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EXHIBIT 10.11
THE CONNECTICUT WATER COMPANY
EMPLOYEES' RETIREMENT PLAN
Amended and Restated as of
January 1, 1997
(except as otherwise indicated herein)
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AMENDMENT AND RESTATEMENT OF
THE CONNECTICUT WATER COMPANY
EMPLOYEES' RETIREMENT PLAN
THE CONNECTICUT WATER COMPANY, a corporation organized and existing under the
laws of the State of Connecticut, with its principal place of business at
Clinton, Connecticut, pursuant to ARTICLE XI, Section A of The Connecticut Water
Company Employees' Retirement Plan and Trust, dated October 23, 1957, as
amended, does hereby further amend and restate said Plan in its entirety,
effective as of January 1, 1997, except as otherwise indicated herein, as
follows:
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TABLE OF CONTENTS
ARTICLE I INTRODUCTION
ARTICLE II DEFINITIONS
ARTICLE III PARTICIPATION
ARTICLE IV NORMAL RETIREMENT
ARTICLE V EARLY RETIREMENT
ARTICLE VI POSTPONED RETIREMENT
ARTICLE VII TERMINATION OF EMPLOYMENT
AND VESTED RIGHTS
ARTICLE VIII DISABILITY
ARTICLE IX PRE-RETIREMENT DEATH
BENEFIT
ARTICLE X NORMAL AND OPTIONAL FORMS
OF RETIREMENT INCOME
ARTICLE XI FIDUCIARIES-ADMINISTRATION OF THE PLAN
ARTICLE XII METHOD OF FINANCING
ARTICLE XIII AMENDMENT OR TERMINATION
ARTICLE XIV GENERAL PROVISIONS
ARTICLE XV TOP-HEAVY PLAN PROVISIONS
EXHIBIT I
APPENDIX A SPECIAL EARLY RETIREMENT BENEFIT
APPENDIX B SPECIAL EARLY RETIREMENT BENEFIT
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CONNECTICUT WATER COMPANY
EMPLOYEES' RETIREMENT PLAN
ARTICLE I
INTRODUCTION
1.1 This Plan shall be known as The Connecticut Water Company Employees'
Retirement Plan.
1.2 The purpose of this Plan is to provide eligible Employees with
retirement income benefits which will provide periodic income during
the Employees' retirement years, and support their beneficiaries upon
the death of such Employees.
1.3 It is the intention of the Company that The Connecticut Water Company
Employees' Retirement Trust, which is a part of this Plan, shall meet
the requirements of the Employee Retirement Income Security Act of 1974
(ERISA) and shall be qualified and exempt under Sections 401(a) and
501(a) of the Internal Revenue Code of 1986, as amended from time to
time.
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ARTICLE II
DEFINITIONS
Unless otherwise required by the context, the terms used herein shall have the
meanings set forth in the remaining paragraphs of this Article II.
2.1 Actuarial Equivalent shall mean a benefit of equivalent current value
to the benefit which would otherwise have been provided to the
Participant, determined as described in Exhibit I attached to and made
part of this Plan.
2.2 Actuary shall mean an actuary selected by the Committee who has been
"enrolled" in accordance with ERISA.
2.3 Administrator shall mean the person or persons designated by the
Committee in accordance with Article XI as the Administrator of the
Plan within the meaning of Section 3(16) of ERISA.
2.4 Affiliated Company shall mean any company which is included within a
"controlled group of corporations" within which the Company is also
included, as determined under Section 1563 of the Code without regard
to Subsections (a)(4) and (e)(3)(C) of said Section 1563.
Notwithstanding the foregoing, with respect
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to the benefit limitation set forth in Section 4.4 of this Plan, such
determination under Section 1563 shall be made assuming the phrase
"more than 50 percent" were substituted for the phrase "at least 80
percent" each place it appears in Section 1563(a)(1).
2.5 Anniversary Date shall mean January 1 of each year commencing on or
after January 1, 1958.
2.6 Annual Earnings shall mean the regular basic earnings paid to a
Participant by his Employer during a Plan Year, excluding any other
items of compensation such as overtime earnings, bonuses, or
contributions made by the Employer to or under any form of employee
benefit program expressed on an annual basis. For hourly Employees,
Annual Earnings shall mean the average hourly straight time rate,
determined by dividing total straight time earnings by actual hours
worked, times 2080 hours. Notwithstanding the foregoing, Annual
Earnings shall include any amounts which would otherwise be Annual
Earnings and which are deferred by a Participant pursuant to a cash or
deferred arrangement qualified under Section 401(k) of the Code, or a
cafeteria plan pursuant to Section 125 of the Code, or a nonqualified
retirement plan or arrangement maintained by the Employer.
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In addition to other applicable limitations set forth in the Plan, and
notwithstanding any provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the Annual Earnings of
each Employee taken into account under the Plan shall not exceed the
OBRA '93 annual compensation limit. The OBRA '93 annual compensation
limit is $150,000, as adjusted by the Commissioner of Internal Revenue
for increases in the cost of living in accordance with Section
401(a)(17)(B) of the Code. The cost-of-living adjustment in effect for
a calendar year applies to any period, not exceeding 12 months, over
which compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer than 12
months, the OBRA' 93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this
provision.
If Annual Earnings for any prior determination period is taken into
account in determining an employee's benefits accruing in the current
Plan Year, the Annual Earnings for that prior determination period is
subject to the OBRA '93 annual
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compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day
of the first Plan Year beginning on or after January 1, 1994, the OBRA
'93 annual compensation limit is $150,000.
2.7 Average Earnings shall mean the average Annual Earnings earned during
the sixty consecutive months of highest Annual Earnings of a
Participant (or during his total Employment if less than 60 months).
2.8 Beneficiary shall mean any person entitled to receive benefits under
the Plan which are payable upon the death of a Participant.
2.9 Board shall mean the Board of Directors of the Company.
2.10 Code shall mean the Internal Revenue Code of 1986, as amended from time
to time.
2.11 Committee shall mean the Committee as provided for in Article XI.
2.12 Company shall mean The Connecticut Water Company, a Connecticut
corporation, or any successor thereto.
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2.13 Contingent Annuitant shall mean any person designated by a Participant
and entitled to receive benefits pursuant to the Contingent Annuitant
Option described in Section 10.3(b).
2.14 Covered Compensation shall mean for each Participant the average of the
contribution and benefit bases in effect under Section 230 of the
Social Security Act for each year in the thirty-five (35) year period
ending with the year in which the Participant attains the Social
Security Retirement Age. The determination for any Plan Year preceding
the year in which the Participant attains the Social Security
Retirement Age shall be made by assuming that there is no increase in
the bases described herein after the beginning of the Plan Year and
before the Participant attains the Social Security Retirement Age.
2.15 Credited Service shall mean the number of years of service as an
Employee, in completed twelfths of a year commencing with the
Employee's earliest date of hire and ending on the earlier of his
Termination Date or Retirement Date, subject to adjustment as follows:
(a) a full year of Credited Service shall be granted for each Plan
Year for which an Employee completes at least 1,000 Hours of
service;
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(b) no credit shall be granted for any Plan Year in which an
Employee has less than 1,000 Hours of service; except that (i)
for each Employee, pro rata credit shall be granted for the
Plan Year in which the Employee was hired if he is a
Participant and is credited with at least 2,000 Hours of
service in the next succeeding Plan Year and (ii) for each
Employee, pro rata credit shall be granted for the Plan Year
in which the earlier of the Employee's Termination Date or
Retirement Date occurs if he was a Participant and was
credited with at least 2,000 Hours of service in the
immediately preceding Plan Year; and
(c) no credit shall be granted for any period of employment during
which an Employee waived his right to participate in the Plan
pursuant to Section 3.3.
For purposes of this Section 2.15, pro rata credit shall be granted in
completed twelfths of a year, based upon a full year of 1,000 Hours of
service, but no more than one full year of Credited Service shall be
granted with respect to any Plan Year.
Effective September 1, 1996, Credited Service shall be determined by
crediting an Employee with two months of Credited Service for each
completed full
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calendar month of service. Notwithstanding any provision of this Plan
to the contrary, for the period prior to September 1, 1996, an
Employee's Credited Service shall equal the greater of Credited Service
calculated based on actual Hours of service and Credited Service
calculated as described in the preceding sentence.
2.16 Effective Date shall mean November 1, 1957.
2.17 Employee shall mean any person who is engaged in rendering personal
services to the Employer other than as an independent contractor.
2.18 Employer shall mean the Company and any Participating Company.
2.19 Employment shall mean the service of an Employee with an Employer or a
Predecessor Company.
2.20 ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations issued pursuant
thereto.
2.21 Fiduciary shall mean any person who exercises discretionary authority
or control over the management of the Plan, assets held under the Plan
or disposition of Plan
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assets; who renders investment advice for direct or indirect
compensation as to assets held under the Plan or has any authority or
responsibility to do so; or who has any discretionary authority or
responsibility in the administration of the Plan; but only to the
extent required by ERISA.
2.22 Hour shall mean:
(a) each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer for the
performance of duties (to be credited as of the time when the
duties are performed);
(b) each hour for which the Employee is directly or indirectly
paid, or entitled to payment, by the Employer for reasons
other than the performance of duties, such as vacation or
holidays (to be credited in accordance with Labor Department
Regulation 2530.200b-2(c) or any successor regulation); and
(c) each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer
(to be credited as of the time to which the award or agreement
pertains). The same hour shall not be credited under more than
one of the above clauses. In determining
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Hours of service for the purposes of clause (b) above, the
provisions of Labor Department Regulation 2530.200b-2(b) or
any successor regulation shall be applicable. Hours of service
shall also include each hour, based on the Employee's standard
work week and work day as in effect from time to time, during
which an Employee is absent from work:
(i) temporarily, on account of illness or with the
consent of the Employer for a period not to exceed
six months. In the event of any absence approved by
the Employer and exceeding six months the Committee
shall establish uniform rules for the inclusion or
exclusion of any hour as an Hour of service on
account of such absence in excess of six months; or
(ii) effective as of December 12, 1994, on account of
qualified military service, as determined in
accordance with USERRA and Section 414(u) of the
Code.
2.23 Participant shall mean any Employee who is or becomes eligible to
participate in the Plan pursuant to Article III and who has taken all
the steps required by said Article III to participate in the Plan.
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2.24 Participating Company shall mean any Affiliated Company which is
designated by the Board as a Participating Company under the Plan and
whose designation as such has become effective and has continued in
effect. The designation shall become effective only when it shall have
been accepted by the Board of Directors of the Participating Company. A
Participating Company may revoke its acceptance of such designation at
any time, but until such acceptance has been revoked, all of the
provisions of the Plan and amendments thereto shall apply to the
Employees (and their Beneficiaries) of the Participating Company. In
the event the designation of a Participating Company as such is revoked
by the Board of Directors of the Participating Company, the Plan will
be deemed terminated only as to such Participating Company in
accordance with Article XIII.
