EXHIBIT 4.1
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COLUMBIA SAVINGS PLAN
As Amended and Restated
Effective November 1, 2000 (except as otherwise noted)
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . 1
ARTICLE II ELIGIBILITY . . . . . . . . . . . . . . . . . . . 9
ARTICLE III PARTICIPANT DEPOSITS . . . . . . . . . . . . . . . 10
ARTICLE IV EMPLOYER CONTRIBUTIONS ("MATCHING CONTRIBUTIONS") 12
ARTICLE V NON-DISCRIMINATION TESTS . . . . . . . . . . . . . 22
ARTICLE VI INVESTMENT PROVISIONS . . . . . . . . . . . . . . 29
ARTICLE VII VALUATION OF UNITS/SHARES AND PARTICIPANT
ACCOUNTS . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VIII VESTING, TERMINATION OF PARTICIPATION AND
TRANSFERS . . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX PAYMENT OF BENEFITS . . . . . . . . . . . . . . . 35
ARTICLE X WITHDRAWALS . . . . . . . . . . . . . . . . . . . 42
ARTICLE XI PLAN LOANS . . . . . . . . . . . . . . . . . . . . 45
ARTICLE XII THE TRUST . . . . . . . . . . . . . . . . . . . . 47
ARTICLE XIII ADMINISTRATION . . . . . . . . . . . . . . . . . . 48
ARTICLE XIV AMENDMENT AND TERMINATION . . . . . . . . . . . . 52
ARTICLE XV TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . 54
ARTICLE XVI GENERAL PROVISIONS . . . . . . . . . . . . . . . . 58
ARTICLE I
DEFINITIONS
Unless otherwise required by the context, the following definitions
shall control:
1.1. "ACQUISITION LOAN" means a loan or other extension of credit
described in Code Section 4975(d)(3) which is used to
finance the purchase of Common Stock by the Trustee with
respect to the employee stock ownership portion of the Plan
or to repay a prior Acquisition Loan. Any Acquisition Loan
must be made over a definitely ascertainable number of
years, determined without taking into account any possible
extensions or renewal periods.
1.2. "ADDITIONAL ALLOCATIONS" means allocations of Common Stock
to a Participant's Employer Source pursuant to Section
4.3(c).
1.3. "AFFILIATED COMPANY" means the Company and any corporation
while it is a member of the same "controlled group" of
corporations (within the meaning of Code Section 414(b)) as
the Company; any other trade or business (whether or not
incorporated) while it is under "common control" (within the
meaning of Code Section 4 14(c)) with the Company; any
organization during any period in which it (along with the
Company) is a member of an "affiliated service group"
(within the meaning of Code Section 414(m)); or any other
entity during any period in which it is required to be
aggregated with the Company under Code Section 4 14(o).
1.4. "AFTER-TAX SOURCE" means the portion of the account
maintained for a Participant to hold after-tax deposits made
by the Participant to the Plan and any earnings thereon.
1.5. "ALLOCATED DIVIDENDS" means cash dividends on Common Stock
held in Participants' Employer Source.
1.6. "BASE PAY" means the regular basic salary or wages, plus
sales commissions, paid to the Employee during a pay period
by an Employer before any payroll deductions for taxes or
any other purposes, and prior to any before-tax Participant
deposits pursuant to Section 3.2 of this Plan, or any
flexible spending or premium conversion account.
1.7. "BEFORE-TAX SOURCE" means the portion of the account
maintained for a Participant to hold before-tax deposits
made by the Participant to the Plan and any earnings
thereon.
1.8. "BENEFICIARY" means any person, trust or estate designated
by a Participant on a form supplied by the Savings Plan
Committee to receive benefits payable in the event of the
death of the Participant.
1.9. "BOARD" means the Company's board of directors or other
governing body, or its delegatee.
1.10. "BREAK IN SERVICE" means an event that will occur at the end
of any 12-consecutive month period beginning on a Severance
Date during which an Employee fails to complete an Hour of
Service.
1.11. "CODE" means the Internal Revenue Code of 1986, as amended,
or as it may be amended from time to time. A reference to a
particular Section of the Code shall also refer to
regulations and other regulatory guidance issued under that
Code Section.
1.12. "COMMON STOCK" shall mean the common stock of NiSource
(whether such shares are issued or constitute Treasury
stock, or both).
1.13. "COMPANY" means Columbia Energy Group, a corporation
organized and existing under the laws of the state of
Delaware or any successor to it in ownership of
substantially all of its assets.
1.14. "COMPENSATION" means the total remuneration received by a
Participant from his Employer, as reported on IRS Form W-2,
for federal income tax purposes, excluding "transfer of
personnel" related payments and other taxable related
business expenses; provided, however, that this Plan shall
not take into consideration a Participant's Compensation to
the extent it exceeds $170,000, as indexed under Section 4
15(d) of the Code.
Effective for Plan Years beginning after December 31, 1997,
"Compensation" shall include amounts which are contributed
by the Employer pursuant to a salary reduction agreement and
which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions
described in Code Section 14(h)(2) that are treated as
Employer contributions.
1.15. "DEPOSIT ACCOUNTS" means the Participant's Before-Tax
Source, After-Tax Source, Employer Source, Lump-Sum Deposits
Source and Rollover Source.
1.16. "EMPLOYEE" means any person who is actively engaged in the
conduct of the business of the Company or Affiliated
Companies, or any of them, in a capacity other than solely
as a director,except that an individual having the status of
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an independent contractor shall not be considered an
Employee. Employee shall include Leased Employees within
the meaning of Code Section 414(n)(2), unless such Leased
Employees do not constitute more than 20 percent of the
Employer's non-highly compensated work force and are covered
by a plan described in Code Section 414(n)(5).
"Leased Employee," effective January 1, 1997, means any
person (other than an employee of the Company or an
Affiliated Company who pursuant to an agreement between the
Company or Affiliated Company and any other person has
performed services for the Company or Affiliated Company (or
for the Company or Affiliated Company and related persons
determined in accordance with Code Section 414(n)(6)) on a
substantially full-time basis for a period of at least one
year and such services are performed under primary direction
or control by the Company or Affiliated Company.
1.17. "EMPLOYER" means the Company or any Affiliated Company that
elects to become a party to the Plan by action of its board
of directors or other governing authority.
1.18. "EMPLOYER ALLOCATION CONTRIBUTIONS" means contributions made
by Employers to the Trust pursuant to Section 4.3(b) which
are intended to be used to ensure that the Employer
contribution requirements of Section 4.1 are satisfied.
1.19. "EMPLOYER DEBT SERVICE CONTRIBUTIONS" means contributions by
Employers to the Trust which are intended to be used (with
any earnings thereon) to repay principal and interest on an
Acquisition Loan.
1.20. "EMPLOYER MATCHING ALLOCATIONS" means the amount of Common
Stock, measured with respect to a Participant's matched
deposits to the Plan, which is allocated to a Participant's
Employer Source, from time to time on one or more monthly
Valuation Dates, pursuant to Section 4.2.
1.21. "EMPLOYER SHARES FUND" means a subfund of the Employer Stock
Fund that is invested in Common Stock acquired with Employer
contributions made prior to April 1, 1990, the proceeds of
an Acquisition Loan, the Suspense Account, the Intermediate
Holding Account, and Employer Allocation Contributions made
pursuant to Section 4.2.
1.22. "EMPLOYER STOCK FUND" means the stock fund of NiSource.
1.23. "EMPLOYER SOURCE" means the account maintained for a
Participant to record Employer Matching Allocations and
Additional Allocations made to the Plan on his behalf
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1.24. "EMPLOYMENT DATE" means the date on which the Employee is
first credited with an Hour of Service with respect to the
Employer or an Affiliated Company.
1.25. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or as it may be amended from time to time.
A reference to a particular Section of ERISA shall also
refer to regulations and other regulatory guidance issued
under that ERISA Section.
1.26. "HIGHLY COMPENSATED EMPLOYEE" means, with respect to any
Plan Year after December 31, 1996, any individual who is
described in subsection (a) or (b).
(a) An Employee shall be treated as a Highly Compensated
Employee if the Participant--
(i) was a 5-percent owner (as defined in Code
Section 416(i)( 1)) during the current Plan
Year or the preceding Plan Year; or
(ii) received compensation during the prior Plan
Year from the Company and Affiliated
Companies in excess of $80,000 and, if the
Company so elects, was m the top-paid group
(as defined in Code Section 414(q)(3)) for
the prior Plan Year.
(b) A former Employee shall be treated as a Highly
Compensated Employee if--
(i) the former Employee was a Highly Compensated
Employee when he or she separated from
service; or
(ii) the former Employee was a Highly Compensated
Employee at any time after attaining age 55.
(c) For purposes of this Section --
(i) the $80,000 amount specified in subsection
(a) shall be adjusted as provided under Code
Sections 414(q)(1) and 415, except that the
base period is the calendar quarter ending
September 30, 1996;
(ii) "compensation" means compensation as defined
in Code Section 414(q)(4).
(iii) in determining whether an Employee is a
Highly Compensated Employee for years
beginning in 1997, the amendments to Code
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Section 414(q) stated above are treated as
having been in effect for years beginning in
1996.
1.27. "HOUR OF SERVICE" means each hour for which an Employee is
paid, or is entitled to payment, for the performance of
duties for the Company or an Affiliated Company including
any payments pursuant to a salary continuation period.
Hours of Service shall be credited in accordance with
Department of Labor Regulation Section 2530.200b-2.
1.28. "INACTIVE PARTICIPANT" means any Employee or former Employee
who has ceased to be a Participant and on whose behalf an
account is maintained under the Plan.
1.29. "INTERMEDIATE HOLDING ACCOUNT" means the account which shall
hold Common Stock released from the Suspense Account but not
allocated to Participants' Employer Sources.
1.30. "LEVERAGED ESOP EFFECTIVE DATE" means April 1, 1990, the
date on which the provisions of this Plan relating to the
Leveraged ESOP became operational.
1.31. "LEVERAGED SHARES" means shares of Common Stock acquired by
the Trustee with the proceeds of an Acquisition Loan,
pursuant to Section 4.4. Except as required by Code Section
409(h) and by Treasury Regulation Sections 54.4975-7(b)(9)
and (10), or as otherwise required by applicable law, no
Leveraged Shares may be subject to a put, call or other
option, or buy-sell or similar arrangement while held by,
and when distributed from, the Plan, whether or not the Plan
is an employee stock ownership plan within the meaning of
Code Section 4975(e)(7) at that time.
1.32. "LUMP SUM DEPOSIT SOURCE" means the portion of the account
maintained for a Participant to hold lump sum deposits made
by the Participant prior to September 1, 1996.
1.33. "MATCHING CONTRIBUTION" means any contribution to the Plan
made by the Employer for the Plan Year and allocated to a
Participant's account by reason of the Participant's
deposits up to 6%.
1.34. "NISOURCE" means NiSource, Inc., a Delaware corporation.
1.35. "NON-HIGHLY COMPENSATED EMPLOYEE" shall mean an Employee of
the Employer who is not a Highly Compensated Employee.
1.36. "OPTION" means the assets held by any fiduciary in
accordance with this Plan, and will consist of separate
mutual funds and other investment options selected by the
Savings Plan Committee. The description of the investment
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characteristics of each Option, as set forth in this
Agreement, will not limit or prevent the Trustee, in its
discretion, from holding any portion of an Option in cash or
other forms of short-term securities or otherwise acting in
accordance with the Plan and the Trust Agreement.
1.37. "PARTICIPANT" means an Employee who is participating in this
Plan in accordance with its provisions.
1.38. "PARTICIPATION" means:
(a) (1) The amount of Participation earned prior to March
31, 1998, as determined by the Savings Plan
Committee, and credited to the Participant as of
March 31, 1998, plus
(2) The period of time after March 31, 1998, during
which an Employee is a Participant in this Plan,
regardless of any voluntary or involuntary
suspension of deposits under Section 3.5; or
(b) For those Employees in a collective bargaining unit
whose collective bargaining agreements terminate in
1998 but after March 31, 1998, "Participation" shall
mean the following until such time as their collective
bargaining unit approves the definition of
"Participation" as set forth in subsection (a), at
which time the definition of "Participation" as set
forth in subsection (a) shall be effective for said
bargaining unit Employees: "Participation" means the
period of time during which an Employee is a
Participant in the Plan and is measured by the number
of months during which an Employee makes deposits under
this Plan as determined in accordance with the
following provisions:
(1) Any month as to which a Participant's deposits are
voluntarily suspended under Section 3.5, or
suspended following a withdrawal as required under
Section 10.5, will not be counted as a month of
Participation, but any month as to which a
Participant's deposits are automatically suspended
will be counted as a month of Participation. A
suspension shall not result in a loss of credit
for prior Participation in this Plan.
Notwithstanding the above, Participation shall
also include any period of sick leave, total
disability, government service approved by the
Employer, authorized leave of absence, or a period
(not exceeding 365 calendar days) of a temporary
layoff
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(2) With respect to any Participant who, prior to
January 1, 1984, completely terminated his
Participation in this Plan and received a
distribution of his entire account (whether or not
his employment was terminated), any subsequent
period of Participation will not include credit
for months during which he made deposits prior to
such termination of Participation.
(3) With respect to any Participant who, on and after
January 1, 1984, (i) terminates his Participation
in the Plan by reason of a termination of
employment with the Employer and/or any Affiliated
Company other than by reason of disability, and
(ii) incurs a Break in Service, any subsequent
period of Participation will not include credit
for months during which he made deposits prior to
such termination of Participation. This Paragraph
shall not apply in cases where Participation is
terminated due to disability; or in cases where
Participation is terminated due to business
conditions or resulted from a sale, divestiture,
or spinoff of an Affiliated Company or part
thereof, and the Participant returns to employment
within five years of his termination of
Participation; or in cases where the Participant
returns to employment before incurring a Break in
Service.
Except as otherwise provided above, separate periods of
Participation shall be aggregated to determine a
Participant's total period of Participation for purposes of
this Plan.
1.39. "PLAN" means this Columbia Savings Plan, as amended from
time to time.
1.40. "PLAN ADMINISTRATOR" means the Savings Plan Committee.
1.41. "PLAN YEAR" means the calendar year.
1.42. "REEMPLOYMENT DATE" means the first date following a
Severance Date with respect to which an Employee is credited
with an Hour of Service.
1.43. "ROLLOVER CONTRIBUTION SOURCE" means the portion of a
Participant's or Employee's account derived from rollover
amounts pursuant to Section 3.7.
1.44. "SAVINGS PLAN COMMITTEE" means the Savings Plan Committee
created by Section 13.1.
