EXHIBIT 4.1
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BAY STATE GAS COMPANY
EMPLOYEE SAVINGS PLAN
Plan and Trust Agreement
As Amended and Restated
Effective April 1, 1995
TABLE OF CONTENTS
Page
1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 1
2 ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Eligibility . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Ineligible Employees . . . . . . . . . . . . . . . . . 9
2.3 Ineligible or Former Participants . . . . . . . . . . . 9
3 PARTICIPANT CONTRIBUTIONS . . . . . . . . . . . . . . . . . 9
3.1 Employee Pre-Tax Contribution Election . . . . . . . . 9
3.2 Changing a Contribution Election . . . . . . . . . . . 10
3.3 Revoking and Resuming a Contribution Election . . . . . 10
3.4 Contribution Percentage Limits . . . . . . . . . . . . 10
3.5 Refunds When Contribution Dollar Limit Exceeded . . . . 11
3.6 Timing, Posting and Tax Considerations . . . . . . . . 11
4 ROLLOVERS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS . 11
4.1 Rollovers . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Transfers From and To Other Qualified Plans . . . . . . 12
5 EMPLOYER CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . 12
5.1 Employer Match Contributions . . . . . . . . . . . . . 12
6 ACCOUNTING . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.1 Individual Participant Accounting . . . . . . . . . . . 13
6.2 Sweep Account is Transaction Account . . . . . . . . . 13
6.3 Trade Date Accounting and Investment Cycle . . . . . . 14
6.4 Accounting for Investment Funds . . . . . . . . . . . . 14
6.5 Payment of Fees and Expenses . . . . . . . . . . . . . 14
6.6 Accounting for Participant Loans . . . . . . . . . . . 15
6.7 Error Correction . . . . . . . . . . . . . . . . . . . 15
6.8 Participant Statements . . . . . . . . . . . . . . . . 15
6.9 Special Accounting During Conversion Period . . . . . . 15
6.10 Accounts for QDRO Beneficiaries . . . . . . . . . . . . 16
7 INVESTMENT FUNDS AND ELECTIONS . . . . . . . . . . . . . . . 16
7.1 Investment Funds . . . . . . . . . . . . . . . . . . . 16
7.2 Investment Fund Elections . . . . . . . . . . . . . . . 17
7.3 Responsibility for Investment Choice . . . . . . . . . 17
7.4 Default if No Election . . . . . . . . . . . . . . . . 17
7.5 Timing . . . . . . . . . . . . . . . . . . . . . . . . 17
7.6 Investment Fund Election Change Fees . . . . . . . . . 18
8 VESTING . . . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1 Fully Vested Contribution Accounts . . . . . . . . . . 18
9 PARTICIPANT LOANS . . . . . . . . . . . . . . . . . . . . . 18
9.1 Participant Loans Permitted . . . . . . . . . . . . . . 18
9.2 Loan Application, Note and Security . . . . . . . . . . 18
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9.3 Spousal Consent . . . . . . . . . . . . . . . . . . . . 18
9.4 Loan Approval . . . . . . . . . . . . . . . . . . . . . 18
9.5 Loan Funding Limits, Account Sources and Funding Order 18
9.6 Maximum Number of Loans . . . . . . . . . . . . . . . . 19
9.7 Source and Timing of Loan Funding . . . . . . . . . . . 19
9.8 Interest Rate . . . . . . . . . . . . . . . . . . . . . 19
9.9 Loan Payment . . . . . . . . . . . . . . . . . . . . . 20
9.10 Loan Payment Hierarchy . . . . . . . . . . . . . . . . 20
9.11 Repayment Suspension . . . . . . . . . . . . . . . . . 20
9.12 Loan Default . . . . . . . . . . . . . . . . . . . . . 20
9.13 Call Feature . . . . . . . . . . . . . . . . . . . . . 21
10 IN-SERVICE WITHDRAWALS . . . . . . . . . . . . . . . . . . . 20
10.1 In-Service Withdrawals Permitted . . . . . . . . . . . 20
10.2 In-Service Withdrawal Application and Notice . . . . . 20
10.3 Spousal Consent . . . . . . . . . . . . . . . . . . . . 21
10.4 In-Service Withdrawal Approval . . . . . . . . . . . . 22
10.5 Minimum Amount, Payment Form and Medium . . . . . . . . 22
10.6 Source and Timing of In-Service Withdrawal Funding . . 22
10.7 Hardship Withdrawals . . . . . . . . . . . . . . . . . 22
10.8 Prior After-Tax Account Withdrawals . . . . . . . . . . 24
10.9 Rollover Account Withdrawals . . . . . . . . . . . . . 24
10.10 Over Age 59 1/2 Withdrawals . . . . . . . . . . . . . 25
10.11 Prior Company Account Plus Withdrawals . . . . . . . . 25
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW . . 26
11.1 Benefit Information, Notices and Election . . . . . . . 26
11.2 Spousal Consent . . . . . . . . . . . . . . . . . . . . 27
11.3 Payment Form and Medium . . . . . . . . . . . . . . . . 27
11.4 Distribution of Small Amounts . . . . . . . . . . . . . 27
11.5 Source and Timing of Distribution Funding . . . . . . . 27
11.6 Latest Commencement Permitted . . . . . . . . . . . . . 28
11.7 Payment Within Life Expectancy . . . . . . . . . . . . 28
11.8 Incidental Benefit Rule . . . . . . . . . . . . . . . . 28
11.9 Payment to Beneficiary . . . . . . . . . . . . . . . . 29
11.10 Beneficiary Designation . . . . . . . . . . . . . . . 29
12 ADP AND ACP TESTS . . . . . . . . . . . . . . . . . . . . . 30
12.1 Contribution Limitation Definitions . . . . . . . . . . 30
12.2 ADP and ACP Tests . . . . . . . . . . . . . . . . . . . 33
12.3 Correction of ADP and ACP Tests . . . . . . . . . . . . 33
12.4 Multiple Use Test . . . . . . . . . . . . . . . . . . . 35
12.5 Correction of Multiple Use Test . . . . . . . . . . . . 35
12.6 Adjustment for Investment Gain or Loss . . . . . . . . 35
12.7 Testing Responsibilities and Required Records . . . . . 35
12.8 Separate Testing . . . . . . . . . . . . . . . . . . . 36
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS . . . . . . . . 36
13.1 "Annual Addition" Defined . . . . . . . . . . . . . . . 36
13.2 Maximum Annual Addition . . . . . . . . . . . . . . . . 36
13.3 Avoiding an Excess Annual Addition . . . . . . . . . . 36
13.4 Correcting an Excess Annual Addition . . . . . . . . . 37
13.5 Correcting a Multiple Plan Excess . . . . . . . . . . . 37
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13.6 "Defined Benefit Fraction" Defined . . . . . . . . . . 37
13.7 "Defined Contribution Fraction" Defined . . . . . . . . 38
13.8 Combined Plan Limits and Correction . . . . . . . . . . 38
14 TOP HEAVY RULES . . . . . . . . . . . . . . . . . . . . . . 38
14.1 Top Heavy Definitions . . . . . . . . . . . . . . . . . 38
14.2 Special Contributions . . . . . . . . . . . . . . . . . 40
14.3 Adjustment to Combined Limits for Different Plans . . . 40
15 PLAN ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 41
15.1 Plan Delineates Authority and Responsibility . . . . . 41
15.2 Fiduciary Standards . . . . . . . . . . . . . . . . . . 41
15.3 Company is ERISA Plan Administrator . . . . . . . . . . 41
15.4 Administrator Duties . . . . . . . . . . . . . . . . . 42
15.5 Advisors May be Retained . . . . . . . . . . . . . . . 42
15.6 Delegation of Administrator Duties . . . . . . . . . . 43
15.7 Committee Operating Rules . . . . . . . . . . . . . . . 43
16 MANAGEMENT OF INVESTMENTS . . . . . . . . . . . . . . . . . 44
16.1 Trust Agreement . . . . . . . . . . . . . . . . . . . . 44
16.2 Investment Funds . . . . . . . . . . . . . . . . . . . 44
16.3 Authority to Hold Cash . . . . . . . . . . . . . . . . 45
16.4 Trustee to Act Upon Instructions . . . . . . . . . . . 45
16.5 Administrator Has Right to Vote Registered Investment
Company Shares . . . . . . . . . . . . . . . . . . . . 45
16.6 Custom Fund Investment Management . . . . . . . . . . . 45
16.7 Master Custom Fund . . . . . . . . . . . . . . . . . . 46
16.8 Authority to Segregate Assets . . . . . . . . . . . . . 46
16.9 Maximum Permitted Investment in Company Stock . . . . . 46
16.10 Participants Have Right to Vote and Tender Company
Stock . . . . . . . . . . . . . . . . . . . . . . . . . 47
16.11 Registration and Disclosure for Company Stock . . . . 47
17 TRUST ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 47
17.1 Trustee to Construe Trust . . . . . . . . . . . . . . . 47
17.2 Trustee To Act As Owner of Trust Assets . . . . . . . . 48
17.3 United States Indicia of Ownership . . . . . . . . . . 48
17.4 Tax Withholding and Payment . . . . . . . . . . . . . . 48
17.5 Trust Accounting . . . . . . . . . . . . . . . . . . . 49
17.6 Valuation of Certain Assets . . . . . . . . . . . . . . 49
17.7 Legal Counsel . . . . . . . . . . . . . . . . . . . . . 49
17.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . 50
17.9 Trustee Duties and Limitations . . . . . . . . . . . . 50
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION . . . . . 50
18.1 Plan Does Not Affect Employment Rights . . . . . . . . 50
18.2 Limited Return of Contributions . . . . . . . . . . . . 50
18.3 Assignment and Alienation . . . . . . . . . . . . . . . 51
18.4 Facility of Payment . . . . . . . . . . . . . . . . . . 51
18.5 Reallocation of Lost Participant's Accounts . . . . . . 51
18.6 Claims Procedure . . . . . . . . . . . . . . . . . . . 52
18.7 Construction . . . . . . . . . . . . . . . . . . . . . 52
18.8 Jurisdiction and Severability . . . . . . . . . . . . . 53
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18.9 Indemnification by Employer . . . . . . . . . . . . . . 53
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION . . . . . . 53
19.1 Amendment . . . . . . . . . . . . . . . . . . . . . . . 53
19.2 Merger . . . . . . . . . . . . . . . . . . . . . . . . 54
19.3 Divestitures . . . . . . . . . . . . . . . . . . . . . 54
19.4 Plan Termination . . . . . . . . . . . . . . . . . . . 55
19.5 Amendment and Termination Procedures . . . . . . . . . 55
19.6 Termination of Employer's Participation . . . . . . . . 56
19.7 Replacement of the Trustee . . . . . . . . . . . . . . 56
19.8 Final Settlement and Accounting of Trustee . . . . . . 56
APPENDIX A - INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . 58
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES . . . . . . . . . 59
APPENDIX C - LOAN INTEREST RATE . . . . . . . . . . . . . . . . . 60
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BAY STATE GAS COMPANY EMPLOYEE SAVINGS PLAN AND TRUST
AS AMENDED AND RESTATED EFFECTIVE APRIL 1, 1995
Bay State Gas Company previously established the Bay State Gas Company
Employee Savings Plan for the benefit of eligible employees of the
Company and its participating affiliates. The Plan is intended to
constitute a qualified profit sharing plan, as described in Code
section 401(a), which includes a qualified cash or deferred
arrangement, as described in Code section 401(k). The Bay State Gas
Company Employee Stock Ownership Plan was merged into this Plan
effective July 1, 1987.
The provisions of this Plan and Trust relating to the Trustee
constitute the trust agreement which is entered into by and between
Bay State Gas Company and ▇▇▇▇▇ Fargo Bank, National Association. The
Trust is intended to be tax exempt as described under Code section
501(a).
The Plan constitutes an amendment and restatement of the Bay State Gas
Company Employee Savings Plan which was originally established
effective as of January 1, 1979, and its related trust agreement.
The Bay State Gas Company Employee Savings Plan and Trust, as set
forth in this document, is hereby amended and restated effective as of
April 1, 1995.
Date: January 31, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Gas Company
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
-------------------------------
Title: Chairman of Benefits
Committee
The trust agreement set forth in those provisions of this Plan and
Trust which relate to the Trustee is hereby executed.
Date: February 6, 1996 BZW Barclays Global Investors,
National Association
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Principal
Date: February 6, 1996 BZW Barclays Global Investors,
National Association
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Principal
04/20/95
BAY STATE GAS COMPANY
EMPLOYEE SAVINGS PLAN
AMENDMENT AND RESTATEMENT
Adopted: December 8., 1992
WHEREAS, Bay State Gas Company (the "Company") adopted and
established, effective January 1, 1979, an employee savings plan (the
"Plan") for certain of its salaried employees; and
WHEREAS, Northern Utilities, Inc. ("Northern"), and Granite State
Gas Transmission, Inc. ("Granite"), both wholly-owned subsidiaries of
the Company, have also adopted the Plan; and
WHEREAS, the Company wishes to amend and restate the Plan, among
other things to comply with the provisions of the Tax Reform Act of
1986;
NOW, THEREFORE, pursuant to Section 12.1 of the Plan, the Company
hereby amends the Plan, effective generally as of January 1, 1989,
except as otherwise specified in the Plan as so amended and restated,
by deleting in their entirety Articles I through XIII thereof,
inclusive, and by substituting in lieu thereof Articles I through
XIII, attached;
IN WITNESS WHEREOF, Bay State Gas Company has caused this
instrument to be executed as of this 8th day of December, 1992.
BAY STATE GAS COMPANY
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III --------------------------------
------------------------------ Its
Clerk
The undersigned Trustee hereby acknowledges receipt of the
foregoing amendment on this ____ day of ____________________, 1992.
STATE STREET BANK AND TRUST COMPANY
By: ____________________________________
Its
04/20/95
1 DEFINITIONS
When capitalized, the words and phrases below have the following
meanings unless different meanings are clearly required by the
context:
1.1 "Account". The records maintained for purposes of
accounting for a Participant's interest in the Plan.
"Account" may refer to one or all of the following accounts
which have been created on behalf of a Participant to hold
specific types of Contributions under the Plan or previously
permitted under the Plan, amounts transferred from the Bay
State Gas Company Employee Stock Ownership Plan, as merged
herein effective July 1, 1987, or amounts transferred from
the Bay State Gas Company Savings Plan for Operating
Employees on behalf of a Participant who was a former
participant in the Bay State Gas Company Savings Plan for
Operating Employees:
(a) "Employee Pre-Tax Account". An account created to hold
Employee Pre-Tax Contributions or amounts transferred
from the Bay State Gas Company Employee Savings Plan
for Operating Employees designated as "Employee Pre-Tax
Account" amounts thereunder.
(b) "Prior After-Tax Account". An account created to hold
amounts previously contributed by an eligible
Participant on an after-tax basis for periods prior to
January 1, 1987, under former Plan provisions, which
continue to be accounted for in the Plan.
(c) "Rollover Account". An account created to hold
Rollover Contributions or amounts transferred from the
Bay State Gas Company Savings Plan for Operating
Employees designated as "Rollover Account" amounts
thereunder.