2.25 Plan shall mean The Connecticut Water Company Employees' Retirement
Plan set forth in its entirety in this document and the Trust
Agreement, as this document and such Agreement may be amended from time
to time.
2.26 Plan Year shall mean each calendar year.
2.27 Predecessor Company shall mean any organization which was acquired by
the Employer or an Affiliated Company.
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2.28 Retirement Date shall mean a Participant's Normal, Early or Postponed
Retirement Date as defined in Articles IV through VI, whichever is
applicable.
2.29 Retirement Income shall mean a Participant's monthly benefit payable
beginning on his Retirement Date.
2.30 Social Security Retirement Age shall mean the age used as the
retirement age under Section 216(1) of the Social Security Act, except
that such Section shall be applied without regard to the age increase
factor and as if the early retirement age under Section 216(1)(2) of
the Social Security Act were 62.
2.31 Spouse shall mean the spouse to whom a Participant shall be married on
the date payment of his benefits commences or to whom a Participant
shall be married at the time of his death.
2.32 Termination Date shall mean the date on which the Participant ceases to
be an Employee other than by reason of retirement.
2.33 Trust Agreement shall mean The Connecticut Water Company Employees'
Retirement Trust entered into between the Company and the Trustee to
carry out
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the purposes of the Plan, as set forth herein, which Trust Agreement
shall form a part of the Plan.
2.34 Trustee shall mean the Trustee selected by the Company in accordance
with Article XII.
2.35 Trust Fund or Fund shall mean the cash and other properties held and
administered by the Trustee in accordance with the provisions of the
Trust Agreement and the Plan.
2.36 USERRA shall mean the Uniformed Services Employment and Reemployment
Rights Act of 1994. Notwithstanding any provision of this Plan to the
contrary, effective as of December 12, 1994, contributions, benefits
and service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
2.37 Vesting Service shall mean the number of years of service as an
Employee, in completed twelfths of a year, commencing with the
Employee's earliest date of hire and ending on the earlier of his
Termination Date or Retirement Date, subject to adjustment as follows:
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(a) a full year of Vesting Service shall be granted for each Plan
Year in which an Employee completes at least 1,000 Hours of
service;
(b) no Vesting Service shall be granted for any Plan Year in which
an Employee has less than 1,000 Hours of service; except that
(i) for each Employee, pro rata vesting credit shall be
granted for the Plan Year in which the Employee was hired if
he is a Participant and is credited with at least 2,000 Hours
of service in the next succeeding Plan Year, and (ii) for each
Employee, pro rata vesting credit shall be granted for the
Plan Year in which the earlier of the Employee's Termination
Date or Retirement Date occurs if he was a Participant and was
credited with at least 2,000 Hours of service in the
immediately preceding Plan Year.
(c) no Vesting Service shall be granted for any period of
employment during which an Employee waived his right to
participate in the Plan pursuant to Section 3.3.
For purposes of this Section 2.37, pro rata vesting credit shall be
granted in completed twelfths of a year, based upon a full year of
2,000 Hours of service, but no more than one full year of Vesting
Service shall be granted with respect to any Plan Year.
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Effective September 1, 1996, Vesting Service shall be determined by
crediting an Employee with two months of Vesting Service for each
completed full calendar month of service. Notwithstanding any provision
of this Plan to the contrary, for the period prior to September 1,
1996, an Employee's Vesting Service shall equal the greater of Vesting
Service calculated based on actual Hours of service and Vesting Service
calculated as described in the preceding sentence.
Masculine pronouns used herein shall refer to men or women or both and nouns and
pronouns when stated in the singular shall include the plural and when stated in
the plural shall include the singular, wherever appropriate.
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ARTICLE III
PARTICIPATION
3.1 Former Employees. Any person who either retired or terminated
Employment prior to the effective dates of the provisions of this
amendment and restatement of the Plan shall be entitled to benefits in
accordance with the provisions of the Plan as in effect on his
Retirement Date or Termination Date, whichever is applicable.
3.2 Current and Future Employees. Except as provided for in Section 3.3,
each Employee shall participate in the Plan, as described herein,
provided that he has completed 1,000 Hours of service within the
consecutive 12-month period beginning on his date of hire. Any Employee
who had at least one Hour of service on or after January 1, 1988, who
fulfilled the 1,000 Hours of service requirement as of January 1, 1988,
but who had been excluded from participation in the Plan because of the
prior provisions of the Plan which excluded Employees hired at or after
age 60, shall retroactively participate in the Plan as of January 1,
1988. Employees affected by this rule of retroactive Plan participation
shall have their years of service commencing January 1, 1988 counted
toward their Credited Service. In the event an Employee failed to
complete 1,000 Hours of service as described above, he shall
participate in the Plan after completing 1,000 Hours of service in any
Plan Year beginning after his date of hire. If a Participant
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terminates his employment but is rehired by the Employer, he shall
again be eligible to participate in the Plan as of his date of rehire.
3.3 Waiver of Participation. Any Employee may waive his right to become a
Participant under this Plan by electing such waiver in writing on a
form supplied by the Administrator. Such Employee may, also in writing,
withdraw such waiver and, subject to Section 3.2, be eligible to
participate in this Plan.
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ARTICLE IV
NORMAL RETIREMENT
4.1 Normal Retirement Date. The Normal Retirement Date of a Participant
shall be the first day of the month coinciding with or next following
his 65th birthday, or the fifth anniversary of his entry into the Plan,
if later, but in no event later than the first day of the month
coinciding with or next following his 70th birthday.
4.2 Basic Retirement Income. The monthly Basic Retirement Income with
payments commencing at Normal Retirement Date under this Plan is equal
to 1/12 of the sum of (a) plus (b) where:
(a) equals the sum of 1.2% of Average Earnings up to Covered
Compensation and 1.5% of Average Earnings in excess of Covered
Compensation multiplied times years of Credited Service prior
to January 1, 1981, and
(b) equals the sum of 1.45% of Average Earnings up to Covered
Compensation and 1.75% of Average Earnings in excess of
Covered Compensation times years of Credited Service after
December 31, 1980.
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Notwithstanding the foregoing, the minimum Basic Retirement Income with
payments commencing at Normal Retirement Date under this Plan is equal
to 1/12 of $1,000, except that for an Employee who has less than 10
years of Credited Service, the $1,000 shall be reduced by the ratio of
Credited Service to 10 years.
Unless otherwise provided under the Plan, the accrued benefit of each "section
401(a)(17) employee" under this Plan will be the greater of the accrued benefit
determined for the employee under 1 or 2 below:
(1) the employee's accrued benefit determined with respect to the
benefit formula applicable for the Plan Year beginning on or
after January 1, 1994, as applied to the employee's total
years of Service taken into account under the Plan for the
purposes of benefit accruals, or
(2) the sum of:
(a) the employee's accrued benefit as of the last day of
the last Plan Year beginning before January 1, 1994,
frozen in
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accordance with Section 1.401(a)(4)-13 of the
Treasury Regulations, and
(b) the employee's accrued benefit determined under the
benefit formula applicable for the Plan Year
beginning on or after January 1, 1994, as applied to
the employee's Years of Service credited to the
employee for Plan Years beginning on or after January
1, 1994, for purposes of benefit accruals.
A "section 401(a)(17) employee" means an Employee whose current accrued
benefit as of a date on or after the first day of the first Plan Year
beginning on or after January 1, 1994, is based on Annual Earnings for
a year beginning prior to the first day of the first Plan Year
beginning on or after January 1, 1994, that exceeded $150,000.
4.3 Normal Retirement Income. The Retirement Income of a Participant who
retires on his Normal Retirement Date shall be determined as follows:
(a) If the Participant does not have a Spouse and has made no
election as to the form of payment of pension benefits, then
his Retirement Income shall
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be equal to his Basic Retirement Income as determined under
Section 4.2 and shall be paid in the form of a Straight Life
Annuity.
(b) If the Participant has a Spouse and has not made a qualified
waiver of the 50% Contingent Annuitant Option described in
Subsection 10.3(b) with his Spouse as Contingent Annuitant,
his Retirement Income payable as of the date payment of his
Retirement Income commences shall equal the product of (i) and
(ii) where:
(i) equals the Basic Retirement Income as determined
under Section 4.2, and
(ii) equals the Actuarial Equivalent factor for such
Contingent Annuitant Option, and shall be paid in the
manner described under such optional form.
(c) If the Participant elects an optional form of payment under
Article X, his Retirement Income payable as of the date
payment of his Retirement Income commences shall equal the
product of (i) and (ii) where:
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(i) equals his Basic Retirement Income as determined
under Section 4.2, and
(ii) equals the Actuarial Equivalent factor for the
particular optional form elected as of the date
payment of his Retirement Income commences, and shall
be paid in the manner described under such optional
form.
4.4 Maximum Benefit. Except as set forth below, in no event shall the Basic
Retirement Income of a Participant under the Plan exceed one twelfth of
the lesser of (i) $90,000, or (ii) 100% of the Participant's average
compensation for the three (3) consecutive Plan Years during which the
Employee was an active Participant and received the greatest
compensation from the Employer.
For the purposes of this Section, compensation with respect to any
Participant means (A) such Participant's wages, salaries, fees for
professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services
actually rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on
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insurance premiums, tips, bonuses, fringe benefits, and reimbursements
or other expense allowances under a nonaccountable plan (as described
in Treasury Regulations Section 1.62-2(c))) for a Plan Year; and (B)
effective for Plan Years beginning after December 31, 1997, amounts
which are contributed by the Employer pursuant to a salary reduction
agreement and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3), 401(h)(1)(B), 403(b) or
457(b).
Compensation shall exclude: (1) contributions made by the Employer to a
plan of deferred compensation other than contributions described in (B)
hereinabove, to the extent that the contributions are not includible in
the gross income of the Participant for the taxable year in which
contributed; (2) Employer contributions made on behalf of an Employee
to a simplified employee pension plan described in Code Section 408(k)
to the extent such contributions are excludable from the Employee's
gross income; (3) any distributions from a plan of deferred
compensation; (4) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by an
Employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture; (5) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock
option; and (6) other amounts which
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receive special tax benefits, other than contributions described in (B)
hereinabove.