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1.45. "SERVICE" means an individual's period of employment
commencing on his Employment Date or Reemployment Date,
whichever is applicable, and ending on his Severance Date,
and shall include any period of sick leave, total
disability, government service approved by the Employer,
authorized leave of absence, or a period (not exceeding 365
calendar days) of a temporary layoff. Service shall also
include any period of time beginning on an Employee's
Severance Date and ending on whichever of the following
dates is applicable:
(a) in the case of an Employee whose Severance Date
occurred immediately upon termination of his active
employment, the date on which he is next credited with
an Hour of Service, provided that such Hour of Service
is credited within the 12-consecutive month period
following such Severance Date; or
(b) in the case of an Employee whose Severance Date
occurred while he was absent from work, with or without
pay, the date on which he is next credited with an Hour
of Service after such Severance Date, provided that
such Hour of Service is credited within the 12-
consecutive month period following the date he was
first absent from work.
Separate periods of Service shall be aggregated to determine
an Employee's total Service for purposes of this Plan.
1.46. "SEVERANCE DATE" means the earlier of
(a) the date on which an Employee resigns, retires, is
discharged or dies, except if the Employee is entitled
to salary continuation under the Columbia Energy Group
Severance Pay Plan, or any successor plan, then the
date on which the salary continuation ends, or
(b) except as provided in Section 1.45, the first
anniversary of the first date of a period in which an
Employee remains absent from employment (with or
without pay) for any reason other than resignation,
periods of salary continuation, retirement, discharge
or death.
1.47. "SHARE" means the unit of measure of a Participant's
proportionate interest, if any, in the Option.
1.48. "SPOUSE" means the legal husband or wife of a Participant.
1.49. "SUSPENSE ACCOUNT" means the account under which Leveraged
Shares are held as Plan assets which are not then allocated
to the Employer Source of any specific Participant, pending
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the release and allocation of such assets to credit
Participants' Employer Sources pursuant to Section 4.3.
1.50. "TRUST AGREEMENT" means any agreement entered into between
the Company and any Trustee to carry out the purpose of the
Plan.
1.51. "TRUSTEE" means the trustee(s) hereinafter provided for in
Article XII.
1.52. "TRUST FUND" means the assets of every kind and description
held under any Trust Agreement forming a part of this Plan.
1.53. "UNALLOCATED DIVIDENDS" means dividends on Leveraged Shares
held in the Suspense Account or in the Intermediate Holding
Account.
1.54. "UNIT OF PARTICIPATION" or "UNIT" means the unit of measure
of a Participant's proportionate interest, if any, in the
Option.
1.55. "VALUATION DATE" means the close of each business day of the
Plan Year.
ARTICLE II
ELIGIBILITY
2.1. ELIGIBILITY REQUIREMENTS. An Employee shall become a
Participant in this Plan effective for the first pay period
after his Employment Date and his enrollment in the Plan in
accordance with Section 2.2, or if such date is not
administratively practicable, for the next following pay
period thereafter. Participation in the Plan by Employees
is voluntary.
Effective July 1, 1999, an Employer, by appropriate written
action and with the approval of the Savings Plan Committee,
may limit the class of its Employees eligible to participate
in this Plan. Such written action shall be attached to this
Plan and is incorporated herein by reference.
2.2. REEMPLOYMENT. If a Participant terminates his employment
and subsequently returns to active employment as an
Employee, he will be eligible to resume Participation in
this Plan effective for the first pay period following his
return to employment as an Employee and his re-enrollment in
the Plan in accordance with Section 2.2, or if such date is
not administratively practicable, for the next following pay
period thereafter.
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2.3. METHOD OF BECOMING A PARTICIPANT. An eligible Employee,
including one who becomes eligible again under Section 2.2,
may become a Participant by making application to
participate in the Plan as provided by the Savings Plan
Committee and must make deposits hereunder as provided in
Article III.
ARTICLE III
PARTICIPANT DEPOSITS
3.1. AMOUNT OF PARTICIPANT DEPOSITS. Effective January 1, 2000,
each Participant shall designate, at his option, a deposit
equal to any integral percentage in a range of 1% to 19%,
inclusive, of his Base Pay per pay period, subject to a
maximum amount of Base Pay for any Plan Year of $170,000 as
indexed under Code Sections 401(a)(17)(B) and 415(d). In
the case of a change in a Participant's Base Pay, the
deposits will be adjusted to reflect the new level of Base
Pay in accordance with procedures prescribed by the Savings
Plan Committee.
3.2. CHARACTERIZATION OF PARTICIPANT DEPOSITS. Each Participant
shall designate whether his deposits under Section 3.1 are
to be made on a before-tax or after-tax basis, or both,
subject to the following rules:
(a) A Participant who elects to have his Participant
deposits made on a before-tax basis shall authorize his
Employer to make such an adjustment to his Compensation
by any integral percentage of his Base Pay as permitted
under Section 3.1.
(b) An election to have Participant deposits made on a
before-tax basis will continue in effect until the
Participant elects to change such percentage.
(c) The amount of any Participant's before-tax deposits may
be adjusted in order to comply with the requirements of
Section 3.3.
3.3. LIMITATION ON PARTICIPANTS' BEFORE-TAX DEPOSITS. Section
3.2 shall be limited by the following rules:
(a) No Participant shall be permitted to have before-tax
deposits made under this Plan during any calendar year
in excess of $10,500 (increased as provided by the
Secretary of Treasury for years beginning after 2000).
(b) The Plan Administrator shall distribute any before-tax
deposits in excess of the limit set forth in (a)
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("Excess Deferrals") by first distributing before-tax
deposits for which no Employer contributions have been
made, plus investment gain or loss, to the Participant
within 2 1/2 months after the calendar year end in
which the excess occurred. The Plan Administrator is
deemed to have received notice of Excess Deferrals from
the Participant to the extent before-tax deposits from
this Plan and any other plans maintained by the
Employer exceed the limit under Code Section 402(g).
Further, if the Participant provides satisfactory
evidence to demonstrate that all before-tax deposits by
the Participant, in this Plan and any other qualified
plan(s) exceed the applicable limit for the calendar
year, then the Plan Administrator may (but is not
required to) distribute sufficient before-tax deposits
from this Plan to allow the Participant to comply with
the applicable annual limit. The evidence provided by
the Participant must clearly establish the amount of
Excess Deferrals. The Participant must present his or
her evidence of Excess Deferrals to the Plan
Administrator by March 1 following the end of the
calendar year in which the excess occurred. Investment
gain or loss shall be determined as provided in Section
5.7(d) below. Excess Deferrals under this Section are
treated as Annual Additions (see Section 4.7(c)) unless
they are distributed no later than the first April 15
following the close of the applicable calendar year.
Employer contributions based on Excess Deferrals under
this Section shall be forfeited.
3.4. CHANGE IN DEPOSIT PERCENTAGE.
(a) The percentage designated by the Participant as his
after-tax deposit rate will continue in effect until he
elects to change such percentage, except for any change
required by the operation of Section 3.3 and Article V.
A Participant may change his after-tax deposit rate,
but not retroactively, in the method prescribed by the
Savings Plan Committee.
(b) Effective February 18, 1998, a Participant may change
his before-tax deposit election no more than once per
calendar month. Any change will be effective for the
next pay period, or if such date is not
administratively practicable, for the next following
pay period thereafter. Any change in a Participant's
before-tax deposit rate must be made in accordance with
the provisions of Section 3.2 or as the result of the
operation of Section 3.3 or Article V.
3.5. SUSPENSION OF PARTICIPANT DEPOSITS. A Participant
voluntarily may elect to suspend his deposits, including
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both before-tax and after-tax deposits, in the method
prescribed by the Savings Plan Committee. Any such
voluntary election by a Participant to suspend deposits will
be effective with the next pay period or, if such date is
not administratively practicable, with the next following
pay period, and shall extend for such period of time as
specified by the Participant. A Participant will not be
permitted to make up suspended deposits at a later date.
Participant deposits will be suspended automatically for any
payroll period in which the Participant is not in receipt of
Compensation.
3.6. REMITTANCE OF PARTICIPANT DEPOSITS. Amounts deducted as
Participant deposits will be remitted to the Trustee, as
soon as practicable and no later than 15 days after the
month in which the deposit was deducted. Deposits shall be
allocated to the Before-Tax Source and the After-Tax Source,
as applicable, and invested as directed by the Participant
in accordance with Article VI.
3.7. ROLLOVERS FROM OTHER QUALIFIED PLANS.
(a) At the request of a Participant or Employee, but
subject to the approval of the Savings Plan Committee
or any agent designated by the Savings Plan Committee,
the Plan may accept a rollover of cash amounts of at
least $250 from another qualified plan and conduit
individual retirement accounts, as described in Code
Section 401(a). Any such rollover amount must comply
with the requirements of Code Sections 401(a)(31) and
402. Any such rollover amount will be held in a
separate Rollover Contribution Source for the benefit
of the Participant or Employee pursuant to the
provisions of this Plan.
(b) Before approving such a rollover, the Savings Plan
Committee or its agent may request from the Participant
or Employee any documents or opinion of counsel which
the Savings Plan Committee or the agent designated by
the Savings Plan Committee, in its discretion, deems
necessary.
ARTICLE IV
EMPLOYER CONTRIBUTIONS ("MATCHING CONTRIBUTIONS")
4.1. AMOUNT OF EMPLOYER CONTRIBUTIONS. Subject to the
limitations of Article V, the Employer shall contribute and
pay or cause to be paid to the Trustee an "Employer
Contribution" (also referred to as the "Matching
Contribution") determined as follows:
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(a) FINAL PAY PLAN PARTICIPANTS. For the accounts of all
Participants prior to June 1, 2000, and effective the
first full payroll period beginning after June 1, 2000
for the account of each Participant who participates in
the Final Pay Option of the Retirement Plan of Columbia
Energy Group Companies, or any successor plan (as
defined therein):
(1) during the first 120 months of the Participant's
Participation, an amount equal to 50% of the
amount of his deposit paid to the Trustee;
(2) from the 121st through 240th month of the
Participant's Participation, an amount equal to
75% of the amount of his deposit paid to the
Trustee; and
(3) from the 241st month of the Participant's
Participation onward, an amount equal to 100% of
the amount of his deposit paid to the Trustee.
(b) ACCOUNT BALANCE PARTICIPANTS. Effective the first full
payroll period beginning after June 1, 2000, for the
account of each Participant who participates in the
Account Balance Option of the Retirement Plan of
Columbia Energy Group Companies, or any successor plan
(as defined therein):
an amount equal to 75% of the amount of such
Participant's deposit paid to the Trustee.
(c) SPECIAL RULES. The following special rules apply:
(1) Effective August 18, 1999, any Employer may permit
a percentage or amount of Employer contribution
lower than those specified in paragraphs (a) and
(b) for its Employees by taking appropriate
written action with the approval of the Savings
Plan Committee. Any such change in contribution
level will only be permitted to the extent it does
not violate any applicable collective bargaining
agreements and does not adversely affect the
Plan's status as a qualified plan under Code
Sections 401(a) and 401(k) or the Plan's ability
to pass the applicable discrimination tests.
(2) No amount shall be contributed by the Employer and
paid with respect to that portion, if any, of a
Participant's deposit which exceeds 6% of his Base
Pay. In case a Participant is at any time
employed by two or more Employers, the amount to
be contributed by each such Employer shall be
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determined in relation to the deposits made by the
Participant with respect to his Base Pay from such
Employer. Such Employer contributions shall be
made without regard to current or accumulated
earnings and profits for the taxable year or years
ending with or within such Plan Year.
Notwithstanding the foregoing, the Plan shall
continue to be designed to qualify as a profit
sharing plan for purposes of Code Sections 401(a),
402, 412 and 417.
(3) Any "Union Employee" benefiting under the
Retirement Plan of Columbia Energy Group
Companies, or any successor plan, who subsequently
becomes a non-Union Employee under such Retirement
Plan and timely elects to have his accruals
determined under the Account Balance Option of
such Retirement Plan shall be entitled to Employer
contributions under this Plan as determined by
this subsection. Notwithstanding the foregoing, a
Participant who meets the above requirement shall
not begin receiving Employer contributions under
this subsection until the period for making the
requisite Account Balance Option election under
the Retirement Plan has fully expired.
4.2. ALLOCATION OF EMPLOYER CONTRIBUTIONS. Employer
contributions for Participants who have not attained age 50
will be allocated to the Employer Stock Fund. Participants
who have attained age 50 may direct the allocation of past,
current and future Employer contributions, in accordance
with the provisions of Article V. Employer contributions
allocated to the Employer Stock Fund shall be allocated to
the Employer Sources of Participants. Employer Matching
Allocations shall be based on the fair market value of the
Common Stock as of the applicable Valuation Date.
Notwithstanding the above, if Employer contributions
allocated to the Employer Stock Fund are exchanged for cash
or property as a result of a merger, sale, or other
restructuring of the Employer, and such cash or property
does not qualify as qualifying employer securities, the
Savings Plan Committee may permit Participants to direct the
allocation of such nonqualified cash or property to other
sources and to invest such nonqualified cash or property in
one or more of the Options as described in Article VI. If
the Plan accepts nonqualified cash or property, the Savings
Plan Committee shall take such action as it deems necessary
to make sure the Plan continues to comply with applicable
laws.
14
4.3. EMPLOYER CONTRIBUTIONS AFTER THE LEVERAGED ESOP EFFECTIVE
DATE.
(a) EMPLOYER DEBT SERVICE CONTRIBUTIONS. Whenever one or
more Acquisition Loans are outstanding, Employer Debt
Service Contributions shall be made by the Company or
Employers in cash at such times and in such amounts
which, when aggregated with any earnings attributable
to any Employer Debt Service Contributions, any
Allocated Dividends and Unallocated Dividends, any
earnings on Unallocated Dividends, and any other moneys
available to repay an Acquisition Loan, including
earnings attributable to the proceeds of an Acquisition
Loan earned prior to the acquisition of Common Stock
with such proceeds or the proceeds of a sale of
Leveraged Shares in accordance with Section 14.4, will
enable the Trustee to pay any currently maturing
obligation under such Acquisition Loans. To the extent
the total of such Employer Debt Service Contributions
exceeds the amount required to pay any such currently
maturing obligations, the Trustee shall, in accordance
with the direction of the Treasurer of the Company
either (i) apply such excess amount promptly to pre-pay
some or all of any outstanding Acquisition Loan, or
(ii) hold such excess amount in an unallocated Suspense
Account to a date not later than the last day of the
Plan Year in which actually contributed for application
at that time to any principal or interest then payable
on the Acquisition Loan.