(d) "Employer Match Account". An account created to hold
Employer Match Contributions or amounts transferred
from the Bay State Gas Company Savings Plan for
Operating Employees designated as "Employer Account"
amounts thereunder.
(e) "Prior Company Account". An account created to hold
amounts previously contributed by the Employer on an
eligible Participant's behalf for periods prior to
November 1, 1983, based upon the amount contributed by
the eligible Participant under former Plan provisions,
which continue to be accounted for in the Plan.
1.2 "ACP" or "Average Contribution Percentage". The percentage
calculated in accordance with Section 12.1.
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1.3 "Administrator". The Company, which may delegate all or a
portion of the duties of the Administrator under the Plan to
a Committee in accordance with Section 15.6.
1.4 "ADP" or "Average Deferral Percentage". The percentage
calculated in accordance with Section 12.1.
1.5 "Beneficiary". The person or persons who is to receive
benefits after the death of the Participant pursuant to the
"Beneficiary Designation" paragraph in Section 11, or as a
result of a QDRO.
1.6 "Code". The Internal Revenue Code of 1986, as amended.
Reference to any specific Code section shall include such
section, any valid regulation promulgated thereunder, and
any comparable provision of any future legislation amending,
supplementing or superseding such section.
1.7 "Committee". If applicable, the committee which has been
appointed by the Company to administer the Plan in
accordance with Section 15.6.
1.8 "Company". Bay State Gas Company or any successor by merger,
purchase or otherwise.
1.9 "Company Stock". Shares of common stock of the Company, its
predecessor(s), or its successors or assigns, or any
corporation with or into which said corporation may be
merged, consolidated or reorganized, or to which a majority
of its assets may be sold.
1.10 "Compensation". The sum of a Participant's Taxable Income
and salary reductions, if any, pursuant to Code sections
125, 402(e)(3), 402(h), 403(b), 414(h)(2) or 457.
For purposes of determining benefits under this Plan,
Compensation is limited to $150,000, (as adjusted for the
cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year. For purposes of the preceding
sentence, in the case of an HCE who is a 5% Owner or one of
the 10 most highly compensated Employees, (i) such HCE and
such HCE's family group (as defined below) shall be treated
as a single employee and the Compensation of each family
group member shall be aggregated with the Compensation of
such HCE, and (ii) the limitation on Compensation shall be
allocated among such HCE and his or her family group members
in proportion to each individual's Compensation before the
application of this sentence. For purposes of this Section,
the term "family group" shall mean an Employee's spouse and
lineal descendants who have not attained age 19 before the
close of the year in question.
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For purposes of determining HCEs and key employees,
Compensation for the entire Plan Year shall be used. For
purposes of determining ADP and ACP, Compensation shall be
limited to amounts paid to an Eligible Employee while a
Participant.
1.11 "Contribution". An amount contributed to the Plan by the
Employer or an Eligible Employee, and allocated by
contribution type to Participants' Accounts, as described in
Section 1.1. Specific types of contribution include:
(a) "Employee Pre-Tax Contribution". An amount contributed
by an eligible Participant for periods on and after
November 1, 1983 in conjunction with his or her Code
section 401(k) salary deferral election which shall be
treated as made by the Employer on an eligible
Participant's behalf.
(b) "Rollover Contribution". An amount contributed by an
Eligible Employee which originated from another
employer's or an Employer's qualified plan.
(c) "Employer Match Contribution". An amount contributed
by the Employer on an eligible Participant's behalf for
periods on and after November 1, 1983, based upon the
amount contributed by the eligible Participant.
1.12 "Contribution Dollar Limit". The annual limit placed on
each Participant's Employee Pre-Tax Contributions, which
shall be $7,000 per calendar year (as adjusted for the cost
of living pursuant to Code sections 402(g)(5) and 415(d)).
For purposes of this Section, a Participant's Employee Pre-
Tax Contributions shall include (i) any employer
contribution made under any qualified cash or deferred
arrangement as defined in Code section 401(k) to the extent
not includible in gross income for the taxable year under
Code section 402(e)(3) or 402(h)(1)(B) (determined without
regard to Code section 402(g)), and (ii) any employer
contribution to purchase an annuity contract under Code
section 403(b) under a salary reduction agreement (within
the meaning of Code section 3121(a)(5)(D)).
1.13 "Conversion Period". The period of converting the prior
accounting system of the Plan and Trust, if such Plan and
Trust were in existence prior to the Effective Date, or the
prior accounting system of any plan and trust which is
merged into this Plan and Trust subsequent to the Effective
Date, to the accounting system described in Section 6.
1.14 "Direct Rollover". An Eligible Rollover Distribution that
is paid directly to an Eligible Retirement Plan for the
benefit of a Distributee.
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1.15 "Disability". A Participant's total and permanent, mental
or physical disability resulting in termination of
employment as evidenced by presentation of medical evidence
satisfactory to the Administrator.
1.16 "Distributee". An Employee or former Employee, the
surviving spouse of an Employee or former Employee and a
spouse or former spouse of an Employee or former Employee
determined to be an alternate payee under a QDRO.
1.17 "Effective Date". The date upon which the provisions of
this document become effective. This date is April 1, 1995,
unless stated otherwise. In general, the provisions of this
document only apply to Participants who are Employees on or
after the Effective Date. However, investment and
distribution provisions apply to all Participants with
Account balances to be invested or distributed after the
Effective Date.
1.18 "Eligible Employee". An Employee of an Employer whose
employment classification is "Administrative, Professional
and Supervisory" ("APS") or "Clerical/Technical" ("C/T"),
except any such Employee whose compensation and conditions
of employment are covered by a collective bargaining
agreement to which an Employer is a party unless the
agreement calls for the Employee's participation in the
Plan.
1.19 "Eligible Retirement Plan". An individual retirement
account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an
annuity plan described in Code section 403(a), or a
qualified trust described in Code section 401(a), that
accepts a Distributee's Eligible Rollover Distribution,
except that with regard to an Eligible Rollover Distribution
to a surviving spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement
annuity.
1.20 "Eligible Rollover Distribution". A distribution of all or
any portion of the balance to the credit of a Distributee,
excluding a distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of a
Distributee or the joint lives (or joint life expectancies)
of a Distributee and the Distributee's designated
Beneficiary, or for a specified period of ten years or more;
a distribution to the extent such distribution is required
under Code section 401(a)(9); and the portion of a
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to Employer
securities).
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1.21 "Employee". An individual who is:
(a) directly employed by any Related Company and for whom
any income for such employment is subject to
withholding of income or social security taxes, or
(b) a Leased Employee.
1.22 "Employer". The Company and any Subsidiary or other Related
Company of either the Company or a Subsidiary which adopts
this Plan with the approval of the Company.
1.23 "ERISA". The Employee Retirement Income Security Act of
1974, as amended. Reference to any specific section shall
include such section, any valid regulation promulgated
thereunder, and any comparable provision of any future
legislation amending, supplementing or superseding such
section.
1.24 "HCE" or "Highly Compensated Employee". An Employee
described as a Highly Compensated Employee in Section 12.
1.25 "Hour of Service". Each hour for which an Employee is
entitled to:
(a) payment for the performance of duties for any Related
Company;
(b) payment from any Related Company for any period during
which no duties are performed (irrespective of whether
the employment relationship has terminated) due to
vacation, holiday, sickness, incapacity (including
disability), layoff, leave of absence, jury duty or
military service;
(c) back pay, irrespective of mitigation of damages, by
award or agreement with any Related Company (and these
hours shall be credited to the period to which the
agreement pertains); or
(d) no payment, but is on a Leave of Absence (and these
hours shall be based upon his or her normally scheduled
hours per week or a 40 hour week if there is no regular
schedule).
The crediting of hours for which no duties are performed
shall be in accordance with Department of Labor regulation
sections 2530.200b-2(b) and (c). Actual hours shall be used
whenever an accurate record of hours are maintained for an
Employee. Otherwise, an equivalent number of hours shall be
credited for each payroll period in which the Employee would
be credited with at least 1 hour. The payroll period
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equivalencies are 45 hours weekly, 90 hours biweekly, 95
hours semimonthly and 190 hours monthly.
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her
Hours of Service for eligibility and/or vesting purposes if
(1) the Company directs that credit for such service be
granted, or (2) a qualified plan of the predecessor or
acquired company is subsequently maintained by any Employer
or Related Company.
1.26 "Ineligible". The Plan status of an individual during the
period in which he or she is (1) an Employee of a Related
Company which is not then an Employer, (2) an Employee, but
not an Eligible Employee, or (3) not an Employee.
1.27 "Investment Fund" or "Fund". An investment fund as
described in Section 16.2. The Investment Funds authorized
by the Administrator to be offered under the Plan as of the
Effective Date are set forth in Appendix A.
1.28 "Leased Employee". An individual who is deemed to be an
employee of any Related Company as provided in Code section
414(n) or (o).
1.29 "Leave of Absence". A period during which an individual is
deemed to be an Employee, but is absent from active
employment, provided that the absence:
(a) was authorized by a Related Company; or
(b) was due to military service in the United States armed
forces and the individual returns to active employment
within the period during which he or she retains
employment rights under federal law.
1.30 "Loan Account". The record maintained for purposes of
accounting for a Participant's loan and payments of
principal and interest thereon.
1.31 "NHCE" or "Non-Highly Compensated Employee". An Employee
described as a Non-Highly Compensated Employee in Section
12.
1.32 "Normal Retirement Date". The date of a Participant's 65th
birthday.
1.33 "Owner". A person with an ownership interest in the
capital, profits, outstanding stock or voting power of a
Related Company within the meaning of Code section 318 or
416 (which exclude indirect ownership through a qualified
plan).
6 04/20/95
1.34 "Participant". An Eligible Employee who begins to
participate in the Plan after completing the eligibility
requirements as described in Section 2.1 or an individual
who has an Account balance in the Plan solely as a result of
the merger of the Bay State Gas Company Employee Stock
Ownership Plan into this Plan. An Eligible Employee who
makes a Rollover Contribution prior to completing the
eligibility requirements as described in Section 2.1 shall
also be considered a Participant, except that he or she
shall not be considered a Participant for purposes of
provisions related to Contributions, other than a Rollover
Contribution, until he or she completes the eligibility
requirements as described in Section 2.1. A Participant's
participation continues until his or her employment with all
Related Companies ends and his or her Account is distributed
or forfeited.
1.35 "Pay". The straight time wages, exclusive of all daily or
weekly overtime, bonuses, supplementary compensation
payments, retirement benefits and other forms of non-
recurring compensation, but inclusive of shift
differentials, Saturday/Sunday premiums, compensation paid
at an alternative rate (not including compensation paid at
an alternative rate to a salesperson) and seventy-five
percent of sales commissions paid to an Eligible Employee by
an Employer while a Participant during the current period.
Pay is neither increased by any salary credit or decreased
by any salary reduction pursuant to Code sections 125 or
402(e)(3). Pay is limited to $150,000 (as adjusted for the
cost of living pursuant to Code sections 401(a)(17) and
415(d)) per Plan Year.
1.36 "Plan". The Bay State Gas Company Employee Savings Plan set
forth in this document, as from time to time amended.
1.37 "Plan Year". The annual accounting period of the Plan and
Trust which ends on each December 31.
1.38 "QDRO". A domestic relations order which the Administrator
has determined to be a qualified domestic relations order
within the meaning of Code section 414(p).
1.39 "Related Company". With respect to any Employer, that
Employer and any corporation, trade or business which is,
together with that Employer, a member of the same controlled
group of corporations, a trade or business under common
control, or an affiliated service group within the meaning
of Code sections 414(b), (c), (m) or (o), except that for
purposes of Section 13 "within the meaning of Code sections
414(b), (c), (m) or (o), as modified by Code section 415(h)"
shall be substituted for the preceding reference to "within
the meaning of Code section 414(b), (c), (m) or (o)".
7 04/20/95
1.40 "Settlement Date". For each Trade Date, the Trustee's next
business day.
1.41 "Spousal Consent". The written consent given by a spouse to
a Participant's Beneficiary designation. The spouse's
consent must acknowledge the effect on the spouse of the
Participant's designation, and be duly witnessed by a Plan
representative or notary public. Spousal Consent shall be
valid only with respect to the spouse who signs the Spousal
Consent and only for the particular choice made by the
Participant which requires Spousal Consent. A Participant
may revoke (without Spousal Consent) a prior designation
that required Spousal Consent at any time before payments
begin. Spousal Consent also means a determination by the
Administrator that there is no spouse, the spouse cannot be
located, or such other circumstances as may be established
by applicable law.
1.42 "Subsidiary". A company which is 50% or more owned,
directly or indirectly, by the Company.
1.43 "Sweep Account". The subsidiary Account for each
Participant through which all transactions are processed,
which is invested in interest bearing deposits of the
Trustee.
1.44 "Sweep Date". The cut off date and time for receiving
instructions for transactions to be processed on the next
Trade Date.
1.45 "Taxable Income". Compensation in the amount reported by
the Employer or a Related Company as "Wages, tips, other
compensation" on Form W-2, or any successor method of
reporting under Code section 6041(d).
1.46 "Trade Date". Each day the Investment Funds are valued,
which is normally every day the assets of such Funds are
traded.
1.47 "Trust". The legal entity created by those provisions of
this document which relate to the Trustee. The Trust is
part of the Plan and holds the Plan assets which are
comprised of the aggregate of Participants' Accounts and any
unallocated funds invested in deposit or money market type
assets pending allocation to Participants' Accounts or
disbursement to pay Plan fees and expenses.
1.48 "Trustee". ▇▇▇▇▇ Fargo Bank, National Association.
8 04/20/95
2 ELIGIBILITY
2.1 Eligibility
All Participants as of April 1, 1995 shall continue their
eligibility to participate. Each other Eligible Employee
shall become a Participant on the first day of the next
month after the date he or she completes a 12-month
eligibility period in which he or she is credited with at
least 1,000 Hours of Service. The initial eligibility
period begins on the date an Employee first performs an Hour
of Service. Subsequent eligibility periods begin with the
start of each Plan Year beginning after the first Hour of
Service is performed.
2.2 Ineligible Employees
If an Employee completes the above eligibility requirements,
but is Ineligible at the time participation would otherwise
begin (if he or she were not Ineligible), he or she shall
become a Participant on the first subsequent date on which
he or she is an Eligible Employee.
2.3 Ineligible or Former Participants
A Participant may not make or share in Plan Contributions,
nor generally be eligible for a new Plan loan, during the
period he or she is Ineligible, but he or she shall continue
to participate for all other purposes. An Ineligible
Participant or former Participant shall automatically become
an active Participant on the date he or she again becomes an
Eligible Employee.
3 PARTICIPANT CONTRIBUTIONS
3.1 Employee Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect
to reduce his or her Pay by an amount which does not exceed
the Contribution Dollar Limit, within the limits described
in the Contribution Percentage Limits paragraph of this
Section 3, and have such amount contributed to the Plan by
the Employer as an Employee Pre-Tax Contribution. The
election shall be made as a whole percentage of Pay in such
manner and with such advance notice as prescribed by the
Administrator. In no event shall an Employee's Employee
Pre-Tax Contributions under the Plan and comparable
contributions to all other plans, contracts or arrangements
of all Related Companies exceed the Contribution Dollar
Limit for the Employee's taxable year beginning in the Plan
Year.