The foregoing maximum benefit shall be subject to adjustment as
follows:
(a) The $90,000 amount referred to in (i) shall be subject to an
annual cost of living adjustment as provided by Treasury
Regulations in effect from time to time under Section 415 of
the Code and shall be increased to the extent necessary to
equal the Participant's current accrued benefit (as defined in
Section 235(g)(4) of the Tax Equity and Fiscal Responsibility
Act of 1982) as of September 30, 1983;
(b) In the case of a Participant who has less than ten (10) years
of Plan participation, the maximum benefit shall be reduced by
multiplying the maximum benefit stated above by a fraction the
numerator of which is the number of years of Plan
participation (or parts thereof) with the Employer and the
denominator of which is 10;
(c) In the event that the Participant's retirement benefits
commence on or after the Participant has attained age 62 but
prior to his Social Security Retirement Age, the maximum
dollar limitation referred to in (i) shall be reduced in such
manner as the Secretary of the Treasury shall prescribe
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which is consistent with the reduction for old-age insurance
benefits commencing before the Social Security Retirement Age
under the Social Security Act. In the event that the
Participant's retirement benefits commence prior to age 62,
the maximum dollar limitation is the lesser of the equivalent
amount computed using the interest rate and mortality table in
effect for lump sum distributions made on or after September
1, 1996, as specified in the definition of Actuarial
Equivalent and the amount computed using an interest rate of
five percent (5%) and the mortality table prescribed by the
Secretary of the Treasury pursuant to Section
417(e)(3)(A)(ii)(I) of the Code;
(d) If the Participant's retirement benefits commence subsequent
to his Social Security Retirement Age, the maximum dollar
limitation referred to in (i) shall be increased so that it is
the lesser of the Actuarial Equivalent of the maximum dollar
limitation referred to above and the amount computed using an
interest rate of five percent (5%) and the mortality table
prescribed by the Secretary of the Treasury pursuant to
Section 417(e)(3)(A)(ii)(I) of the Code;
(e) Any benefit payable in a form other than a straight life
annuity must be adjusted to an actuarially equivalent straight
life annuity before applying
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the limitations of this Section 4.4. Such equivalent annual
benefit shall be the greater of the equivalent annual benefit
computed using the interest rate and mortality table in effect
for lump sum distributions made on or after September 1, 1996,
as specified in the definition of Actuarial Equivalent or an
interest rate of five percent (5%) and the mortality table
prescribed by the Secretary of the Treasury pursuant to
Section 417(e)(3)(A)(ii)(I) of the Code. The annual benefit
does not include any benefits attributable to employee
contributions or rollover contributions, or the assets
transferred from a qualified plan that was not maintained by
the Employer. No actuarial adjustment to the benefit is
required for (1) the value of a qualified joint and survivor
annuity, (2) the value of benefits that are not directly
related to retirement benefits (such as qualified disability
benefits, pre-retirement death benefits, and post-retirement
medical benefits), and (3) the value of post-retirement
cost-of-living increases made in accordance with the Federal
Income Tax Regulations.
Notwithstanding the foregoing, the interest rate and mortality
table used to determine actuarial equivalence of lump sum
distributions for purposes of Section 415 of the Code shall be
the interest rate and mortality table in
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effect for lump sum distributions made on or after September
1, 1996, as specified in the definition of Actuarial
Equivalent.
(f) Notwithstanding anything in this Article to the contrary, the
maximum benefit for any individual who is a Participant as of
January 1, 1987 shall not be less than the Participant's
accrued benefit under the Plan expressed as an annual benefit
within the meaning of Code Section 415(b)(2) and determined as
if the Participant had separated from service as of December
31, 1986. For purposes of this clause, in determining the
amount of such Participant's accrued benefit, the following
shall be disregarded: (1) any change in the terms and
conditions of the Plan after May 5, 1986; and (2) any cost of
living adjustment occurring after May 5, 1986.
Notwithstanding the foregoing, so long as the Employer does not
maintain a defined contribution plan in which the Participant
participates, the maximum benefit limitation stated above shall not be
deemed to be exceeded if the retirement benefits payable with respect
to a Participant hereunder (and under any other defined benefit plan
which the Employer may establish) do not exceed $10,000 for the Plan
Year or for any prior Plan Year; provided that in the case of
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a Participant who has less than ten (10) years of Plan participation,
the $10,000 figure shall be adjusted in the manner provided in (b)
above.
4.5 Additional Limitation-Members of Defined Contribution Plan. In the case
of any Participant who is entitled to benefits due to Employer
contributions under any defined contribution plan maintained by the
Employer, in addition to the limitations under Section 4.4 hereof, the
sum of the defined benefit plan fraction and the defined contribution
plan fraction for any Plan Year may not exceed 1.0. The "defined
benefit plan fraction" for any Plan Year is a fraction (a) the
numerator of which is the projected annual benefit of the Participant
under this Plan (determined as of the close of the Plan Year), and (b)
the denominator of which is the lesser of: (1) the product of 1.25
multiplied by the maximum dollar limitation in effect under Section
415(b)(1)(A) of the Code for such Plan Year, or (2) the product of 1.4
multiplied by the amount which may be taken into account under Section
415(b)(1)(B) of the Code for such Participant for such Plan Year. The
"defined contribution plan fraction" for any Plan Year is a fraction
(a) the numerator of which is the sum of the annual additions to the
Participant's account as of the close of the Plan Year, and (b) the
denominator of which is the sum of the lesser of the following amounts
determined for such year and for each prior year of service with the
Employer: (1) the product of 1.25 multiplied by the maximum dollar
limitation in effect under Section 415(c)(1)(A) of the Code for
IV-11
32
such Plan Year (determined without regard to Section 415(c)(6) of the
Code), or (2) the product of 1.4 multiplied by the amount which may be
taken into account under section 415(c)(1)(B) of the Code for such
Participant for such Plan Year; provided, however, that the foregoing
denominator may instead, at the election of the Administrator, be
determined in accordance with the special transition rule set forth in
Section 415(e)(6) of the Code, and further provided that the defined
contribution plan fraction may be reduced in accordance with Section
235(g)(3) of the Tax Equity and Fiscal Responsibility Act of 1982. In
the event that the said projected annual benefit of a Participant under
this Plan should cause the aforesaid limitation to be exceeded, the
Administrator shall have the right to accomplish the aforementioned
compliance by reducing or limiting either benefits under this Plan in
the manner set forth above or annual additions under any defined
contribution plan in the manner set forth in such defined contribution
plan, and may vary the extent to which the reduction or limitation will
be applied to either, provided that any such reduction or limitation
shall be made in a nondiscriminatory manner.
Effective for Plan Years beginning after December 31, 1999, this
Section 4.5 shall not apply.
IV-12
33
ARTICLE V
EARLY RETIREMENT
5.1 Early Retirement Date. A Participant may retire on the first of any
month between his 55th and 65th birthdays, provided he has then
completed at least 10 years of Credited Service, any such date being
his Early Retirement Date. Any such Participant may elect to receive
his Retirement Income commencing on his Early Retirement Date in a
reduced amount as set forth in Section 5.2 or to receive his Retirement
Income commencing on his Normal Retirement Date as determined under
Section 4.3 based on his Average Earnings and Credited Service as of
his Early Retirement Date.
5.2 Early Commencement. A Participant who retires in accordance with the
provisions of Section 5.1 and elects to have payment of his Retirement
Income commence on his Early Retirement Date shall be entitled to
receive a reduced Annual Retirement Income in the form stated in
Section 4.3. The amount of such reduced Retirement Income shall equal
(a) times (b) where:
(a) equals such Participant's Normal Retirement Income as
determined under Section 4.3 based on his Average Earnings and
his Credited Service as of his Early Retirement Date and with
the Actuarial Equivalent factors
V-1
34
described in Subsections 4.3(b) and 4.3(c) being determined as
of his Early Retirement Date; and
(b) equals the appropriate percentage factor from the following
table:
Complete Years by Which
Early Retirement Date Early Retirement
Precedes Age 65 Percentage Factors
--------------- ------------------
10 .72
9 .76
8 .80
7 .84
6 .88
5 .92
4 .96
3 1.00
2 1.00
1 1.00
0 1.00
5.3 Delayed Commencement of Pension. A Participant who retires in
accordance with the provisions of Section 5.1 but elects to have
payment of his Retirement Income commence at a later date, may defer
such commencement of payment to the first of any subsequent month which
is not later than his Normal Retirement Date. Notice of the selected
payment commencement date must be given to the Administrator at least
30 days prior to such date. The amount of pension payable to the
Participant shall be determined in accordance with Section 5.2, except
that
V-2
35
the selected payment commencement date shall be considered the
Participant's Early Retirement Date for purposes of this benefit
determination.
5.4 Special Early Retirement Benefit. The Retirement Income payable to any
Participant eligible for the Special Early Retirement Benefit described
in Appendix A or B attached to and made a part of this Plan shall be
determined as provided in such Appendix.
V-3
36
ARTICLE VI
POSTPONED RETIREMENT
6.1 Delayed Retirement. Subject to the provisions of Article XIV, Section
14.1, any Employee may remain in the Company's employment after his
Normal Retirement Date.
6.2 Commencement of Pension. A Participant whose retirement is postponed
beyond his Normal Retirement Date shall begin receiving his monthly
Retirement Income on the first day of the month coinciding with or next
following his actual retirement. The amount and form of the
Participant's Retirement Income payable monthly commencing on his
Postponed Retirement Date shall be the same as the Participant's
Retirement Income that would have been had he retired on his Normal
Retirement Date except the Basic Retirement Income shall be determined
based on Credited Service and Average Earnings of the Participant as of
his Postponed Retirement Date. The Retirement Income shall be offset by
the Actuarial Equivalent of the total benefit distributions made to the
Participant by the close of the Plan Year pursuant to Section 14.9. If
the Participant should die
VI-1
37
after Normal Retirement Date, but before his actual retirement date, it
shall be presumed that the Participant had retired as of the first day
of the month coinciding with or next preceding his date of death.
VI-2
38
ARTICLE VII
TERMINATION OF EMPLOYMENT AND VESTED RIGHTS
7.1 Vesting Requirements. A Participant whose Employment is terminated
other than by retirement, disability or death, and prior to having
completed 5 years of Vesting Service shall not be entitled to any
benefit under this Plan. A Participant whose Employment is terminated
after having completed at least 5 years of Vesting Service shall be
entitled to receive a Retirement Income equal to his Vested Benefit
determined as of his Termination Date as set forth in Section 7.2.
A participant who terminates Employment with the Employer and has no
Vested Benefit under this Plan shall be deemed to have received the
full value of his Vested Benefit ($0) upon such termination of
Employment.
7.2 Vested Benefit. A Participant's Vested Benefit shall be the Retirement
Income payable at Normal Retirement Date in the form and amount as set
forth in Section 4.3 based on his Average Earnings and Credited Service
as of his Termination Date, multiplied by the applicable percentage
specified below:
VII-1
39
If Years of Vesting Then Vested
Service Are Percentage Is
----------- -------------
Less than 5 0%
5 or more 100%
Notwithstanding the foregoing, a Participant shall be 100% vested upon
the later of his 65th birthday or the fifth anniversary of his entry
into the Plan.
7.3 Commencement of Payments. Retirement Income payments in the form stated
in Section 4.3 shall commence at the terminated Participant's Normal
Retirement Date unless the Participant elects in writing on a form
supplied by the Administrator to have reduced payments commence at an
earlier date provided that such earlier date shall not be prior to the
first day of the calendar month coinciding with or next following the
terminated Participant's attainment of age 55. Such written election
must be received by the Administrator at least six months prior to the
commencement of benefits.