(b) EMPLOYER ALLOCATION CONTRIBUTIONS. In addition to the
Employer Debt Service Contributions referred to in
Section 4.3(a), each Employer will contribute for each
Plan Year, or more frequently, as directed by the
Savings Plan Committee, Employer Allocation
Contributions in cash in an amount equal to the amount
required (if any) to make up the difference between:
(i) the total amount equal to the Employer Matching
Allocations required for the Plan Year pursuant to
Section 4.1, and (ii) the total fair market value
determined in accordance with Section 4.4(c) of the
total of all Leveraged Shares (if any) allocated to
such eligible Participants' Employer Sources during the
Plan Year in accordance with Section 4.5. Employer
Allocation Contributions by the Company may be made in
shares of Common Stock in an amount equal to the amount
required under this Section or in an amount when
combined with cash so contributed equals the amount
required hereunder. The Employer Matching Allocations
to the Participants' Employer Sources on such Valuation
Date shall be drawn from either or both of the
following sources: (i) Common Stock released directly
15
(or indirectly, through the Intermediate Holding
Account) during the Plan Year containing the Valuation
Date, and (ii) Common Stock acquired with the Employer
Allocation Contributions made pursuant to this Section
4.3(b).
(c) ADDITIONAL ALLOCATIONS. If shares of Common Stock have
been transferred to the Intermediate Holding Account as
a result of the payment of an Acquisition Loan with the
proceeds of a sale of Leveraged Shares pursuant to
Section 14.4 such shares shall be allocated, as soon
thereafter as practicable, to Participants' Employer
Sources in the form of Employer Matching Allocations.
In the event that the shares of Common Stock held in
the Intermediate Holding Account at the end of any Plan
Year exceed the number of shares necessary to satisfy
the Employer Matching Allocations requirements for that
Plan Year, each Participant will have allocated to his
Employer Source an amount determined by the Savings
Plan Committee, in its sole discretion, under one of
the following methods:
(1) each Participant shall receive an equal number of
shares on a per capita basis;
(2) each Participant shall receive a pro-rata number
of shares on the basis of his Compensation for the
calendar year in which the Additional Allocation
is made in proportion to the Base Pay of all
Participants; or
(3) each Participant shall receive a uniform
percentage of the Participant's matched deposits
for the Plan Year.
Such Additional Allocations shall be credited to eligible
Participants' Employer Sources as of the last day of the
Plan Year in which the Participants' matched deposits were
made.
4.4. ACQUISITION LOANS
(a) TERMS OF ACQUISITION LOANS. The Company, from time to
time on or after the Leveraged ESOP Effective Date, may
direct the Trustee to deliver notes or incur
indebtedness in the form of one or more Acquisition
Loans either to finance the acquisition of Leveraged
Shares or to repay a prior Acquisition Loan. The
Acquisition Loan shall be on such terms and conditions
as the Company shall determine. The Company shall
direct the Trustee to take such actions as the Company
16
shall determine with respect to any such Acquisition
Loan, including, without limitation, entering into loan
agreements, stock purchase agreements, and related
documents in accordance with interest rates, maturities
and other terms negotiated by the Company. The
indebtedness under any Acquisition Loan shall be
incurred primarily for the benefit of Participants and
their Beneficiaries. The proceeds of any Acquisition
Loan shall be used within a reasonable time, as
determined by the Company or a fiduciary to whom the
responsibility to acquire Leveraged Shares is
delegated, solely to finance the acquisition of
Leveraged Shares or to repay a prior Acquisition Loan.
Any Acquisition Loan shall be an obligation of the
trust associated with the Plan (including the employee
stock ownership portion of the Plan) and shall be for a
specific term, shall bear a reasonable rate of
interest, and shall not be payable on demand except in
the event of a default under the terms of the
Acquisition Loan. In the event of a default under the
terms of an Acquisition Loan, the value of trust assets
transferred in satisfaction of any Acquisition Loan
shall not exceed the amount due upon default; provided
however that if the lender is a "party in interest"
within the meaning of Section 3(14) of ERISA, a
transfer of Trust assets upon default shall be made
only in the event of, and to the extent of, the Trust's
failure to meet the Acquisition Loan's payment
schedule. Any Acquisition Loan may be secured by a
collateral pledge of the Leveraged Shares so acquired
or Leveraged Shares acquired with the proceeds of a
prior Acquisition Loan that was repaid with the
proceeds of the current Acquisition Loan. No other
Trust assets may be pledged as collateral for an
Acquisition Loan. Any pledge of Leveraged Shares must
provide for the release from the Suspense Account of
shares so pledged on a pro rata basis as principal and
interest on the Acquisition Loan are repaid by the
Trustee. Upon the release of Leveraged Shares from the
Suspense Account, such shares shall either be allocated
immediately to Employer Sources or be held in the
Intermediate Holding Account, as provided under Section
4.4(b). Except upon termination of the Plan or the
employee stock ownership portion of the Plan, as
provided in Section 14.2, repayments of principal and
interest on any Acquisition Loan shall be made by the
Trustee (as directed by the Company) only from (a)
Employer Debt Service Contributions made by Employers
to enable the Trustee to repay such Acquisition Loan,
(b) Allocated Dividends and Unallocated Dividends
(which dividends shall be used to repay principal on
any Acquisition Loan prior to any interest payment),
17
(c) earnings attributable to the proceeds of the
Acquisition Loan earned prior to the acquisition of
shares of Common Stock with such proceeds, and (d)
earnings attributable to Employer Debt Service
Contributions and Unallocated Dividends. No person
entitled to payment under an Acquisition Loan shall be
entitled to payment from the trust other than to the
following extent: (i) from the portion of the Suspense
Account representing the balance of Leveraged Shares
acquired with the proceeds of the Acquisition Loan,
(ii) from Employer Debt Service Contributions made
under the Plan for the purpose of satisfying the
obligations under the Acquisition Loan, (iii) from
Allocated Dividends and Unallocated Dividends, (iv)
from earnings attributable to Employer Debt Service
Contributions and Unallocated Dividends, (v) from
earnings attributable to the proceeds of the
Acquisition Loan earned prior to the acquisition of
shares of Common Stock with such proceeds, and (vi)
such other assets, if any, as to which recourse may be
permitted under Code Section 4975.
(b) EMPLOYER INTER-ACCOUNT TRANSFERS. Any Leveraged Shares
shall initially be credited to the Suspense Account and
invested in the Employer Shares Fund. Leveraged Shares
shall be released from the Suspense Account and
transferred to the Intermediate Holding Account as
payments of principal and interest on the Acquisition
Loan are made by the Trustee. With respect to each
such payment of principal and interest, the number of
Leveraged Shares to be released from the Suspense
Account and transferred to the Intermediate Holding
Account shall equal the number of Leveraged Shares in
the Suspense Account immediately before release
multiplied by a fraction. The numerator of the
fraction shall be the amount of such payment of
principal and interest, it being permissible for the
Trustee, at the direction of the Savings Plan
Committee, to draw for such payment upon any or all of
the following sources: Employer Debt Service
Contributions, Allocated Dividends, Unallocated
Dividends, earnings attributable to the proceeds of the
Acquisition Loan earned prior to the acquisition of
shares of Common Stock with such proceeds, earnings on
the Employer Debt Service Contributions and Unallocated
Dividends and the proceeds of a sale of Leveraged
Shares in accordance with Section 14.2. The
denominator of the fraction shall be the sum of the
numerator plus the principal and interest to be paid
for all future periods over the duration of the
Acquisition Loan repayment period. If the interest
rate under any Acquisition Loan is variable, the
18
interest to be paid in future periods shall be computed
by using the interest rate applicable as of the end of
the year of payment.
(c) NUMBER OF RELEASED LEVERAGED SHARES ATTRIBUTABLE TO
DIVIDENDS. The number of Leveraged Shares released
from the Suspense Account as a result of a loan
amortization payment made in whole or in part with
dividends on Common Stock shall be separately
determined with respect to Allocated Dividends and
Unallocated Dividends.
(1) ALLOCATED DIVIDENDS. The number of released
shares with respect to Allocated Dividends shall
be the total number of shares released on account
of the loan amortization payment multiplied by a
fraction. The numerator of the fraction shall be
the amount of the Allocated Dividends used to make
the loan amortization payment, provided that such
amount shall not exceed the denominator of the
fraction. The denominator of the fraction shall
be the fair market value of the total number of
shares released from the Suspense Account as a
result of the loan amortization payment. The
number of released Leveraged Shares with respect
to Allocated Dividends shall be allocated among
Participants pursuant to Section 4.5(a).
(2) UNALLOCATED DIVIDENDS. The number of released
shares with respect to Unallocated Dividends shall
be the balance (after the application of the
preceding Paragraph) of the shares released on
account of the loan amortization payment,
multiplied by a fraction. The numerator of the
fraction shall be the amount of Unallocated
Dividends used to make the loan amortization
payment. The denominator of the fraction shall be
the amount of the loan amortization payment
reduced by the amount of Allocated Dividends used
to make the loan amortization payment, if any.
The number of released shares with respect to
Unallocated Dividends shall be allocated among
Participants pursuant to Section 4.5(b) below.
4.5. ALLOCATION OF RELEASED LEVERAGED SHARES.
(a) LEVERAGED SHARES ATTRIBUTABLE TO ALLOCATED DIVIDENDS.
In connection with the release of Leveraged Shares from
the Suspense Account to the Intermediate Holding
Account as a result of a loan amortization payment
where the source of funds for such payment includes
Allocated Dividends, a portion of the shares thus
19
released, equal in value to the Allocated Dividends,
shall be allocated to the Employer Source of the
Participants (not later than the last Valuation Date of
the Plan Year in which the applicable dividend payment
date or dates occurred). The number of shares of
Common Stock released from the Suspense Account with
respect to Allocated Dividends under Section 4.4(c)(1)
shall be released from the Suspense Account and
allocated among the Participants in the same proportion
that each Participant's Allocated Dividends used to
make the loan amortization payment bears to the total
amount of such Allocated Dividends. For each Plan Year
in which Allocated Dividends are used to repay an
Acquisition Loan, shares of Common Stock with a value
equal to the amount of each Participant's share of the
Allocated Dividends which are used to repay the
Acquisition Loan shall be allocated to the Employer
Source of each such Participant. A special
contribution by the Company to the Plan will be
required if and to the extent that (i) the amount
required to restore the amount of the Allocated
Dividends to the Participant's Employer Source in
accordance with the requirements of the last Paragraph
of Code Section 404(k)(2), exceeds (ii) the value of
shares of Common Stock available to be allocated to
such Account from the shares of Common Stock released
pursuant to Section 4.4(b) or acquired or contributed
with respect to Employer Allocation Contributions
during such Plan Year.
(b) OTHER LEVERAGED SHARES. Shares of Common Stock held in
the Intermediate Holding Account and shares of Common
Stock acquired with Employer Allocation Contributions
pursuant to Section 4.3(b) that have not and will not
be allocated pursuant to Section 4.5(a) shall be
allocated to the Participants' Employer Sources in
accordance with Sections 4.1, 4.2 and 4.3(c).
(c) VALUATION OF ALLOCATED SHARES. All shares of Common
Stock that are allocated to the Participants' Employer
Sources shall be based on the value of such stock as of
the Valuation Date coinciding with or next preceding
the date as of which such allocation is made.
4.6. REMITTANCE OF EMPLOYER CONTRIBUTIONS. Employer
contributions with respect to any pay period will be paid by
the Employer to the Trustee with reasonable promptness after
the total of the deposits made by the Participants during a
pay period has been accurately and finally determined, but
in no event shall said contributions be paid later than the
time period as specified in the applicable regulations
promulgated by the U.S. Department of Labor. Any special
20
contributions by the Employer shall be paid by the Employer
with reasonable promptness.
4.7. LIMITATIONS ON CONTRIBUTIONS AND BENEFITS. The following
limitations shall apply, effective January 1, 1997:
(a) MAXIMUM ANNUAL ADDITION. The maximum Annual Addition
that may be contributed or allocated to a Participant's
account under the Plan for any calendar year shall not
exceed the lesser of:
(1) the Defined Contribution Dollar Limitation as set
forth in Code Section 415(c)(1)(A), or
(2) 25 percent of the Participant's compensation,
within the meaning of Code Section 415(c)(3) for
the Plan Year.
(b) SPECIAL RULES. The compensation limitation referred to
in subsection (a)(2) shall not apply to:
(1) Any contribution for medical benefits (within the
meaning of Code Section 419A(D(2)) after
separation from service which is otherwise treated
as an Annual Addition, or
(2) Any amount otherwise treated as an Annual Addition
under Code Section 415(l)(2).
(c) DEFINITIONS. For purposes of this Section, the
following definitions shall apply.
(1) "Annual Addition" shall mean the amount allocated
to a Participant's account during the calendar
year that constitutes Employer contributions,
Employee deposits, Forfeitures, and amounts
described in Code Sections 415(l)(2) and 4
19A(d)(2).
(2) "Employer Contributions" shall mean the actual
dollar amounts of Employer contributions allocated
to a Participant's account. Whenever Leveraged
Shares are released from the Suspense Account or
Intermediate Holding Account and are allocated to
a Participant's account, only that portion of
Employer Debt Service Contributions deemed
allocated to the Participant's Employer Source
shall be treated as an Employer contribution for
purposes of determining Annual Additions,
regardless of the fair market value of the Common
Stock actually allocated to the Employer Source.
If no more than one-third of the Employer Matching
21
Allocations for a Plan Year are allocated to the
Employer Source of Participants who are Highly
Compensated Employees, only that portion of
Employer Debt Service Contributions used for
repayment of principal on any Acquisition Loan
(after the annual application of Allocated and
Unallocated Dividends as required under Section
4.4) shall be counted as an Annual Addition.
4.8. EFFECT OF SUSPENSION OF PARTICIPANT DEPOSITS ON EMPLOYER
CONTRIBUTIONS. During any period in which a Participant's
deposits are suspended, the Employer contributions on his
behalf will also be suspended.
ARTICLE V
NON-DISCRIMINATION TESTS
This Article shall be effective January 1, 1997.
5.1. GENERAL NON-DISCRIMINATION TEST. The Plan Administrator
shall perform this test as described below:
(a) Separate all employees eligible to make before-tax
deposits into two (2) groups: (1) Highly Compensated
Employees (HCE's) and (2) Non-Highly Compensated
Employees (non-HCE's).
(b) For each person in the HCE group above, compute the
"Actual Deferral/Contribution Percentage" by taking the
Applicable Amount (as defined in Section 5.2) and
dividing it by the Participant's Compensation for the
Plan Year. The Plan Administrator may on a uniform and
consistent basis use Compensation earned as a
Participant (during the period within the Plan Year
when the Participant was eligible to make before-tax
deposits).
(c) For each person in the non-HCE group above, compute the
"Actual Deferral/Contribution Percentage" by taking the
Applicable Amount (as defined in Section 5.2) and
dividing it by the Participant's Compensation for the
Plan Year. The Plan Administrator may on a uniform and
consistent basis use Compensation earned as a
Participant (during the period within the Plan Year
when the Participant was eligible to make before-tax
deposits).