9 04/20/95
3.2 Changing a Contribution Election
A Participant who is an Eligible Employee may change his or
her Employee Pre-Tax Contribution election as of the first
day of any month in such manner and with such advance notice
as prescribed by the Administrator, and such election shall
be effective with the first payroll paid after such date.
Participants' Contribution election percentages shall
automatically apply to Pay increases or decreases.
3.3 Revoking and Resuming a Contribution Election
A Participant may revoke his or her Contribution election at
any time in such manner and with such advance notice as
prescribed by the Administrator, and such revocation shall
be effective with the first payroll paid after such date.
A Participant who is an Eligible Employee may resume
Contributions by making a new Contribution election at the
same time in which a Participant may change his or her
election in such manner and with such advance notice as
prescribed by the Administrator, and such election shall be
effective with the first payroll paid after such date.
3.4 Contribution Percentage Limits
The Administrator may establish and change from time to
time, in writing, without the necessity of amending this
Plan and Trust, the minimum, if applicable, and maximum
Employee Pre-Tax Contribution percentages, prospectively
(for the current Plan Year), for all Participants. In
addition, the Administrator may establish any lower
percentage limits for Highly Compensated Employees as it
deems necessary to satisfy the tests described in Section
12. As of the Effective Date, the Employee Pre-Tax
Contribution maximum percentage is 15%.
Irrespective of the limits that may be established by the
Administrator in accordance with this paragraph, in no event
shall the contributions made by or on behalf of a
Participant for a Plan Year exceed the maximum allowable
under Code section 415.
3.5 Refunds When Contribution Dollar Limit Exceeded
A Participant who makes Employee Pre-Tax Contributions for a
calendar year to this Plan and comparable contributions to
any other qualified defined contribution plan in excess of
the Contribution Dollar Limit may notify the Administrator
in writing by the following March 1 (or as late as April 14
if allowed by the Administrator) that an excess has
occurred. In this event, the amount of the excess specified
by the Participant, adjusted for investment gain or loss,
shall be refunded to him or her by April 15 and shall not be
10 04/20/95
included as an Annual Addition under Code section 415 for
the year contributed. Refunds shall not include investment
gain or loss for the period between the end of the
applicable calendar year and the date of distribution.
Excess amounts shall first be taken from unmatched Employee
Pre-Tax Contributions and then from matched Employee Pre-Tax
Contributions. Any Employer Match Contributions
attributable to refunded excess Employee Pre-Tax
Contributions as described in this Section shall be
forfeited and used to reduce Contributions made by an
Employer as soon as administratively feasible.
3.6 Timing, Posting and Tax Considerations
Participants' Contributions, other than Rollover
Contributions, may only be made through payroll deduction.
Such amounts shall be paid to the Trustee in cash and posted
to each Participant's Account(s) as soon as such amounts can
reasonably be separated from the Employer's general assets
and balanced against the specific amount made on behalf of
each Participant. In no event, however, shall such amounts
be paid to the Trustee more than 90 days after the date
amounts are deducted from a Participant's Pay. Employee
Pre-Tax Contributions shall be treated as Contributions made
by an Employer in determining tax deductions under Code
section 404(a).
4 ROLLOVERS AND TRANSFERS FROM AND TO OTHER QUALIFIED PLANS
4.1 Rollovers
The Administrator may authorize the Trustee to accept a
rollover contribution, within the meaning of Code section
402(c) or 408(d)(3)(A)(ii), in cash, directly from an
Eligible Employee or as a Direct Rollover from another
qualified plan on behalf of the Eligible Employee, even if
he or she is not yet a Participant. The Employee shall be
responsible for furnishing satisfactory evidence, in such
manner as prescribed by the Administrator, that the amount
is eligible for rollover treatment. A rollover contribution
received directly from an Eligible Employee must be paid to
the Trustee in cash within 60 days after the date received
by the Eligible Employee from a qualified plan or conduit
individual retirement account. Contributions described in
this paragraph shall be posted to the applicable Employee's
Rollover Account as of the date received by the Trustee.
If it is later determined that an amount contributed
pursuant to the above paragraph did not in fact qualify as a
rollover contribution under Code section 402(c) or
408(d)(3)(A)(ii), the balance credited to the Employee's
Rollover Account shall immediately be (1) segregated from
all other Plan assets, (2) treated as a nonqualified trust
11 04/20/95
established by and for the benefit of the Employee, and (3)
distributed to the Employee. Any such nonqualifying
rollover shall be deemed never to have been a part of the
Plan.
4.2 Transfers From and To Other Qualified Plans
The Administrator may instruct the Trustee to receive assets
in cash or in kind directly from another qualified plan or
transfer assets in cash or in kind directly to another
qualified plan; provided that a transfer should not be
directed if:
(a) any amounts are not exempted by Code section
401(a)(11)(B) from the annuity requirements of Code
section 417 unless, in the event of a receipt of
assets, the Plan complies with such requirements or, in
the event of a transfer of assets, the receiving plan
complies with such requirements; or
(b) any amounts include benefits protected by Code section
411(d)(6) which would not be preserved under applicable
Plan provisions, in the event of a receipt of assets
or, under the applicable provisions of the receiving
plan, in the event of a transfer of assets.
The Trustee may refuse the receipt of any transfer if:
(a) the Trustee finds the in-kind assets unacceptable; or
(b) instructions for posting amounts to Participants'
Accounts are incomplete.
Such amounts shall be posted to the appropriate Accounts of
Participants as of the date received by the Trustee.
5 EMPLOYER CONTRIBUTIONS
5.1 Employer Match Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer shall
make Employer Match Contributions, as described in the
following Allocation Method paragraph, on behalf of each
Participant who contributed during the period.
(b) Allocation Method. The Employer Match Contributions
(including any Forfeiture Account amounts applied as
Employer Match Contributions in accordance with Section 8.4)
for each period shall total 50% of each eligible
Participant's Employee Pre-Tax Contributions for the period,
provided that no Employer Match Contributions (and
Forfeiture Account amounts) shall be made based upon a
12 04/20/95
Participant's Contributions in excess of 5% of his or her
Pay. Notwithstanding, "100% of each eligible Participant's
Employee Pre-Tax Contributions for the period up to 2.5% of
his or her Pay and 50% of each eligible Participant's
Employee Pre-Tax Contributions for the period on the next 5%
of his or her Pay" shall be substituted for the formula as
stated in the preceding sentence with regard to an eligible
Participant who:
(1) became an Employee before September 1, 1990 and was
under age forty-five on January 1, 1992; or
(2) became an Employee on or after September 1, 1990; or
(3) became an Employee before September 1, 1990, was at
least age forty-five on January 1, 1992 and irrevocably
elected to waive eligibility for post-retiree medical
coverage no later than September 1, 1992.
(c) Timing, Medium and Posting. The Employer shall make each
period's Employer Match Contribution in cash as soon as
administratively feasible, and for purposes of deducting
such Contribution, not later than the Employer's federal tax
filing date, including extensions. The Trustee shall post
such amount to each Participant's Employer Match Account
once the total Contribution received has been balanced
against the specific amount to be credited to each
Participant's Employer Match Account.
6 ACCOUNTING
6.1 Individual Participant Accounting
The Administrator shall maintain an individual set of
Accounts for each Participant in order to reflect
transactions both by type of Contribution and investment
medium. Financial transactions shall be accounted for at
the individual Account level by posting each transaction to
the appropriate Account of each affected Participant.
Participant Account values shall be maintained in shares for
the Investment Funds and in dollars for the Sweep and Loan
Accounts. At any point in time, the Account value shall be
determined using the most recent Trade Date values provided
by the Trustee.
6.2 Sweep Account is Transaction Account
All transactions related to amounts being contributed to or
distributed from the Trust shall be posted to each affected
Participant's Sweep Account. Any amount held in the Sweep
Account shall be credited with interest up until the date on
which it is removed from the Sweep Account.
13 04/20/95
6.3 Trade Date Accounting and Investment Cycle
Participant Account values shall be determined as of each
Trade Date. For any transaction to be processed as of a
Trade Date, the Trustee must receive instructions for the
transaction by the Sweep Date. Such instructions shall
apply to amounts held in the Account on that Sweep Date.
Financial transactions of the Investment Funds shall be
posted to Participants' Accounts as of the Trade Date, based
upon the Trade Date values provided by the Trustee, and
settled on the Settlement Date.
6.4 Accounting for Investment Funds
Investments in each Investment Fund shall be maintained in
shares. The Trustee is responsible for determining the
share values of each Investment Fund as of each Trade Date.
To the extent an Investment Fund is comprised of collective
investment funds of the Trustee, or any other fiduciary to
the Plan, the share values shall be determined in accordance
with the rules governing such collective investment funds,
which are incorporated herein by reference. All other share
values shall be determined by the Trustee. The share value
of each Investment Fund shall be based on the fair market
value of its underlying assets.
6.5 Payment of Fees and Expenses
Except to the extent Plan fees and expenses related to
Account maintenance, transaction and Investment Fund
management and maintenance, as set forth below, are paid by
the Employer directly, such fees and expenses shall be paid
as set forth below. The Employer may pay a lower portion of
the fees and expenses allocable to the Accounts of
Participants who are no longer Employees or who are not
Beneficiaries, unless doing so would result in
discrimination.
(a) Account Maintenance: Account maintenance fees and
expenses, may include but are not limited to,
administrative, Trustee, government annual report
preparation, audit, legal, nondiscrimination testing
and fees for any other special services. Account
maintenance fees shall be charged to Participants on a
per Participant basis provided that no fee shall reduce
a Participant's Account balance below zero.
(b) Transaction: Transaction fees and expenses, may
include but are not limited to, periodic installment
payment, and Investment Fund election change and loan
fees. Transaction fees shall be charged to the
Participant's Account involved in the transaction
14 04/20/95
provided that no fee shall reduce a Participant's
Account balance below zero.
(c) Investment Fund Management and Maintenance: Management
and maintenance fees and expenses related to the
Investment Funds shall be charged at the Investment
Fund level and reflected in the net gain or loss of
each Fund.
As of the Effective Date, a breakdown of which Plan fees and
expenses shall generally be borne by the Trust (and charged
to individual Participants' Accounts or charged at the
Investment Fund level and reflected in the net gain or loss
of each Fund) and those that shall be paid by the Employer
is set forth in Appendix B and may be changed from time to
time by the Administrator, in writing, without the necessity
of amending this Plan and Trust.
The Trustee shall have the authority to pay any such fees
and expenses, which remain unpaid by the Employer for 60
days, from the Trust.
6.6 Accounting for Participant Loans
Participant loans shall be held in a separate Loan Account
of the Participant and accounted for in dollars as an
earmarked asset of the borrowing Participant's Account.
6.7 Error Correction
The Administrator may correct any errors or omissions in the
administration of the Plan by restoring any Participant's
Account balance with the amount that would be credited to
the Account had no error or omission been made. Funds
necessary for any such restoration shall be provided through
payment made by the Employer, or by the Trustee to the
extent the error or omission is attributable to actions or
inactions of the Trustee.
6.8 Participant Statements
The Administrator shall provide Participants with statements
of their Accounts as soon after the end of each quarter of
the Plan Year as administratively feasible.
6.9 Special Accounting During Conversion Period
The Administrator and Trustee may use any reasonable
accounting methods in performing their respective duties
during any Conversion Period. This includes, but is not
limited to, the method for allocating net investment gains
or losses and the extent, if any, to which contributions
15 04/20/95
received by and distributions paid from the Trust during
this period share in such allocation.
6.10 Accounts for QDRO Beneficiaries
A separate Account shall be established for an alternate
payee entitled to any portion of a Participant's Account
under a QDRO as of the date and in accordance with the
directions specified in the QDRO. In addition, a separate
Account may be established during the period of time the
Administrator, a court of competent jurisdiction or other
appropriate person is determining whether a domestic
relations order qualifies as a QDRO. Such a separate
Account shall be valued and accounted for in the same manner
as any other Account.
(a) Distributions Pursuant to QDROs. If a QDRO so
provides, the portion of a Participant's Account
payable to an alternate payee may be distributed, in a
form as permissible under Section 11, to the alternate
payee at the time specified in the QDRO, regardless of
whether the Participant is entitled to a distribution
from the Plan at such time.
(b) Participant Loans. Except to the extent required by
law, an alternate payee, on whose behalf a separate
Account has been established, shall not be entitled to
borrow from such Account. If a QDRO specifies that the
alternate payee is entitled to any portion of the
Account of a Participant who has an outstanding loan
balance, all outstanding loans shall generally continue
to be held in the Participant's Account and shall not
be divided between the Participant's and alternate
payee's Accounts.
(c) Investment Direction. Where a separate Account has
been established on behalf of an alternate payee and
has not yet been distributed, the alternate payee may
direct the investment of such Account in the same
manner as if he or she were a Participant.
7 INVESTMENT FUNDS AND ELECTIONS
7.1 Investment Funds
Except for Participants' Sweep and Loan Accounts, the Trust
shall be maintained in various Investment Funds. The
Administrator shall select the Investment Funds offered to
Participants and may change the number or composition of the
Investment Funds, subject to the terms and conditions agreed
to with the Trustee. As of the Effective Date, a list of
the Investment Funds offered under the Plan is set forth in
Appendix A, and may be changed from time to time by the
16 04/20/95
Administrator, in writing, and as agreed to by the Trustee,
without the necessity of amending this Plan and Trust.
7.2 Investment Fund Elections
Each Participant shall direct the investment of all of his
or her Contribution Accounts.
A Participant shall make his or her investment election in
any combination of one or any number of the Investment Funds
offered in accordance with the procedures established by the
Administrator and Trustee. However, during any Conversion
Period, Trust assets may be held in any investment vehicle
permitted by the Plan, as directed by the Administrator,
irrespective of Participant investment elections.
The Administrator may set a maximum percentage of the total
election that a Participant may direct into any specific
Investment Fund, which maximum, if any, as of the Effective
Date, is set forth in Appendix A, and may be changed from
time to time by the Administrator, in writing, without the
necessity of amending this Plan and Trust.
7.3 Responsibility for Investment Choice
Each Participant shall be solely responsible for the
selection of his or her Investment Fund choices. No
fiduciary with respect to the Plan is empowered to advise a
Participant as to the manner in which his or her Accounts
are to be invested, and the fact that an Investment Fund is
offered shall not be construed to be a recommendation for
investment.
7.4 Default if No Election
The Administrator shall specify an Investment Fund for the
investment of that portion of a Participant's Account which
is not yet held in an Investment Fund and for which no valid
investment election is on file. The Investment Fund
specified as of the Effective Date is set forth in Appendix
A, and may be changed from time to time by the
Administrator, in writing, without the necessity of amending
this Plan and Trust.
7.5 Timing
A Participant shall make his or her initial investment
election upon becoming a Participant and may change his or
her investment election at any time in accordance with the
procedures established by the Administrator and Trustee.
Investment elections received by the Trustee by the Sweep
Date shall be effective on the following Trade Date.
17 04/20/95
7.6 Investment Fund Election Change Fees
A reasonable processing fee may be charged directly to a
Participant's Account for Investment Fund election changes
in excess of a specified number per year as determined by
the Administrator.