If a terminated Participant elects to have payments commence prior to
his Normal Retirement Date, the terminated Participant's Retirement
Income shall be reduced by .5% for each complete month by which the
date payments commence precedes his Normal Retirement Date.
VII-2
40
ARTICLE VIII
DISABILITY
8.1 Eligibility and Disability Determination. If a medical examiner
selected by the Employer certifies that an Employee who has completed 5
years of Credited Service is mentally or physically disabled for
further performance of duty and that such disability is likely to be
permanent, such that the Employee is considered eligible for full
disability benefits under the provisions of the Social Security Act,
this Employee shall be eligible for the monthly benefit described
below.
8.2 Disability Benefit. The monthly income of an Employee who becomes
eligible for a monthly benefit in accordance with Section 8.1 shall
equal the Basic Retirement Income as determined in Section 4.2 based on
his Average Earnings and his Credited Service as of his Termination
Date reduced by the Early Retirement Percentage Factor from Subsection
5.2(b) applicable to the number of complete years by which the
commencement of payment of his Retirement Income precedes his
attainment of age 65, with a Percentage Factor of .72 if the
commencement of payment of his Retirement Income precedes his
attainment of age 65 by more than 9 complete years. Notwithstanding the
foregoing to the contrary, effective January 1, 1998, the monthly
income of an Employee who becomes eligible for a monthly benefit in
accordance with Section 8.1, and with respect to whom the sum of his
age and Credited Service as of his
VIII-1
41
Termination Date is equal to or greater than 80, shall equal his Basic
Retirement Income as determined in Section 4.2 based on his Average
Earnings and his Credited Service as of his Termination Date unreduced
for commencement prior to his attainment of age 65.
8.3 Form and Commencement of Payments. An Employee who becomes eligible for
a monthly benefit in accordance with Section 8.1 may elect to receive
such benefit commencing on the first day of any month following his
Termination Date; provided, however, that no payments shall be made
under this Article VIII while the Employee is receiving disability
benefits from the Employer's long-term disability plan. Such benefit
shall be paid in the form provided in Section 4.3.
8.4 Reemployment. If a former Employee is reemployed by the Employer after
commencing to receive benefits under this Article VIII, payment of the
Employee's benefits will be suspended and benefits will continue to
accrue under this Plan as described in Article IV when all of the
following have occurred:
(a) The Employee has been rehired by the Employer;
(b) The Employee is credited with 40 or more Hours of Service in a
month; and
(c) The Employee has elected to resume participation in the Plan.
VIII-2
42
Benefit payments suspended as provided above will recommence as of the
Employee's subsequent retirement and will be determined as provided in Article
IV. The Employee's accrued benefit, however, will be offset by the Actuarial
Equivalent of any amount of the Employee's prior accrued benefit previously
distributed to him. An Employee whose benefits are suspended as provided above
shall receive the notification required by applicable law and regulations on the
suspension of benefits.
VIII-3
43
ARTICLE IX
PRE-RETIREMENT DEATH BENEFIT
9.1 Death While Employed and Eligible for Early Retirement. If a
Participant dies while he is actively employed and after he has become
eligible for Early Retirement as provided in Section 5.1, his surviving
Spouse (if designated or deemed his Beneficiary in accordance with
Section 9.4), if any, shall receive monthly benefits equal to 50% of
the Retirement Income the Participant would have received under Section
5.2 had he retired early as of the first day of the month coinciding
with or next preceding his date of death and elected the 50% Contingent
Annuitant Option under Subsection 10.3(b) with his Beneficiary as
Contingent Annuitant. Payment shall commence on the first day of the
calendar month following the Participant's death and shall continue
each month thereafter through the month in which the Beneficiary's
death occurs. If a Participant dies while he is actively employed and
after he has become eligible for Early Retirement as provided in
Section 5.1, with no surviving Spouse designated or deemed his
Beneficiary, his Beneficiary (as determined in accordance with Section
9.4), if any, shall receive a death benefit. This death benefit shall
be paid in the form of a lump sum which shall be the Actuarial
Equivalent of the Retirement Income which the Beneficiary would have
received had the
IX-1
44
Participant retired on the date of his death with the optional form of
benefit under Subsection 10.3(d) (Five Years Certain and Life Option)
in effect.
9.2 Death After Early Retirement But Before Commencement of Pension. If a
Participant retires after he has become eligible for Early Retirement
but dies before payment of his Retirement Income commences, his
surviving Spouse (if designated or deemed his Beneficiary in accordance
with Section 9.4), if any, shall receive monthly benefits equal to 50%
of the Retirement Income the Participant would have received under
Section 5.3 had he elected to have payment of his Retirement Income
commence as of the first day of the month coinciding with or next
preceding his date of death and elected the 50% Contingent Annuitant
Option under Subsection 10.3(b) with his Spouse as Contingent
Annuitant.
If a Participant retires after he has become eligible for Early
Retirement but dies before payment of his Retirement Income commences
with no surviving Spouse designated or deemed his Beneficiary, his
Beneficiary (as determined in accordance with Section 9.4), if any,
shall receive a death benefit. This death benefit shall be paid in the
form of a lump sum which shall be the Actuarial Equivalent of the
Retirement Income which the Beneficiary would have received
IX-2
45
had the Participant retired on the date of his death with the optional
form of benefit under Subsection 10.3(d) (Five Years Certain and Life
Option) in effect.
9.3 Death Before Retirement.
(a) Unless waived within the Waiver Period pursuant to a qualified
waiver as described in Section 10.2, if a Participant who is
no longer actively employed dies after attaining the Earliest
Retirement Age, the Participant's surviving Spouse (if any)
shall receive the same benefit that would be payable if the
Participant had retired with the 50% Contingent Annuitant
Option as described in Subsection 10.3(b) on the day before
the Participant's date of death.
(b) Unless waived within the Waiver Period pursuant to a qualified
waiver as described in Section 10.2, if a Participant dies
before attaining the Earliest Retirement Age, the
Participant's surviving Spouse (if any) shall receive the same
benefit that would be payable if the Participant had:
(i) separated from service on the date of death, or date
of actual separation from service, if earlier,
IX-3
46
(ii) survived to the Earliest Retirement Age,
(iii) retired with an immediate 50% Contingent Annuitant
Option as described in Subsection 10.3(b) at the
Earliest Retirement Age, and
(iv) died on the day after the Earliest Retirement Age;
provided, however, that in calculating the benefit of
a surviving Spouse of a Participant who dies while
actively employed, the Retirement Income to which the
Participant would have been entitled at his Normal
Retirement Date shall be reduced in accordance with
the formula described in Section 5.2, rather than
that described in Section 7.3.
(c) For purposes of this Section 9.3, a surviving Spouse shall
begin to receive payments at the later of (i) the date of the
Participant's death, or (ii) the Earliest Retirement Age,
unless such surviving Spouse elects a later date.
(d) For purposes of this Section 9.3, the following definitions
shall apply:
(i) Waiver Period: The period which begins on the date
the Participant separates from service and ends on
the date of the Participant's death.
IX-4
47
(ii) Earliest Retirement Age: The earliest date on which,
under the Plan, the Participant could have elected to
receive retirement benefits.
(e) For the period during which a Participant who is no longer
actively employed has not waived the pre-retirement survivor
annuity described in this Section 9.3, the Participant's
Retirement Income shall be reduced as follows:
Reduction in Retirement Income
Attained Age for each Month of Coverage
------------ --------------------------
Under 45 1/120%
45-54 1/60%
55 and over 1/24%
9.4 Designation of Beneficiary. The Administrator shall provide to each
actively employed Participant at least 90 days before the date on which
he meets the age and service requirements for early retirement, a form
on which he may designate his Beneficiary. The person whom a
Participant designates as his Beneficiary must be his Spouse, unless a
qualified waiver of the qualified pre-retirement survivor annuity has
been made in accordance with Section 10.2. If such a qualified waiver
has been made, the Participant's Beneficiary for this purpose must be
one of the following: the Participant's spouse, father, mother, sister,
IX-5
48
brother, son or daughter. The beneficiary may also be a legal ward
living with and dependent on the Participant at the time of his death.
If the Participant dies after satisfying the requirements for early
retirement, and has not designated a Beneficiary, his Beneficiary shall
be his Spouse, if living; otherwise, he shall have no Beneficiary and
no payments shall be made pursuant to this Article IX.
IX-6
49
ARTICLE X
NORMAL AND OPTIONAL FORMS OF RETIREMENT INCOME
10.1 Normal Form of Payments. If a Participant does not make a timely
election of one of the optional forms of payment described below, then
his Retirement Income shall be payable in the form and amount under
Section 4.3, if he retires as of his Normal or Postponed Retirement
Date; under Section 7.3, if he terminates his employment other than by
reason of death, disability or retirement; and under Section 8.3, if he
is disabled.
10.2 Election of Optional Form of Payment. A Participant whose Retirement
Income is otherwise payable under the Normal Form may elect in writing
to the Employer to receive his benefit under one of the optional forms
set forth in Section 10.3. The Administrator shall provide to each
active Participant and each terminated Participant with a vested
interest whose benefits have not yet commenced, by personal delivery or
mail, no less than 30 and no more than 90 days before his Normal
Retirement Date or the date on which he meets the age and service
requirements for early retirement, the following information in written
nontechnical language: (1) a general description of the Normal Form and
optional forms of payment and the availability of the election not to
receive the Normal Form; (2) a general explanation of the relative
financial effect of an election not
X-1
50
to receive the Normal Form; (3) the right to make, and the effect of, a
revocation of a previous election not to receive the Normal Form; (4)
the rights of a Participant's Spouse; and (5) notification of the
availability upon written request of a written explanation of the
financial effect (in dollars per annuity payment) upon the particular
Participant's annuity of an election not to take the Normal Form.
The payment commencement date for a distribution to a married
Participant in a form other than the Normal Form may be less than 30
days after receipt of the written explanation described above provided:
(a) the Participant has been provided with information that clearly
indicates that the Participant has at least 30 days to consider whether
to waive the Normal Form and elect (with spousal consent) a form of
distribution other than the Normal Form; (b) the Participant is
permitted to revoke any affirmative distribution election at least
until the payment commencement date or, if later, at any time prior to
the expiration of the 7-day period that begins the day after the
explanation of the Normal Form is provided to the Participant; and (c)
the payment commencement date is a date after the date that the written
explanation was provided to the Participant. For distributions on or
after December 31, 1996, the payment commencement date may be a date
prior to the date the written explanation is provided to the
Participant if the distribution does not commence until at least 30
days after such written
X-2
51
explanation is provided, subject to the waiver of the 30-day period as
provided for above.
