan Amendment Procedure. This plan may be
amended from time to time as necessary for compliance
with laws or regulations, or to meet the needs of
covered employees or the plan sponsor. The board of
directors, Committee members, human resources
personnel, trustee and/or record keeper personnel,
plan accountants, actuaries and attorneys, and plan
participants or beneficial owners may propose or
recommend amendments. Proposed amendments will be
discussed and adopted or rejected at Committee
meetings. Those proposing amendments are not
entitled to attend the meetings when the amendments
are considered. In general the Committee has the
authority to adopt amendments, but the board of
directors reserves the authority to adopt amendments
which have a significant effect upon the funding or
cost of the plan. Amendments adopted will be
reflected in the appropriate meeting minutes. Plan
attorneys will incorporate adopted amendments into
the plan document. Material modifications will be
included in the summary of material modifications
sent to participants periodically for attachment to
the summary plan description of this plan, and
eventually incorporated into the summary plan
description itself.
MISCELLANEOUS PROVISIONS
ARTICLE
I. : MISCELLANEOUS PROVISIONS
A. Expenses. The operating expenses of the plan,
including fees paid to a servicing organization and
fees for professional services and technical or
clerical assistance, are generally paid by CG&E with
some charges specifically allocated to participants
by plan terms. CG&E reserves the right to shift some
or all of the expenses it pays to the investment
funds and/or to the individual beneficial owners.
A. Number. Any use of the singular shall be
interpreted to include the plural and the plural the
singular.
A. Plan Procedures.
1. Conflicts between Plan and Procedures.
Procedures must be in accordance with the plan as
it is then being administered. Any conflict
between written procedures and written plan
terms, or plan terms required by law, adopted by
the board of directors, or the Committee pursuant
to the authority delegated to it, shall be
resolved in favor of the plan terms, as
administered.
1. Sunset Provision. Any procedure, if not
examined and re-authorized by the Committee,
shall automatically expire on the date 5 years
from its date of publication.
1. Expired Procedures. Any expired procedure
may be consulted for its historical value in
relation to plan administration, but it shall not
be dispositive of the administrative decision.
A. Titles and Headings. The names of articles,
table of contents, section and sub-section headings,
and the index of the plan have been inserted for
convenience of reference. In the event of any
conflict, the text of the plan, rather than titles,
headings, etc., shall control.
A. Merger, Consolidation, and Transfer of Assets.
Before this plan can be merged or consolidated with
any other plan, or its assets or liabilities
transferred to another plan, each participant in the
plan must be entitled to receive a benefit
immediately after the merger, transfer, or
consolidation (as if the plan had then terminated)
which is equal to or greater than the benefit he/she
would have been entitled to receive immediately
before the merger, consolidation or transfer (as if
the plan had then terminated). This plan will accept
the transfer of funds from the SIP in accordance with
. As a general rule, this plan will not accept a
transfer of assets from any other plan for any
reason, including rollovers and mergers.
[This section should be deleted effective 01-01-96.]
A. Merger, Consolidation, and Transfer of Assets.
Before this plan can be merged or consolidated with
any other plan, or its assets or liabilities
transferred to another plan, each participant in the
plan must be entitled to receive a benefit
immediately after the merger, transfer, or
consolidation (as if the plan had then terminated)
which is equal to or greater than the benefit he/she
would have been entitled to receive immediately
before the merger, consolidation or transfer (as if
the plan had then terminated). This plan will accept
the transfer of funds from the SIP in accordance with
. This plan will accept rollovers from other
qualified retirement plans.
[This section becomes effective on 01-01-96.]
A. Transfer of ESOP Funds. The plan will accept a
one-time transfer of assets, at the election of
participants in the CG&E Employee Stock Ownership
Plan (ESOP), from the terminated ESOP at the time the
ESOP assets are disbursed directly from the ESOP Plan
Trustee to the Trustee of this plan.
A. Service of Process. The secretary of the
Committee shall be the designated agent of the plan
for the service of process in connection with all
matters affecting the plan.
A. Warranties. Neither CG&E nor the Committee nor
the trustee warrant against any loss or diminution in
the value of accounts.
A. Adoption of the Plan by Subsidiaries. Any
subsidiary of CG&E may participate in the plan by
indicating its intention to that effect in writing
and delivering a copy of the instrument to the board
of directors and the trustee for acceptance in
writing. Upon acceptance by the board and the
trustee, the subsidiary will be bound by the terms of
the plan and the trust agreement, and all subsequent
plan amendments. Plan amendments are not subject to
review or approval by any subsidiary which has
elected to participate in the plan. A subsidiary may
withdraw from plan participation at any time by
delivery of its written intent to withdraw at least
60 days in advance of the effective date of the
withdrawal.
