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Form 10-K
Securities and Exchange Commission
Washington, D.C. 20549
(Mark One)
[ X ] Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended DECEMBER 31, 1994
OR
[ ] Transition Report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from ____________ to ____________
Commission file number 1-1217
Consolidated Edison Company of New York, Inc.
(Exact name of registrant as specified in its charter)
New York 13-5009340
(State of Incorporation) (I.R.S. Employer Identification No.)
4 Irving Place, New York, New York 10003
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (212) 460-4600
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Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Consolidated Edison Company of New York, Inc.
$5 Cumulative Preferred Stock, without par value New York
Stock
Exchange
Cumulative Preferred Stock, 4.65% New York
Series C ($100 par value) Stock
Exchange
Cumulative Preference Stock, 6% New York
Convertible Series B ($100 par value) Stock
Exchange
Common Stock ($2.50 par value) New York, Chicago and
Pacific Stock
Exchanges
The Edison Electric Illuminating Company
of New York
First Consolidated Mortgage Gold Bonds, New York
5%, due July 1, 1995 Stock
(non-callable) Exchange
Kings County Electric Light and Power Company,
Purchase Money, 6%, 99 Years Gold Bonds, New York
due October 1, 1997 Stock
(non-callable) Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
Title of each class
Consolidated Edison Company of New York, Inc.
Cumulative Preferred Stock ($100 par value):
4.65% Series D
5-3/4% Series E
6.20% Series F
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months,
and (2) has been subject to such filing requirements for the past
90 days.
Yes X No
Indicate by check mark if the disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrant's
knowledge, in the definitive proxy statement incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ X ]
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The aggregate market value of the voting stock held by
non-affiliates of the registrant, as of January 31, 1995, was
$6,749,980,542. Excluded from this figure is $2,525,098
representing the market value of 89,384 shares of Common Stock
held by the registrant's Trustees (directors). The registrant's
Trustees are the only stockholders of the registrant, known to
the registrant, who might be deemed "affiliates" of the
registrant.
As of February 28, 1995, the registrant had outstanding
234,912,541 shares of Common Stock.
Documents Incorporated By Reference
Portions of the registrant's Proxy Statement for its 1995
Annual Meeting of Stockholders, to be filed with the Commission
pursuant to Regulation 14A not later than 120 days after December
31, 1994, the close of the registrant's fiscal year, are incorpo-
rated in Part III of this report.
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TABLE OF CONTENTS
Page
PART I
ITEM 1. Business . . . . . . . . . . . . . . . . . . . . 5
ITEM 2. Properties . . . . . . . . . . . . . . . . . . . 27
ITEM 3. Legal Proceedings . . . . . . . . . . . . . . . 30
ITEM 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . None
Executive Officers of the Registrant . . . . . . . . . . 40
PART II
ITEM 5. Market for the Registrant's Common Equity
and Related Stockholder Matters . . . . . . . . 48
ITEM 6. Selected Financial Data . . . . . . . . . . . . 48
ITEM 7. Management's Discussion and Analysis
of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . 49
ITEM 8. Financial Statements and Supplementary Data. . . 68
ITEM 9. Changes in and Disagreements with
Accountants on Accounting and Financial
Disclosure . . . . . . . . . . . . . . . . . . None
PART III
ITEM 10. Directors and Executive Officers of the
Registrant . . . . . . . . . . . . . . . . . . *
ITEM 11. Executive Compensation . . . . . . . . . . . . *
ITEM 12. Security Ownership of Certain Beneficial
Owners and Management . . . . . . . . . . . . . *
ITEM 13. Certain Relationships and Related
Transactions . . . . . . . . . . . . . . . . . *
PART IV
ITEM 14. Exhibits, Financial Statement Schedules
and Reports on Form 8-K . . . . . . . . . . . . 101
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 112
___________________
*Incorporated by reference from the Company's definitive proxy
statement for its Annual Meeting of Stockholders to be held on
May 15, 1995.
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PART I
ITEM 1. BUSINESS
Contents of Item 1 Page
THE COMPANY . . . . . . . . . . . . . . . . . . . . . 5
INDUSTRY SEGMENTS . . . . . . . . . . . . . . . . . . 5
ELECTRIC OPERATIONS . . . . . . . . . . . . . . . . . 6
GAS OPERATIONS . . . . . . . . . . . . . . . . . . . 10
STEAM OPERATIONS . . . . . . . . . . . . . . . . . . 11
CAPITAL REQUIREMENTS AND FINANCING . . . . . . . . . 12
FUEL SUPPLY . . . . . . . . . . . . . . . . . . . . 12
REGULATION AND RATES . . . . . . . . . . . . . . . . 15
COMPETITION . . . . . . . . . . . . . . . . . . . . . 18
ENVIRONMENTAL MATTERS AND
RELATED LEGAL PROCEEDINGS . . . . . . . . . . . . . 18
GENERAL . . . . . . . . . . . . . . . . . . . . . . . 22
EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . 22
RESEARCH AND DEVELOPMENT . . . . . . . . . . . . . . 22
OPERATING STATISTICS . . . . . . . . . . . . . . . . 23
FIVE-YEAR FORECAST . . . . . . . . . . . . . . . . . 25
THE COMPANY
Consolidated Edison Company of New York, Inc. (the Company),
incorporated in New York State in 1884, supplies electric service
in all of New York City (except part of Queens) and most of
Westchester County, an approximately 660 square mile service area
with a population of more than 8 million. It also supplies gas
in Manhattan, The Bronx and parts of Queens and Westchester, and
steam in part of Manhattan. Most governmental customers within
the Company's service territory receive electric service from the
New York Power Authority (NYPA) through the Company's facilities.
In 1994, electric, gas and steam operating revenues were
80.6 percent, 14.0 percent and 5.4 percent, respectively, of the
Company's operating revenues.
INDUSTRY SEGMENTS
For information on operating revenues, expenses and income
for the years ended December 31, 1994, 1993 and 1992, and assets
at those dates, relating to the Company's electric, gas and steam
operations, see Note H to the financial statements in Item 8.
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ELECTRIC OPERATIONS
ELECTRIC SALES. Electric operating revenues were $5.1
billion in 1994 or 80.6 percent of total Company operating
revenues. The percentages were 81.9 and 82.4, respectively, in
the two preceding years. Electricity sales in the Company's
service area in 1994, including usage by customers served by NYPA
and the New York City and Westchester County municipal electric
agencies, but excluding sales to other utilities, increased 2.0
percent from 1993, after increasing 3.3 percent in 1993 and
decreasing 2.7 percent in 1992. After adjusting for variations,
principally weather, electricity sales volume increased 1.5
percent in 1994, increased 1.0 percent in 1993 and decreased 0.3
percent in 1992. Weather-adjusted sales represent the Company's
estimate of the sales that would have been made if historical
average weather conditions had occurred.
In 1994, 80.0 percent of the electricity sold in the
Company's service area was sold by the Company to its customers,
and the balance was sold by NYPA and municipal electric agencies
to their customers. Of the Company's sales, 29.0 percent was to
residential customers, 66.7 percent was to commercial customers,
2.7 percent was to industrial customers and the balance was to
railroads and public authorities.
For further information about amounts of electric energy
sold, see "Operating Statistics", below. For a forecast of
electric energy sales, see "Five-Year Forecast", below.
ELECTRIC SUPPLY. The Company either generates the electric
energy it sells, purchases the energy from other utilities or
independent power producers (IPPs) pursuant to long-term firm
power contracts or purchases non-firm economy energy.
The sources of electric energy generated and purchased
during the years 1990-1994 are shown below:
1990 1991 1992 1993 1994
Generated:
Fossil-Fueled . . . . . 59.8% 51.4% 42.3% 35.5% 30.9%
Nuclear (Indian Point 2) 13.3% 9.8% 20.4% 14.8% 18.4%
Total Generated . . . 73.1% 61.2% 62.7% 50.3% 49.3%
Firm Purchases:
NYPA . . . . . . . . . 8.1% 8.9% 4.8% 6.0% 1.3%
Hydro-Quebec . . . . . 3.3% 1.9% 2.9% 4.3% 4.8%
IPPs . . . . . . . . . 0.9% 1.0% 8.9% 11.9% 12.9%
Other Purchases . . . . . 14.6% 27.0% 20.7% 27.5% 31.7%
Generated & Purchased . . 100% 100% 100% 100% 100%
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For information about the Company's generating facilities,
see "Electric Facilities - Generating Facilities" in Item 2. For
information about the Company's purchases of electric energy, see
"NYPA", "Hydro-Quebec", "Independent Power Producers" and "New
York Power Pool", below. For further information about amounts
of electric energy generated and purchased, see "Operating
Statistics", below.
ELECTRIC PEAK LOAD AND CAPACITY. The electric peak load in
the Company's service area occurs during the summer air
conditioning season. The 1994 one-hour peak load in the
Company's service area, which occurred on July 8, 1994, was
10,384 thousand kilowatts (MW), including an estimated 8,833 MW
for the Company's customers and 1,551 MW for NYPA's customers and
municipal electric agency customers. It is estimated that the
service area peak load was reduced by 25 MW of curtailable load
reduction. The record one-hour peak for the service area
occurred on July 23, 1991 - 10,752 MW, including an estimated
9,229 MW for the Company's customers. The peak in 1994, if
adjusted to design weather conditions, would have been 10,700 MW,
50 MW higher than the peak in 1993 and 150 MW higher than 1991's
record peak, each similarly adjusted. "Design weather" for the
electric system is a standard to which the actual peak load is
adjusted for evaluation.
The capacity resources available to the Company's service
area at the time of the system peak in the summer of 1994
totalled (before outages) 13,462 MW, of which 9,481 MW
represented net available generating capacity (including the
capacity of NYPA's Poletti unit) and 3,981 MW represented net
firm purchases by the Company and NYPA.
For a forecast of peak load and capacity, see "Five-Year
Forecast", below. For information about the Company's
generating, transmission and distribution facilities, see
"Electric Facilities" in Item 2. For information about the
Company's plans to meet its requirements for electric capacity,
see "Liquidity and Capital Resources - Electric Capacity
Resources" in Item 7.
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NYPA. NYPA supplies its customers in the Company's service
area with electricity from its Poletti fossil-fueled unit in
Queens, New York, its Indian Point 3 nuclear unit in Westchester
County and other NYPA sources. Electricity is delivered to these
NYPA customers through the Company's transmission and
distribution facilities, and NYPA pays a delivery charge to the
Company. NYPA is contractually obligated to the Company to
provide the capacity needed to meet the present and future
electricity requirements of its customers, except that upon 17
years' prior notice to the Company, NYPA may elect not to provide
for future growth of its customers' requirements. NYPA's Indian
Point 3 nuclear unit was out of service throughout 1994, and NYPA
met its capacity requirements from other sources, including firm
purchases.
The Company purchases portions of the output of Poletti and
Indian Point 3 on a firm basis. The Company also purchases firm
capacity from NYPA's Blenheim-Gilboa pumped-storage generating
facility in upstate New York. The Company and NYPA also sell to
each other energy through the New York Power Pool. See "New York
Power Pool", below.
HYDRO-QUEBEC. The Company has an agreement with NYPA to
purchase, through a contract between NYPA and Hydro-Quebec (a
government-owned Canadian electric utility), 780 MW of capacity
and associated kilowatt-hours of energy each year during the
months of April through October until October 31, 1998. The
amount and price of a "basic amount" of energy the Company is
entitled to purchase each year are subject to negotiation with
Hydro-Quebec and approval by the National Energy Board of Canada,
a Canadian regulatory agency. However, the capacity commitment
is firm and the Company may draw upon the capacity in accordance
with the contract even if the energy received by the Company
exceeds the basic amount, provided the Company returns the excess
energy to Hydro-Quebec during the following November-through-
March period. See "Liquidity and Capital Resources - Electric
Capacity Resources" in Item 7.
INDEPENDENT POWER PRODUCERS. Federal and state regulations
encourage competition in the market for generation of electric
power. These laws generally require electric utilities to
purchase electric power from and sell electric power to
qualifying IPPs. The Federal Energy Regulatory Commission (FERC)
has issued rules requiring utilities to purchase electricity from
all qualifying facilities at a price equal to the purchasing
utility's "avoided cost." In addition, the Energy Policy Act of
1992 broadened the FERC's authority to require electric utilities
to provide others with access to their transmission systems and
reduced regulation of certain IPPs.
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At December 31, 1994, the Company had capacity contracts
with IPPs with plants in commercial operation as follows:
Scheduled Annual
Site Contract Contract Capacity
IPP Location Capacity Termination Payment*
(millions)
Sithe/Independence
Power Partners, L.P. Scriba, NY 740 MW 2034 **
Cogen Technologies Linden, NJ 645 MW 2017 $89.2
Selkirk Cogen
Partners, L.P. Selkirk, NY 265 MW 2014 83.9
York Warbasse Brooklyn, NY 20 MW 2011 6.0
_________________________
* Represents average annual capacity-related payments for the
period 1995-1999.
** This contract requires no capacity-related payments until
November 1999. Capacity-related payments of approximately $5
million are estimated for the balance of 1999, with average
annual capacity-related payments for the remainder of the
contract estimated to be approximately $42.7 million.
For additional information about the Company's contracts
with IPPs, see "Liquidity and Capital Resources - Electric
Capacity Resources and Competition" in Item 7.
NEW YORK POWER POOL. The Company and the other major electric
utilities in New York State, including NYPA, are members of the
New York Power Pool. The primary purpose of the Power Pool is to
coordinate planning and operations, including the purchase and
sale of non-firm economy energy. The Company, however, is not
required to purchase or sell non-firm economy energy through the
Power Pool.
As a member of the Power Pool, the Company is required to
maintain its capacity resources (net generating capacity and net
firm purchases) at a minimum reserve margin of 18% above its peak
load, and to pay penalties if it fails to maintain the required
level. The Company met the reserve requirement in 1994 and
expects to meet it in 1995. See "Five-Year Forecast", below.
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MUNICIPAL ELECTRIC AGENCIES. Westchester County and New
York City maintain municipal electric agencies to purchase
electric energy, including hydroelectric energy from NYPA. The
Company has entered into agreements with the County and City
agencies whereby the Company is delivering interruptible
hydroelectric energy from NYPA's Niagara and St. Lawrence
projects to electric customers designated by the agencies. These
agreements may be terminated by either party on or after December
31, 1995 upon either one year's prior notice or, in certain
circumstances, upon 10 days' notice. A similar agreement,
covering energy from NYPA's Fitzpatrick nuclear plant, terminates
in 2003. For information on the amount of energy delivered, see
"Operating Statistics", below.
GAS OPERATIONS
GAS SALES. Gas operating revenues in 1994 were $890.1
million or 14.0 percent of total Company operating revenues.
The percentages were 12.9 and 12.3, respectively, in the two
preceding years. Gas sales volume to firm customers increased
3.9 percent in 1994 from the 1993 level. After adjusting for
variations, principally weather, firm gas sales volume to these
customers increased 1.6 percent. Including sales to interruptible
customers, actual sales volume increased 5.8 percent in 1994.
Natural gas is delivered by pipeline to the Company and is
distributed to customers through the Company's system of
distribution mains and services. For information about the
Company's gas facilities, see "Gas Facilities" in Item 2.
Regulatory changes, which have resulted in the unbundling of
services in the natural gas industry, are enabling users of gas
to purchase gas directly from suppliers and arrange for its
transportation by the appropriate pipeline and local utility
companies. In December 1994, the New York State Public Service
Commission issued an opinion and order regarding the emerging
competitive gas market. See "Regulation and Rates - Generic
Proceedings", below. During 1994, 72 large-volume customers in
the Company's service territory purchased gas directly from
suppliers. The customers pay a transportation charge to the
Company for delivering the gas. For information on the
quantities of gas sold, transported for others and used by the
Company as boiler fuel to generate electricity and steam, see
"Operating Statistics" and "Fuel Supply", below.
In 1993, the Company established an unregulated subsidiary
which markets gas and related services. In compliance with
regulatory restrictions, the subsidiary does not market gas
within the Company's gas service area.
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GAS REQUIREMENTS. Demand for gas in the Company's service
area tends to peak during the winter heating season. The design
criteria for the Company's gas system assume severe weather
conditions that have not occurred in the Company's service area
since 1934. Under these criteria, the Company estimates that the
requirements to supply its firm gas customers, together with the
minimum amount essential for its electric and steam systems,
would amount to 72,600 thousand dekatherms (mdth) of gas during
the 1994/95 winter heating season and that gas available to the
Company would amount to 91,800 mdth. For the 1995/96 winter, the
Company estimates that the requirements would amount to
approximately 74,900 mdth and that the gas available to the
Company would amount to approximately 92,100 mdth. As of March
14, 1995, the 1994/95 winter peak day sendout to the Company's
customers was 702 mdth, which occurred on February 6, 1995. The
Company estimates that, under the design criteria, the peak day
requirements for firm customers during the 1995/96 winter season
would amount to approximately 855 mdth and expects that it would
have sufficient gas available to meet these requirements.
GAS SUPPLY. The Company has contracts for the purchase of
firm transportation and storage services with seven interstate
pipeline companies. The Company also has contracts with twelve
pipeline and non-pipeline suppliers and three Canadian suppliers
for the firm purchase of natural gas. The Company also has
interruptible gas purchase contracts with numerous suppliers and
interruptible gas transportation contracts with interstate
pipelines. Based on its current projections of demand and prices
for gas and oil, the Company expects for at least the next
several years to be able to supply its firm gas customers'
requirements, maintain an adequate inventory of storage gas and
meet most of the requirements of its large-volume interruptible
customers. Gas Operations also purchases gas for the Company's
electric and steam generating stations.
STEAM OPERATIONS
STEAM SALES. The Company sells steam in Manhattan south of
96th Street, mostly to large office buildings, apartment houses
and hospitals. In 1994, steam operating revenues were $342.5
million or 5.4 percent of total Company operating revenues. The
percentages were 5.2 and 5.3, respectively, in the two preceding
years. Steam sales volume increased 4.4 percent in 1994 from the
1993 level. After adjusting for variations, principally weather,
steam sales increased 0.6 percent.
STEAM SUPPLY. 72 percent of the steam sold by the Company
is produced in the Company's electric generating stations, where
it is first used to generate electricity. For information about
the Company's steam facilities, see "Steam Facilities" in Item 2.
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STEAM PEAK LOAD AND CAPABILITY. Demand for steam in the
Company's service area tends to peak during the winter heating
season. The one-hour peak load during the winter of 1994/95
(through March 14, 1995) occurred on February 6, 1995 when the
load reached 11.3 million pounds. The Company estimates that for
the winter of 1995/96 the peak demand of its steam customers
would be approximately 12.4 million pounds per hour under design
criteria, which assume severe weather.
On December 31, 1994, the steam system had the capability of
delivering about 13.8 million pounds of steam per hour. This
figure does not reflect the unavailability or reduced capacity of
generating facilities resulting from repair or maintenance. The
Company estimates that, on a comparable basis, the system will
have the capability to deliver approximately 13.2 million pounds
of steam per hour in the 1995/96 winter.
CAPITAL REQUIREMENTS AND FINANCING
For information about the Company's capital requirements and
financing, the refunding of certain securities and the Company's
securities ratings, see "Liquidity and Capital Resources" in Item
7.
Securities ratings assigned by rating organizations are
expressions of opinion and are not recommendations to buy, sell
or hold securities. A securities rating is subject to revision
or withdrawal at any time by the assigning rating organization.
Each rating should be evaluated independently of any other
rating.
For a forecast of certain operating and financial data, see
"Five-Year Forecast", below.
FUEL SUPPLY
GENERAL. In 1994, 31.7 percent of the electricity supplied
to the Company's customers was obtained by the Company through
economy purchases of energy produced from a variety of fuels. Of
the remaining 68.3 percent, which was either generated by the
Company or obtained through long-term firm purchases of energy
(see "Electric Operations", above), on the basis of British
thermal units (Btu) consumed, oil was used to generate 9.0
percent of the electricity, natural gas 34.5 percent, nuclear
power 19.3 percent, hydroelectric power 4.6 percent, and refuse
0.9 percent. The fuel used to produce steam during 1994 was 70.8
percent oil and 29.2 percent natural gas.
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A comparison of the cost, in cents per million Btu, of fuel
used by the Company to generate electricity and steam during the
years 1990-1994 is shown below:
1990 1991 1992 1993 1994
Residual Oil . . . . . 398 355 345 348 349
Distillate Oil . . . . 558 491 501 499 467
Natural Gas . . . . . 283 288 285 286 255
Nuclear . . . . . . . 63 50 43 37 42
Weighted Average . . . 297 281 232 229 215
The Company is prohibited from using fuels that do not
conform to the requirements of the New York State air pollution
control code and, in the case of its in-City plants, the New York
City air pollution control code. In the City, the Company is not
permitted to burn coal or to burn residual fuel oil having a
sulfur content of more than 0.3 percent.
RESIDUAL OIL. Based on anticipated consumption rates, the
Company has an adequate supply of residual fuel oil for its
generating stations and the Company's shares of generating
capacity at the Roseton and Bowline Point stations jointly-owned
by the Company and other utilities. See "Electric Facilities" in
Item 2. Oil consumption rates vary widely from month to month.
The oil burned at Company facilities in 1994, including the
Company's shares of generating capacity at Roseton and Bowline
Point, totaled 11.3 million barrels. The Company has contracts
for oil supply that have staggered termination dates and has
options for additional oil supply sufficient to cover all of its
expected requirements for residual oil through September 1995.
The Company anticipates covering the balance of its 1995
requirements through new contracts, exercise of existing contract
options and purchases on the spot market.
The Company estimates that more than 90 percent of its
residual oil originates from foreign sources of crude oil.
Supplies could be jeopardized by events such as the oil embargo
imposed in 1973 or the 1979 supply disruption resulting from the
revolution in Iran. The Company experienced no supply
interruption during the 1991 Persian Gulf hostilities.
NATURAL GAS. During 1994, the Company burned approximately
110,900 mdth of gas for the production of electricity and steam,
including 18,500 mdth attributable to the Company's share of
generating capacity at the Roseton and Bowline Point stations.
Burning gas instead of oil reduced the Company's 1994 fuel oil
requirements by about 17.8 million barrels. The Company expects
to continue to have substantial amounts of gas available in 1995
for the production of electricity and steam.
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DISTILLATE OIL. The Company's estimated 1995 requirements
for distillate oil for gas turbine fuel are about 170,000
barrels. The Company expects to be able to satisfy these
requirements through purchases on the spot market.
COAL. The Company does not burn coal. In 1983, the New
York State Department of Environmental Conservation (DEC) ruled
on an application by the Company for permission to convert three
electric generating units, Ravenswood 3 in Queens and Arthur Kill
2 and 3 on Staten Island, to coal-burning. The DEC ruled that
the Company would be permitted to burn coal at each location only
if flue gas desulfurization (FGD) systems were installed. The
Company's studies showed that it would not be economical to
pursue coal conversion with FGD systems. However, the Company
has installed most of the necessary facilities (without FGD
systems) at Ravenswood 3 and Arthur Kill 3 to provide for
coal-burning in emergency circumstances such as an oil supply
interruption. Even in such an emergency, a special permit, or
waiver of existing restrictions, would be required to allow the
Company to burn coal at these units.
NUCLEAR FUEL. The nuclear fuel cycle for power plants like
Indian Point 2 consists of (1) mining and milling of uranium ore,
(2) chemically converting the uranium in preparation for
enrichment, (3) enriching the uranium, (4) fabricating the
enriched uranium into fuel assemblies, (5) using the fuel
assemblies in the generating station and (6) storing the spent
fuel.
The Company has contracts covering its expected requirements
for uranium and conversion for Indian Point 2 through 1995, with
options extending through 1999, and for fuel fabrication through
2001. The Company has contracts covering most of its
requirements for uranium enrichment services for the operating
life of Indian Point 2.
Under the Energy Policy Act of 1992, the DOE is to collect a
special annual assessment, for a period of 15 years, from
utilities that have purchased enriched uranium from the DOE. The
assessments are to be used to pay a portion of the costs to
decontaminate and decommission DOE's gaseous diffusion facilities
used to enrich uranium for commercial and defense purposes. The
Company has paid assessments attributable to Indian Point Units 1
and 2 for 1993, 1994 and 1995. The 1995 assessment was
approximately $2.6 million. Future amounts are subject to review
and adjustment for inflation. The Company's liability at
December 31, 1994 for future installments of this assessment is
$30.7 million, of which $28.1 million is classified as non-
current. The Company is recovering these costs through its
electric fuel adjustment clause.
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Under normal operating conditions, scheduled refueling and
maintenance outages are generally required for Indian Point 2
after each cycle of approximately 22 months of operation. A
scheduled refueling and maintenance outage commenced on February
4, 1995, and is expected to conclude before the beginning of the
summer. The last previous such outage ran from January 30, 1993
to April 22, 1993. Mid-cycle inspection and maintenance outages
may also be required from time to time.
See "Liquidity and Capital Resources - Nuclear Fuel
Disposal" in Item 7 and "Nuclear Decommissioning" in Note A to
the financial statements in Item 8.
Under a 1985 Federal law, by January 1996 New York State is
to provide for permanent disposal of low-level radioactive wastes
(LLRW) generated at Indian Point 1 and 2. The Company is
providing for on-site storage of LLRW as required until New York
State establishes an interim storage or permanent disposal
facility or adopts some other LLRW management method. There is
no domestic licensed disposal facility currently accepting LLRW
from New York State waste generators for permanent disposal.
REGULATION AND RATES
GENERAL. The New York State Public Service Commission (PSC)
regulates, among other things, the Company's electric, gas and
steam rates, the siting of its transmission lines and the
issuance of its securities. In January 1995, a new State
administration took office. It is not known what effect, if any,
this change in administration will have on State regulatory
policy.
Certain activities of the Company are subject to the
jurisdiction of the Federal Energy Regulatory Commission (FERC).
The Nuclear Regulatory Commission (NRC) regulates the Company's
nuclear units. In addition, various matters relating to the
construction and operation of the Company's facilities are
subject to regulation by other governmental agencies.
ELECTRIC, GAS and STEAM RATES. The Company's rates are
among the highest in the country. For additional information
about the Company's rates, see "Liquidity and Capital Resources -
1992 Electric Rate Settlement Agreement, 1994 Electric Rate
Increase Filing and Gas and Steam Rate Increases" in Item 7.
In 1994, a controversy arose over the rates the Company
charges to religious organizations. State law requires electric
and gas utilities to charge religious organizations rates that do
not exceed those charged to residential customers. Due mainly to
the complexity of the Company's rates, a significant number of
religious institutions, for the most part small store-front type
<PAGE>
<PAGE> - 16 -
accounts, had been served under generally higher commercial
rates. In December 1994, the Company and the Attorney General
executed a settlement under which the Company admitted no
wrongdoing but agreed to provide refunds amounting to $5 to $6
million to affected religious organizations and transfer affected
customers to the appropriate rates. In a related matter, a
customer claiming to be a church has sued the Company in Federal
court. The plaintiff claims that it has operated as a religious
organization since 1983 and has been charged commercial rates for
electric service. The plaintiff is seeking $500 million for the
class members in this purported class action. The lawsuit is in
its early stages.
GENERIC PROCEEDINGS. In 1991, the PSC initiated a
proceeding to review the financial policies it uses to set
utility rates. In May 1993, the Company agreed with the PSC
staff, the other New York State electric and gas utilities and
intervenors that the PSC should establish an "A" bond rating as
the appropriate financial integrity target in order to give
utilities needed access to financial markets on reasonable terms.
Under this agreement, no action would be taken to reduce the
rating of utilities above the "A" level unless the PSC found that
the higher rating was inconsistent with the public interest. In
June 1993, the utilities, the PSC staff and one intervenor in
this proceeding agreed to a new method of calculating the cost of
common equity in rate cases. The new method is less volatile
because it is less sensitive to changes in interest rates than
the method the PSC traditionally has used. In July 1994, the
Administrative Law Judges issued a recommended decision. The
judges generally accepted the parties' resolution of financial
integrity issues, but rejected the agreement on the method of
calculating the cost of common equity. Instead, the judges
recommended their own method, which is more sensitive to changes
in interest rates than the traditional PSC method. A PSC
decision is expected in 1995.
For several years the PSC has required utilities to favor
demand side resources in evaluating the cost-effectiveness of
such resources by deeming their cost to be reduced by savings
from avoiding adverse environmental impacts ("externalities").
Currently, the required reduction is 1.6 cents per kilowatt-hour.
In 1992, the PSC instituted a proceeding to reexamine the
appropriate value for externalities. Consideration is being
given to the application of externalities to supply side
resources and the use of environmental (as opposed to economic)
dispatch. This proceeding could have a significant impact on the
cost of electricity. In a separate proceeding, the Company,
together with other members of the New York Power Pool, entered
into a settlement agreement under which the utilities would
procure about 300-400 MW of renewable resources provided that
these resources could be obtained at an acceptable price. The
<PAGE>
<PAGE> - 17 -
settlement agreement was recently "approved" by the PSC except
that the PSC expanded the Company's obligations to purchase
electric capacity. The Company is withdrawing from the
settlement agreement because it believes that the PSC's
substantial modification of the agreement constitutes rejection
of the agreement.
In March 1993, the PSC instituted a proceeding to examine
competitive opportunities in the energy marketplace. In July
1994, the PSC issued an order in this case establishing general
guidelines for "flexible" rates. Under tariffs designed pursuant
to these guidelines, utilities may negotiate discount rates with
customers who have options for obtaining electric service from
other sources such as through the installation of on-site
generation. The loss of revenue due to the discount must be
shared between ratepayers and shareholders. In August 1994, the
PSC initiated a second phase of this proceeding to investigate
the transition to a competitive market in electricity service.
In December 1994, the PSC issued an order proposing guiding
principles for this transition. The proposed principles, among
other things, assert that vertically integrated electric
utilities are "incompatible with effective wholesale or retail
competition" and indicate that utilities "should have a
reasonable opportunity to recover prudent and verifiable
expenditures and commitments made pursuant to their legal
obligations as long as they are cooperating in furthering all of
these principles". In March 1995, the Company, other electric
utilities and other parties to this proceeding filed comments on
the proposed guidelines. The Company believes that the
principles raise important issues which will require more
extensive review than they have been afforded, particularly in
the case of the Company's complex electric system. The PSC is
expected to finalize its transition guidelines in 1995.
In late 1993, the PSC instituted a proceeding to examine the
impact of the emerging competitive gas market on gas utility
rates and services. In particular, the PSC wanted to explore the
impact of "unbundling" of sales and transportation services by
interstate pipeline companies pursuant to FERC Order 636. In
December 1994, the PSC issued an order establishing regulatory
policies and guidelines for gas utilities regarding the pricing
and provision of bundled and unbundled sales and transportation
services. Utilities were required to implement a number of these
policies in a compliance filing and the balance no later than
their general rate filings. The order also provided for the
institution of a separate proceeding to examine the
implementation of a performance-based gas purchase mechanism and
the Commission's principle of affordability for core customers
(i.e., those customers who could be disadvantaged in a
competitive gas market).
<PAGE>
<PAGE> - 18 -
STATE ENERGY PLAN. In October 1994, the New York State
Energy Planning Board, comprised of the PSC Chairman and the
Commissioners of the New York State Energy Office and the
Department of Environmental Conservation, released a final 1994
State Energy Plan which is designed to provide "an intelligent
framework for evaluating the proper course for energy policy,
environmental protection and economic development. . . to assure
that New Yorkers will have a safe, affordable and reliable supply
of energy that will promote future economic growth and protect
our environment." Under New York State law, any energy-related
decisions of State agencies must be reasonably consistent with
the findings and recommendations of the Plan.
COMPETITION
For information concerning competition in the electricity
and gas business, see "Liquidity and Capital Resources - Electric
Capacity Resources and Competition" in Item 7 and "Gas Operations
- Gas Sales" above.
The PSC has issued rules requiring competitive bidding to be
the primary means by which additional electric capacity and
energy is obtained by utilities, although the PSC has indicated
that utilities should pursue other alternatives when justified.
ENVIRONMENTAL MATTERS AND RELATED LEGAL PROCEEDINGS
GENERAL. During 1994, the Company's capital expenditures for
environmental protection facilities and related studies were
approximately $24 million. The Company estimates that such
expenditures will amount to approximately $19 million in 1995 and
$18 million in 1996. These amounts include capital expenditures
in 1995 and 1996 required to comply with the consent decree
discussed under "Environmental Matters - DEC Settlement" in Note
F to the financial statements in Item 8.
INDIAN POINT. The Company believes that a serious accident
at its Indian Point 2 nuclear unit is extremely unlikely, but
despite substantial insurance coverage, the losses to the Company
in the event of a serious accident could materially adversely
affect the Company's financial position and results of
operations. For information about Indian Point 2 and the
Company's retired Indian Point 1 nuclear unit, see "Electric
Operations" and "Fuel Supply - Nuclear Fuel" above, "Cooling
Towers" below, "Electric Facilities - Generating Facilities" in
Item 2, "Liquidity and Capital Resources - Capital Requirements"
in Item 7 and Notes A and F to the financial statements in Item
8.
<PAGE>
<PAGE> - 19 -
SUPERFUND. The Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (Superfund) by
its terms imposes joint and several strict liability, regardless
of fault, upon generators of hazardous substances for resulting
removal and remedial costs and environmental damages.
In the course of the Company's operations, materials are
generated that are deemed to be hazardous substances under
Superfund. These materials include asbestos and dielectric
fluids containing polychlorinated biphenyls (PCBs). Other
hazardous substances may be generated in the Company's operations
or may be present at Company locations. Also, other hazardous
substances may have been generated at the manufactured gas plants
which the Company and its predecessor companies used to operate.
For additional information about Superfund, see "Superfund"
in Item 3 and "Environmental Matters - Superfund Claims" in Note
F to the financial statements in Item 8.
ASBESTOS. Asbestos is present in numerous Company
facilities. In 1989, a Company steam main exploded in the
Gramercy Park area of Manhattan, causing asbestos contamination
of nearby buildings and requiring a major cleanup. Most of the
costs were covered by insurance. See "Gramercy Park" in Item 3.
For additional information about asbestos, see "Environmental
Matters - Asbestos Claims" in Note F to the financial statements
in Item 8 and "Asbestos Litigation" in Item 3.
TOXIC SUBSTANCES CONTROL ACT. Virtually all electric
utilities, including the Company, own equipment containing PCBs.
PCBs are regulated under the Federal Toxic Substances Control Act
of 1976. The Company has reduced substantially the amount of
PCBs in electrical equipment it uses, including transformers
located in or near public buildings.
For information about a claim under the Toxic Substances
Control Act, see "Toxic Substances Control Act" in Item 3.
AIR QUALITY. For information about the Federal Clean Air
Act amendments of 1990, see "Liquidity and Capital Resources -
Clean Air Act Amendments" in Item 7.
<PAGE>
<PAGE> - 20 -
The flue gases from oil combustion furnaces, including the
Company's generating stations as well as home heating furnaces,
contain microscopic particles of ash and soot. Some chemical
constituents of these particles have been designated as
"Hazardous Air Pollutants" under the Clean Air Act Amendments of
1990. Utility boilers are exempt from regulation as sources of
hazardous air pollutants until the United States Environmental
Protection Agency (EPA) completes a study of the hazards to
public health reasonably anticipated to occur as a result of
emissions by electric generating units. The EPA was expected to
make a determination concerning the need for control of hazardous
air pollutants from utility facilities in 1994. The results of
the study have not yet been released.
The New York State Department of Environmental Conservation
(DEC) in March 1991 issued a notice of intent to prepare a draft
environmental impact statement (DEIS) concerning a DEC draft of
regulations that would establish standards of performance,
effective beginning in the year 2000, for steam electric
generating units that are operated beyond their "useful design
life." The DEC draft regulations define "useful design life" as
45 years from the date of initial operation. All of the
Company's steam electric generating units in New York City will
have reached that point by 2014. The draft regulations would
impose operating efficiency requirements (heat rates) that many
of these units may not be able to meet, and stringent nitrogen
oxides and particulate matter emissions limitations. The DEC has
not yet issued the DEIS.
The DEIS process affords the Company and other interested
parties the opportunity to submit comments and suggest changes to
the draft regulations. Upon completion of the DEIS, the DEC may
propose regulations for adoption. If the DEC proposes
regulations in their current draft form and they are adopted, the
regulations could require the retirement of many of the Company's
in-City electric generating units earlier than planned, starting
in the year 2000. The Company and the New York Power Pool will
oppose adoption of any regulations that would impose unreasonable
standards of performance on electric generating units or require
the premature retirement of such units. The Company is unable to
predict the final form of the regulations.
The New York City air pollution control code contains
limitations on the allowable sulfur content of fuels and on
emissions of sulfur dioxide, particulate matter, oxides of
nitrogen and various trace elements. Certain provisions of the
code, specifically those pertaining to standards for emissions of
nitrogen oxides, may be impracticable to meet at some of the
Company's generating stations located in New York City unless
variances or other relief from such provisions are granted.
<PAGE>
<PAGE> - 21 -
COOLING TOWERS. The Federal Clean Water Act provides for
effluent limitations, to be implemented by a permit system, to
regulate the discharge of pollutants, including heat, into United
States waters. In 1981, the Company entered into a settlement
with the EPA and others that relieved the Company for at least 10
years from a proposed regulatory agency requirement that, in
effect, would have required that cooling towers be installed at
the Bowline Point, Roseton and Indian Point units. In return the
Company agreed to certain plant modifications, operating
restrictions and other measures and surrendered its operating
license for a proposed pumped-storage facility that would have
used Hudson River water.
In September 1991, after the expiration of the 1981
settlement, three environmental interest groups commenced
litigation challenging the permit status of the units pending
renewal of their discharge permits, which expired in October
1992. Under a consent order settling this litigation, certain
restrictions on the units' usage of Hudson River water have been
imposed on an interim basis. Permit renewal applications were
filed in April 1992, after which the DEC determined that the
Company must submit a DEIS to provide a basis for determining new
permit conditions. The DEIS, submitted in July 1993, includes an
evaluation of the costs and environmental benefits of potential
mitigation alternatives, one of which is the installation of
cooling towers. After its review, the DEC will release for
public comment the DEIS and draft permit conditions. Pending
issuance of final renewal permits, the terms and conditions of
the expired permits continue in effect.
ELECTRIC AND MAGNETIC FIELDS. Electric and magnetic fields
(EMF) are found wherever electricity is used. Several scientific
studies have raised concerns that EMF surrounding electric
equipment and wires, including power lines, may present health
risks. For additional information about EMF, see "Environmental
Matters - EMF" in Note F to the financial statements in Item 8.
<PAGE>
<PAGE> - 22 -
GENERAL
STATE ANTITAKEOVER LAW. New York State law provides that a
"resident domestic corporation," such as the Company, may not
consummate a merger, consolidation or similar transaction with
the beneficial owner of a 20 percent or greater voting stock
interest in the corporation, or with an affiliate of the owner,
for five years after the acquisition of the voting stock
interest, unless the transaction or the acquisition of the voting
stock interest was approved by the corporation's board of
directors prior to the acquisition of the voting stock interest.
After the expiration of the five-year period, the transaction may
be consummated only pursuant to a stringent "fair price" formula
or with the approval of a majority of the disinterested
stockholders.
EMPLOYEES
The Company had 17,097 employees on December 31, 1994.
Approximately two-thirds of the employees are represented by a
union whose collective bargaining agreement with the Company
expires on June 22, 1996. An additional 2.4 percent of the
employees are represented by another union whose collective
bargaining contract expires on June 21, 1997.
RESEARCH AND DEVELOPMENT
For information about the Company's research and development
costs, see Note A to the financial statements in Item 8.
<PAGE>
<PAGE> - 23 -
<TABLE>
OPERATING STATISTICS
===============================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended December 31 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------
ELECTRIC Energy Generated
Purchased and Sold (MWhrs):
Generated 20,419,828 20,079,995 24,157,503 23,989,334 28,578,580
Purchased from Others 21,036,437 19,813,654 14,360,373 15,238,100 10,497,311
Total Electric Energy
Generated and Purchased 41,456,265 39,893,649 38,517,876 39,227,434 39,075,891
Less:
Electric energy supplied
without direct charge 73 74 75 74 72
Electric energy used by
Company (a) 134,940 183,903 173,834 157,079 164,274
Distribution losses and
other variances 2,762,315 2,863,828 2,781,046 2,786,547 2,543,025
Total Electric Energy
Sold (b) 38,558,937 36,845,844 35,562,921 36,283,734 36,368,520
Electric Energy Sold (MWhrs):
Residential 10,660,148 10,512,496 9,845,397 10,380,814 9,861,492
Commercial and Industrial 25,511,974 25,118,125 24,680,600 24,930,864 25,066,438
Railroads and Railways 47,289 49,542 50,934 46,726 47,057
Public Authorities 554,753 560,836 542,358 531,272 499,243
Total Sales to Con
Edison Customers 36,774,164 36,240,999 35,119,289 35,889,676 35,474,230
Delivery Service to
NYPA Customers 8,773,155 8,441,624 8,187,292 8,241,174 8,205,452
Service for Municipal
Agencies 413,893 361,854 287,489 681,791 250,913
Total Sales in
Franchise Area 45,961,212 45,044,477 43,594,070 44,812,641 43,930,595
Sales to other electric
utilities (c) 1,784,773 604,845 443,632 394,058 894,290
Average Annual kWhr Use Per
Residential Customer (d) 4,136 4,104 3,872 4,116 3,928
Average Revenue Per kWhr
Sold (cents):
Residential (d) 15.8 16.0 15.0 14.7 14.4
Commercial and Industrial (d) 12.2 12.6 12.0 11.9 11.6
(a) Electric energy used by the Company in 1994 includes 21,275 MWhrs received from NYPA. In 1993,
1992, 1991 and 1990 electric energy used by the Company includes MWhrs of 29,233, 30,859, 9,354
and 22,483 supplied to NYPA.
(b) Includes sales to other electric utilities.
(c) 1994, 1993, 1992, 1991 and 1990 include MWhrs of 350, 2,142, 52,929, 4,982 and 38,149 which were
sold to NYPA and are also included in the Delivery Service to NYPA.
(d) Includes Municipal Agency sales.
<PAGE>
<PAGE> - 24 -
OPERATING STATISTICS
===============================================================================================
<S> <C> <C> <C> <C> <C>
Year Ended December 31 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------
GAS (Dth):
Purchased 208,328,267 214,719,241 221,181,200 222,730,835 226,222,779
Underground storage-net (4,410,363) 222,559 752,561 (2,691,256) (7,119,602)
Used as boiler fuel
at Electric and Steam
Stations (92,680,221)(108,153,436)(116,951,577)(121,773,852)(120,971,124)
Gas Purchased for Resale 111,237,683 106,788,364 104,982,184 98,265,727 98,132,053
Less:
Gas used by Company 221,715 203,793 153,537 150,387 145,521
Distribution losses and
other variances 2,443,486 3,998,234 3,856,836 5,563,386 3,001,176
Total Gas Sold 108,572,482 102,586,337 100,971,811 92,551,954 94,985,356
Gas Sold (Dth)
Firm Sales
Residential 53,981,416 52,624,331 52,626,406 46,200,725 46,471,766
General 39,365,003 37,214,994 36,656,433 33,539,780 33,968,421
Total Firm Sales 93,346,419 89,839,325 89,282,839 79,740,505 80,440,187
Interruptible Sales 15,226,063 12,747,012 11,688,972 12,811,449 14,545,169
Total Sales to Con
Edison Customers 108,572,482 102,586,337 100,971,811 92,551,954 94,985,356
Transportation of Customer-
Owned Gas 18,369,501 20,891,649 25,448,441 26,823,303 23,142,014
Total Sales and
Transportation 126,941,983 123,477,986 126,420,252 119,375,257 118,127,370
Average Revenue Per Dth Sold:
Residential $ 9.85 $ 9.27 $ 8.41 $ 8.76 $ 8.78
General $ 7.05 $ 6.71 $ 6.03 $ 6.07 $ 6.28
STEAM Sold (Mlbs): 30,685,155 29,394,335 29,381,922 28,531,067 28,492,095
Average Revenue per Mlbs Sold $11.10 $11.06 $10.63 $10.45 $10.39
Customers - Average for Year
Electric 2,980,026 2,964,716 2,950,614 2,938,201 2,928,559
Gas 1,031,675 1,028,048 1,026,546 1,027,933 1,028,018
Steam 1,964 1,973 1,970 1,975 1,981
</TABLE>
<PAGE>
<PAGE> - 25 -
<TABLE>
FIVE-YEAR FORECAST
The following pages show actual 1994 amounts for certain operating and financial data and the Company's forecasts of such data
for the years 1995 through 1999. Footnotes appear following the forecast. The forecast data are estimates and not statements
of fact. These estimates were developed by the Company for its planning purposes, based on information available on or shortly
after December 31, 1994, including information and estimates provided by others. These estimates are reviewed and revised by the
Company periodically. Like all projections, they are subject to, and may be rendered inaccurate by, future events. The forecast
data could be affected by weather variations, changes in economic conditions or trends, changes in laws or regulations, and other
unknown or unforeseen factors.
<S> <C> <C> <C> <C> <C> <C>
Actual Forecast Forecast Forecast Forecast Forecast
1994 1995 1996 1997 1998 1999
ENERGY SALES (a)
Electric - millions of kilowatthours
Con Edison customers:
Total before DSM (b) 39,081 40,075 40,742 41,344 42,030
DSM (c) (2,734) (3,116) (3,490) (3,848) (4,236)
Net Con Edison Customers 36,774 36,347 36,959 37,252 37,496 37,794
NYPA customers (d) 8,773 8,903 9,080 9,203 9,337 9,484
Municipal Electric Agencies (e) 414 391 393 397 451 460
Total Service Area 45,961 45,641 46,432 46,852 47,284 47,738
Gas - firm customers (f)
(thousands of dekatherms) 93,346 96,500 99,200 100,000 101,900 104,100
Steam (millions of pounds) 30,685 30,000 30,420 30,480 30,620 30,800
PEAK LOAD (g)
Electric - peak hour load - megawatts
Con Edison customers:
Total before DSM (b) 9,936 10,154 10,378 10,583 10,806
Curtailable Electric Service (h) (i) (25) 0 0 0 0
DSM (j) (820) (941) (1,061) (1,173) (1,284)
Net Con Edison Customers 8,833 9,091 9,213 9,317 9,410 9,522
NYPA customers (d) 1,496 1,592 1,616 1,636 1,656 1,678
Municipal Electric Agencies (e)(k) 55 92 101 107 129 135
Net Service Area Peak Load 10,384(l) 10,775 10,930 11,060 11,195 11,335
Gas - firm customers (m)
(thousands of dekatherms per day) 702 855 865 880 900 920
Steam (millions of pounds per hour)(n) 11.3 12.4 12.4 12.4 12.5 12.5
CAPABILITY
Electric (net megawatts at summer peak)
Con Edison generation 8,652 8,615 8,596 8,466 8,466 8,466
Firm purchases - IPPs (o) 645 1,804 2,061 2,079 2,079 2,079
Firm purchases - Short-term capacity 950 - - - - -
Firm purchases - NYPA & Hydro-Quebec (p) 1,000 1,113 1,113 1,113 1,113 733
Con Edison capacity resources 11,247 11,532 11,770 11,658 11,658 11,278
Capacity for NYPA customers(d) 2,215 2,212 2,210 2,217 2,243 2,279
Total Service Area 13,462 13,744 13,980 13,875 13,901 13,557
Gas - firm supply
(thousands of dekatherms per day) 898 913 913 943 943 943
Steam (millions of pounds per hour) 13.8 13.2 13.2 13.2 13.3 13.3
<PAGE>
<PAGE> - 26 -
<S> <C> <C> <C> <C> <C> <C> <C>
Actual Forecast Forecast Forecast Forecast Forecast Forecast
1994 1995 1996 1997 1998 1999 5 Year Total
CAPITAL REQUIREMENTS AND MATURING SECURITIES
(millions of dollars)
Construction Expenditures
Electric $ 499 $461 $454 $448 $400 $372 $2,135
Gas 107 115 116 117 119 119 586
Steam 45 33 29 29 29 30 150
Common 107 121 114 113 95 86 529
Total Construction Expenditures (q) 758 730 713 707 643 607 3,400
Enlightened Energy program - net 30 (4) (20) (18) (15) - (57)
Power contract termination costs - net (r) 62 (21) (26) (2) 6 - (43)
Nuclear decommissioning trust (r)(s) 15 19 21 21 21 21 103
Nuclear fuel expenditures 47 11 59 16 63 15 164
Investment in gas marketing subsidiary 7 11 11 - - - 22
Subtotal 919 746 758 724 718 643 3,589
Retirements of Long-Term Debt and
Preferred Stock (t) 134 11 184 106 200 225 726
Total $1,053 $757 $942 $830 $918 $868 $4,315
PRINCIPAL NON-CASH CHARGES AND CREDITS TO INCOME
(million of dollars)
Book depreciation and amortization 422 457 480 506 529 535 2,507
Amortization of nuclear fuel 25 19 26 24 28 28 125
Deferred taxes 74 100 66 63 48 61 338
Deferred Investment Tax Credits (10) (9) (9) (9) (9) (9) (45)
Allowance for equity and borrowed
funds used during construction 12 8 10 11 10 8 47
--------------------------------
FOOTNOTES TO FIVE-YEAR FORECAST
(a) Forecasts for 1995-1999 assume normal weather conditions.
(b) Does not include sales to other utilities.
(c) For 1995-1999, this represents anticipated sales reduction resulting from Company sponsored demand side management and
non-rebate induced conservation, cumulative since 1990.
(d) See "Electric Operations - NYPA," above.
(e) See "Electric Operations - Municipal Electric Agencies", above.
(f) Actual sales to interruptible gas customers in 1994 amounted to 14,028 thousands of dekatherms (including 737 thousands
of dekatherms sold to NYPA). Actual contract sales in 1994 amounted to 1,198 thousand dekatherms (including 243 thousands
of dekatherms sold out of system).
(g) Forecasts for 1995-1999 assume design weather conditions.
(h) For 1995, this represents anticipated load reduction resulting from the Company sponsored curtailable electric service
program. The program is scheduled to be terminated after 1995.
(i) At 1994 peak, an estimated 25 MW of load reduction resulted from the Company sponsored curtailable electric service program.
(j) For 1995-1999, this represents anticipated load reduction resulting from Company sponsored demand side management and
non-rebate induced conservation, cumulative since 1990.
(k) Includes electric demand of economic development customers.
(l) At design weather conditions, the 1994 peak electric load would have been 10,700 MW.
(m) Reflects the gas supply year which begins on November 1 of each calendar year shown. "Actual" peak day demand shown for 1994
assumes that peak day demand for the period occurred prior to March 14, 1995.
(n) Reflects the winter season beginning in the year shown. "Actual" peak steam demand shown for 1994 assumes that peak day demand
for the winter occurred prior to March 14, 1995.
(o) For 1994, includes capacity from Cogen Technologies (645 MW). Beginning in 1995, also includes Selkirk Cogen Partners, L.P.
(265 MW), and Sithe/Independence Power Partners, L.P. (740 MW). Certain other IPPs (approximately 400 MW) are expected to
commence commercial operation during 1995 and 1996. See "Liquidity and Capital Resources - Electric Capacity Resources and
Competition" in Item 7.
(p) See "Electric Operations - NYPA and Hydro-Quebec", above.
(q) Assumes cost escalation at an average annual rate of 4.0 percent throughout the forecast period.
(r) Assumes recovery as proposed by the Company of the portion of these costs not already in rates. See "Liquidity and Capital
Resources - 1994 Electric Rate Increase Filing" in Item 7.
(s) See Note A to the financial statements in Item 8 for discussion of nuclear decommissioning costs.
(t) Does not reflect refundings in advance of maturity.