(d) For each of the groups described in (a) above, average
the Actual Deferral/Contribution Percentages computed
in (b) and (c) above ("Average Actual Deferral/
22
Contribution Percentage"). If a Participant is
eligible to make before-tax deposits but does not make
them, then that Participant's Actual Deferral/
Contribution Percentage equals zero and that
Participant counts in computing the average of the
Actual Deferral/Contribution Percentages in this
Section.
(e) The Plan passes this test if either of the following
conditions are met:
(1) The Average Actual Deferral/Contribution
Percentage for the HCE group does not exceed 1.25
times the Average Actual Deferral/Contribution
Percentage for the non-HCE groups, or
(2) Both (i) and (ii) below must be satisfied:
(i) The Average Actual Deferral/Contribution
Percentage for the HCE group does not
exceed two (2) times the Average Actual
Deferral/Contribution Percentage for the
non-HCE groups and
(ii) The Average Actual Deferral/Contribution
Percentage for the HCE group does not
exceed two (2) percentage points more
than the Average Actual Deferral/
Contribution Percentage of the non-HCE
group.
(f) Notwithstanding the foregoing, on and after the
Leveraged ESOP Effective Date, the Actual Deferral/
Contribution Percentage and the Average Actual
Deferral/Contribution Percentage with respect to
Employer Contributions to the Employer Shares Fund
shall be determined separately.
5.2. BEFORE-TAX DEPOSIT NONDISCRIMINATION TEST. Each Plan Year
the Plan Administrator shall perform the test described in
Section 5.1 above where the Applicable Amount equals before-
tax deposits made by the Participant on behalf of
Compensation earned during the Plan Year and paid within
2 1/2 months after the close of the Plan Year. The
Applicable Amount only includes before-tax deposits
allocated to a Participant's account as of a date within the
Plan Year and which are paid to the Plan before the close of
the following Plan Year. These before-tax deposits shall be
reduced by any amounts distributed to the Participant
pursuant to Section 4.4 for the Plan Year. Before-tax
deposits shall not be reduced by excess amounts returned
23
pursuant to Section 3.3 above (for purposes of performing
the test in this Section).
5.3. MATCHING CONTRIBUTION NONDISCRIMINATION TEST. Each Plan
Year the Plan Administrator shall perform the test described
in Section 5.1 above where the Applicable Amount equals
Matching Contributions paid by the Employer which correspond
to before-tax deposits made on behalf of Compensation earned
during the Plan Year by the Participant and which are
allocated to the Participant's Matching Contribution Account
as of a date within the Plan Year. The Employer must pay
these Matching Contributions before the end of the following
Plan Year. If the Plan requires corrective action due to
failure to meet the test in Section 5.2 above, and the Plan
as part of this corrective action recharacterizes before-tax
deposits as after-tax deposits pursuant to Section 5.7(c),
then the recharacterized before-tax deposits are included in
determining the Applicable Amount. The Matching
Contributions included above must be allocated to the
Participant's Matching Contribution Account for the Plan
Year and must be paid to the Plan prior to the close of the
succeeding Plan Year. Excess Matching Contributions which
are distributed or forfeited pursuant to Section 4.4 shall
not be included in the Applicable Amount. Refer to Article
XIV for certain Matching Contributions allocated to non-Key
Employees that cannot be included in the Applicable Amount.
Matching Contributions which are forfeited under Sections
5.7(a)(1) or 3.3 are not included in the Applicable Amount.
5.4. APPRECIATION OF APPLICABLE AMOUNTS. If the Employer
maintains two or more plans (including this Plan) which are
aggregated under Code Sections 401(a)(4) or 410(b), then the
Applicable Amount includes all before-tax deposits and
Matching Contributions made under these aggregated plans.
If an HCE participates in two or more plans of the Employer
(including this Plan), then the Applicable Amount includes
before-tax deposits and Matching Contributions made on
behalf of the HCE under all plans of the Employer.
5.5. COMBINED NONDISCRIMINATION TEST. The Plan Administrator may
perform the tests of Sections 5.2 and 5.3 above with the
following variations, at the Plan Administrator's option:
(a) If all Participants' Matching Contribution Accounts are
at all times fully vested, then the Plan Administrator
may add all or part of the Matching Contributions
allocated to a Participant (as modified by Section 5.3
above) to the Applicable Amount when performing the
test described in Section 5.2. Such amounts shall not
also be used in performing the test in Section 5.3.
24
(b) Qualified Non-Elective Contributions (QNECs) as
described in Sections 4.2(b) and 5.7(b) may be added to
the Applicable Amount in performing the tests described
in Sections 5.2 or 5.3. Such amounts may be used in
performing either test, but the same amounts may not be
used in both tests.
(c) All or part of before-tax deposits may be added to the
Applicable Amount of a Participant in performing the
test in Section 5.3. In this case, the test in Section
5.2 must be satisfied both including the before-tax
deposits used for the test in Section 5.3 and excluding
the before-tax deposits used for the test in Section
5.3.
(d) By using any other combination of before-tax deposits,
Matching Contributions and Qualified Nonelective
Contributions which is permitted under Regulations.
5.6. QUALIFIED NONELECTIVE CONTRIBUTIONS (QNEC).
(a) The Employer, in its sole discretion, may make
qualified non-elective contributions to be allocated to
eligible Non-Highly Compensated Employees for the
purpose of ensuring that the Plan satisfies the non-
discrimination tests described in Article V. Qualified
non- elective contributions made for the purpose of
satisfying the before-tax deposit nondiscrimination
test described in Section 5.2 shall be considered to be
before-tax deposits for purposes of satisfying such
test. Qualified non-elective contributions made for
the purpose of satisfying the matching contribution
nondiscrimination test described in Section 5.3 shall
be considered to be Employer contributions for purposes
of satisfying such test. Contributions made for the
purpose of satisfying the combined nondiscrimination
test described in Section 5.5 shall be considered to be
before-tax deposits and/or Employer contributions
(whichever shall be applicable) for purposes of
satisfying such test. Qualified non-elective
contributions shall be treated as before-tax deposits
for all other purposes of the Plan, shall be
nonforfeitable when made and shall be subject to the
same distribution requirements as before-tax deposits
except that such contributions (or earnings thereon)
may not be distributed as a hardship withdrawal from
this Plan.
(b) Qualified non-elective contributions as described in
subsection (a) shall be allocated to or on behalf of
Participants who are Non-Highly Compensated Employees
25
and who are employed on the last day of the Plan Year
for which such contributions are made as follows:
(1) If the qualified non-elective contributions will
be used to satisfy the before-tax deposit
nondiscrimination test described in Section 5.2,
such contributions shall be allocated as a uniform
percentage of each eligible Participant's before-
tax deposits.
(2) If the qualified non-elective contributions will
be used to satisfy the matching contribution
nondiscrimination test described in Section 5.3,
such contributions shall be allocated as a uniform
percentage of each eligible Participant's
allocable Employer contributions for such Plan
Year.
5.7. CORRECTIVE ACTIONS. If either of the tests performed in
Sections 5.2 or 5.3 (or the combined test in Section 5.5)
fails, the Plan Administrator must take one or more (alone
or in any combination) of the corrective actions outlined
below to eliminate the failures:
(a) Distribution --
(1) Before-tax deposits: Excess before-tax deposits
plus earnings thereon shall be distributed to the
Participant prior to the close of the Plan Year
which follows the Plan Year in which the excess
occurred. Excess before-tax deposits are those
computed in Section 5.8 below. Earnings on excess
before-tax deposits which are distributed shall be
determined in accordance with Section 5.7(d)
below. In no event, however, will the amount
distributed be less than the lesser of: (1) the
Participant's account attributable to before-tax
deposits at the end of the Plan Year in which the
excess occurred, or (2) the excess before-tax
deposits. Matching contributions based on excess
before-tax deposits shall be forfeited.
(2) Matching Contributions: Matching Contributions
(to the extent they are fully vested), plus
earnings thereon, shall be distributed to the
Participant prior to the close of the Plan Year
which follows the Plan Year in which the excess
occurred. Excess Matching Contributions are
determined in Section 5.8. The earnings on Excess
Matching Contributions shall be determined in
accordance with Section 5.7(d) below. To the
26
extent Excess Matching Contributions are not
vested, they shall be forfeited.
The amounts distributed under this Section shall
be coordinated with distributions of Excess
Deferrals under Section 3.3.
(b) Qualified Nonelective Contributions: These may be used
to satisfy any or all of the tests in Sections 5.2
through 5.5. If only a portion of the QNECs are used
to satisfy these nondiscrimination tests, the remaining
QNECs must meet the nondiscrimination rules of Code
Section 401(a)(4). QNECs may not be included in the
Applicable Amount if the effect is to increase the
difference between the HCEs and non-HCEs when
performing the nondiscrimination tests under Sections
5.2 or 5.3. QNECs may be used for a Plan Year only if
they are allocated to the Participant's Account as of a
date within that Plan Year.
(c) Recharacterization: The Plan Administrator may
recharacterize before-tax deposits (only) as after-tax
deposits. These after-tax deposits are treated as
Matching Contributions for purposes of the
nondiscrimination test in Section 5.3. Such
recharacterization shall be done in accordance with all
applicable provisions of Treasury Regulation Section
1.401(k)-i.
(d) Determining Income or Loss on Distributions:
(1) Generally: Determine the gain or loss on the
Applicable Account for the Plan Year. Multiply
this amount by a fraction. The numerator of the
fraction is the Distributable Amount and the
denominator equals the Applicable Account Balance,
excluding any gain or loss occurring during the
Plan Year.
(2) Applicable Account: This is the account from
which the distribution was made. For before-tax
deposits, it is the Before-Tax Source. However,
if Qualified Nonelective Contributions or Matching
Contributions are included as before-tax deposits
in performing the tests in Sections 5.2 through
5.5, then the Applicable Account includes the
Qualified Nonelective Contribution Account or
Employer Contribution Account (or both). For
Matching Contributions, it is the Employer
Contribution Account. However, if Qualified
Nonelective Contributions or before-tax deposits
are included as Matching contributions in
27
performing the tests in Sections 5.2 through 5.5,
then the Applicable Account includes the Before-
Tax Source or Qualified Nonelective Contribution
Account (or both).
(3) Distributable Amount: This refers to the amount
distributed which falls into one or more of the
following categories:
(i) Excess Contributions (Excess before-tax
deposits under Section 5.9),
(ii) Excess Aggregate Contributions (Excess
Employer contributions under Section
5.9),
(iii) Excess Deferrals (Before-tax deposits in
excess of the limit provided in Section
3.3).
(4) Before-tax deposits recharacterized as Matching
Contributions under Section 5.7(c) are treated as
before-tax deposits for purposes of determining
gain or loss under this subsection 5.7(d).
(5) Gain or loss for the period from the end of the
Plan Year to the date of distribution shall be
disregarded.
5.8. DETERMINATION OF EXCESS DEFERRALS/MATCHING CONTRIBUTIONS:
This shall be determined by repeating the two step process
below until the tests in Sections 5.2 through 5.5 are met.
(a) Lower the Actual Deferral/Contribution Percentage of
the HCE with the highest before- tax deposits/Matching
Contributions until either the nondiscrimination tests
of Sections 5.2 through 5.5 are met or until his or her
before-tax deposits/Matching Contributions equal the
before-tax deposits/Matching Contributions of the
HCE(s) who had the next highest before-tax deposits/
Matching Contributions.
(b) If the nondiscrimination tests are still not met, then
repeat the process in (a) by reducing all HCE's who now
have the same before-tax deposits/Matching
Contributions.
The amount of excess before-tax deposits/Matching
Contributions attributable to an HCE is the difference
between the before-tax deposits/Matching Contributions
the HCE made and the before-tax deposits/Matching
Contributions as adjusted above.
28
5.9. MULTIPLE USE. To determine if multiple use exists, compute
the sum of:
(a) 125% of the greater of the Actual Deferral/Contribution
Percentage (ADP) or actual contribution percentage
(ACP) for the non-HCE group; plus
(b) the lesser of:
(1) two percentage points plus the lesser of the ADP
or ACP of the non-HCE group, or
(2) 200% of the lesser of the ADP or ACP of the non-
HCE group.
If, and only if, this is less than the sum of the ADP
plus the ACP of the HCE group, then multiple use
exists. If multiple use exists, then the Plan
Administrator, at its option, may elect to reduce the
ADP, ACP, or both using the methods described in
Section 5.7. The excess determined under this method
will be corrected under any of the methods described in
Section 5.7. As used in this Section, the term Actual
Deferral/Contribution Percentage has the meaning given
in Code Section 401(k)(3)(B) and the term actual
contribution percentage has the meaning given in Code
Section 401(m)(3). This Section incorporates by
reference any relief promulgated by the Secretary of
Treasury with respect to the existence of multiple use.
ARTICLE VI
INVESTMENT PROVISIONS
6.1. INVESTMENT OF DEPOSIT ACCOUNTS. Each Participant or
Employee will direct, at the time he elects to become a
Participant under the Plan, that his Deposit Accounts
(including Employer contributions only if the Participant
has attained age 50) be invested in one or more of the
Options selected by the Committee.
As provided in Section 12.4, the Savings Plan Committee
shall have the power to delete or change any of the above
Options, and to select other Options. If the Participant or
Employee elects to have his Deposit Accounts (including
Employer contributions only, if the Participant has attained
age 50) invested in more than one Option, he shall
designate, in whole percentages, the portion of his Deposit
Accounts (including Employer contributions only if the
Participant has attained age 50) that will be invested in
29
each Option. Portions of the Before-Tax and After-Tax
Sources, Lump Sum Deposits Source, and the Rollover
Contribution Source invested in the Employer Stock Fund
Option shall be invested in the portion of the Option that
does not constitute an employee stock ownership plan.
6.2. CHANGE IN INVESTMENT ELECTION. Any investment election
given by a Participant for investment of his Deposit
Accounts (including Employer contributions only if the
Participant has attained age 50) will continue in effect
until changed by the Participant, Inactive Participant, or
Beneficiary. A Participant, Inactive Participant, or
Beneficiary may change his current investment election as to
his future Deposit Accounts (including Employer
contributions only if the Participant, Inactive Participant
or Beneficiary has attained age 50), within the limits of
Section 6.1 and in accordance with procedures established by
the Savings Plan Committee.