DISCRIMINATION TESTING
ARTICLE
I. : DISCRIMINATION TESTING
A. Definitions. The following terms are defined
for the purpose of this Article only.
1. Average Contribution Percentage (ACP). The
ACP is the average of the ratios, calculated
separately for each eligible employee [see ,
and ], of the sum of the eligible employee's
optional contributions, company-matched
contributions, company-matched stock incentive
contributions which are fully vested or are for
participants who actually make deferred
compensation or optional contributions for the
plan year, and any recharacterized deferred
compensation contributions, to the eligible
employee's compensation for the plan year.
[This sub-section should be deleted effective 01-01-97.]
1. Average Contribution Percentage (ACP). The
ACP is the average of the ratios, calculated
separately for each eligible employee [see ,
and ], of the sum of the eligible employee's
optional contributions, company-matched
contributions, company-matched stock incentive
contributions which are fully vested or are for
participants who actually make deferred
compensation contributions for the plan year, and
any recharacterized deferred compensation
contributions, to the eligible employee's
compensation for the plan year.
[This sub-section becomes effective on 01-01-97.]
1. Actual Deferral Percentage (ADP). The ADP
is the average of the ratios, calculated
separately for each eligible employee, of the
amount of deferred compensation contributions
made on behalf of the eligible employee for the
plan year, to the eligible employee's
compensation for that plan year.
1. Compensation. Compensation is the total
wages earned and other compensation including
amounts paid for sick pay, moving expense
payments and reimbursements that are not
deductible under IRC 217. Compensation also
includes employer contributions under this plan
and Code Section 125 plans which are not
currently taxable to the employee. Premiums for
group term life insurance that exceed the IRC
79(a) limits are also included in compensation.
Compensation is limited to $150,000 as adjusted
by the Internal Revenue Commissioner for
increases in the cost of living in accordance
with IRC 401(a)(17)(B) in the same manner as
base pay is limited.
1. Excess Aggregate Contributions. A
participant's excess aggregate contribution for
any year is the excess of
a) The total amount of the
contributions taken into account in
computing the numerator of the ACP for a plan
year for that participant over
a) the maximum amount of that participant's
contributions permitted by the ACP test.
1. Excess Contributions. A participant's
excess contribution for any year is the excess of
a) The total amount of his or her
contributions taken into account in computing
the numerator of the ADP for a plan year over
a) the maximum amount of his or her
contributions permitted by the ADP test.
1. Highly Compensated Employee.
a) A highly compensated employee is any
employee who, during the plan year or the
preceding plan year, (A) was at any time a 5%
owner, (B) received compensation in excess of
$75,000 (or such larger amount as may be
determined by the Secretary of Treasury
pursuant to IRC 415(d)), (C) received
compensation in excess of $50,000 (or such
larger amount as may be determined by the
Secretary of Treasury pursuant to IRC 415(d)
and was in the top-paid group of employees
for such plan year, or (D) was at any time an
officer and received compensation greater
than 50% of the amount in effect under IRC
415(b)(1)(A) for such plan year. Provided,
sub-sections (B) through (D) shall apply to
an employee meeting such criteria in the plan
year only if such employee is also one of the
100 employees who received the most
compensation from CG&E during the plan year.
For purposes of this sub-section ,
"compensation" shall include compensation
from CG&E and any employer required to be
aggregated with CG&E under IRC 414(b), c),
(m) or (o).
a) A highly compensated employee is any
employee who (A) separated from service with
CG&E, or is deemed to have separated from
service, prior to the plan year, (B) performs
no service for CG&E during the plan year, and
was a highly compensated employee during
either the plan year in which such separation
from service occurred or in any plan year
ending on or after the employee's 55th
birthday.
a) The maximum number of officers which
will be considered highly compensated
employees for a plan year or preceding plan
year pursuant to 1)D) above is the lesser of
(A) 50 or (B) the greater of three employees
or 10% of CG&E's employees. If no officer of
CG&E received compensation greater than 50%
of the amount in effect under IRC
415(b)(1)(A) for the plan year or the
preceding plan year, the highest paid officer
for such plan year shall be treated as a
highly compensated employee.
a) For purposes of 15.1g)1)(C) above, an
employee shall be considered a member of the
"top paid group" for any year if such
employee is in the group consisting of the
top 20% of the employees of CG&E when ranked
on the basis of compensation paid during the
year, pursuant to IRC 414(q)(4).
a) If an employee is a "family member" of a
highly compensated employee who is a 5% owner
(or an employee who was a highly compensated
employee by reason of being a 5% owner during
the plan year in which the employee separated
from service with CG&E or any plan year
ending on or after the employee's 55th
birthday) during the plan year or the
preceding plan year, or a family member of
one of the 10 most highly compensated
employees of CG&E ranked on the basis of
compensation paid by CG&E during the plan
year, then the family member and the highly
compensated employee shall be aggregated. In
such case, the family member and highly
compensated employee shall be treated as a
single employee receiving compensation and
contributions equal to the sum of the
compensation and contributions of the family
member and highly compensated employee. For
purposes of , the term "family member" shall
include the spouse, lineal ascendants and
descendants of an employee or former employee
and the spouses of such lineal ascendants and
descendants.
a) For purposes of determining whether an
employee is a highly compensated employee,
the provisions of IRC 414(q), and the
regulations thereunder, shall apply.