The Administrator shall furnish any additional information requested by
a Participant to such Participant by personal delivery or first-class
mail within 30 days from the date of the Participant's written request.
An election of an optional form of payment pursuant to Section 10.3
shall not be effective unless it is filed with the Administrator no
more than 90 days before pension benefit payments are to commence.
Notwithstanding the foregoing, no election of an optional form of
benefit or election to waive the pre-retirement survivor annuity by a
married Participant will be effective without a qualified waiver. Such
waiver must be in writing and may only be made with the written consent
of the Participant's Spouse. The Spouse's consent to a waiver must be
witnessed by the Administrator or his representative or by a notary
public. Notwithstanding the foregoing requirement of spousal consent,
if the Participant establishes to the satisfaction of the Administrator
that such written consent may not be obtained because there is no
Spouse or the Spouse cannot be located, a waiver will be deemed to be a
qualified waiver. Any consent necessary under this provision will be
valid only with respect to the Spouse who signs the consent, or in the
event of a deemed qualified waiver, the
X-3
52
designated Spouse, if any. Additionally, a revocation of a prior
qualified waiver may be made by a Participant without the consent of
the Spouse at any time before the date payment of benefits commences.
The number of revocations shall not be limited.
10.3 Optional Forms of Payment. The optional forms of benefit payment
available shall be the Actuarial Equivalent of the Retirement Income
otherwise payable to the Participant.
(a) Straight Life Annuity Option - Retirement Income payable
monthly during the Participant's lifetime, with no further
payments on his behalf after his death. If this option is
elected, the Participant's Retirement Income shall equal his
Basic Retirement Income without actuarial adjustment except as
provided for election of early commencement of payments, as
applicable.
(b) Contingent Annuitant Option - Retirement Income payable
monthly during the Participant's lifetime with the provision
that after his death such Retirement Income shall be continued
to the Contingent Annuitant, in the same or a lesser amount,
as specified by the Participant, during the life of such
Contingent Annuitant. The lesser percentage which may be
specified
X-4
53
by a Participant shall be either 75% or 50% of the
Participant's Retirement Income.
Except as provided for in Article IX, if a Participant shall
elect the Contingent Annuitant Option and he shall die before
the earlier of his Early Retirement Date, or Normal Retirement
Date, whichever is applicable, his Contingent Annuitant shall
not be entitled to any Retirement Income under this Plan.
If a Participant shall elect the Contingent Annuitant Option
and his Contingent Annuitant shall die before the Participant
does, but such death occurs after the retirement of the
Participant, the Participant shall continue to receive the
Retirement Income payable to him prior to the death of his
Contingent Annuitant.
(c) Ten Years Certain and Life Option - Retirement Income payable
monthly during the Participant's lifetime and in the event of
the Participant's death within a period of 10 years after
benefits hereunder have commenced, the Actuarial Equivalent of
the value of the Retirement Income remaining to be paid during
the aforementioned 10-year period shall be paid to the
X-5
54
Participant's Beneficiary in a lump sum within 5 years of the
date of the Participant's death.
Except as provided for in Article IX, if a Participant shall
elect the Ten Years Certain and Life Option and he shall die
before the earlier of his Early Retirement Date, or Normal
Retirement Date, whichever is applicable, his Beneficiary
shall not be entitled to any Retirement Income under this
Plan.
If a Participant shall elect the Ten Years Certain and Life
Option and his Beneficiary shall die before the Participant
does, but such death occurs after the retirement of the
Participant, the Participant shall continue to receive the
Retirement Income payable to him prior to the death of his
Beneficiary and shall designate a new Beneficiary.
(d) Five Years Certain and Life Option - Retirement Income payable
monthly during the Participant's lifetime and in the event of
the Participant's death within a period of 5 years after
benefits hereunder have commenced, the Actuarial Equivalent of
the value of the Retirement Income remaining to be paid during
the aforementioned 5-year period shall be paid to the
X-6
55
Participant's Beneficiary in a lump sum within 5 years of the
date of the Participant's death.
Except as provided for in Article IX, if a Participant shall
elect the Five Years Certain and Life Option and he shall die
before the earlier of his Early Retirement Date, or Normal
Retirement Date, whichever is applicable, his Beneficiary
shall not be entitled to any Retirement Income under this
Plan.
If a Participant shall elect the Five Years Certain and Life
Option and his Beneficiary shall die before the Participant
does, but such death occurs after the retirement of the
Participant, the Participant shall continue to receive the
Retirement Income payable to him prior to the death of his
Beneficiary and shall designate a new Beneficiary.
For purposes of the optional forms of payment set forth in Subsections
(b), (c) and (d) hereof, the Participant's Beneficiary shall be
designated on a form provided by the Administrator. Any person may be
designated a Beneficiary for these purposes; provided, however, that if
no other Beneficiary shall have been effectively designated, the
executor or administrator of the Participant's estate shall be deemed
his Beneficiary.
X-7
56
10.4 General Limitation. Anything in the foregoing to the contrary
notwithstanding, no method of distribution may be made under this
Article which would result in the Actuarial Equivalent of a Contingent
Annuitant's or Beneficiary's interest equaling or exceeding 50% of the
Actuarial Equivalent of the Participant's full retirement benefit, both
equivalents being determined as of the Participant's actual Retirement
Date.
10.5 Lump Sum Distributions. Anything in the Plan to the contrary
notwithstanding, effective as of January 1, 1998, the Committee shall
pay benefits to a Participant who retires or otherwise terminates
Employment with the Employer in a lump sum that is the Actuarial
Equivalent of a Participant's Retirement Income; provided, however,
that the lump sum value of such Retirement Income may not exceed (or
have ever exceeded) $5,000 (or such greater amount as may be permitted
by law or regulation at the time of payment). A Participant who
receives a lump sum distribution pursuant to this Section 10.5 shall
forfeit all Credited Service accrued prior to such distribution, and
such forfeited Credited Service shall be disregarded if such
Participant is subsequently reemployed by the Employer unless the
Participant repays the entire amount of the distribution, plus interest
compounded annually from the date of the distribution at the rate of 5
percent per year, prior to the earlier of (1) the expiration of the
fifth consecutive
X-8
57
Plan Year in which the Participant completed 500 or fewer Hours of
service or (2) the fifth anniversary of the date of the Participant's
reemployment.
10.6 Direct Rollover.
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the
manner prescribed by the Administrator, to have any portion of
an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct
rollover.
(b) Definitions.
(1) Eligible rollover distribution: An eligible rollover
distribution is any distribution of all or any
portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include: any distribution that
is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee or
the joint lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period of ten years
or
X-9
58
more; any distribution to the extent such
distribution is required under Section 401(a)(9) of
the Code; and the portion of any distribution that is
not includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) Eligible retirement plan: An eligible retirement plan
is an individual retirement account described in
Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code,
or a qualified trust described in Section 401(a) of
the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an
eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) Distributee: A distributee includes an Employee or
former Employee. In addition, the Employee's or
former Employee's surviving Spouse and the Employee's
or former Employee's Spouse or former Spouse who is
the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of
X-10
59
the Code, are distributees with regard to the
interest of the Spouse or former Spouse.
(4) Direct rollover: A direct rollover is a payment by
the Plan to the eligible retirement plan specified by
the distributee.
X-11
60
ARTICLE XI
FIDUCIARIES -
ADMINISTRATION OF THE PLAN
11.1 Appointment of Named Fiduciary. The Committee is hereby designated as
the named Fiduciary of the Plan, within the meaning of Section
402(a)(2) of ERISA.
11.2 Authority of Named Fiduciary. Subject to the provisions of Section
11.4, the Committee shall have the authority to control and manage the
operation and administration of the Plan in accordance with the terms
hereof.
11.3 Discharge of Duties - Fiduciaries. Any Fiduciary with respect to the
Plan shall discharge its duties solely in the interest of the
Participants and Beneficiaries for the exclusive purpose of providing
benefits to Participants and Beneficiaries and defraying reasonable
expenses of administering the Plan. In addition any Fiduciary with
respect to the Plan shall discharge its duties with the care, skill,
prudence and vigilance under the circumstances then prevailing that a
prudent man acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with
like aims.
11.4 Delegation of Duties. The Committee shall have authority and discretion
to designate or appoint in writing (i) persons to carry out specified
fiduciary
XI-1
61
responsibilities, other than Trustee responsibilities, to manage and
control the assets of the Plan, and (ii) investment advisors and
managers to manage (including the power to acquire and dispose of) any
assets of the Plan. Any such person shall serve at the pleasure of the
Committee and may resign by delivering a written notice to the
Committee. Any delegation of duties shall be made and acknowledged in
writing and shall clearly state the powers and duties so delegated.
11.5 Appointment of Committee. The Board shall appoint the Committee which
shall consist of not less than three members, who shall serve at the
pleasure of the Board. The members of the Committee shall elect a
chairman and a secretary, the latter of whom may, but need not be, a
member of the Committee.
11.6 Meetings. The Committee shall hold meetings upon such notice, and at
such place or places, and at such intervals as it may from time to time
determine.
11.7 Quorum. A majority of the members of the Committee at any time in
office shall constitute a quorum for the transaction of business. All
resolutions or other actions taken by the Committee shall be by vote of
a majority of those present at a meeting of the Committee; or without a
meeting by instrument in writing signed by a majority of the members of
the Committee.
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11.8 Expenses. The reasonable expenses incident to the operation of the
Plan, including premiums for termination insurance payable to the
Pension Benefit Guaranty Corporation, the compensation of the Trustee,
Actuary, attorney, advisors, Fiduciaries, and such other technical and
clerical assistance as may be required, shall be paid out of the Fund,
but the Employer in its discretion may elect at any time to pay part or
all thereof directly, and any such election shall not bind the Employer
as to its right to elect with respect to the same or other expenses at
any other time to have such compensation paid from the Fund.
11.9 Powers and Duties of the Committee. In addition to any implied powers
and duties which may be needed to carry out the provisions of the Plan,
the Committee, subject to the provisions of Section 11.4, shall have
the following specific powers and duties.
(a) To make and enforce such rules and regulations as it shall
deem necessary or proper for the efficient administration of
the Plan;
(b) To interpret the Plan and to decide any and all matters
arising hereunder; including the right to remedy possible
ambiguities, inconsistencies or omissions; provided, however,
that all such interpretations and decisions
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shall be applied in a uniform and nondiscriminatory manner to
all Employees similarly situated;
(c) To compute the amount of Retirement Income which shall be
payable to any Participant, Spouse or Beneficiary in
accordance with the provisions of the Plan; and
(d) To authorize disbursements from the Fund, any instructions of
the Committee to the Trustee to be evidenced in writing and
signed by a member of the Committee delegated with such
authority by a majority of the Committee.