6.3. CONVERSION/EXCHANGES OF PAST INVESTMENT ELECTIONS. A
Participant, Inactive Participant, Employee or Beneficiary
may elect to convert his investment election as to his prior
Deposit Accounts (including Employer contributions only if
the Participant has attained age 50) at their current value
in accordance with procedures adopted by the Savings Plan
Committee. Such conversions/exchanges must be made in whole
percentages and may be made no more frequently than once
each Valuation Date subject to any further restrictions
imposed by the Trustee(s). The Savings Plan Committee may
effect such conversions/exchanges of Deposit Accounts
(including Employer contributions only if the Participant,
Inactive Participant, or Beneficiary has attained age 50)
out of the Employer Stock Fund over a period not to exceed
one year. Unless the Participant, Inactive Participant, or
Beneficiary has attained age 50, Units/Shares in the
Employer Stock Fund which have been credited to a
Participant's account by reason of Employer contributions
may not be converted/exchanged to any other Option.
6.4. SEPARATE ELECTIONS. Any investment election with respect to
Participant Deposit Accounts, including a conversion of past
investments pursuant to Section 6.3, shall include separate
elections with respect to each source.
6.5. SPECIAL INVESTMENT REQUIREMENTS WHEN ACQUISITION LOAN
OUTSTANDING. Unless and to the extent that the Trustee is
directed by the Savings Plan Committee from time to time not
to do so, all Unallocated Dividends, earnings on Unallocated
Dividends and earnings attributable to the proceeds of the
Acquisition Loan earned prior to the acquisition of Common
Stock with such proceeds shall be utilized to repay an
Acquisition Loan until such Acquisition Loan is repaid.
30
With respect to the portion of the Employer Shares Fund
which is allocated to the Employer Source of a Participant,
the Savings Plan Committee may, in its sole discretion,
direct the Trustee to use either all, a portion, or none of
the Allocated Dividends on such shares to repay one or more
installments of principal and interest on an Acquisition
Loan. To the extent that the Treasurer of the Company
directs the Trustee to utilize such Allocated Dividends from
such accounts to make payments on the Acquisition Loan, the
amount of such dividends derived from the Employer Source
shall be utilized to repay an Acquisition Loan until such
Acquisition Loan is repaid, and shall be allocated as
described under Section 4.5(a). All other cash dividends
received with respect to the Employer Shares Fund shall be
invested in the Employer Shares Fund.
6.6. TELEPHONIC VOICE RESPONSE SYSTEM AND INTERNET SERVICE. If
so required by the Savings Plan Committee, any notice
required to effectuate elections of a Participant under this
Article shall be made by the response of the Participant in
compliance with the procedures established by the Savings
Plan Committee with respect to such telephone voice response
system or the Internet service as may be established by the
Savings Plan Committee. Without limitation of the
foregoing, responses on such voice response service or the
Internet may be directed to the Trustee or any agent
designated by the Trustee or the Savings Plan Committee, and
Participants shall be required to execute such forms as may
be required by the Trustee or such agent in connection with
establishing and controlling entry to such service. Any
such voice response service or Internet service shall
provide for written confirmation to Participants of
elections made thereunder, and elections so made and so
confirmed shall be binding on Participants.
Participants with Internet access may monitor investments
on-line and make on-line deferral elections. However, any
withdrawals must be made only through the telephonic voice
response system.
6.7. SPECIAL RULES APPLICABLE TO QUALIFYING EMPLOYER SECURITIES.
With respect to an Option comprised of qualifying employer
securities, as defined in ERISA, the following special rules
shall apply:
(a) Information provided to shareholders of such securities
shall be provided to Participants and Beneficiaries
with accounts holding such qualifying employer
securities.
(b) Voting, tender and similar rights with respect to such
qualifying employer securities will be passed through
31
to Participants and Beneficiaries with accounts holding
such qualifying employer securities. The Trustee will
vote only those shares for which the Trustee has
received direction from Participants and Beneficiaries,
unless failure to vote non-directed shares would be a
breach of fiduciary duty or contrary to Section 404(c)
of ERISA.
(c) Information relating to the purchase, holding, and sale
of securities, and the exercise of voting, tender and
similar rights with respect to such securities by
Participants and Beneficiaries, shall be maintained in
accordance with procedures which are designed to
safeguard the confidentiality of such information,
except to the extent necessary to comply with Federal
laws or state laws not preempted by ERISA.
(d) The Plan Administrator shall be responsible for
ensuring that the procedures described in subsection
(c) above are sufficient to safeguard the
confidentiality of the information described in such
subsection and that such procedures are being followed.
(e) The Savings Plan Committee shall be responsible for
appointing an independent fiduciary to carry out
activities relating to any situation which the Savings
Plan Committee determines involve a potential for undue
Employer influence upon Participants and Beneficiaries
with regard to the direct or indirect exercise of
shareholder rights. For purposes of this subsection, a
fiduciary is not independent if the fiduciary is
affiliated with any sponsor of the Plan.
(f) The Savings Plan Committee may effect any reallocation
out of the Employer Stock Fund and into another Option,
as elected pursuant to Section 6.4, over a period not
to exceed one year.
6.8. PARTICIPANTS. As used in this Section, "Participant" shall
mean Participant, Inactive Participant, and Beneficiary.
ARTICLE VII
VALUATION OF UNITS/SHARES AND PARTICIPANT ACCOUNTS
7.1 UNITS/SHARES. Each of the Options shall be divided into
Units/Shares and the interests of each Participant in each
Option shall be evidenced by the number of Units/Shares and
portions thereof in such Option credited to his account.
Each Unit/Share in an Option shall have an equal beneficial
32
interest in such Option and none shall have priority or
preference over any other.
7.2. VALUATION OF ASSETS. Each Option shall be valued by the
Trustee at the market value thereof, on the Valuation Date.
Records of valuations of each Option and of the Units/Shares
thereof shall be prepared and preserved by the Trustee in
such manner and within such time after each Valuation Date
as may be prescribed by the Savings Plan Committee or, in
the absence thereof, as determined by the Trustee.
Notwithstanding the foregoing, valuation of any Employer
Contributions consisting of shares of Common Stock shall be
made in good faith based on relevant factors for determining
fair market value at least annually by a qualified
appraiser, who customarily makes such appraisals and who is
independent of any party to a transaction, within ninety
(90) days of the close of plan year.
7.3. VALUATION OF UNITS/SHARES. At or as of such times as may be
prescribed by the Savings Plan Committee and such other
times as the Trustee may elect, the value of a Unit/Share in
each Option shall be determined by dividing the value of
such Option, determined by the Trustee as provided in
Section 7.2, by the total number of outstanding Units/Shares
in such Option.
7.4. DETERMINATION OF NUMBER OF UNITS/SHARES. Each investment of
a Participant in Units/Shares in an Option shall be on the
basis of the value of such a Unit/Share as of the Valuation
Date last preceding such investment. Each distribution in
respect of and each conversion of Units/Shares in an Option
shall be on the basis of the value of such a Unit/Share as
of the Valuation Date specified according to the type of
distribution or conversion. The number of Units/Shares and
fractions of Units/Shares in each Option to be credited or
debited to a Participant's account each pay period shall be
calculated by dividing the pay period sum to be contributed
to or paid from such Option for such Participant by the
value of a Unit/Share of such Option immediately prior to
such contribution or payment. The number of outstanding
Units/Shares in such Option shall be increased or decreased
accordingly.
7.5. CONVERSION OF UNITS/SHARES. If a Participant elects to
convert his prior investment elections with respect to his
Units/Shares as provided in Section 6.3, the conversion will
be made and the amounts to be transferred from one Option to
another will be determined on the basis of the values of the
Units/Shares on the applicable Valuation Date.
33
7.6. VALUATION OF OPTIONS. For the purpose of valuing assets in
each Option, no distinction will be made between the sources
to which such assets are allocated.
ARTICLE VIII
VESTING, TERMINATION OF PARTICIPATION AND TRANSFERS
8.1. TIME OF TERMINATION. A Participant's Participation in this
Plan shall terminate upon the occurrence of any of the
following events:
(a) death,
(b) termination of the status as an Employee of every
Employer by which he is employed, or
(c) termination of the Participant's employment with the
Employer for reasons other than retirement or total
disability, as described in Section 8.2. A transfer to
an Affiliated Company which is not an Employer, as
described in Section 8.3, will not cause termination of
Participation.
8.2. TIME OF TERMINATION FOR RETIREES AND DISABLED PARTICIPANTS.
A Participant who terminates active employment: (1) because
of retirement under the Retirement Plan of Columbia Energy
Group Companies or any successor plan, or (2) due to total
disability that qualifies the Participant for benefits under
the Company's long-term disability plan, shall automatically
continue as a Participant up to the last day of the quarter
preceding his attainment of age 69, at which time
distribution of his account in this Plan must commence;
provided, however, that the Participant may elect to
discontinue his Participation at any time prior to such
date. Any election to terminate Participation in this Plan
shall become effective as soon as administratively
practicable following the date such election is made. A
Participant who remains in this Plan beyond the date he
terminates active employment will not, however, be allowed
to make additional deposits.
8.3. TRANSFER TO AN AFFILIATED COMPANY. In the event a
Participant is transferred to an Affiliated Company which is
not an Employer, such transfer shall not constitute a
termination of Participation. No further Participant
deposits or Employer contributions shall be made after the
date of such transfer, but the Participant will in all other
respects remain a Participant under the Plan.
34
8.4. COVERAGE BY ANOTHER PLAN. In the event a Participant
commences participation in any other plan for the purchase
of stock of the Company and participation in such plan is
conditioned on withdrawal from this Plan, such coverage
shall not constitute a termination of Participation in this
Plan. No further Participant deposits or Employer
contributions shall be made to this Plan after commencement
of participation in such other plan, but the Participant
will in all other respects remain a Participant in this
Plan.
8.5. VESTING. Each Participant shall at all times have a 100%
nonforfeitable interest in his account in the Plan.
8.6. BENEFIT AT TIME OF TERMINATION OF PARTICIPATION. Upon his
termination of Participation, the Participant, his surviving
Spouse, his Beneficiary, or his legal representative may
elect to receive 100% of the value of the Participant's
account valued as of the Valuation Date coincident with or
next following his election of a distribution in accordance
with procedures established by the Savings Plan Committee.
If such election is made, the Participant's account will be
distributed in accordance with Article IX; provided,
however, there will be no distribution of any Participant's
before-tax deposits before the earliest of the date the
Participant retires, becomes disabled, attains age 59-1/4,
terminates his employment with the Employer and all
Affiliated Companies, dies, or meets the requirements for a
hardship withdrawal as defined in Section 10.3.
ARTICLE IX
PAYMENT OF BENEFITS
9.1. FORM OF PAYMENT. At the direction of the Participant (or
his legal representative or Beneficiary in the case of his
incapacity or death), distribution will be made as follows:
(a) in cash,
(b) by such other method of payment as may be adopted by
the Savings Plan Committee according to uniform
standards.
At the direction of the Participant, any distribution
consisting of Units in the Employer Stock Fund may be paid
in cash or in whole shares of Common Stock of the Company
represented by such Units plus a cash amount equal to the
market value of any fraction of a share of Common Stock of
the Company represented by such Units plus the share
represented by such Units of any assets in the Employer
35
Stock Fund on the appropriate Valuation Date not invested in
Common Stock of the Company, or m a combination of cash and
shares of Common Stock. Any cash distribution will be made
in the form of a lump sum payment.
9.2. TIME OF PAYMENT.
(a) PAYMENT OF ACCOUNTS OF $5.000 OR LESS. If the
Participant who incurs a separation from employment
(whether due to termination of employment, death or
retirement) has a nonforfeitable account balance that
does not exceed $5,000 and the Participant has not
elected a sooner payment, the account shall
automatically be paid to the Participant in a lump sum
payment pursuant to procedures adopted by the Savings
Plan Committee.
(b) PAYMENT OF ACCOUNTS EXCEEDING $5,000. Effective
September 1, 1999, a distribution shall be made prior
to the Participant's attainment of age 69 only with the
Participant's written consent and (when applicable) the
consent of the Participant's spouse. Distribution
shall automatically commence as soon as
administratively practicable but no later than the last
day of the quarter preceding the Participant's
attainment of age 69.
(c) Notwithstanding anything in this Article to the
contrary, unless the Participant otherwise elects in
writing, distribution to the Participant shall not
commence later than 60 days after the close of the Plan
Year in which occurs the latest of the following
events:
(1) the Participant attains age 65;
(2) the Participant attains the tenth anniversary of
the date on which he or she became a Participant
under the Plan; or
(3) the Participant incurs a termination of service.
(d) PAYMENT OF ACCOUNTS UPON PARTICIPANT'S DEATH
(1) Notwithstanding any other provision of this Plan
to the contrary, in the event that a Participant
dies before the commencement of benefits under the
Plan, any benefits payable under the Plan upon the
death of the Participant must satisfy one of the
following rules:
36
(i) Such benefit shall be payable within
five years of the death of the
Participant; or
(ii) Such benefit shall commence within one
(1) year after the date of the
Participant's death, payable over the
life of the Participant's designated
beneficiary or a period not extending
beyond the life expectancy of the
Participant's designated beneficiary; or
(iii) If the Participant's Beneficiary is the
Participant's Surviving Spouse, such
benefit commences not later than one
year after the later of date of the
Participant's death or the last day of
the quarter preceding the date on which
the Participant would have attained the
age of sixty-nine (69) years, payable
over the life of the Participant's
Surviving Spouse or a period not to
exceed the life expectancy of the
Participant's Surviving Spouse.
(2) In the event that the Participant dies prior to
commencement of benefits under the Plan, and the
Participant's designated Beneficiary is the
Participant's Surviving Spouse, and the
Participant's Surviving Spouse dies before
commencement of benefits to Participant's
Surviving Spouse, then subsection 9.2(d)(1)(ii)
above shall apply as if the Participant's spouse
were the Participant.
(3) In the event that a Participant shall die after
commencement of retirement benefits hereunder, the
Participant's remaining benefits under the Plan
must be paid at least as rapidly as under the
method of distribution being used under the Plan
as of the date of the Participant's death.
(e) COMMENCEMENT OF DISTRIBUTION. If a distribution is one
to which Sections 401(a)(11) and 417 of the Code do not
apply, such distribution may commence less than 30 days
after the notice required under Treasury Regulation
Section 1.411(a)(11)(c) is given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the
notice to consider the decision of whether or not
37
to elect a distribution (and, if applicable, a
particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution; and
(3) the distribution commences more than seven (7)
days after the notice was provided.
9.3. BENEFICIARIES. Upon the death of a Participant, his account
shall be transferred to an account for his surviving Spouse.