[This sub-section should be deleted effective 01-01-
97.]
1. Highly Compensated Employee.
a) A highly compensated employee is any
employee who (A) was at any time a 5% owner
during the plan year or the preceding plan
year, or (B) received compensation for the
preceding plan year in excess of $80,000 (or
such larger amount as may be determined by
the Secretary of Treasury pursuant to IRC
415(d)) and if CG&E elects, was in the
top-paid group of employees for such
preceding plan year.
a) A highly compensated employee is any
employee who (A) separated from service with
CG&E, or is deemed to have separated from
service, prior to the plan year, (B) performs
no service for CG&E during the plan year, and
was a highly compensated employee during
either the plan year in which such separation
from service occurred or in any plan year
ending on or after the employee's 55th
birthday.
a) For purposes of 15.1h)1)(B) above, an
employee shall be considered a member of the
"top paid group" for any year if such
employee is in the group consisting of the
top 20% of the employees of CG&E when ranked
on the basis of compensation paid during the
preceding plan year, pursuant to IRC
414(q)(4).
a) For purposes of determining whether an
employee is a highly compensated employee,
the provisions of IRC 414(q), and the
regulations thereunder, shall apply.
[This sub-section becomes effective on 01-01-97.]
A. ADP Testing. The ADP for highly compensated
eligible employees for each plan year must satisfy
one of the following tests :
1. The ADP Test. The ADP for highly
compensated eligible employees for the plan year
shall not exceed the ADP for non-highly
compensated eligible employees for the plan year,
multiplied by 1.25.
1. The ADP Alternative Limitation Test. The
ADP for highly compensated eligible employees for
the plan year shall not exceed the lesser of
a) 2 times the ADP for non-highly
compensated eligible employees for the plan
year or,
a) 2 percentage points, plus the ADP, for
non-highly compensated eligible employees.
[This section should be deleted effective 01-01-97.]
A. ADP Testing. The ADP for highly compensated
eligible employees for each plan year must satisfy
one of the following tests :
1. The ADP Test. The ADP for highly
compensated eligible employees for the plan year
shall not exceed the ADP for non-highly
compensated eligible employees for the preceding
plan year (unless CG&E elects to use current plan
year percentages), multiplied by 1.25.
1. The ADP Alternative Limitation Test. The
ADP for highly compensated eligible employees for
the plan year shall not exceed the lesser of
a) 2 times the ADP for non-highly
compensated eligible employees for the
preceding plan year (unless CG&E elects to
use current plan year percentages) or,
a) 2 percentage points, plus the ADP, for
non-highly compensated eligible employees for
the preceding plan year (unless CG&E elects
to use current plan year percentages).
[This section becomes effective on 01-01-97.]
A. ACP Testing. The ACP test will be performed
following any recharacterization of deferred
contributions required by . The ACP for highly
compensated eligible employees for each plan year
must satisfy one of the following tests :
1. The ACP Test. The ACP for highly
compensated eligible employees for the plan year
shall not exceed the ACP for non-highly
compensated eligible employees for the plan year,
multiplied by 1.25.
1. The ACP Alternative Limitation Test. The
ACP for highly compensated eligible employees for
the plan year shall not exceed the lesser of
a) 2 times the ACP for non-highly
compensated eligible employees for the plan
year or,
a) 2 percentage points, plus the ACP, for
non-highly compensated eligible employees.
[This section should be deleted effective 01-01-97.]
A. ACP Testing. The ACP test will be performed
following any recharacterization of deferred
contributions required by . The ACP for highly
compensated eligible employees for each plan year
must satisfy one of the following tests :
1. The ACP Test. The ACP for highly
compensated eligible employees for the plan year
shall not exceed the ACP for non-highly
compensated eligible employees for the preceding
plan year (unless CG&E elects to use current plan
year percentages), multiplied by 1.25.
1. The ACP Alternative Limitation Test. The
ACP for highly compensated eligible employees for
the plan year shall not exceed the lesser of
a) 2 times the ACP for non-highly
compensated eligible employees for the
preceding plan year (unless CG&E elects to
use current plan year percentages) or,
a) 2 percentage points, plus the ACP, for
non-highly compensated eligible employees for
the preceding plan year (unless CG&E elects
to use current plan year percentages).
[This section becomes effective on 01-01-97.]