</TABLE>
<PAGE>
<PAGE> - 27 -
ITEM 2. PROPERTIES
At December 31, 1994, the capitalized cost of the Company's
utility plant, net of accumulated depreciation, (and excluding
$92.4 million of nuclear fuel assemblies) was as follows:
Net Capitalized Cost Percentage of
Classification (millions of dollars) Net Utility Plant
In Service:
Electric:
Generation $ 1,845.8 18%
Transmission 1,148.1 11%
Distribution 4,777.1 46%
Gas 1,124.9 11%
Steam 358.0 3%
Common 796.5 7%
Held For Future Use 28.8 -
Construction Work in
Progress 389.6 4%
Net Utility Plant $10,468.8 100%
ELECTRIC FACILITIES
GENERATING FACILITIES. As shown in the following table, at
December 31, 1994, the Company's net maximum generating capacity
(on a summer rating basis) was 8,652 MW, without reduction to
reflect the unavailability or reduced capacity at any given time
of particular units because of maintenance or repair or their use
to produce steam for sale. For information about the electric
energy purchased by the Company, see "Electric Operations" in
Item 1.
Net Generating Capacity Percentage of Electric
Generating at December 31, 1994 Energy Generated and
Stations (Megawatts-Summer Rating) Purchased in 1994
Fossil-Fueled
Ravenswood (3 Units) 1,742 7.5%
Astoria (3 Units) 1,075 9.8%
Arthur Kill (2 Units) 826 1.9%
East River (3 Units) 430 1.8%
Bowline Point (2 Units)
- two-thirds interest 790 4.1%
Roseton (2 Units)
- 40% interest 484 2.7%
Other (7 Units) 287 2.1%
Subtotal 5,634 29.9%
Nuclear - Indian Point 931 18.4%
Gas Turbines (39 Units) 2,087 1.0%
Total 8,652 49.3%
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The Company's fossil-fueled plants burn natural gas or
residual oil. Most of the gas turbines burn distillate oil.
Certain units have the capability to burn either natural gas or
oil, and certain units can be converted to burn coal. See "Fuel
Supply" in Item 1.
For information about the Company's Indian Point 2 nuclear
unit, see "Electric Operations", "Fuel Supply - Nuclear Fuel",
"Environmental Matters and Related Legal Proceedings - Indian
Point and Cooling Towers" in Item 1, "Liquidity and Capital
Resources - Capital Requirements" in Item 7 and Notes A and F to
the financial statements in Item 8.
The Company's generating stations are located in New York
City with the exception of the Indian Point station in
Westchester County, New York; the Bowline Point station in
Rockland County, New York; and the Roseton station in Orange
County, New York.
The Company's electric and steam generating stations are
held in fee with the following exceptions: (i) Orange and
Rockland Utilities, Inc. (O&R) has a one-third interest and the
Company has a two-thirds interest as tenants in common in the
Bowline Point station, which is operated by O&R; (ii) Central
Hudson Gas & Electric Corporation (Central Hudson) has a 35
percent interest, Niagara Mohawk Power Corporation (Niagara
Mohawk) has a 25 percent interest and the Company has a 40
percent interest as tenants in common in the Roseton station
(which is operated by Central Hudson), with Central Hudson having
the right to acquire the Company's interest in 2004; and (iii)
the Company leases from trusts in which it owns the remainder
interests certain gas turbine generating facilities of which the
Company can assume direct ownership upon expiration of the leases
between 1995 and 1997.
The Company has property in the mid-Hudson valley which was
acquired, at a cost of approximately $12.8 million, as a possible
location for baseload plants in the next century. Pursuant to
the 1992 Electric Rate Settlement Agreement (see "Liquidity and
Capital Resources - 1992 Electric Rate Settlement Agreement" in
Item 7), the Company conducted a study which indicated that the
Company no longer needs this site. A divestiture plan for the
site is being developed.
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TRANSMISSION FACILITIES. The Company has interconnections
for the transmission of power with Niagara Mohawk, Central
Hudson, O&R, New York State Electric and Gas Corporation,
Connecticut Light and Power Company, Long Island Lighting Company
and Public Service Electric and Gas Company. At December 31,
1994, the Company's capacity to receive power from other systems
to supply service area load at the time of the summer peak was
approximately 3,550 MW, in addition to the approximately 1,280 MW
of transmission capacity needed to deliver to the Company's
service area its share of the output of the Roseton and Bowline
Point stations. The Company's transmission facilities are
located in New York City and Westchester, Orange, Rockland,
Putnam and Dutchess counties in New York State.
At December 31, 1994, the Company's transmission system had
approximately 427 miles of overhead circuits operating at 138,
230, 345 and 500 kilovolts and approximately 378 miles of
underground circuits operating at 138 and 345 kilovolts. There
are approximately 267 miles of radial subtransmission circuits
operating at 138 kilovolts. The Company's 15 transmission
substations, supplied by circuits operated at 69 kilovolts and
above, have a total transformer capacity of 15,632 megavolt
amperes.
DISTRIBUTION FACILITIES. The Company owns various
distribution substations and facilities located throughout New
York City and Westchester County. At December 31, 1994, the
Company's distribution system had 294 distribution substations,
with a transformer capacity of 20,273 megavolt amperes, 32,205
miles of overhead distribution lines and 86,234 miles of
underground distribution lines.
GAS FACILITIES
Natural gas is delivered by pipeline to the Company at
various points in its service territory and is distributed to
customers by the Company through approximately 4,200 miles of
mains and 357,000 service lines. The Company owns a natural gas
liquefaction facility and storage tank at its Astoria property in
Queens, New York. The plant can store approximately 1,000 mdth
of which a maximum of about 250 mdth can be withdrawn per day.
The Company has about 1,230 mdth of additional natural gas
storage capacity at a field in upstate New York, owned and
operated by Honeoye Storage Corporation, a corporation in which
the Company and two neighboring utilities own a controlling
interest.
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STEAM FACILITIES
The Company generates steam for distribution at five
electric generating stations and two steam-only generating
stations and distributes steam to customers through approximately
87 miles of mains and 17 miles of service lines.
OTHER FACILITIES
The Company also owns or leases various pipelines, fuel
storage facilities, office equipment, a thermal outfall structure
at Indian Point, and other properties located primarily in New
York City and Westchester, Orange, Rockland, Putnam and Dutchess
counties in New York State.
THE COMPANY MORTGAGE
Substantially all the properties and franchises of the
Company, other than expressly excepted property, are subject to
the liens securing the Company's First and Refunding Mortgage
Bonds and the mortgage bonds of acquired companies. As of
December 31, 1994, $177.9 million aggregate principal amount of
such mortgage bonds remained outstanding, of which $1.4 million
is scheduled to mature in 1995, $175 million in 1996 and $1.5
million in 1997. The Company has not issued mortgage bonds since
1974.
ITEM 3. LEGAL PROCEEDINGS
SUPERFUND
The following is a discussion of significant proceedings
pending under Superfund or similar statutes involving sites for
which the Company has been asserted to have a liability. The
list is not exhaustive and additional proceedings may arise in
the future. For a further discussion of claims and possible
claims against the Company under the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(Superfund) and the estimated liability accrued for certain
Superfund claims, see "Environmental Matters and Related Legal
Proceedings - Superfund" in Item 1, and "Environmental Matters -
Superfund" in Note F to the financial statements in Item 8.
MAXEY FLATS NUCLEAR DISPOSAL SITE. The United States
Environmental Protection Agency (EPA) advised the Company by
letter, dated November 26, 1986, that it was a potentially
responsible party (PRP) under Superfund for the investigation and
cleanup of the Maxey Flats Nuclear Disposal Site in Morehead,
Kentucky. The site is owned by the State of Kentucky and was
operated as a disposal facility for low level radioactive waste
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<PAGE> - 31 -
from 1963 through 1977 by the Nuclear Engineering Corporation(now
known as U.S. Ecology Corporation). EPA's letter alleges that
various radionuclides and organic chemicals have been released
from the site into the environment. In September 1991, the EPA
issued its Record of Decision ("ROD") for the site cleanup
program. Phase one of the program requires, among other things,
the removal, treatment and on-site disposal of the leachate that
has accumulated in the site's waste burial trenches and the
installation of an impervious cover over the waste burial trench
area of the site, monitoring wells and erosion control and
surface water drainage systems. Phase two requires a 100-year
stabilization period, with periodic monitoring and maintenance of
the cover, followed by installation of a permanent cap.
In March 1995, the EPA, de minimis PRPs, large private party
PRPs, large federal agency PRPs and Kentucky entered into a
settlement agreement with respect to the costs of the cleanup
program. Subject to court approval, the settlement agreement is
to be implemented pursuant to a consent decree. The Company has
agreed to be responsible for approximately 1.9 percent of the
costs allocable to the large private party PRPs. The large
private party PRPs have agreed to implement phase one of the
program and any corrective actions required, during the ten years
following completion of phase one, to meet the performance
standards established in the ROD, and to share the costs of those
activities with the large Federal agency PRPs. Also, if during
this ten-year period the EPA determines that horizontal flow
barriers are required, the large party PRPs will be required to
share the cost of such barriers. The large party private PRPs
are not responsible for any costs after the ten year period
expires. Kentucky will implement and fund the phase two program.
The Company's share of the cleanup costs is estimated to be about
$500,000. In addition, if horizontal flow barriers are required,
depending on their extent, the Company would be obligated to pay
an estimated $10,000 to $100,000.
EASTERN DIVERSIFIED METALS SITE. The EPA advised the
Company by letter, dated March 5, 1987, that it is one of 118
PRPs under Superfund for the investigation and cleanup of the
Eastern Diversified Metals Site in Hometown, Pennsylvania.
Between 1966 and 1977, Diversified Industries used the site for a
copper wire salvaging operation which involved the disposal of
shredded wire insulation in a waste pile located on the site.
The EPA alleges that various metals and organic chemicals have
been released from the waste pile into the environment. A
preliminary ranking list appended to the EPA's letter indicates
that the Company is responsible for less than 0.03 percent of the
waste insulation material at the site. An EPA-approved site
study has been performed by the site owner and a PRP allegedly
responsible for about 77 percent of the waste. The Company has
accepted EPA's offer to settle the Company's liability for this
site by paying $11,000.
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CURCIO SCRAP METAL SITE. The EPA advised the Company, in a
letter received on August 11, 1987, that it had documented the
release of hazardous substances into the environment at the site
of Curcio Scrap Metal, Inc. in Saddle Brook, New Jersey, and that
the EPA had information indicating that the Company sent
hazardous substances (PCBs) to the site. The Company provided
the EPA with records that indicated that the Company sold scrap
electric transformers to a metal broker who in turn sold them to
the owner of the site. A site study indicated that chemical
contamination has occurred on a portion of the site. Elevated
concentrations of PCBs and various organic compounds and metals
have been detected in the soil and PCBs and organic compounds and
metals have also been detected in the shallow groundwater beneath
the site.
On September 30, 1991, the EPA issued a Unilateral
Administrative Order which requires the Company and three other
PRPs to commence a soil cleanup of this site pursuant to the
EPA's Record of Decision, dated June 28, 1991. This soil cleanup
has been completed. The EPA has not yet formulated a cleanup
program for the groundwater under and around the Curcio site.
The Company's estimate of the cost of the additional groundwater
studies is $400,000. The EPA has only designated five PRPs for
this site and, as a result, the Company will be expected to pay a
major share of the cleanup costs.
METAL BANK OF AMERICA SITES. The EPA advised the Company by
letter dated October 26, 1987 that it has reason to believe that
the Company was a supplier of used transformers to Metal Bank of
America Inc.'s recycling sites in Philadelphia during the late
1960s and thereafter. One of the sites has been placed on the
EPA's national priority list under Superfund as a result of a
leak in a storage tank containing PCBs. The EPA alleges that
PCBs have been found in the ground water, soils and in the
sediments of the adjoining Delaware River. The Company has
provided the EPA with documents which indicate that the Company
sold approximately 81 scrap transformers to a broker who, in
turn, delivered them to the site. Under a steering committee
participation agreement, the Company is responsible for 1.48% of
the expense of the remedial investigation and feasibility study,
which has been completed under an EPA administrative consent
order. The Company's share of the cost of the study was about
$80,000. The study identified various alternative site clean-up
programs ranging in cost from $1.8 million to $90 million. The
EPA has requested some additional study work, the results of
which it will consider before selecting the clean up program.
NARROWSBURG SITE. In 1987, the New York State Attorney
General notified the Company that he has evidence that the
Company is a PRP under Superfund for hazardous substances that
have been released at the Cortese landfill in Narrowsburg,
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<PAGE> - 33 -
Sullivan County, New York. The Cortese landfill is listed on the
EPA's national priorities list. Company records indicate that
drums containing non-nuclear waste were shipped from Indian Point
to the Cortese landfill for disposal. The Attorney General has
commenced an action under Superfund in the United States District
Court for the Southern District of New York against the Cortese
site owner and operator and SCA Services, an alleged transporter
of hazardous substances to the site. On January 17, 1989, SCA
Services commenced a third-party action for contribution against
the Company and five other parties whose chemical waste was
allegedly disposed of at the site. In 1990, SCA served a second
amended third-party complaint in which it sued the Company and 27
other third-party defendants for contribution. The Company and
SCA Services have reached a settlement of the third-party action
under which the Company's sole responsibility will be to pay 6%
of the first $25 million of remedial costs at the site. SCA
Services has agreed to indemnify the Company for any other
remedial costs that it has to pay. The EPA recently selected the
clean up program for the site. The program is estimated to cost
about $12 million to implement.
CARLSTADT SITE. On August 20, 1990, the Company was served
with a third-party complaint in a Superfund cost contribution
action for a former waste solvent and oil recycling facility
located in Carlstadt, New Jersey. The complaint, which is
pending before the United States District Court for the District
of New Jersey, alleges that the Company shipped 120,000 gallons
of waste oil to this site and that the Company is one of several
hundred parties who are responsible under Superfund for the study
and cleanup of the facility. The plaintiffs in the action, which
include a group of former customers of the facility, have
completed a $3 million remedial investigation and feasibility
study for the site. Plaintiffs estimate that 7 to 15 million
gallons of waste solvents and oil were recycled at the site and
based on this estimate, the Company's share of the cleanup costs
would be about one percent. The costs of the cleanup
alternatives that were evaluated in the remedial investigation
and feasibility study range from $48 million to $321 million. In
1990, the EPA selected an interim remedy, expected to cost about
$13 million, to control release from the site while the EPA
evaluates and develops a final cleanup remedy. The interim
remedy calls for, among other things, the construction of a
slurry wall around the site and an infiltration barrier over the
site.
HELEN KRAMER LANDFILL SITE. In September 1991, Orange and
Rockland Utilities, Inc. (O&R) was served with third-party
complaints in consolidated Superfund cost recovery contribution
actions for the Helen Kramer Landfill Site in Mantau, New Jersey.
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<PAGE> - 34 -
The complaints, which are pending before the United States
District Court for the District of New Jersey, allege that, in
1974, Marvin Jonas, Inc. transported hazardous substances for O&R
and disposed of those substances in the Helen Kramer Landfill.
Preliminary investigation by O&R indicates that waste materials
generated during the construction of the Bowline Point generating
station were hauled and disposed of by Marvin Jonas, Inc. in
1974. The Company owns a two-thirds interest in Bowline Point.
O&R, which operates Bowline Point, owns the remaining one-third
interest. Bowline Point liabilities are shared by the Company
and O&R in accordance with their respective ownership interests.
The EPA has commenced cleanup of this site and the total site
cleanup cost is estimated at $150 million. Assuming that all of
the Bowline wastes alleged to have been disposed of at the site
were so disposed of, they represent about 0.4% of the total
volume of waste-in at the site. On this basis, the Company's
share of the cleanup cost is estimated at $400,000.
GLOBAL LANDFILL SITE. The Company has been designated a PRP
under Superfund and the New Jersey Spill Compensation and Control
Act (Spill Act) for the study and cleanup of the Global Landfill
Site in Old Bridge, New Jersey. This 65-acre municipal and
industrial waste landfill is included on the Superfund National
Priorities List and is being administered by the New Jersey
Department of Environmental Protection and Energy (NJDEPE)
pursuant to an agreement between the EPA and the State of New
Jersey.
The Company provided EPA with records indicating that it had
disposed of approximately ten cubic yards of waste asbestos at
the site in February 1984. In August 1989, the NJDEPE served the
Company with a Spill Act directive that required the Company and
40 other PRPs to fund a $1.5 million remedial investigation and
feasibility study for the site. A PRP Group was formed and the
Group entered into a settlement agreement and an administrative
consent order with NJDEPE that, among other things, required the
PRP Group's members to contribute $500,000 towards the cost of
the study. The Company's share of the PRP Group's payment to the
NJDEPE was $5,000.
In February 1991, the EPA and the NJDEPE proposed a $30
million interim remedy for the site. This remedy calls for the
installation of gas and leachate collection and treatment systems
at the landfill and the construction of an impervious cover over
the landfill (Phase I). It also calls for further studies to
determine the alternatives for addressing groundwater and
wetlands contamination in the vicinity of the landfill (Phase
II). In March 1991, the NJDEPE served the Company with a second
Spill Act Directive that requires the Company and the other
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<PAGE> - 35 -
members of the PRP Group to pay for the implementation of the
Phase I remedy for the site. The PRP Group negotiated a
settlement of this directive with the NJDEPE and the Company's
share of the cost is estimated at $150,000.
CHEMSOL SITE. By letter dated December 20, 1991, the EPA
advised the Company that it had documented the release of
hazardous substances at the Chemsol Site in Piscataway, New
Jersey and that it had reason to believe that the Company sent
waste materials to the site during the 1960 to 1965 period. In
response to EPA's demand for records, including any relating to
Cenco Instruments Corp., the Company submitted to EPA records of
payments to Central Scientific Company, a Division of Cenco
Instruments Corp. during the 1960-1965 period. The Company is
unable at this time to determine either the purpose of the
payments to Central Scientific Company or the connection of that
company to the site. The EPA has not designated the Company as a
PRP and has not yet selected a final cleanup program for the
site. However, the EPA has selected an interim remedy, expected
to cost about $8 million, for the site groundwater contamination
and has ordered several designated PRPs to implement that remedy.
ECHO AVENUE SITE. In December 1987, the DEC classified the
Company's former Echo Avenue Substation Site in New Rochelle, New
York as an "Inactive Hazardous Waste Disposal Site." The basis
for this classification was the presence of PCBs in the soil and
in the buildings on the site. Although the Company has cleaned
up the PCBs on the site, the DEC requires a thorough site survey
before it will remove the site from the Inactive Hazardous Waste
Disposal Site list. Under a consent order with the DEC a new
site survey was done and remedial action taken. The cost to the
Company of this additional work was $213,000. The Company
intends to demolish its building on this site, and expects to
incur approximately $1 million in additional clean up expenses.
In January 1992, the owners of Echo Bay Marina filed suit in
Federal court alleging that PCBs were being discharged from the
Echo Avenue site into Long Island Sound. Plaintiffs are seeking
a declaration that the Company is in violation of the Clean Water
Act, civil penalties of $25,000 per day for each violation,
remediation costs, an injunction against further discharges,
legal fees, and compensatory damages of $24 million. In December
1994, the court dismissed plaintiffs claims for property damage,
including loss of business. Pretrial discovery on the remaining
claims is continuing.
C&D RECYCLING SITE. On July 13, 1992, the Company received
a letter from the EPA stating that it is a PRP with respect to
the C&D Recycling site located in Foster Township, Luzerne
County, Pennsylvania. In 1979, the Company retained C&D
Recycling Company to recover copper and lead from a shipment of
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30,560 pounds of scrap electric cable. It appears that the bulk
of the scrap cable sent to this site was generated by AT&T Nassau
Metals, a subsidiary of AT&T. The total cleanup cost is
estimated at $12.5 million. In March 1995, the EPA advised the
Company, that based on the information currently available to it,
the Company is responsible for 0.0297% of the scrap cable at this
site. The EPA has offered to negotiate with the Company and
other de minimis PRPs to settle their liability for this site.
PCB TREATMENT, INC., SITES. On September 30, 1994, the
Company received a letter from the EPA indicating that it had
been identified as a PRP for the PCB Treatment, Inc. ("PTI")
Sites in Kansas City, Kansas and Kansas City, Missouri. The
sites--a vacant, five-story building at 45 Ewing Street (K.C.,
Kansas) and a partially-occupied, seven-story building at 2100
Wyandotte Street (K.C., Missouri)-- were used by PTI from 1982
until 1987 for the storage, processing, and treatment of PCB-
containing electric equipment, dielectric oils, and materials.
According to the EPA, the buildings' floor slabs and ceilings and
the soil areas outside the buildings' loading docks are
contaminated with PCBs.
On October 21, 1994, the EPA held a PRP meeting for the
sites and requested the PRPs to form a steering committee and to
consider conducting a cleanup program for the sites under the
auspices of the Toxic Substances Control Act, or failing that,
performing a Superfund cleanup for the sites. At the meeting,
the EPA provided the Company with waste manifests and other
documents indicating that the Company was responsible for 141,090
pounds (about 0.7%) of the approximately 20.3 million pounds of
PCB-containing equipment, oil, and materials that were shipped to
the 2100 Wyandotte Street Site. The EPA has not yet completed
compiling the waste manifests and shipment records for the 45
Ewing Street Site. The PRPs are attempting to organize for the
purpose of developing and implementing acceptable cleanup
programs for the sites. Efforts are also being made to elicit
the participation of various federal agencies, which in the
aggregate are responsible for about 5.7 million pounds of the
PCB-containing equipment, oil, and materials that were shipped to
the 2100 Wyandotte Street Site.
PELHAM MANOR SITE. Prior to 1968, the Company and its
predecessor companies operated a manufactured gas plant (MGP) on
a site located in Pelham Manor, Westchester County. Soil and
groundwater tests by the current owners and lessees indicate the
presence of hazardous substances which are associated with the
MGP process. The Company has agreed to participate with the site
owners and lessees in further site studies to develop and
implement a cleanup plan that will be acceptable to the DEC.
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ASTORIA SITE. The Federal Resource Conservation and
Recovery Act delegates to the states licensing authority for PCB
storage. As a condition to renewal by the DEC of the Company's
permit to store PCBs at the Company's Astoria generating station,
the Company is required to conduct a site investigation and,
where necessary, a remediation program. The site investigation
commenced in April 1994 and will continue through 1995. The cost
of the investigation is estimated at $2 million. The extent and
cost of the remediation program will depend on the results of the
investigation.
HUNTS POINT SITE. In September 1994, the City of New York
notified the Company that it had discovered coal tar on the site
of a former Company manufactured gas plant in the Hunts Point
section of the Bronx. The Company had manufactured gas at that
location prior to its sale of the site to the City in the 1960s.
The Company has agreed to conduct a site study and to develop and
implement a remediation program. However, the Company has not
agreed to pay costs not associated with the Company's use of the
site. The Company is unable at this time to estimate its
exposure to liability with respect to this site.
TOXIC SUBSTANCES CONTROL ACT
In November 1994, BCF Oil Refining, Inc., a processor and
re-refiner of used oil products and waste containing oil, brought
suit in federal court against the Company and four transporters
of waste oil products alleging that the defendants (primarily the
Company) caused PCB contaminated waste to be shipped to BCF
thereby contaminating its facilities. In addition to the
remediation of BCF's facilities under the Federal Toxic
Substances Control Act, the suit seeks compensatory damages of
not less than $12.5 million from all the defendants and
additional punitive damages of not less than $12.5 million from
the Company. Pre-trial discovery began in January 1995 and
should continue into 1996.
GRAMERCY PARK
On August 19, 1989, a Company steam main exploded in the
Gramercy Park area of Manhattan, releasing debris containing
asbestos into that area. The Company took responsibility for the
asbestos cleanup and most of the cost of that cleanup was covered
by the Company's insurance.
A Federal Grand Jury in the Southern District of New York
issued an indictment in December 1993, which was superseded by an
indictment issued in April 1994, charging the Company and two of
its retired employees with criminal acts relating to the
reporting of the release of asbestos from the steam main
explosion. The April 1994 indictment contained eight counts.
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On October 31, 1994, the Company pled guilty to four counts
of the eight count indictment. Sentencing is expected on March
31, 1995, at which time a fine of up to $500,000 on each of the
four counts, and up to five years probation, could be imposed.
DEC PROCEEDING
For information about this proceeding, see "Environmental
Matters - DEC Settlement" in Note F to the financial statements
in Item 8 and "Results of Operation - Other Operations and
Maintenance Expenses" in Item 7.
ASBESTOS LITIGATION
For a discussion of asbestos and suits against the Company
involving asbestos, see "Environmental Matters and Related Legal
Proceedings - Asbestos" in Item 1, and "Environmental Matters -
Asbestos Claims" in Note F to the financial statements in Item 8.
The following is a discussion of the significant suits involving
asbestos in which the Company has been named a defendant. The
listing is not exhaustive and additional suits may arise in the
future.
MASS TORT CASES. Numerous suits have been brought in New
York State and Federal courts against the Company and many other
defendants for death and injuries allegedly caused by exposure to
asbestos at various Company premises. Many of these suits have
been disposed of without any payment by the Company, or for
immaterial amounts. The amounts specified in the remaining
suits, including the Moran v. Vacarro suit and the United States
of America v. Con Edison suit discussed below, total billions of
dollars, but the Company believes that these amounts are greatly
exaggerated, as were the claims already disposed of.
MORAN, ET AL. V. VACARRO, ET AL. On May 9, 1988, the
Company was served with a complaint in an action in the New York
State Supreme Court, New York County, in which approximately 184
Company employees and their union alleged that the employees were
exposed to dangerous levels of asbestos as a result of alleged
intentional conduct of supervisory employees. Each of the
employee plaintiffs seeks $1 million in punitive damages,
unspecified additional compensatory damages, and to enjoin the
Company from violating EPA regulations and exposing employees to
asbestos without first taking certain safety measures. On May
16, 1988, the complaint was amended to add a claim by each
employee plaintiff for $1 million in damages for mental distress.
In November 1988, the complaint was amended to add four
additional employee plaintiffs. On July 9, 1990, the complaint
was amended to add the spouses of 131 plaintiffs as additional
plaintiffs and to remove the union as a plaintiff. Each spouse
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<PAGE> - 39 -
seeks medical monitoring, $1 million for emotional distress and
$1 million for punitive damages. On January 19, 1995, the court
dismissed the claims of the employee plaintiffs, leaving employee
spouses as the only plaintiffs.
UNITED STATES OF AMERICA V. CON EDISON. This suit was
commenced on March 7, 1994 by the United States in the United
States District Court for the Southern District of New York. The
complaint alleges that the Company violated hazardous emissions
provisions of the Federal Clean Air Act in connection with
asbestos removal activities at the Company's Waterside generating
station during 1989. The complaint seeks civil penalties of
$25,000 per day per violation and injunctive relief. The Company
has entered into a consent decree with the Federal government
under which the Company will pay $100,000 to settle this action.
The consent decree is subject to court approval.
RATE PROCEEDINGS
For information concerning proceedings relating to the
Company's rates, see "Regulation and Rates" in Item 1.
NUCLEAR FUEL DISPOSAL
Reference is made to the information under the caption
"Liquidity and Capital Resources - Nuclear Fuel Disposal" in Item
7 for information concerning a suit brought by the Company and a
number of other utilities against the United States Department of
Energy. The suit is entitled Northern States Power Co., et al.
v. Department of Energy, et al.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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EXECUTIVE OFFICERS OF THE REGISTRANT
The names of the executive officers of the Company together
with their ages and the positions and offices with the Company
held by them as of March 1, 1995, the respective dates they
became executive officers and their business experience during
the past five years (or since they became executive officers, if
earlier) are set forth below. Under the Company's By-laws,
officers of the Company are elected to hold office until the next
election of Trustees (directors) of the Company and until their
respective successors are chosen and qualify, subject to removal
at any time by the Company's Board of Trustees.
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an
and Date First Became an Executive Officer,
Executive Officer If Longer
Eugene R. McGrath - 53 9/90 to present - Chairman of
Chairman of the Board, the Board, President, Chief
President, Chief Executive Executive Officer and Trustee
Officer and Trustee; 2/89 to 8/90 - President, Chief
9/1/78 Operating Officer and Trustee
10/87 to 1/89 - Executive Vice
President - Operations and
Trustee
9/82 to 9/87 - Executive Vice
President - Central Operations
3/81 to 8/82 - Senior Vice
President - Power Generation
9/78 to 2/81 - Vice President
- Power Generation
Raymond J. McCann - 60 2/89 to present - Executive Vice
Executive Vice President President and Chief Financial
and Chief Financial Officer, and Trustee
Officer, and Trustee; 10/87 to 1/89 - Executive Vice
5/15/72 President, Finance and Law, and
Trustee
8/80 to 9/87 - Executive Vice
President - Division Operations
6/77 to 8/80 - Vice President
- Manhattan Division
6/76 to 5/77 - Vice President
- Accounting and Treasury
3/74 to 5/76 - Controller
5/72 to 3/74 - General Auditor
<PAGE>
<PAGE> - 41 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
J. Michael Evans - 49 9/91 to present - Executive Vice
Executive Vice President President - Central Operations
- Central Operations; 7/89 to 8/91 - Senior Vice
9/1/91 President and Chief Operating
Officer - Kansas City Power and
Light
Charles F. Soutar - 58 2/89 to present - Executive Vice
Executive Vice President President - Customer Service
- Customer Service; 3/85 to 1/89 - Executive Vice
9/1/77 President - Central Services
5/80 to 2/85 - Senior Vice
President - Construction,
Engineering and Environmental
Affairs
9/77 to 4/80 - Vice President
- Central Services
Stephen B. Bram - 52 12/94 to present - Senior Vice
Senior Vice President; President
8/1/79 9/94 to 11/94 - Vice President
12/87 to 8/94 - Vice President
- Nuclear Power
9/82 to 11/87 - Vice President
- Fossil Power
7/80 to 8/82 - Vice President
- Central Substation, Systems
Operations and Technical
Services
8/79 to 6/80 - Vice President
- Central Substation and
System Operations
Thomas J. Galvin - 56 2/93 to present - Senior Vice
Senior Vice President President - Central Services
- Central Services; 6/89 to 1/93 - Senior Vice
6/1/78 President - Administration
8/86 to 5/89 - Vice President
- Employee Relations
3/83 to 7/86 - Vice President
- Purchasing
6/78 to 2/83 - General Auditor
<PAGE>
<PAGE> - 42 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
Carl W. Greene - 59 9/94 to present - Senior Vice
Senior Vice President President - Financial and
- Financial and Regulatory Regulatory Matters
Matters; 7/92 to 8/94 - Senior Vice
6/1/76 President - Accounting and
Treasury
6/82 to 6/92 - Vice President and
Controller
6/76 to 5/82 - Controller
Edward W. Livingston - 63 9/92 to present - Senior Vice
Senior Vice President President
3/1/79 6/89 to 8/92 - Senior Vice
President - Public Affairs
3/79 to 5/89 - Vice President
- Government & Community
Relations
Mary Jane McCartney - 46 10/93 to present - Senior Vice
Senior Vice President President - Gas Operations
- Gas Operations; 2/93 to 10/93 - Vice President
12/1/90 - Gas Supply
7/92 to 1/93 - Vice President
- Gas Business Development
12/90 to 6/92 - Vice President
- Queens
2/89 to 11/90 - Assistant Vice
President - Environmental
Affairs and Fuel Supply
Horace S. Webb - 54 9/92 to present - Senior Vice
Senior Vice President President - Public Affairs
- Public Affairs; 1/90 to 8/92 - Vice President
9/1/92 - Communications and Public
Affairs, Hoechst Celanese
Corp.
T. Bowring Woodbury, II - 57 6/89 to present - Senior Vice
Senior Vice President President and General Counsel
and General Counsel;
6/1/89
<PAGE>
<PAGE> - 43 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
Archie M. Bankston - 57 6/89 to present - Secretary and
Secretary and Associate Associate General Counsel
General Counsel; 1/74 to 5/89 - Secretary and
1/7/74 Assistant General Counsel
John F. Cioffi - 61 7/92 to present - Treasurer
Treasurer; 6/87 to 6/92 - Assistant Vice
7/1/92 President
Lawrence F. Travaglia - 56 3/93 to present - General Auditor
General Auditor; 10/80 to 2/93 - Assistant
3/1/93 Treasurer
Robert A. Bell - 61 6/81 to present - Vice President
Vice President - Research & Development
Research & Development;
6/1/81
Arthur J. Bennett - 59 3/93 to present - Vice President
Vice President - Brooklyn Customer Service
- Brooklyn Customer 6/91 to 2/93 - Vice President
Service; - Transportation & Stores
3/1/83 3/83 to 6/91 - Vice President
- Bronx Division
David G. Bosland - 58 6/91 to present - Vice President
Vice President - Staten Island Customer Service
- Staten Island 3/83 to 6/91 Vice President
Customer Service; - Transportation & Stores
3/1/83
Kevin M. Burke - 44 3/93 to present - Vice President
Vice President - Corporate Planning
- Corporate Planning; 3/90 to 2/93 - Vice President
12/1/87 - Brooklyn Customer Service
12/87 to 2/90 - Vice President
- Construction
<PAGE>
<PAGE> - 44 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
Richard P. Cowie - 48 3/94 to present - Vice President
Vice President - Employee Relations
- Employee Relations; 2/91 to 2/94 - Director - Central
3/1/94 Customer Service
9/90 to 1/91 - Assistant to the
Executive Vice President -
Customer Service
9/86 to 8/90 - Director - Credit
& Collections
Robert F. Crane - 58 3/94 to present - Vice President
Vice President - Fuel Supply
- Fuel Supply; 10/93 to 2/94 - Vice President
12/1/82 - Gas Supply
2/93 to 10/93 - Vice President
- Gas Business Development
4/91 to 1/93 - Vice President
- Gas Supply
12/84 to 3/91 - Vice President
- Manhattan Division
12/82 to 11/84 - Vice President
- Queens Division
George J. Delaney - 59 12/78 to present - Vice President
Vice President - Westchester Customer Service
- Westchester 9/74 to 11/78 - Vice President
Customer Service; - Bronx Division
5/28/74 5/74 to 8/74 - Vice President
- Staten Island Division
Robert W. Donohue, Jr. - 52 2/94 to present - Vice President
Vice President - Queens Customer Service
- Queens Customer Service; 3/90 to 1/94 - Vice President
3/1/90 - Construction
12/84 to 2/90 - Assistant Vice
President - Electrical
Distribution
Charles J. Durkin, Jr. - 51 12/93 to present - Vice President
Vice President - Fossil Power
- Fossil Power; 1/88 to 12/93 - Vice President
9/1/82 - Engineering
9/82 to 12/87 - Vice President
- System and Transmission
Operations
<PAGE>
<PAGE> - 45 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
Jacob Feinstein - 51 4/91 to present - Vice President
Vice President - System & Transmission
- System & Transmission Operations
Operations; 12/88 to 3/91 - Plant Manager
4/1/91
Joan S. Freilich - 53 9/94 to present - Vice President,
Vice President, Controller Controller and Chief Accounting
and Chief Accounting Officer
Officer; 7/92 to 8/94 - Vice President
12/1/90 and Controller
12/90 to 6/92 - Vice President -
Corporate Planning
12/89 to 11/90 - Assistant Vice
President - Corporate Planning
David F. Gedris - 46 2/94 to present - Vice President
Vice President - Maintenance and Construction
- Maintenance and 7/92 to 1/94 - Assistant Vice
Construction; President - Power Generation
2/1/94 Maintenance
3/90 to 6/92 - Assistant Vice
President - Steam Operations
11/89 to 2/90 - Project Manager
- Steam Operations
Garrett W. Groscup - 54 2/94 to present - Vice President
Vice President - Energy Services
- Energy Services; 4/91 to 1/94 - Vice President
12/1/82 - Manhattan Customer Service
1/88 to 3/91 - Vice President
- System & Transmission
Operations
12/82 to 12/87 - Vice President
- Engineering
William A. Harkins - 49 2/89 to present - Vice President
Vice President - Planning and Inter-Utility
- Planning and Inter- Affairs
Utility Affairs;
2/1/89
<PAGE>
<PAGE> - 46 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
Paul H. Kinkel - 50 12/93 to present - Vice President
Vice President - Engineering
- Engineering; 12/87 to 12/93 - Vice President
5/24/83 - Fossil Power
5/83 to 11/87 - Vice President
- Construction
Laurence V. Kleinman - 52 9/86 to present - Vice President
Vice President - Corporate Communications and
- Corporate Communications Public Information
and Public Information;
9/1/86
John A. Nutant - 59 2/94 to present - Vice President
Vice President - Manhattan Customer Service
- Manhattan 7/92 to 1/94 - Vice President
Customer Service; - Queens Customer Service
5/27/80 9/86 - 6/92 - Vice President
- Purchasing
7/80 to 8/86 - Vice President -
Environmental Affairs
5/80 to 6/80 - Vice President
James P. O'Brien - 47 3/94 to present - Vice President
Vice President - Information Resources
- Information Resources; (formerly Systems and
3/1/94 Information Processing)
6/89 to 2/94 - Assistant Vice
President - Employee Relations
Stephen E. Quinn - 48 9/94 to present - Vice President
Vice President - Nuclear Power
- Nuclear Power; 8/88 to 8/94 - General Manager
9/1/94 - Nuclear Power Generation
Edwin W. Scott - 56 6/89 to present - Vice President
Vice President and Deputy and Deputy General Counsel
General Counsel;
6/1/89
Minto L. Soares - 58 6/91 to present - Vice President
Vice President - Bronx Customer Service
- Bronx Customer Service; 11/88 to 5/91 - Plant Manager
6/1/91
<PAGE>
<PAGE> - 47 -
Business Experience
Name, Age, Positions and During the Past Five Years
Offices with the Company or Since Becoming an,
and Date First Became an Executive Officer,
Executive Officer If Longer
Alfred R. Wassler - 50 3/94 to present - Vice President
Vice President - Purchasing, Transportation
- Purchasing, Trans- and Stores
portation and Stores; 7/92 to 2/94 - Vice President
8/15/80 - Purchasing
8/80 to 6/92 - Treasurer
<PAGE>
<PAGE> - 48 -
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
The Company's Common Stock ($2.50 par value) is the only class of
common equity of the Company. The Common Stock is traded on the
New York, Chicago and Pacific Stock Exchanges.
<TABLE>
MARKET PRICE RANGE IN CONSOLIDATED REPORTING SYSTEM AND DIVIDENDS PAID ON COMMON STOCK
1994 1993
------------------------------ ----------------------------
Dividends Dividends
High Low Paid High Low Paid
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1st Quarter $32-3/8 $28-3/8 $.50 $35-7/8 $31-1/2 $.48-1/2
2nd Quarter 31-3/8 25-3/4 .50 37-3/8 32-1/2 .48-1/2
3rd Quarter 29-7/8 23 .50 37-3/4 35-1/8 .48-1/2
4th Quarter 27-1/8 24-1/8 .50 36-3/8 30-1/4 .48-1/2
As of January 31, 1995 there were 159,139 holders of record of common stock.
===============================================================================================
</TABLE>
On January 24, 1995, the Board of Trustees of the Company
declared a quarterly dividend of 51 cents per share of Common
Stock payable on March 15, 1995 to holders of record on February
15, 1995.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
===============================================================================================
Year Ended December 31 (Millions of Dollars) 1994 1993 1992 1991 1990
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating revenues $ 6,371.1 $ 6,265.4 $ 5,932.9 $ 5,873.1 $ 5,738.9
Fuel 567.8 605.2 710.3 879.4 997.6
Purchased power 787.5 812.6 606.8 561.2 437.4
Gas purchased for resale 341.2 289.7 245.2 223.4 254.2
Operating income 1,036.2 951.1 880.4 813.1 800.8
Net income for common stock 698.7 622.9 567.7 530.1 534.4
Total assets 13,728.4* 13,257.4* 11,596.1 11,107.9 10,685.6
Long-term obligations
Long-term debt 4,030.5 3,643.9 3,493.6 3,364.8 3,312.7
Capitalized leases 47.8 50.4 52.9 55.5 58.0
Preferred stock subject to
mandatory redemption 100.0 100.0 100.0 41.3 43.5
Common shareholders' equity 5,313.0 5,068.5 4,886.9 4,608.3 4,502.1
-----------------------------------------------------------------------------------------------
Per common share:
Net income $2.98 $2.66 $2.46 $2.32 $2.34
Cash dividends $2.00 $1.94 $1.90 $1.86 $1.82
-----------------------------------------------------------------------------------------------
Average common shares
outstanding (millions) 234.8 234.0 231.1 228.3 228.2
===============================================================================================
*Includes $1,106.0 million and $1,150.6 million for 1994 and 1993, respectively, of Regulatory
Assets attributable to the adoption of SFAS 109. Equal amounts of Accumulated Deferred Federal
Income Tax have been established. See Notes A and G to the financial statements in Item 8.
</TABLE>
<PAGE>
<PAGE> - 49 -
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
SOURCES OF LIQUIDITY. Cash and temporary cash investments were
$245.2 million at December 31, 1994 compared with $36.8 million
at December 31, 1993 and $282.5 million at December 31, 1992. The
Company's cash balances reflect, among other things, the timing
and amounts of external financing.
In the first quarter of 1994, pursuant to its amended dividend
reinvestment plan, the Company issued 478,016 shares of common
stock for $14.7 million. The Company amended the plan in 1993 to
permit, at the option of the Company, the sale of new shares or
the purchase in the market of outstanding shares.
In February 1994 the Company issued $150 million of 35-year
debentures. In July 1994 the Company issued $150 million of
five-year floating rate debentures; the interest rate is reset
quarterly, based on the addition of 0.1875 percent to the
three-month LIBOR (London Interbank Offered Rate). In December
1994 the Company issued $100 million of 35-year tax-exempt debt
through the New York State Energy Research and Development
Authority (NYSERDA). The balance of 1994 capital requirements was
met from internally generated funds.
In April 1993 the Company issued $101 million of 35-year
tax-exempt debt through NYSERDA. The Company issued 373,227
shares of common stock in December 1993 for $11.9 million
pursuant to the Company's amended dividend reinvestment plan.
In June 1993 the Company issued $380 million of 30-year
debentures of which approximately $80 million was used to meet
1993 capital requirements and the balance was used to retire
higher-cost debt securities. Declining interest rates during 1992
and 1993 provided the Company an opportunity to reduce costs by
redeeming outstanding securities in advance of maturity dates and
replacing them with new securities bearing lower interest or
dividend rates. The Company retired all or part of 16 series of
securities totaling more than $1.7 billion, replacing them with
16 new series of debt and preferred stock. These refundings
produced aggregate first-year savings in interest and preferred
dividends of about $22 million, with continued savings in
subsequent years.
In 1992 the Company issued $200 million of 35-year tax-exempt
debt and $100 million of 35-year taxable debentures. In 1992 the
Company issued 5,550,000 shares of common stock for $156.8
million.
<PAGE>
<PAGE> - 50 -
The Company's cash requirements are subject to substantial
fluctuations during the year due to seasonal variations in cash
flow and peak in January and July of each year when the
semi-annual payments of New York City property taxes are due.
In 1994, 1993 and 1992 the Company borrowed from banks for
short periods. For 1995 the Company has arranged for bank credit
lines amounting to $150 million. Borrowings thereunder would bear
interest at prevailing market rates.
Customer accounts receivable, less allowance for uncollectible
accounts, amounted to $440.5 million, $459.3 million and $424.3
million at December 31, 1994, 1993 and 1992, respectively. In
terms of equivalent days of revenue outstanding, these amounts
represented 27.1, 27.6 and 26.7 days, respectively.
Regulatory accounts receivable, amounting to $26.3 million,
$97.1 million and $167.9 million at December 31, 1994, 1993 and
1992, respectively, include accruals under the three-year
electric rate agreement effective April 1, 1992 for differences
in electric sales revenues from forecast levels (the "ERAM"
accrual), incentives and "lost revenues" related to the Company's
Enlightened Energy program, incentives related to customer
service activities and savings achieved in fuel and purchased
power costs below target levels. Regulatory accounts receivable
are further described in Note A to the financial statements in
this report.
The following is a summary of the balances and activity in
regulatory accounts receivable in 1994:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Balance Balance
Dec. 31, 1994 1994 Dec. 31,
(Millions of Dollars) 1993 Accruals Billings 1994
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ERAM $36.2 $(63.7) $ (28.9) $ (56.4)
Incentives
Enlightened Energy program 42.4 77.8 (50.1) 70.1
Customer service 6.4 6.8 (6.5) 6.7
Fuel and purchased power 9.8 31.8 (35.7) 5.9
Lost revenues relating to
Enlightened Energy program 2.3 -- (2.3) --
-----------------------------------------------------
Total $97.1 $ 52.7 $(123.5) $ 26.3
----------------------------------------------------------------------------------
</TABLE>
The balance in regulatory accounts receivable at December 31,
1994 will be billed to customers during 1995 and 1996. The
incentives are discussed below under "1992 Electric Rate
Settlement Agreement."
<PAGE>
<PAGE> - 51 -
Deferred charges for Enlightened Energy program costs amounted
to $170.2 million, $140.1 million and $80.8 million at December
31, 1994, 1993 and 1992, respectively. These costs are being
recovered in rates, as discussed below under "1992 Electric Rate
Settlement Agreement."
The Company's earnings include an allowance for funds used
during construction which, as a percent of net income for common
stock, was 1.7 percent in 1994 and 1993, and 2.4 percent in 1992.
Interest coverage on the SEC book basis was 4.58, 4.19 and
3.93 times for 1994, 1993 and 1992, respectively. The improvement
in interest coverage in 1994 and 1993 was due to debt refundings
and increased earnings. The Company's interest coverage continues
to be high compared with the electric utility industry generally.
The Company's senior debt (first mortgage bonds) is rated Aa2
by Moody's Investors Service and AA- by Standard & Poor's. In
September 1994, following the filing by the New York State Public
Service Commission's (PSC) staff of its recommendations with
respect to the Company's 1994 electric rate filing, discussed
below, Moody's placed its rating of the Company under review for
possible downgrade and Standard & Poor's placed its rating of the
Company on CreditWatch with negative implications.
Cash flows from operating activities for years 1992 through
1994 were as follows:
-----------------------------------------------------------------
(Millions of Dollars) 1994 1993 1992
----------------------------------------------------------------
Net cash flows from
operating activities $1,250 $1,025 $ 962
Less: Dividends on common
and preferred stock 505 490 475
-----------------------
Net after dividends $ 745 $ 535 $ 487
-----------------------------------------------------------------
Net cash flows in 1994 were favorably affected by incentive
billings of $92.3 million, ERAM billings of $28.9 million, and
labor productivity improvements resulting in costs estimated to
be approximately $51 million less than reflected in rates. Net
cash flows in 1993 were favorably affected by incentive billings
of $47.5 million, ERAM billings of $104.8 million, and labor
productivity improvements resulting in costs estimated to be
approximately $29 million less than reflected in rates. Such
amounts in 1995 are expected to be lower than in 1994. See the
table on the preceding page for balances in regulatory accounts
receivable at December 31, 1994 to be billed to customers in
future periods.
<PAGE>
<PAGE> - 52 -
CAPITAL REQUIREMENTS. The following table compares the Company's
capital requirements for the years 1992 through 1994 and
estimated amounts for 1995 and 1996:
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------
(Millions of Dollars) 1996 1995 1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Construction expenditures $713 $730 $ 758 $ 789 $ 795
Enlightened Energy program costs less recoveries (a) (20) (4) 30 59 21
Power contract termination costs - net (b) (26) (21) 62 68 -
Nuclear decommissioning trust (b) (c) 21 19 15 19 7
Nuclear fuel 59 11 47 14 35
Investment in gas marketing subsidiary 11 11 7 1 -
--------------- ---------------------------------
Subtotal 758 746 919 950 858
Retirement of long-term debt
and preferred stock (d) 184 11 134 178 257
--------------- ---------------------------------
Total $942 $757 $1,053 $1,128 $1,115
------------------------------------------------------------------------------------------------------------
</TABLE>
(a) See discussion below of electric rate agreements.
(b) Assumes recovery as proposed by the Company of the portion of these costs
not already in rates. See "1994 Electric Rate Increase Filing," below.
(c) See Note A to the financial statements for discussion of nuclear
decommissioning costs.
(d) Does not include refundings in advance of maturity. For details of
securities maturing after 1996, see Note B to the financial statements.
The Company expects to finance its capital requirements,
including amounts for maturing securities, for 1995 and 1996 from
internally generated funds and external financings of about $400
million, most, if not all, of which would be debt issues.
In 1995 and 1996 the Company may, from time to time, make
short-term borrowings.
<PAGE>
<PAGE> - 53 -
ELECTRIC CAPACITY RESOURCES. Electric energy sales in the
Company's service area increased, after adjustment for
variations, principally weather, by 1.5 percent in 1994 and 1.0
percent in 1993. However, electric peak load growth in the
Company's service area continues at approximately 50 megawatts
(MW), or about one-half of one percent, per year. The low growth
in peak load is largely a result of the Company's Enlightened
Energy program, introduced in 1990, which helps our customers
purchase and install energy-efficient equipment and encourages
the efficient use of energy resources. This program has been
modified for future years, based on the Company's experience to
date, so as to obtain the same energy efficiency benefits at
lower program costs.
In response to federal and state regulatory policies and
requirements for utilities to contract with independent power
producers (IPPs), the Company by December 1992 had entered into
contracts for the supply of approximately 2,700 MW of capacity
from facilities of IPPs scheduled to come into service in the
1990s. Plants with 1,670 MW of such capacity are in commercial
operation, and the related charges are reflected in the Company's
rates. Most of the balance of the IPP capacity (net of the
terminations discussed below) is expected to be in operation in
1995. See "1994 Electric Rate Increase Filing," below.
Because of a decline in peak load growth rates and changing
conditions in the marketplace, the need for long term power
contracts is continuing to be re-evaluated. Excess generating
capacity is projected for the Northeast and the market price of
power has decreased significantly. Over the past two years, the
Company has entered into agreements for the termination of
several IPP contracts involving approximately 720 MW at a cost of
$211 million (exclusive of interest) to be paid over a period of
several years. The Company expects to recover these termination
costs from its electric customers and most of these costs are
already reflected in rates. See "1994 Electric Rate Increase
Filing," below. The Company's electric customers are expected to
realize a savings, net of the termination costs, of about $2
billion over the life of the contracts, based on current
estimates of future market prices for power.
<PAGE>
<PAGE> - 54 -
On May 31, 1994 the Company gave notice of termination to the
New York Power Authority (NYPA) with respect to a 20-year
contract for the purchase of 780 MW from Hydro-Quebec. Initial
deliveries were to begin in April 1999. The terms of the
contract, which the Company had entered into in February 1990,
had become uneconomic compared to power available in the electric
marketplace. The Company is exploring with Hydro-Quebec an
extension of its existing summer diversity contract, set to
expire in 1998, for a period of up to five years. Under the
current contract, the Company purchases 780 MW of capacity and
associated energy from Hydro-Quebec during the summer months.
Based on current resource planning, the Company does not
expect to add any long-term capacity resources to its system
during the next twenty years.
COMPETITION. No federal or New York State law presently requires
the Company to permit other sellers of electricity to use the
Company's facilities to make sales to the Company's retail
customers in New York City and Westchester County. However, in
recent years, federal and New York State legislation have
promoted the development of non-utility electric generating
capacity and competition at the wholesale level for electric
capacity and energy sales. A number of states, including New
York, are now considering whether to require electric utilities
to deliver electricity from other sellers directly to electricity
consumers, referred to as "retail wheeling."
The most likely targets for retail wheeling are large
industrial customers and, to a lesser extent, governmental
customers. Almost all of the Company's customers are residential
or commercial, with sales to industrial customers comprising less
than 3 percent of the Company's 1994 electric sales. Most
governmental customers in the Company's service area are, and for
many years have been, served by the NYPA. If retail wheeling were
permitted, the Company's large-usage commercial customers also
might be targets. In any case, competition would be mitigated by
the limited transmission capacity of the existing facilities for
importing power and energy into the Company's service area.