11.10 Administrator. The Committee may designate an Administrator of the
Plan, and may delegate to the Administrator such duties as the
Committee may decide including the responsibility to prepare and file,
or to cause to be prepared and filed, such reports, descriptions,
summaries financial and other statements as may be required from time
to time under applicable provisions of ERISA, within the time
prescribed for the preparation or filing of such documents, and to
furnish such reports, statements and documents to Participants and
Beneficiaries of the Plan as may be required by ERISA, within the time
specified for furnishing such
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documents. Any such designation and delegation shall be made in the
manner provided in Section 11.4.
11.11 Agent for Service. The Committee, or the Administrator if one shall be
appointed, shall be the agent for service of legal process in
connection with any claim or proceeding relating to the Plan.
11.12 Use of Enrolled Actuary. The Company shall employ or engage an Actuary
to make actuarial valuations of the liabilities under this Plan and to
recommend the amounts of contributions to be made and to perform such
other services deemed necessary or advisable in connection with the
administration of the Plan.
11.13 Bonding; Liability of Committee. The Committee, or its delegee, shall
ensure that each Fiduciary of the Plan, including members of the
Committee, is bonded in accordance with ERISA. The Employer shall
indemnify and hold harmless each member of the Committee, the
Administrator, and any Director or Employee held to be a Fiduciary with
respect to the Plan from any liability, claim, demand, suit or action
of any type arising from any action or failure to act; provided that
such person acted in good faith and in a manner he reasonably believed
to be in the best interests of the Participants and Beneficiaries and
consistent with the
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provisions of the Plan and, with respect to any criminal action or
proceeding, that he had no reasonable cause to believe his conduct was
unlawful.
11.14 Reliance on Reports and Certificates. The Committee, and its delegees,
shall be entitled to rely conclusively upon all tables, valuations,
certificates, opinions and reports which will be furnished by an
Actuary, accountant, controller, counsel or other person who is
employed or engaged for such purposes.
11.15 Member's Own Participation. No member of the Committee may act, vote or
otherwise influence a decision of the Committee specifically relating
to his own participation under the Plan.
11.16 Claims Procedure. Each Participant and Beneficiary of the Plan shall
submit all claims for benefits, claims relating to the amount or manner
of any distribution, and any other request relating to any account, in
writing, to the Administrator of the Plan. The Administrator shall
within a reasonable period of time, but not later than 60 days after
receipt thereof, either approve or deny such claim or request either
wholly or in part, and notify the claimant in writing of the action
taken.
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11.17 Notice of Denial. If such claim or request is wholly or partially
denied, the written notice of the Administrator shall set forth in a
manner calculated to be understood by the claimant:
(a) specific reasons for the denial;
(b) specific references to the pertinent Plan provisions on which
the denial is based;
(c) specific reference to any additional material or information
necessary for the claimant to perfect review of the claim and
an explanation of why such material or information is
necessary; and
(d) an explanation of the Plan's claims review procedure.
If the notice of the denial is not furnished to the Participant in
accordance with this Section within a reasonable period of time, such
Participant's claim shall be deemed denied.
11.18 Review. Upon denial of such a claim or request, the claimant shall be
entitled within 60 days after the receipt of written notice of denial
by the Administrator:
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(a) to request, in writing, a review by the Committee of the
denial;
(b) to review pertinent documents; and
(c) to submit issues and comments in writing.
The Committee shall render a decision on its review of the denial
promptly, but not later than 60 days after the receipt of the request
for review, unless special circumstances require an extension of time,
in which case a decision shall be rendered not later than 120 days
after the receipt of a request for review.
If the Committee's decision on review is not furnished to the
Participant within the time limitations described herein, the claim
shall be deemed denied upon review.
The decision of the Committee shall be in writing and shall set forth
reasons therefor stated in a manner calculated to be understood by the
claimant, including specific references to the pertinent Plan
provisions. Determinations, decisions and other actions of the
Committee, taken in accordance with the provisions hereof shall be
final, conclusive and binding on all parties.
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ARTICLE XII
METHOD OF FINANCING
12.1 Appointment of Trustee. The Trustee under the Plan will be appointed by
the Board, with such powers, as to investments, reinvestment, control
and disbursement of the Fund, as set forth in the Trust Agreement, or
in such Trust Agreement as modified from time to time. The Board may
remove the Trustee at any time on the notice required by the terms of
such Trust Agreement, and upon such removal or upon the resignation of
any such Trustee, such Board will designate a successor Trustee.
12.2 The Employer shall contribute to the Trust Fund such amounts as are
deemed necessary by an Actuary to fund the benefits provided by the
Plan on an acceptable basis in accordance with Title I, Section 302 and
Title II, Section 1013 of ERISA. Any actuarial gains arising from
actual experience under the Plan will be used to reduce future Employer
contributions and will not be used to increase any benefits payable
under the Plan. All contributions made under this Plan are made on the
condition that they are deductible under Section 404 of the Code.
12.3 Except as provided in Section 12.6, all Employer contributions when
made to the Trust Fund and all property of the Trust Fund, including
income from
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investments and all other sources, shall be retained for the exclusive
benefit of Participants, Spouses, or their Beneficiaries and shall be
used to pay benefits provided hereunder or to pay expenses of
administration of the Plan and the Trust Fund to the extent not paid by
the Employer.
12.4 The Employer shall not be required to make, but may make in any
calendar or fiscal year, any contributions to the Trust Fund in any
amount which is greater than the amount specified in Section 12.2. The
timing of all contributions shall be entirely discretionary with the
Employer to the extent permitted by ERISA.
12.5 Participants will not be required or permitted to make contributions to
the Plan.
12.6 Amounts forfeited by any Participant shall be used to reduce Employer
contributions.
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ARTICLE XIII
AMENDMENT OR TERMINATION
13.1 Right to Amend or Terminate. The Employer hopes and expects to continue
the Plan indefinitely. Nevertheless, each Employer maintains the right
to suspend, terminate, or completely discontinue contributions under
the Plan with respect to its Employees and the Board may terminate the
Plan for any reason at any time; subject to the requirement that the
Administrator shall file a notice of intent to terminate with the
Pension Benefit Guaranty Corporation ("PBGC") at least 60 days prior to
the proposed date of termination of the Plan, and shall comply with all
other provisions of ERISA or the PBGC relating to plan terminations. In
addition, the Company, by action of the Pension Trust Committee of the
Board, may amend or modify the Plan from time to time, provided,
however, that no such action shall adversely affect Participants to the
extent of their vested benefits, nor shall such action decrease a
Participant's accrued benefit or eliminate an optional form of
distribution with respect to benefits accrued prior to such amendment.
Notwithstanding the foregoing, however, any modification or amendment
of the Plan may be made retroactively, if necessary or appropriate to
qualify or maintain the Plan as a Plan meeting the requirements of the
Code and ERISA. Upon any termination of the Plan all accrued benefits,
to the extent funded, shall become nonforfeitable on the date of the
termination. In the event
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of partial termination of the Plan, all accrued benefits for
Participants affected by such partial termination, to the extent
funded, shall become nonforfeitable on the date of the termination.
13.2 Change in Vesting. If an amendment or a change in the top-heavy status
of the Plan changes the vesting schedule of the Plan, as set forth in
Section 7.2 hereof, any Participant having three (3) or more years of
service on the date which is sixty (60) days after such amendment or
change is adopted or becomes effective (or, if later, sixty (60) days
after written notice of the amendment is given) may, no later than the
end of the election period, elect to remain subject to the vesting
schedule in effect prior to such amendment or change. For purposes of
the foregoing, the "election period" shall begin on the date the
amendment changing the vesting schedule is adopted or the date on which
the Plan's top-heavy status is changed and shall end no earlier than
the latest of the following dates (provided that in the case of a
change in the Plan's top-heavy status, only clause (b) shall apply):
(a) the date which is 60 days after the day the Plan amendment is
adopted;
(b) the date which is 60 days after the day the Plan
XIII-2
72
amendment becomes effective or the top-heavy status of the
Plan changes; or
(c) the date which is 60 days after the day the Participant is
issued written notice of the Plan amendment by the Employer or
Administrator.
13.3 Mergers, Consolidations and Transfers. The Plan shall not be
automatically terminated by the Employer's acquisition by or merger
into any other company, but the Plan shall be continued after such
merger provided the successor company agrees to continue the Plan. All
rights to amend, modify, suspend, or terminate the Plan shall be
transferred to the successor company, effective as of the date of the
merger.
The merger or consolidation with, or transfer of assets and liabilities
to, any other qualified retirement plan shall be permitted only if the
benefit each plan participant would receive if the plan were terminated
immediately after such merger or consolidation, or transfer of assets
and liabilities, would be at least as great as the benefit he would
have received had the Plan been terminated immediately before any such
transaction.
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13.4 Distribution of Funds upon Termination. In the event the Plan shall be
terminated or contributions permanently discontinued, the then present
value of benefits vested in each Participant in accordance with Article
VII shall be determined as of the Plan termination date and the assets
of any Fund then held by the Trustee as reserves for Retirement Income
for Participants under this Plan shall be allocated to the extent that
they shall be sufficient, after providing for expenses of
administration, in the order of precedence set forth below:
(a) There shall first be set aside an amount which will provide
Retirement Income for Participants, Spouses, or Beneficiaries
who were receiving benefits or who were eligible to receive
benefits at least three years prior to termination of the Plan
based on Plan provisions in effect five years prior to the
date of the Plan's termination.
(b) There shall next be set aside an amount which will provide all
other benefits insured by the PBGC.
(c) There shall next be set aside an amount which will provide all
other vested benefits, under the provisions of the Plan on its
termination date, but which are not incurred under ERISA.
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(d) Finally, there shall be set aside an amount which will provide
all other accrued benefits for Participants who were not
vested as of the date of Plan termination.
If the assets of the Fund held by the Trustee as reserves for
Retirement Income for Participants of the Plan, as of the date of the
Plan is terminated, are not sufficient to provide in whole the amounts
required within the classes described above, such assets will be
allocated pro rata within the class in which the amounts first cannot
be provided in full.
Allocation in any of the above listed categories is adjusted for any
allocation already made to the same Participant under a prior category.
Allocation of assets may be modified by the Internal Revenue Service to
meet nondiscrimination requirements. After all liabilities of the Plan
have been satisfied, the Employer shall be entitled to any balance of
the Fund which shall remain.
13.5 Provision of Benefits. The Retirement Income payable in accordance with
Section 13.4 shall be provided through continuance of the existing
Trust Agreement or through a new instrument entered into for that
purpose or through the purchase of nontransferable annuity contract or
contracts from a commercial life insurance company or by a combination
thereof. If the allocations produce
XIII-5
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Retirement Income of less than $120 a year, a lump sum payment which is
the Actuarial Equivalent of such Retirement Income may be paid in lieu
thereof.