A. Multiple Use of Alternative Limitation. If
neither the ADP nor the ACP for highly compensated
employees meets the tests in and , the multiple
use test of the alternative limitation must be
satisfied for the plan year. In order to satisfy the
multiple use test of the alternative limitation, the
sum of the ACP for highly compensated employees and
the ADP for highly compensated employees may not
exceed the greater of the following :
1. the sum of:
a) 1.25 times the greater of the ADP or the
ACP for non-highly compensated eligible
employees, and
a) the lesser of:
(1) 2 percentage points plus the lesser
of the ADP or ACP for the non-highly
compensated eligible employees, or
(1) 2 times the lesser of the ADP or ACP
of the non-highly compensated eligible
employees; or
1. the sum of:
a) 1.25 times the lesser of the ADP or the
ACP for non-highly compensated eligible
employees, and
a) the lesser of:
(1) 2 percentage points plus the greater
of the ADP or ACP of non-highly
compensated eligible employees, or
(1) 2 times the greater of the ADP or
ACP of non-highly compensated eligible
employees.
[This section should be deleted effective 01-01-97.]
A. Multiple Use of Alternative Limitation. If
neither the ADP nor the ACP for highly compensated
employees meets the tests in and , the multiple
use test of the alternative limitation must be
satisfied for the plan year. In order to satisfy the
multiple use test of the alternative limitation, the
sum of the ACP for highly compensated employees and
the ADP for highly compensated employees may not
exceed the greater of the following :
1. the sum of:
a) 1.25 times the greater of the ADP or the
ACP for non-highly compensated eligible
employees for the preceding plan year (unless
CG&E elects to use current plan year
percentages), and
a) the lesser of:
(1) 2 percentage points plus the lesser
of the ADP or ACP for the non-highly
compensated eligible employees for the
preceding plan year (unless CG&E elects
to use current plan year percentages), or
(1) 2 times the lesser of the ADP or ACP
of the non-highly compensated eligible
employees for the preceding plan year
(unless CG&E elects to use current plan
year percentages); or
1. the sum of:
a) 1.25 times the lesser of the ADP or the
ACP for non-highly compensated eligible
employees for the preceding plan year (unless
CG&E elects to use current plan year
percentages), and
a) the lesser of:
(1) 2 percentage points plus the greater
of the ADP or ACP of non-highly
compensated eligible employees for the
preceding plan year (unless CG&E elects
to use current plan year percentages), or
(1) 2 times the greater of the ADP or
ACP of non-highly compensated eligible
employees for the preceding plan year
(unless CG&E elects to use current plan
year percentages).
[This section becomes effective on 01-01-97.]
A. Corrective Procedure If ADP Limitation Exceeded.
If the plan fails the ADP test provided for in this
Article, the following procedure will be followed:
1. Reduction of Highly Compensated
Participants' ADP. The ADP for highly
compensated participants shall be reduced to the
maximum acceptable level determined by the ADP
test. In determining the amount of excess
contributions for each highly compensated
participant, the highest ratio will be reduced to
the next highest ratio until the maximum allowed
percentage is reached .
[This sub-section should be deleted effective 01-01-
97.]
1. Reduction of Highly Compensated
Participants' ADP. The ADP for highly
compensated participants shall be reduced to the
maximum acceptable level determined by the ADP
test. Excess contributions will be returned to
the highly compensated participants who
contributed the largest dollar amounts until the
maximum allowed percentage is reached .
[This sub-section becomes effective on 01-01-97.]
1. Recharacterization of Excess Contributions.
The amount resulting from a reduction in a
participant's deferred compensation contributions
in or above shall be recharacterized as
optional contributions and treated as taxable
income to the participant in the tax year in
which the participant would have received them if
he or she had originally elected to receive them
in cash. This recharacterization normally will
be made within 2 1/2 months after the close of
the plan year .
A. Corrective Procedure if ACP Limitation Exceeded.
If the plan fails the ACP test, the following
procedure will be followed, after recharacterizing
any deferred compensation contributions required
under or :
1. Reduction of Highly Compensated
Participants' ACP. The ACP for highly
compensated participants shall be reduced to the
maximum acceptable level determined by the ACP
test. In determining the amount of excess
aggregate contributions for each highly
compensated participant, the highest ratio will
be reduced to the next highest ratio until the
maximum allowed percentage is reached.
[This sub-section should be deleted effective 01-01-
97.]
1. Reduction of Highly Compensated
Participants' ACP. The ACP for highly
compensated participants shall be reduced to the
maximum acceptable level determined by the ACP
test. Excess aggregate contributions will be
returned to the highly compensated participants
who contributed the largest dollar amounts until
the maximum allowed percentage is reached.
[This sub-section becomes effective on 01-01-97.]