If there is no surviving Spouse, or if the surviving Spouse
previously consented in writing to the payment of the
account to a Beneficiary designated in writing by the
Participant, then an account will be established for such
Beneficiary. If there is no surviving Spouse or no
Beneficiary designated by the Participant surviving at the
death of the Participant, payment of his account shall be
made to the Participant's estate. Payment of benefits upon
a Participant's death shall be made pursuant to Section 9.2
above. A Participant, with the written consent of his
Spouse, may designate a new Beneficiary, other than the
Spouse, at any time by filing with the Employer a written
request for such change on a form prescribed by the Savings
Plan Committee. The designation of a Spouse as a new or
amended Beneficiary does not require the consent of such
Spouse. Such change shall become effective only upon
receipt of the form by the Savings Plan Committee or other
person designated in writing by the Savings Plan Committee,
but upon such receipt the change shall relate back to and
take effect as of the date the Participant signed such
request, whether or not the Participant is living at the
time of such receipt; provided, however, that neither the
Trustee, the Savings Plan Committee, the Company nor any
Employer shall be liable by reason of any payment of the
Participant's account made before receipt of such form. If
the Trustee shall be in doubt as to the right of any
claimant, the amount in question may be paid to the
Participant~s surviving Spouse or, in the event the Spouse
is not living, to his children in equal shares per stirpes.
If none of these parties are living at the time of the
Participant's death, the amount in question shall be paid to
the estate of the Participant. If payment is made in this
manner, neither the Trustee, the Savings Plan Committee, the
Company nor any Employer shall be under any further
liability to anyone with respect to the account of such
Participant. Any consent by a surviving Spouse or Spouse
must be in writing and witnessed by a notary public. Such
consent must also be informed, and must acknowledge the
effect of the designation.
38
9.4. DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's
election under this Section, distributee may elect, at
the time and in the manner prescribed by the Savings
Plan Committee, to have any portion of an eligible
rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a
direct rollover.
(b) DEFINITIONS.
(1) "Eligible rollover distribution" means any
distribution of all or any portion of the balance
to the credit of the distributee, except that an
eligible rollover distribution does not include:
any distribution that is one of a series of
substantially equal periodic payments (not less
frequently than annually) made for the life (or
life expectancy) of the distributee or the joint
lives (or joint life expectancies) of the
distributee and the distributee's designated
beneficiary, or for a specified period often years
or more; any distribution to the extent such
distribution is required under Section 401(a)(9)
of the Code; any hardship distribution described
in Section 401(k)(2)(B)(i)(IV) of the Code; and
the portion of any distribution that is not
includible in gross income (determined without
regard to the exclusion for net unrealized
appreciation with respect to employer securities).
(2) "Eligible retirement plan" means an individual
retirement account described in Section 408(a) of
the Code, an individual retirement annuity
described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 40
1(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the
case of an eligible rollover distribution to the
surviving Spouse, an eligible retirement plan is
an individual retirement account or individual
retirement annuity.
(3) "Distributee" means an Employee or former
Employee. In addition, the Employee's or former
Employee's surviving Spouse and the Employee's or
former Employee's Spouse or former Spouse who is
the alternate payee under a qualified domestic
relations order, as defined in Section 414(p) of
39
the Code, are distributees with regard to the
interest of the spouse or former Spouse.
(4) "Direct rollover" means a payment by the Plan to
the eligible retirement plan specified by the
distributee.
9.5. PUT REQUIREMENTS ON SHARES HELD IN EMPLOYER SHARES FUND.
(a) If Common Stock acquired with the proceeds of an
Acquisition Loan and held in the Employer Shares Fund
("ESOP Stock") is, at the time of distribution not
publicly traded or subject to a trading limitation, the
Participant or Beneficiary shall have an option (the
"Put") to require the Company to purchase all of the
shares actually distributed to him. A "trading
limitation" is a restriction under any Federal or state
securities law, or applicable regulation, or an
agreement, which would make the ESOP Stock not as
freely tradable as Common Stock not subject to the
restriction. The Put may be exercised at any time
during the Option Period (as defined in Section 9.6(g))
by giving the Company written notice of the election to
exercise the Put. The Put may be exercised by a former
Participant or a Beneficiary only during the Option
Period in which the former Participant or Beneficiary
receives a distribution of ESOP Stock.
(b) The Put shall also apply to ESOP Stock that is publicly
traded without restriction when distributed, but which
ceases to be publicly traded or which becomes subject
to a trading limitation during the Option Period. In
that event, the Savings Plan Committee shall notify in
writing each former Participant or Beneficiary to whom
the Put becomes applicable that the ESOP Stock held by
the former Participant or Beneficiary is subject to the
Put for the remainder of the applicable Option Period
and shall inform the Participant or Beneficiary of the
terms of the Put. If the written notice is given later
than ten days after the ESOP Stock ceases to be
publicly traded or becomes subject to a trading
limitation, the period during which the Put may be
exercised will be extended by the number of days
between the tenth day and the date the notice is
actually given.
(c) (1) The price paid for ESOP Stock sold to the Company
pursuant to the Put shall be the value of each
share of ESOP Stock as of the Valuation Date
immediately preceding the date the Put is
exercised, multiplied by the number of shares to
be sold under the Put, with appropriate
40
adjustments to reflect intervening stock
dividends, stock splits, stock redemptions, or
similar changes to the number of outstanding
shares. Except as otherwise set forth in
Paragraph (2) below, the price shall be payable in
cash not later than thirty days after the Company
receives written notice of the election by the
former Participant or Beneficiary to exercise the
Put.
(2) If the distribution of ESOP Stock to the
Participant or Beneficiary constituted a
distribution within one taxable year of the
balance of his account, the Company reserves the
right to establish guidelines to be exercised in a
uniform and nondiscriminatory manner to make
payment for the shares subject to the Put on an
installment basis in substantially equal annual,
quarterly or monthly payments over a period not to
exceed five years, beginning no later than thirty
days after exercise of the Put. The Company shall
pay reasonable interest at least annually on the
unpaid balance of the price and shall provide to
the Participant or Beneficiary adequate security
with respect to the unpaid balance.
(d) The Put shall not be assignable, except that the
former Participant's donees or, in the event of a
Participant's death, his surviving Spouse or
Beneficiary (or his personal representative, if
there is no surviving Spouse or Beneficiary),
shall be entitled to exercise the Put during the
Option Period for which it is applicable.
(e) The Trustee may, with the Company's consent,
assume the Company's obligations under this
Section at the time a former Participant or
Beneficiary exercises the Put. If the Trustee
assumes the Company's obligations, the provisions
of this Section that apply to the Company shall
also apply to the Trustee.
(f) The Savings Plan Committee shall notify each
former Participant or Beneficiary who is eligible
to exercise the Put of the fair market value of
each share of ESOP Stock as soon as practicable
following its determination. The Savings Plan
Committee shall send all notices required under
this Section to the last known address of a former
Participant or Beneficiary, and it shall be the
duty of those persons to inform the Savings Plan
Committee of any changes in address.
41
(g) For purposes of this Section, the "Option Period"
is the period of sixty days following the day on
which a Participant or Beneficiary receives a
distribution. If the former Participant or
Beneficiary does not exercise the Put during that
sixty-day period, the Option Period shall also be
the sixty-day period beginning on the first
anniversary of the day on which the former
Participant or Beneficiary received a
distribution. The Option Period shall be extended
by any amount of time during which the Company is
unable to honor the Put by reason of applicable
Federal or state law.
ARTICLE X
WITHDRAWALS
10.1. WITHDRAWAL OF PARTICIPANT DEPOSITS AND ROLLOVER CONTRIBUTION
SOURCE. Subject to the limitations of Section 10.5, a
Participant or Employee may elect to withdraw up to 100% of
the value of his Before-Tax Source, After-Tax Source, Lump
Sum Contribution Source, and/or Rollover Contribution
Source; provided, however, that a withdrawal from a
Participant's Before-Tax Source before the Participant has
attained age 59-1/2, terminated, retired, or become disabled
will only be allowed under the conditions specified in
Section 10.3. A Participant who has attained age 59-1/2, is
terminated, retired or is disabled may withdraw his before-
tax deposits as specified in Section 10.4. The request for
withdrawal shall be made in the manner provided by the
"Guidelines for Savings Plan Withdrawals" established by the
Savings Plan Committee. The request for withdrawal will be
processed as soon as practicable by the Savings Plan
Committee and will be valued on the date such request is
processed.
10.2. WITHDRAWAL OF EMPLOYER CONTRIBUTIONS. Subject to the
limitations of Section 10.5, a Participant may elect to
withdraw up to 100% of the value of his Employer
Contribution Source; provided, however, that no such
withdrawal from his Employer Contribution Source will be
permitted unless the Participant has withdrawn the full
amount of his After-Tax Source available to him in
accordance with Section 10.1. The request for withdrawal
shall be made in the manner provided by the "Guidelines for
Savings Plan Withdrawals" promulgated by the Savings Plan
Committee. The request for withdrawal will be processed as
soon as practicable and will be valued on the date such
request is processed.
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10.3. FINANCIAL HARDSHIP WITHDRAWALS OF PARTICIPANT BEFORE-TAX
DEPOSITS. Subject to the limitations of Section 10.5 and
the following restrictions, a Participant who is under age
59-1/2 may elect to withdraw up to 100% (if available) of
his Before-Tax Source (excluding any gain on such deposits);
provided, however, that (1) no request under this Section
will be approved unless the withdrawal is necessary in light
of immediate and heavy financial needs of the Participant,
and the Participant represents that such needs cannot be
relieved through reimbursement or compensation by insurance
or otherwise; by reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself
cause an immediate and heavy financial need; by cessation of
elective deposits under the Plan; by distributions from
other plans of the Employer; or by borrowing from commercial
services on reasonable commercial terms; (2) the amount to
be withdrawn cannot exceed the amount required to meet the
financial hardship, plus any amounts necessary to pay
federal, state or local income taxes or penalties reasonably
anticipated to result from the withdrawal; and (3) the
Participant must make a full withdrawal of his Deposit
Accounts pursuant to Sections 10.1 and 10.2 prior to or
concurrent with the hardship withdrawal. For purposes of
this Section, financial hardship shall include the following
types of expenses:
(a) Capital expenditures for the purchase of a principal
residence of the Participant;
(b) Tuition, related educational fees, and room and board
expenses for the next twelve months of post-secondary
education for the Participant or his dependents;
(c) Medical expenses (as defined in Code Section 213(d))
incurred by the Participant or his dependents, or
necessary for these persons to obtain medical care, to
the extent not otherwise covered by employee benefit
plans sponsored by the Employer; and
(d) Expenses or payments necessary to prevent the eviction
of the Participant from his principal residence or
foreclosure on the mortgage on that residence; and
(e) Other expenses which are determined to be deemed
immediate and heavy financial needs by the Commissioner
of the Internal Revenue Service.
The request for withdrawal will be processed as soon as
practicable and will be valued on the date such request is
approved.
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10.4. NON-HARDSHIP WITHDRAWALS OF PARTICIPANT BEFORE-TAX DEPOSITS.
A Participant may elect to withdraw all or a portion of the
value of his Before-Tax Source if he is terminated, retired,
disabled, or has attained age 59-1/2. The Participant must
make a full withdrawal of his Rollover Contribution Source,
Lump-Sum Contribution Source, After-Tax Source and Employer
Contribution source pursuant to Sections 10.1 and 10.2 prior
to or concurrent with a withdrawal under this Section 10.4.
10.5. LIMITATIONS ON WITHDRAWALS. Any withdrawal under this
Article IX shall be subject to the following provisions:
(a) For withdrawals under Section 10.1, 10.2, or 10.3,
Participants who are active Employees may make up to
two withdrawals per twelve (12) month period. For
withdrawals under Section 10.1, 10.2 or 10.4,
Participants who are not active Employees may make up
to two withdrawals per twelve (12) month period, plus
an additional full withdrawal of their Plan account.
(b) No partial withdrawal will be permitted unless the
amount to be withdrawn is at least $250.
(c) Withdrawals from Employer Contribution Sources under
Section 10.2 shall require a suspension of Participant
deposits for a period of six (6) months. Financial
Hardship Withdrawals from Before-Tax Sources under
Section 10.3 shall require a suspension of Participant
deposits to this Plan and all other qualified plans
maintained by an Employer for a period of twelve (12)
months.
10.6. PAYMENT OF WITHDRAWALS. As of the Valuation Date of any
withdrawal, an appropriate portion of the Participant's
account will be liquidated and paid in cash, and/or paid in
Common Stock if the Participant so elects, to the
Participant or his designee as soon as practicable
thereafter.
10.7. PRIORITY OF PAYMENT FROM A PARTICIPANT'S OR EMPLOYEE'S
ACCOUNT. Upon any withdrawal of less than the full value of
the Participant's or Employee's account, the distribution to
be made to the Participant or Employee shall be satisfied in
an order of priority and Option hierarchy determined by the
Savings Plan Committee, as provided in Section 13.4.
10.8. RESUMPTION OF PARTICIPANT DEPOSITS. Participant deposits
which have been suspended pursuant to Section 10.5 and the
voluntary suspension provision of Section 4.5 may be resumed
as soon as administratively practicable following the
expiration of any period of suspension, or in any subsequent
payroll period, if the Participant elects to resume deposits
44
in a manner prescribed by the Savings Plan Committee. In
the Participant's taxable year following the year of a
Financial Hardship Withdrawal under Section 10.3, the
Participant's before-tax deposits to this Plan and all other
qualified plans maintained by an Employer may not exceed the
amount allowed under Section 3.3 reduced by the
Participant's before-tax deposits for the taxable year in
which the Financial Hardship Withdrawal occurred.
ARTICLE XI
PLAN LOANS
11.1. AMOUNT OF LOAN. The Savings Plan Committee, in its
discretion in accordance with the Code and applicable law
and regulations, may authorize a loan to a Participant who
is an active Employee and who is a party in interest, within
the meaning of Section 3(14) of ERISA, upon receipt of a
written request from the Participant. The total amount of
any such loan (when added to the outstanding balance of any
other loan to the Participant under the Plan or any other
qualified plan of an Affiliated Company) will not exceed the
lesser of $50,000 or 50% of the value of the Participant's
vested account balance. The $50,000 limitation will be
reduced by the highest outstanding loan balance from the
Plan, including defaulted loans plus interest during the
one-year period ending on the day before the date on which
such loan is made. A Participant may not have more than two
loans outstanding at any one time.
11.2. MANNER OF MAKING LOANS. A request by a Participant for a
loan will be made and processed in accordance with the
procedures adopted by the Savings Plan Committee, as amended
from time to time. A request by a Participant for a loan
will be made and processed in accordance with the procedures
adopted by the Savings Plan Committee, as amended, from time
to time. The terms and conditions on which the Savings Plan
Committee will approve loans under the Plan will be applied
on a reasonably equivalent basis with respect to all
Participants. If a Participant's request for a loan is
approved by the Savings Plan Committee, the Savings Plan
Committee will arrange for the distribution of the specified
amount in a single sum payment to the Participant.
Administrative fees may be charged to a Participant's
account.