Nevertheless, in a competitive environment, the Company would be
disadvantaged by the relatively high cost of its in-City
generating facilities and the Company's substantial commitments
under its IPP contracts. These contracts extend for various
periods, up to 2034. The Company estimates that during the next
five years under the IPP contracts relating to the 1,670 MW of
capacity already in commercial operation, it will be obligated
(assuming performance by the IPPs) to make annual
capacity-related payments of approximately $180 million. In
addition to these capacity payments, one of these contracts
<PAGE>
<PAGE> - 55 -
requires the Company (assuming performance by the IPP) to make
payments for energy during the next five years which will be
about $170 million per year higher priced than the Company's
alternative sources of energy.
The Company's strategy for dealing with competition includes
ongoing cost reduction, increased productivity, pursuit of growth
opportunities and strengthening of customer relations by
providing value-added services. Another major element of the
strategy which the Company is promoting with government and
regulators is a "level playing field" on which the Company could
compete without unfair burdens of regulation or taxation. For
example, taxes other than federal income taxes represent 21 cents
of every dollar the Company bills customers, and one of the
Company's largest operating expenses.
The PSC is conducting a generic "competitive opportunities"
proceeding to investigate the potential impact of competition on
the State's utilities, as well as the appropriate regulatory
response to such competition. Among the issues being considered
are the current vertically integrated structure of the industry,
and the extent to which, in a competitive environment, rate
regulation should continue to assure recovery of all costs
prudently incurred. If the outcome of this proceeding were to
adversely affect the eligibility of New York electric utilities
to apply Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation,"
significant write-downs of assets could be required.
In January 1995 a new State administration took office. It is
not known what effect, if any, this change in administration will
have on State regulatory policy.
1992 ELECTRIC RATE SETTLEMENT AGREEMENT. On April 1, 1992 the PSC
approved an electric rate agreement covering the three-year
period April 1, 1992 through March 31, 1995. The principal
features of the agreement and subsequent developments are as
follows:
Rate Increases. Annual electric rates were increased by $250.5
million (5.0 percent) in April 1992, by $251.2 million (5.0
percent) in April 1993 and by $55.2 million (1.1 percent) in
April 1994. The increase in April 1993 included $138.4 million
for recovery of accrued ERAM amounts. The increase in April 1994
reflects a return to customers of $6.0 million under ERAM
procedures.
<PAGE>
<PAGE> - 56 -
Rate of Return and Equity Ratio. The agreement provides a rate of
return on common equity of 11.50 percent for the first rate year
and 11.60 percent for the second and third rate years, based on a
common equity ratio of 52 percent. In order to settle disputed
items, including alleged excess earnings in prior years, the
Company's revenue allowance was reduced in each of the three
years by $35 million.
Earnings Sharing. Earnings above an 11.75 percent return on
common equity in the first year, and above 11.85 percent in the
second or third year will be shared with customers. One-half will
be retained by the Company for shareholders. The other half will
be applied first to make up any shortfall below the sharing
threshold in the other rate years and the balance deferred to be
applied for the future benefit of customers. For purposes of this
calculation, earnings levels will exclude incentive awards and
labor productivity in excess of amounts reflected in rates.
For each of the first two rate years, the twelve months ended
March 31, 1993 and 1994 (and for the first nine months of the
third rate year, the nine months ended December 31, 1994), the
Company's rate of return on electric common equity, excluding
incentives and labor productivity, was below the thresholds for
sharing with customers.
Incentive Provisions. The rate agreement provided that the
Company could earn additional amounts (not subject to the
earnings sharing provision) by attaining certain objectives for
the Company's Enlightened Energy program, customer service and
fuel costs, or incur penalties for failing to achieve minimum
objectives. For calendar years 1994, 1993 and 1992, the Company
accrued benefits of $77.8 million (including $25.8 million
related to prior years' achievements), $36.2 million and $28.8
million, respectively, before federal income tax, for the
Enlightened Energy incentive. For calendar years 1994, 1993 and
1992, the Company earned $6.8 million, $6.5 million and $4.5
million, respectively, before federal income tax, for customer
service performance.
Partial Pass-Through Fuel Adjustment Clause. A partial
pass-through fuel adjustment clause (PPFAC) was implemented with
monthly targets for fuel and purchased power costs. The Company
retains for stockholders 30 percent of any savings in actual
costs below the target amount, but must bear 30 percent of any
excess of actual costs over the target. For each rate year of the
agreement there is a $30 million cap on the maximum incentives or
penalties under the PPFAC, with a "sub-cap" (within the $30
million cap) of $10 million for generation from the Company's
Indian Point 2 nuclear unit. For calendar years 1994, 1993 and
1992, the Company earned $31.8 million, $26.9 million
<PAGE>
<PAGE> - 57 -
and $24.8 million, respectively, before federal income tax. These
amounts are billed to customers on a monthly basis through the
fuel adjustment clause.
Enlightened Energy Program Costs and Incentive Recovery. The
costs for the Enlightened Energy program for each rate year of
the agreement are generally recovered over a five-year period.
Unrecovered balances earn an approved rate of return. The
incentive for Enlightened Energy is recovered in the rate year
following the calendar year in which it is earned.
As part of the agreement, Enlightened Energy program costs,
incentives and associated lost revenues deferred as of March 31,
1992 of approximately $98 million were set off against an equal
amount of property tax reductions and other deferred credits that
had been previously deferred for the future benefit of customers.
Effective April 1, 1992, lost revenues associated with the
Enlightened Energy program are reflected in the ERAM.
Electric Revenue Adjustment Mechanism. The settlement introduced
a rate-making concept known as the ERAM. The purpose of the ERAM
is to eliminate the linkage between customers' energy consumption
and Company profits. Under the ERAM the Company's rates are based
on annual forecasts of electric sales and sales revenues with
return to or recovery from customers of any overages or
deficiencies from the forecast in the prior rate year.
Implementation of the ERAM removes from Company earnings all
variations in electric sales from forecasts, including the
effects of year-to-year weather variations and the results of
changes in economic conditions. In 1994 the Company set aside
$63.7 million to be returned to customers for revenue
overcollections under the ERAM. In 1993 the Company accrued $10.9
million of additional revenues under the ERAM compared with
$130.1 million accrued under the ERAM in 1992.
1994 ELECTRIC RATE INCREASE FILING. In April 1994 the Company
filed with the PSC for a $191.3 million electric rate increase to
become effective April 1, 1995. On September 9, 1994 the PSC
staff filed a recommendation for an electric rate reduction of
$199 million, and on September 23, 1994 the Company revised its
electric rate increase request to $223 million. On December 30,
1994 the PSC's Administrative Law Judges (ALJs) hearing the case
issued a recommended decision which, if adopted by the PSC, would
provide for a $23 million, one-year rate increase.
<PAGE>
<PAGE> - 58 -
On January 19, 1995 the Company, the PSC staff and other
parties to the rate case announced that they had reached an
agreement in principle resolving the issues in the case. On
February 3, 1995 the Company and the PSC staff signed a detailed
written agreement reflecting this resolution. The agreement has
been submitted to the PSC for approval, and the PSC is expected
to act on the agreement in March 1995.* If approved, the
agreement would be effective for a three-year period beginning
April 1, 1995 but could be extended. The principal features of
the proposed new settlement agreement are as follows:
Limited Increases in Base Revenues. There will be no increase in
base electric revenues for the first rate year of the agreement
(the twelve months ending March 31, 1996). However, differences
between actual and projected amounts for certain expense items
during the first rate year will be reconciled and deferred for
charging or crediting to customers. These items include pension
and retiree health and life insurance expenses, costs incurred
under IPP contracts, and certain demand side management and
renewable energy expenses. Property tax differences will be
similarly reconciled and charged or credited to customers, except
that the Company will absorb (or retain) 14 percent of any
property tax increase or decrease from the forecast amounts.
For each of the second and third rate years, rates will be
changed to provide for projected increases or decreases in each
year in pension and retiree health and life insurance costs, IPP
contract costs, and demand side management and renewable energy
costs. During the second and third rate years, differences
between the projected and actual amounts of these items, and
property taxes, will be reconciled and deferred for charging or
crediting to customers as in the case of the first rate year,
including the 86 percent/14 percent sharing between customers and
the Company of property tax changes from the levels projected for
the first rate year.
Unlike previous multi-year rate settlements, there will be no
increases in rates to cover general escalation, wage and salary
increases or carrying costs on increased utility plant
investment. The rates effective April 1, 1995 will give customers
the benefit of labor productivity achieved during the term of the
1992 electric rate settlement. Under the proposed settlement
agreement, subject to the earnings sharing provisions discussed
below, the Company will retain the benefit of further
productivity gains achieved in excess of the productivity gain
forecast for the first rate year.
_______________
* At its public session on March 29, 1995, the PSC indicated its
general approval of the agreement, with some changes in detail.
The specific terms of the PSC's order are not yet available.
<PAGE>
<PAGE> - 59 -
Return on Equity and Equity Ratio. The settlement is premised on
a rate of return on common equity of 11.1 percent in the first
rate year and assumes a 52 percent common equity ratio throughout
the term of the agreement. Base rates in the second and third
rate years will be adjusted for changes in the allowed return on
equity. The allowed rate of return on equity is to be adjusted
for each succeeding rate year by adding or subtracting one-half
of the change in 30- year Treasury bond rates from a
January/February 1995 base to or from 11.1 percent. The maximum
change in the rate of return from the previous rate year is 100
basis points (one percent).
Costs for debt and preferred stock will not be updated from
the levels projected for the first rate year.
Earnings Sharing. Following each rate year the Company's actual
return on equity will be calculated, using actual capitalization
ratios and debt and preferred stock costs, but excluding any
earnings from the incentives discussed below. The Company will
retain 100 percent of any earnings up to 50 basis points above
the allowed rate of return for that rate year. The Company will
retain 50 percent of earnings exceeding the allowed rate of
return by more than 50 basis points but not more than 150 basis
points and the balance will be deferred for customer benefit. The
Company will retain 25 percent of earnings that exceed the
allowed rate of return by more than 150 basis points; one third
of the balance will be deferred for customer benefit and
two-thirds will be applied to reduce rate base balances in a
manner to be determined by the Company.
Contested Power Purchases and IPP Termination Costs. A major
portion of the rate decrease which had been proposed by the PSC
staff was based on proposed disallowances of costs associated
with the Company's largest IPP contract, with Sithe Energies,
Inc., and with a contract with NYPA relating to its Blenheim-
Gilboa pumped-storage plant. The settlement agreement resolves
the staff allegations by providing that "no future ratemaking
disallowances based on grounds of imprudence [relating to the
Sithe or Blenheim-Gilboa contracts]... will be permitted."
The settlement agreement also provides for full recovery by
the Company of all IPP contract termination costs incurred to
date, and permits the Company to petition the PSC to defer the
costs of new IPP contract terminations or modifications, if any,
during the term of the settlement agreement.
<PAGE>
<PAGE> - 60 -
Incentive Provisions. The settlement agreement, like the 1992
electric rate settlement, includes provisions which permit the
Company to earn additional incentive amounts, not subject to the
earnings sharing provisions, by attaining certain objectives for
the Company's Enlightened Energy program, fuel costs, and
customer service. There would also be penalties for failing to
achieve minimum objectives, and there is a penalty-only incentive
mechanism designed to encourage the Company to maintain its high
level of service reliability.
The Company estimates that it could earn incentive amounts
equivalent to a maximum of 22 basis points of additional equity
rate of return (or a maximum penalty of 22 basis points) under
the Enlightened Energy provision; a maximum incentive (or
penalty) of 50 basis points under the fuel incentive; and a
maximum incentive of 10 basis points (or a maximum penalty of 15
basis points) under the customer service incentive. Under the
service reliability incentive mechanism, the maximum penalty will
be the equivalent of 5 basis points of common equity return. In
general, opportunities for earning incentives will be more
limited under the new settlement agreement than under the 1992
electric rate settlement.
Partial Pass-Through Fuel Adjustment Clause. The fuel incentive
is implemented through the PPFAC, which is continued with certain
modifications from the 1992 electric rate settlement. Under the
PPFAC, monthly targets are set for fuel and purchased power
costs. The Company will collect, as an incentive, 30 percent of
any savings in actual costs below the target amount, and must
bear 30 percent of any excess of actual costs over the target.
For each rate year of the settlement there will be a $35 million
cap on the maximum incentive or penalty, with a "sub-cap"
(within the $35 million cap) of $10 million for costs associated
with generation from the Company's Indian Point 2 nuclear unit.
Modified ERAM. The settlement agreement continues, in modified
form, the ERAM introduced in the 1992 electric rate settlement.
Under the ERAM, the Company's electric revenues are adjusted, up
or down, to offset variances of actual electric revenues from
those forecast. Such variances typically result from factors,
such as weather and the Enlightened Energy program, which alter
consumption patterns. The new settlement agreement adds to the
ERAM a revenue per customer (RPC) mechanism which excludes from
adjustment those variances in the Company's electric revenues
which result from changes in the number of customers in each
electric service classification. A forecast amount of revenue per
customer (the RPC Factor) is developed for each service
classification by dividing the forecast amount of revenue
expected from that service classification by the average number
of customers expected in that classification during the first
<PAGE>
<PAGE> - 61 -
rate year. At the end of each rate year, the RPC Factor for each
service classification is multiplied by the actual average number
of customers in that classification for that rate year. The
result is compared with the actual revenues from that service
classification. The RPC Factor for the following rate year will
be adjusted to return any surplus, or collect any deficiency, to
or from customers in that classification during the following
rate year. The RPC Factors will also be adjusted for the second
and third rate years to reflect any increase or decrease in
allowed base revenues (e.g. because of a change in allowed return
on equity). Thus, the Company will retain additional revenues
attributable to added customers, but will bear the revenue
shortfall resulting from lost customers, while other variances
from forecast revenues will be deferred for subsequent collection
from, or return to, customers, and will not affect the Company's
earnings.
The RPC mechanism will not apply to delivery service for NYPA.
Nuclear Decommissioning Expense and Other Depreciation. Revenues
for each rate year include an annual allowance of $23.1 million
for the cost of decommissioning the Company's nuclear units
(including $1.8 million for the non-nuclear portions). This
represents an increase over the $14.8 million decommissioning
expense allowance (including $3.1 million for the non-nuclear
portions) under the 1992 electric rate settlement.
The Company's request for additional depreciation allowances
for retired generation facilities and acceleration of recovery of
other production plant was deferred by the ALJs for consideration
as part of the PSC's generic "competitive opportunities"
proceeding, and is not reflected in this settlement.
Extension of Agreement. The proposed settlement stipulates that
if the Company abstains from filing for a general electric rate
increase to take effect at the end of the three-year period, the
operation of the settlement agreement will be extended beyond
March 31, 1998, the end of the third rate year. In such event the
provisions for limited rate changes, adjustment of equity return,
earnings sharing, incentives, and modified ERAM will continue in
effect until changed by the PSC.
Restrictions on Further Changes. In general, the settlement will
not permit further changes in the Company's base electric rates
during the settlement period (April 1, 1995 - March 31, 1998),
except as provided in the settlement. However, as in prior
settlements, there are limited exceptions, for the protection of
both the Company and the customers, including exceptions for
certain tax and regulatory changes.
<PAGE>
<PAGE> - 62 -
As noted above, the settlement is subject to the approval of
the PSC.* While the PSC may condition its approval on further
changes, the Company is not obliged to accept the settlement with
any such changes that are not agreeable to the Company.
GAS AND STEAM RATE INCREASES. In October 1991 the PSC granted the
Company permission to increase its firm gas and steam base rates
by $21.4 million (3.1 percent) and $17.6 million (5.0 percent),
respectively. The increases were premised upon an allowed equity
return of 11.3 percent and a common equity ratio of 50 percent of
total capitalization.
In October 1992 the PSC approved two-year gas and steam rate
settlements which included annual increases for the first rate
year in firm gas and steam rates of $12.3 million (1.9 percent)
and $11.8 million (3.6 percent), respectively. In September 1993
the PSC granted the Company permission to increase its firm gas
rates for the second rate year by $21.6 million (2.8 percent). In
lieu of a steam rate increase of $2.1 million for the second rate
year, the PSC authorized the Company to retain certain tax
refunds being held by the Company for return to steam customers.
The gas and steam rate settlements were premised upon an allowed
equity return of 11.6 percent and a common equity ratio of 52
percent of total capitalization. Earnings above an 11.95 percent
return were to be shared equally with customers. For the first
and second rate years, the twelve months ended September 30, 1993
and 1994, the Company's rate of return on gas common equity was
below the 11.95 percent threshold for sharing with customers. The
Company's rate of return on steam common equity for the first and
second rate years was above the sharing threshold, and as a
result, the Company recorded a provision for refund to steam
customers of $1.7 million in 1993 and $3.6 million in 1994.
In October 1994 the PSC approved three-year rate agreements
for gas and steam services. The agreements provide for gas and
steam rate increases in the first rate year, the twelve months
ending September 30, 1995, of $7.7 million (0.9 percent) and $9.9
million (3.0 percent), respectively, and a methodology for rate
changes in the second and third rate years. For both services,
the October 1994 increases reflect a 10.9 percent rate of return
on common equity and a 52.0 percent common equity ratio. The
agreements contain "excess earnings" provisions giving
stockholders the benefit of 100 percent retention of any earnings
between 10.9 percent and 11.65 percent, and 50 percent sharing
with customers above 11.65 percent. The gas agreement contains
incentive (or penalty) mechanisms (not subject to the "excess
earnings" provisions), equivalent to approximately 85 basis
points of return on common equity.
_______________
* See footnote on page 58.
<PAGE>
<PAGE> - 63 -
CLEAN AIR ACT AMENDMENTS. The Clean Air Act amendments of 1990
impose limits on sulfur dioxide emissions from electric
generating units. Because the Company uses very low sulfur fuel
oil and natural gas as boiler fuels, the sulfur dioxide emission
limits should not affect the Company's operations. The Company
will incur increased capital and operating costs to meet the
nitrogen oxide emissions limits set by the New York State
Department of Environmental Conservation under the "Reasonably
Available Control Technology" (RACT) provisions of the Clean Air
Act. The Company has spent approximately $23 million to comply
with the Phase I limitations. The State may further reduce the
nitrogen oxide emissions limits under Phase II of the RACT
program which is expected to take effect in 1999. New York and
nine other member states of the Northeast Ozone Transport
Commission have entered into a Memorandum of Understanding which
calls for the states to adopt more stringent nitrogen oxide
emissions limits for RACT Phases II and III, effective in 1999
and 2003, respectively. The Company estimates that the cost of
compliance with these phases could approximate $180 million.
NUCLEAR FUEL DISPOSAL. The Company has a contract with the United
States Department of Energy (DOE) which provides that, in return
for payments being made by the Company to the DOE pursuant to the
contract, the DOE, starting in 1998, will take title to the
Company's spent nuclear fuel, transport it to a Federal
repository and store it permanently. Notwithstanding the
contract, the DOE has announced that it is not likely to have an
operating permanent repository before 2010. The DOE has also
taken the position that it is not obligated to begin accepting
the spent fuel until it has an appropriate facility for such
purpose. In June 1994 the Company and a number of other utilities
petitioned the United States Court of Appeals for the District of
Columbia for a declaratory judgment that the DOE is
unconditionally obligated to begin accepting the spent fuel by
1998, an order directing the DOE to implement a program enabling
it to begin acceptance of spent fuel by 1998, and, if warranted,
appropriate relief for the financial burden to the utilities
resulting from the DOE's delay. The Company estimates that it now
has adequate on-site capacity until 2005 for interim storage of
its spent fuel. If the DOE does not begin accepting spent fuel by
2005, absent regulatory or technological developments, the
Company expects that it will require additional on-site or other
spent fuel storage facilities. Such additional facilities would
require regulatory approvals. In the event that the Company is
unable to make appropriate arrangements for the storage of its
spent fuel, the Company would be required to curtail the
operation of its Indian Point 2 nuclear unit. See discussion of
decommissioning in Note A to the financial statements.
<PAGE>
<PAGE> - 64 -
SUPERFUND AND ASBESTOS CLAIMS AND OTHER CONTINGENCIES. Reference
is made to Note F to the financial statements for information
concerning potential liabilities of the Company arising from the
Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("Superfund"), from claims relating to
alleged exposure to asbestos, and from certain other
contingencies to which the Company is subject.
IMPACT OF INFLATION. In an inflationary period the purchasing
power of the dollar declines. The historical cost amounts
reported in traditional financial statements represent dollars of
varying purchasing power because such financial statements
combine dollars spent at various times in the past with dollars
spent currently.
Although the rate of inflation has eased greatly from its peak
levels, the Company is still affected by the decline in the
purchasing power of the dollar caused by even modest inflation.
The Company cannot readily increase its prices to keep pace with
inflation. The regulatory process introduces a time lag during
which increased operating expenses are typically not fully
recovered. Moreover, regulation permits the Company to recover
through depreciation only the historical cost of its plant assets
even though in an inflationary economy the cost to replace the
assets upon their retirement will substantially exceed historical
cost. Thus, the Company experiences losses on its property
equivalent to the effect of inflation. These losses are, however,
partially offset by the fact that repayment of the Company's
long-term debt is made in dollars of lesser value than the
dollars originally borrowed.
<PAGE>
<PAGE> - 65 -
RESULTS OF OPERATIONS
Earnings per share were $2.98 in 1994, $2.66 in 1993 and $2.46
in 1992. The average number of common shares outstanding for
1994, 1993 and 1992 was 234.8 million, 234.0 million and 231.1
million, respectively.
Earnings for 1994, 1993 and 1992 reflect electric, gas and
steam rate increases, incentives earned and labor productivity
retained under the provisions of the 1992 electric rate
agreement, discussed above. There were no incentives accrued in
1994 under the October 1994 gas rate agreement.
OPERATING REVENUES AND FUEL COSTS. Operating revenues in 1994 and
1993 increased from the prior year by $107.7 million and by
$332.5 million, respectively. The principal increases and
decreases in revenues were:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
(Millions of Dollars) Increase (Decrease)
--------------------------------------------------------------------------------------------------
1994 over 1993 1993 over 1992
--------------------------------------
<S> <C> <C>
Electric, gas and steam
rate changes $115.8 $238.2
Fuel billings (143.3) 113.4
Sales volume changes
Electric* 56.3 167.4
Gas 26.1 11.2
Steam 14.4 (1.6)
Weather normalization-gas (5.6) 7.9
ERAM accrual (74.7) (119.2)
ERAM billings-prior rate
year accruals 75.9 (104.8)
Sales to other electric utilities 19.8 .9
Other 23.0 19.1
Total $107.7 $332.5
----------------------------------------------------------------------------------------------------
*Includes Con Edison direct customers and delivery service for NYPA and municipal agencies.
</TABLE>
The decrease in fuel billings in 1994 reflects decreases in
the unit costs of both purchased power and fuel used to produce
electricity. The increase in fuel billings in 1993 reflects an
increase in the unit cost of fuel used to produce electricity and
steam and increased electric sales due to weather variations.
Fuel costs in 1994 and 1993 were also affected by the greater
availability in 1994 than 1993 of lower-cost nuclear generation
from the Company's Indian Point 2 unit. The cost of gas per therm
was 10.4 percent lower in 1994 than in 1993 but was 11.5 percent
higher in 1993 than in 1992.
<PAGE>
<PAGE> - 66 -
Electricity sales volume in the Company's service territory
increased 2.0 percent in 1994 and 3.3 percent in 1993. Gas sales
volume to firm customers increased 3.9 percent in 1994 and 0.6
percent in 1993. Transportation of customer-owned gas decreased
12.1 percent in 1994 and 17.9 percent in 1993, primarily due to a
reduction in the volume of gas transported for NYPA's use as
boiler fuel at its Poletti unit. Steam sales volume increased 4.4
percent in 1994 and was unchanged in 1993.
The Company's electricity, gas and steam sales vary seasonally
in response to weather. Electric peak load occurs in the summer,
while gas and steam sales peak in the winter. After adjusting for
variations, principally weather, in each period, electricity
sales volume increased 1.5 percent in 1994 and 1.0 percent in
1993. Similarly adjusted, gas sales volume to firm customers
increased 1.6 percent in 1994 and 3.9 percent in 1993, and steam
sales volume increased 0.6 percent in 1994 and decreased 0.1
percent in 1993. Weather-adjusted sales represent the Company's
estimate of the sales that would have been made if historical
average weather conditions had prevailed.
OTHER OPERATIONS AND MAINTENANCE EXPENSES. Other operations and
maintenance expenses decreased 1.5 percent in 1994 and increased
5.4 percent in 1993. The decrease in 1994 reflects lower
production expenses principally due to the refueling and
maintenance outage of the Indian Point 2 nuclear unit in 1993 but
none in 1994. The decrease was offset by costs in connection with
the settlement of an environmental proceeding (discussed below)
and higher health insurance costs. For 1993 the increase reflects
the cost of the 1993 refueling and maintenance outage of the
Indian Point 2 nuclear unit, higher electric and gas distribution
expenses, the amortization of previously deferred costs
associated with the Company's Enlightened Energy program, in
accordance with the electric rate agreements, and higher labor
costs.
In November 1994 the Company settled a New York State
Department of Environmental Conservation (DEC) civil
administrative proceeding against the Company. Pursuant to the
settlement, the Company has paid a $9 million penalty and
contributed $5 million to an environmental projects fund. The
penalty was charged to miscellaneous income deductions ($2
million in 1994 and $7 million in prior years). The payment to
the environmental projects fund was charged to operations and
maintenance expense in 1994. See Note F to the financial
statements for additional information about the settlement.
<PAGE>
<PAGE> - 67 -
TAXES OTHER THAN FEDERAL INCOME TAX. At $1.1 billion, taxes other
than federal income tax remain one of the Company's largest
operating expenses. The principal components and variations in
operating taxes were:
<TABLE>
------------------------------------------------------------------------------------------------------------
(Millions of Dollars) Increase (Decrease)
------------------------------------------------------------------------------------------------------------
1994 1994 1993
Amount Over 1993 Over 1992
--------------------------------------------------------
<S> <C> <C> <C>
Property taxes $ 539.4 $(36.8) $(68.3)
State and local taxes
on revenues 462.5 (6.3) 26.9
Payroll taxes 57.8 (.2) 1.8
Other taxes 68.0 11.7 (.7)
---------------------------------------------------------
Total $1,127.7* $(31.6) $(40.3)
------------------------------------------------------------------------------------------------------------
*Including sales taxes on customers' bills, total taxes other than federal income taxes billed to customers
in 1994 were $1,420.7 million.
</TABLE>
The reductions in property taxes in 1994 and 1993 reflect
decreases in the share of total New York City property taxes
borne by the Company. Under the terms of the current electric,
gas and steam rate agreements the difference between property
taxes included in rates and actual property taxes is being
deferred for future collection from or return to customers. The
increase in state and local taxes on revenues in 1993 was due
principally to increased revenues. The Company bills its
customers for all revenue taxes and remits the amounts collected
to the municipalities and the state.
OTHER INCOME. Other income decreased $2.3 million in 1994 and
$9.7 million in 1993. For 1994 the decrease reflects lower
interest income accrued on ERAM revenue under the 1992 electric
rate agreement. For 1993 the decrease reflects a lower level of
temporary cash investments and lower interest rates. The decrease
in both years also reflects the DEC settlement.
NET INTEREST CHARGES. Interest on long-term debt increased in
1994 and 1993 by $7.3 million in each year principally as a
result of new debt issues offset to a large extent by the effect
of debt refundings.
FEDERAL INCOME TAX. Federal income tax increased $73.6 million in
1994 and $44.5 million in 1993 reflecting the changes each year
in income before tax and in tax deductions. For the rate
treatment of the increase in the corporate income tax rate from
34 percent to 35 percent effective January 1, 1993, see Note G to
the financial statements.
February 28, 1995
<PAGE>
<PAGE> - 68 -
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
A. Financial Statements
Page
Index to Financial Statements Number
Report of Independent Accountants 70
Consolidated Balance Sheet at December 31, 1994 71-72
and 1993
Consolidated Income Statement for the years 73
December 31, 1994, 1993 and 1992
Consolidated Statement of Cash Flows for the 74
years ended December 31, 1994, 1993 and 1992
Consolidated Statement of Capitalization at 75-76
December 31, 1994 and 1993
Consolidated Statement of Retained Earnings 77
for the years ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements 78-96
The following Schedule is filed as a "Financial Statement
Schedule" pursuant to Item 14 of this report:
Schedule VIII - Valuation and Qualifying Accounts 97-99
All other schedules are omitted because they are not
applicable or the required information is shown in the
financial statements or notes thereto.
Separate financial statements of subsidiaries, not
consolidated, have been omitted because, if considered in the
aggregate, they would not constitute a significant
subsidiary.
<PAGE>
<PAGE> - 69 -
B. Supplementary Financial Information
Selected Quarterly Financial Data for the years ended December
31, 1994 and 1993 (Unaudited)
<TABLE>
First Second Third Fourth
1994 (Millions of Dollars) Quarter Quarter Quarter Quarter
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenues $1,697.8 $1,392.1 $1,822.0 $1,461.2
Operating income 265.1 158.0 418.4 194.7
Net income 189.3 87.2 339.9 117.9
Net income for common stock 180.4 78.3 331.0 109.0
Earnings per common share $ .77 $ .33 $1.41 $ .47
-----------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
First Second Third Fourth
1993 (Millions of Dollars) Quarter Quarter Quarter Quarter
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenues $1,586.1 $1,396.0 $1,799.7 $1,483.6
Operating income 222.3 134.5 400.1 194.2
Net income 153.9 62.5 324.8 117.3
Net income for common stock 145.0 53.6 315.9 108.4
Earnings per common share $ .62 $ .23 $1.35 $ .46
===============================================================================================
</TABLE>
In the opinion of the Company these quarterly amounts include all
adjustments, consisting only of normal recurring accruals,
necessary for a fair presentation.
<PAGE>
<PAGE> - 70 -
Report of Independent Accountants
To the Board of Trustees and Stockholders of
Consolidated Edison Company of New York, Inc.
In our opinion, the consolidated financial statements listed
under Item 8.A in the index appearing on page 68 present fairly,
in all material respects, the financial position of Consolidated
Edison Company of New York, Inc. and its subsidiaries at December
31, 1994 and 1993, and the results of their operations and their
cash flows for each of the three years in the period ended
December 31, 1994 in conformity with generally accepted
accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is
to express an opinion on these financial statements based on our
audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used
and significant estimates made by management and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Price Waterhouse LLP
1177 Avenue of the Americas
New York, N.Y. 10036
February 28, 1995
<PAGE>
<PAGE> - 71 -
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
Consolidated Edison Company of New York, Inc.
====================================================================================================================================
Assets
------------------------------------------------------------------------------------------------------------------------------------
At December 31 (Thousands of Dollars) 1994 1993
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Utility plant, at original cost (Notes A and B)
Electric $10,956,187 $10,530,193
Gas 1,437,071 1,341,704
Steam 430,848 403,411
General 1,083,705 1,015,947
------------------------------------------------------------------------------------------------------------------------------------
Total 13,907,811 13,291,255
Less: Accumulated depreciation 3,828,646 3,594,784
------------------------------------------------------------------------------------------------------------------------------------
Net 10,079,165 9,696,471
Construction work in progress 389,630 389,244
Nuclear fuel assemblies and components, less accumulated amortization 92,413 70,441
------------------------------------------------------------------------------------------------------------------------------------
Net utility plant 10,561,208 10,156,156
====================================================================================================================================
Current assets
Cash and temporary cash investments (Note A) 245,221 36,756
Accounts receivable -- customers, less allowance for uncollectible
accounts of $21,600 in 1994 and 1993 440,496 459,261
Other receivables 61,853 84,955
Regulatory accounts receivable (Note A) 26,346 97,117
Fuel, at average cost 50,883 53,755
Gas in storage, at average cost 50,698 49,091
Materials and supplies, at average cost 229,744 245,785
Prepayments 56,283 56,274
Other current assets 13,262 11,486
------------------------------------------------------------------------------------------------------------------------------------
Total current assets 1,174,786 1,094,480
====================================================================================================================================
Investments and nonutility property 111,523 93,899
====================================================================================================================================
Deferred charges
Enlightened Energy program costs (Note A) 170,201 140,057
Unamortized debt expense 138,428 144,928
Power contract termination costs 180,506 121,740
Other deferred charges (Note A) 285,721 355,475
------------------------------------------------------------------------------------------------------------------------------------
Total deferred charges 774,856 762,200
====================================================================================================================================
Regulatory asset-future federal income taxes (Notes A and G) 1,105,991 1,150,630
====================================================================================================================================
Total $13,728,364 $13,257,365
====================================================================================================================================
</TABLE>
<PAGE>
<PAGE> - 72 -
<TABLE>
<CAPTION>
===================================================================================================================================
Capitalization and Liabilities
------------------------------------------------------------------------------------------------------------------------------------
At December 31 (Thousands of Dollars) 1994 1993
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Capitalization (see Consolidated Statement of Capitalization)
Common shareholders' equity $ 5,312,997 $ 5,068,530
Preferred stock subject to mandatory redemption (Note B) 100,000 100,000
Other preferred stock 540,310 540,728
Long-term debt 4,030,464 3,643,891
------------------------------------------------------------------------------------------------------------------------------------
Total capitalization 9,983,771 9,353,149
====================================================================================================================================
Noncurrent liabilities
Obligations under capital leases 47,805 50,355
Other noncurrent liabilities 72,561 125,369
------------------------------------------------------------------------------------------------------------------------------------
Total noncurrent liabilities 120,366 175,724
====================================================================================================================================
Current liabilities
Long-term debt due within one year (Note B) 10,889 133,639
Accounts payable 374,469 392,543
Customer deposits 161,455 157,380
Accrued income taxes 3,022 28,410
Other accrued taxes 6,799 30,896
Accrued interest 84,544 82,002
Accrued wages 73,611 81,174
Other current liabilities 179,611 179,876
------------------------------------------------------------------------------------------------------------------------------------
Total current liabilities 894,400 1,085,920
====================================================================================================================================
Provisions related to future federal income taxes
and other deferred credits (Notes A and G)
Accumulated deferred federal income tax 2,266,458 2,234,350
Accumulated deferred investment tax credits 191,524 201,144
Other deferred credits 271,845 207,078
------------------------------------------------------------------------------------------------------------------------------------
Total deferred credits 2,729,827 2,642,572
====================================================================================================================================
Contingencies (Note F)
====================================================================================================================================
Total $13,728,364 $13,257,365
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> - 73 -
<TABLE>
<CAPTION>
CONSOLIDATED INCOME STATEMENT
Consolidated Edison Company of New York, Inc.
====================================================================================================================================
Year Ended December 31 (Thousands of Dollars) 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating revenues (Note A)
Electric $5,140,472 $5,131,665 $4,892,054
Gas 890,107 808,389 728,343
Steam 342,507 325,340 312,507
------------------------------------------------------------------------------------------------------------------------------------
Total operating revenues 6,373,086 6,265,394 5,932,904
====================================================================================================================================
Operating expenses
Fuel 567,764 605,213 710,250
Purchased power 787,455 812,616 606,822
Gas purchased for resale 341,204 289,708 245,175
Other operations 1,146,094 1,106,966 1,062,552
Maintenance 506,179 570,794 528,994
Depreciation and amortization (Note A) 422,356 403,730 380,861
Taxes, other than federal income tax 1,127,691 1,159,283 1,199,573
Federal income tax (Notes A and G) 438,160 366,020 318,320
------------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 5,336,903 5,314,330 5,052,547
====================================================================================================================================
Operating income 1,036,183 951,064 880,357
------------------------------------------------------------------------------------------------------------------------------------
Other income (deductions)
Investment income (Note A) 10,601 4,934 12,063
Allowance for equity funds used during construction (Note A) 8,354 7,222 9,313
Other income less miscellaneous deductions (15,201) (7,565) (3,899)
Federal income tax (Notes A and G) (430) 1,010 (2,150)
------------------------------------------------------------------------------------------------------------------------------------
Total other income 3,324 5,601 15,327
====================================================================================================================================
Income before interest charges 1,039,507 956,665 895,684
====================================================================================================================================
Interest on long-term debt 289,060 281,756 274,442
Other interest 19,853 19,721 21,688
Allowance for borrowed funds used during construction (Note A) (3,676) (3,334) (4,534)
------------------------------------------------------------------------------------------------------------------------------------
Net interest charges 305,237 298,143 291,596
====================================================================================================================================
Net income 734,270 658,522 604,088
Preferred stock dividend requirements 35,587 35,617 36,428
------------------------------------------------------------------------------------------------------------------------------------
Net income for common stock $ 698,683 $ 622,905 $ 567,660
====================================================================================================================================
Earnings per common share based on average
number of shares outstanding during each year
(234,753,901; 233,981,369; and 231,129,040) $2.98 $2.66 $2.46
====================================================================================================================================
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
<PAGE> - 74 -
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
Consolidated Edison Company of New York, Inc.
====================================================================================================================================
Year Ended December 31 (Thousands of Dollars) 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating activities
Net income $ 734,270 $ 658,522 $604,088
Principal non-cash charges (credits) to income
Depreciation and amortization 422,356 403,730 380,861
Federal income tax deferred 64,090 94,210 67,870
Common equity component of allowance for funds used
during construction (7,876) (6,795) (8,710)
Other non-cash charges 65,669 (20,578) 49,086
Changes in assets and liabilities
Accounts receivable - customers, less allowance for uncollectibles 18,765 (34,912) (34,367)
Regulatory accounts receivable 70,771 70,814 (127,497)
Materials and supplies, including fuel and gas in storage 17,306 60,554 (6,570)
Prepayments, other receivables and other current assets 21,317 (32,236) 16,088
Enlightened Energy program costs (30,144) (59,297) (20,841)
Power contract termination costs (62,376) (68,380) -
Accounts payable (18,074) 19,007 28,689
Other - net (46,175) (59,374) 13,326
------------------------------------------------------------------------------------------------------------------------------------
Net cash flows from operating activities 1,249,899 1,025,265 962,023
====================================================================================================================================
Investing activities including construction
Construction expenditures (757,530) (789,068) (794,681)
Nuclear fuel expenditures (47,071) (14,092) (35,220)
Contributions to nuclear decommissioning trust (14,586) (19,247) (6,973)
Common equity component of allowance for funds used
during construction 7,876 6,795 8,710
Investments other than temporary cash investments - - 137,152
-----------------------------------------------------------------------------------------------------------------------------------
Net cash flows from investing activities including construction (811,311) (815,612) (691,012)
===================================================================================================================================
Financing activities including dividends
Issuance of common stock 14,650 11,881 156,788
Issuance of preferred stock - - 100,000
Issuance of long-term debt 400,000 1,378,475 875,000
Retirement of long-term debt and preferred stock (133,639) (177,897) (256,718)
Advance refunding of long-term debt and preferred stock - (1,069,732) (664,000)
Issuance and refunding costs (5,988) (108,562) (41,996)
Common stock dividends (469,561) (453,902) (439,150)
Preferred stock dividends (35,585) (35,614) (36,343)
------------------------------------------------------------------------------------------------------------------------------------
Net cash flows from financing activities including dividends (230,123) (455,351) (306,419)
====================================================================================================================================
Net increase (decrease) in cash and temporary cash investments 208,465 (245,698) (35,408)
Cash and temporary cash investments at January 1 36,756 282,454 317,862
Cash and temporary cash investments at December 31 $ 245,221 $ 36,756 $282,454
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest $ 269,839 $ 265,475 $261,619
Income taxes 385,355 280,122 250,753
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> - 75 -
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CAPITALIZATION
Consolidated Edison Company of New York, Inc.
====================================================================================================================================
At December 31 (Thousands of Dollars) 1994 1993
------------------------------------------------------------------------------------------------------------------------------------
Shares outstanding
--------------------------------------
December 31, 1994 December 31, 1993
--------------------------------------
<S> <C> <C> <C> <C>
Common shareholders' equity (Note B)
Common stock, $2.50 par value, authorized
340,000,000 shares 234,905,235 234,372,931 $1,463,913 $1,448,845
Retained earnings 3,888,010 3,658,886
Capital stock expense (38,926) (39,201)
------------------------------------------------------------------------------------------------------------------------------------
Total common shareholders' equity 5,312,997 5,068,530
====================================================================================================================================
Preferred stock (Note B)
Subject to mandatory redemption
Cumulative Preferred, $100 par value,
7.20% Series I 500,000 500,000 50,000 50,000
6 1/8% Series J 500,000 500,000 50,000 50,000
------------------------------------------------------------------------------------------------------------------------------------
Total subject to mandatory redemption 100,000 100,000
------------------------------------------------------------------------------------------------------------------------------------
Other preferred stock
$5 Cumulative Preferred, without par value,
authorized 1,915,319 shares 1,915,319 1,915,319 175,000 175,000
Cumulative Preferred, $100 par value,
authorized 6,000,000 shares*
5 3/4% Series A 600,000 600,000 60,000 60,000
5 1/4% Series B 750,000 750,000 75,000 75,000
4.65% Series C 600,000 600,000 60,000 60,000
4.65% Series D 750,000 750,000 75,000 75,000
5 3/4% Series E 500,000 500,000 50,000 50,000
6.20% Series F 400,000 400,000 40,000 40,000
Cumulative Preference, $100 par value,
authorized 2,250,000 shares
6% Convertible Series B 53,102 57,278 5,310 5,728
------------------------------------------------------------------------------------------------------------------------------------
Total other preferred stock 540,310 540,728
------------------------------------------------------------------------------------------------------------------------------------
Total preferred stock $ 640,310 $ 640,728
====================================================================================================================================
</TABLE>
*Represents total authorized shares of cumulative preferred stock, $100 par
value, including preferred stock subject to mandatory redemption.
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> - 76 -
<TABLE>
====================================================================================================================================
At December 31 (Thousands of Dollars) 1994 1993
------------------------------------------------------------------------------------------------------------------------------------
Long-term debt (Note B)
Maturity Interest Rate Series
------------------------------------------------------------------------------------------------------------------------------------
First and Refunding Mortgage Bonds (open-end mortgage):
<S> <C> <C> <C> <C>
1994 4.60% BB $ - $125,000
1996 5 CC 100,000 100,000
1996 5.90 DD 75,000 75,000
------------------------------------------------------------------------------------------------------------------------------------
Total mortgage bonds 175,000 300,000
------------------------------------------------------------------------------------------------------------------------------------
Debentures:
1997 5.30% 1993 E 100,000 100,000
1998 6 1/4 1993 A 100,000 100,000
1998 5.70 1993 F 100,000 100,000
1999 6 1/2 1992 D 75,000 75,000
1999 * 1994 B 150,000 -
2000 7 3/8 1992 A 150,000 150,000
2000 7.60 1992 C 125,000 125,000
2001 6 1/2 1993 B 150,000 150,000
2002 6 5/8 1993 C 150,000 150,000
2003 6 3/8 1993 D 150,000 150,000
2004 7 5/8 1992 B 150,000 150,000
2005 7 3/8 1992 E 75,000 75,000
2023 7 1/2 1993 G 380,000 380,000
2025 9.70 1990 A 27,414 27,414
2026 9 3/8 1991 A 95,329 95,329
2027 8.05 1992 F 100,000 100,000
2029 7 1/8 1994 A 150,000 -
------------------------------------------------------------------------------------------------------------------------------------
Total debentures 2,227,743 1,927,743
------------------------------------------------------------------------------------------------------------------------------------
Tax-exempt debt- notes issued to New York State Energy Research and
Development Authority for Facilities Revenue Bonds:
2020 9 % 1985 A 128,285 128,285
2020 5 1/4 1993 B 127,715 127,715
2021 7 1/2 1986 A 150,000 150,000
2022 7 1/8 1987 A 100,855 100,855
2022 9 1/4 1987 B 29,385 29,385
2022 5 3/8 1993 C 19,760 19,760
2024 7 3/4 1989 A 150,000 150,000
2024 7 3/8 1989 B 100,000 100,000
2024 7 1/4 1989 C 150,000 150,000
2025 7 1/2 1990 A 150,000 150,000
2026 7 1/2 1991 A 128,150 128,150
2027 6 3/4 1992 A 100,000 100,000
2027 6 3/8 1992 B 100,000 100,000
2028 6 1993 A 101,000 101,000
2029 7 1/8 1994 A 100,000 -
------------------------------------------------------------------------------------------------------------------------------------
Total tax-exempt debt 1,635,150 1,535,150
------------------------------------------------------------------------------------------------------------------------------------
Other long-term debt:
Liens on purchased gas turbines 22,779 31,419
Other long-term debt 9,007 10,476
Unamortized debt discount (28,326) (27,258)
------------------------------------------------------------------------------------------------------------------------------------
Total 4,041,353 3,777,530
Less: Long-term debt due within one year 10,889 133,639
------------------------------------------------------------------------------------------------------------------------------------
Total long-term debt 4,030,464 3,643,891
====================================================================================================================================
Total capitalization $9,983,771 $9,353,149
====================================================================================================================================
</TABLE>
*This rate is reset quarterly. For the fourth quarter of 1994 it was 5.625%.
<PAGE>
<PAGE> - 77 -
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
Consolidated Edison Company of New York, Inc.
====================================================================================================================================
Year Ended December 31 (Thousands of Dollars) 1994 1993 1992
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, January 1 $3,658,886 $3,489,880 $3,361,305
Net income for the year 734,270 658,522 604,088
------------------------------------------------------------------------------------------------------------------------------------
Total 4,393,156 4,148,402 3,965,393
====================================================================================================================================
Dividends declared on capital stock
Cumulative Preferred, at required annual rates 35,259 35,259 35,957
Cumulative Preference, 6% Convertible Series B 326 355 386
Common, $2.00, $1.94 and $1.90 per share 469,561 453,902 439,150
------------------------------------------------------------------------------------------------------------------------------------
Total dividends declared 505,146 489,516 475,493
Redemption of Cumulative Preferred Stock, 8 1/8% Series H - - 20
------------------------------------------------------------------------------------------------------------------------------------
Total deductions 505,146 489,516 475,513
------------------------------------------------------------------------------------------------------------------------------------
Balance, December 31 $3,888,010 $3,658,886 $3,489,880
====================================================================================================================================
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
<PAGE> - 78 -
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
========================================================
Note A Summary Of Significant Accounting Policies
-------------------------------------------------
REGULATION. The Company is subject to regulation by the New York
Public Service Commission (PSC) and the Federal Energy Regulatory
Commission (FERC). The Company's accounting policies conform to
generally accepted accounting principles, as applied in the case
of regulated public utilities, and to the accounting requirements
and rate-making practices of these regulatory authorities.
PRINCIPLES OF CONSOLIDATION. The accompanying consolidated
financial statements include the accounts of the Company and its
wholly-owned subsidiaries. Intercompany transactions have been
eliminated.
UTILITY PLANT AND DEPRECIATION. The capitalized cost of additions
to utility plant includes indirect costs such as engineering,
supervision, payroll taxes, pensions, other benefits and an
allowance for funds used during construction (AFDC). The original
cost of property, together with removal cost, less salvage, is
charged to accumulated depreciation as property is retired. The
cost of repairs and maintenance is charged to expense, and the
cost of betterments is capitalized.
Rates used for AFDC include the cost of borrowed funds used
for construction purposes and a reasonable rate on the Company's
own funds when so used, determined in accordance with PSC and
FERC regulations. The AFDC rate was 9.4 percent in 1994 and 9.5
percent in 1993 and 1992. The rate was compounded semiannually,
and the amounts applicable to borrowed funds were treated as a
reduction of interest charges.
The annual charge for depreciation is computed on the
straight-line method for financial statement purposes, using
rates based on average lives and net salvage factors, with the
exception of the Indian Point 2 nuclear unit, the Company's share
of the Roseton generating station and certain leaseholds, which
are depreciated on a remaining life amortization method.
Depreciation rates averaged approximately 3.2 percent in 1994 and
3.1 percent in 1993 and 1992. Depreciation expense includes the
amortization of certain deferred charges authorized by the PSC.
<PAGE>
<PAGE> - 79 -
The Company is a joint owner of two 1,200-megawatt electric
generating stations: (1) Bowline Point, operated by Orange and
Rockland Utilities, Inc. with Con Edison owning a two-thirds
interest and (2) Roseton, operated by Central Hudson Gas &
Electric Corp. with Con Edison owning a 40 percent interest.
Central Hudson has the option to acquire the Company's interest
in the Roseton station in 2004. Con Edison's share of the
investment in these stations at original cost and as included in
its balance sheet at December 31, 1994 and 1993 was:
-----------------------------------------------------------------
(Thousands of Dollars) 1994 1993
-----------------------------------------------------------------
Bowline Point: Plant in service $196,065 $195,546
Construction work in progress 10,351 2,400
Roseton: Plant in service 141,487 139,798
Construction work in progress 4,283 1,204
-----------------------------------------------------------------
The Company's share of accumulated depreciation for the
Roseton station at December 31, 1994 and 1993 was $61.6 million
and $57.9 million, respectively. A separate depreciation account
is not maintained for the Company's share of the Bowline Point
station. The Company's share of operating expenses for these
stations is included in its income statement.
NUCLEAR DECOMMISSIONING. Depreciation charges include a provision
for decommissioning both the Indian Point 2 and the retired
Indian Point 1 nuclear units. Decommissioning costs are being
accrued ratably over the Indian Point 2 license period which
extends to the year 2013. The Company has been accruing for the
costs of decommissioning within the internal depreciation reserve
since 1975. In 1989 the PSC permitted the Company to establish an
external trust fund for the costs of decommissioning the nuclear
portions of the plants pursuant to NRC regulations. Accordingly,
beginning in 1989 the Company made contributions to such a trust.
The external trust fund is discussed below under "Investments" in
this Note A.
<PAGE>
<PAGE> - 80 -
Accumulated decommissioning provisions at December 31, 1994
and 1993, which include earnings on funds externally invested,
are as follows:
-----------------------------------------------------------------
Amounts Included in
Accumulated Depreciation
--------------------------
(Millions of Dollars) 1994 1993
-----------------------------------------------------------------
Nuclear $102.2 $ 86.0
Non-Nuclear 53.7 50.6
Total $155.9 $136.6
-----------------------------------------------------------------
The Company currently provides annual expense allowances of
$11.7 million and $3.1 million, respectively, for decommissioning
the nuclear and non-nuclear portions of the plants. These
amounts, which are recovered from customers through billings,
were approved by the PSC in the 1992 electric rate settlement
agreement, and were designed to fund decommissioning costs which
had been estimated at approximately $300 million in 1993 dollars.
In 1994 a site-specific decommissioning study was prepared for
both the Indian Point 2 and the retired Indian Point 1 nuclear
units. Based on this study, the estimated decommissioning cost in
1993 dollars is approximately $657 million, of which $252 million
is for extended on-site storage of spent nuclear fuel, and (using
a 3.25 percent annual escalation factor) approximately $1,372
million in 2016, the assumed midpoint for decommissioning
expenditures. Under the proposed 1995 electric rate settlement
agreement, effective April 1995, the Company will revise the
annual decommissioning expense allowance for the nuclear and
non-nuclear portions of the plants to $21.3 million and $1.8
million, respectively, to fund the future estimated costs of
decommissioning. The annual expense allowance assumes a 6 percent
after-tax annual return on fund assets.
The Financial Accounting Standards Board is currently
reviewing the utility industry's accounting treatment of nuclear
decommissioning costs.
NUCLEAR FUEL. Nuclear fuel assemblies and components are
amortized to operating expenses based on the quantity of heat
produced for the generation of electricity. Fuel costs also
include a provision for payments to the U.S. Department of Energy
for the future off-site storage of the spent fuel, based on the
kilowatt-hours of electricity generated. Nuclear fuel costs are
recovered in revenues through base rates or through the fuel
adjustment clause.