8 VESTING
8.1 Fully Vested Contribution Accounts
A Participant shall be fully vested in all Accounts at all
times.
9 PARTICIPANT LOANS
9.1 Participant Loans Permitted
Loans to Participants are permitted pursuant to the terms
and conditions set forth in this Section.
9.2 Loan Application, Note and Security
A Participant shall apply for any loan in such manner and
with such advance notice as prescribed by the Administrator.
All loans shall be evidenced by a promissory note, secured
only by the portion of the Participant's Account from which
the loan is made, and the Plan shall have a lien on this
portion of his or her Account.
9.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to take out a loan under the Plan.
9.4 Loan Approval
The Administrator, or the Trustee, if otherwise authorized
by the Administrator and agreed to by the Trustee, is
responsible for determining that a loan request conforms to
the requirements described in this Section and granting such
request.
9.5 Loan Funding Limits, Account Sources and Funding Order
The loan amount must meet all of the following limits as
determined as of the Sweep Date the loan is processed and
shall be funded from the Participant's Accounts as follows:
(a) Plan Minimum Limit. The minimum amount for any loan is
$1,000.
18 04/20/95
(b) Plan Maximum Limit, Account Sources and Funding Order.
Subject to the legal limit described in (c) below, the
maximum a Participant may borrow, including the
outstanding balance of existing Plan loans, is 100% of
the following of the Participant's Accounts which are
fully vested in the priority order as follows:
Employee Pre-Tax Account
Employer Match Account
Prior Company Account
Rollover Account
Prior After-Tax Account
(c) Legal Maximum Limit. The maximum a Participant may
borrow, including the outstanding balance of existing
Plan loans, is 50% of his or her vested Account
balance, not to exceed $50,000. However, the $50,000
maximum is reduced by the Participant's highest
outstanding loan balance during the 12 month period
ending on the day before the Sweep Date as of which the
loan is made. For purposes of this paragraph, the
qualified plans of all Related Companies shall be
treated as though they are part of this Plan to the
extent it would decrease the maximum loan amount.
9.6 Maximum Number of Loans
A Participant may have a maximum of two loans outstanding at
any given time.
9.7 Source and Timing of Loan Funding
A loan to a Participant shall be made solely from the assets
of his or her own Account. The available assets shall be
determined first by Account type and then within each
Account used for funding a loan, amounts shall first be
taken from the Sweep Account and then taken by Investment
Fund in direct proportion to the market value of the
Participant's interest in each Investment Fund as of the
Trade Date on which the loan is processed.
The loan shall be funded on the Settlement Date following
the Trade Date as of which the loan is processed. The
Trustee shall make payment to the Participant as soon
thereafter as administratively feasible.
9.8 Interest Rate
The interest rate charged on Participant loans shall be a
fixed reasonable rate of interest, determined from time to
time by the Administrator, which provides the Plan with a
return commensurate with the prevailing interest rate
charged by persons in the business of lending money for
19 04/20/95
loans which would be made under similar circumstances. As
of the Effective Date, the interest rate is determined as
set forth in Appendix C, and may be changed from time to
time by the Administrator, in writing, without the necessity
of amending this Plan and Trust.
9.9 Loan Payment
Substantially level amortization shall be required of each
loan with payments made at least monthly, generally through
payroll deduction. Loans may be prepaid in full or in part
at any time. The Participant may choose the loan repayment
period, not to exceed five years.
9.10 Loan Payment Hierarchy
Loan principal payments shall be credited to the
Participant's Accounts in the inverse of the order used to
fund the loan. Loan interest shall be credited to the
Participant's Accounts in direct proportion to the principal
payment. Loan payments are credited to the Investment Funds
based upon the Participant's current investment election for
new Contributions.
9.11 Repayment Suspension
The Administrator may agree to a suspension of loan payments
for up to 12 months for a Participant who is on a Leave of
Absence without pay. During the suspension period interest
shall continue to accrue on the outstanding loan balance.
At the expiration of the suspension period all outstanding
loan payments and accrued interest thereon shall be due
unless otherwise agreed upon by the Administrator.
9.12 Loan Default
A loan is treated as a default if scheduled loan payments
are more than 90 days late. A Participant shall then have
30 days from the time he or she receives written notice of
the default and a demand for past due amounts to cure the
default before it becomes final.
In the event of default, the Administrator may direct the
Trustee to report the outstanding principal balance of the
loan and accrued interest thereon as a taxable distribution.
As soon as a Plan withdrawal or distribution to such
Participant would otherwise be permitted, the Administrator
may instruct the Trustee to execute upon its security
interest in the Participant's Account by distributing the
note to the Participant.
20 04/20/95
9.13 Call Feature
The Administrator shall have the right to call any
Participant loan once a Participant's employment with all
Related Companies has terminated or if the Plan is
terminated.
10 IN-SERVICE WITHDRAWALS
10.1 In-Service Withdrawals Permitted
In-service withdrawals to a Participant who is an Employee
are permitted pursuant to the terms and conditions set forth
in this Section and as required by law as set forth in
Section 11. Except to the extent as required by law as set
forth in Section 11, in-service withdrawals under the Plan
are limited to those in-service withdrawals described in
Sections 10.7 through 10.11.
10.2 In-Service Withdrawal Application and Notice
A Participant shall apply for an in-service withdrawal in
such manner and with such advance notice as prescribed by
the Administrator. The Participant shall be provided the
notice prescribed by Code section 402(f).
If an in-service withdrawal is one to which Code sections
401(a)(11) and 417 do not apply, such in-service withdrawal
may commence less than 30 days after the aforementioned
notice is provided, if:
(a) the Participant is clearly informed that he or she has
the right to a period of at least 30 days after receipt
of such notice to consider his or her option to elect
or not elect a Direct Rollover for all or a portion, if
any, of his or her in-service withdrawal which shall
constitute an Eligible Rollover Distribution; and
(b) the Participant after receiving such notice,
affirmatively elects a Direct Rollover for all or a
portion, if any, of his or her in-service withdrawal
which shall constitute an Eligible Rollover
Distribution or alternatively elects to have all or a
portion made payable directly to him or her, thereby
not electing a Direct Rollover for all or a portion
thereof.
10.3 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to make an in-service withdrawal under the Plan.
21 04/20/95
10.4 In-Service Withdrawal Approval
The Administrator, or the Trustee, if otherwise authorized
by the Administrator and agreed to by the Trustee, is
responsible for determining that an in-service withdrawal
request conforms to the requirements described in this
Section and granting such request.
10.5 Minimum Amount, Payment Form and Medium
There is no minimum amount for any type of withdrawal.
The form of payment for an in-service withdrawal shall be a
single lump sum and payment shall be made in cash. With
regard to the portion of a withdrawal representing an
Eligible Rollover Distribution, a Participant may elect a
Direct Rollover for all or a portion of such amount.
10.6 Source and Timing of In-Service Withdrawal Funding
An in-service withdrawal to a Participant shall be made
solely from the assets of his or her own Account and shall
be based on the Account values as of the Trade Date the in-
service withdrawal is processed. The available assets shall
be determined first by Account type and then within each
Account used for funding an in-service withdrawal, amounts
shall first be taken from the Sweep Account and then taken
by Investment Fund in direct proportion to the market value
of the Participant's interest in each Investment Fund (which
excludes his or her Loan Account balance) as of the Trade
Date on which the in-service withdrawal is processed.
The in-service withdrawal shall be funded on the Settlement
Date following the Trade Date as of which the in-service
withdrawal is processed. The Trustee shall make payment as
soon thereafter as administratively feasible.
10.7 Hardship Withdrawals
(a) Requirements. A Participant who is an Employee may
request the withdrawal of up to the amount necessary to
satisfy a financial need including amounts necessary to
pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the
withdrawal. Only requests for withdrawals (1) on
account of a Participant's "Deemed Financial Need", and
(2) which are "Deemed Necessary" to satisfy the
financial need shall be approved.
(b) "Deemed Financial Need". An immediate and heavy
financial need relating to:
22 04/20/95
(1) the payment of unreimbursable medical expenses
described under Code section 213(d) incurred (or
to be incurred) by the Employee, his or her spouse
or dependents;
(2) the purchase (excluding mortgage payments) of the
Employee's principal residence;
(3) the payment of unreimbursable tuition, related
educational fees and room and board for up to the
next 12 months of post secondary education for the
Employee, his or her spouse or dependents;
(4) the payment of amounts necessary for the Employee
to prevent losing his or her principal residence
through eviction or foreclosure on the mortgage;
or
(5) any other circumstance specifically permitted
under Code section 401(k)(2)(B)(i)(IV).
(c) "Deemed Necessary". A withdrawal is "deemed necessary"
to satisfy the financial need only if the withdrawal
amount does not exceed the financial need and all of
these conditions are met:
(1) the Employee has obtained all possible withdrawals
(other than hardship withdrawals) and nontaxable
loans available from this Plan and all other plans
maintained by Related Companies;
(2) the Administrator shall suspend the Employee from
making any contributions to this Plan and all
other qualified and nonqualified plans of deferred
compensation and all stock option or stock
purchase plans maintained by Related Companies for
12 months from the date the withdrawal payment is
made; and
(3) the Administrator shall reduce the Contribution
Dollar Limit for the Employee with regard to this
Plan and all other plans maintained by Related
Companies, for the calendar year next following
the calendar year of the withdrawal by the amount
of the Employee's Employee Pre-Tax Contributions
for the calendar year of the withdrawal.
(d) Account Sources and Funding Order. All available
amounts must first be withdrawn from a Participant's
Prior After-Tax Account. The remaining withdrawal
amount shall come from the following of the
Participant's fully vested Accounts, in the priority
order as follows:
23 04/20/95
Rollover Account
Employer Match Account
Prior Company Account
Employee Pre-Tax Account
The amount that may be withdrawn from a Participant's
Employee Pre-tax Account shall not include any earnings
credited to his or her Employee Pre-Tax Account after
the start of the first Plan Year beginning after
December 31, 1988.
(e) Permitted Frequency. There is no restriction on the
number of Hardship withdrawals permitted to a
Participant.
(f) Suspension from Further Contributions. Upon making a
Hardship withdrawal, a Participant may not make
additional Employee Pre-Tax Contributions (or
additional contributions to all other qualified and
nonqualified plans of deferred compensation and all
stock option or stock purchase plans maintained by
Related Companies) for a period of 12 months from the
date the withdrawal payment is made.
10.8 Prior After-Tax Account Withdrawals
(a) Requirements. A Participant who is an Employee may
withdraw from the Accounts listed in paragraph (b)
below.
(b) Account Sources and Funding Order. The withdrawal
amount shall come from a Participant's Prior After-Tax
Account.
(c) Permitted Frequency. The maximum number of Prior
After-Tax Account withdrawals permitted to a
Participant in any 12-month period is one.
(d) Suspension from Further Contributions. An Prior After-
Tax Account withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
10.9 Rollover Account Withdrawals
(a) Requirements. A Participant who is an Employee may
withdraw from the Accounts listed in paragraph (b)
below.
(b) Account Sources and Funding Order. The withdrawal
amount shall come from a Participant's Rollover
Account.
24 04/20/95
(c) Permitted Frequency. The maximum number of Rollover
Account withdrawals permitted to a Participant in any
12-month period is one.
(d) Suspension from Further Contributions. A Rollover
Account withdrawal shall not affect a Participant's
ability to make or be eligible to receive further
Contributions.
10.10 Over Age 59 1/2 Withdrawals
(a) Requirements. A Participant who is an Employee and
over age 59 1/2 may withdraw from the Accounts listed
in paragraph (b) below.
(b) Account Sources and Funding Order. The withdrawal
amount shall come from the following of the
Participant's fully vested Accounts, in the priority
order as follows, except that the Participant may
instead choose to have amounts taken from his or her
Prior After-Tax Account first:
Rollover Account
Employee Pre-Tax Account
Employer Match Account
Prior Company Account
Prior After-Tax Account
(c) Permitted Frequency. The maximum number of Over Age 59
1/4 withdrawals permitted to a Participant in any 12-
month period is one.
(d) Suspension from Further Contributions. An Over Age 59
1/2 withdrawal shall not affect a Participant's ability
to make or be eligible to receive further
Contributions.
10.11 Prior Company Account Plus Withdrawals
(a) Requirements. A Participant who is an Employee may
withdraw from the Accounts listed in paragraph (b)
below.
(b) Account Sources and Funding Order. The withdrawal
amount shall come from the following of the
Participant's fully vested Accounts, in the priority
order as follows, except that the Participant may
instead choose to have amounts taken from his or her
Prior After-Tax Account first:
Rollover Account
Prior Company Account
Prior After-Tax Account
25 04/20/95
(c) Permitted Frequency. The maximum number of Prior
Company Account Plus withdrawals permitted to a
Participant in any 12-month period is one.
(d) Suspension from Further Contributions. A Prior Company
Account Plus withdrawal shall not affect a
Participant's ability to make or be eligible to receive
further Contributions.
11 DISTRIBUTIONS ONCE EMPLOYMENT ENDS OR AS REQUIRED BY LAW
11.1 Benefit Information, Notices and Election
A Participant, or his or her Beneficiary in the case of his
or her death, shall be provided with information regarding
all optional times and forms of distribution available, to
include the notices prescribed by Code section 402(f) and
Code section 411(a)(11). Subject to the other requirements
of this Section, a Participant, or his or her Beneficiary in
the case of his or her death, may elect, in such manner and
with such advance notice as prescribed by the Administrator,
to have his or her vested Account balance paid to him or her
beginning upon any Settlement Date following the
Participant's termination of employment with all Related
Companies or, if earlier, at the time required by law as set
forth in Section 11.6.
If a distribution is one to which Code sections 401(a)(11)
and 417 do not apply, such distribution may commence less
than 30 days after the aforementioned notices are provided,
if:
(a) the Participant is clearly informed that he or she has
the right to a period of at least 30 days after receipt
of such notices to consider the decision as to whether
to elect a distribution and if so to elect a particular
form of distribution and to elect or not elect a Direct
Rollover for all or a portion, if any, of his or her
distribution which shall constitute an Eligible
Rollover Distribution; and
(b) the Participant after receiving such notices,
affirmatively elects a distribution and a Direct
Rollover for all or a portion, if any, of his or her
distribution which shall constitute an Eligible
Rollover Distribution or alternatively elects to have
all or a portion made payable directly to him or her,
thereby not electing a Direct Rollover for all or a
portion thereof.
26 04/20/95
11.2 Spousal Consent
A Participant is not required to obtain Spousal Consent in
order to receive a distribution under the Plan.
11.3 Payment Form and Medium
Except to the extent otherwise provided by Section 11.4, a
Participant may elect to be paid in any of these forms:
(a) a single lump sum,
(b) a portion paid in a lump sum, and the remainder paid
later, or
(c) periodic installments over a period not to exceed the
life expectancy of the Participant and his or her
Beneficiary.
Distributions shall be made in cash, except to the extent a
distribution consists of a loan call as described in Section
9. Alternatively, a Participant may elect that a lump sum
payment be made in the form of whole shares of Company Stock
and cash in lieu of fractional shares to the extent invested
in the Company Stock Fund. With regard to the portion of a
distribution representing an Eligible Rollover Distribution,
a Distributee may elect a Direct Rollover for all or a
portion of such amount.