13.6 Special Limitations. Subject to the limitations expressed in Sections
4.3, 4.4 and 13.4, if, at any time prior to June 3, 1985 the Plan shall
be terminated or the full current cost of the Plan shall not have been
met, then the amount of the contributions by the Employer, or funds
attributable thereto, that may be applied for the benefit of any
Participant who on June 3, 1975 is one of the 25 highest paid Employees
and whose anticipated annual Normal Retirement Income resulting from
contributions of the Employer is more than $1,500 shall not exceed:
(a) the greater of $20,000 or an amount computed by multiplying
the number of years or parts thereof from June 3, 1975, to the
date of failure to meet the full current costs of the Plan or
the date of termination of the Plan, as the case may be, by
20% of the first $50,000 of the Employee's average Annual
Earnings during the five year period preceding the date of
failure to meet the full current costs of the Plan or the date
of termination of the Plan, or
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(b) such larger amount as may be permissible under relevant laws
and regulations at the time in force.
The provisions of this Section shall not restrict the current payment
of full benefits called for by the Plan to any person while the Plan is
in full effect and its full current costs have been met; nor shall it
restrict payment of any benefit withheld for a prior year (under the
foregoing provisions) after all deficits for all prior years and full
current costs have been met. Notwithstanding the otherwise applicable
restrictions on distributions of benefits incident to early Plan
termination, a Participant's otherwise restricted benefit may be
distributed in full upon such Participant's depositing with an
acceptable depository property having a fair market value equal to 125%
of the amount which would be repayable had the Plan terminated on the
date of the lump sum distribution. If the fair market value of the
property held by the depository falls below 110% of the amount which
would be repayable if the Plan were then to terminate, additional
property necessary to bring the value of the property held by the
depository up to 125% of such amount shall be deposited.
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ARTICLE XIV
GENERAL PROVISIONS
14.1 No Guarantee of Employment. The Plan shall not be deemed to constitute
a contract between an Employer and any Employee or to be a
consideration for, or an inducement for, the employment of any Employee
by an Employer. Nothing contained in the Plan shall be deemed to give
any Employee the right to be retained in the service of any Employer or
to interfere with the right of the Employer to discharge or to
terminate the service of any Employee at any time without regard to the
effect such discharge or termination may have on any rights under the
Plan.
14.2 Payments to Minors and Incompetents. If a Participant, Contingent
Annuitant or Beneficiary entitled to receive any benefits hereunder is
a minor or is deemed by the Committee or is adjudged to be legally
incapable of giving valid receipt and discharge for such benefits, they
will be paid to such persons as the Committee might designate or to the
duly appointed guardian. Such payment shall, to the extent made, be
deemed a complete discharge of any liability for such payment under the
Plan.
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14.3 Nonalienation of Benefits. To the extent permitted by law and with the
exception of payments pursuant to a qualified domestic relations order
within the meaning of Section 414(p) of the Code, no benefit payable
under this Plan will be subject in any manner to anticipation,
alienation, assignment, garnishment, or pledge; and any attempt to
anticipate, alienate, assign, garnishee or pledge the same will be
void; and no such benefits will be in any manner liable for or subject
to the debts, liabilities, engagements, or torts of any Participant;
and if any Participant is adjudicated bankrupt or attempts to
anticipate, alienate, assign, or pledge any benefits, then such
benefits will, in the discretion of the Committee, cease, and in this
event, the Committee will have the authority to cause the same or any
part thereof to be held or applied to or for the benefit of such
Participant, his Spouse, his children or other dependents, or any of
them, in such manner and in such proportion as the Committee may deem
proper.
Notwithstanding any provision of this Section to the contrary, an
offset to a Participant's accrued benefit against an amount that the
Participant is ordered or required to pay the Plan with respect to a
judgment, order, or decree issued, or a settlement entered into, on or
after August 5, 1997, shall be permitted in accordance with Code
Sections 401(a)(13)(C) and (D).
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79
14.4 Purchase of Annuities. If the Committee for any reason deems it
advisable, the Retirement Income benefits payable at retirement date
under the Plan may be provided through the purchase of non-transferable
annuities from such insurance company or companies as may be approved
by the Committee. Payment thereof will be made from the Fund held by
the Trustee.
14.5 Notwithstanding any other provision of the Plan, a former Participant
shall not be entitled to payment of duplicate benefits upon again
becoming a Participant.
14.6 A Participant shall not, with or without cause, be divested of any
annual benefits that are vested under the terms of the Plan.
14.7 Governing Law. The provisions of the Plan will be construed according
to the laws of the State of Connecticut, subject to ERISA.
14.8 Preservation of Prior Methods of Payment. Notwithstanding any of the
methods of payment of benefits provided in Articles IX and X, in the
case of a Participant who has made a designation prior to January 1,
1984 which conforms to the requirements of Section 242(b)(2) of the Tax
Equity and Fiscal Responsibility Act of 1982 and which provides that
one or more of the payment methods contained in the Plan prior to
January 1, 1984 shall apply to such Participant's
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benefits, the Participant and any Beneficiary shall be entitled to
receive such benefits in accordance with the payment methods in effect
under the Plan prior to January 1, 1984. The Committee shall be
authorized to disregard any designation, or any portion thereof, which
has been made in accordance with the preceding sentence if it
determines that such action is necessary to preserve the tax
qualification of the Plan.
14.9 Commencement of Benefits. In no case shall distributions of benefits
under the Plan be made or commence later than April 1 of the calendar
year following the calendar year in which a Participant attains age 70
1/2 whether or not he has retired or otherwise terminated his
Employment at that time; provided that, however, if a Participant had
attained age 70 1/2 before January 1, 1988 and was not a five percent
(5%) owner at any time during the Plan Year ending with or within the
calendar year in which the Participant had attained age 66 1/2 or any
subsequent Plan Year, such Participant may elect to delay his
distribution until the calendar year in which the Participant retires,
and, provided further, that if a Participant has made a designation
prior to January 1, 1984 which conforms to the requirements of Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982,
distributions of benefits under the Plan may be made or commence in
accordance with the terms of such designation.
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14.10 Notwithstanding any other provision of the Plan, in no event shall a
Participant's benefit payments under the Plan decrease due to any
increase in such Participant's social security benefits.
14.11 Suspension of Benefits.
(a) Except for payments required by Section 14.9 hereof, benefits
under this Plan are payable only after termination of
employment; provided, however, that benefits shall be paid to
a Participant who is otherwise entitled to receive benefits
hereunder even if such Participant has not terminated
Employment, but only if such Participant does not complete at
least 40 Hours of service during a calendar month in Section
203(a)(3)(B) service, within the meaning of Section
203(a)(3)(B) of ERISA and Section 2530.203-3 of the Code of
Federal Regulations. In addition, normal or early retirement
benefits in pay status will be suspended for each calendar
month during which the Participant completes at least 40 Hours
of service in Section 203(a)(3)(B) service. In accordance with
the foregoing, the actuarial value of benefits which commence
later than a Participant's Normal Retirement Date will be
computed without regard to amounts which would have been
suspended under the preceding sentences
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82
as if the Participant had been receiving benefits since Normal
Retirement Date.
(b) If benefit payments have been suspended, payments shall resume
no later than the first day of the third calendar month after
the calendar month in which the Participant ceases to be
employed for at least 40 Hours of service for a calendar month
in Section 203(a)(3)(B) service. The initial payment upon
resumption shall include the payment scheduled to occur in the
calendar month when payments resume and any amounts withheld
during the period between the cessation of such Section
203(a)(3)(B) service and the resumption of payments.
(c) No payment shall be withheld by the Plan pursuant to this
Section unless the Plan notifies the Participant by personal
delivery or first class mail during the first calendar month
or payroll period in which the Plan withholds payments that
his or her benefits are suspended. Such notification shall
contain a description of the specific reasons why benefit
payments are being suspended, a description of the Plan
provision relating to the suspension of payments, a copy of
such provisions, and a statement to the effect that applicable
Department of Labor regulations may be found in Section
2530.203-3 of the Code of Federal Regulations. In
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83
addition, the notice shall inform the Participant of the
Plan's procedures for affording a review of the suspension of
benefits. Requests for such review may be considered in
accordance with the claims procedure adopted by the Plan
pursuant to Section 503 of ERISA and applicable regulations.
(d) The amount suspended shall be an amount equal to the portion
of a monthly benefit payment derived from Company
contributions.
(e) This paragraph does not apply to the minimum benefit to which
the Participant may become entitled under the top-heavy rules
of Article XV.
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ARTICLE XV
TOP-HEAVY PLAN PROVISIONS
(Paragraphs 15.1 - 15.10 provide definitions for Article XV.)
15.1 Compensation. Compensation of an Employee which is reportable on Form
W-2 for the calendar year ending with or within the Plan Year.
15.2 Key Employee. Any Employee or former Employee (and the Beneficiaries of
such Employee) who at any time during the Determination Period was an
officer of the Employer with Compensation greater than 150 percent of
the dollar limitation under Section 4l5(c)(1)(A) of the Code, an owner
(or considered an owner under Section 318 of the Code) of one of the
ten largest interests in the Employer if such individual's Compensation
exceeds the dollar limitation under Section 4l5(c)(1)(A) of the Code
and such individual's ownership interest exceeds 1/2 percent, a
5-percent owner of the Employer, or a 1-percent owner of the Employer
who has Compensation of more than $150,000. The determination of who is
a Key Employee shall be made in accordance with Section 416(i)(1) of
the Code.
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85
15.3 Top-Heavy Plan. For any Plan Year, this Plan is top-heavy if any of the
following conditions exists:
(a) If the Top-Heavy Ratio for this Plan exceeds 60 percent and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(b) If this Plan is a part of a Required Aggregation Group of
plans (but which is not part of a Permissive Aggregation
Group) and the Top-Heavy Ratio for the Required Aggregation
Group of plans exceeds 60 percent.
(c) If this Plan is a part of a Required Aggregation Group of
plans and part of a Permissive Aggregation Group and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds
60 percent.
15.4 Top-Heavy Ratio.
(a) If the Employer maintains one or more defined benefit plans
and the Employer has not maintained any defined contribution
plan (including any simplified employee pension plan) which
during the Determination Period(s) has or has had account
balances, the Top-Heavy Ratio for this Plan alone or for the
Required or Permissive Aggregation Group as
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86
appropriate is a fraction, the numerator of which is the sum
of the Present Values of accrued benefits of all Key Employees
as of the Determination Date(s) (including any part of any
accrued benefit distributed in the Determination Period(s)),
and the denominator of which is the sum of the Present Values
of all accrued benefits (including any part of any accrued
benefit distributed in the Determination Period(s)),
determined in accordance with Section 416 of the Code and the
Regulations thereunder.