<PAGE>
<PAGE> - 81 -
LEASES. In accordance with Statement of Financial Accounting
Standards (SFAS) No. 71, "Accounting for the Effects of Certain
Types of Regulation," those leases that meet the criteria for
capitalization are capitalized for accounting purposes. For
rate-making purposes, all leases have been treated as operating
leases.
REVENUES. Revenues for electric and steam service are recognized
on a monthly billing cycle basis. Pursuant to the three-year
electric rate settlement agreement, effective April 1, 1992,
actual electric net revenues (operating revenues less fuel and
purchased power costs and revenue taxes) are adjusted by accrual
to target levels established under the agreement in accordance
with the electric revenue adjustment mechanism (ERAM). Revenues
are also increased (or decreased) each month to reflect
incentives (or penalties) earned for the Enlightened Energy
program and for customer service activities. The 1992 settlement
agreement provides that the net regulatory asset (or liability),
including interest thereon, thus accrued in each rate year is to
be reflected in customers' bills in the following rate year.
In accordance with a PSC rate order the Company began phasing
in recognition of unbilled gas revenues over a 4 1/4 year period
effective October 1989. Pursuant to the gas rate decision in
October 1991, this recognition of unbilled gas revenues was
modified so as to be fully phased in by September 30, 1994 to the
extent provided in rates.
Revenues from the fuel adjustment clause are not recorded
until billed.
RECOVERABLE FUEL COSTS. Fuel and purchased power costs that are
above the levels included in base rates are recoverable under
electric, gas and steam fuel adjustment clauses. If costs fall
below these levels, the difference is credited to customers. For
electric and steam, such costs are deferred until the period in
which they are billed or credited to customers (40 days for
electric, 30 days for steam). For gas, the excess or deficiency
is accumulated for refund or surcharge to customers on an annual
basis.
<PAGE>
<PAGE> - 82 -
Effective April 1992, a partial pass-through electric fuel
adjustment clause (PPFAC) was implemented with monthly targets
for fuel and purchased power costs. The Company retains for
stockholders 30 percent of any savings in actual costs below the
target amount, but must bear 30 percent of any excess of actual
costs over the target. For each rate year of the 1992 electric
rate agreement there is a $30 million cap on the maximum increase
or decrease in fuel billings, with a limit (within the $30
million) of $10 million for costs associated with generation at
the Company's Indian Point 2 nuclear unit. Subject to these
limits, 30 percent of any variance below target amounts is added
to regulatory accounts receivable and 30 percent of any variance
above target amounts is deducted from regulatory accounts
receivable.
The PSC has allowed the Company to recover in rates certain
deferred recoverable fuel costs that were affected by shortening
the billing lag period or changing the cost of fuel in base
rates. If there were any further such revisions, the Company
believes that deferred recoverable fuel costs affected thereby
would be recovered.
REGULATORY ACCOUNTS RECEIVABLE. Regulatory accounts receivable,
amounting to $26.3 million at December 31, 1994 include accruals
under the three-year 1992 electric rate settlement agreement for
incentives related to the Company's Enlightened Energy program
($70.1 million), for incentives related to customer service
activities ($6.7 million), for the amounts to be billed under the
PPFAC ($5.9 million) and for net electric sales revenues in
accordance with the ERAM (a refund of $56.4 million). The
revenues accrued in 1993 under the ERAM and for incentives
related to the Enlightened Energy program and customer service
activities are being collected from customers over the
twelve-month period ending March 31, 1995. Revenues accrued in
1994 are anticipated to be collected over a twelve-month period
beginning April 1, 1995. The revenues accrued under the PPFAC are
billed to customers on a monthly basis through the electric fuel
adjustment clause.
ENLIGHTENED ENERGY COSTS. In accordance with PSC directives, the
Company defers the costs for its Enlightened Energy program for
future recovery from ratepayers. Such deferrals amounted to
$170.2 million at December 31, 1994 and $140.1 million at
December 31, 1993. In accordance with the 1992 electric rate
settlement agreement, the Company is generally recovering its
Enlightened Energy program costs over a five-year period.
<PAGE>
<PAGE> - 83 -
TEMPORARY CASH INVESTMENTS. Temporary cash investments are
short-term, highly liquid investments which generally have
maturities of three months or less. They are stated at cost which
approximates market. The Company considers temporary cash
investments to be cash equivalents.
INVESTMENTS. Investments consist primarily of an external nuclear
decommissioning trust fund. At December 31, 1994 and 1993, the
trust fund amounted to $102.2 million and $83.1 million,
respectively. Investments for 1994 are stated at market and for
1993 at cost which approximated market. Earnings on the trust
fund are not recognized in income but are included in the
accumulated depreciation reserve. See "Nuclear Decommissioning"
in this Note A.
FEDERAL INCOME TAX. The Company provides for deferred federal
income taxes with respect to certain benefits realized from
depreciation deductions utilized for tax purposes, deferred fuel
accounting, unbilled revenues (electricity, gas and steam)
included in taxable income, deferrals arising from the rate
settlement agreements, and certain other specific items, when
approved by the PSC.
For rate-making purposes, accumulated deferred federal income
taxes previously collected from customers are deducted from rate
base and amortized or otherwise applied as a reduction in federal
income tax expense in future years. Accumulated deferred
investment tax credits are amortized ratably over the lives of
the related properties and applied as a reduction in future
federal income tax expense.
The Company, beginning January 1, 1993, adopted SFAS 109,
"Accounting for Income Taxes." SFAS 109 requires the Company to
record a deferred income tax liability for substantially all
temporary differences between book and tax bases of assets and
liabilities at current tax rates, including differences for which
deferred taxes have not previously been provided. For regulated
enterprises, a regulatory asset is recognized for the latter if
the criteria of SFAS 71 are met, that is, it is probable that
future revenues will be allowed sufficient in amount to recover
the costs for which deferred taxes have not previously been
provided. The regulatory asset, stated at the revenue requirement
level, amounts to $1,106.0 million and $1,150.6 million, at
December 31, 1994 and 1993, respectively. These amounts which are
included in accumulated deferred federal income tax (see Note G),
are not reflected in rate base for rate-making purposes. In
January 1993, the PSC issued an interim policy statement
proposing accounting procedures consistent with SFAS 109 and
providing assurances that these future increases in taxes will be
recoverable in rates. The final policy statement is not expected
to materially differ from the interim policy statement.
<PAGE>
<PAGE> - 84 -
The Company and its subsidiaries file a consolidated federal
income tax return. Income taxes are allocated to each company
based on its taxable income.
RESEARCH AND DEVELOPMENT COSTS. Research and development costs
relating to specific construction projects are capitalized. All
other such costs are charged to operating expenses as incurred.
Research and development costs in 1994, 1993 and 1992, amounting
to $46.8 million, $48.0 million and $44.8 million, respectively,
were charged to operating expenses. No research and development
costs were capitalized in these years.
RECLASSIFICATION. Certain prior year amounts have been
reclassified to conform with current year presentation.
Note B Capitalization
-----------------------------------------------------------------
COMMON STOCK AND PREFERRED STOCK NOT SUBJECT TO MANDATORY
REDEMPTION. Each share of Series B preference stock is
convertible into 13 shares of common stock at a conversion price
of $7.69 per share. During 1994, 1993 and 1992, 4,176 shares,
5,208 shares and 4,349 shares of Series B preference stock were
converted into 54,288 shares, 67,704 shares and 56,537 shares of
common stock, respectively.
At December 31, 1994, 690,326 shares of unissued common
stock were reserved for conversion of preference stock. The
preference stock is subordinate to the $5 Cumulative Preferred
Stock and Cumulative Preferred Stock with respect to dividends
and liquidation rights.
<PAGE>
<PAGE> - 85 -
Redemption prices of preferred stock other than Series I and
Series J (in each case, plus accrued dividends) are as follows:
-----------------------------------------------------------------
$5 Cumulative Preferred Stock $105.00
-----------------------------------------------------------------
Cumulative Preferred Stock:
Series A $102.00
Series B 102.00
Series C 101.00
Series D 101.00
Series E 101.00
Series F 102.50
-----------------------------------------------------------------
Cumulative Preference Stock:
6% Convertible Series B $100.00
-----------------------------------------------------------------
PREFERRED STOCK SUBJECT TO MANDATORY REDEMPTION. The Company is
required to redeem 25,000 of the Series I shares on May 1 of each
year in the five-year period commencing with the year 2002 and to
redeem the remaining Series I shares on May 1, 2007. The Company
is required to redeem the Series J shares on August 1, 2002. In
each case, the redemption price is $100 per share plus accrued
and unpaid dividends to the redemption date. In addition, the
Company may redeem Series I shares at a redemption price of
$105.76 per share, plus accrued dividends, if redeemed prior to
May 1, 1995 (and thereafter at prices declining annually to $100
per share, plus accrued dividends, after April 30, 2002);
provided, however, that prior to May 1, 1997, the Company may not
redeem any Series I shares with borrowed funds or proceeds from
certain securities issuances having a cost to the Company of less
than 7.20 percent per annum.
Neither Series I nor Series J shares may be called for
redemption while dividends are in arrears on outstanding shares
of $5 Cumulative Preferred Stock or Cumulative Preferred Stock.
Nevertheless, the mandatory redemption obligation of the Company
with respect to such shares is cumulative and if the redemption
requirement is in arrears the Company may not purchase or redeem
or pay any dividends on the common stock or any other stock
ranking junior as to dividends or assets to the Cumulative
Preferred Stock, except for payments or distributions in common
stock or such junior stock.
<PAGE>
<PAGE> - 86 -
LONG-TERM DEBT. Total long-term debt maturing in the period
1995-1999 is as follows:
-----------------------------------------------------------------
1995 $ 10,889,000
1996 183,524,000
1997 106,256,000
1998 200,000,000
1999 225,000,000
-----------------------------------------------------------------
Substantially all properties and franchises of the Company,
other than expressly excepted property, are subject to the liens
securing the Company's First and Refunding Mortgage Bonds and the
mortgage bonds of acquired companies.
Note C Lines of Credit
-----------------------------------------------------------------
The Company has bank lines of credit for 1995 amounting to $150
million. The credit lines require average compensating balances
of 2.5 percent of the credit lines, with interest on any
borrowings to be at prevailing market rates. There are no legal
restrictions applicable to the Company's cash balances resulting
from its obligation to maintain compensating balances.
Note D Pension Plans
-----------------------------------------------------------------
The pension plans for management and bargaining unit employees
cover substantially all employees of the Company and are designed
to comply with the Employee Retirement Income Security Act of
1974 (ERISA). Contributions are made solely by the Company based
on an actuarial valuation, and are not less than the minimum
amount required by ERISA. The Company's policy is to fund the
actuarially computed net pension cost as such cost accrues.
Benefits for management and bargaining unit employees are
generally based on a final five-year average pay formula.
<PAGE>
<PAGE> - 87 -
In accordance with SFAS 87, "Employers' Accounting for
Pensions," the Company uses the projected unit credit method for
determining pension cost. Pension costs for 1994, 1993 and 1992
amounted to $38.7 million, $42.4 million and $56.8 million,
respectively, of which $30.3 million for 1994, $33.6 million for
1993 and $44.8 million for 1992 was charged to operating expense.
In accordance with SFAS 88, "Employers' Accounting for
Settlements and Curtailments of Defined Benefit Pension Plans and
for Termination Benefits," as modified by SFAS 71, the Company in
1993 recorded an additional $4.4 million of pension cost, of
which $3.5 million was charged to operating expense, in
connection with the special retirement program discussed below.
Effective January 1, 1993, the Company adopted the PSC's
"Statement of Policy and Order Concerning the Accounting and
Ratemaking Treatment for Pensions and Postretirement Benefits
Other Than Pensions" (the PSC Policy). The PSC Policy requires
certain departures from the Company's previous accounting under
SFAS 87, including actuarial recognition of investment gains and
losses over five years (previously four years), removal of the 10
percent gain/loss corridor and adoption of a 10-year period for
amortization of recognized actuarial gains and losses.
(Previously, amounts in excess of corridor limits were amortized
over the remaining average service life of active employees.)
These changes have reduced pension cost due to more rapid
amortization of outstanding actuarial gains.
The Company offered a special retirement program in 1993
providing enhanced pension benefits for those employees who met
certain eligibility requirements and retired within specific time
limits. The incentives offered by the Company fall within the
category of special termination benefits as described in SFAS 88.
The increase in pension obligations as a result of this program
amounted to $33.3 million. Under an agreement with the PSC, the
Company is amortizing this liability over a 15-year period, with
rate recovery anticipated for the costs allocable to years three
through fifteen. In accordance with SFAS 71, the Company charged
the equivalent of the first two years of the amortization ($4.4
million) to pension expense in 1993 and established a liability
and offsetting regulatory asset for the $28.9 million allocable
to future periods.
<PAGE>
<PAGE> - 88 -
<TABLE>
The components of net periodic pension cost for 1994, 1993 and
1992 were as follows:
------------------------------------------------------------------------------------------------------------
(Millions of Dollars) 1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 96.6 $ 96.0 $ 89.7
Interest cost on projected
benefit obligation 285.5 259.9 243.2
Actual return on plan assets (3.4) (500.0) (258.4)
Unrecognized investment
(loss) gain deferred (322.6) 201.5 (19.3)
Net amortization (17.4) (15.0) 1.6
Net periodic pension cost 38.7 42.4 56.8
Special retirement program cost - 33.3 -
Regulatory asset - (28.9) -
Net special retirement program cost - 4.4 -
Total pension cost $ 38.7 $ 46.8 $ 56.8
------------------------------------------------------------------------------------------------------------
The funded status of the pension plans as of December 31, 1994,
1993 and 1992 was as follows:
------------------------------------------------------------------------------------------------------------
(Millions of Dollars) 1994 1993 1992
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Actuarial present value of
benefit obligation:
Vested $2,813.0 $2,731.9 $2,421.0
Nonvested 189.6 212.6 206.0
Accumulated to date 3,002.6 2,944.5 2,627.0
Effect of projected future
compensation levels 786.0 841.5 809.0
Total projected obligation 3,788.6 3,786.0 3,436.0
Plan assets at fair value 4,046.7 4,154.3 3,745.0
Plan assets less projected
benefit obligation 258.1 368.3 309.0
Unrecognized net gain (401.1) (522.9) (447.0)
Unrecognized prior service cost* 93.9 102.5 112.0
Unrecognized net transition
liability at January 1, 1987* 20.2 23.2 26.0
Accrued pension cost** $ (28.9) $ (28.9) $ 0
------------------------------------------------------------------------------------------------------------
</TABLE>
* Being amortized over approximately 15 years.
**See discussion above in this Note D.
To determine the present value of the projected benefit
obligation in 1994, a discount rate of 8 percent was assumed. For
1993 and 1992, a discount rate of 7.5 percent was assumed. A
weighted average rate of increase in future compensation levels
of 5.8 percent and a long-term rate of return on plan assets of
8.5 percent were assumed for all years.
The pension plan assets consist primarily of corporate
common stock and bonds, group annuity contracts and debt of the
United States government and its agencies.
<PAGE>
<PAGE> - 89 -
Note E Postretirement Benefits Other Than Pensions (OPEB)
-----------------------------------------------------------------
The Company has a contributory comprehensive hospital, medical
and prescription drug program for all retirees, their dependents
and surviving spouses. The Company also provides life insurance
benefits for approximately 6,600 retired employees. All of the
Company's employees become eligible for these benefits upon
retirement except that the amount of life insurance is limited
and is available only to management employees and to those
bargaining unit employees who participated in the optional
program prior to retirement. The Company has reserved the right
to amend or terminate these programs.
The Company adopted the provisions of SFAS 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions,"
effective January 1, 1993. It contains specific rules for
determining the cost of postretirement health and life insurance
benefits. These rules require accrual of the obligation for
previously unrecognized retiree benefit cost over a shorter
period than previous methods.
The Company's policy is to fund in external trusts the
actuarially determined annual costs for retiree health and life
insurance subject to statutory maximum (and minimum) limits. Rate
allowances that are not funded to an external trust accrue
interest at the pre-tax rate of return. As of December 31, 1993,
the Company had accrued $6.9 million in interest on its unfunded
liability of $28.5 million. In 1994, the Company funded both
amounts in addition to $0.9 million accrued in 1994.
The retiree health and life insurance expense for 1994 and
1993 was determined in accordance with the PSC Policy (see Note
D) which requires the Company to defer the difference between
the rate allowance for OPEB expense and the OPEB expense
determined in accordance with SFAS 106, amortize the transition
obligation over 20 years and recognize all gains and losses over
a 10-year period in determining the SFAS 106 expense. Current
electric, gas and steam rates reflect the increase in expense
resulting from the adoption of SFAS 106.
The cost to the Company for retiree health benefits for
1994, 1993 and 1992 amounted to $67.1 million, $66.3 million and
$46.1 million, respectively, of which $52.7 million for 1994,
$52.5 million for 1993 and $36.4 million for 1992 was charged to
operating expense. The cost of the retiree life insurance plan
for 1994, 1993 and 1992 amounted to $21.6 million, $22.3 million
and $8.6 million, respectively, of which $17.0 million for 1994,
$17.7 million for 1993 and $6.8 million for 1992 was charged to
operating expense.
<PAGE>
<PAGE> - 90 -
The components of postretirement benefit (health and life
insurance) costs for years 1994 and 1993 were as follows:
<TABLE>
------------------------------------------------------------------------------------------------------------
(Millions of Dollars) 1994 1993
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Service cost - benefits earned during the period $10.7 $10.3
Interest cost on accumulated postretirement
benefit obligation 57.7 53.0
Actual return on plan assets (8.4) (8.5)
Unrecognized investment (loss) gain deferred (5.7) 2.9
Amortization of transition obligation
and unrecognized net loss 34.4 30.9
Net periodic postretirement benefit cost $88.7 $88.6
------------------------------------------------------------------------------------------------------------
The following table sets forth the program's funded status
at December 31, 1994 and 1993:
------------------------------------------------------------------------------------------------------------
(Millions of Dollars) 1994 1993
------------------------------------------------------------------------------------------------------------
Accumulated postretirement benefit obligation:
Retirees $413.9 $413.2
Employees eligible to retire 167.2 144.2
Employees not eligible to retire 204.5 221.5
Total projected obligation 785.6 778.9
Plan assets at fair value 219.1 130.8
Plan assets less accumulated
postretirement benefit obligation (566.5) (648.1)
Unrecognized net loss 11.1 33.4
Unrecognized net transition liability
at January 1, 1993* 555.4 586.2
Accrued postretirement benefit cost $ 0 $ (28.5)
------------------------------------------------------------------------------------------------------------
</TABLE>
*Being amortized over a period of 20 years.
To determine the accumulated postretirement benefit
obligation in 1994 and 1993, a discount rate of 8 percent and 7.5
percent, respectively, was assumed. The assumed long-term rate of
return on plan assets was 8.5 percent for these years. The health
cost trend rate assumed for year 1994 was 9 percent, and then
declining approximately one percent per year to 5 percent for
year 1999 and thereafter. If the assumed health care cost trend
rate were to be increased by one percentage point each year, the
accumulated postretirement benefit obligation would increase by
approximately $91.8 million and the service cost and interest
component of the net periodic postretirement benefit cost would
increase by $9.3 million.
Postretirement plan assets consist of corporate common stock
and bonds, group annuity contracts, debt of the United States
government and its agencies and short-term securities.
<PAGE>
<PAGE> - 91 -
Note F Contingencies
-----------------------------------------------------------------
INDIAN POINT. Nuclear generating units similar in design to the
Company's Indian Point 2 unit have experienced problems of
varying severity in their steam generators, which in a number of
instances have required steam generator replacement. Inspections
of the Indian Point 2 steam generators since 1976 have revealed
various problems, some of which appear to have been arrested, but
the remaining service life of the steam generators is uncertain
and may be shorter than the unit's life. The projected service
life of the steam generators is reassessed periodically in the
light of the inspections made during scheduled outages of the
unit. The 1995 outage inspection has just begun. Based on data
from the latest completed inspection (1993) and other sources,
the Company estimates that steam generator replacement will not
be required before 1997, and possibly not until some years later.
To avoid procurement delays in the event replacement is
necessary, the Company purchased replacement steam generators,
which are stored at the site. If replacement of the steam
generators is required, such replacement is presently estimated
(in 1994 dollars) to require additional expenditures of
approximately $102 million (exclusive of replacement power costs)
and an outage of approximately six months. However, securing
necessary permits and approvals or other factors could require a
substantially longer outage if steam generator replacement is
required on short notice.
NUCLEAR INSURANCE. The insurance policies covering the Company's
nuclear facilities for property damage, excess property damage,
and outage costs permit assessments under certain conditions to
cover insurers' losses. As of December 31, 1994, the highest
amount which could be assessed for losses during the current
policy year under all of the policies was $26.1 million. While
assessments may also be made for losses in certain prior years,
the Company is not aware of any losses in such years which it
believes are likely to result in an assessment.
Under certain circumstances, in the event of nuclear
incidents at facilities covered by the federal government's
third-party liability indemnification program, the Company could
be assessed up to $79.3 million per incident of which not more
than $10 million may be assessed in any one year. The
per-incident limit is to be adjusted for inflation not later than
1998 and not less than once every five years thereafter.
The Company participates in an insurance program covering
liabilities for injuries to certain workers in the nuclear power
industry. In the event of such injuries, the Company is subject
to assessment up to an estimated maximum of approximately $3.1
million.
<PAGE>
<PAGE> - 92 -
ENVIRONMENTAL MATTERS. The normal course of the Company's
operations necessarily involves activities and substances that
expose the Company to potential liabilities under federal, state
and local laws protecting the environment. Such liabilities can
be material and in some instances may be imposed without regard
to fault, or may be imposed for past acts, even though such past
acts may have been lawful at the time they occurred. Sources of
such potential liabilities include (but are not limited to) the
Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 (Superfund), a recent settlement with the
New York State Department of Environmental Conservation (DEC),
asbestos, and electric and magnetic fields (EMF).
Superfund. By its terms, Superfund imposes joint and several
strict liability, regardless of fault, upon generators of
hazardous substances for resulting removal and remedial costs and
environmental damages. The Company has received process or notice
concerning possible claims under Superfund or similar state
statutes relating to a number of sites at which it is alleged
that hazardous substances generated by the Company (and, in most
instances, a large number of other potentially responsible
parties) were deposited. Estimates of the investigative, removal,
remedial and environmental damage costs (if any) the Company will
be obligated to pay with respect to each of these sites range
from extremely preliminary to highly refined. These estimates
currently aggregate approximately $12 million and the Company has
accrued a liability in this amount. However, it is possible that
material additional costs in amounts not presently determinable
may be incurred with respect to these and other sites.
DEC Settlement. In November 1994 the Company agreed to a consent
order settling a civil administrative proceeding instituted by
the DEC in 1992, alleging environmental violations by the
Company. Under the consent order, in addition to required
payments which have been made, the Company must also conduct an
environmental compliance audit and an environmental management
review, develop and implement "best management practices" plans
for certain facilities and undertake a remediation program at
certain sites. At December 31, 1994, the Company accrued a
liability of $10.9 million for the expense of the site
remediation program. Capital expenditures for environmental
projects in the next five years to comply with the consent order
are estimated at $64 million. There may be additional costs which
could be material, but are not presently determinable.
<PAGE>
<PAGE> - 93 -
Asbestos Claims. Suits have been brought in New York State and
federal courts against the Company and many other defendants,
wherein several thousand plaintiffs sought large amounts of
compensatory and punitive damages for deaths and injuries
allegedly caused by exposure to asbestos at various premises of
the Company. Many of these suits have been disposed of without
any payment by the Company, or for immaterial amounts. The
amounts specified in all the remaining suits total billions of
dollars but the Company believes that these amounts are greatly
exaggerated, as were the claims already disposed of. Based on the
information and relevant circumstances known to the Company at
this time, it is the opinion of the Company that these suits will
not have a material adverse effect on the Company's financial
position.
EMF. Electric and magnetic fields are found wherever electricity
is used. Several scientific studies have raised concerns that EMF
surrounding electric equipment and wires, including power lines,
may present health risks. The Company is the defendant in several
suits claiming property damage or personal injury allegedly
resulting from EMF. In the event that a causal relationship
between EMF and adverse health effects is established, or
independently of any such causal determination, in the event of
adverse developments in related legal or public policy doctrines,
there could be a material adverse effect on the electric utility
industry, including the Company.
<PAGE>
<PAGE> - 94 -
Note G Federal Income Tax
----------------------------------------------------------------
In the case of regulated utilities, SFAS 109 requires recognition
in the balance sheet of the revenue requirements to meet the
costs of future federal income taxes for temporary differences
for which deferred taxes had not previously been provided.
Accumulated deferred federal income taxes in excess of the
statutory 35 percent tax rate for 1993 were reclassified to
conform to the current year presentation. This reclassification
had no effect on income. The net revenue requirements related to
future federal income taxes at December 31, 1994 and 1993 are
shown on the following table.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
(Millions of Dollars) 1994 1993
--------------------------------------------------------------------------------
<S> <C> <C>
Future federal income tax liability:
Temporary differences between the book
and tax bases of assets and liabilities:
Property related $5,389.1 $5,255.0
Reserve for injuries and damages (43.9) (50.1)
Other 24.4 28.3
Total 5,369.6 5,233.2
Future federal income tax 1,879.4 1,831.6
Less: Accumulated deferred federal income
taxes previously provided 1,160.5 1,083.7
Net future federal income tax expense for
which deferred taxes have not been provided 718.9 747.9
Net revenue requirements for above
(Regulatory asset - future federal
income taxes)* 1,106.0 1,150.6
Add: Accumulated deferred federal income
taxes previously provided 1,160.5 1,083.7
Total accumulated deferred
federal income tax $2,266.5 $2,234.3
--------------------------------------------------------------------------------
</TABLE>
*Net revenue requirements will be offset by the amortization to federal income
tax expense of accumulated deferred investment tax credits. Including the full
effect therefrom, the net revenue requirements related to future federal
income taxes at December 31, 1994 and 1993 are $914.5 million and $949.5
million, respectively.
<PAGE>
<PAGE> - 95 -
<TABLE>
===================================================================================================================================
Note G Federal Income Tax, continued
-----------------------------------------------------------------------------------------------------------------------------------
Year Ended December 31 (Thousands of Dollars) 1994 1993 1992
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Charged to: Operations $ 438,160 $ 366,020 $318,320
Other income 430 (1,010) 2,150
------------------------------------------------------------------------------------------------------------------------------------
Total federal income tax 438,590 365,010 320,470
====================================================================================================================================
Reconciliation of reported net income with taxable income
Federal income tax -- current 374,500 270,800 252,600
Federal income tax -- deferred 73,710 106,470 81,670
Investment tax credits deferred (9,620) (12,260) (13,800)
------------------------------------------------------------------------------------------------------------------------------------
Total federal income tax 438,590 365,010 320,470
Net income 734,270 658,522 604,088
------------------------------------------------------------------------------------------------------------------------------------
Income before federal income tax 1,172,860 1,023,532 924,558
------------------------------------------------------------------------------------------------------------------------------------
Effective federal income tax rate 37.4% 35.7% 34.7%
====================================================================================================================================
Adjustments decreasing (increasing) taxable income:
Tax depreciation in excess of book depreciation:
Amounts subject to normalization 218,181 226,442 204,639
Other (94,813) (90,428) (88,608)
Regulatory accounts receivable (70,771) (70,814) 127,497
Enlightened Energy program costs 29,677 59,297 20,841
Advance refunding of long-term debt (6,814) 86,346 17,375
Other - net 24,131 30,282 (100,982)
------------------------------------------------------------------------------------------------------------------------------------
Total 99,591 241,125 180,762
------------------------------------------------------------------------------------------------------------------------------------
Taxable income 1,073,269 782,407 743,796
====================================================================================================================================
Federal income tax -- current
Amount computed at statutory rates (35%, 35% and 34%)* 375,644 273,842 252,891
Tax credits (1,144) (3,042) (291)
------------------------------------------------------------------------------------------------------------------------------------
Total 374,500 270,800 252,600
------------------------------------------------------------------------------------------------------------------------------------
Charged to: Operations 374,160 271,140 250,160
Other income 340 (340) 2,440
------------------------------------------------------------------------------------------------------------------------------------
Total 374,500 270,800 252,600
====================================================================================================================================
Federal income tax -- deferred
Provisions for deferred federal income taxes consist of the following
tax effects of timing differences between tax and book income:
Tax depreciation in excess of book depreciation 72,597 76,193 66,220
Regulatory accounts receivable (24,770) (24,785) 43,349
Enlightened Energy program costs 10,387 20,754 7,086
Advance refunding of long-term debt (2,385) 30,221 5,908
Other -- net 17,881 4,087 (40,893)
------------------------------------------------------------------------------------------------------------------------------------
Total 73,710 106,470 81,670
------------------------------------------------------------------------------------------------------------------------------------
Charged to: Operations 73,620 107,140 81,960
Other income 90 (670) (290)
------------------------------------------------------------------------------------------------------------------------------------
TOTAL $ 73,710 $ 106,470 $ 81,670
====================================================================================================================================
*Under rate agreements, the effect of increases in the statutory rate from 34% to 35% effective January 1, 1993 was deferred until
such effect could next be reflected in rates. The deferrals applicable to gas and steam operations began to be amortized over a
twelve-month period which began October 1, 1993 when new rates became effective. For electric operations, deferrals for the year
1993 and the first three months of 1994 are being amortized over a twelve-month period which began April 1, 1994 when new electric
rates became effective.
</TABLE>
<PAGE>
<PAGE> - 96 -
<TABLE>
Note H Financial Information By Business Segments (Thousands of Dollars)
------------------------------------------------------------------------------------------------------------------------------------
Electric Steam
--------------------------------------- -------------------------------------------
1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------- -------------------------------------------
Operating revenues* $5,152,351 $5,145,010 $4,905,523 $ 343,916 $ 326,888 $ 314,075
------------------------------------------------------------------------------------------------------------------------------------
Operating expenses
Fuel 410,173 446,578 563,349 157,591 158,635 146,901
Purchased power 787,455 812,616 606,822 -- -- --
Other operations and maintenance* 1,372,865 1,403,022 1,328,900 80,035 78,787 75,210
Depreciation and amortization 364,988 350,590 331,610 10,961 9,909 9,259
Taxes, other than federal income 955,850 994,174 1,037,461 46,178 46,090 46,741
Federal income tax 379,584 322,076 281,960 11,577 4,966 6,069
------------------------------------------------------------------------------------- -------------------------------------------
Total operating expenses* 4,270,915 4,329,056 4,150,102 306,342 298,387 284,180
------------------------------------------------------------------------------------- -------------------------------------------
Operating income 881,436 815,954 755,421 37,574 28,501 29,895
------------------------------------------------------------------------------------- -------------------------------------------
Construction expenditures 587,189 626,494 641,076 44,957 36,612 32,008
------------------------------------------------------------------------------------- -------------------------------------------
Net utility plant** 8,874,341 8,592,187 8,285,993 378,748 337,713 303,198
Fuel 50,821 53,681 87,410 62 74 75
Other identifiable assets 1,899,182 1,970,998 743,795 48,141 50,555 15,929
------------------------------------------------------------------------------------- -------------------------------------------
*Intersegment rentals included in segments' income but eliminated for total company
Operating revenues $11,879 $13,345 $13,469 $ 1,409 $ 1,548 $ 1,568
Operating expenses 2,331 2,726 2,559 12,733 14,139 14,250
====================================================================================================================================
Gas Total Company
--------------------------------------- -------------------------------------------
1994 1993 1992 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------- -------------------------------------------
Operating revenues* $ 891,897 $ 810,377 $ 730,132 $ 6,373,086 $ 6,265,394 $ 5,932,904
------------------------------------------------------------------------------------- -------------------------------------------
Operating expenses
Fuel -- -- -- 567,764 605,213 710,250
Purchased power -- -- -- 787,455 812,616 606,822
Gas purchased for resale 341,204 289,708 245,175 341,204 289,708 245,175
Other operations and maintenance* 214,451 212,832 204,262 1,652,273 1,677,760 1,591,546
Depreciation and amortization 46,407 43,231 39,992 422,356 403,730 380,861
Taxes, other than federal income 125,663 119,019 115,371 1,127,691 1,159,283 1,199,573
Federal income tax 46,999 38,978 30,291 438,160 366,020 318,320
------------------------------------------------------------------------------------ -------------------------------------------
Total operating expenses* 774,724 703,768 635,091 5,336,903 5,314,330 5,052,547
------------------------------------------------------------------------------------ -------------------------------------------
Operating income 117,173 106,609 95,041 1,036,183 951,064 880,357
------------------------------------------------------------------------------------ -------------------------------------------
Construction expenditures 125,384 125,962 121,597 757,530 789,068 794,681
------------------------------------------------------------------------------------ -------------------------------------------
Net utility plant** 1,308,119 1,226,256 1,140,467 10,561,208 10,156,156 9,729,658
Fuel and gas in storage 50,698 49,091 45,570 101,581 102,846 133,055
Other identifiable assets 151,628 172,790 86,829 2,098,951 2,194,343 846,553
Other corporate assets 966,624 804,020 886,853
------------------------------------------------------------------------------------ -------------------------------------------
Total assets $13,728,364 $13,257,365 $11,596,119
------------------------------------------------------------------------------------ -------------------------------------------
*Intersegment rentals included in segments' income but eliminated for total company
Operating revenues $ 1,790 $ 1,988 $ 1,789 $15,078 $16,881 $16,826
Operating expenses 14 16 17 15,078 16,881 16,826
====================================================================================================================================
**General Utility Plant was allocated to Electric and Gas on the basis of the departmental use of such plant. Pursuant to PSC
requirements the Steam department is charged an interdepartmental rent for General Plant used in Steam operations which is credited
to the Electric and Gas departments.
</TABLE>
<PAGE>
<PAGE> - 97 -
<TABLE>
SCHEDULE VIII
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1994
(Thousands of Dollars)
<S> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other At End
Description of Period Expenses Accounts Deductions of Period
Valuation Accounts
deducted in the balance
sheet from the assets to
which they apply:
Accumulated Provision
for uncollectible
accounts receivable:
Electric, Gas and
Steam Customers........ $ 21,600 $ 30,256 - $ 30,256* $ 21,600
Other.................... - - - - -
*Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated
as receivables previously written off.
</TABLE>
<PAGE>
<PAGE> - 98 -
<TABLE>
SCHEDULE VIII
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1993
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other At End
Description of Period Expenses Accounts Deductions of Period
Valuation Accounts
deducted in the balance
sheet from the assets to
which they apply:
Accumulated Provision
for uncollectible
accounts receivable:
Electric, Gas and
Steam Customers........ $ 19,600 $ 28,006 - $ 26,006* $ 21,600
Other.................... - - - - -
*Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated
as receivables previously written off.
</TABLE>
<PAGE>
<PAGE> - 99 -
<TABLE>
SCHEDULE VIII
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
VALUATION AND QUALIFYING ACCOUNTS
YEAR ENDED DECEMBER 31, 1992
(Thousands of Dollars)
<S> <C> <C> <C> <C> <C>
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
Additions
(1) (2)
Balance at Charged to Charged to Balance
Beginning Costs and Other At End
Description of Period Expenses Accounts Deductions of Period
Valuation Accounts
deducted in the balance
sheet from the assets to
which they apply:
Accumulated Provision
for uncollectible
accounts receivable:
Electric, Gas and
Steam Customers........ $ 18,500 $ 27,037 - $ 25,937* $ 19,600
Other.................... - - - - -
*Accounts written off less cash collections, miscellaneous adjustments and amounts reinstated
as receivables previously written off.
</TABLE>
<PAGE>
<PAGE> - 100 -
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
NONE.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
ITEM 11. EXECUTIVE COMPENSATION
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by Part III is incorporated by
reference from the Company's definitive proxy statement for its
Annual Meeting of Stockholders to be held on May 15, 1995. The
proxy statement is to be filed pursuant to Regulation 14A not
later than 120 days after December 31, 1994, the close of the
fiscal year covered by this report.
In accordance with General Instruction G(3) to Form 10-K
other information regarding the Company's Executive Officers may
be found in Part I of this report under the caption "Executive
Officers of the Registrant."
<PAGE>
<PAGE> - 101 -
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
(a) Documents filed as part of this report:
1. List of Financial Statements
Consolidated Balance Sheet at December 31, 1994 and
1993
Consolidated Income Statement for the years ended
December 31, 1994, 1993 and 1992
Consolidated Statement of Cash Flows for the years
ended December 31, 1994, 1993 and 1992
Consolidated Statement of Capitalization at December
31, 1994 and 1993
Consolidated Statement of Retained Earnings for the
years ended December 31, 1994, 1993 and 1992
Notes to Consolidated Financial Statements
2. List of Financial Statement Schedules
Valuation and Qualifying Accounts
(Schedule VIII)
<PAGE>
<PAGE> - 102 -
3. List of Exhibits
3(i).1 Restated Certificate of Incorporation filed with the
Department of State of the State of New York on
December 31, 1984. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1989 (File No. 1-1217) as Exhibit 3(a).)
3(i).2 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on May 16, 1988. (Designated in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1989 (File No. 1-1217) as Exhibit 3(b).)
3(i).3 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on June 2, 1989. (Designated in the
Company's Annual Report on Form 10-K for the year ended
December 31, 1989 (File No. 1-1217) as Exhibit 3(c).)
3(i).4 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on April 28, 1992. (Designated in
the Company's Current Report on Form 8-K, dated April
24, 1992, as Exhibit 4(d).)
3(i).5 Certificate of Amendment of Restated Certificate of
Incorporation filed with the Department of State of the
State of New York on August 21, 1992. (Designated in
the Company's Current Report on Form 8-K, dated August
20, 1992, as Exhibit 4(e).)
3(ii) By-laws of the Company, effective as of July 26, 1994.
(Designated in the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1994 as Exhibit
3.2.)
4.1 Indenture, dated as of April 1, 1946, between the
Company and the National City Bank of New York (now
Citibank, N.A.), as Trustee. (Designated in
Registration Statement No. 2-6932 as Exhibit 7-48.)
<PAGE>
<PAGE> - 103 -
4.2 The following Supplemental Indentures between the
Company and the National City Bank of New York (now
Citibank, N.A.), as Trustee, which are designated as
follows:
Securities Act
Supplemental Registration
Indenture Statement Exhibit
1. Fifteenth 2-13939 2-4
2. Twenty-ninth 2-24272 4-4
3. Thirtieth 2-25736 4-4
4.3 Instrument of Resignation, Appointment and Acceptance,
dated as of October 31, 1979, among the Company,
Citibank, N.A., and Chemical Bank, Supplemental to
Mortgage Trust Indenture, dated as of April 1, 1946.
(Designated in the Company's Annual Report on Form 10-K
for the year ended December 31, 1991 as Exhibit 4(c).)
4.4 Participation Agreement, dated as of August 15, 1985,
between New York State Energy Research and Development
Authority ("NYSERDA") and the Company. (Designated in
the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990 as Exhibit 4(a)(1).)
4.5 The following Supplemental Participation Agreements
supplementing the Participation Agreement, dated as of
August 15, 1985, between NYSERDA and the Company, which
are designated as follows:
Supplemental Securities Exchange Act
Participation Agreement File No. 1-1217
Number Date Form Date Exhibit
1. First 11/15/86 10-Q 6/30/90 4(a)(2)
2. Second 4/15/87 10-Q 6/30/90 4(a)(3)
3. Third 9/15/87 10-Q 6/30/90 4(a)(4)
4. Fourth 1/1/89 10-Q 6/30/90 4(a)(5)
5. Fifth 7/1/89 10-Q 6/30/90 4(a)(6)
6. Sixth 11/1/89 10-Q 6/30/90 4(a)(7)
7. Seventh 7/1/90 10-Q 6/30/90 4(a)(8)
8. Eighth 1/1/91 10-K 12/31/90 4(e)(8)
9. Ninth 1/15/92 10-K 12/31/91 4(e)(9)
4.6 Participation Agreement, dated as of December 1, 1992,
between NYSERDA and the Company. (Designated in the
Company's Annual Report on Form 10-K for the year
ended December 31, 1992 as Exhibit 4(f).)
<PAGE>
<PAGE> - 104 -
4.7 The following Supplemental Participation Agreements
supplementing the Participation Agreement, dated as of
December 1, 1992, between NYSERDA and the Company,
which are designated as follows:
Supplemental Securities Exchange Act
Participation Agreement File No. 1-1217
Number Date Form Date Exhibit
1. First 3/15/93 10-Q 6/30/93 4.1
2. Second 10/1/93 10-Q 9/30/93 4.3
*3. Third 12/1/94
4.8 Indenture of Trust, dated as of August 15, 1985,
between NYSERDA and Morgan Guaranty Trust Company of
New York, as Trustee ("Morgan Guaranty"). (Designated
in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990 as Exhibit 4(b)(1).)
4.9 The following Supplemental Indentures of Trust
supplementing the Indenture of Trust, dated as of
August 15, 1985, between NYSERDA and Morgan Guaranty.
Supplemental Securities Exchange Act
Indenture of Trust File No. 1-1217
Number Date Form Date Exhibit
1. First 11/15/86 10-Q 6/30/90 4(b)(2)
2. Second 4/15/87 10-Q 6/30/90 4(b)(3)
3. Third 9/15/87 10-Q 6/30/90 4(b)(4)
4. Fourth 1/1/89 10-Q 6/30/90 4(b)(5)
5. Fifth 7/1/89 10-Q 6/30/90 4(b)(6)
6. Sixth 11/1/89 10-Q 6/30/90 4(b)(7)
7. Seventh 7/1/90 10-Q 6/30/90 4(b)(8)
8. Eighth 1/1/91 10-K 12/31/90 4(g)(8)
9. Ninth 1/15/92 10-K 12/31/91 4(g)(9)
4.10 Indenture of Trust, dated as of December 1, 1992,
between NYSERDA and Morgan Guaranty Trust Company of
New York, as Trustee ("Morgan Guaranty"). (Designated
in the Company's Annual Report on Form 10-K for the
year ended December 31, 1992 as Exhibit 4(i).)
4.11 The following Supplemental Indentures of Trust
supplementing the Indenture of Trust, dated as of
December 1, 1992, between NYSERDA and Morgan Guaranty.
Supplemental Securities Exchange Act
Indenture of Trust File No. 1-1217
Number Date Form Date Exhibit
1. First 3/15/93 10-Q 6/30/93 4.2
2. Second 10/1/93 10-Q 9/30/93 4.4
*3. Third 12/1/94
<PAGE>
<PAGE> - 105 -
4.12 Indenture, dated as of December 1, 1990, between the
Company and The Chase Manhattan Bank (National
Association), as Trustee. (Designated in the
Company's Annual Report on Form 10-K for the year
ended December 31, 1990 as Exhibit 4(h).)
4.13 The following Forms of the Company's Debentures:
Securities Exchange Act
File No. 1-1217
Debenture Form Date Exhibit
9.70%, Series 1990 A 8-K 11/29/90 4
9 3/8%, Series 1991 A 8-K 6/20/91 4
7 3/8%, Series 1992 A 8-K 2/5/92 4(a)
7 5/8%, Series 1992 B 8-K 2/5/92 4(b)
7.60%, Series 1992 C 8-K 2/25/92 4
6 1/2%, Series 1992 D 8-K 8/26/92 4(a)
7 3/8%, Series 1992 E 8-K 8/26/92 4(b)
8.05%, Series 1992 F 8-K 12/15/92 4
6 1/4%, Series 1993 A 8-K 1/13/93 4
6 1/2%, Series 1993 B 8-K 2/4/93 4(a)
6 5/8%, Series 1993 C 8-K 2/4/93 4(b)
6 3/8%, Series 1993 D 8-K 4/7/93 4
5.30%, Series 1993 E 8-K 5/19/93 4(a)
5.70%, Series 1993 F 8-K 5/19/93 4(b)
7 1/2%, Series 1993 G 8-K 6/7/93 4
7 1/8% Series 1994 A 8-K 2/8/94 4
Floating Rate Series 1994 B 8-K 6/29/94 4
10.1 Agreement dated as of October 31, 1968 among Central
Hudson Gas & Electric Corporation, the Company and
Niagara Mohawk Power Corporation. (Designated in
Registration Statement No. 2-31884 as Exhibit 7.)
10.2 Amendment dated November 23, 1976 to Agreement dated
as of October 31, 1968 among Central Hudson Gas &
Electric Corporation, the Company and Niagara Mohawk
Power Corporation and Additional Agreement dated as of
November 23, 1976 between Central Hudson and the
Company. (Designated in the Company's Annual Report
on Form 10-K for the year ended December 31, 1991 as
Exhibit 10(b).)
10.3 General Agreement between Orange and Rockland
Utilities, Inc. and the Company dated October 10,
1969. (Designated in Registration Statement No.
2-35734 as Exhibit 7-1.)
<PAGE>
<PAGE> - 106 -
10.4 Letters, dated November 18, 1970 and November 23,
1970, between Orange and Rockland Utilities, Inc. and
the Company pursuant to Article 14(a) of the aforesaid
General Agreement. (Designated in Registration
Statement No. 2-38807 as Exhibit 5-3.)
*10.5 The Con Edison Thrift Savings Plan for Management
Employees and Tax Reduction Act Stock Ownership Plan,
as amended and restated.
10.6 Deferred Compensation Plan for the Benefit of Trustees
of the Company, dated February 27, 1979, and
amendments thereto, dated September 19, 1979
(effective February 27, 1979), February 26, 1980, and
November 24, 1992 (effective January 1, 1993).
(Designated in Company's Annual Report on Form 10-K
for the year ended December 31, 1992 as Exhibit
10(i).)
10.7 Employment contract, dated August 24, 1982, between
the Company and Arthur Hauspurg, as amended.
(Designated in the Company's Annual Report on Form
10-K for the year ended December 31, 1991 as Exhibit
10(i).)
10.8 Agreement, dated January 24, 1991, between the Company
and Arthur Hauspurg. (Designated in the Company's
Annual Report on Form 10-K for the year ended December
31, 1990 as Exhibit 10(l).)
10.9 Employment Contract, dated May 22, 1990, between the
Company and Eugene R. McGrath. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1990 as Exhibit 10.)
10.10 Amendment, dated August 27, 1991, to Employment
Contract dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1991 as Exhibit 19.)
10.11 Amendment, dated August 25, 1992, to Employment
Contract, dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1992 as Exhibit 19.)
10.12 Amendment, dated February 18, 1993, to Employment
Contract dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(o).)
<PAGE>
<PAGE> - 107 -
10.13 Amendment, dated August 24, 1993, to Employment
Contract dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1993 as Exhibit 10.1.)
10.14 Amendment, dated August 24, 1994, to Employment
Contract, dated May 22, 1990, between the Company and
Eugene R. McGrath. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarterly
period ended September 30, 1994 as Exhibit 10.1.)
10.15 Agreement, effective March 1, 1989, between Raymond J.
McCann and the Company as to salary and deferred
compensation. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(p).)
10.16 Amendment, dated February 27, 1990, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1989 (File No. 1-1217) as Exhibit 10(w).)
10.17 Amendment, dated November 27, 1990, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1990 as Exhibit 10(r).)
10.18 Amendment, dated March 11, 1992, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1991, as Exhibit 10(p).)
10.19 Amendment, dated February 18, 1993, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(t).)
10.20 Amendment, dated March 10, 1993, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(u).)
<PAGE>
<PAGE> - 108 -
10.21 Amendment, dated March 10, 1994, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1993 as Exhibit 10.23.)
*10.22 Amendment, dated March 1, 1995, to Agreement,
effective March 1, 1989, between Raymond J. McCann and
the Company.
10.23 The Consolidated Edison Company of New York, Inc.
Executive Incentive Plan adopted by the Company's
Board of Trustees on March 23, 1982 as amended through
March 30, 1989. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1991, as Exhibit 10(q).)
10.24 Amendment and Restatement, dated August 26, 1991 and
effective as of April 30, 1991, of The Consolidated
Edison Company of New York, Inc. Executive Incentive
Plan. (Designated in the Company's Annual Report on
Form 10-K for the year ended December 31, 1991 as
Exhibit 10(r).)
10.25 Amendment and Restatement, dated January 29, 1992 and
effective as of December 1, 1991, of The Consolidated
Edison Company of New York, Inc. Executive Incentive
Plan. (Designated in the Company's Annual Report on
Form 10-K for the year ended December 31, 1991 as
Exhibit 10(s).)
*10.26 The Consolidated Edison Retirement Plan for Management
Employees, as amended and restated, effective as of
January 1, 1994.
10.27 Con Edison Supplemental Retirement Income Plan,
adopted July 22, 1987, effective January 1, 1987.
(Designated in the Company's Annual Report on Form
10-K for the year ended December 31, 1992 as Exhibit
10(cc).)
10.28 Copy of memorandum and resolutions adopted by the
Company's Board of Trustees on August 23, 1983
authorizing additional compensation for certain
officers of the Company and permitting the deferral by
the officers of certain compensation. (Designated in
the Company's Annual Report on Form 10-K for the year
ended December 31, 1992 as Exhibit 10(dd).)
<PAGE>
<PAGE> - 109 -
10.29 Consolidated Edison Company of New York, Inc.
Retirement Plan for Trustees, effective as of July 1,
1988. (Designated in the Company's Annual Report on
Form 10-K for the year ended December 31, 1992 as
Exhibit 10(ee).)
10.30 Amendment No. 1, dated September 28, 1990, to the
Consolidated Edison Company of New York, Inc.
Retirement Plan for Trustees. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1990 as Exhibit 19(c).)
10.31 Planning and Supply Agreement, dated March 10, 1989,
between the Company and the Power Authority of the
State of New York. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(gg).)
10.32 Delivery Service Agreement, dated March 10, 1989,
between the Company and the Power Authority of the
State of New York. (Designated in the Company's Annual
Report on Form 10-K for the year ended December 31,
1992 as Exhibit 10(hh).)
10.33 Supplemental Medical Plan for the Benefit of the
Company's officers. (Designated in the Company's
Annual Report on Form 10-K for the year ended December
31, 1991, as Exhibit 10(aa).)
10.34 The Con Edison Discount Stock Purchase Plan.
(Designated in the Company's Annual Report on Form
10-K for the year ended December 31, 1991, as Exhibit
10(bb).)
10.35 Employment Agreement, dated June 25, 1991, between the
Company and J. Michael Evans. (Designated in the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1991 as Exhibit 19.)
10.36 Amendment, dated March 29, 1993, to Employment
Agreement, dated June 25, 1991, between the Company
and J. Michael Evans. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarter ended
March 31, 1993 as Exhibit 10.)
10.37 Amendment, dated November 8, 1993, to Employment
Agreement, dated June 25, 1991, between the Company
and J. Michael Evans. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarter ended
September 30, 1993 as Exhibit 10.2.)
<PAGE>
<PAGE> - 110 -
10.38 The Consolidated Edison Retiree Health Program for
Management Employees, effective as of January 1, 1993.
(Designated in the Company's Annual Report on Form
10-K for the year ended December 31, 1992 as Exhibit
10(ll).)
10.39 Amendment No. 1, dated October 31, 1994, to the
Consolidated Edison Retiree Health Program for
Management Employees. (Designated in the Company's
Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 1994 as Exhibit 10.3.)
*12 Statement of computation of ratio of earnings to fixed
charges for the years ended December 31, 1994, 1993,
1992, 1991 and 1990.
*23 Consent of Price Waterhouse dated March 28, 1995.
*24 Powers of Attorney of each of the persons signing this
report by attorney-in-fact.
*27 Financial Data Schedule. (To the extent provided in
Rule 402 of Regulation S-T, this exhibit shall not be
deemed "filed", or otherwise subject to liabilities, or
be deemed part of a registration statement.)
Exhibits listed above which have been filed with the
Securities and Exchange Commission pursuant to the Securities Act
of 1933 and the Securities Exchange Act of 1934, and which were
designated as noted above, are hereby incorporated by reference
and made a part of this report with the same effect as if filed
with the report.