1. Disposition of Excess Aggregate
Contributions. The aggregate excess
contributions resulting from a reduction in a
highly compensated participant's ACP ratio in
shall be disposed of as follows:
a) Excess Optional Contributions. Any
excess optional contributions, plus the net
of any income or loss attributable to
optional contributions as of the last day of
the plan year, normally will be distributed
to the participant within 2 1/2 months after
the end of the plan year. However, if
distributions are not made by that time,
distributions shall be made within 12 months
after the close of the plan year.
a) Excess Company-Matched Contributions.
Any excess company-matched contributions
which are not vested will be treated as
forfeitures under . Any excess vested
company-matched contributions plus the net
of any income or loss attributable to the
excess company-matched contributions as of
the end of the plan year, shall normally be
distributed to the participant within 2 1/2
months after the end of the plan year.
However, if distributions are not made by
that time, distributions shall be made within
12 months after the close of the plan year.
a) Excess Company-Matched Stock Incentive
Contributions. Any excess company-matched
stock incentive contributions which are not
vested will be treated as forfeitures under
. Any excess vested company-matched stock
incentive contributions plus the net of any
income or loss attributable to the excess
company-matched stock incentive contributions
as of the end of the plan year, shall
normally be distributed to the participant
within 2 1/2 months after the end of the plan
year. However, if distributions are not
made by that time, distributions shall be
made within 12 months after the close of the
plan year.
A. Corrective Procedure if the Test for the
Multiple Use of Alternative Limitation is Exceeded.
If the plan fails the test for the multiple use of
the alternative limitation, the following procedure
will be followed:
1. Simultaneous Reduction of the ADP and ACP of
Highly Compensated Participants. After
determining the amount of excess contributions
and excess aggregate contributions for each
highly compensated participant, the participants
with the highest individual ADP and ACP ratios
will have their ratios reduced to the next
highest ADP and ACP ratio, until the maximum
multiple use limit is reached.
[This sub-section should be deleted effective 01-01-
97.]
1. Simultaneous Reduction of the ADP and ACP of
Highly Compensated Participants. After
determining the amount of excess contributions
and excess aggregate contributions for each
highly compensated participant, the participants
who contributed the largest dollar amounts will
have their contributions returned, until the
maximum multiple use limit is reached.
[This sub-section becomes effective on 01-01-97.]
1. Disposition of Excess Contributions and
Excess Optional Contributions and Excess Vested
Company-Matched Contributions and Excess Vested
Company-Matched Stock Incentive Contributions.
Any excess contributions, optional contributions,
vested company-matched contributions and vested
company-matched stock incentive contributions
which are determined by the application of or ,
plus the net of any income or loss attributable
to the excess contributions, optional
contributions, vested company-matched
contributions and vested company-matched stock
incentive contributions as of the last day of the
plan year, shall normally be distributed to the
participant within 2 1/2 months after the end of
the plan year. However, if distributions are
not made by that time, distributions shall be
made within 12 months after the close of the plan
year.
LIMITATION ON ANNUAL ADDITIONS
ARTICLE
I. : LIMITATION ON ANNUAL ADDITIONS
A. Definitions.
The following terms are defined solely for purposes
of this Article:
1. Annual Addition. A participant's annual
addition is the sum of the following amounts
credited to the participant's account for a plan
year:
a) deferred compensation contributions;
a) company-matched contributions;
a) company-matched stock incentive
contributions;
a) optional contributions; and
a) forfeitures.
1. Compensation. A participant's
compensation for any plan year consists of his or
her total wages earned and other compensation
including amounts paid for sick pay, moving
expense payments and reimbursements that are not
deductible under IRC 217, and premiums for group
term life insurance that exceed IRC 79(a)
limits. Compensation also includes any
distribution from any non-qualified deferred
compensation plan paid to the participant while
s/he remains employed. Compensation does not
include employer contributions under this plan or
any IRC 125 plan which are not currently taxable
to the employee or any distributions from a
qualified deferred compensation plan, regardless
of whether such amounts are includable in the
employee's gross income when distributed.
1. Defined Benefit Fraction. The defined
benefit plan fraction applicable to a participant
for any plan year is a fraction: 1) the
numerator of which is the participant's projected
annual benefit (determined as of the close of
the plan year) under the MRP; and 2) the denomi-
nator of which is the lesser of 1.25 multiplied
by the dollar limitation under IRC 415 for
defined benefit plans for such year, or 1.4
multiplied by the participant's average
compensation for the 3 consecutive calendar years
aggregating the greatest compensation from CG&E
during which s/he participated in the plan.
1. Defined Benefit Plan. A qualified plan as
defined in IRC 414(j).