(b) If the Employer maintains one or more defined benefit plans
and the Employer maintains or has maintained one or more
defined contribution plans (including any simplified employee
pension plan) which during the Determination Period(s) has or
has had any account balances, the Top-Heavy Ratio for any
Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of the Present
Values of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees, determined in
accordance with (a) above, and the sum of account balances
under the aggregated defined contribution plan or plans for
all Key Employees as of the Determination Date(s), and the
denominator of which is the sum of the Present Values of
accrued benefits under the aggregated defined benefit plan or
plans, determined in accordance with (a) above for all
Participants, and the sum of the account balances under the
aggregated defined contribution plan or
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87
plans for all Participants as of the Determination Date(s),
all determined in accordance with Section 416 of the Code and
the Regulations thereunder. The account balances under a
defined contribution plan in both the numerator and
denominator of the Top-Heavy Ratio are adjusted for any
distribution of an account balance made in the Determination
Period.
(c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits shall be
determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Section 416 of the
Code and the Regulations thereunder for the first and second
plan year of a defined benefit plan. The account balances and
accrued benefits of a Participant (1) who is not a Key
Employee but who was a Key Employee in a prior year, or (2)
who has not received any compensation from any Employer
maintaining the plan at any time during the Determination
Period shall be disregarded. The calculation of the Top-Heavy
Ratio, and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance
with Section 416 of the Code and the Regulations thereunder.
Deductible Employee contributions shall not be taken into
account for purposes of computing the Top-Heavy Ratio. When
aggregating plans, the value of account balances and accrued
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88
benefits shall be calculated with reference to the
Determination Date(s) that falls within the same calendar
year.
15.5 Permissive Aggregation Group. The Required Aggregation Group of plans
plus any other plan or plans of the Employer which, when considered as
a group with the Required Aggregation Group, would continue to satisfy
the requirements of Sections 401(a)(4) and 410 of the Code.
15.6 Required Aggregation Group. (1) Each qualified plan of the Employer in
which at least one Key Employee participated during the Determination
Period, and (2) any other qualified plan of the Company which enables a
plan described in (1) to meet the requirements of Sections 410(a)(4)
and 410 of the Code during the Determination Period.
15.7 Determination Date. For any Plan Year, the last day of the preceding
Plan Year.
15.8 Determination Period. The Plan Year containing the Determination Date
and the four (4) preceding Plan Years.
15.9 Valuation Date. For purposes of computing the Top-Heavy Ratio, the
Valuation Date shall be the normal annual valuation date for the Plan.
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89
15.10 A Present Value. For purposes of computing the Top-Heavy Ratio, any
benefit shall be discounted only for mortality and interest as follows:
Interest rate: 5%
Mortality table: 1971 TPF&C Forecast Mortality Table
15.11 If the Plan is or becomes a Top-Heavy Plan in any Plan Year beginning
after December 31, 1983, the following provisions shall supersede any
conflicting provision in the Plan.
(a) Vesting.
Notwithstanding the provisions of Section 7.2, a Participant's
Vested Benefit shall be the Retirement Income payable at
Normal Retirement Date in the form and amount as set forth in
Section 4.3 based on his Average Earnings and Credited Service
as of his Termination Date, multiplied by the applicable
percentage specified below:
If Years of Then Vested
Vesting Service Are Percentage Is
------------------- -------------
less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
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90
Notwithstanding the foregoing, a Participant shall be 100%
vested upon the later of his 65th birthday or the fifth
anniversary of his entry into the Plan. In the event of a
change in the top-heavy status of the Plan, Section 13.2 of
the Plan shall apply.
(b) Minimum Accrued Benefit.
(i) Notwithstanding any other provision in this Plan
except (iii), (iv) and (v) below, for any Plan Year
in which this Plan is a Top Heavy Plan, each
Participant who is not a Key Employee and has
completed 1,000 Hours of service shall accrue a
benefit (to be provided solely by Employer
contributions and expressed as a life annuity
commencing at normal retirement age) of not less than
two percent of his or her highest average
Compensation for the five consecutive years for which
the Participant had the highest Compensation. The
minimum accrual is determined without regard to any
Social Security contribution. The minimum accrual
applies even though under other Plan provisions the
Participant would not otherwise be entitled to
receive an accrual, or would have received a lesser
accrual for the year because (1) the non-Key Employee
fails to make mandatory contributions to the Plan,
(2)
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91
the non-Key Employee's Compensation is less than a
stated amount, (3) the non-Key Employee is not
employed on the last day of the accrual computation
period, or (4) the Plan is integrated with Social
Security.
(ii) No additional benefit accruals shall be provided
pursuant to (i) above to the extent that the total
accruals on behalf of the Participant attributable to
Employer contributions will provide a benefit
expressed as a life annuity commencing at age 65 that
equals or exceeds 20 percent of the Participant's
highest average Compensation for the five consecutive
years for which the Participant had the highest
Compensation.
(iii) The provisions in (i) above shall not apply to any
Participant to the extent that the Participant is
covered under any other plan or plans of the Employer
which provide(s) for the minimum allocation or
benefit applicable to Top-Heavy Plans.
(iv) All accruals of Employer derived benefit, whether or
not attributable to years for which the Plan is a
Top-Heavy Plan, may be used in computing whether the
minimum accrual requirements of Section (ii) above
are satisfied.
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92
(c) Additional Limitation - Members of Retirement Plan.
With respect to any Plan Year for which the Plan is
determined to be a Top-Heavy Plan, paragraphs (2)(B)
and (3)(B) of Section 415(e) of the Code, as
incorporated in Section 4.5 hereof, shall be applied
by substituting "1.0" for "1.25" in the calculation
of the defined benefit and defined contribution
fractions unless the requirements of Section
416(h)(2) of the Code are met.
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93
THE CONNECTICUT WATER COMPANY
EMPLOYEES' RETIREMENT PLAN
EXHIBIT I
This Exhibit is attached to and made a part of the Plan.
Actuarial Equivalent shall mean a benefit of equivalent current value to the
benefit which would otherwise have been provided to the Participant. The factors
used to determine equivalencies shall be determined as follows:
- 50% Contingent Annuity Option
90% (less)(plus) .5% for each year by which the age of the
Contingent Annuitant (is less than)(exceeds) the age of the
Participant. Such factor not to exceed 1.0.
- 75% Contingent Annuity Option
86% (less)(plus) .6% for each year by which the age of the
Contingent Annuitant (is less than)(exceeds) the age of the
Participant. Such factor not to exceed 1.0.
- 100% Contingent Annuity Option 82% (less)(plus) .7% for each
year by which the age of the Contingent Annuitant (is less
than)(exceeds) the age of the Participant. Such factor not to
exceed 1.0.
94
- Lump Sum Distribution
Actuarial Equivalent factors shall be determined using the
UP-1984 Mortality Table and, for any Plan Year, the interest
rates promulgated by the Pension Benefit Guaranty Corporation
for the purposes of determining the present value of a lump
sum distribution on plan termination for the month containing
the first day of such Plan Year.
Effective for lump sum distributions made on or after
September 1, 1996, Actuarial Equivalent factors shall be
determined using the mortality table prescribed by the
Secretary of the Treasury pursuant to Section
417(e)(3)(A)(ii)(I) of the Code and the annual rate of
interest on 30-year Treasury securities for the month
containing the first day of the Plan Year in which such
distribution is made.
- Five Years Certain and Life Option: 98%
- Ten Years Certain and Life Option: 93%
- Lump Sum Distribution Under Years Certain and Life Options:
Actuarial Equivalent factors shall be determined using the
mortality table prescribed by the Secretary of the Treasury
pursuant to Section 417(e)(3)(A)(ii)(I) of the Code and the
annual rate of interest on 30-year Treasury
95
securities for the month containing the first day of the Plan
Year in which such distribution is made.
96
APPENDIX A
SPECIAL EARLY RETIREMENT BENEFIT
A.1 Eligibility
A special early retirement benefit, as set forth in Section A.2 hereof,
shall be offered to all Eligible Participants; provided, however, that
said special early retirement benefit shall not be available to any
Eligible Participant if fewer than six (6) Eligible Participants elect
to retire and receive such benefit. For purposes of this Appendix A,
the term 'Eligible Participant' shall mean each Participant who as of
September 1, 1991 (a) will have completed ten (10) or more years of
Credited Service, and (b) will have attained the age of fifty-five
(55). Each such Eligible Participant will be offered the special early
retirement benefit described in Section A.2 and may make a written
election during an election period beginning on July 10, 1991 and
ending at 4:30 P.M. on August 9, 1991 to retire on September 1, 1991
and receive such special early retirement benefit commencing as of said
date; provided, however, that such Eligible Participant either electing
or declining to retire and receive the special early retirement benefit
described in Section A.2 may revoke said decision during the period
beginning on August 10, 1991 and ending at 4:30 P.M. on August 16,
1991, after which date such decision shall be irrevocable.
97
A.2 Special Early Retirement Benefit
Each Eligible Participant who, pursuant to Section A.1, has elected to
retire and receive the special early retirement benefit shall be
credited with an additional five (5) years of Credited Service for
purposes of the calculation of the benefit under Articles IV, V and VI
and, if such retirement occurs prior to attainment of age sixty-two
(62), shall receive an additional benefit of $500 each month ending
with the month in which such Eligible Participant attains age sixty-two
(62).
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98
APPENDIX B
SPECIAL EARLY RETIREMENT BENEFIT
B.1 Eligibility
A special early retirement benefit, as set forth in Section B.2 hereof,
shall be offered to all eligible Participants. For purposes of this
Appendix B, the term 'Eligible Participant' shall mean each Participant
who as of July 1, 1997 (a) will have completed ten (10) or more years
of Credited Service, and (b) will have attained the age of fifty-five
(55). Each such Eligible Participant will be offered the special early
retirement benefit described in Section B.2 and may make a written
election during an election period beginning on March 15, 1997 and
ending at 4:30 P.M. on April 30, 1997 to retire between July 1, 1997
through December 31, 1997 and receive such special early retirement
benefit commencing as of said date; provided, however, that such
Eligible Participant either electing or declining to retire and receive
the special early retirement benefit described in Section B.2 may
revoke said decision during the period beginning on May 1, 1997 and
ending at 4:30 P.M. on May 7, 1997, after which date such decision
shall be irrevocable.
99
B.2 Special Early Retirement Benefit
(a) Each Eligible Participant who, pursuant to Section B.1, has elected
to retire and receive the special early retirement benefit shall be
credited with an additional five (5) years of Credited Service for
purposes of the calculation of the benefit under Articles IV, V and VI.
(b) Each Eligible Participant who, pursuant to Section B.1, has elected
to retire and receive the special early retirement benefit and whose
retirement occurs prior to attainment of age sixty-two (62) shall also
receive an additional benefit of $500 each month ending with the month
in which such Eligible Participant attains age sixty-two (62), or, if
earlier, dies. The benefit described in this subsection (b) shall not
be provided to an Eligible Participant who is age sixty-two (62) or
older as of the date of commencement of his Retirement Income and no
benefits shall be payable to any Contingent Annuitant with respect to
the benefit described in this subsection (b) following an Eligible
Participant's death regardless of the form in which such Eligible
Participant's Retirement Income is being paid.
2