____________________
* Filed herewith
<PAGE>
<PAGE> - 111 -
(b) Reports on Form 8-K:
During the quarter ended December 31, 1994, the Company
filed no Current Reports on Form 8-K.
The Company filed a Current Report on Form 8-K, dated
February 13, 1995, reporting (under Item 5) the settlement
agreement discussed under the caption "Liquidity and Capital
Resources - 1994 Electric Rate Increase Filing" in Item 7 of this
report.
<PAGE>
<PAGE> - 112 -
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Date: March 29, 1995 By Raymond J. McCann
Raymond J. McCann
Executive Vice President &
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities and on
the dates indicated.
Date Signature Title
March 29, 1995 Eugene R. McGrath* Chairman of the Board,
President, Chief Executive
Officer and Trustee
(Principal Executive Officer)
March 29, 1995 Raymond J. McCann* Executive Vice President
& Chief Financial Officer
and Trustee
(Principal Financial Officer)
March 29, 1995 Joan S. Freilich* Vice President, Controller
and Chief Accounting Officer
(Principal Accounting Officer)
E. Virgil Conway* Trustee
Gordon J. Davis* Trustee
Ruth M. Davis* Trustee
Ellen V. Futter* Trustee
Arthur Hauspurg* Trustee
Sally Hernandez-Pinero* Trustee
Peter W. Likins* Trustee
Frederick P. Rose* Trustee
Donald K. Ross* Trustee
Robert G. Schwartz* Trustee
Richard A. Voell* Trustee
Myles V. Whalen, Jr.* Trustee
March 29, 1995 *By Raymond J. McCann Attorney-in-Fact
Raymond J. McCann
<PAGE>
<PAGE>
_________________________________________________________________
_________________________________________________________________
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
_____________________________________________
THIRD SUPPLEMENTAL PARTICIPATION AGREEMENT
dated as of December 1, 1994
to
PARTICIPATION AGREEMENT
dated as of December 1, 1992
_____________________________________________
relating to
7 1/8% Facilities Revenue Bonds, Series 1994 A
(Consolidated Edison Company of New York, Inc. Project)
_________________________________________________________________
_________________________________________________________________
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
SHORT TITLE; DEFINITIONS
SECTION 1.01. Short Title . . . . . . . . . . . . . . . . . 3
SECTION 1.02. Definitions . . . . . . . . . . . . . . . . . 3
ARTICLE II
REPRESENTATIONS
SECTION 2.01. Representations and Warranties by the
Authority . . . . . . . . . . . . . . . . . . 4
SECTION 2.02. Representations and Warranties by the
Corporation. . . . . . . . . . . . . . . . . . 5
ARTICLE III
SALE AND ISSUANCE OF SERIES 1994 A BONDS
SECTION 3.01. Sale of Series 1994 A Bonds, Deposit of
Proceeds and Series 1994 A Note. . . . . . . . 7
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Administration Fees and Bond Issuance Charges
Pertaining to Series 1994 A Bonds Payable Under
Section 4.04 of the Basic Participation
Agreement . . . . . . . . . . . . . . . . . . 8
SECTION 4.02. Mandatory Prepayment of Series 1994 A Note upon
Occurrence of Certain Events in Accordance with
Section 5.06 of the Basic Participation
Agreement . . . . . . . . . . . . . . . . . . 8
i
<PAGE>
<PAGE>
SECTION 4.03. Series 1994 A Tax Regulatory Agreement. . . . . 10
SECTION 4.04. Effective Date; Counterparts . . . . . . . . . 10
EXHIBIT A - Description of Series 1994 A Project Exempt
Facilities. . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B - Description of Other Series 1994 A Project
Facilities. . . . . . . . . . . . . . . . . . . .B-1
EXHIBIT C - Form of Series 1994 A Note . . . . . . . . . . . .C-1
ii
<PAGE>
<PAGE>
This THIRD SUPPLEMENTAL PARTICIPATION AGREEMENT, dated
as of December 1, 1994, to PARTICIPATION AGREEMENT, dated as of
December 1, 1992 (the "Basic Participation Agreement"), between
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT AUTHORITY, a body
corporate and politic, constituting a public benefit corporation,
established and existing under and by virtue of the laws of the
State of New York (the "Authority") and CONSOLIDATED EDISON
COMPANY OF NEW YORK, INC., a corporation duly organized and
existing and qualified to do business as a public utility under
the laws of the State of New York (the "Corporation"),
WITNESSETH:
WHEREAS, the Authority has previously issued four
series of bonds in order to provide funds for the payment of a
portion of the cost of the acquisition, construction and
installation of certain facilities for the furnishing of electric
energy and gas within the Corporation's service areas or for the
refunding of prior obligations of the Authority issued for the
purpose of financing the cost of such facilities, which bonds
were issued pursuant to an Indenture of Trust, dated as of
December 1, 1992, between the Authority and Morgan Guaranty Trust
Company of New York, as trustee (the "Basic Indenture"), as
supplemented, and the proceeds were made available to the
Corporation pursuant to the Basic Participation Agreement, as
supplemented; and
WHEREAS, the Authority by a resolution of the Members
of the Authority adopted on June 30, 1994 authorized the
appointment of Marine Midland Bank as successor Trustee and
appointed Marine Midland Bank as Paying Agent under the Basic
Indenture effective on the close of business August 31, 1994, and
the Authority, Morgan Guaranty Trust Company of New York and
Marine Midland Bank entered into an Instrument of Resignation,
Appointment and Acceptance dated as of August 10, 1994, whereby
Morgan Guaranty Trust Company of New York resigned as Trustee and
Paying Agent under the Basic Indenture and Marine Midland Bank
accepted appointment as Trustee and Paying Agent; and
WHEREAS, the Corporation has requested that the
Authority participate in the acquisition, construction and
installation of certain facilities for the furnishing of gas
within the Corporation's gas service area (such additional
facilities referred to above being hereinafter referred to as the
"Series 1994 A Project" and being further described in Exhibit A
and Exhibit B to this Supplemental Participation Agreement), and
as part of such participation, that the Authority issue an
additional series of bonds pursuant to the Act (as defined in the
Basic Indenture) to provide funds for such purposes; and
WHEREAS, the Basic Participation Agreement provides
that the Authority may issue additional series of bonds to
finance the cost of the acquisition, construction and
<PAGE>
<PAGE> 2.
installation of one or more Additional Projects (as defined in
the Basic Indenture) provided that the Authority comply with the
requirements of the Basic Indenture and the Corporation comply
with the requirements of the Basic Participation Agreement in
connection therewith; and
WHEREAS, pursuant to Resolution No. 834, adopted June
30, 1994, the Authority has determined to issue its "Facilities
Revenue Bonds, Series 1994 A (Consolidated Edison Company of New
York, Inc. Project)" in an aggregate principal amount of
$100,000,000 (the "Series 1994 A Bonds") to provide for the
financing of a portion of the cost of the acquisition,
construction and installation of the Series 1994 A Project; and
WHEREAS, the Authority is entering into a supplement to
the Basic Indenture dated as of December 1, 1994, between the
Authority and Marine Midland Bank, as Trustee (the "Third
Supplemental Indenture"), to provide for the issuance of the
Series 1994 A Bonds; and
WHEREAS, the Authority and the Corporation are entering
into a Tax Regulatory Agreement dated the date of initial
delivery of the Series 1994 A Bonds pursuant to which the
Corporation will enter into certain covenants designed to assure
that certain conditions to the exclusion from gross income of
interest on the Series 1994 A Bonds imposed by the Internal
Revenue Code of 1986, as amended, are met;
NOW, THEREFORE, for and in consideration of the
premises and of the mutual representations, covenants and
agreements hereinafter set forth, the Authority and the
Corporation, each binding itself, its successors and assigns, do
mutually promise, covenant and agree to supplement the Basic
Participation Agreement as follows:
<PAGE>
<PAGE> 3.
ARTICLE I
SHORT TITLE; DEFINITIONS
SECTION 1.01. Short Title. This supplement to the
Basic Participation Agreement may hereafter be cited by the
parties hereto, and is herein referred to, as the Third
Supplemental Participation Agreement.
SECTION 1.02. Definitions. Unless the context shall
otherwise require, the terms used in this Third Supplemental
Participation Agreement, including the recitals, which are
defined in Section 1.01 of the Basic Indenture and Section 1.02
of the Third Supplemental Indenture shall have the meanings,
respectively, herein, which such terms are given in said
sections.
<PAGE>
<PAGE> 4.
ARTICLE II
REPRESENTATIONS
SECTION 2.01. Representations and Warranties by the
Authority. The Authority represents and warrants as follows:
(a) The Authority is a body corporate and politic,
constituting a public benefit corporation, established and
existing under the laws of the State of New York;
(b) The Authority has full power and authority to
execute and deliver this Third Supplemental Participation
Agreement, the Third Supplemental Indenture and the Series 1994 A
Tax Regulatory Agreement, and to consummate the transactions
contemplated hereby and thereby and to perform its obligations
hereunder and thereunder;
(c) The Authority is not in violation of or in default
under any of the provisions of the laws or the Constitution of
the State of New York which would affect its existence or its
powers referred to in the preceding paragraph (b);
(d) The Authority has determined that its
participation in the financing of the Series 1994 A Project, as
contemplated by this Third Supplemental Participation Agreement,
is in the public interest;
(e) The Authority has duly authorized the execution
and delivery of this Third Supplemental Participation Agreement,
the Third Supplemental Indenture and the Series 1994 A Tax
Regulatory Agreement and the execution and delivery of the other
documents incidental to this transaction, and all necessary
authorizations therefor or in connection with the performance by
the Authority of its obligations hereunder or thereunder have
been obtained and are in full force and effect;
(f) The execution and delivery by the Authority of
this Third Supplemental Participation Agreement, the Third
Supplemental Indenture, the Series 1994 A Tax Regulatory
Agreement and the other documents incidental to this transaction,
and the consummation of the transactions herein or therein
contemplated will not violate or cause a default under any
indenture, mortgage, loan agreement or other contract or
instrument to which the Authority is a party or by which it is
bound, or any judgment, decree, order, statute, rule or
regulation applicable to the Authority; and
<PAGE>
<PAGE> 5.
(g) The Participation Agreement and the Indenture are
in full force and effect.
SECTION 2.02. Representations and Warranties by the
Corporation. The Corporation represents and warrants as follows:
(a) The Corporation is a corporation duly incorporated
and in good standing under the laws of the State of New York, is
duly qualified and authorized to transact business as a public
utility in the State of New York and is not in violation of any
provision of its Certificate of Incorporation or its By-Laws, has
power to enter into, execute and deliver this Third Supplemental
Participation Agreement, the Series 1994 A Tax Regulatory
Agreement and the Series 1994 A Note and by proper corporate
action has duly authorized the execution and delivery of this
Third Supplemental Participation Agreement, the Series 1994 A Tax
Regulatory Agreement and the Series 1994 A Note;
(b) The execution and delivery by the Corporation of
this Third Supplemental Participation Agreement, the Series 1994
A Tax Regulatory Agreement and the Series 1994 A Note and the
consummation of the transactions herein and therein contemplated
will not conflict with or constitute a breach of or a default
under the Corporation's Certificate of Incorporation, By-Laws or
any indenture, mortgage, loan agreement or other contract or
instrument to which the Corporation is a party or by which it is
bound, or any judgment, decree, order, statute, rule or
regulation applicable to the Corporation;
(c) This Third Supplemental Participation Agreement,
the Series 1994 A Tax Regulatory Agreement and the Series 1994 A
Note constitute valid and legally binding obligations of the
Corporation, enforceable against the Corporation in accordance
with their respective terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, moratorium, reorganization
or other laws, judicial decisions or principles of equity
relating to or affecting the enforcement of creditors' rights or
contractual obligations generally;
(d) The execution and delivery by the Corporation of
this Third Supplemental Participation Agreement and the Series
1994 A Note in the manner and for the purposes herein set forth
have been duly authorized by order of the Public Service
Commission of the State of New York;
<PAGE>
<PAGE> 6.
(e) No additional authorizations for or approvals of
the execution and delivery by the Corporation of this Third
Supplemental Participation Agreement, the Series 1994 A Tax
Regulatory Agreement and the Series 1994 A Note need be obtained
by the Corporation or if any such authorization or approval is
necessary it has been obtained;
(f) The Corporation is not in default under the
Participation Agreement or under any Note; and
(g) The Participation Agreement and all outstanding
Notes are in full force and effect.
<PAGE>
<PAGE> 7.
ARTICLE III
SALE AND ISSUANCE OF SERIES 1994 A BONDS
SECTION 3.01. Sale of Series 1994 A Bonds, Deposit of
Proceeds and Series 1994 A Note. In order to provide funds for
payment of a portion of the Cost of Construction of the Series
1994 A Project, the Authority, as soon as practicable after the
execution of this Third Supplemental Participation Agreement, and
concurrently with the execution and delivery to the Trustee of
the Series 1994 A Note as provided in Section 4.01 of the Basic
Participation Agreement (which Series 1994 A Note shall be in
substantially the form attached hereto as Exhibit C), will issue,
sell and deliver the Series 1994 A Bonds to the initial
purchasers thereof, all pursuant to and as provided in the Series
1994 A Purchase Contract. The Authority will deposit the
proceeds of such sale of the Series 1994 A Bonds with the
Trustee, as follows: (i) in the Bond Fund, a sum equal to the
accrued interest, if any, paid by the initial purchasers of the
Series 1994 A Bonds and (ii) in the Series 1994 A Bond Proceeds
Sub-account of the Series 1994 A Project Construction Account in
the Project Fund, the balance of the proceeds received from such
sale.
<PAGE>
<PAGE> 8.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Administrative Fees and Bond Issuance
Charge Pertaining to Series 1994 A Bonds payable under Section
4.04 of the Basic Participation Agreement. In accordance with the
first paragraph of Section 4.04 of the Basic Participation
Agreement, the Corporation shall pay to the Authority with
respect to the Series 1994 A Bonds an initial Administration Fee
on the date of authentication and delivery of the Series 1994 A
Bonds to the initial purchasers in the amount of $250,000 and an
annual Administration Fee in the amount of $13,000 on December 1
of each year commencing December 1, 1995, until the Series 1994 A
Bonds are no longer outstanding.
In accordance with the third paragraph of such Section
4.04, the Corporation shall also pay to the State of New York
with respect to the Series 1994 A Bonds a bond issuance charge on
the date of authentication and delivery of the Series 1994 A
Bonds to the initial purchasers in the amount of $350,000.
SECTION 4.02. Mandatory Prepayment of Series 1994 A
Note upon the Occurrence of Certain Events in Accordance with
Section 5.06 of the Basic Participation Agreement. The occurrence
of an event requiring the redemption of Series 1994 A Bonds
pursuant to Section 2.01.5(b) or 2.01.5(e) of the Third
Supplemental Indenture constitute "events triggering the
comparable redemption provisions relating to any series of
Additional Bonds" within the meaning of Section 5.06 of the Basic
Participation Agreement and, in accordance with such Section
5.06, upon the occurrence of any event requiring the redemption
of the Series 1994 A Bonds pursuant to Section 2.01.5(b) or
2.01.5(e) of the Third Supplemental Indenture, the Corporation
shall pay to the Trustee the amount specified in the Series 1994
A Note. Notwithstanding any other provision of the Participation
Agreement or the Indenture, the Corporation's obligations under
such Section 5.06 in respect of the Series 1994 A Note shall
survive the termination of the Participation Agreement and the
Indenture.
The occurrence of an event requiring the redemption of
Bonds pursuant to said Section 2.01.5(b) or 2.01.5(e) shall not
be an event of default under the Series 1994 A Note but shall
require only the performance of the obligations of the
Corporation stated in this Section, the breach of which shall
constitute an event of default under the Series 1994 A Note.
<PAGE>
<PAGE> 9.
SECTION 4.03. Series 1994 A Tax Regulatory Agreement.
The Authority and the Corporation are entering into the Series
1994 A Tax Regulatory Agreement, and the Corporation hereby
covenants and agrees to comply with the provisions thereof.
SECTION 4.04. Effective Date; Counterparts. This
Third Supplemental Participation Agreement shall become effective
on delivery, subject to receipt of the written consent of the
Trustee to the extent required pursuant to Section 4.01 of the
Basic Indenture. This Third Supplemental Participation Agreement
may be executed in any number of counterparts, each of which when
so executed and delivered shall be an original; but such
counterparts shall together constitute but one and the same Third
Supplemental Participation Agreement.
<PAGE>
<PAGE> 10.
IN WITNESS WHEREOF, the Authority and the Corporation
have caused this Third Supplemental Participation Agreement to be
duly executed as of the day and year first above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
(SEAL) By____________________________
Chair
ATTEST:
______________________________
Secretary
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.
(SEAL) By____________________________
Treasurer
ATTEST:
______________________________
Secretary
<PAGE>
<PAGE>
EXHIBIT A
(To Third Supplemental Participation Agreement,
dated as of December 1, 1994,
between New York State Energy Research and Development Authority
and Consolidated Edison Company of New York, Inc.)
DESCRIPTION OF SERIES 1994 A PROJECT
EXEMPT FACILITIES
The following facilities are as further described in
the Series 1994 A Tax Regulatory Agreement between the Authority
and the Corporation dated the date of the initial delivery of the
Series 1994 A Bonds. All terms used in this Exhibit A and not
otherwise defined are used as defined in the above-referenced
Third Supplemental Participation Agreement.
The Series 1994 A Project Exempt Facilities will
consist of the following facilities which have been or are to be
acquired, constructed and installed within the City of New York
and the County of Westchester, New York by the Corporation as
part of the Corporation's gas distribution system:
1. Gas Mains
2. Gas Measuring and Regulating Station Equipment
3. Gas Services
4. Gas Meters
5. Gas Meter Installations
6. House Regulators
7. House Regulator Installations
8. Liquefied Natural Gas Storage Projects
9. Gas Distribution Plant Structures and Improvements
The Series 1994 A Project Exempt Facilities shall also
include (i) such instrumentation, controls, structures and all
other facilities, equipment, devices and the like necessary to
support the facilities herein described, (ii) such necessary land
improvements and (iii) such additional or substituted facilities
for the furnishing of gas within the Corporation's gas service
area which because of changes in technology, environmental
standards, cost or the like, the Corporation determines shall be
added to or substituted for said facilities.
Provided, however, that the Series 1994 A Project
Exempt Facilities shall not include: (i) facilities placed in
service more than 18 months prior to the issuance of the Series
1994 A Bonds; and (ii) facilities for which the Cost of
Construction was expended by the Corporation prior to December
13, 1991.
A-1
<PAGE>
<PAGE>
EXHIBIT B
(To Third Supplemental Participation Agreement
dated as of December 1, 1994,
between New York State Energy Research and Development Authority
and Consolidated Edison Company of New York, Inc.)
DESCRIPTION OF OTHER SERIES 1994 A PROJECT FACILITIES
Any facilities which would be described in the
preceding Exhibit A but for the proviso thereto.
B-1
<PAGE>
<PAGE>
EXHIBIT C
(To Third Supplemental Participation Agreement
dated as of December 1, 1994,
between New York State Energy Research and Development Authority
and Consolidated Edison Company of New York, Inc.)
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
$100,000,000 PROMISSORY NOTE
FOR
7 1/8% FACILITIES REVENUE BONDS, SERIES 1994 A
(CONSOLIDATED EDISON COMPANY OF NEW YORK, INC. PROJECT)
Consolidated Edison Company of New York, Inc. (the
"Corporation"), a New York corporation, for value received,
hereby promises to pay, on or before the dates set forth below,
the principal amount of $100,000,000 together with interest on
the unpaid amount thereof at the rate set forth below, to Marine
Midland Bank, or its successor or successors as trustee (the
"Trustee") under the Indenture of Trust dated as of December 1,
1992 (the "Basic Indenture"), between New York State Energy
Research and Development Authority (the "Authority"), a body
corporate and politic, constituting a public benefit corporation,
established and existing under and by virtue of the laws of the
State of New York, and the Trustee. The Basic Indenture as
previously supplemented, and as supplemented by the Third
Supplemental Indenture of Trust dated as of December 1, 1994,
between the Authority and the Trustee (such Third Supplemental
Indenture being herein referred to as the "Third Supplemental
Indenture"), is herein called the "Indenture," and all bonds
issued under and secured by the Indenture are herein collectively
called the "Bonds." Bonds of the Authority designated as
"Facilities Revenue Bonds, Series 1994 A (Consolidated Edison
Company of New York, Inc. Project)," issued in the aggregate
principal amount of $100,000,000 under and secured by the
Indenture are herein collectively called the "Series 1994 A
Bonds." Unless otherwise defined herein or unless the context
clearly requires otherwise, the terms used herein that are
defined in the Indenture have the meanings, respectively, herein
that such terms are given in the Indenture.
This Note (the "Note") is issued pursuant to a certain
Participation Agreement dated as of December 1, 1992, between the
Corporation and the Authority (the "Basic Participation
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<PAGE>
Agreement"). Such Basic Participation Agreement as previously
supplemented, and as supplemented by the Third Supplemental
Participation Agreement dated as of December 1, 1994, between the
Corporation and the Authority (such Third Supplemental
Participation Agreement being herein referred to as the "Third
Supplemental Participation Agreement"), is herein called the
"Participation Agreement," and any Note issued pursuant to the
Participation Agreement is herein called "any Note." Additional
similar notes may be issued as provided in the Participation
Agreement. Similar notes have previously been issued pursuant to
the Participation Agreement. This Note, the notes previously
issued and such additional notes as may hereinafter be issued and
outstanding pursuant to the Participation Agreement are
hereinafter collectively called the "Notes." In accordance with
the Participation Agreement, the Authority has authorized and
directed the Corporation to issue this Note payable to the order
of the Trustee as security for the payment of principal of and
premium, if any, and interest on the Bonds. The rights and
interest of the Authority under the Participation Agreement
(subject to certain exceptions and reservations described in the
Indenture) have been assigned to the Trustee pursuant to the
Indenture.
This Note shall mature on December 1, 2029, subject to
the prepayment provisions hereinafter provided, and shall bear
interest from the date hereof at the rate of seven and one-eighth
per centum (7 1/8%) per annum, payable on the first day of June
and December in each year commencing June 1, 1995.
This Note is subject to prepayment at the option of the
Corporation on or after December 1, 2004, as a whole or in part
at any time, upon payment in each case of the applicable
prepayment price (expressed as a percentage of the principal
amount of this Note or portion hereof to be prepaid) as set forth
in the schedule below, together with unpaid interest accrued to
the prepayment date on the principal amount of this Note or
portion hereof to be so prepaid:
Payment Dates Prepayment
(Inclusive) Price
December 1, 2004 through November 30, 2005 102%
December 1, 2005 through November 30, 2006 101%
December 1, 2006 and thereafter 100%
All payments of principal, premium, if any, and
interest shall be made to the Trustee at its Corporate Trust
Office, New York, New York, on or before the due date for the
corresponding payment on the Series 1994 A Bonds, in such coin or
currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and
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private debts. The amount of any such payment shall be reduced
by the amount, if any, in the Bond Fund under the Indenture on
the due date for such payment which is available for and applied
to the corresponding payment on the Series 1994 A Bonds.
In the event that, on the due date of any principal
(whether due at maturity or by call for redemption prior to
maturity) and premium, if any, or interest payment on the Series
1994 A Bonds, the monies on deposit in the Bond Fund held by the
Trustee under the Indenture shall not be sufficient to pay in
full such principal and premium, if any, or interest, on account
of a loss or losses incurred on the investment of monies held in
such Bond Fund, or for any other reason, the Corporation shall
forthwith pay to the Trustee in immediately available funds for
deposit in the Bond Fund the amount of monies sufficient,
together with available monies on deposit in such Bond Fund, to
pay in full all such principal and premium, if any, and interest
on the Series 1994 A Bonds. Prepayment of this Note or any
portion hereof may be made only in connection with the redemption
or purchase prior to maturity of all or a portion of the Series
1994 A Bonds or pursuant to Article XIV of the Indenture.
This Note shall be prepaid, without premium, in whole,
or in part if and to the extent that redemption of the Series
1994 A Bonds in part is permitted under Section 2.01.5(b) of the
Third Supplemental Indenture, in the event of the redemption of
the Series 1994 A Bonds pursuant to Section 2.01.5(b) of the
Third Supplemental Indenture. This Note may be prepaid in whole,
without premium, at the option of the Corporation in connection
with a redemption of the Series 1994 A Bonds pursuant to Section
2.01.5(c) of the Third Supplemental Indenture.
This Note may be prepaid in whole or in part at any
time, without premium, at the option of the Corporation
subsequent to the redemption of the Series 1994 A Bonds pursuant
to Section 2.01.5(d) of the Third Supplemental Indenture.
This Note shall be prepaid in whole, or in part if and
to the extent that redemption of the Series 1994 A Bonds in part
is permitted under Section 2.01.5(e) of the Third Supplemental
Indenture, in the event of the redemption of the Series 1994 A
Bonds pursuant to Section 2.01.5(e) of the Third Supplemental
Indenture. Prepayment of this Note pursuant to this paragraph
shall be with or without a premium, as required to provide
sufficient funds to redeem the Series 1994 A Bonds being redeemed
pursuant to the applicable provision of Section 2.01.5(e) of the
Third Supplemental Indenture.
In the event that payment or provision therefor has
been made in respect of the principal of and premium, if any, and
interest on all of the Series 1994 A Bonds, in accordance with
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<PAGE>
Article XIV of the Indenture, then this Note shall be deemed paid
in full and shall be cancelled and returned to the Corporation.
No reference herein to the Participation Agreement
shall impair the obligation of the Corporation to pay the
principal of and premium, if any, and interest on this Note at
the time and place and in the amounts herein prescribed, which
obligation is absolute, irrevocable and unconditional and is not
subject to any defense (other than payment) or any right of
setoff, counterclaim or recoupment for any reason, including,
without limitation, any breach by the Authority of any obligation
to the Corporation, whether under the Participation Agreement or
otherwise, or inaccuracy of any representation by the Authority
to the Corporation under the Participation Agreement, or any
indebtedness or liability at any time owing to the Corporation by
the Authority or any failure to complete any Project (as defined
in the Participation Agreement), or the destruction by fire or
other casualty of any Project or any portion thereof, or the
taking of title thereto or the use thereof by the exercise of the
power of eminent domain.
COVENANTS OF THE CORPORATION
The Corporation covenants (but without limiting other
covenants and provisions of this Note and the Participation
Agreement) as follows:
SECTION 1.1. Maintenance of Office or Agency. So long
as this Note remains outstanding and unpaid, the Corporation will
at all times keep, in New York, New York, or another location in
the State of New York, an office or agency where notices and
demands with respect to this Note may be served, and will, from
time to time, give written notice to the Trustee of the location
of such office or agency; and, in case the Corporation shall fail
so to do, notices may be served and demands may be made at the
principal office of the Trustee.
SECTION 1.2. Further Assurances. The Corporation will
make, execute, acknowledge and deliver, or cause to be made,
executed, acknowledged and delivered, to the Trustee any and all
such further acts, deeds, conveyances, assignments or assurances
as may be reasonably required for effectuating the intention of
this Note.
SECTION 1.3. Payment of Taxes and Other Charges. So
long as this Note remains outstanding and unpaid, the Corporation
will promptly pay and discharge, or cause to be paid and
discharged as the same shall become due and payable, any and all
lawful taxes, rates, levies, assessments, and governmental liens,
claims and other charges at any time imposed or accruing upon or
against the Corporation or upon or against its properties or any
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<PAGE>
part thereof, or upon the income derived therefrom or from the
operations of the Corporation, provided, that the Corporation
shall not be required to pay or discharge, or cause to be paid or
discharged, any such obligation, tax, rate, levy, assessment,
lien, claim or other charge so long as in good faith and by
appropriate legal proceedings the validity thereof shall be
contested.
SECTION 1.4. Maintenance of Properties. So long as
this Note remains outstanding and unpaid, the Corporation will at
all times make or cause to be made such expenditures for repairs,
maintenance and renewals, or otherwise, as shall be necessary to
maintain its properties in good repair, working order and
condition as an operating system or systems to the extent
necessary to meet the Corporation's obligations under the Public
Service Law of the State of New York and the Participation
Agreement.
SECTION 1.5. Insurance. So long as this Note remains
outstanding and unpaid, the Corporation will keep or cause to be
kept its properties that are of an insurable nature, insured
against loss or damage by fire or other risks, the risk of which
in the opinion of an Authorized Corporation Representative (who
shall be an officer or employee of the Corporation responsible
for the management of such risks) is customarily insured against
by companies similarly situated and operating like properties, to
the extent that property of similar character is, in such
Authorized Corporation Representative's opinion, customarily
insured against by such companies, either (a) by reputable
insurers or (b) in whole or in part in the form of reserves or of
one or more insurance funds created by the Corporation, whether
alone or with other corporations.
SECTION 1.6. Proper Books of Record and Account. So
long as this Note remains outstanding and unpaid, the Corporation
will at all times keep or cause to be kept proper books of record
and account, in which full, true and correct entry will be made
of all dealings, business and affairs of the Corporation,
including proper and complete entries to capital or property
accounts covering property worn out, obsolete, abandoned or sold,
all in accordance with the requirements of any system of
accounting or keeping accounts or the rules, regulations or
orders prescribed by a regulatory commission with jurisdiction
over the rates of the Corporation giving rise to at least fifty-
one percent (51%) of the Corporation's gross revenues, or if
there are no such requirements or rules, regulations or orders,
then in compliance with generally accepted accounting principles.
SECTION 1.7. Compliance with laws. So long as this
Note remains outstanding and unpaid, the Corporation agrees to
use its best efforts to comply in all material respects with all
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<PAGE>
applicable laws, rules and regulations and orders of any
governmental authority, non-compliance with which would have a
material adverse effect on its business, financial condition or
results of operations (to the extent the Corporation deems it can
reasonably comply while maintaining its public utility
operations) or would materially adversely affect the
Corporation's ability to perform its obligations hereunder or
under the Participation Agreement, except laws, rules,
regulations or orders being contested in good faith or laws,
rules, regulations or orders which the Corporation has applied
for variances from, or exceptions to.
SECTION 1.8. Consolidation, Merger or Sale of Assets.
So long as this Note remains outstanding and unpaid, the
Corporation will not consolidate with or permit itself to be
merged into any other corporation or corporations, or sell,
transfer or otherwise dispose of all or substantially all of its
properties and assets, except in the manner and upon the terms
and conditions set forth in this Section 1.8.
Nothing contained in this Note shall prevent (and this
Note shall be construed as permitting and authorizing, without
acceleration of the maturity of this Note) any lawful
consolidation or merger of the Corporation with or into any other
corporation or corporations lawfully authorized to acquire and
operate the properties of the Corporation, or a series of
consolidations or mergers, or successive consolidations or
mergers, in which the Corporation or its successor or successors
shall be a party, or any sale of all or substantially all the
properties of the Corporation as an entirety to a corporation
lawfully authorized to acquire and operate the same; provided
that, upon any such consolidation, merger or sale, the
corporation formed by such consolidation, or into which such
merger may be made if other than the Corporation, or making such
purchase shall execute and deliver to the Trustee an instrument,
in form reasonably satisfactory to the Trustee, whereby such
corporation shall effectually assume the due and punctual payment
of the principal of and premium, if any, and interest on this
Note according to its tenor and the due and punctual performance
and observance of all covenants and agreements to be performed by
the Corporation pursuant to this Note and the Participation
Agreement on the part of the Corporation to be performed and
observed; and, thereupon, such corporation shall succeed to and
be substituted for the Corporation hereunder, with the same
effect as if such successor corporation had been named herein as
obligor.
Every such successor corporation shall possess, and may
exercise, from time to time, each and every right and power
hereunder of the Corporation, in its name or otherwise; and any
act, proceeding, resolution or certificate by any of the terms of
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<PAGE>
this Note required or provided to be done, taken and performed or
made, executed or verified by any board or officer of the
Corporation shall and may be done, taken and performed or made,
executed and verified with like force and effect by the
corresponding board or officer of any such successor corporation.
If consolidation, merger or sale or other transfer is
made as permitted by this Section, the provisions of this Section
shall continue in full force and effect and no further
consolidation, merger or sale or other transfer shall be made
except in compliance with the provisions of this Section.
SECTION 1.9. Financial Statements of Corporation. The
Corporation agrees to have an annual audit made by independent
accountants and to furnish the Trustee with a balance sheet and
statements of income, retained earnings and cash flow showing the
financial condition of the Corporation and its consolidated
subsidiaries, if any, at the close of each fiscal year, and the
results of operations of the Corporation and its consolidated
subsidiaries, if any, for each fiscal year, as audited by said
accountants, on or before the last day of the third month
following the close of the fiscal year or as soon thereafter as
they are reasonably available. The Corporation further agrees to
furnish to the Trustee, the Authority and to any owner of such
Bonds if requested in writing by such owner all financial
statements which it sends to its shareholders. The Corporation's
obligations under this Section 1.9 shall terminate when none of
the Series 1994 A Bonds shall be outstanding.
SECTION 1.10. Certificates as to Defaults. So long as
this Note remains outstanding and unpaid, the Corporation shall
file with the Trustee, on or before August 15 of each year, a
certificate signed by an Authorized Corporation Representative
(as defined in the Indenture) stating that, to the best of his
knowledge and belief, the Corporation has kept, observed,
performed and fulfilled each and every one of its covenants and
obligations contained herein and in the Participation Agreement
and there does not exist at the date of such certificate any
default by the Corporation under Section 4.07 of the Basic
Participation Agreement or any event of default hereunder or
other event which, with notice or the lapse of time specified in
Section 2.1, or both, would become an event of default or, if any
such default or event of default or other event shall so exist,
specifying the same and the nature and status thereof.
DEFAULTS BY CORPORATION
SECTION 2.1. Events of Default; Acceleration. In case
one or more of the following events of default shall have
occurred and be continuing:
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<PAGE>
(a) default in the payment of any installment of
interest due in respect of this Note or any Note issued under the
Participation Agreement and the continuance of such default for a
period of five (5) days; or
(b) default in the payment of the principal of or
premium, if any, due in respect of any Note either at maturity,
by declaration or otherwise; or
(c) default in the making of any mandatory prepayment
due in respect of any Note; or
(d) subject to the second and third paragraphs of
Section 5.06 of the Basic Participation Agreement as
supplemented, failure on the part of the Corporation duly to
observe or perform any other of the covenants or agreements on
the part of the Corporation contained in the Participation
Agreement (other than failure to pay the amounts due under
Sections 4.04, 4.05, 4.07, 4.08 and 4.09 of the Basic
Participation Agreement, as supplemented) or in any Note, in each
case for a period of fifty (50) days after the date on which
written notice of such failure, requiring the Corporation to
remedy the same, shall have been given to the Corporation by the
Authority, the Trustee or the owners of at least twenty-five
percent (25%) in aggregate principal amount of the Bonds
outstanding under the Indenture; or
(e) the Corporation shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law
now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case under any such law, or
shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator
(or similar official) of the Corporation or for any substantial
part of its property, or shall make any general assignment for
the benefit of creditors, or shall fail generally to pay its
debts as they become due; or
(f) an event of default as defined in Section 13.01 of
the Mortgage;
then, (i) provided that the principal of the Bonds shall have
been declared to be due and payable by acceleration pursuant to
the terms of the Indenture, this Note shall thereupon become and
be immediately due and payable, and/or (ii) the Trustee may, and
upon the written request of the owners of at least twenty-five
percent (25%) in aggregate principal amount of the Bonds then
outstanding shall, proceed to enforce the performance or
observance of any obligations, agreements, or covenants of the
Corporation under the Participation Agreement or this Note.
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<PAGE>
In addition, if at any time the principal of the Bonds
shall have been declared to be due and payable by acceleration
pursuant to the terms of the Indenture, this Note shall thereupon
become and be immediately due and payable.
If any such declaration of acceleration of the Bonds
shall have been annulled pursuant to the terms of the Indenture
and if, at any time after such declaration, but before all the
Bonds shall have matured by their terms, all arrears of interest
upon such Notes, and interest on overdue installments of interest
(to the extent enforceable under applicable law) at the rate or
rates per annum specified for such Notes and the principal of and
premium, if any, on all Notes then outstanding which shall have
become due and payable otherwise than by acceleration, and all
other sums payable hereunder, except the principal of, and
interest on, the Notes which by such declaration shall have
become due and payable, shall have been paid by or on behalf of
the Corporation or provision satisfactory to the Trustee shall
have been made for such payment, then any such declaration shall
ipso facto be deemed to be rescinded and any such default and its
consequences shall ipso facto be deemed to be annulled, but no
such annulment shall extend to or affect any subsequent default
or impair or exhaust any right or remedy consequent thereon.
In case the Trustee shall have proceeded to enforce any
right under this Note and such proceedings shall have been
discontinued or abandoned for any reason or shall have been
determined adversely to the Trustee, then and in every such case
the Corporation and the Trustee shall be restored respectively to
their former positions and rights hereunder, and all rights,
remedies and powers of the Corporation and the Trustee shall
continue as though no such proceedings had been taken.
SECTION 2.2. Failure to pay Administration Fee or
provide for indemnification. In case the Corporation shall have
failed to pay the Administration Fee or to provide
indemnification to the Authority or the Trustee or compensation
or reimbursement of expenses to the Authority or the Trustee
under the Participation Agreement which event shall have
continued for a period of fifty (50) days after the date on which
written notice of such failure, requiring the Corporation to
remedy the same, shall have been given to the Corporation by the
Authority or the Trustee, the Authority or the Trustee may take
whatever action at law or in equity as may appear necessary or
desirable to enforce performance or observance of any
obligations, agreements or warranties of the Corporation under
Sections 4.04, 4.05, 4.07, 4.08, 4.09 and 4.10 of the Basic
Participation Agreement, as supplemented.
SECTION 2.3. Payment of Notes on Default; Suit
Therefor. The Corporation covenants that in case default shall
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<PAGE>
occur in the payment of any installment of the principal of or
premium, if any, or interest in respect of any Note, as and when
the same shall have become due and payable, whether at maturity
or upon mandatory prepayment or by declaration or otherwise,
then, upon demand of the Trustee, the Corporation will pay to the
Trustee the whole amount that then shall have become due and
payable on such Note for principal and premium, if any, and
interest, with interest upon the overdue principal and premium,
if any, and (to the extent enforceable under applicable law) upon
the overdue installments of interest at the respective rate or
rates borne by such Note and any expenses or liabilities incurred
by the Trustee other than through its negligence or bad faith.
In case the Corporation shall fail forthwith to pay
such amounts upon such demand, the Trustee may, and upon the
written request of the owners of at least twenty-five percent
(25%) in aggregate principal amount of the Bonds then outstanding
shall, institute any actions or proceedings at law or in equity
for the collection of the sums so due and unpaid, and may
prosecute any such action or proceeding to judgment or final
decree, and may collect in the manner provided by law the monies
adjudged or decreed to be payable and all other sums due and
payable by the Corporation hereunder or under the Indenture.
In case there shall be pending proceedings for the
bankruptcy or for the reorganization of the Corporation under the
Federal bankruptcy laws or any other applicable law, or in case a
receiver or trustee shall have been appointed for the property of
the Corporation or in the case of any other similar judicial
proceedings relative to the Corporation, or to the creditors or
property of the Corporation, the Trustee shall be entitled and
empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of
principal and premium, if any, and interest owing and unpaid in
respect of any Note and, in case of any judicial proceedings, to
file such proofs of claim and other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
allowed in such judicial proceedings relative to the Corporation,
its creditors, or its property, and to collect and receive any
monies or other property payable or deliverable on any such
claims, and to distribute the same after the deduction of its
charges and expenses; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized to make such
payments to the Trustee, and to pay to the Trustee any amount due
it for compensation and expenses, including counsel fees incurred
by it up to the date of such distribution.
MISCELLANEOUS PROVISIONS
SECTION 3.1. Amendments. This Note may not be amended
except by an instrument in writing signed by the Corporation and
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<PAGE>
by the Trustee, on behalf of the owners of the Bonds, in the
manner and subject to the conditions provided in Section 4.03 of
the Basic Indenture.
SECTION 3.2. LAW GOVERNING. THIS NOTE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE
OF NEW YORK.
SECTION 3.3. Presentment, etc. Presentment, demand,
protest and notice of dishonor are hereby expressly waived.
IN WITNESS WHEREOF, the Corporation has caused this
Note to be duly executed and delivered as of December 1, 1994.
CONSOLIDATED EDISON COMPANY OF
NEW YORK, INC.
By:___________________________
Treasurer
(SEAL)
ATTEST:
____________________________
Secretary
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<PAGE>
<PAGE>
_________________________________________________________________
_________________________________________________________________
THIRD SUPPLEMENTAL
INDENTURE OF TRUST
dated as of December 1, 1994
to
INDENTURE OF TRUST
dated as of December 1, 1992
BETWEEN
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
AND
Marine Midland Bank,
as Trustee
_________________________________________________________________
_________________________________________________________________
relating to
7 1/8% Facilities Revenue Bonds, Series 1994 A
(Consolidated Edison Company of New York, Inc. Project)
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
FORM OF SERIES 1994 A BOND . . . . . . . . . . . . . . . . . . 3
FORM OF TRUSTEE'S AUTHENTICATION ON SERIES 1994 A BOND . . . . 12
GRANTING CLAUSE . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE I
AUTHORIZATION; DEFINITIONS
SECTION 1.01. Supplemental Indenture. . . . . . . . . . . . . 17
SECTION 1.02. Definitions . . . . . . . . . . . . . . . . . . 17
ARTICLE II
DESCRIPTION AND AUTHORIZATION
OF SERIES 1994 A BONDS
SECTION 2.01. Creation and particulars of Series 1994 A
Bonds; form of Series 1994 A Bonds. . . . . . . 19
SECTION 2.02. Purpose . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.03. Issuance and Sale of the Series 1994 A
Bonds . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Creation of Series 1994 A Project
Construction Account of the Project Fund. . . . 25
SECTION 3.02. Application of Moneys in the Series 1994
A Rebate Sub-account. . . . . . . . . . . . . . 26
SECTION 3.03. No Individual Liability . . . . . . . . . . . . 27
SECTION 3.04. Effective Date; Counterparts. . . . . . . . . . 27
SECTION 3.05. Date for Identification Purposes Only . . . . . 28
SECTION 3.06. Compliance with the Series 1994 A Tax
Regulatory Agreement. . . . . . . . . . . . . . 28
SECTION 3.07. Project Fund Requisitions . . . . . . . . . . . 28
SECTION 3.08. Recitals. . . . . . . . . . . . . . . . . . . . 28
(i)
<PAGE>
<PAGE>
THIS THIRD SUPPLEMENTAL INDENTURE OF TRUST, made and
entered into as of December 1, 1994 (the "Third Supplemental
Indenture"), by and between New York State Energy Research and
Development Authority (the "Authority") and Marine Midland Bank,
as trustee (the "Trustee"), a New York banking corporation and
trust company, with its principal corporate trust office located
in New York, New York, as Trustee,
WITNESSETH THAT:
WHEREAS, the Authority has previously issued four
series of bonds in order to provide funds for the payment of a
portion of the cost of the acquisition, construction and
installation of certain facilities for the furnishing of electric
energy and gas within the service areas of Consolidated Edison
Company of New York, Inc. (the "Corporation") or for the
refunding of prior obligations of the Authority issued for the
purpose of financing the cost of such facilities, which bonds
were issued pursuant to an Indenture of Trust dated as of
December 1, 1992, between the Authority and Morgan Guaranty Trust
Company of New York, as trustee (the "Basic Indenture"), as
supplemented, and the proceeds were made available to the
Corporation pursuant to a Participation Agreement dated as of
December 1, 1992, by and between the Authority and the
Corporation (the "Basic Participation Agreement"), as
supplemented; and
WHEREAS, the Authority by a resolution of the Members
of the Authority adopted on June 30, 1994 authorized the
appointment of Marine Midland Bank as successor Trustee and
appointed Marine Midland Bank as Paying Agent under the Basic
Indenture effective on the close of business August 31, 1994, and
the Authority, Morgan Guaranty Trust Company of New York and
Marine Midland Bank entered into an Instrument of Resignation,
Appointment and Acceptance dated as of August 10, 1994, whereby
Morgan Guaranty Trust Company of New York resigned as Trustee and
Paying Agent under the Basic Indenture and Marine Midland Bank
accepted appointment as Trustee and Paying Agent; and
WHEREAS, the Corporation has requested that the
Authority participate in the acquisition, construction and
installation of certain facilities for the furnishing of gas
within the Corporation's gas service area (such additional
facilities for the furnishing of gas being hereinafter referred
to as the "Series 1994 A Project" and being further described in
Exhibit A and Exhibit B to the Third Supplemental Participation
Agreement (as hereinafter defined)) and, as part of such
participation, that the Authority issue an additional series of
bonds pursuant to the Act to provide funds for such purposes; and
WHEREAS, the Basic Indenture provides that the
Authority may issue additional series of bonds to finance the
cost of the Series 1994 A Project, provided that the Authority
<PAGE>
<PAGE> 2.
comply with the requirements of the Basic Indenture and the
Corporation comply with the requirements of the Basic
Participation Agreement in connection therewith; and
WHEREAS, pursuant to Resolution No. 834, adopted June
30, 1994, the Authority has determined to issue $100,000,000
aggregate principal amount of Additional Bonds (as defined in the
Basic Indenture) for the purpose of financing a portion of the
costs of the acquisition, construction and installation of the
Series 1994 A Project (such Additional Bonds issued for such
purpose being hereinafter referred to as "Series 1994 A Bonds");
and
WHEREAS, the Authority proposes to issue the Series
1994 A Bonds pursuant to this Third Supplemental Indenture; and
WHEREAS, the Authority and the Corporation are entering
into a Tax Regulatory Agreement dated the date of initial
delivery of the Series 1994 A Bonds pursuant to which the
Corporation is entering into certain covenants designed to assure
that certain conditions to the exclusion from gross income of
interest on the Series 1994 A Bonds imposed by the Internal
Revenue Code of 1986, as amended, are met, and certain of the
Authority's rights thereunder are being assigned to the Trustee
under this Third Supplemental Indenture; and
WHEREAS, all acts, conditions and things necessary or
required by the Constitution and laws of the State of New York or
otherwise, to exist, happen, and be performed as prerequisites to
the execution and delivery of this Third Supplemental Indenture,
do exist, have happened, and have been performed; and
WHEREAS, the Authority has determined that the Series
1994 A Bonds issuable hereunder and the certificate of
authentication by the Trustee to be endorsed on the Series 1994 A
Bonds shall be, respectively, substantially in the following
forms with such variations, omissions and insertions as are
required or permitted by the Indenture (as defined in the Basic
Indenture):
<PAGE>
<PAGE> 3.
(FORM OF SERIES 1994 A BOND)
NEW YORK STATE ENERGY RESEARCH AND
DEVELOPMENT AUTHORITY
7 1/8% Facilities Revenue Bond, Series 1994 A
(Consolidated Edison Company of New York, Inc. Project)
No. AR...... $__________
ORIGINAL
INTEREST RATE MATURITY DATE ISSUE DATE CUSIP
7 1/8% December 1, 2029 December 1, 1994 64984E BC 8
REGISTERED OWNER:
PRINCIPAL SUM: DOLLARS
NEW YORK STATE ENERGY RESEARCH AND DEVELOPMENT
AUTHORITY (the "Authority"), a body corporate and politic,
constituting a public benefit corporation, organized and existing
under and by virtue of the laws of the State of New York, for
value received, hereby promises to pay solely from the sources
and as hereinafter provided to the Registered Owner (named
above), or registered assigns, on the Maturity Date (stated
above), unless redeemed prior thereto as hereinafter provided,
upon the presentation and surrender hereof, the Principal Sum
(stated above) and in like manner to pay interest on said
Principal Sum from the date hereof, at the Interest Rate (stated
above) per annum, on the first day of June and December in each
year (commencing June 1, 1995), until said Principal Sum is paid
or made available for payment. The principal of and premium, if
any, on this bond are payable in any coin or currency of the
United States of America which, at the time of payment, is legal
tender for the payment of public and private debts, upon
presentation and surrender hereof, at the principal corporate
trust office (the "Corporate Trust Office") of Marine Midland
Bank, as Trustee or its successors in trust (the "Trustee"). The
interest on this bond, when due and payable, shall be paid to the
Registered Owner hereof (or of any bond or bonds previously
outstanding in exchange, transfer or substitution for which this
bond was issued) as of the close of business on the Record Date
(hereinafter referred to) for each interest payment date by
check, payable in such coin or currency of the United States of
America which, at the respective times of payment, is legal
tender for the payment of public and private debts, mailed to
<PAGE>
<PAGE> 4.
such person at his or her address last appearing as of the close
of business on the Record Date on the Bond Register to be kept by
the Trustee at its Corporate Trust Office. The Indenture
(hereinafter referred to) designates the fifteenth day, whether
or not a business day, of the month next preceding each interest
payment date as the Record Date for such interest payment date.
Interest not so paid shall be paid in accordance with the
provisions of Article X of the Indenture.
This bond is one of a duly authorized issue of bonds of
the Authority designated as "Facilities Revenue Bonds, Series
1994 A (Consolidated Edison Company of New York, Inc. Project)"
(the "Series 1994 A Bonds"), issued in the aggregate principal
amount of $100,000,000 under and pursuant to the Constitution and
laws of the State of New York, particularly the New York State
Energy Research and Development Authority Act, Title 9 of Article
8 of the Public Authorities Law of the State of New York, as
amended (the "Act"), and under and pursuant to a resolution
adopted by the Authority on June 30, 1994. The Series 1994 A
Bonds are issued under and are secured ratably by an Indenture of
Trust (the "Basic Indenture") dated as of December 1, 1992, as
previously supplemented, and as supplemented by the Third
Supplemental Indenture of Trust dated as of December 1, 1994 (the
"Third Supplemental Indenture"), between the Authority and the
Trustee. The Basic Indenture as so supplemented and as hereafter
supplemented and amended in accordance therewith is hereinafter
referred to as the "Indenture." The Series 1994 A Bonds are
issued for the purpose of providing financing for the cost of
acquisition, construction and installation of certain facilities
of Consolidated Edison Company of New York, Inc. (the
"Corporation") to be used for the local furnishing of gas (all of
said facilities being referred to herein as the "Series 1994 A
Project"), pursuant to the terms of a Participation Agreement
(the "Basic Participation Agreement") dated as of December 1,
1992, as previously supplemented, and as supplemented by the
Third Supplemental Participation Agreement dated as of December
1, 1994 (the "Third Supplemental Participation Agreement"),
between the Authority and the Corporation. The Basic
Participation Agreement as so supplemented and as hereafter
supplemented and amended in accordance therewith is hereinafter
referred to as the "Participation Agreement." As provided in the
Indenture, additional bonds may be issued in one or more series
to finance the cost of completing the Series 1994 A Project or
any Project financed with the proceeds of Bonds (as hereinafter
defined) , or to finance the cost of additional facilities for
the furnishing of electric energy and gas and the distribution of
steam or other facilities of the Corporation, or to refund
obligations issued or incurred by the Authority pursuant to an
agreement with the Corporation. Any such additional bonds,
together with the Series 1994 A Bonds and other bonds of the
Authority currently outstanding under the Indenture, are herein
<PAGE>
<PAGE> 5.
referred to as the "Bonds." Any terms used and not otherwise
defined herein, are used as defined in the Indenture.
*Copies of the Indenture are on file at the Corporate
Trust Office of the Trustee, and reference is made to the
Indenture for the provisions relating, among other things, to the
terms and security of the Bonds, the rights and remedies of the
owners of the Bonds, the terms and conditions upon which Bonds
are issued and may be issued thereunder and the terms and
provisions under which the Bonds may be redeemed.