11.3. TERMS OF LOAN. Loans will be made on such terms and subject
to such limitations as the Savings Plan Committee may
prescribe, provided any such loan is evidenced by a written
promissory note, bears a reasonable rate of interest on the
unpaid principal, is adequately secured, and will be repaid
45
by the Participant over a period not to exceed five years,
unless the loan is for the purpose of acquiring a dwelling
unit used or to be used within a reasonable time as the
principal residence of the Participant, in which case the
repayment period will not exceed ten years.
11.4. SECURITY FOR LOAN. Any loan to a Participant under the Plan
will be secured by the pledge of up to 50% of the
Participant's right, title, and interest in the
Participant's account balance. The pledge will be evidenced
by the execution of a promissory note by the Participant.
11.5. REPAYMENT OF LOAN. Loans will be repaid by means of payroll
deductions or as otherwise approved by the Savings Plan
Committee or provided for herein. Repayment will be paid to
the Plan. Any loan must be amortized on a substantially
level basis, with payments not less frequently than
quarterly over the term of the loan. A loan may be prepaid
without penalty at any time.
11.6. DEFAULT ON LOAN: OTHER EVENTS REQUIRING IMMEDIATE REPAYMENT.
In the event of a termination of the Participant's
employment with the Employer, termination of the
Participant's Participation in the Plan, default by the
Participant on a loan repayment, or the death or retirement
of the Participant, all remaining principal payments on the
loan will be immediately due and payable in full. The
Savings Plan Committee will be authorized (to the extent
permitted by law) to take any and all actions necessary and
appropriate to enforce collection of an unpaid loan. A
default will be deemed to have occurred if any loan payment
has not been made within 90 days of when the payment was due
to be paid by the Participant.
11.7. UNPAID AMOUNTS. Upon the occurrence of an event specified
in Section 11.6 requiring immediate repayment of a loan or
upon a Participant's Break In Service or earlier
distribution, the unpaid balance of any loan, including any
unpaid interest, will be deducted from any payment or
distribution from the Plan to which such Participant or his
designated Beneficiary may be entitled, and the vested
interest in the account will be correspondingly reduced.
11.8. LOAN GUIDELINES. The Savings Plan Committee shall issue
written loan guidelines, which shall form part of the Plan,
describing the procedures and conditions for making loans,
and may revise those guidelines at any time and for any
reason.
46
ARTICLE XII
THE TRUST
12.1. TRUST AGREEMENT. The Company has entered into a Trust
Agreement with one or more Trustees selected by it in its
sole discretion, and the Trustee(s) shall receive
contributions made by Employers and deposits made by
Participants pursuant to the Plan and shall hold, invest,
reinvest and distribute such funds in accordance with the
terms and provisions of the Trust Agreement(s). The Company
will determine the form and terms of any such Trust
Agreement and may modify such Trust Agreement from time to
time to accomplish the purposes of this Plan.
12.2. DELEGATION OF DUTIES. The Trustee and the Company may by
mutual agreement arrange for the delegation by the Trustee
to the Company or the Savings Plan Committee or any Employer
of any of its functions as undertaken in the Trust Agreement
other than the valuation and custody of assets, the voting
with respect to securities held by the Trustee and the
purchase and sale or redemption of securities; provided that
the Trust Agreement permits delegation of such functions in
accordance with the foregoing provisions of this Section.
12.3. RECORDS. The Trustee shall keep full books of account for
each Option in accordance with procedures established by the
Savings Plan Committee, and agreed to by the Trustee. The
Trustee shall, at least once during each calendar year,
submit to the Savings Plan Committee and Participants a
report on each Option. Copies of such reports shall be
available for inspection at the principal office of the
Company and at such other places as the Savings Plan
Committee shall specify. Subject to the provisions of
Section 13.2, the records of the Trustee and the Employers
shall be conclusive in respect to all matters involved in
the administration of this Plan.
12.4. VOTING AND TENDER RIGHTS. In accordance with the Trust
Agreement and ERISA, Participants and Inactive Participants
shall be entitled to exercise voting, tender offer and other
rights with respect to Common Stock held by the Trustee in
the Employer Stock Fund and applicable Options under the
Plan, and the Savings Plan Committee and the Trustee shall
take appropriate action to effectuate this provision.
Notwithstanding anything in this Section or Section 6.7 to
the contrary, the Trustee shall have the right to override
any such Participant rights to the extent required by ERISA
and other applicable laws.
12.5. OPERATION OF THE TRUST. All assets of the Plan shall be
held in a special trust or trusts for use in accordance with
47
the Plan in providing the benefits payable under the Plan
and for such investment expenses as may properly be incurred
by the Trustee or any other fiduciary named herein or to
whom such responsibilities may be delegated. The Trust
Agreement may from time to time be amended in the manner
herein provided. A copy of the Trust Agreement will, upon
written request of a Participant, be made available for
inspection by him. The Board may from time to time remove a
Trustee and upon removal or resignation of a Trustee
designate a successor Trustee, and may take such other steps
and execute such other instruments as the Company may deem
necessary or desirable to put this Plan into effect or to
carry it out. Each fiduciary warrants that any directions
given, information furnished, or action taken by it shall be
in accordance with provisions of the Plan or the Trust
Agreement, as the case may be, authorizing or providing for
such direction, information, or action.
12.6. PARTICIPANT'S REPRESENTATIVES. The Trustee shall not be
bound to recognize the authority or agency of any party for
a Participant unless and until it shall receive documentary
evidence thereof in form and substance satisfactory to it
and thereafter from time to time, as the Trustee may
require, further documentary evidence disclosing the status
of any agency.
ARTICLE XIII
ADMINISTRATION
13.1. APPOINTMENT OF SAVINGS PLAN COMMITTEE. The Board will
appoint a Savings Plan Committee consisting of not fewer
than five nor more than fourteen members, who shall serve at
the will of the Board. Any person appointed a member of the
Savings Plan Committee shall signify his acceptance by
filing written acceptance with the Board. Any member of the
Savings Plan Committee may resign by delivering his written
resignation to such Board, and such resignation shall become
effective at delivery or at any later date specified
therein. No member of the Savings Plan Committee shall
receive any remuneration for his services in that capacity.
If otherwise eligible, the fact that an Employee is a member
of the Savings Plan Committee shall not preclude his
participating in the Plan. No member of the Savings Plan
Committee shall act or participate in actions of the Savings
Plan Committee directly affecting his own account under the
Plan and not of general application to all Participants.
Except as provided under ERISA, no bonds or other security
shall be required of any member of the Savings Plan
Committee in any jurisdiction. The Savings Plan Committee
shall elect a Chairman from its number, and a Secretary and
48
such other officers as the Savings Plan Committee may
determine upon, who may, but need not, be members of the
Committee to serve at the will of the Committee.
13.2. ALLOCATION OF RESPONSIBILITY FOR PLAN AND TRUST
ADMINISTRATION. The Savings Plan Committee will have only
those specific powers, duties, responsibilities and
obligations as are specifically provided for under this
Plan, or as are specifically delegated to it by the Company
acting in its capacity as a fiduciary under the Plan. In
general, the Employers will have the sole responsibility for
making the contributions provided for under Section 4.1.
The Board will have the sole authority to appoint and remove
any Trustee and members of the Savings Plan Committee, and
to amend or terminate, in whole or in part, this Plan. The
Board shall establish a general investment policy. The
Savings Plan Committee will have the sole responsibility for
the administration of this Plan, the selection and removal
of any investment option, and subsequently notify the
Trustee of any action, and will be the named fiduciary
within the meaning of ERISA and the Plan Administrator. To
the extent consistent with the provisions of the Plan or
Trust Agreement, the Company, the Savings Plan Committee,
and the Trustee will have the responsibility for the
administration and management of the Plan assets under their
control.
The Savings Plan Committee, Trustee and any other fiduciary
under this Plan may rely upon the direction, information or
actions of each other as being proper under this Plan and
shall not be required to inquire into the propriety of such
direction, information or action. It is intended under this
Plan that each fiduciary will be responsible for the proper
exercise of its own powers, duties, responsibilities and
obligations under this Plan or the Trust Agreement or other
agreement and will not be responsible for any act or failure
to act of each other. No fiduciary guarantees the Trust
Fund in any manner against investment loss or depreciation
in asset value.
Fiduciaries shall have only those specific powers, duties,
responsibilities and obligations as are specifically
provided for them under this Plan or the Trust Agreement.
In accordance with Section 405(c)(1) of ERISA, any fiduciary
may allocate in writing a portion of its fiduciary
responsibility to another fiduciary under the Plan. When
accepted in writing, such other fiduciary shall be solely
responsible for its own acts or omissions in carrying out
such responsibility, except as provided in Section 405(a) of
ERISA.
49
13.3. SAVINGS PLAN COMMITTEE PROCEDURES. The Savings Plan
Committee will operate and administer the Plan, will
determine all questions arising under or in connection
therewith, and may from time to time prescribe and amend
regulations for such administration. The Savings Plan
Committee will cause the records of the Plan to be kept on a
basis that accounts separately for Participant deposits made
on a before-tax and after-tax basis and for Employer
contributions. Whenever directions, designations,
applications, requests or other notices are to be given by a
Participant under the Plan, they shall be on forms
prescribed by the Savings Plan Committee and shall be filed
in such manner as shall be specified by the Savings Plan
Committee on such forms. The Savings Plan Committee shall
make all determinations as to the right of any person to a
benefit. In the event of a denial of a claim as to the
amount of any distribution and/or the method of payment
under the Plan, a Participant or his Beneficiary will be
given notice in writing of such denial within 90 days, which
notice will set forth the reason for the denial, the
pertinent Plan provision on which the denial is based, a
description of the information necessary to perfect the
claim and an explanation of why such information is
necessary, and appropriate steps to be taken by the claimant
to submit the claim for review. The Participant or his
Beneficiary may request a review of such denial by filing
notice in writing with the Plan Administrator within 60 days
after receipt of such denial, may review pertinent
documents, and may submit issues and comments in writing.
The Plan Administrator, in his discretion, may request a
meeting to clarify any immediate matters he deems
appropriate. All interpretations, determinations, and
decisions of the Plan Administrator in respect to any matter
will be final, conclusive and binding upon the Employer,
Participant, and Beneficiaries and all other persons
claiming any interest in the Plan.
Action of the Savings Plan Committee as to all matters
requiring the exercise of discretion by the Savings Plan
Committee shall, if taken, at a meeting of the Savings Plan
Committee, be by the vote of a majority of the members of
the Savings Plan Committee attending such meeting (a quorum
being present) and, if not taken at a meeting, shall be by
the agreement of a majority of the members of the Savings
Plan Committee. Ministerial powers in connection with the
administration of the Plan may be delegated by the Savings
Plan Committee to any member or members thereof or to such
agent or agents as it may select.
13.4. SAVINGS PLAN COMMITTEE POWERS AND DUTIES. The Savings Plan
Committee shall have power (1) with the consent of the
Board, to change or waive any requirements of the Plan to
50
conform with law or to meet special circumstances not
anticipated or covered in the Plan; (2) to appoint such
committees with such powers as it shall determine, including
an executive committee to exercise all powers of the Savings
Plan Committee between meetings of the Savings Plan
Committee; (3) to determine the times and places for holding
meetings of the Savings Plan Committee and the notice to be
given of such meetings; (4) to determine the number of
members of the Savings Plan Committee at the time in office
which shall constitute a quorum for the transaction of
business at a meeting, which shall not be less than one-
third of the members at the time in office; (5) to employ
such agents and assistance, such counsel (who may be of
counsel to the Company) and such clerical and other services
as the Savings Plan Committee may require in carrying out
the provisions of the Plan; (6) to authorize one or more of
their number or any agent to execute or deliver any
instrument on behalf of the Savings Plan Committee, except
that requests, directions, notifications and instruments to,
the Trustee shall be signed either by two members of the
Savings Plan Committee or by one member and the Secretary
thereof, (7) to select and remove at any time and from time
to time one or more investment Options and to provide
investment direction to the Trustee in respect to the Trust
Fund assets allocated by the Savings Plan Committee for such
investment direction; (8) to act on requests from
Participants for hardship withdrawals under Section 10.3;
(9) to select, change and delete mutual funds or investment
Options to be elected by Participants for their deposits and
(if applicable) the allocation of Employer contributions;
and (10) to determine and change the order of priority for
Units/Shares and Option hierarchy when partial distributions
from a Participant's or Employee's account are processed.
13.5. RELIANCE UPON OTHERS. The members of the Savings Plan
Committee and the Employers and their officers and directors
shall be entitled to rely upon all valuations, certificates
and reports furnished by the Trustee, upon all certificates
and reports made by an accountant and upon all opinions
given by any legal counsel selected or approved by the
Savings Plan Committee, and the members of the Savings Plan
Committee and the Employers and their officers and directors
shall be fully protected in respect to any action taken or
suffered by them in good faith in reliance upon any such
valuations, certificates, reports, opinions or other advice
of the Trustee or any such accountant or counsel, and all
action so taken shall be conclusive upon each of them and
upon all Participants.
13.6. NOTIFICATIONS. All notices, reports and statements given,
made, delivered or transmitted to a Participant shall be
deemed duly given, made, delivered or transmitted when
51
mailed, by such class as the sender may deem appropriate,
with postage prepaid and addressed to the Participant at the
address last appearing on the records of the Company with
respect to this Plan.
All notices, directions or other communications given, made,
delivered or transmitted by a Participant to the Trustee
shall not be deemed to have been duly given, made,
delivered, transmitted or received unless and until actually
received by the Trustee, or by the Company acting upon
delegation from the Trustee.
The Trustee, the Savings Plan Committee or the Employers
shall, as soon as practicable after the end of each calendar
quarter, mail to each Participant a statement setting forth
the account of such Participant in the respective Options as
of the end of such calendar quarter. Such statement shall
be deemed to have been accepted as correct unless written
notice to the contrary is received by the Savings Plan
Committee or Employer, within 30 days after the mailing of
such statement to the Participant.
13.7. ADMINISTRATIVE AND INVESTMENT EXPENSES. All brokerage,
taxes and other expenses related to the purchase and sale of
securities (excluding expenses relating to the Acquisition
Loan) will be paid out of the assets of the applicable
Option. All other expenses, including expenses relating to
the Acquisition Loan, Trustee's fees, and all other costs
and expenses incurred in administering the Plan, but not
including the fees described in Section 11.2, will be
ratably shared by the Employers on such basis as they
mutually agree, or failing such agreement, as may be
determined by the Savings Plan Committee.
13.8. MILITARY SERVICE. Effective December 12, 1994,
notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credits with respect to
qualified military service will be provided in accordance
with Code Section 4 14(u). In addition, loan repayment will
be suspended under this Plan as permitted in Code Section
414(u)(4).