1. Defined Contribution Fraction. The defined
contribution fraction applicable to a participant
for any plan year is a fraction: 1) the
numerator of which is the sum of annual additions
to the participant's account under the plan as of
the close of the limitation year; and 2) the
denominator of which is the sum of the lesser of
the following amounts determined for the
limitation year and for each prior limitation
year of service with CG&E:
(1) the product of 1.25 multiplied by the
dollar limitation under IRC 415(c)(1)(A)
for defined contribution plans for such
year, or
(2) the product of 1.4 multiplied by 25%
of the participant's compensation for
such year.
1. Defined Contribution Plan. A qualified plan
as defined in IRC 414(i).
1. Company. The employer that adopts this
plan, and all members of a controlled group of
corporations, all commonly controlled trades or
businesses or affiliated service groups of which
the adopting employer is a part, and any other
entity required to be aggregated with the
employer pursuant to IRC 414(o) regulations.
1. Excess Amount. The excess of the
participant's annual additions for the plan year
over the maximum annual additions permitted under
this Article for the plan year.
1. Projected Annual Benefit. A participant's
projected annual benefit is an amount equal to
the annual benefit that the participant would be
entitled to receive under the terms of the
defined benefit plan in which he is a
participant, assuming that:
a) the participant continues employment
until his or her normal retirement age;
a) that his or her compensation continues
at the same rate as in effect in the plan
year under consideration; and
a) that all relevant factors used to
determine benefits under such plan remain
constant.
Projected annual benefit is a benefit expressed
in the form of a single life annuity disregarding
any ancillary benefits or benefits attributable
to a rollover contribution.
A. General Limitations. Notwithstanding any other
provisions of this plan, the maximum annual addition
credited to the account of a participant for any plan
year shall not exceed the lesser of:
1. $30,000, or
1. 25% of the participant's compensation for
that plan year.
A. Estimation of Compensation. Prior to the
determination of a participant's actual compensation
for a plan year, the maximum annual addition for a
participant may be computed using a reasonable
estimation of the participant's compensation for a
plan year.
A. Disposition of Excess Amount. In the event the
limitations of this Article are exceeded because of
an allocation of forfeitures, a reasonable error in
estimating a participant's compensation or other
reasonable circumstances, the excess amount shall be
disposed of as follows :
1. First, any optional contributions that are
not eligible for company-matched contributions
and company-matched stock incentive contributions
will be returned to the participant to the extent
that the return would reduce the excess amount.
[This sub-section should be deleted effective 01-01-
97.]
1. First, any optional contributions will be
returned to the participant to the extent that
the return would reduce the excess amount.
[This sub-section becomes effective on 01-01-97.]
1. Second, any deferred compensation that are
not eligible for company-matched contributions
and company-matched stock incentive contributions
will be returned to the participant to the extent
that the return will reduce the excess amount.
1. Third, any company-matched contributions,
made on behalf of a participant under this plan
shall be reduced to the extent that the reduction
will reduce the excess amount. Such reduction in
company-matched contributions shall be treated as
a forfeiture in accordance with .
1. Fourth, any company-matched stock incentive
contributions, made on behalf of a participant
under this plan shall be reduced by the amount
needed to eliminate the excess amount. Such
reduction in company-matched stock incentive
contributions shall be treated as a forfeiture in
accordance with .
A. Aggregation of Plans of CG&E.
1. For purposes of applying the limitation of
this Article, all defined benefit plans (whether
or not terminated) of CG&E shall be treated as
one defined benefit plan and all defined
contribution plans (whether or not terminated)
shall be treated as one defined contribution
plan.
1. If an excess amount results from the
aggregation of annual additions under this plan
with annual additions under another defined
contribution plan:
a) the excess amount shall be first
attributable to this plan; and
a) such excess amount shall be treated in
accordance with .
1. Where a participant is a participant at any
time in both a defined contribution plan and a
defined benefit plan sponsored by CG&E, the sum
of the defined benefit fraction and the defined
contribution fraction for any plan year shall not
exceed 1.0. Should this limitation be exceeded
in any plan year, the participant's benefits
under the MRP shall be appropriately reduced so
that the defined benefit fraction is equal to the
difference between 1.0 and the defined
contribution fraction.
AMENDMENT AND TERMINATION OF THE PLAN
ARTICLE
I. : AMENDMENT AND TERMINATION OF THE PLAN
A. Amendment of the Plan.
1. Reservation of Right. CG&E expects to
continue the plan indefinitely, but as future
conditions cannot be foreseen, the board of
directors reserves the right to amend or
terminate the plan at any time.
1. Effect on Participants. No amendment shall
retroactively reduce the rights or benefits of
participants or permit the return to CG&E of
the CINergy stock, other securities, obligations,
deposits, or cash held by the trustee, or permit
their use or diversion for any purpose other than
for the exclusive benefits of the participants or
their beneficiaries. In addition, no amendment
shall eliminate an optional form of benefit or
eliminate or reduce an early retirement option
with respect to benefits attributable to service
before this amendment.