11.4 Distribution of Small Amounts
If, after a Participant's employment with all Related
Companies ends, the Participant's vested Account balance is
$3,500 or less, and if at the time of any prior in-service
withdrawal or distribution the Participant's vested Account
balance did not exceed $3,500, the Participant's benefit
shall be paid as a single lump sum as soon as
administratively feasible in accordance with procedures
prescribed by the Administrator.
11.5 Source and Timing of Distribution Funding
A distribution to a Participant shall be made solely from
the assets of his or her own Accounts and shall be based on
the Account values as of the Trade Date the distribution is
processed. The available assets shall be determined first
by Account type and then within each Account used for
funding a distribution, amounts shall first be taken from
the Sweep Account and then taken by Investment Fund in
direct proportion to the market value of the Participant's
interest in each Investment Fund as of the Trade Date on
which the distribution is processed.
27 04/20/95
The distribution shall be funded on the Settlement Date
following the Trade Date as of which the distribution is
processed. The Trustee shall make payment as soon
thereafter as administratively feasible.
11.6 Latest Commencement Permitted
ln addition to any other Plan requirements and unless a
Participant elects otherwise, his or her benefit payments
shall begin not later than 60 days after the end of the Plan
Year in which he or she attains his or her Normal Retirement
Date or retires, whichever is later. However, if the amount
of the payment or the location of the Participant (after a
reasonable search) cannot be ascertained by that deadline,
payment shall be made no later than 60 days after the
earliest date on which such amount or location is
ascertained but in no event later than as described below.
A Participant's failure to elect in such manner as
prescribed by the Administrator to have his or her vested
Account balance paid to him or her, shall be deemed an
election by the Participant to defer his or her
distribution.
Benefit payments shall begin by the April 1 immediately
following the end of the calendar year in which the
Participant attains age 70 1/2, whether or not he or she is
an Employee.
If benefit payments cannot begin at the time required
because the location of the Participant cannot be
ascertained (after a reasonable search), the Administrator
may, at any time thereafter, treat such person's Account as
forfeited subject to the provisions of Section 18.5.
11.7 Payment Within Life Expectancy
The Participant's payment election must be consistent with
the requirement of Code section 401(a)(9) that all payments
are to be completed within a period not to exceed the lives
or the joint and last survivor life expectancy of the
Participant and his or her Beneficiary. The life
expectancies of a Participant and his or her Beneficiary, if
such Beneficiary is his or her spouse, may be recomputed
annually.
11.8 Incidental Benefit Rule
The Participant's payment election must be consistent with
the requirement that, if the Participant's spouse is not his
or her sole primary Beneficiary, the minimum annual
distribution for each calendar year, beginning with the year
in which he or she attains age 70 1/2, shall not be less
than the quotient obtained by dividing (a) the Participant's
28 04/20/95
vested Account balance as of the last Trade Date of the
preceding year by (b) the applicable divisor as determined
under the incidental benefit requirements of Code section
401(a)(9).
11.9 Payment to Beneficiary
Payment to a Beneficiary must either: (1) be completed by
the end of the calendar year that contains the fifth
anniversary of the Participant's death or (2) begin by the
end of the calendar year that contains the first anniversary
of the Participant's death and be completed within the
period of the Beneficiary's life or life expectancy, except
that:
(a) If the Participant dies after the April 1 immediately
following the end of the calendar year in which he or
she attains age 70 1/2, payment to his or her
Beneficiary must be made at least as rapidly as
provided in the Participant's distribution election;
(b) If the surviving spouse is the Beneficiary, payments
need not begin until the end of the calendar year in
which the Participant would have attained age 70 1/2
and must be completed within the spouse's life or life
expectancy; and
(c) If the Participant and the surviving spouse who is the
Beneficiary die (1) before the April 1 immediately
following the end of the calendar year in which the
Participant would have attained age 70 1/2 and (2)
before payments have begun to the spouse, the spouse
shall be treated as the Participant in applying these
rules.
11.10 Beneficiary Designation
Each Participant may complete a beneficiary designation form
indicating the Beneficiary who is to receive the
Participant's remaining Plan interest at the time of his or
her death. The designation may be changed at any time.
However, a Participant's spouse shall be the sole primary
Beneficiary unless the designation includes Spousal Consent
for another Beneficiary. If no proper designation is in
effect at the time of a Participant's death or if the
Beneficiary does not survive the Participant, the
Beneficiary shall be, in the order listed, the:
(a) Participant's surviving spouse,
(b) Participant's children, in equal shares, (or if a child
does not survive the Participant, and that child leaves
29 04/20/95
issue, the issue shall be entitled to that child's
share, by right of representation) or
(c) Participant's estate.
12 ADP AND ACP TESTS
12.1 Contribution Limitation Definitions
The following definitions are applicable to this Section 12
(where a definition is contained in both Sections 1 and 12,
for purposes of Section 12 the Section 12 definition shall
be controlling):
(a) "ACP" or "Average Contribution Percentage". The
Average Percentage calculated using Contributions
allocated to Participants as of a date within the Plan
Year.
(b) "ACP Test". The determination of whether the ACP is in
compliance with the Basic or Alternative Limitation for
a Plan Year (as defined in Section 12.2).
(c) "ADP" or "Average Deferral Percentage". The Average
Percentage calculated using Deferrals allocated to
Participants as of a date within the Plan Year.
(d) "ADP Test". The determination of whether the ADP is in
compliance with the Basic or Alternative Limitation for
a Plan Year (as defined in Section 12.2).
(e) "Average Percentage". The average of the calculated
percentages for Participants within the specified
group. The calculated percentage refers to either the
"Deferrals" or "Contributions" (as defined in this
Section) made on each Participant's behalf for the Plan
Year, divided by his or her Compensation for the
portion of the Plan Year in which he or she was an
Eligible Employee while a Participant. (Employee Pre-
Tax Contributions to this Plan or comparable
contributions to plans of Related Companies which shall
be refunded solely because they exceed the Contribution
Dollar Limit are included in the percentage for the HCE
Group but not for the NHCE Group.)
(f) "Contributions" shall include Employer Match
Contributions. In addition, Contributions may include
Employee Pre-Tax Contributions, but only to the extent
that (1) the Employer elects to use them, (2) they are
not used or counted in the ADP Test and (3) they
otherwise satisfy the requirements as prescribed under
Code section 401(m) permitting treatment as
Contributions for purposes of the ACP Test.
30 04/20/95
(g) "Deferrals" shall include Employee Pre-Tax
Contributions.
(h) "Family Member". An Employee who is, at any time
during the Plan Year or Lookback Year, a spouse, lineal
ascendant or descendant, or spouse of a lineal
ascendant or descendant of (1) an active or former
Employee who at any time during the Plan Year or
Lookback Year is a more than 5% Owner (within the
meaning of Code section 414(q)(3)), or (2) an HCE who
is among the 10 Employees with the highest Compensation
for such Year.
(i) "HCE" or "Highly Compensated Employee". With respect
to each Employer and its Related Companies, an Employee
during the Plan Year or Lookback Year who (in
accordance with Code section 414(q)):
(1) Was a more than 5% Owner at any time during the
Lookback Year or Plan Year;
(2) Received Compensation during the Lookback Year (or
in the Plan Year if among the 100 Employees with
the highest Compensation for such Year) in excess
of (i) $75,000 (as adjusted for such Year pursuant
to Code sections 414(q)(1) and 415(d)), or (ii)
$50,000 (as adjusted for such Year pursuant to
Code sections 414(q)(1) and 415(d)) in the case of
a member of the "top-paid group" (within the
meaning of Code section 414(q)(4)) for such Year),
provided, however, that if the conditions of Code
section 414(q)(12)(B)(ii) are met, the Company may
elect for any Plan Year to apply clause (i) by
substituting $50,000 for $75,000 and not to apply
clause (ii);
(3) Was an officer of a Related Company and received
Compensation during the Lookback Year (or in the
Plan Year if among the 100 Employees with the
highest Compensation for such Year) that is
greater than 50% of the dollar limitation in
effect under Code section 415(b)(1)(A) and (d) for
such Year (or if no officer has Compensation in
excess of the threshold, the officer with the
highest Compensation), provided that the number of
officers shall be limited to 50 Employees (or, if
less, the greater of three Employees or 10% of the
Employees); or
(4) Was a Family Member at any time during the
Lookback Year or Plan Year, in which case the
Deferrals, Contributions and Compensation of the
HCE and his or her Family Members shall be
31 04/20/95
aggregated and they shall be treated as a single
HCE.
A former Employee shall be treated as an HCE if (1)
such former Employee was an HCE when he separated from
service, or (2) such former Employee was an HCE in
service at any time after attaining age 55.
The determination of who is an HCE, including the
determinations of the number and identity of Employees
in the top-paid group, the top 100 Employees and the
number of Employees treated as officers shall be made
in accordance with Code section 414(q).
(j) "HCE Group" and "NHCE Group". With respect to each
Employer and its Related Companies, the respective
group of HCEs and NHCEs who are eligible to have
amounts contributed on their behalf for the Plan Year,
including Employees who would be eligible but for their
election not to participate or to contribute, or
because their Pay is greater than zero but does not
exceed a stated minimum.
(1) If the Related Companies maintain two or more
plans which are subject to the ADP or ACP Test and
are considered as one plan for purposes of Code
sections 401(a)(4) or 410(b), all such plans shall
be aggregated and treated as one plan for purposes
of meeting the ADP and ACP Tests, provided that
the plans may only be aggregated if they have the
same Plan Year.
(2) If an HCE, who is one of the top 10 paid Employees
or a more than 5% Owner, has any Family Members,
the Deferrals, Contributions and Compensation of
such HCE and his or her Family Members shall be
combined and treated as a single HCE. Such
amounts for all other Family Members shall be
removed from the NHCE Group percentage calculation
and be combined with the HCE's.
(3) If an HCE is covered by more than one cash or
deferred arrangement, or more than one arrangement
permitting employee or matching contributions,
maintained by the Related Companies, all such
plans shall be aggregated and treated as one plan
(other than those plans that may not be
permissively aggregated) for purposes of
calculating the separate percentage for the HCE
which is used in the determination of the Average
Percentage.
32 04/20/95
(k) "Lookback Year". Pursuant to Code section 414(q), the
Company elects as the Lookback Year the current
calendar year (ending with the Plan Year).
(l) "Multiple Use Test". The test described in Section
12.4 which a Plan must meet where the Alternative
Limitation (described in Section 12.2(b)) is used to
meet both the ADP and ACP Tests.
(m) "NHCE" or "Non-Highly Compensated Employee". An
Employee who is not an HCE.
12.2 ADP and ACP Tests
For each Plan Year, the ADP and ACP for the HCE Group must
meet either the Basic or Alternative Limitation when
compared to the respective ADP and ACP for the NHCE Group,
defined as follows:
(a) Basic Limitation. The HCE Group Average Percentage may
not exceed 1.25 times the NHCE Group Average
Percentage.
(b) Alternative Limitation. The HCE Group Average
Percentage is limited by reference to the NHCE Group
Average Percentage as follows:
If the NHCE Group Then the Maximum HCE
Average Percentage is: Group Average Percentage is:
---------------------- ----------------------------
Less than 2% 2 times NHCE Group Average %
2% to 8% NHCE Group Average % plus 2%
More than 8% NA - Basic Limitation applies
12.3 Correction of ADP and ACP Tests
If the ADP or ACP Tests are not met, the Administrator shall
determine, no later than the end of the next Plan Year, a
maximum percentage to be used in place of the calculated
percentage for all HCEs that would reduce the ADP and/or ACP
for the HCE group by a sufficient amount to meet the ADP and
ACP Tests. ADP and/or ACP corrections shall be made in
accordance with the leveling method as described below.
(a) ADP Correction. The HCE with the highest Deferral
percentage shall have his or her Deferral percentage
reduced to the lesser of the extent required to meet
the ADP Test or to cause his or her Deferral percentage
to equal that of the HCE with the next highest Deferral
percentage. The process shall be repeated until the
ADP Test is met.
33 04/20/95
To the extent an HCE's Deferrals were determined to be
reduced as described in the paragraph above, Employee
Pre-Tax Contributions shall, by the end of the next
Plan Year, be refunded to the HCE in an amount equal to
the actual Deferrals minus the product of the maximum
percentage and the HCE's Compensation, except that such
amount to be refunded shall be reduced by Employee Pre-
Tax Contributions previously refunded because they
exceeded the Contribution Dollar Limit. The excess
amounts shall first be taken from unmatched Employee
Pre-Tax Contributions and then from matched Employee
Pre-Tax Contributions. Any Employer Match
Contributions attributable to refunded excess Employee
Pre-Tax Contributions as described in this Section
shall be forfeited and used to reduce Contributions
made by an Employer as soon as administratively
feasible.
(b) ACP Correction. The HCE with the highest Contribution
percentage shall have his or her Contribution
percentage reduced to the lesser of the extent required
to meet the ACP Test or to cause his or her
Contribution percentage to equal that of the HCE with
the next highest Contribution percentage. The process
shall be repeated until the ACP Test is met.
To the extent an HCE's Contributions were determined to
be reduced as described in the paragraph above,
Employer Match Contributions shall, by the end of the
next Plan Year, be refunded to the HCE in an amount
equal to the actual Contributions minus the product of
the maximum percentage and the HCE's Compensation.
(c) Investment Fund Sources. Once the amount of excess
Deferrals and/or Contributions is determined amounts
shall first be taken from the Sweep Account and then
taken by Investment Fund in direct proportion to the
market value of the Participant's interest in each
Investment Fund (which excludes his or her Loan Account
balance) as of the Trade Date on which the correction
is processed.
(d) Family Member Correction. To the extent any reduction
is necessary with respect to an HCE and his or her
Family Members that have been combined and treated for
testing purposes as a single Employee, the excess
Deferrals and Contributions from the ADP and/or ACP
Test shall be prorated among each such Participant in
direct proportion to his or her Deferrals or
Contributions included in each Test.
34 04/20/95
12.4 Multiple Use Test
If the Alternative Limitation (defined in Section 12.2) is
used to meet both the ADP and ACP Tests, the ADP and ACP for
the HCE Group must also comply with the requirements of Code
section 401(m)(9). Such Code section requires that the sum
of the ADP and ACP for the HCE Group (as determined after
any corrections needed to meet the ADP and ACP Tests have
been made) not exceed the sum (which produces the most
favorable result) of:
(a) the Basic Limitation (defined in Section 12.2) applied
to either the ADP or ACP for the NHCE Group, and
(b) the Alternative Limitation applied to the other NHCE
Group percentage.
12.5 Correction of Multiple Use Test
If the multiple use limit is exceeded, the Administrator
shall determine a maximum percentage to be used in place of
the calculated percentage for all HCEs that would reduce
either or both the ADP or ACP for the HCE Group by a
sufficient amount to meet the multiple use limit. Any
excess shall be handled in the same manner that the
distribution of excess Deferrals or Contributions are
handled.
12.6 Adjustment for Investment Gain or Loss
Any excess Deferrals or Contributions to be refunded to a
Participant in accordance with Section 12.3 or 12.5 shall be
adjusted for investment gain or loss. Refunds shall not
include investment gain or loss for the period between the
end of the applicable Plan Year and the date of
distribution.