*The Bonds are not general obligations of the
Authority, and shall not constitute an indebtedness of or a
charge against the general credit of the Authority or give rise
to any pecuniary liability of the Authority. The liability of
the Authority under such Bonds shall be enforceable only to the
extent provided in the Indenture, and the Bonds shall be payable
solely from payments to be made by the Corporation to the Trustee
and any other funds held by the Trustee under the Indenture and
available for such payment. In order to provide security for the
payment of the principal of and premium, if any, and interest on
all the Bonds in accordance with their terms and the terms of the
Indenture, the Authority has in the Participation Agreement
directed the Corporation to execute and deliver its promissory
notes (the "Notes") to the Trustee as evidence of the obligation
of the Corporation to the Authority to repay the advance of the
proceeds of the Bonds by the Authority, and the Authority has
under the Indenture pledged and assigned all its right, title and
interest in and to the payments under the Notes to the Trustee
for the benefit of the owners from time to time of the Bonds.
The Bonds are further secured by a pledge and assignment of the
rights and interest of the Authority under the Participation
Agreement (except the rights and interest of the Authority under
Sections 4.04, 4.08, 4.09 and 4.10 of the Basic Participation
Agreement, as supplemented, and subject to the reservation by the
Authority of its rights under Article III and Section 4.07 of the
Basic Participation Agreement and subject to the provisions of
the Participation Agreement relating to the amendment thereof),
the rights and interest of the Authority under the Tax Regulatory
Agreement dated the date of the initial delivery of the Series
1994 A Bonds between the Authority and the Corporation (the
"Series 1994 A Tax Regulatory Agreement"), subject to a
reservation by the Authority of a right independently to enforce
the obligations of the Corporation thereunder and subject to the
provisions of the Series 1994 A Tax Regulatory Agreement relating
to the amendment thereof, the proceeds of sale of the Bonds, all
funds held by the Trustee under the Indenture and available for
the payment of the Bonds, and the income earned by the investment
of such funds held under the Indenture.
<PAGE>
<PAGE> 6.
*The Series 1994 A Bonds are issuable in the form of
registered bonds without coupons in the denomination of $5,000 or
any integral multiple of $5,000. The owner of any Series 1994 A
Bond or Bonds may surrender the same at the Corporate Trust
Office of the Trustee (together with a written instrument of
transfer satisfactory to the Trustee duly executed by the
registered owner or his or her attorney duly authorized in
writing), in exchange for an equal aggregate principal amount of
Series 1994 A Bonds in any authorized denominations in the
manner, subject to the conditions and upon the payment of the
charges provided in the Indenture.
*This bond is transferable, as provided in the
Indenture, only upon the Bond Register kept for that purpose at
the Corporate Trust Office of the Trustee at the written request
of the registered owner hereof or by his or her representative
duly authorized in writing, upon surrender of this bond to the
Trustee (together with a written instrument of transfer
satisfactory to the Trustee duly executed by the registered owner
or his or her attorney duly authorized in writing). Thereupon,
and upon payment of the charges prescribed, one or more new fully
registered Series 1994 A Bonds of the same aggregate principal
amount, maturity and interest rate shall be issued to the
transferee in exchange therefor as provided in the Indenture.
*The Series 1994 A Bonds are subject to redemption
prior to maturity, at the option of the Authority exercised at
the direction of the Corporation, on or after December 1,2004, as
a whole or in part, at any time, upon payment in each case of the
applicable redemption price (expressed as a percentage of the
principal amount of the Series 1994 A Bonds to be redeemed) as
set forth in the schedule below, together with unpaid interest
accrued thereon to the date fixed for redemption, upon the notice
and in the manner and subject to the provisions of the Indenture:
Redemption Dates Redemption
(Inclusive) Price
December 1, 2004 through November 30, 2005 102%
December 1, 2005 through November 30, 2006 101%
December 1, 2006 and thereafter 100%
*The Series 1994 A Bonds are also subject to
extraordinary optional redemption, without premium, upon the
occurrence of certain events in accordance with the terms of
Section 2.01.5(c) of the Third Supplemental Indenture.
*The Series 1994 A Bonds shall be subject to mandatory
redemption as a whole (provided, however, that the Series 1994 A
<PAGE>
<PAGE> 7.
Bonds shall be redeemed in part if the Corporation obtains an
opinion of Bond Counsel to the effect that, by redeeming such
portion of the Series 1994 A Bonds, the interest on the remaining
Series 1994 A Bonds will not be included for Federal income tax
purposes in the gross income of any owner of the Series 1994 A
Bonds (other than an owner who is a "substantial user" of the
Series 1994 A Project or a "related person" within the meaning of
Section 147(a)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"))) at any time at a redemption price of 100%
of the principal amount thereof, together with unpaid interest
accrued thereon to the date fixed for redemption, if, in a
published or private ruling of the Internal Revenue Service or in
a final, nonappealable judicial decision by a court of competent
jurisdiction (provided that the Corporation has been afforded the
opportunity to participate at its own expense in the proceeding
resulting in such ruling or in the litigation resulting in such
decision, as the case may be), it is determined that, as a result
of a failure by the Corporation to observe any covenant,
agreement or representation in the Participation Agreement or the
Series 1994 A Tax Regulatory Agreement, interest on the Series
1994 A Bonds is includible for Federal income tax purposes in the
gross income (as defined in Section 61 of the Code) of any owner
of a Series 1994 A Bond (other than a "substantial user" of the
Series 1994 A Project or a "related person" within the meaning of
Section 147(a)(1) of the Code), and, in such event, the Series
1994 A Bonds shall be subject to such mandatory redemption not
more than one hundred eighty (180) days after receipt by the
Trustee of notice of such published or private ruling or judicial
decision and a demand for redemption of the Series 1994 A Bonds.
*The Series 1994 A Bonds will also be subject to
mandatory redemption in whole at a redemption price equal to the
principal amount thereof plus unpaid interest accrued thereon to
the redemption date if the Corporation reasonably concludes and
certifies to the Trustee that the business, properties, condition
(financial or otherwise), operations or business prospects of the
Corporation will be materially and adversely affected unless the
Corporation takes or omits to take a specified action and that
the Corporation has been advised in writing by Bond Counsel that
either (i) the specified action or omission would adversely
affect the exclusion from gross income for Federal income tax
purposes of interest on the Series 1994 A Bonds afforded by
Section 103 of the Code, or (ii) that the matter is subject to
such doubt that such Bond Counsel is unable to advise the
Corporation that the specified action or omission would not
adversely affect such exclusion. Such conclusion and
certification shall be evidenced by delivery to the Trustee of a
written certificate of an Authorized Corporation Representative
to the effect that the Corporation has reached such conclusion,
together with a copy of such advice of Bond Counsel.
<PAGE>
<PAGE> 8.
*The Series 1994 A Bonds will also be subject to
mandatory redemption at a redemption price equal to one hundred
three percent (103%) of the principal amount thereof plus unpaid
interest accrued thereon to the redemption date if the
Corporation reasonably concludes and certifies to the Trustee
that the business, properties, condition (financial or
otherwise), operations or business prospects of the Corporation
will be materially and adversely affected unless the Corporation
takes or omits to take a specified action and that the
Corporation has been advised in writing by Bond Counsel that the
specified action or omission would cause the use of the Series
1994 A Project to be such that, pursuant to Section 150 of the
Code, the Corporation would not be entitled to deduct the
interest on the Series 1994 A Bonds for purposes of determining
the Corporation's Federal taxable income, for a period of not
less than ninety (90) consecutive or nonconsecutive days during a
twelve-month period. Such conclusion and certification shall be
evidenced by delivery to the Trustee of a written certificate of
an Authorized Corporation Representative to the effect that the
Corporation has reached such conclusion, together with a
certified copy of a resolution of the Board of Trustees of the
Corporation authorizing such certificate and a copy of such
advice of Bond Counsel. In the event that the Series 1994 A
Bonds become subject to redemption as provided in this paragraph,
the Series 1994 A Bonds will be redeemed in whole unless
redemption of a portion of the Series 1994 A Bonds outstanding
would, in the opinion of Bond Counsel, have the result that
interest payable on the Series 1994 A Bonds remaining outstanding
after such redemption would be deductible for purposes of
determining the Federal taxable income of the Corporation, and,
in such event, the Series 1994 A Bonds shall be redeemed (in the
principal amount of $5,000 or any integral multiple thereof) from
time to time at random in such manner as the Trustee shall
determine, in such amount as is necessary to accomplish that
result.
*The occurrence of an event requiring the redemption of
the Series 1994 A Bonds as provided in either of the three
immediately preceding paragraphs does not constitute an event of
default under any Note or under the Indenture and the sole
obligation in such event shall be for the Corporation to prepay
the Note relating to the Series 1994 A Bonds in an amount
sufficient to redeem the Series 1994 A Bonds to the extent
specified in such paragraph.
*The State of New York may on or after December 1,
2014, upon furnishing sufficient funds therefor, require the
Authority to redeem the Series 1994 A Bonds as provided in the
Act and as more fully described in the Indenture.
<PAGE>
<PAGE> 9.
*If less than all the Series 1994 A Bonds shall be
called for redemption, the Series 1994 A Bonds to be redeemed
shall be selected at random by the Trustee in such manner as the
Trustee in its discretion may deem proper.
*Any such redemption, either as a whole or in part,
shall be made upon at least thirty (30) days' and no more than
sixty (60) days' prior notice in the manner and upon the terms
and conditions provided in the Indenture. If this bond shall have
been duly called for redemption and payment of the redemption
price, together with unpaid interest accrued to the date fixed
for redemption, shall have been made or provided for, all as more
fully set forth in the Indenture, interest on this bond shall
cease to accrue from such date, and from and after such date this
bond shall cease to be entitled to any lien, benefit or security
under the Indenture, and the owner hereof shall have no rights
except to receive payment of such redemption price and unpaid
interest accrued to the date fixed for redemption.
*This bond shall not be entitled to any benefit under
the Indenture or be valid or become obligatory for any purpose
until this bond shall have been authenticated by the execution by
the Trustee of the Trustee's certificate of authentication
hereon.
*No covenant or agreement contained in this bond or the
Indenture shall be deemed to be a covenant or agreement of any
member or employee of the Authority in his or her individual
capacity, and neither the members of the Authority nor any
officer thereof executing this bond shall be liable personally on
this bond or be subject to any personal liability or
accountability by reason of the issuance of this bond.
*To the extent permitted by and as provided in the
Indenture, modifications or amendments of the Indenture or of any
indenture supplemental thereto may be made (1) by agreement of
the Authority and the Trustee in certain circumstances without
the consent of Bondowners and (2) with the consent of (a) in case
all of the several series of Bonds then outstanding are affected
by such modification or amendment, the owners of not less than
two-thirds in aggregate principal amount of the Bonds then
outstanding or (b) in case less than all of the several series of
Bonds then outstanding are so affected, the owners of not less
than two-thirds in aggregate principal amount of the Bonds so
affected then outstanding; provided, however, that if such
modification or amendment will by its terms not take effect so
long as any Bonds of any specified series remain outstanding, the
consent of the owners of such Bonds shall not be required and
such Bonds shall not be deemed to be outstanding for the purpose
of any calculations of outstanding Bonds under the Indenture;
provided, further, that no such modification or amendment shall
<PAGE>
<PAGE> 10.
be made which will reduce the percentages of the aggregate
principal amount of Bonds, the consent of the owners of which is
required for any such modification or amendment, or permit the
creation by the Authority of any lien prior to, or, except to
secure additional Bonds, on a parity with, the lien of the
Indenture upon the Note payments and other funds pledged under
the Indenture or which will affect the times, amounts and
currency of payment of the principal of and premium, if any, and
interest on said Bonds without the consent of the owners of all
Bonds then outstanding and affected thereby. Any such consent by
the owner of this bond shall be conclusive and binding upon such
owner and all future owners of this bond and of any Bond issued
on registration of transfer thereof or in exchange therefor
irrespective of whether or not any notation of such consent is
made upon this bond.
THE SERIES 1994 A BONDS ARE NOT A DEBT OF THE STATE OF
NEW YORK, AND THE STATE OF NEW YORK SHALL NOT BE LIABLE THEREON.
NO OWNER OF ANY SERIES 1994 A BOND WILL HAVE THE RIGHT TO DEMAND
PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR INTEREST ON THE
SERIES 1994 A BONDS OUT OF ANY FUNDS RAISED BY TAXATION.
It is hereby certified and recited that all conditions,
acts and things required by law and the Indenture to exist, to
have happened and to have been performed, precedent to and in the
issuance of this bond, exist, have happened and have been
performed, and that the issuance of this bond and the issue of
which it forms a part are within every debt and other limit
prescribed by the laws of the State of New York.
<PAGE>
<PAGE> 11.
IN WITNESS WHEREOF, the Authority has caused this bond
to be signed in its name and on its behalf by the manual or
facsimile signature of its Chair, Vice Chair, President or
Treasurer and its seal or a facsimile thereof to be impressed,
imprinted or otherwise reproduced hereon and attested by the
manual or facsimile signature of its Secretary or an Assistant
Secretary, as of the date set forth below.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
Attest:
By___________________________
Chair
____________________________
Secretary
<PAGE>
<PAGE> 12.
(FORM OF ASSIGNMENT)
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto
_________________________________________________________________
_________________________________________________________________
the within bond and all rights thereunder,and hereby irrevocably
constitutes and appoints
_____________________________________________________ attorney
to transfer the within bond on the books kept for registration
thereof with full power of substitution in the premises.
Dated: ______________________
________________________________________
NOTICE: The signature to this assignment
must correspond with the name as it
appears on the face of the within bond
in every particular, without alteration
or enlargement or any change whatsoever.
(FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION ON ALL
SERIES 1994 A BONDS)
This bond is one of the Facilities Revenue Bonds,
Series 1994 A (Consolidated Edison Company of New York, Inc.
Project) referred to in the within-mentioned Indenture.
[_____________________________],
Marine Midland Bank,
as Trustee
By______________________________
Authorized Signatory
Dated:__________________________
<PAGE>
<PAGE> 13.
The Authority may, in its discretion, cause the
paragraphs preceded by the symbol "*" to be printed on the
reverse of the Bonds, in which event the face of the Bonds shall
state the following after the second paragraph of the Bonds:
REFERENCE IS MADE TO THE FURTHER PROVISIONS OF
THIS BOND SET FORTH ON THE REVERSE HEREOF WHICH SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS
PLACE.
WHEREAS, the Trustee has accepted the trusts created by
this Third Supplemental Indenture and in evidence thereof has
joined in the execution hereof;
NOW, THEREFORE, THIS THIRD SUPPLEMENTAL INDENTURE
WITNESSETH, that in consideration of the premises, of the
acceptance by the Trustee of the trusts created by the Indenture,
and of the purchase and acceptance of the Bonds by the owners
thereof, and also for and in consideration of the sum of One
Dollar ($1.00) to the Authority in hand paid by the Trustee at or
before the execution and delivery of this Third Supplemental
Indenture, the receipt of which is hereby acknowledged, and in
order to secure the payment of all the Bonds at any time issued
and outstanding under the Indenture and the interest and the
redemption premiums, if any, thereon according to their tenor,
purport and effect, and in order to secure the performance and
observance of all the covenants, agreements and conditions
therein or herein or in the Participation Agreement contained,
the Authority has executed and delivered this Third Supplemental
Indenture, has caused or will cause the Corporation to deliver to
the Trustee the Series 1994 A Note (as hereinafter defined), and
has assigned and pledged to the Trustee, for the benefit of such
Bondowners, as security for the payment of the principal of and
premium, if any, and interest on the Bonds in accordance with
their terms and the provisions of the Indenture subject only to
the provisions of the Indenture permitting the application
thereof for the purposes and on the terms and conditions set
forth in the Indenture and as security for the performance and
observance of all the covenants, agreements and conditions
contained therein or herein or in the Participation Agreement,
(i) the rights and interest of the Authority under the
Participation Agreement (except the rights and interest of the
Authority under Sections 4.04, 4.08, 4.09 and 4.10 of the Basic
Participation Agreement, as supplemented, subject to a
reservation by the Authority of a right to enforce the
obligations of the Corporation under Article III of the Basic
Participation Agreement independently of the Trustee's
enforcement thereof, to a reservation by the Authority of its
rights under Section 4.07 of the Basic Participation Agreement,
<PAGE>
<PAGE> 14.
and to the provisions of the Participation Agreement relating to
the amendment thereof), (ii) the proceeds of sale of the Bonds,
(iii) all funds held by the Trustee under the Indenture and
available for the payment of Bonds, (iv) the income earned by the
investment of such funds held under the Basic Indenture, and (v)
by this Third Supplemental Indenture, the rights and interest of
the Authority under the Series 1994 A Tax Regulatory Agreement
(as defined herein), subject to a reservation by the Authority of
a right to enforce the obligations of the Corporation thereunder
independently of the Trustee's enforcement thereof and subject to
the provisions of the Series 1994 A Tax Regulatory Agreement
relating to the amendment thereof;
THIS THIRD SUPPLEMENTAL INDENTURE FURTHER WITNESSETH,
and it is expressly declared, that all Series 1994 A Bonds from
time to time issued and secured hereunder are to be issued,
authenticated and delivered, and all said property, rights and
interest, including, without limitation, the amounts hereby
assigned and pledged, are to be dealt with and disposed of
subject to the terms of the Indenture, and the Authority agrees
with the Trustee and with the respective owners, from time to
time, of the Bonds or any part thereof as follows:
<PAGE>
<PAGE> 15.
ARTICLE I
AUTHORIZATION; DEFINITIONS
SECTION 1.01. Supplemental Indenture. This Third
Supplemental Indenture is supplemental to, and is entered into in
accordance with Article XIII of the Basic Indenture.
SECTION 1.02. Definitions. Unless the context shall
otherwise require and except as to terms otherwise defined
herein, all terms which are defined in Section 1.01 of the Basic
Indenture shall have the same meanings, respectively, in this
Third Supplemental Indenture, including the recitals and granting
clause, as such terms are given in said Section 1.01 of the Basic
Indenture and, in addition, as used in this Third Supplemental
Indenture, the following terms shall have the following
respective meanings:
Corporate Trust Office shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date hereof is located at Marine Midland Bank, 140 Broadway, New
York, New York 10005-1180.
Series 1994 A Bonds shall mean $100,000,000 aggregate
principal amount of the 7 1/8% Facilities Revenue Bonds, Series
1994 A (Consolidated Edison Company of New York, Inc. Project) of
the Authority.
Series 1994 A Computation Period shall have the
meaning ascribed to "Computation Period" in the Series 1994 A Tax
Regulatory Agreement.
Series 1994 A Note shall mean the Corporation's Note
relating to the Series 1994 A Bonds.
Series 1994 A Project shall mean the Series 1994 A
Project Exempt Facilities and the Other Series 1994 A Project
Facilities set forth in Exhibits A and B to the Third
Supplemental Participation Agreement.
Series 1994 A Project Construction Account shall mean
the account bearing such name in the Project Fund established
pursuant to Section 3.01 of this Third Supplemental Indenture.
Series 1994 A Purchase Contract shall mean the
Purchase Contract dated December 6, 1994, among the Authority,
the Corporation and Lehman Brothers Inc., Goldman, Sachs & Co.,
<PAGE>
<PAGE> 16.
and Merrill Lynch, Pierce, Fenner & Smith Incorporated (Merrill
Lynch & Co.).
Series 1994 A Tax Regulatory Agreement shall mean the
Tax Regulatory Agreement, dated the date of initial delivery of
the Series 1994 A Bonds, between the Authority and the
Corporation, as it may be amended and supplemented from time to
time in accordance with its terms.
Third Supplemental Participation Agreement shall mean
the Third Supplemental Participation Agreement dated as of
December 1, 1994, between the Authority and the Corporation.
The definition of Corporate Trust Office contained in the Basic
Indenture is hereby amended to conform to the definition of
Corporate Trust Office which is set forth above.
<PAGE>
<PAGE> 17.
ARTICLE II
DESCRIPTION AND AUTHORIZATION
OF SERIES 1994 A BONDS
SECTION 2.01. Creation and particulars of Series 1994
A Bonds; form of Series 1994 A Bonds. 1. There shall be issued
under and secured by the Indenture an issue of Additional Bonds
(the "Series 1994 A Bonds") to be designated "Facilities Revenue
Bonds, Series 1994 A (Consolidated Edison Company of New York,
Inc. Project)" in the aggregate principal amount of $100,000,000.
Each Series 1994 A Bond shall be dated the June 1 or December 1,
as the case may be, next preceding the date of its authentication
to which interest has been paid or duly provided for (except that
if any Series 1994 A Bond shall be authenticated on any June 1 or
December 1 to which interest has been paid or duly provided for,
it shall be dated as of such date, or if it shall be
authenticated prior to June 1, 1995, it shall be dated December
1, 1994) and shall bear interest from such dates until the
principal sum is paid, at a rate of seven and one-eighth per
centum (7 1/8%) per annum payable semiannually on June 1 and
December 1 of each year (commencing June 1, 1995) and shall
mature (subject to the right of prior redemption at the prices
and dates and upon the terms and conditions hereinafter set
forth) on December 1, 2029.
2. The Series 1994 A Bonds shall be issuable in the
form of registered bonds without coupons in the denomination of
$5,000 or any integral multiple of $5,000 not exceeding the
aggregate principal amount of such series of Bonds and shall be
numbered from one (1) consecutively upwards (with the letters
"AR" prefixed to the number) in order of issuance according to
the records of the Trustee.
3. The Series 1994 A Bonds shall be substantially in
the form set forth in the recitals to this Third Supplemental
Indenture, with such appropriate variations, omissions and
insertions as are permitted or required by this Third
Supplemental Indenture and may have endorsed thereon such legends
or text as may be necessary or appropriate to conform to any
applicable rules and regulations of any governmental authority or
any usage or requirement of law with respect thereto.
4. The principal of and premium, if any, on each
Series 1994 A Bond shall be payable to the owner of such Bond
upon presentation and surrender thereof when due at the Corporate
Trust Office. The interest on each Series 1994 A Bond due on an
interest payment date shall be payable to the Registered Owner
<PAGE>
<PAGE> 18.
thereof as of the close of business on the Record Date (as
hereinafter defined) as the same becomes due by check mailed to
such Registered Owner thereof at his or her address last
appearing on the Bond Register. All payments of principal of and
premium, if any, and interest on the Series 1994 A Bonds shall be
payable in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of
public and private debts. The fifteenth day, whether or not a
business day, of the month next preceding each interest payment
date is the Record Date (the "Record Date") for such interest
payment date.
5. In the manner and with the effect provided herein
the Series 1994 A Bonds shall be subject to redemption prior to
maturity, as follows:
(a) The Series 1994 A Bonds shall be subject to redemption
at the option of the Authority, exercised at the direction of the
Corporation, upon notice as provided in Article VIII of the Basic
Indenture, on or after December 1, 2004, as a whole or in part at
any time, upon payment in each case of the applicable redemption
price (expressed as a percentage of the principal amount of such
Series 1994 A Bonds to be redeemed) as set forth in the schedule
below, together with unpaid interest accrued thereon to the date
fixed for redemption:
Redemption Dates Redemption
(Inclusive) Price
December 1, 2004 through November 30, 2005 102%
December 1, 2005 through November 30, 2006 101%
December 1, 2006 and thereafter 100%
(b) The Series 1994 A Bonds shall be subject to mandatory
redemption as a whole (provided, however, that the Series 1994 A
Bonds shall be redeemed in part if the Corporation obtains an
opinion of Bond Counsel to the effect that, by redeeming such
portion of the Series 1994 A Bonds, the interest on the remaining
Series 1994 A Bonds will not be included for Federal income tax
purposes in the gross income of any owner of the Series 1994 A
Bonds (other than an owner who is a "substantial user" of the
Series 1994 A Project or a "related person" within the meaning of
Section 147(a)(1) of the Code)) at any time at a redemption price
of one hundred percent (100%) of the principal amount thereof,
together with unpaid interest accrued thereon to the date fixed
for redemption, if, in a published or private ruling of the
Internal Revenue Service or in a final, nonappealable judicial
decision by a court of competent jurisdiction (provided that the
Corporation has been afforded the opportunity to participate at
its own expense in the proceeding resulting in such ruling or in
the litigation resulting in such decision, as the case may be),
<PAGE>
<PAGE> 19.
it is determined that, as a result of a failure by the
Corporation to observe any covenant, agreement or representation
in the Participation Agreement or the Series 1994 A Tax
Regulatory Agreement, interest on Series 1994 A Bonds is
includible for Federal income tax purposes in the gross income
(as defined in Section 61 of the Code), of any owner of a Series
1994 A Bond (other than a "substantial user" of the Series 1994 A
Project or a "related person" within the meaning of Section
147(a)(1) of the Code), and, in such event, the Series 1994 A
Bonds shall be subject to such mandatory redemption not more than
one hundred eighty (180) days after receipt by the Trustee of
notice of such published or private ruling or judicial decision
and a demand for redemption of such Series 1994 A Bonds. The
occurrence of an event requiring the redemption of the Series
1994 A Bonds under this paragraph does not constitute an event of
default under any Note or under the Indenture and the sole
obligation in such event shall be for the Corporation to prepay
the Series 1994 A Note in an amount sufficient to redeem the
Series 1994 A Bonds to the extent required by this paragraph.
(c) In whole at any time at the option of the Authority,
exercised at the direction of the Corporation, upon notice as
provided in Article VIII of the Basic Indenture, at a redemption
price equal to the principal amount thereof, together with unpaid
interest accrued thereon to the date fixed for redemption, in any
of the following events:
(i) All or substantially all of the Series 1994 A
Project shall have been damaged or destroyed or title to, or the
temporary use of, all or a substantial portion of the Series 1994
A Project shall have been taken under the exercise of the power
of eminent domain by any governmental authority, or person, firm
or corporation acting under governmental authority, as in each
case renders the Series 1994 A Project unsatisfactory to the
Corporation for its intended use;
(ii) Unreasonable burdens or excessive
liabilities shall have been imposed upon the Authority or the
Corporation with respect to all or substantially all of the
Series 1994 A Project, including without limitation the
imposition of federal, state or other ad valorem property, income
or other taxes other than ad valorem taxes in effect on the date
of original issuance of the Series 1994 A Bonds levied upon
privately owned property used for the same general purpose as the
Series 1994 A Project; or
<PAGE>
<PAGE> 20.
(iii) Any court or regulatory or administrative
body shall enter or adopt, or fail to enter or adopt, a judgment,
order, approval, decree, rule or regulation, as a result of which
the Corporation elects to cease operation of all or substantially
all of the Series 1994 A Project.
(d) In whole on any interest payment date on or after
December 1, 2014, at a redemption price to be determined in
accordance with Section 8.05 of the Basic Indenture, together
with unpaid interest accrued thereon to the date fixed for
redemption, if the State of New York furnishes funds therefor as
provided in Section 8.05 of the Basic Indenture.
(e) The Series 1994 A Bonds will also be subject to
mandatory redemption in whole at a redemption price equal to the
principal amount thereof plus unpaid interest accrued thereon to
the redemption date if the Corporation reasonably concludes and
certifies to the Trustee that the business, properties, condition
(financial or otherwise), operations or business prospects of the
Corporation will be materially and adversely affected unless the
Corporation takes or omits to take a specified action and that
the Corporation has been advised in writing by Bond Counsel that
either (i) the specified action or omission would adversely
affect the exclusion from gross income for Federal income tax
purposes of interest on the Series 1994 A Bonds afforded by
Section 103 of the Code, or (ii) that the matter is subject to
such doubt that such Bond Counsel is unable to advise the
Corporation that the specified action or omission would not
adversely affect such exclusion. The Series 1994 A Bonds will
also be subject to mandatory redemption at a redemption price
equal to one hundred three percent (103%) of the principal amount
thereof plus unpaid interest accrued thereon to the redemption
date if the Corporation reasonably concludes and certifies to the
Trustee that the business, properties, condition (financial or
otherwise), operations or business prospects of the Corporation
will be materially and adversely affected unless the Corporation
takes or omits to take a specified action and that the
Corporation has been advised in writing by Bond Counsel that the
specified action or omission would cause the use of the Series
1994 A Project to be such that, pursuant to Section 150 of the
Code, the Corporation would not be entitled to deduct the
interest on the Series 1994 A Bonds for purposes of determining
the Corporation's Federal taxable income, for a period of not
less than ninety (90) consecutive or nonconsecutive days during a
twelve-month period. In the event that the Series 1994 A Bonds
become subject to redemption as provided in the preceding
sentence, the Series 1994 A Bonds will be redeemed in whole
<PAGE>
<PAGE> 21.
unless redemption of a portion of the Series 1994 A Bonds
outstanding would, in the opinion of Bond Counsel, have the
result that interest payable on the Series 1994 A Bonds remaining
outstanding after such redemption would be deductible for
purposes of determining the Federal taxable income of the
Corporation, and, in such event, the Series 1994 A Bonds shall be
redeemed (in the principal amount of $5,000 or any integral
multiple thereof) from time to time at random in such manner as
the Trustee shall determine pursuant to Section 8.02 of the Basic
Indenture, in such amount as is necessary to accomplish that
result. Any such conclusion and certification shall be evidenced
by delivery to the Trustee of a written certificate of an
Authorized Corporation Representative to the effect that the
Corporation has reached such conclusion, together with a
certified copy of a resolution of the Board of Trustees of the
Corporation authorizing such certificate and a copy of such
advice of Bond Counsel. The occurrence of an event requiring the
redemption of the Series 1994 A Bonds under this paragraph does
not constitute an event of default under any Note or under the
Indenture and the sole obligation in such event shall be for the
Corporation to prepay the Series 1994 A Note in an amount
sufficient to redeem the Series 1994 A Bonds to the extent
required by this paragraph.
6. If less than all the Series 1994 A Bonds are called
for redemption, the particular Series 1994 A Bonds to be redeemed
shall be selected at random by the Trustee as provided in Section
8.02 of the Basic Indenture.
SECTION 2.02. Purpose. The purpose for which the
Series 1994 A Bonds are issued is to finance a portion of the
Cost of Construction of the Series 1994 A Project.
SECTION 2.03. Issuance and Sale of the Series 1994 A
Bonds. The Series 1994 A Bonds shall forthwith be executed by
the Authority and delivered to the Trustee for authentication and
thereupon the Series 1994 A Bonds shall be authenticated by the
Trustee and shall be delivered to or upon the written order of an
Authorized Officer of the Authority, but only upon the receipt by
the Trustee of proceeds (including accrued interest, if any) of
sale of the Series 1994 A Bonds, of which a sum equal to the
accrued interest, if any, paid by the initial purchasers of such
Series 1994 A Bonds shall be deposited in the Bond Fund and the
balance shall be deposited in the Series 1994 A Bond Proceeds
Sub-account of the Series 1994 A Project Construction Account of
the Project Fund created pursuant to Section 3.01 hereof.
<PAGE>
<PAGE> 22.
ARTICLE III
MISCELLANEOUS
SECTION 3.01. Creation of Series 1994 A Project
Construction Account of the Project Fund. There is hereby
established within the Project Fund a separate account for the
payment of the Cost of Construction of the Series 1994 A Project
to be designated the "Series 1994 A Project Construction Account"
and within such account there are hereby established three (3)
separate sub-accounts to be designated as the "Series 1994 A Bond
Proceeds Sub-account," the "Series 1994 A Investment Proceeds
Sub-account" and the "Series 1994 A Rebate Sub-account."
All income or gain on monies deposited in the Series
1994 A Bond Proceeds Sub-account or the Series 1994 A Investment
Proceeds Sub-account shall be deposited in the Series 1994 A
Investment Proceeds Sub-account. All income or gain on monies
deposited in the Series 1994 A Rebate Sub-account shall be
deposited in the Series 1994 A Rebate Sub-account. Not later
than fifteen (15) days after certification of the Rebate Amount
for each Series 1994 A Computation Period to the Trustee by an
Authorized Corporation Representative and not later than thirty
(30) days after such Series 1994 A Computation Period, the
Trustee shall withdraw from the Series 1994 A Investment Proceeds
Sub-account and deposit in the Series 1994 A Rebate Sub-account
an amount such that the amount held in the Series 1994 A Rebate
Sub-account after such deposit as certified to the Trustee by an
Authorized Corporation Representative is equal to the Rebate
Amount as defined in the Series 1994 A Tax Regulatory Agreement
calculated for the period commencing on the date of issuance of
the Series 1994 A Bonds and ending on the last day of the most
recent Series 1994 A Computation Period as certified to the
Trustee by an Authorized Corporation Representative. In the
event of any deficiency, the balance required shall be provided
by the Corporation by directing the Trustee to transfer moneys
from amounts available in the Series 1994 A Project Construction
Account or from other moneys of the Corporation made available
pursuant to the Series 1994 A Tax Regulatory Agreement.
Computations of the amounts on deposit in each fund hereunder,
descriptions of each investment held therein, computations of the
Rebate Amount and directions as to the payment of the Rebate
Amount to the United States shall be furnished to the Trustee by
the Corporation in accordance with the Series 1994 A Tax
Regulatory Agreement. The Trustee shall be entitled conclusively
to rely upon the accuracy of any such computation, certification,
directions or description so furnished.
<PAGE>
<PAGE> 23.
SECTION 3.02. Application of Moneys in the Series 1994
A Rebate Sub-account. (1) The Series 1994 A Rebate Sub-account
and the amounts deposited therein shall not be subject to a claim
and charge in favor of the Trustee or any owners of Bonds and
shall be applied solely in accordance with the provisions of this
Section 3.02 and shall not be available for the payment of Bonds
within the meaning of the Indenture. Amounts deposited in the
Series 1994 A Rebate Sub-account shall be applied to pay amounts
payable by the Authority to the United States of America pursuant
to Section 148 of the Code in connection with the Series 1994 A
Bonds in accordance with subsection 2 of this Section 3.02 except
to the extent otherwise permitted by subsection 3 of this Section
3.02.
(2) The Trustee, upon receipt of written instructions
from an Authorized Corporation Representative given in accordance
with the Series 1994 A Tax Regulatory Agreement, shall pay to the
United States of America out of amounts in the Series 1994 A
Rebate Sub-account (a) not later than thirty (30) days after the
end of each five-year period following the date of issuance of
the Series 1994 A Bonds, an amount certified to the Trustee by an
Authorized Corporation Representative as the amount such that,
together with amounts previously paid, the total amount paid to
the United States is equal to ninety percent (90%) of the Rebate
Amount calculated for the period commencing on the date of
issuance of the Series 1994 A Bonds and ending on the last day of
the most recent Series 1994 A Computation Period, and (b) not
later than sixty (60) days after the date on which all of the
Series 1994 A Bonds have been paid or redeemed, the amount such
that, together with amounts previously paid, the total amount
paid to the United States of America is equal to one hundred
percent (100%) of the Rebate Amount for the period commencing on
the date of issuance of the Series 1994 A Bonds and ending on the
last day of the final Series 1994 A Computation Period as
certified to the Trustee by an Authorized Corporation
Representative. The Trustee shall be entitled conclusively to
rely upon such written instructions and certifications as to the
amounts to be so paid to the United States of America.
(3) In the event that on the first day of any Bond
Year (as defined in the Series 1994 A Tax Regulatory Agreement)
the amount on deposit in the Series 1994 A Rebate Sub-account
exceeds the Rebate Amount for the period commencing on the date
of issuance of the Series 1994 A Bonds and ending on the last day
of the most recent Series 1994 A Computation Period, the Trustee,
upon the receipt of written instructions from an Authorized
Corporation Representative specifying the amount of such excess,
shall withdraw such excess amount and deposit it in the Series
1994 A Investment Proceeds Sub-account of the Series 1994 A
Project Construction Account of the Project Fund prior to the
completion of the Series 1994 A Project, or, after the completion
<PAGE>
<PAGE> 24.
date of the Series 1994 A Project, deposit it in the Bond Fund.
Unless the Corporation shall first deliver to the
Trustee a certificate of an Authorized Corporation Representative
to the effect that as of the Completion Date of the Series 1994 A
Project ninety-five percent (95%) or more of the net proceeds
(within the meaning of Section 142(a) of the Code) deposited in
the Series 1994 A Project Construction Account of the Project
Fund and constituting proceeds of the Series 1994 A Bonds have
been used to provide facilities for the local furnishing of gas
or other exempt facilities or facilities functionally related and
subordinate to any of the foregoing, all within the meaning of
Section 142 of the Code as in effect on the date of issue of the
Series 1994 A Bonds, any amounts deposited in the Bond Fund
pursuant to the preceding paragraph shall at the written
direction of an Authorized Corporation Representative be applied
to (i) the redemption of the Series 1994 A Bonds (other than a
redemption at the demand of the State) pursuant to the provisions
of the Indenture, or (ii) the purchase of the Series 1994 A Bonds
and, pending any such application, shall be invested in
securities pursuant to the instructions of an Authorized
Corporation Representative, provided that such investment will
not be in violation of the covenants made to the Authority by the
Corporation in the Series 1994 A Tax Regulatory Agreement.
SECTION 3.03. No Individual Liability. No covenant or
agreement contained in the Series 1994 A Bonds or in the
Indenture shall be deemed to be the covenant or agreement of any
member, agent, or employee of the Authority in his or her
individual capacity, and neither the members of the Authority nor
any official executing the Series 1994 A Bonds shall be liable
personally on the Series 1994 A Bonds or be subject to any
personal liability or accountability by reason of the issuance
thereof.
SECTION 3.04. Effective Date; Counterparts. This
Third Supplemental Indenture shall become effective on delivery.
This Third Supplemental Indenture may be executed in several
counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument.
SECTION 3.05. Date for Identification Purposes Only.
The date of this Third Supplemental Indenture shall be for
identification purposes only and shall not be construed to imply
that this Third Supplemental Indenture was executed as of any
date other than the respective dates of the acknowledgements of
the parties hereto.
<PAGE>
<PAGE> 25.
SECTION 3.06. Compliance with the Series 1994 A Tax
Regulatory Agreement. Notwithstanding any provision of the
Indenture to the contrary, no later than twenty (20) days after
any partial redemption of the Series 1994 A Bonds, the Trustee
shall reduce the aggregate amount of all investments held under
the Indenture which are subject to the one hundred fifty percent
(150%) limitation described in the Series 1994 A Tax Regulatory
Agreement to the extent required by such limitation, all in
accordance with a written direction received from an Authorized
Corporation Representative. The Trustee shall be entitled
conclusively to rely upon such written direction.
SECTION 3.07. Project Fund Requisitions. In addition
to the certifications required by Section 5.03 of the Basic
Indenture in connection with requisitions from the Project Fund,
any requisition submitted in connection with moneys deposited in
the Series 1994 A Project Construction Account shall include a
certification of the Corporation to the effect that the moneys
requisitioned by the Corporation will not be used in a manner
which would be contrary to any material representation or
warranty contained in the Series 1994 A Tax Regulatory Agreement.
SECTION 3.08. Recitals. The Trustee shall have no
responsibility for the recitals contained in this Third
Supplemental Indenture.
<PAGE>
<PAGE> 26.
IN WITNESS WHEREOF, the Authority has caused this Third
Supplemental Indenture to be executed by its Chair and its
corporate seal to be hereunto affixed and attested by its
Secretary, and the Trustee has caused this Third Supplemental
Indenture to be executed by its Assistant Vice President and
attested by its Assistant Vice President all as of the date first
above written.
NEW YORK STATE ENERGY RESEARCH
AND DEVELOPMENT AUTHORITY
By____________________________
Chair
(SEAL)
Attest:
________________________
Secretary
MARINE MIDLAND BANK,
as Trustee
By___________________________
Assistant Vice President
(SEAL)
Attest:
________________________
Assistant Vice President
<PAGE>
<PAGE> 27.
STATE OF NEW YORK )
: ss.:
COUNTY OF ALBANY )
On the _____ day of December, 1994, before me
personally came Francis J. Murray, Jr., to me known, who being by
me duly sworn, did depose and say that he is Chair of New York
State Energy Research and Development Authority, the Authority
described in and which executed the above instrument; that he
knows the seal of said Authority; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the members of said Authority; and that he signed
his name thereto by like authority.
_________________________
Notary Public
STATE OF NEW YORK )
: ss.:
COUNTY OF ALBANY )
On the ______ day of December, 1994, before me
personally came Howard A. Jack, to me known, who being by me duly
sworn, did depose and say that he is Secretary of New York State
Energy Research and Development Authority, the Authority
described in and which executed the above instrument; that he
knows the seal of said Authority; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by
authority of the members of said Authority; and that he signed
his name thereto by like authority.
_________________________
Notary Public
<PAGE>
<PAGE> 28.
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the _____ day of December, 1994 before me personally
came ____________________ and ______________________, to me
known, who being by me duly sworn, did depose and say that they
are Assistant Vice Presidents, of Marine Midland Bank, the
Trustee described in and which executed the above instrument;
that they know the seal of said Trustee; that the seal affixed to
said instrument is such corporate seal; that it was so affixed by
authority of the Board of Directors of said Trustee; and that
they signed their names thereto by like authority.
___________________________
Notary Public
<PAGE>
<PAGE>
Consolidated Edison Company of New York, Inc.
_________________________________________________________
_________________________________________________________
Con Edison Thrift Savings Plan
for Management Employees
and
Tax Reduction Act Stock Ownership Plan
_________________________________________________________
_________________________________________________________
As Amended and Restated Effective as of January 1, 1994,
Except as Otherwise Noted.
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<PAGE>
<PAGE>
PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Definitions . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Eligibility and Participation. . . . . . . . . . . . . . 17
2.01 Eligibility . . . . . . . . . . . . . . . . . 17
2.02 Participation. . . . . . . . . . . . . . . . . 18
2.03 Reemployment of Former Employees and
Former Participants. . . . . . . . . . . . . . 18
2.04 Transferred Participants . . . . . . . . . . . 18
2.05 Termination of Participation . . . . . . . . . 19
ARTICLE 3 . . . . . . . . . . . . . . . . . . . . . . . . . 19
Contributions . . . . . . . . . . . . . . . . . . . . . 19
3.01 Pre-Tax Contributions . . . . . . . . . . . . 19
3.02 After-Tax Contributions. . . . . . . . . . . . 21
3.03 Company Contributions. . . . . . . . . . . . . 21
3.04 Participating and Nonparticipating
Contributions . . . . . . . . . . . . . . . . 22
3.05 Rollover Contributions and Trust
to Trust Transfers . . . . . . . . . . . . . . 22
3.06 Changes in Contributions . . . . . . . . . . . 24
3.07 Suspension in Contributions. . . . . . . . . . 24
3.08 Payment To Trust . . . . . . . . . . . . . . . 25
3.09 No Contributions to TRASOP . . . . . . . . . . 25
ARTICLE 4 . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Company Contributions. . . . . . . . . . . . . . . . . . 25
4.01 Company Contributions Election . . . . . . . . 25
4.02 Change of Election . . . . . . . . . . . . . . 26
4.03 Certification to Trustee . . . . . . . . . . . 26
4.04 Forfeitures . . . . . . . . . . . . . . . . . 26
ARTICLE 5 . . . . . . . . . . . . . . . . . . . . . . . . . . 26
The Trust Fund; Investments. . . . . . . . . . . . . . . 26
5.01 Trust Agreement. . . . . . . . . . . . . . . . 26
5.02 Investment of Trust Fund . . . . . . . . . . . 27
5.03 Rules for Investment Elections . . . . . . . . 27
5.04 Fixed Income Fund . . . . . . . . . . . . . . 30
5.05 Equity Index Fund . . . . . . . . . . . . . . 31
5.06 Company Stock Fund . . . . . . . . . . . . . . 32
5.07 Temporary Investments. . . . . . . . . . . . . 34
i 12/28/94
<PAGE>
<PAGE>
5.08 Accounts and Subaccounts . . . . . . . . . . . 35
5.09 Pre-January 1, 1985 Contributions. . . . . . . 35
5.10 Statements of Account. . . . . . . . . . . . . 36
5.11 Treasury Bill Fund . . . . . . . . . . . . . . 36
5.12 Balanced Fund . . . . . . . . . . . . . . . . 37
5.13 Responsibility for Investments . . . . . . . . 38
ARTICLE 6 . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Vesting. . . . . . . . . . . . . . . . . . . . . . . . . 38
6.01 Participant Contributions. . . . . . . . . . . 38
6.02 Company Contributions . . . . . . . . . . . . 38
6.03 TRASOP Account . . . . . . . . . . . . . . . . 39
ARTICLE 7 . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Distributions, Withdrawals and Forfeitures . . . . . . . 39
7.01 Retirement . . . . . . . . . . . . . . . . . . 39
7.02 Voluntary Termination or Termination
by the Company; Forfeitures. . . . . . . . . . 39
7.03 Death . . . . . . . . . . . . . . . . . . . . 41
7.04 Withdrawals. . . . . . . . . . . . . . . . . . 41
7.05 Hardship Withdrawals . . . . . . . . . . . . . 45
7.06 Distribution from Company Stock Fund . . . . . 50
7.07 Leaves of Absence and Transfers
to Weekly Payroll . . . . . . . . . . . . . . 51
7.08 Age 70 1/2 Required Distribution . . . . . . . 51
7.09 Form and Timing of Distributions . . . . . . . 53
7.10 Status of Account Pending Distribution . . . . 54
7.11 Proof of Death and Right of Beneficiary
or Other Person . . . . . . . . . . . . . . . 54
7.12 Distribution Limitation. . . . . . . . . . . . 55
7.13 Direct Rollover of Certain Distributions . . . 55
ARTICLE 8 . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Non-Discrimination and Limitation. . . . . . . . . . . . 56
8.01 Actual Deferral Percentage Test. . . . . . . . 56
8.02 Actual Contribution Percentage Test. . . . . . 58
8.03 Aggregate Contribution Limitation. . . . . . . 60
8.04 Additional Discrimination Testing Provisions . 61
8.05 Maximum Annual Additions . . . . . . . . . . . 63
8.06 Defined Benefit Plan Limitation. . . . . . . . 66
ARTICLE 9 . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Loans. . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.01 Loans Permitted. . . . . . . . . . . . . . . . 66
ii 12/28/94
<PAGE>
<PAGE>
9.02 Amount of Loans. . . . . . . . . . . . . . . . 67
9.03 Source of Loans. . . . . . . . . . . . . . . . 67
9.04 Interest Rate. . . . . . . . . . . . . . . . . 68
9.05 Repayment. . . . . . . . . . . . . . . . . . . 68
9.06 Multiple Loans . . . . . . . . . . . . . . . . 69
9.07 Pledge . . . . . . . . . . . . . . . . . . . . 69
9.08 Loan Reserve . . . . . . . . . . . . . . . . . 70
9.09 Minimum Account Balance. . . . . . . . . . . . 70
9.10 Consent. . . . . . . . . . . . . . . . . . . . 70
9.11 Other Terms. . . . . . . . . . . . . . . . . . 71
ARTICLE 10. . . . . . . . . . . . . . . . . . . . . . . . . . 71
Administration of the Plan . . . . . . . . . . . . . . . 71
10.01 Named Fiduciaries and Plan Administrator. . . 71
10.02 Authority of Plan Administrator . . . . . . . 71
10.03 Reliance on Reports . . . . . . . . . . . . . 72
10.04 Delegation of Authority . . . . . . . . . . . 72
10.05 Administration Expenses . . . . . . . . . . . 72
10.06 Fiduciary Insurance . . . . . . . . . . . . . 73
10.07 Claim Review . . . . . . . . . . . . . . . . 74
10.08 Appointment of Trustee. . . . . . . . . . . . 75
10.09 Limitation of Liability . . . . . . . . . . . 75
ARTICLE 11. . . . . . . . . . . . . . . . . . . . . . . . . . 76
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . 76
11.01 Exclusive Benefit; Amendments . . . . . . . . 76
11.02 Termination; Sale of Assets of Subsidiary . . 76
11.03 Beneficiaries . . . . . . . . . . . . . . . . 78
11.04 Assignment of Benefits. . . . . . . . . . . . 79
11.05 Merger. . . . . . . . . . . . . . . . . . . . 80
11.06 Conditions of Employment Not
Affected by Plan. . . . . . . . . . . . . . . 81
11.07 Facility of Payment . . . . . . . . . . . . . 81
11.08 Information . . . . . . . . . . . . . . . . . 81
11.09 Additional Participating Employers. . . . . . 81
11.10 IRS Determination . . . . . . . . . . . . . . 82
11.11 Mistaken Contributions. . . . . . . . . . . . 83
11.12 Prevention of Escheat . . . . . . . . . . . . 84
11.13 Limitations Imposed on
Insider Participants . . . . . . . . . . . . 84
11.14 Construction. . . . . . . . . . . . . . . . . 84
ARTICLE 12. . . . . . . . . . . . . . . . . . . . . . . . . . 85
Top-Heavy Provisions . . . . . . . . . . . . . . . . . . 85
iii 12/28/94
<PAGE>
<PAGE>
12.01 Application of Top-Heavy Provisions . . . . . 85
12.02 Minimum Benefit for Top-Heavy Year. . . . . . 85
12.03 Aggregation Groups. . . . . . . . . . . . . . 85
12.04 Special Benefit Limits. . . . . . . . . . . . 86
12.05 Special Distribution Rule . . . . . . . . . . 86
ARTICLE 13 . . . . . . . . . . . . . . . . . . . . . . . . . 87
Tax Reduction Act Stock Ownership Plan . . . . . . . . . 87
13.01 Purpose; Separate Entity. . . . . . . . . . . 87
13.02 TRASOP Accounts; Application of Dividends . . 87
13.03 Voting Rights; Options; Rights; Warrants. . . 89
13.04 Distribution of Shares. . . . . . . . . . . . 89
13.05 Diversification of TRASOP Accounts. . . . . . 95
iv 12/28/94
<PAGE>
<PAGE>
CON EDISON THRIFT SAVINGS PLAN
FOR MANAGEMENT EMPLOYEES
AND
TAX REDUCTION ACT STOCK OWNERSHIP PLAN
___________________________________
PURPOSE
The purpose of this Plan is to establish a convenient
way for management employees of the Company to supplement their
retirement income by saving on a regular and long-term basis and
to provide additional financial security for emergencies, thereby
offering these employees an additional incentive to continue
their careers with the Company. This Plan is intended to satisfy
the requirements of Sections 401(k) and 401(m) of the Code and to
qualify under Section 401(a) of the Code, and the trust described
in Article 5 of this Plan is intended to qualify under Section
501(a) of the Code, so as to provide Participants an option to
defer a portion of their compensation on a pre-tax and/or after-
tax basis and to invest and reinvest their savings under the Plan
on a tax-deferred basis. It is intended that a Participant's
Pre-Tax Contributions, as defined in this Plan, shall constitute
payments by the Company as contributions to the Trust Fund on
behalf of the Participant, within the meaning of Section 401(k)
of the Code.
Effective as of July 1, 1988, the Company's Tax
Reduction Act Stock Ownership Plan ("TRASOP") for management
employees has been included within this plan document, and all
TRASOP Accounts and all transactions with respect to TRASOP and
TRASOP Accounts shall be governed by this plan document, but this
Plan and the TRASOP shall be separate plans. All TRASOP matters
relating to the period up to June 30, 1988 shall be governed by
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<PAGE>
<PAGE>
TRASOP as amended to February 19, 1988. There shall be no
transfers between TRASOP Accounts and other Plan Accounts and
Subaccounts, and Plan Accounts and Subaccounts and TRASOP
Accounts shall continue to be operated as separate entities,
albeit within a single plan document and trust.
The Plan is amended and restated in its entirety, as
amended through December 28, 1994, and this amendment and
restatement is effective as of January 1, 1994, except as
otherwise provided herein.
ARTICLE 1
Definitions
The following words and phrases have the following
meanings unless a different meaning is plainly required by the
context:
1.01 "Account" means the record maintained pursuant to
Section 5.08 by the Trustee for each Participant relating to
thrift savings contributions to the Plan.
1.02 "Act" means the Tax Reduction Act of 1975, as amended
from time to time.