1. Discontinuance of Contributions. In the
event of a complete discontinuance of
company-matched contributions or company-matched
stock incentive contributions, the
company-matched sub-account will be immediately
vested.
A. Plan Termination.
If the plan is terminated all contributions will
cease. The Committee shall direct the trustee to
determine the value of each beneficial owner's
account as of the date of termination. The value of
any unallocated plan assets shall be allocated to the
beneficial owners. Each beneficial owner shall
become fully vested in the total value of his or her
account. Each beneficial owner's balance shall be
segregated by the trustee pending disposition.
Distribution shall be made, in a single payment, to
each beneficial owner as soon as practicable
following the date of plan termination. No
amendment shall deprive the beneficial owners of
their vested rights upon termination of the plan.
A. Partial Termination.
If the plan is partially terminated, all
contributions to the accounts of all affected
participants will cease. The Committee shall direct
the trustee to determine the value of each affected
beneficial owner's account as of the date of the
partial termination. The value of any unallocated
plan assets shall be allocated to beneficial owners.
Each
affected beneficial owner shall become fully vested
in his or her account. Distribution shall be made,
in a single payment, to each beneficial owner as soon
as practical following the date of partial plan
termination. However, no distribution from a
participant's deferred compensation contribution
sub-account shall be made at a time not otherwise
permitted under the plan. No amendment shall deprive
the affected beneficial owners of their vested rights
upon partial termination of the plan.
A. Liquidation of the Investment Funds.
The trust and the investment funds shall continue in
existence after the termination of the plan for such
period of time as may be required to complete the
liquidation thereof in accordance with the terms of
this Article.
TOP-HEAVY PROVISIONS
ARTICLE
I. : TOP-HEAVY PROVISIONS
A. General Rule.
For any plan year for which this plan is a "top-heavy
plan" the following provisions will supersede any
other conflicting provisions of the Plan:
1. The vesting provisions of or .
1. The minimum contribution provisions of .
1. The limitation on contributions set by .
A. Vesting Provisions.
1. Minimum Service Requirements. Participants
who have completed at least three years of
service and who have completed an hour of service
during any plan year in which the plan is
top-heavy, shall have a nonforfeitable right to
the benefit accrued under this plan.
1. Change from Top-Heavy Status. If the plan
ceases to be top-heavy, each participant's vested
accrued benefits shall be no less than his or her
account balance as of the last day of the last
plan year in which the plan was top-heavy. Each
participant with 5 or more years of service shall
have the right to elect to continue to vest in
accordance with the provisions of this Section.
Such election must be made in writing to the
Committee within 60 days of receipt of written
notice.
[This section should be deleted effective 01-01-96.]
A. Vesting Provisions.
a) Minimum Service Requirements. Participants
who are credited with an hour of service on or
after January 1, 1996 shall have a nonforfeitable
right to the benefit accrued under this plan.
b) Change from Top-Heavy Status. For
participants who are credited with an hour of
service on or after January 1, 1996, if the plan
ceases to be top-heavy, each participant's vested
accrued benefits shall be no less than his or her
account balance as of the last day of the last
plan year in which the plan was top-heavy.
[This section becomes effective on 01-01-96.]
A. Minimum Contribution Provisions.
1. Participants Entitled to Minimum
Contributions. Each participant who is a non-key
employee and who is also employed on the last day
of the plan year, even if s/he has failed to
complete 1,000 hours of service during the plan
year, or is an eligible employee who is excluded
from the plan under because of a break in
service, or for failing to commence
participation in the plan, shall be entitled to
have a combination of contributions and
forfeitures allocated to his or her account
totaling not less than three percent (the
"minimum contribution percentage") of his or her
compensation.
[This sub-section should be deleted effective 01-
01-96.]
1. Participants Entitled to Minimum
Contributions. Each participant who is credited
with an hour of service on or after January 1,
1996 and who is a non-key employee and who is
also employed on the last day of the plan year,
even if s/he has failed to complete 1,000 hours
of service during the plan year, or is an
eligible employee who is excluded from the plan
under for failing to commence participation in
the plan, shall be entitled to have a combination
of contributions and forfeitures allocated to his
or her account totaling not less than three
percent (the "minimum contribution percentage")
of his or her compensation.
[This sub-section becomes effective on 01-01-96.]
1. Reduction of Minimum Contribution
Percentage. The minimum contribution percentage
set forth above shall be reduced for any plan
year to the percentage at which contributions
(including forfeitures) are made (or required to
be made) under the plan for the plan year for the
key employee for whom such percentage is the
highest for such plan year.