12.7 Testing Responsibilities and Required Records
The Administrator shall be responsible for ensuring that the
Plan meets the ADP Test, the ACP Test and the Multiple Use
Test, and that the Contribution Dollar Limit is not
exceeded. In carrying out its responsibilities, the
Administrator shall have sole discretion to limit or reduce
Deferrals or Contributions at any time. The Administrator
shall maintain records which are sufficient to demonstrate
that the ADP Test, the ACP Test and the Multiple Use Test,
have been met for each Plan Year for at least as long as the
Employer's corresponding tax year is open to audit.
35 04/20/95
12.8 Separate Testing
(a) Multiple Employers: The determination of HCEs, NHCEs,
and the performance of the ADP Test, the ACP Test and
Multiple Use Test, and any corrective action resulting
therefrom, shall be made separately with regard to the
Employees of each Employer (and its Related Companies)
that is not a Related Company with the other
Employer(s).
(b) Collective Bargaining Units: The performance of the ADP
Test, and if applicable, the ACP Test and Multiple Use
Test, and any corrective action resulting therefrom,
shall be applied separately to Employees who are
eligible to participate in the Plan as a result of a
collective bargaining agreement.
In addition, separate testing may be applied, at the
discretion of the Administrator and to the extent permitted
under Treasury regulations, to any group of Employees for
whom separate testing is permissible.
13 MAXIMUM CONTRIBUTION AND BENEFIT LIMITATIONS
13.1 "Annual Addition" Defined
The sum of all amounts allocated to the Participant's
Account for a Plan Year. Amounts include contributions
(except for rollovers or transfers from another qualified
plan), forfeitures and, if the Participant is a Key Employee
(pursuant to Section 14) for the applicable or any prior
Plan Year, medical benefits provided pursuant to Code
section 419A(d)(1). For purposes of this Section 13.1,
"Account" also includes a Participant's account in all other
defined contribution plans currently or previously
maintained by any Related Company. The Plan Year refers to
the year to which the allocation pertains, regardless of
when it was allocated. The Plan Year shall be the Code
section 415 limitation year.
13.2 Maximum Annual Addition
The Annual Addition to a Participant's accounts under this
Plan and any other defined contribution plan maintained by
any Related Company for any Plan Year shall not exceed the
lesser of (1) 25% of his or her Taxable Income or (2)
$30,000 (as adjusted for the cost of living pursuant to Code
section 415(d)).
13.3 Avoiding an Excess Annual Addition
If, at any time during a Plan Year, the allocation of any
additional Contributions would produce an excess Annual
Addition for such year, Contributions to be made for the
36 04/20/95
remainder of the Plan Year shall be limited to the amount
needed for each affected Participant to receive the maximum
Annual Addition.
13.4 Correcting an Excess Annual Addition
Upon the discovery of an excess Annual Addition to a
Participant's Account (resulting from forfeitures,
allocations, reasonable error in determining Participant
compensation or the amount of elective contributions, or
other facts and circumstances acceptable to the Internal
Revenue Service) the excess amount (adjusted to reflect
investment gains) shall first be returned to the Participant
to the extent of his or her Employee Pre-Tax Contributions
(however to the extent Employee Pre-Tax Contributions were
matched, the applicable Employer Match Contributions shall
be forfeited in proportion to the returned matched Employee
Pre-Tax Contributions) and the remaining excess, if any,
shall be forfeited by the Participant and used to reduce
Contributions made by an Employer as soon as
administratively feasible.
13.5 Correcting a Multiple Plan Excess
If a Participant, whose Account is credited with an excess
Annual Addition, received allocations to more than one
defined contribution plan, the excess shall be corrected by
reducing the Annual Addition to this Plan only after all
possible reductions have been made to the other defined
contribution plans.
13.6 "Defined Benefit Fraction" Defined
The fraction, for any Plan Year, where the numerator is the
"projected annual benefit" and the denominator is the
greater of 125% of the "protected current accrued benefit"
or the normal limit which is the lesser of (1) 125% of the
maximum dollar limitation provided under Code section
415(b)(1)(A) for the Plan Year or (2) 140% of the amount
which may be taken into account under Code section
415(b)(1)(B) for the Plan Year, where a Participant's:
(a) "projected annual benefit" is the annual benefit
provided by the Plan determined pursuant to Code
section 415(e)(2)(A), and
(b) "protected current accrued benefit" in a defined
benefit plan in existence (1) on July 1, 1982, shall be
the accrued annual benefit provided for under Public
Law 97-248, section 235(g)(4), as amended, or (2) on
May 6, 1986, shall be the accrued annual benefit
provided for under Public Law 99-514, section
1106(i)(3).
37 04/20/95
13.7 "Defined Contribution Fraction" Defined
The fraction where the numerator is the sum of the
Participant's Annual Addition for each Plan Year to date and
the denominator is the sum of the "annual amounts" for each
year in which the Participant has performed service with a
Related Company. The "annual amount" for any Plan Year is
the lesser of (1) 125% of the Code section 415(c)(1)(A)
dollar limitation (determined without regard to subsection
(c)(6)) in effect for the Plan Year and (2)140% of the Code
section 415(c)(1)(B) amount in effect for the Plan Year,
where:
(a) each Annual Addition is determined pursuant to the Code
section 415(c) rules in effect for such Plan Year, and
(b) the numerator is adjusted pursuant to Public Law 97-
248, section 235(g)(3), as amended, or Public Law 99-
514, section 1106(i)(4).
13.8 Combined Plan Limits and Correction
If a Participant has also participated in a defined benefit
plan maintained by a Related Company, the sum of the Defined
Benefit Fraction and the Defined Contribution Fraction for
any Plan Year may not exceed 1.0. If the combined fraction
exceeds 1.0 for any Plan Year, the Participant's benefit
under any defined benefit plan (to the extent it has not
been distributed or used to purchase an annuity contract)
shall be limited so that the combined fraction does not
exceed 1.0 before any defined contribution limits shall be
enforced.
14 TOP HEAVY RULES
14.1 Top Heavy Definitions
When capitalized, the following words and phrases have the
following meanings when used in this Section:
(a) "Aggregation Group". The group consisting of each
qualified plan of an Employer (and its Related
Companies) (1) in which a Key Employee is a participant
or was a participant during the determination period
(regardless of whether such plan has terminated), or
(2) which enables another plan in the group to meet the
requirements of Code sections 401(a)(4) or 410(b). The
Employer may also treat any other qualified plan as
part of the group if the group would continue to meet
the requirements of Code sections 401(a)(4) and 410(b)
with such plan being taken into account.
38 04/20/95
(b) "Determination Date". The last Trade Date of the
preceding Plan Year or, in the case of the Plan's first
year, the last Trade Date of the first Plan Year.
(c) "Key Employee". A current or former Employee (or his
or her Beneficiary) who at any time during the five
year period ending on the Determination Date was:
(1) an officer of a Related Company whose Compensation
(i) exceeds 50% of the amount in effect under Code
section 415(b)(1)(A) and (ii) places him within
the following highest paid group of officers:
Number of Employees
not Excluded Under Number of Highest
Code Section 414(q)(8) Paid Officers Included
---------------------- ----------------------
Less than 30 3
30 to 500 10% of the number of
Employees not excluded
under Code section
414(q)(8)
More than 500 50
(2) a more than 5% Owner,
(3) a more than 1% Owner whose Compensation exceeds
$150,000, or
(4) a more than 0.5% Owner who is among the 10
Employees owning the largest interest in a Related
Company and whose Compensation exceeds the amount
in effect under Code section 415(c)(1)(A).
(d) "Plan Benefit". The sum as of the Determination Date
of (1) an Employee's Account, (2) the present value of
his or her other accrued benefits provided by all
qualified plans within the Aggregation Group, and (3)
the aggregate distributions made within the five year
period ending on such date. Plan Benefits shall
exclude Rollover Contributions and plan to plan
transfers made after December 31, 1983 which are both
employee initiated and from a plan maintained by a non-
related employer.
(e) "Top Heavy". The Plan's status when the Plan Benefits
of Key Employees account for more than 60% of the Plan
Benefits of all Employees who have performed services
at any time during the five year period ending on the
39 04/20/95
Determination Date. The Plan Benefits of Employees who
were, but are no longer, Key Employees (because they
have not been an officer or Owner during the five year
period), are excluded in the determination.
14.2 Special Contributions
(a) Minimum Contribution Requirement. For each Plan Year in
which the Plan is Top Heavy, the Employer shall not allow
any contributions (other than a Rollover Contribution from a
plan maintained by a non-related employer) to be made by or
on behalf of any Key Employee unless the Employer makes a
contribution (other than contributions made by an Employer
in accordance with a Participant's salary deferral election
or contributions made by an Employer based upon the amount
contributed by a Participant) on behalf of all Participants
who were Eligible Employees as of the last day of the Plan
Year in an amount equal to at least 3% of each such
Participant's Taxable Income. The Administrator shall
remove any such contributions (including applicable
investment gain or loss) credited to a Key Employee's
Account in violation of the foregoing rule and return them
to the Employer or Employee to the extent permitted by the
Limited Return of Contributions paragraph of Section 18.
(b) Overriding Minimum Benefit. Notwithstanding, contributions
shall be permitted on behalf of Key Employees if the
Employer also maintains a defined benefit plan which
automatically provides a benefit which satisfies the Code
section 416(c)(1) minimum benefit requirements, including
the adjustment provided in Code section 416(h)(2)(A), if
applicable. If this Plan is part of an aggregation group in
which a Key Employee is receiving a benefit and no minimum
is provided in any other plan, a minimum contribution of at
least 3% of Taxable Income shall be provided to the
Participants specified in the preceding paragraph. In
addition, the Employer may offset a defined benefit minimum
by contributions (other than contributions made by an
Employer in accordance with a Participant's salary deferral
election or contributions made by an Employer based upon the
amount contributed by a Participant) made to this Plan.
14.3 Adjustment to Combined Limits for Different Plans
For each Plan Year in which the Plan is Top Heavy, 100%
shall be substituted for 125% in determining the Defined
Benefit Fraction and the Defined Contribution Fraction.
40 04/20/95
15 PLAN ADMINISTRATION
15.1 Plan Delineates Authority and Responsibility
Plan fiduciaries include the Company, the Administrator, the
Committee and/or the Trustee, as applicable, whose specific
duties are delineated in this Plan and Trust. Fiduciary
duties or responsibilities may be delegated by the Company,
Administrator or the Committee in writing in accordance with
ERISA section 405. Plan fiduciaries shall include any other
person to whom fiduciary duties or responsibility is
delegated with respect to the Plan. Any person or group may
serve in more than one fiduciary capacity with respect to
the Plan. To the extent permitted under ERISA section 405,
no fiduciary shall be liable for a breach by another
fiduciary.
15.2 Fiduciary Standards
Each fiduciary shall:
(a) discharge his or her duties in accordance with this
Plan and Trust to the extent they are consistent with
ERISA;
(b) use that degree of care, skill, prudence and diligence
that a prudent person acting in a like capacity and
familiar with such matters would use in the conduct of
an enterprise of a like character and with like aims;
(c) act with the exclusive purpose of providing benefits to
Participants and their Beneficiaries, and defraying
reasonable expenses of administering the Plan;
(d) diversify Plan investments, to the extent such
fiduciary is responsible for directing the investment
of Plan assets, so as to minimize the risk of large
losses, unless under the circumstances it is clearly
prudent not to do so; and
(e) treat similarly situated Participants and Beneficiaries
in a uniform and nondiscriminatory manner.
15.3 Company is ERISA Plan Administrator
The Company is the plan administrator, within the meaning of
ERISA section 3(16), which is responsible for compliance
with all reporting and disclosure requirements, except those
that are explicitly the responsibility of the Trustee under
applicable law. The Administrator and/or Committee shall
have any necessary authority to carry out such functions
through the actions of the Administrator, duly appointed
officers of the Company, and/or the Committee.
41 04/20/95
15.4 Administrator Duties
The Administrator shall have the discretionary authority to
construe this Plan and Trust, other than the provisions
which relate to the Trustee, and to do all things necessary
or convenient to effect the intent and purposes thereof,
whether or not such powers are specifically set forth in
this Plan and Trust. Actions taken in good faith by the
Administrator shall be conclusive and binding on all
interested parties, and shall be given the maximum possible
deference allowed by law. In addition to the duties listed
elsewhere in this Plan and Trust, the Administrator's
authority shall include, but not be limited to, the
discretionary authority to:
(a) determine who is eligible to participate, if a
contribution qualifies as a rollover contribution, the
allocation of Contributions, and the eligibility for
loans, withdrawals and distributions;
(b) provide each Participant with a summary plan
description no later than 90 days after he or she has
become a Participant (or such other period permitted
under ERISA section 104(b)(1)), as well as informing
each Participant of any material modification to the
Plan in a timely manner;
(c) make a copy of the following documents available to
Participants during normal work hours: this Plan and
Trust (including subsequent amendments), all annual and
interim reports of the Trustee related to the entire
Plan, the latest annual report and the summary plan
description;
(d) determine the fact of a Participant's death and of any
Beneficiary's right to receive the deceased
Participant's interest based upon such proof and
evidence as it deems necessary;
(e) establish and review at least annually a funding policy
bearing in mind both the short-run and long-run needs
and goals of the Plan and to the extent Participants
may direct their own investments, the funding policy
shall focus on which Investment Funds are available for
Participants to use; and
(f) adjudicate claims pursuant to the claims procedure
described in Section 18.
15.5 Advisors May be Retained
The Administrator may retain such agents and advisors
(including attorneys, accountants, actuaries, consultants,
42 04/20/95
record keepers, investment counsel and administrative
assistants) as it considers necessary to assist it in the
performance of its duties. The Administrator shall also
comply with the bonding requirements of ERISA section 412.
15.6 Delegation of Administrator Duties
The Company, as Administrator of the Plan, has appointed a
Committee to administer the Plan on its behalf. The Company
shall provide the Trustee with the names and specimen
signatures of any persons authorized to serve as Committee
members and act as or on its behalf. Any Committee member
appointed by the Company shall serve at the pleasure of the
Company, but may resign by written notice to the Company.
Committee members shall serve without compensation from the
Plan for such services. Except to the extent that the
Company otherwise provides, any delegation of duties to a
Committee shall carry with it the full discretionary
authority of the Administrator to complete such duties.
15.7 Committee Operating Rules
(a) Actions of Majority. Any act delegated by the Company
to the Committee may be done by a majority of its
members. The majority may be expressed by a vote at a
meeting or in writing without a meeting, and a majority
action shall be equivalent to an action of all
Committee members.
(b) Meetings. The Committee shall hold meetings upon such
notice, place and times as it determines necessary to
conduct its functions properly.
(c) Reliance by Trustee. The Committee may authorize one
or more of its members to execute documents on its
behalf and may authorize one or more of its members or
other individuals who are not members to give written
direction to the Trustee in the performance of its
duties. The Committee shall provide such authorization
in writing to the Trustee with the name and specimen
signatures of any person authorized to act on its
behalf. The Trustee shall accept such direction and
rely upon it until notified in writing that the
Committee has revoked the authorization to give such
direction. The Trustee shall not be deemed to be on
notice of any change in the membership of the
Committee, parties authorized to direct the Trustee in
the performance of its duties, or the duties delegated
to and by the Committee until notified in writing.