ARTICLE XIV
AMENDMENT AND TERMINATION
14.1. RIGHTS TO MODIFY OR TERMINATE. The Company hopes and
expects to continue this Plan indefinitely, but as future
conditions affecting the Company cannot be foreseen, the
right is reserved in the Board to terminate this Plan at any
time in whole or in part, or to modify it from time to time.
52
Any such termination or modification shall be effective at
such date as such Board may determine, but not earlier than
the date on which the Company shall have given notice of
such modification or termination to the Trustee and may be
effective as to all Employers, or as to one or more
Employers, and their respective Employees. Effective August
18, 1999, both the Board and the Compensation Committee
shall have the power to make amendments or modifications
dealing with administrative changes, changes required by
law, and/or changes with a de minimus cost (generally
$250,000 or less). The Company shall promptly give notice
of any such modification or termination to all Employers,
and to its and their respective Employees, affected thereby.
Upon termination or partial termination of the Plan, or upon
complete discontinuance of contributions under the Plan, the
rights of all affected Participants to benefits accrued to
the date of such termination, partial termination, or
discontinuance, to the extent funded as of such date, or the
amounts credited to the Participants' accounts, will become
nonforfeitable. Each Participant's Units/Shares will
thereupon be cancelled and distribution of the value of his
Participant account will be made in accordance with Article
IX as soon as permitted by applicable law.
A modification which affects the rights or duties of the
Trustee may be made only with the prior consent of the
Trustee. A modification may affect Employees participating
in this Plan at the time thereof as well as future
Participants, but no modification may have the effect of
eliminating or reducing a benefit, or eliminating an
optional form of benefit with respect to benefits
attributable to Service before the amendment to the extent
prohibited by Code Section 411(d)(6); provided, however,
that any and all amendments may be made which are necessary
to qualify or maintain the qualification of the Plan under
the Code and to meet and continue meeting the requirements
of ERISA. If any provisions of this Plan relating to the
percentage of a Participant's account that is vested are
changed, any Participant with at least three years of
Service may elect, by filing written request with the
Savings Plan Committee within 60 days after the later of:
(1) the date the amendment was adopted, (2) the date the
amendment was effective, or (3) the date the Participant
received written notice of such amendment, to have his
vested interest computed under the provisions of this Plan
as in effect immediately prior to such amendments.
In the event that any modification of this Plan shall
adversely affect the rights of any Participant as to the use
or withdrawal thereafter of such Participant's account, such
Participant, at any time within 90 days after the effective
date of such modification, may withdraw the value of his
53
entire account, excluding any Participant deposits that were
designated as before-tax deposits under Section 3.2. In the
event of such withdrawal, he shall be ineligible for
Participation in this Plan, as so modified, for a period of
6 full calendar months.
14.2. TERMINATION OF EMPLOYEE STOCK OWNERSHIP PORTION OF THE PLAN.
Notwithstanding anything in the Plan to the contrary, upon a
complete termination of the Plan, or of the employee stock
ownership portion of the Plan, any unallocated Leveraged
Shares shall be sold to the Company or on the open market.
The proceeds of such sale shall be used to satisfy any
outstanding Acquisition Loan and the balance of any funds
remaining shall be allocated to each Participant's Employer
Source based in the proportion that each such Participant's
Employer Source balance bears to the total of all Employer
Source balances. Following a Board determination that the
employee stock ownership portion of the Plan is to be
terminated, prior to the sale of all unallocated Leveraged
Shares, the Savings Plan Committee shall have the discretion
to direct the Trustee to sell enough Leveraged Shares to
make full payment of the current installment of an
Acquisition Loan that is in default. In the event of any
such sale, all or such portion of the remaining Leveraged
Shares shall be released from the Suspense Account and
transferred to the Intermediate Holding Account as provided
in Section 4.4(b).
14.3. SUSPENSION OF EMPLOYEE STOCK OWNERSHIP PORTION OF THE PLAN.
In the event the employee stock ownership portion of the
Plan is terminated pursuant to Sections 14.1 and 14.2 of the
Plan, in whole or in part, the applicable provisions in the
Plan relating to such termination shall be suspended during
the period of the termination. If the Plan is modified in
the future to reinstate all or part of the terminated
employee stock ownership portion, the applicable provisions
in the Plan relating to such modification shall also be
reinstated and become effective.
ARTICLE XV
TOP-HEAVY PROVISIONS
15.1. TOP-HEAVY PROVISIONS. The following definitions and
provisions shall become effective in any Plan Year in which
the Plan is determined to be a top-heavy Plan:
(a) KEY EMPLOYEE: Any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during
the determination period was an officer of the Employer
if such individual's annual compensation exceeds 150
54
percent of the dollar limitation under Section
415(c)(1)(A) of the Code, an owner (or considered an
owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's
compensation exceeds 100 percent of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5-
percent owner of the Employer, or a 1-percent owner of
the Employer who has an annual compensation of more
than $170,000. Annual compensation means compensation
as defined in Section 415(c)(3) of the Code, but
including amounts contributed by the Employer pursuant
to a salary reduction agreement which are excludable
from the Employee's gross income under Section 125,
Section 401(a)(8), Section 402(h) or Section 403(b) of
the Code. The determination period is the Plan Year
containing the determination date and the four
preceding Plan Years. The determination of who is a
Key Employee will be made in accordance with Section 4
16(i)(1) of the Code and the Regulations thereunder.
(b) TOP-HEAVY PLAN. This Plan is top-heavy if any of the
following conditions exists:
(1) If the top-heavy ratio for this Plan exceeds 60
percent and this Plan is not part of any required
aggregation group or permissive aggregation group
of plans.
(2) If this Plan is a part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top-heavy ratio for the
group of plans exceeds 60 percent.
(3) If this Plan is a part of a required aggregation
group and part of a permissive aggregation group
of plans and the top-heavy ratio for the
permissive aggregation group exceeds 60 percent.
(c) TOP-HEAVY RATIO.
(1) If the Employer maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Employer has not
maintained any defined benefit plan which during
the 5-year period ending on the determination
date(s) has or has had accrued benefits, the Top-
Heavy Ratio for this Plan alone or for the
required or permissive aggregation group as
appropriate is a fraction, the numerator of which
is the sum of the account balances of all Key
Employees as of the determination date(s)
(including any part of any account balance
55
distributed in the 5-year period ending on the
determination date(s)), and the denominator of
which is the sum of all account balances
(including any part of any account balance
distributed in the 5-year period ending on the
determination date(s)), both computed in
accordance with Section 416 of the Code and the
Regulations thereunder. Both the numerator and
denominator of the Top-Heavy Ratio are increased
to reflect any contribution not actually made as
of the determination date, but which is required
to be taken into account on that date under
Section 416 of the Code and the Regulations
thereunder.
(2) If the Employer maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Employer maintains
or has maintained one or more defined benefit
plans which during the 5-year period ending on the
determination date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any required or
permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of
account balances under the aggregated defined
contribution plan or plans for all Key Employees,
determined in accordance with (1) above, and the
present value of accrued benefits under the
aggregated defined benefit plan or plans for all
Key Employees as of the determination date(s), and
the denominator of which is the sum of the account
balances under the aggregated defined contribution
plan or plans for all Participants, determined in
accordance with (1) above, and the present value
of accrued benefits under the defined benefit plan
or plans for all Participants as of the
determination date(s), all determined in
accordance with Section 416 of the Code and the
Regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator
and denominator of the Top-Heavy Ratio are
increased for any distribution of an accrued
benefit made in the five-year period ending on the
determination date.
(3) For purposes of (1) and (2) above, the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
valuation date that falls within or ends with the
12-month period ending on the determination date,
except as provided in Section 416 of the Code and
the Regulations thereunder for the first and
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second Plan years of a defined benefit plan. The
account balances and accrued benefits of a
Participant (i) who is not a Key Employee but who
was a Key Employee in a prior year, or (ii) who
has not been credited with at least one hour of
service with any Employer maintaining the Plan at
any time during the 5-year period ending on the
determination date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent
to which distributions, rollovers, and transfers
are taken into account will be made in accordance
with Section 416 of the Code and the Regulations
thereunder. Deductible Employee contributions
will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating
plans the value of account balances and accrued
benefits will be calculated with reference to the
determination dates that fall within the same
calendar year.
The accrued benefit of a participant other than a
Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual
purposes under all defined benefit plans
maintained by the Employer, or (b) if there is no
such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b) (1)
(c) of the Code.
(d) PERMISSIVE AGGREGATION GROUP. The required aggregation
group of plans plus any other plan or plans of the
Employer which, when considered as a group with the
required aggregation group, would continue to satisfy
the requirements of Sections 401 (a)(4) and 410 of the
Code.
(e) REQUIRED AGGREGATION GROUP. (1) Each qualified plan of
the Employer in which at least one Key Employee
participates or participated at any time during the
determination period (regardless of whether the Plan
has terminated), and (2) any other qualified plan of
the Employer which enables a Plan described in (1) to
meet the requirements of Sections 401(a)(4) or 410 of
the Code.
(f) DETERMINATION DATE. For any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan
Year. For the first Plan Year of the Plan, the last
day of that year.
57
(g) VALUATION DATE. The date elected by the Employer as of
which account balances or accrued benefits are valued
for purposes of calculating the Top-Heavy Ratio.
(h) PRESENT VALUE. Present Value shall be based on the
interest and mortality rates established by the Plan's
actuary.
ARTICLE XVI
GENERAL PROVISIONS
16.1. EMPLOYMENT CONDITIONS. Nothing in the Plan shall be deemed
or construed to impair or affect in any manner whatsoever
the right of the Company or any Employer, in its discretion,
to hire Employees and, with or without cause, to discharge
or terminate the services of Employees or Participants.
16.2. HOLD HARMLESS CLAUSE. Except as provided by ERISA, no
director, officer or Employee of the Company or any Employer
shall be personally liable for any act or omission to act in
connection with the operation or administration of the Plan,
except for his own willful misconduct or gross negligence.
The Company, at its discretion, may purchase insurance
coverage to cover such liabilities of the directors,
officers or Employees of the Company or any Employer
16.3. NOTICE OF LEGAL PROCESS. In any action or application to
the courts, only the Company and the Trustee shall be
necessary parties, and no other person, firm or corporation
shall be entitled to any notice or process. Any final
judgment entered on such an action or proceeding shall be
conclusive upon all persons claiming under the plan or the
Trust Agreement. Every right of action by any Employee or
former Employee with respect to the Plan, the trust created
by such Trust Agreement, or with respect to any alleged
violation of the Plan or Trust Agreement shall, irrespective
of the place where such action may be brought, cease and be
barred by the expiration of three years from the date of
termination from service of such Employee.
16.4. GOVERNING LAW. To the extent not preempted by ERISA, this
Plan shall be governed by and construed in accordance with
the laws of the State of Delaware.
16.5. SUBSIDIARY COMPANIES. Conditional upon prior approval by
the Company, any Affiliated Company which is a subsidiary of
the Company may participate in this Plan as an Employer,
provided it shall make, execute and deliver such instruments
as the Company and the Trustee shall deem necessary or
desirable, and shall constitute the Company as its agent to
58
act for it in all transactions in which the Company believes
such agency will facilitate the administration of this Plan.
Any Employer may withdraw from participation in this Plan
upon written notice to the Company and the Trustee, and upon
such withdrawal this Plan shall automatically terminate
insofar as it relates to such withdrawing Employer and its
Employees.
16.6. NONALIENATION OF BENEFITS.
(a) Except as provided in Code Section 401(a)(13), no
benefit payable at any time under the Plan shall be
subject in any manner to alienation, sale, transfer,
assignment, pledge, attachment, garnishment, or
encumbrance of any kind. Any attempt to alienate,
sell, transfer, assign, pledge, or otherwise encumber
any benefit, whether presently or thereafter payable,
shall be void. The Trust Fund under the Plan shall not
in any manner be liable for or subject to the debts or
liabilities of any Participant or Beneficiary entitled
to any benefit.
(b) Subsection (a) shall also apply to the creation,
assignment, or recognition of a right to any interest
or benefit payable with respect to a Participant
pursuant to a domestic relations order, unless the
order is determined to be a qualified domestic
relations order (as defined in Code Section 414(p)).
The Plan Administrator shall establish reasonable
procedures to determine the qualified status of
domestic relations orders and to administer
distributions under these orders.
(c) With respect to judgments, orders, decrees issued and
settlement agreements entered into on or after August
5, 1997, a Participant's benefit may be reduced if a
court order or requirement to pay arises from: (1) a
judgment of conviction for a crime involving the Plan;
(2) a civil judgment (or consent order or decree) that
is entered by a court in an action brought in
connection with a breach (or alleged breach) of
fiduciary duty under ERISA; or (3) a settlement
agreement entered into by the Participant and either
the Secretary of Labor or the Pension Benefit Guaranty
Corporation in connection with a breach of fiduciary
duty under ERISA by a fiduciary or any other person.
The court order, judgment, decree, or settlement
agreement must specifically require that all or part of
the amount to be paid to the Plan be offset against the
Participant's Plan benefits. If the survivor annuity
requirements of Code Section 401 (a)( 11) apply with
59
respect to distributions from the Plan to the
Participant and the Participant has a spouse at the
time at which the offset is to be made, such offset
shall not be made unless the Plan complies with Code
Section 401(a)(13)(C)(ii).
16.7. PLAN FOR EXCLUSIVE BENEFIT OF EMPLOYEES. No part of the
corpus or income of the Fund will be used for, or diverted
to, purposes other than the exclusive benefit of a
Participant, surviving Spouse or Beneficiary. This Plan and
Trust are established on the express condition that they
will be considered, by the Internal Revenue Service, as
qualifying under provisions of the Internal Revenue Code.
If, or to the extent that, any Employer's deductions for
contributions made to the Plan are disallowed, such Employer
will have the right to obtain the return of any such
contributions for a period of one year from the date of
disallowance. Furthermore, any contribution made by an
Employer on the basis of a mistake in fact may be returned
to the Employer within one year from the date such
contribution was made.
16.8. MERGER OR CONSOLIDATION OF PLAN. There will be no merger or
consolidation with, or transfer of any assets or liabilities
to, any other Plan, unless each Participant will be entitled
to receive a benefit immediately after such merger,
consolidation, or transfer as if this Plan were then
terminated which is at least equal to the benefit he would
have been entitled to immediately before such merger,
consolidation, or transfer as if this Plan had been
terminated.
16.9. PAYMENTS TO MINORS AND INCOMPETENTS. If a Participant,
surviving Spouse or Beneficiary entitled to receive any
benefits hereunder is a minor or is adjudged to be legally
incapable of giving valid receipt and discharge for such
benefits. they will be paid to such person as the Savings
Plan Committee might designate or to a duly appointed
guardian.
16.10. USE OF MASCULINE PRONOUN. Whenever used herein, the
masculine pronoun shall also include the feminine, unless
otherwise clearly indicated by the context.
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