EIGHTH AMENDMENT TO
CONNECTICUT NATURAL GAS CORPORATION UNION EMPLOYEE SAVINGS PLAN
(As Amended and Restated Effective As Of January 1, 1989)
The Connecticut Natural Gas Corporation Union Employee Savings Plan is
hereby amended as follows:
1. Section 2.08 is amended to read as follows:
"2.08 "Company" shall mean CNG, and any parent, subsidiary,
or other affiliate of CNG (or any division of CNG or its
affiliates) which, with the consent of CNG, shall adopt this Plan
for its employees."
2. Section 5.01 is amended to read as follows effective as of the
date set forth in Section 4 of this Amendment, and with respect to the
Participants identified in Section 5 of the Amendment:
"5.01 The Company shall contribute for the benefit of each
Participant an amount equal to the lesser of (A) his CODA
contributions and (B) whichever of the following amounts is
applicable:
(a) four and one-half percent (4 1/2%) of the
Participant's Compensation during the Payroll Period in the case
of a Participant who as of the preceding Change Date had either
(i) attained the age of forty-five (45) years or (ii) completed
twenty (20) years of Continuous Service;
(b) three percent (3%) of the Participant's
Compensation during the Payroll Period in the case of a
Participant who as of the preceding Change Date had either (i)
attained the age of thirty-five (35) years or (ii) completed ten
(10) years of Continuous Service; or
(c) two percent (2%) of the Participant's Compensation
during the Payroll Period with respect to all other Participants.
(d) Such contributions need not be made out of net
operating profits; the Plan is intended to be a discretionary
contribution Plan in accordance with Section 401(a)(27) of the
Code, and is not intended to be a plan subject to the funding
requirements of Section 412 of the Code.
(e) Participants who were entitled to a six percent
(6%) match shall be permitted to change their level of CODA
contribution to four and one-half percent (4 1/2%) without regard
to the requirement that only one change be made in any twelve (12)
month period, provided such change is made effective as of the
effective date of this Amendment, as set forth in Section 4
below."
3. The following new Section 11.04 is added to the Plan effective as
of the date set forth in Section 4 of this Amendment, and with respect to
Participants identified in Section 5 of the Amendment:
"11.04 PARTICIPANT LOANS. An active Participant, and any
terminated Participant or Beneficiary with an Account balance
under the Plan who qualifies as a "party in interest" under
Section 3(14) of ERISA, will be permitted to direct the investment
of a portion of his Account in a loan to himself, subject to the
following rules:
(a) No purpose for the loan need be shown; however, see
paragraph (e) as it relates to the duration of loans;
(b) There is a minimum loan amount of $1,000;
(c) The maximum amount of a loan, when added to the
outstanding balance of all other loans from all plans of the
Company, shall be one-half (1/2) of the Participant's vested
interest in his Account, or $50,000 if less; provided that the
$50,000 limit shall be reduced by the highest outstanding loan
balance during the one-year period ending on the day before the
date of any new loan;
(d) Loans may not be made from a Participant's Company
Directed Matching Contribution Account or Paysop Transfer Account,
although the vested portion of such Accounts shall be taken into
consideration in determining the maximum available loan amount;
(e) The loan must be payable in full within five (5)
years following the date made, except that a loan which is made
for the purpose of financing the acquisition of the principal
residence of the Participant (a "principal residence" loan) must
be payable in full within fifteen (15) years following the date
made;
(f) A Participant may not have more than one "general
purpose" loan outstanding at any time, or more than one "principal
residence" loan outstanding at any time (maximum two (2) loans);
(g) Loans will be made available to eligible
Participants on a reasonably equivalent basis and shall not be
made available to Highly Compensated Participants in an amount
greater than to other eligible Participants;
(h) Loans shall require level amortization with
payments to be made at least quarterly;
(i) Loans must be adequately secured, utilizing one-
half (1/2) of the Participant's vested interest in his Account as
security;
(j) Interest will be at a reasonable rate, as
determined by the Committee based upon prevailing rates offered by
commercial lenders for comparable loans. Unless otherwise
prescribed by the Committee pursuant to written procedures, the
interest rate shall be the prime rate (as published in THE WALL
STREET JOURNAL) in effect on the first business day of the
calendar quarter in which the loan is made, plus one percent (1%);
(k) Loans to Plan Participants who are active Employees
shall be repaid through payroll deduction. The Committee is
authorized to prescribe rules relating to the circumstances under
which loan prepayments shall be permitted. Loan refinancings
shall not be allowed;
(l) Default shall occur in accordance with the terms of
the promissory note and security agreement. Furthermore, unless
otherwise provided by the Committee, separation from service shall
constitute a default requiring full repayment of the balance due
on any outstanding loan within such period of time as the
Committee shall determine. Foreclosure on the portion of the
Account used as security through offset (to the extent of the
security interest) shall not occur, however, until a distributable
event occurs under the Plan;
(m) Loan repayments shall be invested in accordance
with the Participant's direction as to future contributions; and
(n) If the Participant is married, a Plan loan shall also be
conditioned upon the consent of the Participant's spouse to the loan
and to the use of a portion of the Participant's vested Account as
security for the loan. Such consent must be given within ninety (90)
days in advance of the date the loan is made. The consent of the
spouse must be witnessed by a Plan Representative or a Notary Public
and must acknowledge the effect thereof.
The Committee shall administer the loan program and may
establish reasonable written procedures for the loan program,
which shall be consistent with the foregoing (but which may set
forth additional provisions and requirements), and which are
hereby incorporated by reference. No loans shall be made in any
manner which would constitute a prohibited transaction under
Section 4975 of the Code. The administrative charges associated
with the establishment and maintenance of Plan loans may be
charged to the Account of the Participant as the Committee shall
direct. Loans shall be processed by the Trustee."
4. The provisions of Sections 2 and 3 of this Amendment are effective
as of April 1, 1998. However, the President of CNG be, and he hereby is,
authorized to delay the effective date of such provisions by a subsequent
amendment hereto without further action of the Board of Directors if he
deems it necessary or advisable to do so; for example, if necessary in order
to provide sufficient additional time to make the loan feature operational.
In no event, however, shall the effective date of the change in Section 2 be
different than the effective date of the change in Section 3.
5. The provisions of Sections 2 and 3 of this Amendment shall only
apply with respect to Participants who are represented by the Connecticut
Independent Utility Workers Local 12924 (Hartford Union), and not with
respect to other Plan Participants. The provisions of Section 5.01 as in
effect prior to the adoption of this Amendment shall continue to apply with
respect to other Plan Participants, and the provisions of Section 11.04
shall not apply with respect to other Plan Participants. However, the
President of CNG be, and he hereby is, authorized to amend the provisions of
Sections 5.01 and 11.04 of the Plan, and of this Section 5, without further
action of the Board of Directors if he deems it necessary or advisable to do
so.
IN WITNESS WHEREOF, the Connecticut Natural Gas Corporation executes
this Eighth Amendment this 27th day of January, 1998.
ATTEST: CONNECTICUT NATURAL GAS CORPORATION
Eileen Sheehan By Jean S. McCarthy
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Its AVP Human Resources