43 04/20/95
16 MANAGEMENT OF INVESTMENTS
16.1 Trust Agreement
All Plan assets shall be held by the Trustee in trust, in
accordance with those provisions of this Plan and Trust
which relate to the Trustee, for use in providing Plan
benefits and paying Plan fees and expenses not paid directly
by the Employer. Plan benefits shall be drawn solely from
the Trust and paid by the Trustee as directed by the
Administrator. Notwithstanding, the Administrator may
appoint, with the approval of the Trustee, another trustee
to hold and administer Plan assets which do not meet the
requirements of Section 16.2.
16.2 Investment Funds
The Administrator is hereby granted the authority to select
the Investment Funds offered to Participants for investment
of Trust assets and to direct the Trustee to comply with the
investment instructions of Participants. The number and
composition of Investment Funds may be changed from time to
time, without the necessity of amending this Plan and Trust.
The Trustee may establish reasonable limits on the number of
Investment Funds as well as the acceptable assets for any
such Investment Fund. Each of the Investment Funds may be
comprised of any of the following:
(a) shares of a registered investment company, whether or
not the Trustee or any of its affiliates is an advisor
to, or other service provider to, such company;
(b) collective investment funds maintained by the Trustee,
or any other fiduciary to the Plan, which are available
for investment by trusts which are qualified under Code
sections 401(a) and 501(a);
(c) individual equity and fixed income securities which are
readily tradeable on the open market;
(d) guaranteed investment contracts issued by a bank or
insurance company;
(e) interest bearing deposits of the Trustee; and
(f) Company Stock.
Any Investment Fund assets invested in a collective
investment fund, shall be subject to all the provisions of
the instruments establishing and governing such fund. These
instruments, including any subsequent amendments, are
incorporated herein by reference.
44 04/20/95
16.3 Authority to Hold Cash
The Trustee shall have the authority to cause the investment
manager of each Investment Fund to maintain sufficient
deposit or money market type assets in each Investment Fund
to handle the Fund's liquidity and disbursement needs. Each
Participant's and Beneficiary's Sweep Account, which is used
to hold assets pending investment or disbursement, shall
consist of interest bearing deposits of the Trustee.
16.4 Trustee to Act Upon Instructions
The Trustee shall carry out instructions to invest assets in
the Investment Funds as soon as practicable after such
instructions are received from the Administrator,
Participants, or Beneficiaries. Such instructions shall
remain in effect until changed by the Administrator,
Participants or Beneficiaries.
16.5 Administrator Has Right to Vote Registered Investment
Company Shares
The Administrator shall be entitled to vote proxies or
exercise any shareholder rights relating to shares held on
behalf of the Plan in a registered investment company.
Notwithstanding, the authority to vote proxies and exercise
shareholder rights related to such shares held in a Custom
Fund is vested as provided otherwise in Section 16.
16.6 Custom Fund Investment Management
The Administrator may designate, with the consent of the
Trustee, an investment manager for any Investment Fund
established by the Trustee solely for Participants of this
Plan, and subject to Section 16.7, any other plan of a
Related Company (a "Custom Fund"). The investment manager
may be the Administrator, Trustee or an investment manager
pursuant to ERISA section 3(38). The Administrator shall
advise the Trustee in writing of the appointment of an
investment manager and shall cause the investment manager to
acknowledge to the Trustee in writing that the investment
manager is a fiduciary to the Plan.
A Custom Fund shall be subject to the following:
(a) Guidelines. Written guidelines, acceptable to the
Trustee, shall be established for a Custom Fund. If a
Custom Fund consists solely of collective investment
funds or shares of a registered investment company (and
sufficient deposit or money market type assets to
handle the Fund's liquidity and disbursement needs),
its underlying instruments shall constitute the
guidelines.
45 04/20/95
(b) Authority of Investment Manager. The investment
manager of a Custom Fund shall have the authority to
vote or execute proxies, exercise shareholder rights,
manage, acquire, and dispose of Trust assets.
Notwithstanding, the authority to vote proxies and
exercise shareholder rights related to shares of
Company Stock held in a Custom Fund is vested as
provided otherwise in Section 16.
(c) Custody and Trade Settlement. Unless otherwise agreed
to by the Trustee, the Trustee shall maintain custody
of all Custom Fund assets and be responsible for the
settlement of all Custom Fund trades. For purposes of
this section, shares of a collective investment fund,
shares of a registered investment company and
guaranteed investment contracts issued by a bank or
insurance company, shall be regarded as the Custom Fund
assets instead of the underlying assets of such
instruments.
(d) Limited Liability of Co-Fiduciaries. Neither the
Administrator nor the Trustee shall be obligated to
invest or otherwise manage any Custom Fund assets for
which the Trustee or Administrator is not the
investment manager nor shall the Administrator or
Trustee be liable for acts or omissions with regard to
the investment of such assets except to the extent
required by ERISA.
16.7 Master Custom Fund
The Trustee may establish, at the direction of the Company,
a single Custom Fund (the "Master Custom Fund"), for the
benefit of this Plan and any other plan of a Related Company
for which the Trustee acts as trustee pursuant to a plan and
trust document that contains a provision substantially
identical to this Section 16.7. The assets of this Plan, to
the extent invested in the Master Custom Fund, shall consist
only of that percentage of the assets of the Master Custom
Fund represented by the shares held by this Plan.
16.8 Authority to Segregate Assets
The Company may direct the Trustee to split an Investment
Fund into two or more funds in the event any assets in the
Fund are illiquid or the value is not readily determinable.
In the event of such segregation, the Company shall give
instructions to the Trustee on what value to use for the
split-off assets, and the Trustee shall not be responsible
for confirming such value.
46 04/20/95
16.9 Maximum Permitted Investment in Company Stock
If the Company provides for a Company Stock Fund, the Fund
shall be comprised of Company Stock and sufficient deposit
or money market type assets to handle the Fund's liquidity
and disbursement needs. The Fund may be as large as
necessary to comply with Participants' and Beneficiaries'
investment elections.
16.10 Participants Have Right to Vote and Tender Company
Stock
Each Participant or Beneficiary shall be entitled to
instruct the Trustee as to the voting or tendering of any
full or partial shares of Company Stock held on his or her
behalf in the Company Stock Fund. Prior to such voting or
tendering of Company Stock, each Participant or Beneficiary
shall receive a copy of the proxy solicitation or other
material relating to such vote or tender decision and a form
for the Participant or Beneficiary to complete which
confidentially instructs the Trustee to vote or tender such
shares in the manner indicated by the Participant or
Beneficiary. Upon receipt of such instructions, the Trustee
shall act with respect to such shares as instructed. The
Administrator shall instruct the Trustee with respect to how
to vote or tender any shares for which instructions are not
received from Participants or Beneficiaries.
16.11 Registration and Disclosure for Company Stock
The Administrator shall be responsible for determining the
applicability (and, if applicable, complying with) the
requirements of the Securities Act of 1933, as amended, the
California Corporate Securities Law of 1968, as amended, and
any other applicable blue sky law. The Administrator shall
also specify what restrictive legend or transfer
restriction, if any, is required to be set forth on the
certificates for the securities and the procedure to be
followed by the Trustee to effectuate a resale of such
securities.
17 TRUST ADMINISTRATION
17.1 Trustee to Construe Trust
The Trustee has the authority to do all things necessary or
convenient to the administration of the Trust, whether or
not such powers are specifically set forth in this Plan and
Trust. Actions taken in good faith by the Trustee shall be
conclusive and binding on all interested parties, and shall
be given the maximum possible deference allowed by law.
47 04/20/95
17.2 Trustee To Act As Owner of Trust Assets
Subject to the specific conditions and limitations set forth
in this Plan and Trust, the Trustee shall have all the
power, authority, rights and privileges of an absolute owner
of the Trust assets and, not in limitation but in
amplification of the foregoing, may:
(a) receive, hold, manage, invest and reinvest, sell,
tender, exchange, dispose of, encumber, hypothecate,
pledge, mortgage, lease, grant options respecting,
repair, alter, insure, or distribute any and all
property in the Trust;
(b) borrow money, participate in reorganizations, pay
calls and assessments, vote or execute proxies,
exercise subscription or conversion privileges,
exercise options and register any securities in the
Trust in the name of the nominee, in federal book entry
form or in any other form as shall permit title thereto
to pass by delivery;
(c) renew, extend the due date, compromise, arbitrate,
adjust, settle, enforce or foreclose, by judicial
proceedings or otherwise, or defend against the same,
any obligations or claims in favor of or against the
Trust; and
(d) lend, through a collective investment fund, any
securities held in such collective investment fund to
brokers, dealers or other borrowers and to permit such
securities to be transferred into the name and custody
and be voted by the borrower or others.
17.3 United States Indicia of Ownership
The Trustee shall not maintain the indicia of ownership of
any Trust assets outside the jurisdiction of the United
States, except as authorized by ERISA section 404(b).
17.4 Tax Withholding and Payment
(a) Withholding. The Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes with
regard to any Eligible Rollover Distribution that is
not paid as a Direct Rollover in accordance with the
Participant's withholding election or as required by
law if no election is made or the election is less than
the amount required by law. With regard to any taxable
distribution that is not an Eligible Rollover
Distribution, the Trustee shall calculate and withhold
federal (and, if applicable, state) income taxes in
48 04/20/95
accordance with the Participant's withholding election
or as required by law if no election is made.
(b) Taxes Due From Investment Funds. The Trustee shall pay
from the Investment Fund any taxes or assessments
imposed by any taxing or governmental authority on such
Fund or its income, including related interest and
penalties.
17.5 Trust Accounting
(a) Annual Report. Within 60 days (or other reasonable
period) following the close of the Plan Year, the
Trustee shall provide the Administrator with an annual
accounting of Trust assets and information to assist
the Administrator in meeting ERISA's annual reporting
and audit requirements.
(b) Periodic Reports. The Trustee shall maintain records
and provide sufficient reporting to allow the
Administrator to properly monitor the Trust's assets
and activity.
(c) Administrator Approval. Approval of any Trustee
accounting shall automatically occur 90 days after such
accounting has been received by the Administrator,
unless the Administrator files a written objection with
the Trustee within such time period. Such approval
shall be final as to all matters and transactions
stated or shown therein and binding upon the
Administrator.
17.6 Valuation of Certain Assets
If the Trustee determines the Trust holds any asset which is
not readily tradeable and listed on a national securities
exchange registered under the Securities Exchange Act of
1934, as amended, the Trustee may engage a qualified
independent appraiser to determine the fair market value of
such property, and the appraisal fees shall be paid from the
Investment Fund containing the asset.
17.7 Legal Counsel
The Trustee may consult with legal counsel of its choice,
including counsel for the Employer or counsel of the
Trustee, upon any question or matter arising under this Plan
and Trust. When relied upon by the Trustee, the opinion of
such counsel shall be evidence that the Trustee has acted in
good faith.
49 04/20/95
17.8 Fees and Expenses
The Trustee's fees for its services as Trustee shall be such
as may be mutually agreed upon by the Company and the
Trustee. Trustee fees and all reasonable expenses of
counsel and advisors retained by the Trustee shall be paid
in accordance with Section 6.
17.9 Trustee Duties and Limitations
The Trustee's duties, unless otherwise agreed to by the
Trustee, shall be confined to construing the terms of the
Plan and Trust as they relate to the Trustee, receiving
funds on behalf of and making payments from the Trust,
safeguarding and valuing Trust assets, investing and
reinvesting Trust assets in the Investment Funds as directed
by the Administrator, Participants or Beneficiaries and
those duties as described in this Section 17.
The Trustee shall have no duty or authority to ascertain
whether Contributions are in compliance with the Plan, to
enforce collection or to compute or verify the accuracy or
adequacy of any amount to be paid to it by the Employer.
The Trustee shall not be liable for the proper application
of any part of the Trust with respect to any disbursement
made at the direction of the Administrator.
18 RIGHTS, PROTECTION, CONSTRUCTION AND JURISDICTION
18.1 Plan Does Not Affect Employment Rights
The Plan does not provide any employment rights to any
Employee. The Employer expressly reserves the right to
discharge an Employee at any time, with or without cause,
without regard to the effect such discharge would have upon
the Employee's interest in the Plan.
18.2 Limited Return of Contributions
Except as provided in this paragraph, (1) Plan assets shall
not revert to the Employer nor be diverted for any purpose
other than the exclusive benefit of Participants or their
Beneficiaries; and (2) a Participant's vested interest shall
not be subject to divestment. As provided in ERISA section
403(c)(2), the actual amount of a Contribution made by the
Employer (or the current value of the Contribution if a net
loss has occurred) may revert to the Employer if:
(a) such Contribution is made by reason of a mistake of
fact; or
(b) such Contribution is not deductible under Code section
404 (such Contributions are hereby conditioned upon
50 04/20/95
such deductibility) in the taxable year of the Employer
for which the Contribution is made.
The reversion to the Employer must be made (if at all)
within one year of the mistaken payment of the Contribution
or the date of disallowance of deduction, as the case may
be. A Participant shall have no rights under the Plan with
respect to any such reversion.
18.3 Assignment and Alienation
As provided by Code section 401(a)(13) and to the extent not
otherwise required by law, no benefit provided by the Plan
may be anticipated, assigned or alienated, except:
(a) to create, assign or recognize a right to any benefit
with respect to a Participant pursuant to a QDRO, or
(b) to use a Participant's vested Account balance as
security for a loan from the Plan which is permitted
pursuant to Code section 4975.
18.4 Facility of Payment
If a Plan benefit is due to be paid to a minor or if the
Administrator reasonably believes that any payee is legally
incapable of giving a valid receipt and discharge for any
payment due him or her, the Administrator shall have the
payment of the benefit, or any part thereof, made to the
person (or persons or institution) whom it reasonably
believes is caring for or supporting the payee, unless it
has received due notice of claim therefor from a duly
appointed guardian or conservator of the payee. Any payment
shall to the extent thereof, be a complete discharge of any
liability under the Plan to the payee.
18.5 Reallocation of Lost Participant's Accounts
If the Administrator cannot locate a person entitled to
payment of a Plan benefit after a reasonable search, the
Administrator may at any time thereafter treat such person's
Account as forfeited and use such amount to reduce
Contributions made by an Employer as soon as
administratively feasible. If such person subsequently
presents the Administrator with a valid claim for the
benefit, such person shall be paid the amount treated as
forfeited, plus the interest that would have been earned in
the Sweep Account to the date of determination. The
Administrator shall pay the amount through an additional
amount contributed by the Employer.
51 04/20/95
18.6 Claims Procedure
(a) Right to Make Claim. An interested party who disagrees
with the Administrator's determination of his or her
right to Plan benefits must submit a written claim and
exhaust this claim procedure before legal recourse of
any type is sought. The claim must include the
important issues the interested party believes support
the claim. The Administrator, pursuant to the
authority provided in this Plan, shall either approve
or deny the claim.
(b) Process for Denying a Claim. The Administrator's
partial or complete denial of an initial claim must
include an understandable, written response covering
(1) the specific reasons why the claim is being denied
(with reference to the pertinent Plan provisions) and
(2) the steps necessary to perfect the claim and obtain
a final review.