1. Determining the Percentage of Key Employees.
For the purpose of above, the contribution
percentage of the key employee shall be
determined by dividing the company-matched
contributions, company-matched stock incentive
contributions and deferred compensation
contributions (including forfeitures) made for
the key employee by so much of his or her total
compensation for the plan year as does not exceed
the limitation on compensation. Contributions
taken into account under the preceding sentence
shall include company contributions under this
plan and/or the SIP. Contributions taken into
account under this sub-section shall not include
any contributions under the Social Security Act
or any other federal or state law.
A. Top-Heavy Plan Definition.
This plan is top-heavy if, as of the determination
date the aggregation group for a given plan year is a
top-heavy group. As used in this Article, these
terms have the following meanings:
1. Determination Date. For any plan year the
last day of the preceding plan year.
1. Present Value. The sum of (1) the account
balance determined as of the most recent
valuation date that is within the twelve-month
period ending on the determination date, (2) an
adjustment for contributions due as of the
determination date, and (3) for defined
contribution plans, the amount in dollar value of
the aggregate distributions made to any employee
under the applicable plan during the five year
period ending on the determination date unless
reflected in the value of the accrued benefit or
account balance as of the most recent valuation
date as defined in that plan.
1. Aggregation Group. An aggregation group is
the group of qualified plans, if any, that are
required to be aggregated in accordance with IRC
416.
1. Top-Heavy Group.
a) The aggregated group of plans is
top-heavy if, as of the applicable
determination date, the following ratio
exceeds 60%:
(1) The ratio of:
the sum of the present value of the
cumulative accrued benefits for key
employees under the MRP, plus the sum of
the account balances of key employees
under this plan and all other plans
included in the aggregation group
(1) To:
the sum of the present value of the
accrued benefits for all participants,
excluding former key employees, under the
MRP, plus the sum of account balances for
all participants, excluding former key
employees, under this plan and all other
plans included in the group.
a) In calculating the top-heavy ratio and
determining if it exceeds 60%, the MRP
Committee shall comply with the provisions of
IRC 416.
a) If the aggregation group is a top-heavy
group as of the determination date, each plan
in the group will be top-heavy. If the
aggregation group is not a top-heavy group as
of the determination date, no plan within
such group will be top-heavy.
1. Key Employee. An employee who, at any time
during the plan year or any of the 4 preceding
plan years, was:
a) an officer or former officer of CG&E
having annual compensation greater than 50
percent of the defined benefit limitation of
IRC 415(b)(1)(A). The IRC 415(b)(1)(A)
defined benefit limitation was $90,000 in
1986, and is adjusted annually; or
a) one of the 10 employees having annual
compensation of more than the limitation in
effect under IRC 415(c)(1)(A) and owning, or
considered as owning within the meaning of
IRC 318, both more than a 1/2% interest and
the largest interests in CG&E ; or
a) a 5% owner, or
a) a 1% owner with annual compensation of
more than $150,000.
1. 1% Owner. Any person who owns, or is
considered as owning within the meaning of IRC
318, more than 1% of the outstanding stock of
CG&E or stock possessing more than 1% of the
combined voting power of all stock of CG&E.
1. 5% Owner. Any person who owns, or is
considered as owning within the meaning of IRC
318, more than 5% of the outstanding stock of
CG&E or stock possessing more than 5% of the
combined voting power of all stock of CG&E.
A. Adjustments to IRC Section 415 for Top-Heavy
Plans.
In the event this plan is top-heavy and participants
also participate in the MRP, one of the two following
provisions shall apply:
1. If for the plan year this plan would not be
a "top-heavy plan" as defined in if "90%" were
substituted for "60%," then shall apply for
such plan year as if amended so that "four
percent" were substituted for "three percent".
1. If for the plan year this plan would
continue to be a "top-heavy plan" if "90%" were
substituted for "60 %," then the denominator of
both the defined contribution plan fraction and
the defined benefit plan fraction shall be
calculated as set forth in and for the
limitation year ending in such plan year by
substituting "1.0" for "1.25", except with
respect to any individual for whom there are no
deferred compensation contributions, or
company-matched contributions, company-matched
stock incentive contributions, forfeitures or
optional contributions allocated or any accruals
for such individuals under the defined benefit
plan.
A. Coordination with Other Plans.
In the event this plan is determined to be top-heavy,
the provisions of the MRP dealing with minimum
benefits and with limitations on benefits shall be
substituted for and of this plan.
CERTIFICATE
This plan has been approved and adopted by the Deferred
Compensation Investment Plan Committee on / /96,
subject to comments pursuant to the issuance of a
determination letter by the Internal Revenue Service.
_____________________________________
Richard L. Bond
Secretary of the
Deferred Compensation Investment Plan Committee
_____________________________________
Date
INDEX
This index references the root of hyphenated words as if
they were single words, e.g. "account" will also reference
the occurrence of "sub-account".
This index also references words and phrases in the text
and the endnotes. Endnote references reflect the text page
where the endnote occurs, not the page where the endnote
itself is printed.