1.03 "Actual Contribution Percentage," or "ACP," means,
with respect to a specified group of Employees, the average of
the ratios, calculated separately for each Employee in the group,
of (a) the sum of the Employee's After-Tax Contributions and
Company Contributions for that Plan Year (excluding any Company
Contributions forfeited under the provisions of Sections 3.01 and
8.01), to (b) his Statutory Compensation for that entire Plan
Year; provided that, upon direction of the Plan Administrator,
Statutory Compensation for a Plan Year shall only be counted if
received during the period an Employee is, or is eligible to
2 12/28/94
<PAGE>
<PAGE>
become, a Participant. The Actual Contribution Percentage for
each group and the ratio determined for each Employee in the
group shall be calculated to the nearest one one-hundredth of one
percent.
1.04 "Actual Deferral Percentage," or "ADP," means, with
respect to a specified group of Employees, the average of the
ratios, calculated separately for each Employee in that group, of
(a) the amount of Pre-Tax Contributions made pursuant to Section
3.01 for a Plan Year (including Pre-Tax Contributions returned to
a Highly Compensated Employee under Section 3.01(c) and Pre-Tax
Contributions returned to any Employee pursuant to Section
3.01(d)), to (b) the Employee's Statutory Compensation for that
entire Plan Year, provided that, upon direction of the Plan
Administrator, Statutory Compensation for a Plan Year shall only
be counted if received during the period an Employee is, or is
eligible to become, a Participant. The Actual Deferral
Percentage for each group and the ratio determined for each
Employee in the group shall be calculated to the nearest one one-
hundredth of one percent. For purposes of determining the Actual
Deferral Percentage for a Plan Year, Pre-Tax Contributions may be
taken into account for a Plan Year only if they:
(a) relate to compensation that either would have been
received by the Employee in the Plan Year but for the deferral
election, or are attributable to services performed by the
Employee in the Plan Year and would have been received by the
Employee within 2 1/2 months after the close of the Plan Year but
for the deferral election,
(b) are allocated to the Employee as of a date within that
Plan Year and the allocation is not contingent on the
participation or performance of service after such date, and
3 12/28/94
<PAGE>
<PAGE>
(c) are actually paid to the Trustee no later than 12
months after the end of the Plan Year to which the contributions
relate.
1.05 "Adjustment Factor" means the cost of living
adjustment factor prescribed by the Secretary of the Treasury
under Section 415(d) of the Code for calendar years beginning on
or after January 1, 1988, and applied to such items and in such
manner as the Secretary shall provide.
1.06 "Affiliated Employer" means any company which is a
member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which also includes as a member the
Company; any trade or business under common control (as defined
in Section 414(c) of the Code) with the Company; any organization
(whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which
includes the Company; and any other entity required to be
aggregated with the Company pursuant to regulations under Section
414(o) of the Code. Notwithstanding the foregoing, for purposes
of Sections 1.34 and 8.05, the definitions in Sections 414(b) and
(c) of the Code shall be modified by substituting the phrase
"more than 50 percent" for the phrase "at least 80 percent" each
place it appears in Section 1563(a)(1) of the Code.
1.07 "After-Tax Contribution" shall have the meaning set
forth in Section 3.02.
1.08 "After-Tax Subaccount" shall have the meaning set
forth in Section 5.08.
1.09 "Annual Dollar Limit" means for Plan Years beginning
on or after January 1, 1989 and before January 1, 1994, $200,000
multiplied by the Adjustment Factor. Commencing with the 1994
4 12/28/94
<PAGE>
<PAGE>
Plan Year, the Annual Dollar Limit means $150,000, except that if
for any calendar year after 1994 the Cost-of-Living Adjustment as
hereafter defined is equal to or greater than $10,000, then the
Annual Dollar Limit (as previously adjusted under this Section)
for any Plan Year beginning in any subsequent calendar year shall
be increased by the amount of such Cost-of-Living Adjustment,
rounded to the next lowest multiple of $10,000. The Cost-of-
Living Adjustment shall equal the excess of (i) $150,000
increased by the adjustments made under Section 415(d) of the
Code for the calendar years after 1994 except that the base
period for purposes of Section 415(d)(1)(A) of the Code shall be
the calendar quarter beginning October 1, 1993 over (ii) the
Annual Dollar Limit in effect for the Plan Year beginning in the
calendar year.
1.10 "Annuity Starting Date" means the first day of the
first period for which an amount is paid following a
Participant's Retirement or other termination of employment.
1.11 "Balanced Fund" shall have the meaning set forth in
Section 5.12.
1.12 "Beneficiary" means the person or persons determined
in accordance with the provisions of Section 11.03 to succeed to
a Participant's benefits under the Plan in the event of death of
such Participant prior to the entire distribution of such
benefits.
1.13 "Board" means the Board of Trustees of the Company.
1.14 "Break in Service" means an event affecting
forfeitures, which shall occur to the extent that a Participant's
nonforfeitable rights in his Company Contributions Subaccount are
determined under the cliff vesting provisions of Section 6.02, as
of the Participant's Severance Date if he is not reemployed by
the Company or an Affiliated Employer within one year after a
5 12/28/94
<PAGE>
<PAGE>
Severance Date. However, if an Employee is absent from work
immediately following his or her active employment, irrespective
of whether the Employee's employment is terminated, because of
the Employee's pregnancy, the birth of the Employee's child, the
placement of a child with the Employee in connection with the
adoption of that child by the Employee or for purposes of caring
for that child for a period beginning immediately following that
birth or placement and that absence from work began on or after
the first day of the Plan Year which began in 1985, a Break in
Service shall occur to the extent that a Participant's
nonforfeitable rights in his Company Contributions Subaccount are
determined under the cliff vesting provisions of Section 6.02
only if the Participant does not return to work within two years
of his Severance Date. A Break in Service shall not occur during
an approved leave of absence or during a period of military
service which is included in the Employee's Vesting Service
pursuant to Section 1.61.
1.15 "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
1.16 "Company" means Consolidated Edison Company of New
York, Inc. or any successor by merger, purchase or otherwise,
with respect to its employees; or any other company participating
in the Plan as provided in Section 11.09 with respect to its
employees.
1.17 "Company Contribution" means any contributions to the
Trust Fund by the Company pursuant to Section 3.03.
1.18 "Company Contribution Subaccount" shall have the
meaning set forth in Section 5.08.
6 12/28/94
<PAGE>
<PAGE>
1.19 "Company Stock Fund" shall have the meaning set forth
in Section 5.06.
1.20 "Compensation" means base salary paid to an Employee
for services rendered to the Company, determined prior to any
reduction for Pre-Tax Contributions pursuant to Section 3.01 or
amounts contributed on the Employee's behalf on a salary
reduction basis to a cafeteria plan under Section 125 of the Code
and excluding bonuses, overtime pay, incentive compensation,
deferred compensation and all other forms of special pay.
However, for Plan Years beginning after 1988, Compensation shall
not exceed the Annual Dollar Limit. The Annual Dollar Limit
applies to the aggregate Compensation paid to a Highly
Compensated Employee referred to in Section 8.04, his spouse and
his lineal descendants who have not attained age 19 before the
end of the Plan Year. If, as a result of the application of the
family aggregation rule, the Annual Dollar Limit is exceeded,
then the Limit shall be prorated among the affected individuals
in proportion to each such individual's Compensation as
determined under this Section 1.20 prior to the application of
the Limit.
1.21 "Defined Benefit Plan" means a "defined benefit plan"
as defined in Section 414(j) of the Code which is maintained by
the Company or an Affiliated Employer for its employees.
1.22 "Defined Benefit Plan Fraction" means, for any
Participant, for any calendar year, a fraction:
(a) The numerator of which is the Projected Annual Benefit
of the Participant under all Defined Benefit Plans (determined as
of the close of the year); and
(b) The denominator of which is the lesser of:
7 12/28/94
<PAGE>
<PAGE>
(i) The product of 1.25 multiplied by $90,000 as
adjusted by the Adjustment Factor; or
(ii) The product of 1.4 multiplied by the average of
the Participant's aggregate renumeration as defined in Section
8.05 for his highest three consecutive years.
1.23 "Defined Contribution Plan" means a "defined
contribution plan" as defined in Section 414(i) of the Code which
is maintained by the Company or an Affiliated Employer for its
employees.
1.24 "Defined Contribution Plan Fraction" means, for any
Participant, for any calendar year, a fraction:
(a) The numerator of which is the sum of the Participant's
Annual Additions for the year determined as of the end of such
year; and
(b) The denominator of which is the sum of the lesser of
the following amounts determined for such year and for each prior
year of Service:
(i) The product of 1.25 multiplied by $30,000, as
adjusted by the Adjustment Factor; or
(ii) The product of 1.4 multiplied by 25% of the
Participant's aggregate renumeration as defined in Section 8.05
for the year.
8 12/28/94
<PAGE>
<PAGE>
1.25 "Disability" means total and permanent physical or
mental disability, as evidenced by (a) receipt of a Social
Security disability pension or (b) receipt of disability payments
under the Company's long-term disability program.
1.26 "Earnings" means the amount of income to be returned
with any excess deferrals, excess contributions or excess
aggregate contributions under Section 3.01, 8.01, 8.02 or 8.03.
Earnings on excess deferrals and excess contributions shall be
determined by multiplying the income earned on the Pre-Tax
Subaccount for the Plan Year by a fraction, the numerator of
which is the excess deferrals or excess contributions, as the
case may be, for the Plan Year and the denominator of which is
the Pre-Tax Subaccount balance at the end of the Plan Year,
disregarding any income or loss occurring during the Plan Year.
Earnings on excess aggregate contributions shall be determined in
a similar manner by substituting the sum of the Company
Contributions Subaccount and After-Tax Subaccount for the Pre-Tax
Subaccount, and the excess aggregate contributions for the excess
deferrals and excess contributions in the preceding sentence.
1.27 "Employee" means a salaried employee of the Company
who is on the management payroll and receives stated compensation
other than a pension, severance pay, retainer, or fee under
contract; however, the term "Employee" excludes any Leased
Employee and any person who is included in a unit of employees
covered by a collective bargaining agreement which does not
provide for his participation in the Plan.
1.28 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time.
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1.29 "Equity Index Fund" shall have the meaning set forth
in Section 5.05.
1.30 "Fixed Income Fund" shall have the meaning set forth
in Section 5.04.
1.31 "Highly Compensated Employee" means any employee of
the Company or an Affiliated Employer (whether or not eligible
for participation in the Plan) who satisfies the criteria of
paragraph (a), (b), (c) or (d):
(a) During the look-back year the employee:
(i) received Statutory Compensation in excess of
$75,000 multiplied by the Adjustment Factor;
(ii) received Statutory Compensation in excess of
$50,000 multiplied by the Adjustment Factor and was among the
highest 20 percent of employees for that year when ranked by
Statutory Compensation paid for that year excluding, for purposes
of determining the number of such employees, such employees as
the Company may determine on a consistent basis pursuant to
Section 414(q)(8) of the Code; or
(iii) was at any time an officer of the Company or an
Affiliated Employer and received Statutory Compensation greater
than 50 percent of the dollar limitation on maximum benefits
under Section 415(b)(1)(A) of the Code for such Plan Year. The
number of officers is limited to 50 (or, if lesser, the greater
of 3 employees or 10 percent of employees excluding those
employees who may be excluded in determining the top-paid group).
If no officer has Statutory Compensation in excess of 50 percent
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of the dollar limitation on maximum benefits under Section
415(b)(1)(A) of the Code, the highest paid officer is treated as
a Highly Compensated Employee.
(b) During the determination year, the employee satisfies
the criteria under (i), (ii), or (iii) of (a) above and is one of
the 100 highest paid employees of the Company or an Affiliated
Employer.
(c) During the determination year or the look-back year the
employee was at any time a five percent owner of the Company.
(d) For purposes of Section 8.04(a), a Highly Compensated
Employee shall include a former employee who separated from
service prior to the determination year and who was a five
percent owner for either (i) the year he separated from service
or (ii) any determination year ending on or after the employee's
55th birthday.
(e) Notwithstanding the foregoing, employees who are
nonresident aliens and who receive no earned income from the
Company or an Affiliated Employer which constitutes income from
sources within the United States shall be disregarded for all
purposes of this Section.
(f) For purposes of this Section 1.31, the "determination
year" means the Plan Year and "look-back year" means the 12 month
period immediately preceding the determination year. However, to
the extent permitted under regulations, the Plan Administrator
may elect to determine the status of Highly Compensated Employees
on a current calendar year basis.
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(g) The provisions of the Section shall be further subject
to such additional requirements as shall be described in Section
414(q) of the Code and its applicable regulations, which shall
override any aspects of this Section inconsistent therewith.
1.32 "Hour of Service" means each hour for which the
employee is paid or entitled to payment for the performance of
duties for the Company or an Affiliated Employer.
1.33 "Investment Manager" means an investment manager as
defined in Section 3(38)of ERISA, which is appointed by the Named
Fiduciaries pursuant to Sections 5.04, 5.05, 5.11 or 5.12.
1.34 "Leased Employee" means any person performing services
for the Company or an Affiliated Employer as a leased employee as
defined in Section 414(n) of the Code. In the case of any person
who is a Leased Employee before or after a period of service as
an Employee, the entire period during which he has performed
services as a Leased Employee shall be counted as service as an
Employee for all purposes of the Plan, except that he shall not,
by reason of that status, become a Participant of the Plan.
1.35 "Loan Reserve" shall have the meaning set forth in
Section 9.08.
1.36 "Named Fiduciaries" means the persons designated as
named fiduciaries of the Plan pursuant to Section 10.01.
1.37 "Nonparticipating Contribution" shall have the meaning
set forth in Section 3.04.
1.38 "Participant" means any person who has a balance to
his credit in the Trust Fund and/or shares beneficially owned
under a TRASOP Account.
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1.39 "Participating Contribution" shall have the meaning
set forth in Section 3.04.
1.40 "Plan" means the Con Edison Thrift Savings Plan for
Management Employees and, effective as of July 1, 1988, the
TRASOP, as amended from time to time, as set forth herein.
1.41 "Plan Administrator" means the Plan Administrator
appointed pursuant to Section 10.01 to administer the Plan.
1.42 "Plan Year" means the calendar year.
1.43 "Pre-Tax Contribution" shall have the meaning set
forth in Section 3.01.
1.44 "Pre-Tax Subaccount" shall have the meaning set forth
in Section 5.08.
1.45 "Projected Annual Benefit" means, for any Participant,
for any calendar year, the annual benefit payable in the form of
a straight life annuity to which the Participant would be
entitled under a Defined Benefit Plan on the assumptions that he
continues in the employment of the Company until the normal
retirement age under the Defined Benefit Plan (or his current
age, if later), that his compensation, as defined in such Defined
Benefit Plan, continues at the same rate in effect for the year
under consideration until such age, and that all other relevant
factors used to determine benefits under the Defined Benefit Plan
remain constant as of the year under consideration for all future
years.
1.46 "Retirement" means a termination of service by a
Participant either (a) by reason of disability, or (b) under
circumstances in which he is entitled to receive a retirement
pension under any Defined Benefit Plan, or (c) in the case of any
Participant who is employed after age 60 and who is not entitled
to receive a retirement pension under any Defined Benefit Plan,
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on or after his sixty-fifth birthday.
1.47 "Rollover Subaccount" means the account credited with
the Rollover Contributions made by a Participant and earnings on
those contributions.
1.48 Rollover Contributions" means amounts contributed
pursuant to Section 3.05.
1.49 "Severance Date" means the earlier of (a) the date an
employee quits, retires, is discharged or dies, or (b) the first
anniversary of the date on which an employee is first absent from
service, with or without pay, for any reason such as vacation,
sickness, disability, layoff or leave of absence.
1.50 "Statutory Compensation" means the wages, salaries,
and other amounts paid in respect of an employee for services
actually rendered to the Company or an Affiliated Employer,
including by way of example, overtime and bonuses, but excluding
deferred compensation, stock options and other distributions
which receive special tax benefits under the Code. For purposes
of determining Highly Compensated Employees under Section 1.31
and key employees under Article 12, Statutory Compensation shall
include Pre-Tax Contributions and amounts contributed on a
Participant's behalf on a salary reduction basis to a cafeteria
plan under Section 125 of the Code. For all other purposes, each
Plan Year the Plan Administrator may direct that Statutory
Compensation shall include Pre-Tax Contributions and amounts
contributed on a Participant's behalf on a salary reduction basis
to a cafeteria plan under Section 125 of the Code. For Plan
Years beginning on or after January 1, 1989, Statutory
Compensation shall not exceed the Annual Dollar Limit, provided
that such Limit shall not be applied in determining Highly
Compensated Employees under Section 1.31. The Annual Dollar
Limit applies to the aggregate Statutory Compensation paid to a
Highly Compensated Employee referred to in Section 8.04(a), his
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spouse and his lineal descendants who have not attained age 19
before the close of the Plan Year. If, as a result of the
application of the family aggregation rule, the Annual Dollar
Limit is exceeded, then the Limit shall be prorated among the
affected individuals in proportion to each such individual's
Statutory Compensation as determined under this Section 1.50
prior to the application of the Limit.
1.51 "Shares" means issued and outstanding shares of common
stock of the Company and shall include fractional shares of such
common stock.
1.52 "Treasury Bill Fund" shall have the meaning set forth
in Section 5.11.
1.53 "Top-Heavy Plan" means any Defined Contribution Plan
or Defined Benefit Plan under which more that 60% of the sum of
(i) its aggregate account balances and (ii) the present value of
its aggregate accrued benefits is allocated to key employees.
For the purposes of this definition "present value" shall be
determined on the basis of an interest rate of 5-1/2% and
mortality as set forth in 1971 TPF&C Forecast Mortality.
1.54 "Top Heavy Group" means any "required aggregation
group" (as defined in Section 12.03) or any "permissive
aggregation group" (as defined in Section 12.03) in which more
than 60% of the sum of (i) the aggregate account balances under
all plans in the group and (ii) the aggregate present value of
accrued benefits under all plans in the group is allocated to key
employees. For the purpose of this definition, "present value"
shall be determined on basis of an interest rate of 5-1/2% and
mortality as set forth in 1971 TPF&C Forecast Mortality.
1.55 "TRASOP" means the Tax Reduction Act Stock Ownership
Plan of the Company, as included within this plan document
effective as of July 1, 1988.
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1.56 "TRASOP Account" means an account maintained on behalf
of an Employee by the Trustee under the TRASOP, in which is shown
the number of Shares beneficially owned thereunder by the
Employee, as determined under the provisions and requirements of
the TRASOP.
1.57 "Trust Fund" means the trust fund described in Article
5.
1.58 "Trustee" means the trustee at any time appointed and
acting as trustee of the Trust Fund.
1.59 "Units" shall have the meaning set forth in Section
5.06.
1.60 "Vested Portion" means the portion of the Account in
which the Participant has a nonforfeitable interest as provided
in Article 6 or, if applicable, Article 12.
1.61 "Vesting Service" means, with respect to any employee,
his period of employment with the Company or any Affiliated
Employer, whether or not as an Employee, beginning on the date he
first completes an Hour of Service and ending on his Severance
Date, provided that:
(a) if his employment terminates and he is reemployed
within one year of the earlier of (i) his date of termination or
(ii) the first day of an absence from service immediately
preceding his date of termination, the period between his
Severance Date and his date of reemployment shall be included in
his Vesting Service;
(b) if he is absent from the service of the Company or any
Affiliated Employer because of service in the Armed Forces of the
United States and he returns to service with the Company or an
Affiliated Employer having applied to return while his
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reemployment rights were protected by law, the absence shall be
included in his Vesting Service;
(c) if he is on a leave of absence covered by the Family
and Medical Leave Act of 1993, as it may be amended from time to
time, the period of leave shall be included in his Vesting
Service;
(d) if he is on leave of absence approved by the Company,
under rules uniformly applicable to all Employees similarly
situated, the Company may authorize the inclusion in his Vesting
Service of any portion of that period of leave which is not
included in his Vesting Service under (a), (b) or (c) above; and
(e) if his employment terminates and he is reemployed after
he has incurred a Break in Service, his Vesting Service after
reemployment shall be aggregated with his previous period or
periods of Vesting Service if (i) he was vested in his Company
Contribution Subaccount or (ii) the period from his Break in
Service to his subsequent reemployment does not equal or exceed
the greater of five years or his period of Vesting Service before
his Break in Service.
1.62 "Weekly Plan"means the Con Edison Retirement Income
Savings Plan for Weekly Employees as from time to time in effect.
1.63 The masculine pronoun wherever used includes the
feminine pronoun.
ARTICLE 2
Eligibility and Participation
2.01 Eligibility. Any Employee shall be eligible for
participation in the Plan, except that only an Employee who was a
Participant in, and had an account under TRASOP on June 30, 1988,
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shall be eligible to continue to participate in TRASOP and have a
TRASOP Account under this Plan, because applicable laws do not
permit additional tax credit contributions to TRASOP.
2.02 Participation. An Employee may become a Participant
by completing such enrollment process as may be prescribed by the
Plan Administrator and by electing to make monthly contributions
to the Trust Fund in an amount equal to any percentage of his
Compensation permitted by Sections 3.01 and/or 3.02. An Employee
may also become a Participant by electing to contribute to the
Trust Fund amounts allocated to the Employee by the Company under
a cafeteria plan of the Company under Section 125 of the Code and
otherwise available under such plan to be contributed under this
Plan. A Participant's contributions shall be made by regular
payroll deductions authorized from time to time by such
Participant in such manner and on such conditions as may be
prescribed by the Plan Administrator, including a form furnished
by the Company under a cafeteria plan of the Company under
Section 125 of the Code. An Employee may become a Participant
beginning with any calendar month by making such election on or
before the 15th day of the preceding calendar month.
2.03 Reemployment of Former Employees and Former
Participants. Any person reemployed by the Company as an
Employee, who was previously a Participant or who was previously
eligible to become a Participant, shall become a Participant upon
completing the enrollment process and making an election in
accordance with Section 2.02.
2.04 Transferred Participants. A Participant who remains
in the employ of the Company or an Affiliated Employer but ceases
to be an Employee shall continue to be a Participant of the Plan
but shall not be eligible to make After-Tax Contributions, Pre-
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Tax Contributions or to have Company Contributions made on his
behalf while his employment status is other than as an Employee.
2.05 Termination of Participation. A Participant's
participation shall terminate on the date he is no longer
employed by the Company or any Affiliated Employer unless the
Participant is entitled to benefits under the Plan, in which
event his participation shall terminate when those benefits are
distributed to him.
ARTICLE 3
Contributions
3.01 Pre-Tax Contributions.
(a) A Participant may elect in accordance with Section 2.02
to reduce his Compensation payable while a Participant by at
least 1% and, effective January 1, 1994, not more than 18%, in
multiples of 1% and have that amount contributed to the Plan by
the Company as Pre-Tax Contributions. An amount contributed to
the Plan pursuant to the election of a Participant under a
cafeteria plan of the Company under Section 125 of the Code may
be designated as a Pre-Tax Contribution by the Participant. Pre-
Tax Contributions shall be further limited as provided below and
in Sections 8.01, 8.04 and 8.05.
(b) In no event shall the Participant's Pre-Tax
Contributions and similar contributions made on his behalf by the
Company or an Affiliated Employer to all plans, contracts or
arrangements subject to the provisions of Section 401(a)(30) of
the Code in any calendar year exceed $7,000 multiplied by the
Adjustment Factor. If a Participant's Pre-Tax Contributions in a
calendar year reach that dollar limitation, his election of Pre-
Tax Contributions for the remainder of the calendar year will be
canceled and, if so elected by the Participant, then
recharacterized as an election to make After-Tax Contributions
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under Section 3.02 at the same rate as was previously in effect
for his Pre-Tax Contributions. Each Participant affected by this
paragraph (b) may elect to change or suspend the rate at which he
makes After-Tax Contributions. As of the first pay period of the
calendar year following such cancellation, the Participant's
election of Pre-Tax Contributions shall again become effective at
the rate in accordance with his most recent election.
(c) In the event that the sum of the Pre-Tax Contributions
and similar contributions to any other qualified Defined
Contribution Plan maintained by the Company or an Affiliated
Employer exceeds the dollar limitation in Section 3.01(b) for any
calendar year, the Participant shall be deemed to have elected a
return of Pre-Tax Contributions in excess of such limit ("excess
deferrals") from this Plan. The excess deferrals, together with
Earnings, shall be returned to the Participant no later than the
April 15 following the end of the calendar year in which the
excess deferrals were made. The amount of excess deferrals to be
returned for any calendar year shall be reduced by any Pre-Tax
Contributions previously returned to the Participant under
Section 8.01 for that calendar year. In the event any Pre-Tax
Contributions returned under the this paragraph (c) were matched
by Company Contributions under Section 3.03, those Company
Contributions, together with Earnings, shall be forfeited and
used to reduce future Company contributions.
(d) If a Participant makes tax-deferred contributions under
another qualified defined contribution plan maintained by an
employer other than the Company or an Affiliated Employer for any
calendar year and those contributions when added to his Pre-Tax
Contributions exceed the dollar limitation under Section 3.01(b)
for that calendar year, the Participant may allocate all or a
portion of such excess deferrals to this Plan. In that event,
such excess deferrals, together with Earnings, shall be returned
to the Participant no later than the April 15 following the end
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of the calendar year in which such excess deferrals were made.
However, the Plan shall not be required to return excess
deferrals unless the Participant notifies the Plan Administrator,
in writing, by March 1 of that following calendar year of the
amount of the excess deferrals allocated to this Plan. The
amount of such excess deferrals to be returned for any calendar
year shall be reduced by any Pre-Tax Contributions previously
returned to the Participant under Section 8.01 for that calendar
year. In the event any Pre-Tax Contributions returned under this
paragraph (d) were matched by Company Contributions under Section
3.03, those Company Contributions, together with Earnings, shall
be forfeited and used to reduce future Company contributions.
3.02 After-Tax Contributions. Any Participant may make
After-Tax Contributions under this Section whether or not he has
elected to have Pre-Tax Contributions made on his behalf pursuant
to Section 3.01. The amount of After-Tax Contributions shall be
at least 1% and, effective January 1, 1994, not more than 18% of
his Compensation while a Participant, in multiples of 1%. An
amount contributed to the Plan pursuant to the election of a
Participant under a cafeteria plan of the Company under Section
125 of the Code may be designated as any After-Tax Contribution
by the Participant. If the Participant has made an election
under Section 3.01, the maximum percentage of Compensation which
the Participant may elect to contribute under this Section shall
be equal to the excess of 18% over the percentage elected by the
Participant under Section 3.01.
3.03 Company Contributions. The Company shall contribute
on behalf of each of its Participants who elects to make Pre-Tax
Contributions or After-Tax Contributions an amount equal to 50%
of the sum of the Pre-Tax Contributions and After-Tax
Contributions made on behalf of or by the Participant to the Plan
during each month, not to exceed 6% of the Participant's
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Compensation for such month, in the following order of priority:
(a) Pre-Tax Contributions, and then (b) After-Tax Contributions.
In no event, however, shall the Company Contributions for a month
pursuant to this Section exceed 3% of the Participant's
Compensation for such month. The Company Contributions are made
expressly conditional on the Plan satisfying the provisions of
Sections 3.01, 8.01, 8.02 and 8.03. If any portion of the Pre-
Tax Contribution or After-Tax Contribution to which the Company
Contribution relates is returned to the Participant under Section
3.01, 8.01, 8.02 or 8.03, the corresponding Company Contribution
shall be forfeited, and if any amount of the Company Contribution
is deemed an excess aggregate contribution under Section 8.03,
such amount shall be forfeited in accordance with the provisions
of that Section. Company Contributions shall be paid to the
Trustee each calendar month.
3.04 Participating and Nonparticipating Contributions. The
portion of a Participant's Pre-Tax Contribution or After-Tax
Contribution to which the Company Contribution relates shall be
Participating Contributions, and the portion of a Participant's
Pre-Tax Contribution or After-Tax Contribution in excess of the
Participant's Participating Contributions shall be
Nonparticipating Contributions.
3.05 Rollover Contributions and Trust to Trust Transfers.
(a) Subject to such terms and conditions as the Plan
Administrator may determine to be appropriate, applied in a
uniform and non-discriminatory manner to all Participants, and
without regard to any limitations on contributions set forth in
this Article 3, the Plan may receive from a Participant for
credit to his Rollover Subaccount, in cash, any amount previously
distributed (or deemed to have been distributed) to him from a
qualified plan. The Plan may receive such amount either directly
from the Participant or, effective at such time as the Plan
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Administrator shall determine practicable, in the form of a
direct rollover from an individual retirement account or from a
qualified plan. Notwithstanding the foregoing, the Plan shall
not accept any amount unless such amount is eligible to be rolled
over in accordance with applicable law and the Participant
provides evidence satisfactory to the Plan Administrator that
such amount qualifies for rollover treatment. Unless received by
the Plan in the form of a direct rollover, the Rollover
Contribution must be paid to the Trustee on or before the 60th
day after the day it was received by the Participant or be rolled
over through the medium of an individual retirement account that
contains no assets other than those representing employer
contributions to a qualified plan, any earnings thereon and any
earnings from employee contributions to that plan. At the time
received by the Plan, the Participant shall, in such manner and
on such conditions as may be prescribed by the Plan
Administrator, elect to invest the Rollover Contribution in the
investment funds then available under the Plan to the
Participant. If the Participant fails to make an investment
election, 100% of the Rollover Contribution shall be invested in
the Fixed Income Fund.
(b) Rollovers and direct rollovers shall only be accepted
from a Participant who is an Employee except that the Plan shall
accept a rollover or direct rollover from a former Employee who
is a Participant of an amount received from either a Defined
Benefit Plan or the TRASOP.
(c) Subject to such terms and conditions as the Plan
Administrator may determine to be appropriate, applied in a
uniform and non-discriminatory manner to all Participants, and
effective at such time as the Plan Administrator shall determine
practicable, the Plan shall receive on behalf of a Participant a
trust-to-trust transfer from the Weekly Plan of the Participant's
benefits and liabilities under the Weekly Plan. Any Participant
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whose benefits are the subject of a trust-to-trust transfer from
the Weekly Plan to this Plan will be entitled to receive
benefits, rights and features from the Plan that are no less than
the benefits, rights and features he would be entitled to receive
from the Weekly Plan immediately preceding the transfer.
Following the transfer, the Participant's rights to the non-
vested portion of any benefits transferred from the Weekly Plan
shall vest in accordance with Section 6.02 of this Plan. To the
extent feasible, such transfer shall be made on an in-kind basis.
To the extent that such transfer is made in the form of cash, at
the time received by the Plan the Participant shall, in such
manner and on such terms as may be prescribed by the Plan
Administrator, elect to invest the cash in the investment funds
then available under the Plan except that the Participant may
elect to invest in the Company Stock Fund only cash derived from
the sale of shares in the Company Stock Fund under the Weekly
Plan.
3.06 Changes in Contributions. A Participant may increase
or reduce his contributions within the limits prescribed by
Sections 3.01 and 3.02, effective as of the first day of any
calendar month, by making a new election on or before the 15th
day of the preceding calendar month in such manner and on such
conditions as may be prescribed by the Plan Administrator. A
Participant may make changes in contribution levels four times
within each Plan Year.
3.07 Suspension in Contributions. A Participant may at any
time suspend his contributions as of the last day of any calendar
month by making an election on or before the 15th day of such
month in such manner and on such conditions as may be prescribed
by the Plan Administrator. A Participant may resume making
contributions, effective as of any calendar month, by making an
election on or before the 15th day of the preceding calendar
month in such manner and as such conditions as may be prescribed
by the Plan Administrator. A suspension or resumption of
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contributions is counted as one of four changes in contribution
levels permitted within each Plan Year under the Plan.
3.08 Payment To Trust.
(a) Amounts contributed by Participants shall be paid by
the Company to the Trustee promptly and credited by the Trustee
to their Accounts in accordance with the certification of the
Plan Administrator as to the names of the contributing
Participants and the respective amounts contributed by each
Participant as Participating Contributions, Nonparticipating
Contributions, Pre-Tax Contributions and After-Tax Contributions.
(b) Each Company Contribution shall be paid by the Company
promptly to the Trustee and shall be allocated among the
Participants and credited to their respective Accounts in
proportion to their Participating Contributions made during the
calendar month for which the Company Contribution is being made.
3.09 No Contributions to TRASOP. No contributions to
TRASOP by the Company or by Participants are permitted.
ARTICLE 4
Company Contributions
4.01 Company Contributions Election. A Participant may
elect to have Company Contributions allocated to his Account
invested in the Company Stock Fund described in Section 5.06, the
Equity Index Fund described in Section 5.05, the Treasury Bill
Fund described in Section 5.11, the Balanced Fund described in
Section 5.12, and the Fixed Income Fund described in Section
5.04. A Participant may elect, through February 28, 1994, to
have Company Contributions invested in multiples of 25% and
effective March 1, 1994 may elect to have Company Contributions
invested in multiples of 1%. If the Participant fails to make an
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election as to Company Contributions, 100% of such Contributions
shall be invested in the Fixed Income Fund. Any such election
shall be made in such manner and on such conditions as may be
prescribed by the Plan Administrator.
4.02 Change of Election. A Participant may change his
investment election regarding future Company Contributions not
more than four times in any calendar year. Any such election
shall be made in such manner and on such conditions as may be
prescribed by the Plan Administrator and shall be effective as of
the first day of the calendar month immediately following the
calendar month in which the election change is made.
4.03 Certification to Trustee. The Plan Administrator
shall certify to the Trustee the amount of Company Contributions
that each Participant has most recently elected, pursuant to
Section 4.01 or 4.02, to have invested for his Account in the
Company Stock Fund, the Equity Index Fund, the Balanced Fund, the
Treasury Bill Fund or the Fixed Income Fund.
4.04 Forfeitures. The total amount of the Trust Fund
forfeited by Participants pursuant to Section 7.02 or otherwise,
during any calendar month shall be applied to reduce future
Company Contributions due under the Plan. The Trustee shall
promptly advise the Company of any such forfeiture and the amount
thereof.
ARTICLE 5
The Trust Fund; Investments
5.01 Trust Agreement. Contributions and TRASOP Accounts
shall be held in a Trust Fund by the Trustee under a written
trust agreement between the Company and the Trustee. No person
shall have any rights to or interest in the Trust Fund except as
provided in the Plan.
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5.02 Investment of Trust Fund. Subject to Section 5.07,
and except for that portion of the Trust Fund to be invested in
the Company Stock Fund pursuant to Section 5.06 or in a
Participant's Loan Reserve pursuant to Section 9.08 or in Shares
pursuant to Section 13.02, the Trust Fund shall, subject to the
election rules set forth in Section 5.03, be invested in the
Fixed Income Fund described in Section 5.04 and, to the extent a
Participant so elects, in the Equity Index Fund described in
Section 5.05, the Treasury Bill Fund described in Section 5.11 or
the Balanced Fund described in Section 5.12.
5.03 Rules for Investment Elections. Each Participant in
the Plan may elect to invest the Participant's contributions and
Account balance in accordance with the following rules:
(a) Investment Election for March 31, 1994. The fixed
interest contracts that compose, as of January 1, 1994, the Fixed
Income Fund described in Section 5.04 that mature on March 31,
1994 are herein called "Class Year Contracts". Amounts invested
in the Fixed Income Fund earn a blended rate of return that is a
composite rate based on all of the assets (other than the Class
Year Contracts) in the Fixed Income Fund. Participants may
select investments for the portion of their Account balance
invested in the Class Year Contracts (the "Class Year Balance"),
for the portion of their Account balance invested in the blended-
rate portion of the Fixed Income Fund, for their balances in the
Equity Index Fund, the Company Stock Fund, the Balanced Fund and
for their future contributions after March 31, 1994.
(i) A Participant may elect to transfer all or a
portion, in multiples of 1%, of his Class Year Balance to the
Treasury Bill Fund, the Equity Index Fund or the Balanced Fund or
the blended rate portion of the Fixed Income Fund. Failure by a
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Participant to make an election for his Class Year Balance shall
be deemed to be an election to invest 100% thereof in the Fixed
Income Fund.
(ii) A Participant may elect to transfer all or a
portion, in multiples of 1%, of his balance in the blended-rate
portion of the Fixed Income Fund to the Equity Index Fund or the
Balanced Fund.
(iii) A Participant may elect to transfer all or a
portion, in multiples of 1%, of his balance in the Equity Index
Fund to the Fixed Income Fund or the Balanced Fund.
(iv) A Participant may elect to transfer all or a
portion, in multiples of 1%, of his balance in the Company Stock
Fund to the Equity Index Fund, the Balanced Fund, the Treasury
Bill Fund or the Fixed Income Fund.
(v) The elections provided in the foregoing clauses
(i), (ii), (iii) and (iv) above shall be made in such manner and
on such conditions as may be prescribed by the Plan Administrator
and shall not be counted as one of the changes permitted annually
under the Plan. Any amounts transferred to the Treasury Bill
Fund shall not thereafter be permitted to be transferred out of
the Treasury Bill Fund to any other Fund.
(vi) Future transfers of Account balances shall be
permitted only in accordance with subsection 5.03(c) below.
(b) Future Contributions. A Participant may elect, in such
manner and on such conditions as may be prescribed by the Plan
Administrator, to invest future contributions after February 28,
1994, in multiples of 1%, in the Fixed Income Fund, Equity Index
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Fund, the Treasury Bill Fund and the Balanced Fund. A
Participant may change his investment election regarding future
contributions not more than four times in any Plan Year. Such
change of election shall be made in such manner and on such
conditions as may be prescribed by the Plan Administrator and
shall become effective as of the first day of the calendar month
immediately following the calendar month in which the election
change is made. A Participant's elections shall remain in effect
until changed or until contributions are ceased or suspended.
(c) Accumulated Balances. Effective as of April 1, 1994,
Participants may elect to transfer Account balances, in multiples
of 1%, once in any three-month period, as set forth below:
(i) From the Fixed Income Fund to the Equity
Index Fund or the Balanced Fund;
(ii) From the Balanced Fund to the Equity Index
Fund or the Fixed Income Fund;
(iii) From the Equity Index Fund to the Fixed
Income Fund or the Balanced Fund; and
(iv) From the Company Stock Fund to the Fixed
Income Fund, the Equity Index Fund, the Balanced Fund or the
Treasury Bill Fund.
Any such elections shall be made by a Participant in such manner
and on such conditions as may be prescribed by the Plan
Administrator. An election to make a transfer shall be effective
as of the last day of the calendar month in which the election is
made. A Participant shall not be permitted to make any transfer
of all or any portion of his Account balance in the Treasury Bill
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Fund to the Fixed Income Fund, the Equity Index Fund, the
Balanced Fund or the Company Stock Fund.
5.04 Fixed Income Fund. The Named Fiduciaries shall have
the power to appoint an Investment Manager to manage (including
the power to acquire and dispose of) the assets in the Fixed
Income Fund. The Fixed Income Fund shall include one or more
agreements with one or more insurance companies or other
financial institutions as may be directed in writing from time to
time by the Investment Manager, or, if there is no Investment
Manager appointed, by the Named Fiduciaries in their discretion.
Notwithstanding anything in this Article to the contrary, any
contributions invested in the Fixed Income Fund shall be subject
to any and all terms and conditions of such agreements, including
any limitations placed on the exercise of any rights otherwise
granted to a Participant under any other provisions of the Plan
with respect to such contributions. The Investment Manager or
the Named Fiduciaries, as the case may be, shall direct the
Trustee in writing as to any elections or other actions to be
taken by the Trustee with respect to any such agreement. If at
any time the Investment Manager or the Named Fiduciaries, as the
case may be, shall determine, in its or their discretion, that it
is not feasible to secure such an agreement or agreements on
desirable terms which will permit investment of the entire amount
to be invested pursuant to this Section 5.04, then the Investment
Manager or the Named Fiduciaries, as the case may be, shall so
inform the Trustee in writing. In such event, such part of the
amount to be invested pursuant to this Section 5.04 as cannot be
invested in such an agreement or agreements shall, until such
time as such agreement or agreements are secured, be invested in
obligations of the United States Government or agencies thereof,
or obligations guaranteed as to the payment of principal and
interest by the United States government or agencies thereof, or
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deposits in fully insured savings accounts or in any common,
collective or commingled trust fund maintained by the Trustee
that is qualified under Section 401(a) of the Code and exempt
under Section 501(a) of the Code, or any combination thereof, as
the Trustee in its discretion shall determine. Prompt written
notice of any such determination by the investment manager or the
Named Fiduciaries, as the case may be, shall be given to all
Participants.
5.05 Equity Index Fund. The Equity Index Fund shall
include one or more portfolios of equity securities constructed
and maintained with the objective of providing investment results
which approximate the overall performance of the portfolio
comprising the Standard & Poor's 500 Composite Stock Index,
selected by the Named Fiduciaries in their discretion, or by an
Investment Manager (which may be the bank acting as Trustee)
selected by the Named Fiduciaries in their discretion, although
temporary investments in money market funds or instruments or
accounts shall be permitted. If at any time the Investment
Manager or the Named Fiduciaries, as the case may be, shall
determine, in their discretion, that it is not feasible to secure
such portfolios on desirable terms which will permit investment
of the entire amount to be invested pursuant to this Section
5.05, then the Investment Manager or Named Fiduciaries shall so
inform the Trustee in writing. In such event, such part of the
amount to be invested pursuant to this Section 5.05 as cannot be
invested in such a portfolio shall be invested in obligations of
the United States Government or agencies thereof, or obligations
guaranteed as to the payment of principal and interest by the
United States Government or agencies thereof, or deposits in
fully insured savings accounts or in any common, collective or
commingled trust fund maintained by the Trustee that is qualified
under Section 401(a) of the Code and exempt under Section 501(a)
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of the Code, or any combination thereof, as the Trustee in its
discretion shall determine. Prompt written notice of any such
determination by the Investment Manager or Named Fiduciaries
shall be given to all Participants.
5.06 Company Stock Fund.
(a) Investments in Fund. There shall be established within
the Trust Fund a separate Company Stock Fund, as described in
this Section, for the investment of those portions of the Company
Contributions specified by Participants pursuant to Section 4.01
and 4.02. All Company Contributions so specified shall be
invested solely in Shares, except that a portion of the Company
Stock Fund may be maintained temporarily in cash, or may be
invested temporarily in investments permitted by Section 5.07.
The Trustee shall regularly purchase Shares for the Company Stock
Fund in accordance with a nondiscretionary purchasing program.
Such purchases may be made on any securities exchange where
Shares are traded, in the over-the-counter market, or in
negotiated transactions, and may be on such terms as to price,
delivery and otherwise as the Trustee may determine to be in the
best interests of the Participants. Dividends, interest and other
income received on assets held in the Company Stock Fund shall be
reinvested in the Company Stock Fund. All funds to be invested
in the Company Stock Fund shall be invested by the Trustee in one
or more transactions promptly after receipt by the Trustee,
subject to any applicable requirement of law affecting the timing
or manner of such transactions. All brokerage commissions and
other expenses incurred by the Trustee in the purchase or sale of
Shares under the Plan will be paid by the Company.
(b) Units. The interests of Participants in the Company
Stock Fund shall be measured in Units, the number and value of
which shall be determined, in the manner set forth in this
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subsection, as of the last day of each calendar month and at such
other times as the Plan Administrator shall direct. As of the
first valuation date after January 1, 1985, the market value of
all assets held in the Company Stock Fund (including any
uninvested cash, accrued dividends, interest and other assets),
reduced by the amount of any liabilities chargeable to the
Company Stock Fund, shall be determined by the Trustee. As of
such first valuation date, each Unit shall be assigned a value of
$1 and the total number of Units shall be determined by dividing
the market value determined in accordance with the preceding
sentence by $1. The resulting total number of Units shall be
allocated among the Accounts of the Participants in proportion to
the respective amounts of Company Contributions received by the
Trustee since January 1, 1985 for the Account of each Participant
for investment in the Company Stock Fund. As of each valuation
date thereafter, the market value of all assets held in the
Company Stock Fund (including any uninvested cash, accrued
dividends, interest and other assets), reduced by the amount of
any liabilities chargeable to the Company Stock Fund, and reduced
by any Company Contributions received for investment in the
Company Stock Fund since the last previous date, shall be
determined by the Trustee. The market value determined in
accordance with the preceding sentence shall be divided by the
total number of Units determined as of the last previous
valuation date. The resulting quotient shall be the value of a
Unit as of the current valuation date, and Units shall be
allocated, at such value, to and from the Accounts of
Participants for all transactions by them or on their behalf
since the last preceding valuation date. Fractional units shall
be calculated to at least three decimal places. If part or all
of a Participant's interest in the Company Stock Fund shall be
transferred from the Company Stock Fund pursuant to subsection
5.03(c)(iv), distributed pursuant to Sections 7.01, 7.02, 7.03,
7.05, or 7.06, withdrawn pursuant to Section 7.04, or forfeited
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pursuant to Section 7.02, the number of Units representing the
interests or parts thereof transferred, distributed, withdrawn or
forfeited as of the applicable valuation date shall be cancelled
for purposes of any subsequent determination of the number and
value of Units in the Company Stock Fund. The Trustee's
determination of market values pursuant to this subsection and
Section 5.08 shall be conclusive.
(c) Voting of Shares. Each Participant shall be entitled
to direct the Trustee as to the manner in which any Shares or
fractional Share represented by Units allocated to the
Participant's Account are to be voted. Any such Shares or
fractional Share for which the Participant does not give voting
directions shall be voted by the Trustee in the same manner and
proportions as all other Shares held by the Trustee for which
voting directions are given by Participants. The Trustee shall
keep confidential a Participant's voting instructions and
information regarding a Participant's purchases, holdings and
sales of Shares. The Plan Administrator shall be responsible for
monitoring the Trustee's performance of its confidentiality
obligations.
5.07 Temporary Investments. Any funds which are to be
invested by the Trustee pursuant to Section 5.04, 5.05, 5.06,
5.11, 5.12 or 13.02 may be invested by the Trustee, either
temporarily or during any period when it is not possible to
invest such funds in the manner provided in such Sections, in
marketable United States obligations, or, in the discretion of
the Trustee, in any common, collective or commingled trust fund
maintained by the Trustee that is qualified under Section 401(a)
of the Code and is exempt under Section 501(a) of the Code. Any
income or gains resulting from such investment shall ultimately
be invested in the same manner as the funds producing such income
or gains.
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5.08 Accounts and Subaccounts. The Trustee shall maintain
in any equitable manner, which shall to the extent necessary
include a monthly revaluation at current market values, as
determined by the Trustee, a separate TRASOP Account for each
Participant eligible therefor and a separate Account for each
Participant, and within each such Account a Pre-Tax Subaccount,
an After-Tax Subaccount, a Rollover Subaccount and a Company
Contribution Subaccount, in which the Trustee shall keep a
separate record of the respective shares of such Participant in
the Trust Fund, including the Company Stock Fund, the Fixed
Income Fund, the Equity Index Fund, the Balanced Fund, the
Treasury Bill Fund, and the Loan Reserve, attributable to amounts
credited to his Pre-Tax Subaccount, his After-Tax Subaccount, his
Rollover Subaccount and his Company Contribution Subaccount. A
Participant's Pre-Tax Contributions shall be credited to his
Pre-Tax Subaccount. A Participant's After-Tax Contributions
shall be credited to his After-Tax Subaccount. A Participant's
Rollover Contributions shall be credited to his Rollover
Subaccount. A Participant's share of Company Contributions made
on or after January 1, 1985 shall be credited to his Company
Contribution Subaccount.
5.09 Pre-January 1, 1985 Contributions. Any contributions
to the Trust Fund made by a Participant prior to January 1, 1985
shall, as of January 1, 1985, be credited to his After-Tax
Subaccount. Any contributions to the Trust Fund made by the
Company and allocated to a Participant's Account prior to January
1, 1985 shall be credited to the Participant's Company
Contribution Subaccount.
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5.10 Statements of Account. As soon as practicable after
June 30, and December 31, of each year the Trustee shall cause to
be sent to each Participant a written statement showing, as of
such date, the respective amounts of the Trust Fund, including
the Company Stock Fund, Fixed Income Fund, Equity Index Fund,
Treasury Bill Fund, Balanced Fund and Loan Reserve, attributable
to the Participant's Pre-Tax Subaccount, his After-Tax
Subaccount, his Rollover Subaccount and his Company Contribution
Subaccount and the Participant's balance in his TRASOP Account,
if any. With respect to the Participant's After-Tax Subaccount,
the statement shall show separately the amount of the
Participant's own contributions (less any withdrawals) credited
to his After-Tax Subaccount. The Plan Administrator may direct
the Trustee from time to time to issue comparable statements to
Participants as of other dates during the calendar year.
5.11 Treasury Bill Fund. Effective March 31, 1991 a new
investment option shall become available under the Plan. The new
investment option shall be known as the Treasury Bill Fund, shall
consist of short-term United States Treasury Bills, and shall be
managed by an investment manager (which may be the Trustee)
selected by the Named Fiduciaries in their discretion. This Fund
may also be invested in short-term fixed obligations of the
United States Government or agencies thereof, or other
obligations guaranteed as to the payment of principal and
interest by the United States Government or agencies thereof, or
deposits in fully insured savings accounts, or in any common,
collective or commingled trust fund maintained by the Trustee
that is qualified under Section 401(a) of the Code and exempt
under Section 501(a) of the Code, or any combination thereof, as
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the investment manager in its discretion may determine.
5.12 Balanced Fund. Effective March 31, 1992 a new
investmen]option shall become available under the Plan. The new
investment option shall be the Strategic Asset Allocation fund,
sponsored and managed by Bankers Trust Company. The new fund, to
be known as the Balanced Fund, consists of three components: (i)
a common stock index fund that invests in common stock included
in the S&P 500 Composite Stock Index and has the objective of
providing investment results that replicate the overall
performance of the S&P 500 Composite Stock Index; (ii) a broad
market fixed income index fund that invests primarily in fixed
income securities of the U.S. Government or any agency thereof,
publicly-issued fixed rate investment-grade domestic debt and
government agency and corporate mortgage backed securities and
has the objective of providing investment results that replicate
the overall performance of the Salomon Brothers Broad Investment
Grade Index; and (iii) a money market fund that invests in debt
obligations having maturities of six months or less including
securities of the U.S. Government or agencies thereof;
collateralized repurchase agreements; asset-backed securities;
open-ended demand master notes; commercial paper; loan
participation; and issues offered by US, Canadian, European and
Japanese banking institutions; provided that the issuer's senior
debt is rated A or higher by either Moody's or S&P and if its
commercial paper is rated either P1 or higher by Moody's or A1 or
higher by S&P; if neither Moody's nor S&P rates an issuer's
securities, the fund will acquire such securities only if Bankers
Trust Company determines their quality to be equivalent to the
quality of issuers that satisfy such rating standards. Each of
the component funds of the Balanced Fund is maintained within the
common, commingled or collective trust fund known as the General
Employee Benefit Trust established by Bankers Trust Company which
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acts as trustee of such General Trust. Bankers Trust Company
will determine amounts to be allocated to each component fund.
Over the long term, the common stock index portion is expected to
average about 55 percent of the Balanced Fund, but would not
exceed 70 percent, the fixed income index portion is expected to
average about 35 percent and the money market portion about 10
percent.
5.13 Responsibility for Investments. Each Participant is
solely responsible for the selection of his investment options.
The Trustee, the Named Fiduciaries, the Plan Administrator, the
Company and the trustees, officers and other employees of the
Company are not empowered to advise a Participant as to the
manner in which his Account shall be invested. The fact that an
investment fund is available to Participants for investment under
the Plan shall not be construed as a recommendation for a
particular Participant to invest in that investment fund.
ARTICLE 6
Vesting
6.01 Participant Contributions. The amount to the credit
of a Participant's Account which is attributable to his Pre-Tax
Contributions, After-Tax Contributions and Rollover Contributions
to the Trust Fund made by the Participant shall be 100% vested at
all times.