(c) Appeal of Denial and Final Review. The interested
party may make a written appeal of the Administrator's
initial decision, and the Administrator shall respond
in the same manner and form as prescribed for denying a
claim initially.
(d) Time Frame. The initial claim, its review, appeal and
final review shall be made in a timely fashion, subject
to the following time table:
Days to Respond
Action From Last Action
------ ----------------
Administrator determines benefit NA
Interested party files initial request 60 days
Administrator's initial decision 90 days
Interested party requests final review 60 days
Administrator's final decision 60 days
However, the Administrator may take up to twice the
maximum response time for its initial and final review
if it provides an explanation within the normal period
of why an extension is needed and when its decision
shall be forthcoming.
18.7 Construction
Headings are included for reading convenience. The text
shall control if any ambiguity or inconsistency exists
between the headings and the text. The singular and plural
shall be interchanged wherever appropriate. References to
52 04/20/95
Participant shall include Beneficiary when appropriate and
even if not otherwise already expressly stated.
18.8 Jurisdiction and Severability
The Plan and Trust shall be construed, regulated and
administered under ERISA and other applicable federal laws
and, where not otherwise preempted, by the laws of the State
of California with respect to issues affecting the Trustee's
responsibilities and by the laws of the State of
Massachusetts with respect to all other matters. If any
provision of this Plan and Trust shall become invalid or
unenforceable, that fact shall not affect the validity or
enforceability of any other provision of this Plan and
Trust. All provisions of this Plan and Trust shall be so
construed as to render them valid and enforceable in
accordance with their intent.
18.9 Indemnification by Employer
The Employers hereby agree to indemnify the Administrator,
the Committee and the Trustee against any and all
liabilities resulting from any action or inaction,
(including a Plan termination in which the Company fails to
apply for a favorable determination from the Internal
Revenue Service with respect to the qualification of the
Plan upon its termination), in relation to the Plan or Trust
(1) including (without limitation) expenses reasonably
incurred in the defense of any claim relating to the Plan or
its assets, and amounts paid in any settlement relating to
the Plan or its assets, but (2) excluding liability
resulting from actions or inactions made in bad faith, or
resulting from the negligence or willful misconduct of the
Trustee. The Company shall have the right, but not the
obligation, to conduct the defense of any action to which
this Section applies. The Plan fiduciaries are not entitled
to indemnity from the Plan assets relating to any such
action.
19 AMENDMENT, MERGER, DIVESTITURES AND TERMINATION
19.1 Amendment
The Company reserves the right to amend this Plan and Trust
at any time, to any extent and in any manner it may deem
necessary or appropriate. The Company (and not the Trustee)
shall be responsible for adopting any amendments necessary
to maintain the qualified status of this Plan and Trust
under Code sections 401(a) and 501(a). If the Committee is
acting as the Administrator in accordance with Section 15.6,
it shall have the authority to adopt Plan and Trust
amendments which have no substantial adverse financial
impact upon any Employer or the Plan. All interested
53 04/20/95
parties shall be bound by any amendment, provided that no
amendment shall:
(a) become effective unless it has been adopted in
accordance with the procedures set forth in Section
19.5;
(b) except to the extent permissible under ERISA and the
Code, make it possible for any portion of the Trust
assets to revert to an Employer or to be used for, or
diverted to, any purpose other than for the exclusive
benefit of Participants and Beneficiaries entitled to
Plan benefits and to defray reasonable expenses of
administering the Plan;
(c) decrease the rights of any Employee to benefits accrued
(including the elimination of optional forms of
benefits) to the date on which the amendment is
adopted, or if later, the date upon which the amendment
becomes effective, except to the extent permitted under
ERISA and the Code; nor
(d) permit an Employee to be paid the balance of his or her
Employee Pre-tax Account unless the payment would
otherwise be permitted under Code section 401(k).
19.2 Merger
This Plan and Trust may not be merged or consolidated with,
nor may its assets or liabilities be transferred to, another
plan unless each Participant and Beneficiary would, if the
resulting plan were then terminated, receive a benefit just
after the merger, consolidation or transfer which is at
least equal to the benefit which would be received if either
plan had terminated just before such event.
19.3 Divestitures
In the event of a sale by an Employer which is a corporation
of: (1) substantially all of the Employer's assets used in a
trade or business to an unrelated corporation, or (2) a sale
of such Employer's interest in a subsidiary to an unrelated
entity or individual, lump sum distributions shall be
permitted from the Plan, except as provided below, to
Participants with respect 'to Employees who continue
employment with the corporation acquiring such assets or who
continue employment with such subsidiary, as applicable.
Notwithstanding, distributions shall not be permitted if the
purchaser agrees, in connection with the sale, to be
substituted as the Company as the sponsor of the Plan or to
accept a transfer of the assets and liabilities representing
54 04/20/95
the Participants' benefits into a plan of the purchaser or a
plan to be established by the purchaser.
19.4 Plan Termination
The Company may, at any time and for any reason, terminate
the Plan in accordance with the procedures set forth in
Section 19.5, or completely discontinue contributions. Upon
either of these events, or in the event of a partial
termination of the Plan within the meaning of Code section
411(d)(3), the Accounts of each affected Employee shall be
fully vested. If no successor plan is established or
maintained, lump sum distributions shall be made in
accordance with the terms of the Plan as in effect at the
time of the Plan's termination or as thereafter amended
provided that a post-termination amendment shall not be
effective to the extent that it violates Section 19.1 unless
it is required in order to maintain the qualified status of
the Plan upon its termination. The Trustee's and Employer's
authority shall continue beyond the Plan's termination date
until all Trust assets have been liquidated and distributed.
19.5 Amendment and Termination Procedures
The following procedural requirements shall govern the
adoption of any amendment or termination (a "Change") of
this Plan and Trust:
(a) The Company may adopt any Change by action of its board
of directors in accordance with its normal procedures.
(b) The Committee, if acting as Administrator in accordance
with Section 15.6, may adopt any amendment within the
scope of its authority provided under Section 19.1 and
in the manner specified in Section 15.7(a).
(c) Any Change must be (1) set forth in writing, and (2)
signed and dated by an executive officer of the Company
or, in the case of an amendment adopted by the
Committee, at least one of its members.
(d) If the effective date of any Change is not specified in
the document setting forth the Change, it shall be
effective as of the date it is signed by the last
person whose signature is required under clause (2)
above, except to the extent that another effective date
is necessary to maintain the qualified status of this
Plan and Trust under Code sections 401(a) and 501(a).
(e) No Change shall become effective until it is accepted
and signed by the Trustee (which acceptance shall not
unreasonably be withheld).
55 04/20/95
19.6 Termination of Employer's Participation
Any Employer may, at any time and for any reason, terminate
its Plan participation by action of its board of directors
in accordance with its normal procedures. Written notice of
such action shall be signed and dated by an executive
officer of the Employer and delivered to the Company. If
the effective date of such action is not specified, it shall
be effective on, or as soon as reasonably practicable after,
the date of delivery. Upon the Employer's request, the
Company may instruct the Trustee and Administrator to spin
off all affected Accounts and underlying assets into a
separate qualified plan under which the Employer shall
assume the powers and duties of the Company. Alternatively,
the Company may treat the event as a partial termination
described above or continue to maintain the Accounts under
the Plan.
19.7 Replacement of the Trustee
The Trustee may resign as Trustee under this Plan and Trust
or may be removed by the Company at any time upon at least
90 days written notice (or less if agreed to by both
parties). In such event, the Company shall appoint a
successor trustee by the end of the notice period. The
successor trustee shall then succeed to all the powers and
duties of the Trustee under this Plan and Trust. If no
successor trustee has been named by the end of the notice
period, the Company's chief executive officer shall become
the trustee, or if he or she declines, the Trustee may
petition the court for the appointment of a successor
trustee.
19.8 Final Settlement and Accounting of Trustee
(a) Final Settlement. As soon as administratively feasible
after its resignation or removal as Trustee, the
Trustee shall transfer to the successor trustee all
property currently held by the Trust. However, the
Trustee is authorized to reserve such sum of money as
it may deem advisable for payment of its accounts and
expenses in connection with the settlement of its
accounts or other fees or expenses payable by the
Trust. Any balance remaining after payment of such
fees and expenses shall be paid to the successor
trustee.
(b) Final Accounting. The Trustee shall provide a final
accounting to the Administrator within 90 days of the
date Trust assets are transferred to the successor
trustee.
56 04/20/95
(c) Administrator Approval. Approval of the final
accounting shall automatically occur 90 days after such
accounting has been received by the Administrator,
unless the Administrator files a written objection with
the Trustee within such time period. Such approval
shall be final as to all matters and transactions
stated or shown therein and binding upon the
Administrator.
57 04/20/95
APPENDIX A - INVESTMENT FUNDS
I. Investment Funds Available
The Investment Funds offered under the Plan as of the Effective
Date include this set of daily valued funds:
Category Funds
-------- -----
Income Stable Value
------
Equity Company Stock
------ S&P 500 Stock
AIM, Constellation
▇▇▇▇▇▇▇▇▇, Foreign
Combination LifePath
-----------
II. Default Investment Fund
The default Investment Fund as of the Effective Date is the
Stable Value Fund.
Ill. Maximum Percentage Restrictions Applicable to Certain Investment
Funds
As of the Effective Date, there are no maximum percentage
restrictions applicable to any Investment Funds.
58 04/20/95
APPENDIX B - PAYMENT OF PLAN FEES AND EXPENSES
As of the Effective Date, payment of Plan fees and expenses shall be
as follows:
1) Investment Management Fees: These are paid by Participants in
that management fees reduce the investment return reported and
credited to Participants.
2) Recordkeeping Fees: These are paid by Participants and are
assessed monthly and billed/collected from Accounts quarterly.
3) Loan Fees: A $3.50 per month fee is assessed and billed/collected
quarterly from the Account of each Participant who has an
outstanding loan balance for loans entered into on or after April
1, 1995. For loans entered into prior to April 1, 1995, these
are paid by the Employer on a quarterly basis.
4) Investment Fund Election Changes: For each Investment Fund
election change by a Participant, in excess of 10 changes per
year, a $10 fee shall be assessed and billed/collected quarterly
from the Participant's Account.
5) Periodic Installment Payment Fees: A $3.00 per check fee shall be
assessed and billed/ collected quarterly from the Participant's
Account.
6) Additional Fees Paid by Employer: All other Plan related fees and
expenses shall be paid by the Employer. To the extent that the
Administrator later elects that any such fees shall be borne by
Participants, the fees shall be added to the recordkeeping fees
and assessed against Participants' Accounts, per 2) above and
estimates of the fees shall be determined and reconciled, at
least annually.
59 04/20/95
APPENDIX C - LOAN INTEREST RATE
As of the Effective Date, the interest rate charged on Participant
loans shall be equal to the Trustee's prime rate, plus 1%.
60 04/20/95
Amendment No.1
to the
Bay State Gas Company Employee Savings Plan and Trust
WHEREAS, Bay State Gas Company (the "Company"), approved and
adopted the Bay State Gas Company Employee Savings Plan (the "Plan")
and Trust Agreement (the "Trust") which were originally effective
January 1, 1979 and most recently restated effective April 1,
1995;
WHEREAS, the Bay State Gas Company Employee Stock Ownership Plan
was merged into the Plan effective July 1, 1987;
WHEREAS, Section 19.1 of the Plan and Trust provides that the
Company reserves the right to amend the Plan and Trust;
NOW THEREFORE RESOLVED, that Section 3 is amended effective April
1, 1995, Section 1 is amended effective January 1, 1996 and Sections
1, 2 and 5 are amended effective July 1, 1996 as follows:
Effective April 1, 1995:
-----------------------
1. Section 3 is amended to restate Subsection 3.1 in its entirety as
follows:
3.1 Employee Pre-Tax Contribution Election
Upon becoming a Participant, an Eligible Employee may elect
to reduce his or her Pay by an amount which does not exceed
the Contribution Dollar Limit, "within the limits described
in the Contribution Percentage Limits paragraph of this
Section 3, and have such amount contributed to the Plan by
the Employer as an Employee Pre-Tax Contribution. The
election shall be made as a percentage of Pay in such manner
and with such advance notice as prescribed by the
Administrator. In no event shall an Employee's Employee
Pre-Tax Contributions under the Plan and comparable
contributions to all other plans, contracts or arrangements
of all Related Companies exceed the Contribution Dollar
Limit for the Employee's taxable year beginning in the Plan
Year.
Effective January 1, 1996:
-------------------------
1. Section 1 is amended to restate Subsection 1.48 in its entirety
as follows:
1.48 "Trustee". BZW Barclays Global Investors, National
Association.
1
Effective July 1, 1996:
----------------------
1. Section 1 is amended to add a new Subsection 1.36 and to
redesignate each subsequent Subsection as follows:
1.36 "Period of Employment". The period beginning on the date an
Employee first performs an hour of service and ending on the
date his or her employment ends. Employment ends on the
date the Employee quits, retires, is discharged, dies or (if
earlier) the first anniversary of his or her absence for any
other reason. The period of absence starting with the date
an Employee's employment temporarily ends and ending on the
date he or she is subsequently reemployed is (1) included in
his or her Period of Employment if the period of absence
does not exceed one year, and (2) excluded if such period
exceeds one year.
An Employee's service with a predecessor or acquired company
shall only be counted in the determination of his or her
Period of Employment for eligibility and/or vesting purposes
if (1) the Company directs that credit for such service be
granted, or (2) a qualified plan of the predecessor or
acquired company is subsequently maintained by any Employer
or Related Company.
2. Section 2 is amended to restate Subsection 2.1 in its entirety as
follows:
2.1 Eligibility
Each Eligible Employee who is a Participant shall continue
their eligibility to participate.
For purposes of Employee Pre-Tax Contributions, each other
Eligible Employee shall become a Participant on the earlier
of July 1, 1996 or the first day of the next month after the
date he or she completes a 60 day Period of Employment. The
eligibility period begins on the date an Employee's Period
of Employment commences.
For purposes of Employer Match Contributions, each other
Eligible Employee shall become a Participant on the first
day of the next month after the date he or she completes a
12-month eligibility period in which he or she is credited
with at least 1,000 Hours of Service. The initial
eligibility period begins on the date an Employee first
performs an Hour of Service. Subsequent eligibility periods
begin with the start of each Plan Year beginning after the
first Hour of Service is performed.
2
Bay State Gas Company Amendment No. 1
Employee Savings Plan and Trust
3. Section 5 is amended to restate Subsection 5.1(a) in its entirety
as follows:
5.1 Employer Match Contributions
(a) Frequency and Eligibility. For each period for which
Participants' Contributions are made, the Employer
shall make Employer Match Contributions, as described
in the following Allocation Method paragraph, on behalf
of each Participant who contributed during the period
and who met the eligibility requirements of Section
2.1.
Date: August 14, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ Gas Company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Title: Benefits Manager
The provisions of the above amendment which relate to the Trustee are
hereby approved and executed.
Date: August 26, 1996 BZW Barclays Global Investors,
National Association
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Title: Principal
Date: August 26, 1996 BZW Barclays Global Investors,
National Association
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Title: Principal
3