6.02 Company Contributions. The amount to the credit of a
Participant's Account which is attributable to Company
Contributions, including contributions to the Trust Fund made by
the Company prior to January 1, 1985, shall become 100% vested,
subject to Article 8, on the later of (i) January 1, 1985, and
(ii) the first day of the calendar month in which the Participant
completes three years of Vesting Service; provided, however, that
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all amounts to the credit of a Participant's Account which are
attributable to Company Contributions, shall become 100% vested
upon the Participant's attainment of age 65, his Disability,
termination of his service by reason of Retirement or death or by
the Company for reasons other than cause. Except to the extent
that they shall have become vested, amounts to the credit of a
Participant's Account which are attributable to Company
Contributions are subject to forfeiture as provided in Section
7.02.
6.03 TRASOP Account. A Participant's balance in his TRASOP
Account, if any, shall always be 100% vested.
ARTICLE 7
Distributions, Withdrawals and Forfeitures
7.01 Retirement. If a Participant's service is terminated
by reason of Retirement, the entire amount to the credit of his
Account (including any amount due under any outstanding loan
pursuant to Article 9) shall be distributed to him in accordance
with Section 7.09.
7.02 Voluntary Termination or Termination by the Company;
Forfeitures.
(a) If a Participant's service is terminated by the Company
for cause or if the Participant voluntarily terminates his
service otherwise than by reason of Retirement, the non-vested
portion of the Participant's Company Contributions Subaccount
shall not be forfeited until the Participant incurs a period of
Break in Service of five years or receives a distribution of the
Vested Portion of his Account, if earlier. The Vested Portion to
the credit of such Participant's Account (including any amount
due under any outstanding loan pursuant to Article 9) shall be
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distributed to such Participant in accordance with Section 7.09.
Termination of service for cause shall be determined by the Plan
Administrator under rules uniformly applied to all Participants.
If the Participant is not reemployed by the Company or an
Affiliated Employer before he incurs a period of Break in Service
of five years or receives a distribution, the non-vested portion
of his Company Contribution Subaccount shall be forfeited.
(b) If an amount to the credit of a Participant's Company
Contributions Subaccount has been forfeited in accordance with
paragraph (a) above, such amount shall subsequently be restored
to his Company Contribution Subaccount by the Company provided
(i) he is reemployed by the Company or an Affiliated Employer
prior to incurring a period of Break in Service of five years and
(ii) either he has elected or is deemed to have elected a
deferred distribution in accordance with Section 7.09 or during
his reemployment and within five years after his reemployment
date he makes a lump sum payment to the Trust Fund in cash in an
amount equal to that portion of the distribution received which
represents the Participant's Participating Contributions relating
directly to Company Contributions which were forfeited at the
time of distribution. The forfeited amount so restored shall
vest in accordance with Section 6.02 as a Company Contribution
and shall be credited to the Participant's Company Contribution
Subaccount. The lump sum payment by the Participant shall
immediately be 100% vested and shall be credited to the
Participant's Account.
(c) If any amounts to be restored by the Company to a
Participant's Company Contributions Subaccount have been
forfeited under paragraph (a) above, those amounts shall be taken
first from any forfeitures which have not as yet been applied
against Company contributions and if any amounts remain to be
restored, the Company shall make a special Company contribution
equal to those amounts.
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(d) A Participant may elect, in such manner and on such
terms as may be prescribed by the Plan Administrator, to invest a
repayment in the investment funds available under the Plan to the
Participant at the time of the repayment.
7.03 Death. Upon the death of a Participant the entire
amount to the credit of his Account (including any amount due
under any outstanding loan pursuant to Article 9) shall be
distributed to his Beneficiary in accordance with Section 11.03
as soon as practicable (but in any event within 90 days) after
the calendar month in which his death occurs.
7.04 Withdrawals. Effective March 1, 1994, a Participant
may request cash withdrawals from his Account by making a
withdrawal application in such manner and on such conditions as
may be prescribed by the Plan Administrator. Withdrawal
applications shall be effective as of the last day of the
calendar month during which the application is made. Payment of
the amount withdrawn shall be made as soon as practicable after
such application is effective. Withdrawals shall be permitted
not more than four times in any calendar year and only in
accordance with the following terms:
(a) No withdrawals from the Company Stock Fund shall be
permitted except following a transfer pursuant to Section
5.03(c)(iv); provided, however, that effective at such time as
the Plan Administrator shall determine practicable, withdrawals
shall be permitted directly from the Company Stock Fund.
Withdrawals will be made on a first-in-first-out basis within
each category below and pro rata from the Participant's balances
available for withdrawal.
(b) A Participant may at any time withdraw an amount up to
the entire amount to the credit of his After-Tax and Company
Contribution Subaccounts, except that a Participant may not
withdraw an amount attributable to a Company Contribution until
December 31 of the second calendar year beginning after the
calendar month for which the Company Contribution was made. A
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Participant shall not be permitted to make any such withdrawal
amounting to less than $300 unless the maximum amount available
under this paragraph (b) is less than $300 in which case the
Participant shall only be permitted to withdraw such maximum
amount. Withdrawals shall be made in the following order from a
Participant's Account:
1. If the Participant requests a nontaxable withdrawal:
(i) Nonparticipating After-Tax Contributions made
before January 1, 1987, excluding any earnings thereon, and
(ii) Participating After-Tax Contributions made before
January 1, 1987, excluding any earnings thereon.
2. If the Participant requests a taxable withdrawal,
without incurring a suspension as provided in (f) below:
(i) Nonparticipating After-Tax Contributions made
before January 1, 1987, excluding any earnings thereon;
(ii) Participating After-Tax Contributions made before
January 1, 1987, excluding earnings thereon;
(iii) Nonparticipating After-Tax Contributions made on
or after January 1, 1987, including any earnings thereon;
(iv) Participating After-Tax Contributions made on or
after January 1, 1987 that have been in the Account two full
calendar years after the year contributed, including any earnings
thereon;
(v) Any earnings attributable to Nonparticipating
After-Tax Contributions made before January 1, 1987;
(vi) Any earnings attributable to Participating After-
Tax Contributions made before January 1, 1987; and
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(vii) Company Contributions in the Account for two
full calendar years after the contribution year, including any
earnings thereon.
3. If the Participant requests a taxable withdrawal
resulting in a suspension as provided in (f) below:
(i) Nonparticipating After-Tax Contributions made
before January 1, 1987, excluding any earnings thereon;
(ii) Participating After-Tax Contributions made before
January 1, 1987, excluding any earnings thereon;
(iii) Nonparticipating After-Tax Contributions made on
or after January 1, 1987, including any earnings thereon;
(iv) Participating After-Tax Contributions made on or
after January 1, 1987, including any earnings thereon;
(v) Any earnings attributable to Nonparticipating
After-Tax Contributions made before January 1, 1987;
(vi) Any earnings attributable to Participating After-
Tax Contributions made before January 1, 1987; and
(vii) Company Contributions in the Account for two full
calendar years after the contribution year, including any
earnings thereon.
(c) A Participant who has withdrawn at least the entire
amount available under (b) above without incurring a suspension
may at any time withdraw an amount up to the entire amount to the
credit of his Rollover Subaccount.
(d) A Participant who has attained the age of 59 years and
six months and who has withdrawn at least the entire amounts
available for withdrawal under paragraphs (b) and (c) above
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without incurring a suspension, may withdraw an amount up to the
entire amount to the credit of his Pre-Tax Subaccount in the
following order:
1. If the Participant requests a withdrawal, without
resulting in a suspension under (f) below:
(i) Nonparticipating Pre-Tax Contributions, including
any earnings thereon, and
(ii) Participating Pre-Tax Contributions that have been
in the Account for two full calendar years after the year
contributed, including any earnings thereon.
2. If the Participant requests a withdrawal resulting in a
suspension under (f) below:
(i) Participating After-Tax Contributions, made on or
after January 1, 1987 that have been in the Account for less than
two full calendar years after the contribution year, including
any earnings thereon;
(ii) Nonparticipating Pre-Tax Contributions, including
any earnings thereon; and
(iii)Participating Pre-Tax Contributions including any
earnings thereon. A Participant shall not be permitted to make
any such withdrawal amounting to less than $300 unless the
maximum amount available under this Section 7.04 is less than
$300 in which case the Participant shall only be permitted to
withdraw such maximum amount.
(e) Notwithstanding the preceding paragraphs (b), (c) and
(d), a Participant may not withdraw any amount that would cause
the balance of his Account to be less than the minimum amount
required under Section 9.09.
(f) In the event a Participant withdraws any amounts which
represent After-Tax Participating Contributions made at any time
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during the two full calendar years preceding the calendar year in
which the withdrawal is made, the Participant's right to make any
contributions to the Plan shall be suspended for the six full
calendar months as soon as practicable following the effective
date of the withdrawal application. To resume contributions
following such suspension, the Participant must elect, in such
manner and on such conditions as may be prescribed by the Plan
Administrator, to resume making contributions. The election must
be made on or before the 15th day of the calendar month preceding
the calendar month in which such contributions are to resume.
7.05 Hardship Withdrawals. Effective January 1, 1989, a
Participant may, in the event of hardship, withdraw all or any
part of the amount of Pre-Tax Contributions to the credit of the
Account of the Participant (excluding any earnings after December
31, 1988 attributable to Pre-Tax Contributions) in excess of any
minimum Account balance required under Section 9.09. Effective
March 1, 1994, a Participant may apply for a hardship withdrawal
in such manner and on such conditions as may be prescribed by the
Plan Administrator. For purposes of the Plan a Participant shall
be deemed to have a hardship if the Participant has an immediate
and heavy financial need and if the withdrawal is necessary to
satisfy such financial need as set forth below. The Plan
Administrator or his delegate shall determine whether the
Participant satisfies the requirements for a hardship and the
amount of any hardship withdrawal. Any withdrawal under this
Section shall be made pro-rata from the Participant's balances in
the investment funds from which withdrawal may be made as
provided in Section 7.04. A withdrawal pursuant to this Section
7.05 shall not be subject to the limitations on number of
withdrawals permitted under Section 7.04.
(a) Immediate and Heavy Financial Need - A Participant will
be deemed to have an immediate and heavy financial need if the
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withdrawal is to made on account of any of the following:
(1) Medical expenses described in Section 213(d) of
the Code previously incurred by the Participant, the
Participant's spouse or any dependent (as defined in Section 152
of the Code) of the Participant, or expenses necessary for those
persons to obtain medical care described in Section 213(d) of the
Code;
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the Participant;
(3) Payment of tuition and related educational fees
for the next twelve-months of post- secondary education for the
Participant, or the Participant's spouse, children or dependents;
(4) Payment of amounts necessary to prevent the
eviction of the Participant from his principal residence or to
avoid foreclosure on the mortgage of the Participant's principal
residence; or
(5) Any other need added to the foregoing items of
deemed immediate and heavy financial needs by the Commissioner of
the Internal Revenue Service through the publication of revenue
rulings, notices and other documents of general availability,
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rather than on an individual basis.
A Participant shall not be permitted to make a withdrawal in the
event of a hardship on account of any reason other than as set
forth above.
(b) Necessary to Satisfy Such Need - The requested
withdrawal will not be treated as necessary to satisfy the
Participant's immediate and heavy financial need to the extent
that the amount of the requested withdrawal is in excess of the
amount required to relieve the financial need or to the extent
such need may be satisfied from other sources that are reasonably
available to the Participant. The amount of an immediate and
heavy financial need may include any amounts necessary to pay any
federal, state or local income taxes or penalties reasonably
anticipated to result from the hardship withdrawal. The Plan
Administrator or his delegate shall generally make this
determination on the basis of all relevant facts and
circumstances. In evaluating the relevant facts and
circumstances the Plan Administrator or his delegate shall act in
a nondiscriminatory fashion and shall treat uniformly those
Participants who are similarly situated. The Participant shall
furnish the Plan Administrator or his delegate such supporting
documents as may be requested in evaluating the relevant facts
and circumstances. The Plan Administrator or his delegate may
generally treat a withdrawal as necessary to satisfy a financial
need if he or his delegate reasonably relies upon the
Participant's representation that the need cannot be relieved,
unless the Plan Administrator or his delegate has actual
knowledge to the contrary:
(1) Through reimbursement or compensation by insurance
or otherwise;
(2) By reasonable liquidation of the Participant's
assets, to the extent such liquidation would not itself cause an
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immediate and heavy financial need;
(3) By cessation of Pre-Tax and After-Tax
Contributions under the Plan;
(4) By other distributions or non-taxable loans from
plans maintained by the Company or any other employer; or
(5) By borrowing from commercial sources on reasonable
commercial terms.
For purposes of this subdivision, the Participant's resources
shall be deemed to include those assets of his spouse and minor
children that are reasonably available to the Participant.
(c) Effective at such time as the Plan Administrator shall
determine practicable, as a condition for receiving a hardship
withdrawal, a Participant must comply with (1) or (2) as follows:
(1) The Participant must certify to the Plan
Administrator or his delegate, on such form as the Plan
Administrator or his delegate may prescribe, that the financial
need cannot be fully relieved out of the sources listed in (b)
(1) - (5) above. The sources listed must be used to the extent
necessary to relieve the hardship but any source that would have
the effect of increasing the hardship need not be used. For
purposes of this clause (1), the Participant's resources shall be
deemed to include those assets of his spouse and minor children
that are reasonably available to the Participant. The
Participant shall furnish to the Plan Administrator or his
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delegate such supporting documents as the Plan Administrator or
his delegate may request in accordance with uniform and
nondiscriminatory rules prescribed by the Plan Administrator or
his delegate. If, on the basis of the Participant's
certification and the supporting documents, the Plan
Administrator or his delegate find that he can reasonably rely on
the Participant's certification, then the Plan Administrator or
his delegate shall find that the requested withdrawal is
necessary to meet the Participant's financial need.
(2) The Participant must request, on such form as the
Plan Administrator or his delegate may prescribe, that the Plan
Administrator or his delegate make its determination of the
necessity for the withdrawal solely on the basis of the
Participant's certification, without any supporting documents.
In that event, the Plan Administrator or his delegate shall make
such determination, provided all of the following requirements
are met: (1) the Participant has obtained all distributions and
withdrawals, other than distributions available only on account
of hardship, and all nontaxable loans currently available under
all plans of the Company and Affiliated Employers, (2) the
Participant is prohibited from making Pre-Tax Contributions and
After-Tax Contributions to the Plan and all other plans of the
Company and Affiliated Employers under the terms of such plans or
by means of an otherwise legally enforceable agreement for at
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least 12 months after receipt of the distribution, and (3) the
limitation described in Section 3.01(b) under all plans of the
Company and Affiliated Employers for the calendar year following
the year in which the distribution is made must be reduced by the
Participant's elective deferrals made in the calendar year of the
distribution for hardship. For purposes of clause (2), "all
other plans of the Company and Affiliated Employers" means all
qualified and non-qualified plans of deferred compensation
maintained by the Company and Affiliated Employers and includes a
stock option, stock purchase (including the Company's Discount
Stock Purchase Plan though it isn't a deferred compensation plan)
and such other plans as may be designated under regulations
issued under Section 401(k) of the Code, but shall not include
health and welfare benefit plans and the mandatory employee
contribution portion of a defined benefit plan.
7.06 Distribution from Company Stock Fund. Where an amount
to be distributed pursuant to Section 7.01, 7.02, or 7.03 is
represented in part by Units, the distributee may elect, in such
manner and on such conditions as may be prescribed by the Plan
Administrator, to have distributed the number of whole Shares
represented by such Units, together with an amount of dollars
representing the balance of the current value of such Units. In
the absence of such an election, the distribution shall be made
entirely in dollars. Withdrawals pursuant to Section 7.04 or
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7.05 and loans pursuant to Article 9 to be made from the Company
Stock Fund shall be made entirely in cash.
7.07 Leaves of Absence and Transfers to Weekly Payroll. If
a Participant shall be granted a leave of absence by the Company
or shall transfer from the management payroll to the weekly
payroll, neither such event shall be deemed a termination of
service, but such Participant's Pre-Tax Contributions and
After-Tax Contributions under this Plan shall be suspended as of
the last day of the calendar month in which such leave commences,
or transfer occurs, as the case may be. Such Participant may
resume making Pre-Tax Contributions and After-Tax Contributions,
as of the first day of any calendar month following the
termination of such leave of absence or his return to the
management payroll, as the case may be, by making a new payroll
deduction authorization in such manner and on such conditions as
may be prescribed by the Plan Administrator, on or before the
15th day of the calendar month preceding the calendar month in
which such contributions are to resume.
7.08 Age 70 1/2 Required Distribution.
(a) In no event shall the provisions of this Article
operate so as to extend the time by which a distribution is to be
made under any other provision of the Plan or to allow the
distribution of a Participant's Account to begin later than the
April 1 following the calendar year in which he attains age 70
1/2, provided that such commencement in active service shall not
be required with respect to a Participant (i) who does not own
more than five percent of the outstanding stock of the Company
(or stock possessing more than five percent of the total combined
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voting power of all stock of the Company), and (ii) who attained
age 70 1/2 prior to January 1, 1988.
(b) In the event a Participant in active service is
required to begin receiving payments while in service under the
provisions of paragraph (a) above, the Plan shall distribute to
the Participant in each distribution calendar year the minimum
amount required to satisfy the provisions of Section 401(a)(9) of
the Code provided, however, that the payment for the first
distribution calendar year shall be made on or before April 1 of
the following calendar year. Such minimum amount will be
determined on the basis of the joint life expectancy of the
Participant and his Beneficiary. Such life expectancy will be
recalculated once each year; however, the life expectancy of the
Beneficiary will not be recalculated if the Beneficiary is not
the Participant's spouse. The amount of the withdrawal shall be
allocated among the investment funds in proportion to the value
of the Accounts as of the date of each withdrawal. The
commencement of payments under this Section 7.08 shall not
constitute an Annuity Starting Date for purposes of Sections 72,
401(a)(11) and 417 of the Code. Upon the Participant's
subsequent termination of employment, payment of the
Participant's Account shall be made in accordance with the
provisions of Section 7.09.
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7.09 Form and Timing of Distributions.
(a) Distributions pursuant to Sections 7.01 and 7.02 shall
be made as follows:
(i) the Vested Portion of the Participant's Account
balance which equals $3500 or less shall be distributed in a
single lump sum as soon as practicable, but not later than 60
days after the end of the calendar year in which the
Participant's termination of employment occurs; or
(ii) unless the Participant makes an election under
Section 7.09(b), the Vested Portion of the Participant's Account
balance which exceeds $3500 shall be deferred until the
Participant attains age 65 and the amount to the credit of the
Participant's Account as of the last day of the calendar month in
which he attains age 65 shall be distributed to him in a single
lump sum as soon as practicable after such calendar month. If
the Participant fails to make an election under Section 7.09(b),
the Participant shall be deemed to have elected the deferred
distribution under this Section 7.09(a)(ii).
(b) In lieu of the deferred distribution upon attaining age
65 provided in Section 7.09(a)(ii), the Participant may elect, in
such manner and on such conditions as may be prescribed by the
Plan Administrator, one of the following:
(i) a distribution in a single lump sum as soon as
practicable, but not later than 60 days after the end of the
calendar year in which the Participant's termination occurs;
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(ii) a distribution deferred until the last day of a
calendar month not later than the calendar month in which the
Participant attains age 70 as designated by the Participant, in
which event distribution of the Participant's Account balance as
of the last day of the calendar month so designated by the
Participant shall be made in a single lump sum as soon as
practicable after such calendar month; or
(iii) a distribution in five annual installments as
promptly as practicable after the end of each calendar year
commencing in the calendar year immediately following the
calendar year in which the termination occurs, in which event
each such annual installment shall be an amount equal to the
Participant's Account balance as of December 31 of the previous
year divided by the number of annual installments remaining to be
made hereunder, except that the fifth such installment shall
equal the entire balance in the Participant's Account as of the
preceding December 31. Each such annual installment shall be
taken pro rata from the Participant's balances in the investment
funds under the Plan.
7.10 Status of Account Pending Distribution. Until
completely distributed the Account of a Participant who is
entitled to a distribution shall continue to be invested as part
of the funds of the Plan.
7.11 Proof of Death and Right of Beneficiary or Other
Person. The Plan Administrator may require and rely upon such
proof of death and such evidence of the right of any Beneficiary
or other person to receive the value of the Account of a deceased
Participant as the Plan Administrator may deem proper and his
determination of the right of that Beneficiary or other person to
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receive payment shall be conclusive.
7.12 Distribution Limitation. Notwithstanding any other
provision of this Article 7, all distributions from this Plan
shall conform to the regulations issued under Section 401(a)(9)
of the Code, including the incidental death benefit provisions of
Section 401(a)(9)(G) of the Code. Further, such regulations
shall override any Plan provision that is inconsistent with
Section 401(a)(9) of the Code.
7.13 Direct Rollover of Certain Distributions. This
Section applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a distributee's election under this
Section, a distributee may elect, in such manner and on such
conditions as may be prescribed by the Plan Administrator, to
have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the
distributee in a direct rollover. The following definitions
apply to the terms used in this Section:
(a) "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 of ten years or more, any distribution to
the extent such distribution is required under Section 401(a)(9)
of the Code, and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities);
(b) "Eligible retirement plan" means an individual
retirement account described in Section 408(a) of the Code, an
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individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or
a qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity;
(c) "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 the Code, are distributees
with regard to the interest of the spouse or former spouse; and
(d) "Direct rollover" means a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE 8
Non-Discrimination and Limitation
8.01 Actual Deferral Percentage Test. The Actual Deferral
Percentage for Highly Compensated Employees who are Participants
or eligible to become Participants shall not exceed the Actual
Deferral Percentage for all other Employees who are Participants
or eligible to become Participants multiplied by 1.25. If the
Actual Deferral Percentage for Highly Compensated Employees does
not meet the foregoing test, the Actual Deferral Percentage for
Highly Compensated Employees may not exceed the Actual Deferral
Percentage for all other Employees who are Participants or
eligible to become Participants by more than two percentage
points, and the Actual Deferral Percentage for Highly
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Compensated Employees may not be more than 2.0 times the Actual
Deferral Percentage for all other Employees (or such lesser
amount as the Plan Administrator shall determine to satisfy the
provisions of Section 8.03). The Plan Administrator may
implement rules limiting the Pre-Tax Contributions which may be
made on behalf of some or all Highly Compensated Employees so
that this limitation is satisfied. If the Plan Administrator
determines that the limitation under this Section 8.01 has been
exceeded in any Plan Year, the following provisions shall apply:
(a) The amount of Pre-Tax Contributions made on behalf of
some or all Highly Compensated Employees shall be reduced until
the provisions of this Section are satisfied as follows. The
actual deferral ratio of the Highly-Compensated Employee with the
highest actual deferral ratio shall be reduced to the extent
necessary to meet the test or to cause such ratio to equal the
actual deferral ratio of the Highly Compensated Employee with the
next highest ratio. This process will be repeated until the
actual deferral percentage test is passed. Each ratio shall be
rounded to the nearest one one-hundredth of one percent of the
Participant's Statutory Compensation.
(b) Pre-Tax Contributions subject to reduction under this
Section, together with Earnings thereon, ("excess contributions")
shall be paid to the Participant before the close of the Plan
Year following the Plan Year in which the excess contributions
were made and, to the extent practicable, within 2 1/2 months of
the close of the Plan Year in which the excess contributions were
made. However, any excess contributions for any Plan Year shall
be reduced by any Pre-Tax Contributions previously returned to
the Participant under Section 3.01 for that Plan Year. In the
event any Pre-Tax Contributions returned under this Section 8.01
were matched by Company Contributions, such corresponding Company
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Contributions, with Earnings thereon, shall be forfeited and used
to reduce Company contributions. The Participant may elect, in
lieu of a return of the excess contributions, to have the Plan
treat all or a portion of the excess contributions to the Plan as
After-Tax Contributions for the Plan Year in which the excess
contributions were made, subject to the limitations of Section
3.02. Recharacterized excess contributions shall be considered
After-Tax Contributions made in the Plan Year to which the excess
contributions relate for purposes of Section 8.02 and shall be
subject to the withdrawal provisions applicable to After-Tax
Contributions under Article 7. The Participant's election to
recharacterize Pre-Tax Contributions shall be made within 2 1/2
months of the close of the Plan Year in which the excess
contributions were made, or within such shorter period as the
Plan Administrator may prescribe. In the absence of a timely
election by the Participant, the Plan shall return his excess
contributions as provided in the paragraph (b).
8.02 Actual Contribution Percentage Test. The Actual
Contribution Percentage for Highly Compensated Employees who are
Participants or eligible to become Participants shall not exceed
the Actual Contribution Percentage for all other Employees who
are Participants or eligible to become Participants multiplied by
1.25. If the Actual Contribution Percentage for the Highly
Compensated Employees does not meet the foregoing test, the
Actual Contribution Percentage for Highly Compensated Employees
may not exceed the Actual Contribution Percentage of all other
Employees who are Participants or eligible to become Participants
by more than two percentage points, and the Actual Contribution
Percentage for Highly Compensated Employees may not be more than
2.0 times the Actual Contribution Percentage for all other
Employees (or such lesser amount as the Plan Administrator shall
determine to satisfy the provisions of Section 8.03). The Plan
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Administrator may implement rules limiting the After-Tax
Contributions which may be made by some or all Highly Compensated
Employees so that this limitation is satisfied. If the Plan
Administrator determines that the limitation under this Section
8.02 has been exceeded in any Plan Year, the following provisions
shall apply:
(a) The amount of After-Tax Contributions and Company
Contributions made by or on behalf of some or all Highly
Compensated Employees in the Plan Year shall be reduced until the
provisions of this Section are satisfied as follows. The actual
contribution ratio of the Highly Compensated Employee with the
highest actual contribution ratio shall be reduced to the extent
necessary to meet the test or to cause such ratio to equal the
actual contribution ratio of the Highly-Compensated Employee with
the next highest actual contribution ratio. This process will be
repeated until the actual contribution percentage test is passed.
Each ratio shall be rounded to the nearest one one-hundredth of
one percent of a Participant's Statutory Compensation.
(b) Any After-Tax Contributions and Company Contributions
subject to reduction under this Section, together with Earnings
thereon ("excess aggregate contributions"), shall be reduced and
allocated in the following order:
(i) Nonparticipating After-Tax Contributions, to the
extent of the excess aggregate contributions, together with
Earnings, shall be paid to the Participant; and then, if
necessary,
(ii) so much of the Participating After-Tax
Contributions and corresponding Company Contributions, together
with Earnings, as shall be necessary to meet the test shall be
reduced, with the After-Tax Contributions, together with
Earnings, being paid to the Participant and the Company
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Contributions, together with Earnings, being reduced, with vested
Company Contributions being paid to the Participant, and Company
Contributions which are forfeitable under the Plan being
forfeited and applied to reduce Company contributions; then if
necessary,
(iii) so much of the Company Contributions, together
with Earnings, as shall be necessary to equal the balance of the
excess aggregate contributions shall be reduced, with vested
Company Contributions being paid to the Participant and Company
Contributions which are forfeitable under the Plan being
forfeited and applied to reduce Company contributions.
(c) Any repayment or forfeiture of excess aggregate
contributions shall be made before the close of the Plan Year
following the Plan Year for which the excess aggregate
contributions were made and, to the extent practicable, any
repayments or forfeiture shall be made within 2 1/2 months of the
close of the Plan Year in which the excess aggregate
contributions were made.
8.03 Aggregate Contribution Limitation. Notwithstanding
the provisions of Sections 8.01 and 8.02, in no event shall the
sum of the Actual Deferral Percentage of the group of eligible
Highly Compensated Employees and the Actual Contribution
Percentage of such group, after applying the provisions of
Sections 8.01 and 8.02, exceed the "aggregate limit" as provided
in Section 401(m)(9) of the Code and the regulations issued
thereunder. In the event the aggregate limit is exceeded for any
Plan Year, the Actual Contribution Percentages of the Highly
Compensated Employees shall be reduced to the extent necessary to
satisfy the aggregate limit in accordance with the procedure set
forth in Section 8.02.
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8.04 Additional Discrimination Testing Provisions.
(a) If any Highly Compensated Employee is either (i) a five
percent owner or (ii) one of the 10 highest paid Highly
Compensated Employees, then any Statutory Compensation paid to or
any contribution made by or on behalf of any member of his
"family" shall be deemed paid to or made by or on behalf of such
Highly Compensated Employee for purposes of Sections 8.01, 8.02
and 8.03, to the extent required under regulations prescribed by
the Secretary of the Treasury or his delegate under Sections
401(k) and 401(m) of the Code. The contributions required to be
aggregated under the preceding sentence shall be disregarded in
determining the Actual Deferral Percentage and Actual
Contribution Percentage for the group of non-highly compensated
employees for purposes of Sections 8.01, 8.02 and 8.03. Any
return of excess contributions or excess aggregate contributions
required under Sections 8.01, 8.02 and 8.03 with respect to the
family group shall be made by allocating the excess contributions
or excess aggregate contributions among the family members in
proportion to the contributions made by or on behalf of each
family member that is combined. For purposes of this paragraph,
the term "family" means, with respect to any employee, such
employee's spouse, any lineal ascendants or descendants and
spouses of such lineal ascendants or descendants.
(b) If any Highly Compensated Employee is a member of
another qualified plan of the Company or an Affiliated Employer,
other than an employee stock ownership plan described in Section
4975(e)(7) of the Code or any other qualified plan which must be
mandatorily disaggregated under Section 410(b) of the Code, under
which deferred cash contributions or matching contributions are
made on behalf of the Highly Compensated Employee or under which
the Highly Compensated Employee makes after-tax contributions,
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the Plan Administrator shall implement rules, which shall be
uniformly applicable to all employees similarly situated, to take
into account all such contributions for the Highly Compensated
Employee under all such plans in applying the limitations of
Section 8.01, 8.02 and 8.03. If any other such qualified plan
has a plan year other than the Plan Year defined in Section 1.42,
the contributions to be taken into account in applying the
limitations of Sections 8.01, 8.02 and 8.03 will be those made in
the plan years ending with or within the same calendar year.
(c) In the event that this Plan is aggregated with one or
more other plans to satisfy the requirements of Sections
401(a)(4) and 410(b) of the Code (other than for purposes of the
average benefit percentage test) or if one or more other plans is
aggregated with this Plan to satisfy the requirements of such
sections of the Code, then the provisions of Sections 8.01, 8.02
and 8.03 shall be applied by determining the Actual Deferral
Percentage and Actual Contribution Percentage of employees as if
all such plans were a single plan. If this Plan is permissively
aggregated with any other plan or plans for purposes of
satisfying the provisions of Section 401(k)(3) of the Code , the
aggregated plans must also satisfy the provisions of Section
401(a)(4) and 410(b) of the Code as though they were a single
plan. For Plan Years beginning after December 31, 1989, plans
may be aggregated under this paragraph (c) only if they have the
same plan year.
(d) The Company may elect to use Pre-Tax Contributions to
satisfy the tests described in Sections 8.02 and 8.03, provided
that the test described in Section 8.01 is met prior to such
election, and continues to be met following the Company's
election to shift the application of those Pre-Tax Contributions
from Section 8.01 to Section 8.02.
(e) The Company may authorize that special "qualified
nonelective contributions" shall be made for a Plan Year, which
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shall be allocated in such amounts and to such Participants, who
are not Highly Compensated Employees, as the Named Fiduciaries
shall determine. The Plan Administrator, shall establish such
separate accounts as may be necessary. Qualified nonelective
contributions shall be 100% nonforfeitable when made. Any
qualified nonelective contributions made on or after January 1,
1994 and any earnings credited on any qualified nonelective
contributions after such date shall only be available for
withdrawal under the provisions of Section 7.04(d). Qualified
nonelective contributions made for the Plan Year may be used to
satisfy the tests described in Sections 8.01, 8.02 and 8.03,
where necessary.
(f) Notwithstanding any provision of the Plan to the
contrary, employees included in a unit of employees covered by a
collective bargaining agreement shall be disregarded in applying
the provisions of Sections 8.01, 8.02 and 8.03 except that the
provisions of Section 8.01 above shall be applicable to that
group of employees on and after January 1, 1993 on the basis that
those employees are included in a separate cash-or-deferred
arrangement.
8.05 Maximum Annual Additions.
(a) The annual addition to a Participant's Account for any
Plan Year, which shall be considered the "limitation year" for
purposes of Section 415 of the Code, when added to the
Participant's annual addition for that Plan Year under any other
qualified Defined Contribution Plan of the Company or an
Affiliated Employer, shall not exceed an amount which is equal to
the lesser of (i) 25% of his aggregate remuneration for the Plan
Year or (ii) the greater of $30,000 or one-quarter of the dollar
limitation in effect under Section 415(b)(1)(A) of the Code.
(b) For purposes of this Section, the "annual addition" to
a Participant's Account under this Plan or any other qualified
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Defined Contribution Plan maintained by the Company or an
Affiliated Employer shall be the sum of:
(i) the total contributions, including Pre-Tax
Contributions, made on the Participant's behalf by the Company
and all Affiliated Employers,
(ii) all Participant contributions, exclusive of any
Rollover Contributions, and
(iii)forfeitures, if applicable,
that have been allocated to the Participant's Account under this
Plan or his accounts under any other such qualified Defined
Contribution Plan. For purposes of this paragraph (b), any Pre-
Tax Contributions distributed under Section 8.01 and any Company
Contributions or After-Tax Contributions distributed or forfeited
under the provisions of Section 3.01, 8.01, 8.02 or 8.03 shall be
included in the annual addition for the year allocated.
(c) For purposes of this Section, the term "remuneration"
with respect to any Participant shall mean the wages, salaries
and other amounts paid in respect of the Participant by the
Company or an Affiliated Employer for personal services actually
rendered, determined after any reduction of Compensation pursuant
to Section 3.01 or pursuant to a cafeteria plan as described in
Section 125 of the Code, including (but not limited to) bonuses,
overtime payments and commissions, but excluding deferred
compensation, stock options and other distributions which receive
special tax benefits under the Code.
(d) If the annual addition to a Participant's Account for
any Plan Year, prior to the application of the limitation set
forth in paragraph (a) above, exceeds that limitation due to a
reasonable error in estimating a Participant's annual
compensation or in determining the amount of Pre-Tax
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Contributions that may be made with respect to a Participant
under Section 415 of the Code, or as the result of the allocation
of forfeitures, the amount of contributions credited to the
Participant's Account in that Plan Year shall be adjusted to the
extent necessary to satisfy that limitation in accordance with
the following order of priority:
(i) The Participant's Nonparticipating After-Tax
Contributions under Section 3.02 shall be reduced to the extent
necessary. The amount of the reduction shall be returned to the
Participant, together with any earnings on the contributions to
be returned.
(ii) The Participant's Nonparticipating Pre-Tax
Contributions under Section 3.01 shall be reduced to the extent
necessary. The amount of the reduction shall be returned to the
Participant, together with any earnings on the contributions to
be returned.
(iii) The Participant's Participating After-Tax
Contributions and corresponding Company Contributions shall be
reduced to the extent necessary. The amount of the reduction
attributable to the Participant's Participating After-Tax
Contributions shall be returned to the Participant, together with
any earnings on those contributions to be returned, and the
amount attributable to the Company Contributions shall be
forfeited and used to reduce subsequent contributions payable by
the Company.
(iv) The Participant's Participating Pre-Tax
Contributions and corresponding Company Contributions shall be
reduced to the extent necessary. The amount of the reduction
attributable to the Participant's Participating Pre-Tax
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Contributions shall be returned to the Participant, together with
any earnings on those contributions to be returned, and the
amount attributable to the Company Contributions shall be
forfeited and used to reduce subsequent contributions payable by
the Company.
Any Pre-Tax Contributions returned to a Participant under this
paragraph (d) shall be disregarded in applying the dollar
limitation of Pre-Tax Contributions under Section 3.01(b), and in
performing the Actual Deferral Percentage Test under Section
8.01. Any After-Tax Contributions returned under this paragraph
(d) shall be disregarded in performing the Actual Contribution
Percentage Test under Section 8.02.
8.06 Defined Benefit Plan Limitation. If a Participant is
or ever was a participant in a Defined Benefit Plan then prior to
restricting any Annual Addition under this Plan the rate of
benefit accruals under such Defined Benefit Plan shall first be
reduced so as to cause the sum, for any limitation year, of the
Participant's Defined Benefit Plan Fraction and the Participant's
Defined Contribution Plan Fraction not to exceed 1.0.
ARTICLE 9
Loans
9.01 Loans Permitted. On and after January 1, 1986, a
Participant who is not on a leave of absence and remains on the
active payroll may, with the approval of the Plan Administrator
under such uniform rules as the Plan Administrator may adopt,
borrow from his Account upon terms and conditions set forth in
this Article 9. Any loans made prior to October 19, 1989 shall
be subject to this Article 9 and the rules in effect thereunder
at the time such loans were made. Any loans made, renewed,
renegotiated, modified or extended on or after October 19, 1989
shall be subject to this Article 9 as amended effective as of
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such date. Effective as of October 19, 1989 the Plan
Administrator is authorized to administer the loan program under
this Article 9. Any Participant who is an Employee, and any
Participant who is a former Employee and a "party-in-interest"
(as defined in Section 3(14) of ERISA) to the Plan, may borrow
from his Account, upon application made in such manner and on
such conditions as the Plan Administrator may prescribe and under
such uniform and non-discriminatory rules as the Plan
Administrator may adopt.
9.02 Amount of Loans. The minimum amount of any loan
pursuant to this Article 9 shall be $1,000. The amount of any
such loan to a Participant, together with the outstanding balance
of all other such loans to the same Participant, shall not exceed
the lesser of (a) or (b) where (a) is $50,000 reduced by the
excess (if any) of (i) the highest outstanding balance of loans
to the Participant from the Plan during the one year period
ending on the day before the date on which such loan is made,
over (ii) the outstanding balance of loans to the Participant
from the Plan on the date on which such loan is made, and (b) is
one-half of the Vested Portion of the Participant's Account
balance. Outstanding balance of loans means the outstanding
amount of all loans from the Plan and any other plans of the
Company.
9.03 Source of Loans. Funds for loans from a Participant's
Account shall be taken from the Participant's Subaccounts in the
following order:
(i) Nonparticipating Pre-Tax Contributions and
earnings thereon;
(ii) Participating Pre-Tax Contributions and earnings
thereon;
(iii) Rollover Contributions and earnings thereon;
(iv) Vested Company Contributions (except the Company
Stock Fund) that have been in the Account for two full calendar
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years after the contribution year and earnings thereon;
(v) Vested Company Contributions (except the Company
Stock Fund) that have been in the Account for less than two full
calendar years after the contribution year and earnings thereon;
(vi) Nonparticipating After-Tax Contributions and
earnings thereon; and
(vii) Participating After-Tax Contributions and
earnings thereon.
Effective at such time as the Plan Administrator shall determine
practicable, vested Company Contributions in the Company Stock
Fund may be used as a source of funds for loans. No loan shall
be made from a Subaccount or a part of a Subaccount until
exhaustion of the entire balance in the Subaccount or part of the
Subaccount preceding it on the above list. Within each
Subaccount or part thereof, funds for loans will be taken on a
last-in-first-out basis and pro-rata from each investment fund
within the Subaccount or part of the Subaccount and such pro-rata
portion of each investment fund will be converted to cash for the
loan based upon the market value of the investment on the date of
conversion.
9.04 Interest Rate. The interest rate to be charged on
loans pursuant to this Article 9 shall be a reasonable rate of
interest determined from time to time by the Plan Administrator.
In determining such rate the Plan Administrator shall seek to
provide to the Plan a rate of return commensurate with the
interest rates charged by persons in the business of lending
money for loans that would be made under similar circumstances on
the date the loan is approved. The interest rate will be fixed
for the entire term of the loan.
9.05 Repayment. The Participant may select a period of
one, two, three, four or five years for repayment of a loan,
except that the Participant may, at his option, select a longer
period of whole years, not exceeding ten, for repayment of a loan
for the purpose of purchasing his principal residence. Repayment
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shall be made by level monthly payments in such amount as shall
be sufficient to pay the principal and interest thereon over the
period for repayment. Repayment shall be made by payroll
deductions, except that in the case of a Participant who is not
on the active payroll, repayment shall be made by check or other
similar means as the Plan Administrator shall determine.
Prepayment of a loan in full may be made without penalty at any
time. Partial prepayment of a loan may be made at any time
without penalty by a cash payment of not less than $1000.00 or by
additional repayments of principal made by payroll deduction.
The amount of each monthly payment shall be restored to the
Participant's Subaccounts in the same proportion as the loan was
taken from such Subaccounts. However, the amount of each such
monthly payment shall be placed into investment funds, except the
Company Stock Fund, in accordance with the most recent investment
election made by the Participant with respect to the
Participant's Contributions.
9.06 Multiple Loans. No more than one loan may be granted
to a Participant in a calendar year unless all earlier loans made
in the same calendar year to the Participant shall have been
repaid in full.
9.07 Pledge. The Vested Portion of the Participant's
Account balance shall be pledged as security for all loans to the
Participant pursuant to this Article 9. The amount pledged shall
not be greater than fifty percent of the Participant's Vested
Portion. If a default shall occur in the repayment of a loan,
the entire unpaid principal balance plus accrued interest if any:
(i) shall be charged, when the Participant becomes eligible to
receive a distribution, against that portion of the Participant's
Vested Portion which serves as security for the loan; (ii) shall
be deducted, if a distribution is to made, from the amount
payable to the Participant or the Participant's Beneficiary; or
(iii) if neither (i) nor (ii) applies, shall continue to encumber
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that portion of the Participant's Vested Plan Account balance
Portion that serves as security for the loan.
9.08 Loan Reserve. The amount of each loan to a
Participant shall be transferred from the portion of the
TrustFund held for the Participant's Account and invested
pursuant to Section 5.02 to a special Loan Reserve maintained for
such Participant's Account. Such Loan Reserve shall be invested
solely in the loan or loans made to the Participant. Payments on
any such loan will reduce the Participant's Loan Reserve and
shall be reinvested for the Participant's Account in accordance
with Section 9.05.
9.09 Minimum Account Balance. So long as any amount of a
loan shall remain outstanding to a Participant, the Participant
may not make any withdrawal from his Account
that would reduce the value of his Vested Portion to less than
his Loan Reserve.
9.10 Consent. No loan shall be made pursuant to this
Article 9 without the prior consent of the Participant and the
Participant's spouse, if any, at the time of application
for the loan. Such consent shall be required for (1) the making
of the loan from the Participant's Account and (2) the deduction
of the full outstanding loan balance, including interest and
principal, from the Participant's Account in the event of
default, as provided in this Article 9. Such consent may not be
revoked by the Participant or the Participant's spouse after the
loan proceeds are paid to the Participant. Such consent shall be
in writing on a form furnished by the Company and shall be
witnessed by a Notary Public. Any renegotiation, extension,
renewal or other revision of a loan shall also require prior
consent by the Participant and the Participant's spouse, if any,
in the manner described above. Spousal consent shall not be
required for loans made after March 1, 1994.
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9.11 Other Terms. Each loan made pursuant to this Article
9 shall be evidenced by a promissory note payable to the Trustee.
Such loans shall be upon such additional terms
and conditions as the Plan Administrator shall determine, applied
in a uniform and non-discriminatory manner. The terms and
conditions of any loan may be adjusted at any
time, to the extent determined by the Plan Administrator to be
necessary for compliance with law or to maintain the
qualification of the Plan under the Code.
ARTICLE 10
Administration of the Plan
10.01 Named Fiduciaries and Plan Administrator. The
following persons from time to time occupying the following
offices of the Company are hereby designated as Named
Fiduciaries: Chief Executive Officer, Chief Financial Officer,
and Chief Accounting Officer. The Company may designate other
persons who, upon acceptance of such designation, shall serve as
Named Fiduciaries either instead of or in addition to those named
above. Any such designation and acceptance shall be in writing
and retained by the Plan Administrator. The Named Fiduciaries
shall act by majority rule. The Named Fiduciaries shall appoint
from among the officers of the Company a Plan Administrator who
shall serve at the discretion of the Named Fiduciaries. The Plan
Administrator shall serve without compensation for his services
as such and shall act solely in the interest of the Participants
and their Beneficiaries.
10.02 Authority of Plan Administrator. The Plan
Administrator shall have discretionary authority to control and
manage the operation and administration of the Plan; and, without
limiting the generality of the foregoing, may interpret the Plan,
determine eligibility for benefits under the Plan, determine any
facts or resolve any questions relevant to the administration of
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the Plan and, in connection therewith, may remedy and correct any
ambiguities, inconsistencies, or omissions in the Plan. Any such
action taken by the Plan Administrator shall be conclusive and
binding on all Participants, Beneficiaries and other persons.
10.03 Reliance on Reports. The Named Fiduciaries and the
Plan Administrator shall be entitled to rely upon any opinions,
reports, or other advice which shall be furnished by specialists,
subject to fiduciary responsibilities imposed by ERISA.
10.04 Delegation of Authority. With approval of the Named
Fiduciaries, the Plan Administrator may designate one or more
persons to exercise any power, or perform any duty, of the Plan
Administrator. Any such designation shall be in writing and
signed by the Plan Administrator and the Named Fiduciaries and a
copy thereof shall be delivered to the Trustee.
10.05 Administration Expenses. All expenses arising in
connection with the administration of the Plan shall be paid by
the Company, except expenses arising from administration of
TRASOP within the Trust shall be paid in accordance with the
following paragraph.
The expenses of administration of the TRASOP within the
Trust shall include, without limitation, transfer taxes, postage,
brokerage commissions and other direct selling expenses incurred
by the Trustee in the sale of Shares pursuant to Section 13.04,
losses incurred by the Trustee in transactions pursuant to
Section 5.07 only to the extent applicable to funds which are to
be invested pursuant to Section 13.02, and fees of the Trustee in
connection with the administration of TRASOP within this Trust,
including fees for legal services rendered to the Trustee
(whether or not rendered in connection with a judicial or
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administrative proceeding and whether or not incurred while it is
acting as Trustee), but shall exclude brokerage fees and
commissions for purchases of Shares pursuant to Section 13.02,
which brokerage fees and commissions shall be paid out of the
dividends being reinvested thereby. Such expenses of
administration of TRASOP within the Trust shall, to the extent
permitted by law, be paid:
first, out of any available income of TRASOP;
second, out of any available dividends received by the
Trustee on Shares allocated to Participants pursuant to Section
13.02, which dividends have not then been applied to the purchase
of additional Shares pursuant to Section 13.02; and
third, by the Company.
Provided, however, that in no event shall the amounts paid by the
Trustee during such Plan Year pursuant to clauses "first" and
"second" above, exceed the smaller of:
(a) the sum of 10 percent of the first $100,000 and 5
percent of any amount in excess of $100,000 of the income from
dividends paid to the Trustee with respect to common stock of the
Company during such Plan Year; or
(b) $100,000.
10.06 Fiduciary Insurance. The Company may purchase and
carry fiduciary responsibility insurance under which each member
of the Board, each Named Fiduciary, the Plan Administrator, or
any person to whom there may be delegated any responsibility in
connection with the administration of the Plan, including the
Trustee, will be indemnified against any cost or expense
(including counsel's fees) or liability which may be incurred
arising out of any act or failure to act in the administration of
this Plan, except for gross negligence or willful misconduct.
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10.07 Claim Review.
(a) Any denial by the Plan Administrator of a claim
for benefits under the Plan by a Participant or Beneficiary shall
be stated in writing by the Plan Administrator and delivered or
mailed to the Participant or Beneficiary within 90 days following
the date on which the claim is filed; and such notice shall set
forth the specific reasons for the denial, written in a plain and
understandable manner, specific reference to pertinent Plan
provisions on which the denial is based, a description of any
additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or
information is necessary and an explanation of the Plan's claim
review procedure. If special circumstances require an extension
of time for processing the claim, written notice of an extension
shall be furnished to the claimant prior to the end of the
initial period of 90 days following the date on which the claim
was filed. Such an extension may not exceed a period of 90 days
beyond the end of the initial period. If the claim has not been
granted, and if written notice of the denial of the claim is not
furnished within 90 days following the date on which the claim is
filed, the claim shall be deemed denied for the purpose of
proceeding to the claim review procedure.
(b) Claim Review Procedure. A Participant, Beneficiary,
or the authorized representative of either shall have 60 days
after receipt of written notification of denial of a claim to
request a review of the denial by making written request to the
Plan Administrator. Within 30 days following receipt of such
requests for review, the Plan Administrator shall review his
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prior decision denying the claim. The Plan Administrator shall
give the Participant, Beneficiary, or the authorized
representative of either an opportunity to appear to review
pertinent documents, to submit issues and comments in writing,
and to present evidence supporting the claim.
Not later than 60 days after receipt of the request for
review, the Plan Administrator shall render and furnish to the
claimant a written decision which shall include specific reasons
for the decision, and shall make specific references to pertinent
Plan provisions on which it is based. If special circumstances
require an extension of time for processing, the decision shall
be rendered as soon as possible, but not later than 120 days
after receipt of the request for review, provided that written
notice and explanation of the delay are given to the claimant
prior to commencement of the extension. Such decision by the
Plan Administrator shall not be subject to further review. If a
decision on review is not furnished to a claimant within the
specified time period, the claim shall be deemed to have been
denied on review.
(c) Exhaustion of Remedy. No claimant shall institute any
action or proceeding in any state or federal court of law or
equity, or before any administrative tribunal or arbitrator, for
a claim for benefits under the Plan, until he or she has first
exhausted the procedures set forth in this section.
10.08 Appointment of Trustee. The Trustee and any
successor thereto shall be appointed by the Board.
10.09 Limitation of Liability. The Company, the Board, the
Named Fiduciaries, the Plan Administrator, and any officer,
employee or agent of the Company shall not incur any liability
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individually or on behalf of any other individuals or on behalf
of the Company for any act or failure to act, made in good faith
in relation to the Plan or the funds of the Plan. However, this
limitation shall not act to relieve any such individual or the
Company from a responsibility or liability for any fiduciary
responsibility, obligation or duty under Part 4, Title I, of
ERISA.
ARTICLE 11
Miscellaneous
11.01 Exclusive Benefit; Amendments. It shall be
impossible for any part of the corpus or income of the Trust Fund
to be used for or diverted to purposes other than for the
exclusive benefit of Participants, Beneficiaries and other
persons entitled to benefits under the Plan and for paying the
expenses of the Plan not paid by the Company, or to deprive any
of them of his vested interest in the Trust Fund. No person
shall have any interest in, or right to, any part of the Trust
Fund except as and to the extent expressly provided in the Plan.
Subject to the foregoing, the Plan may be amended, in whole or in
part, at any time and from time to time by the Board or pursuant
to authority granted by the Board and any amendment may be given
such retroactive effect as the Board or its duly authorized
delegate may determine.
11.02 Termination; Sale of Assets of Subsidiary.
(a) The Plan may be terminated or partially terminated or
contributions under the Plan may be permanently discontinued for
any reason at any time by the Board. In the event of termination
or partial termination of the Plan or permanent discontinuance of
contributions under the Plan: (i) no contribution shall be made
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thereafter except for a month the last day of which coincides
with or precedes such termination or discontinuance; (ii) no
distribution shall be made except as provided in the Plan; (iii)
the rights of all Participants to the entire amounts to the
credit of their Accounts as of the date of such termination or
partial termination or discontinuance shall become 100% vested;
(iv) no person shall have any right or interest except with
respect to the Trust Fund; and (v) the Trustee shall continue to
act until the Trust Fund shall have been distributed in
accordance with the Plan.
(b) Upon termination of the Plan, Pre-Tax Contributions,
with earnings thereon, shall only be distributed to Participants
if (i) neither the Company nor an Affiliated Employer establishes
or maintains a successor defined contribution plan, and (ii)
payment is made to the Participants in the form of a lump sum
distribution (as defined in Section 402(d)(4) of the Code,
without regard to clauses (i) through (iv) of subparagraph (A),
subparagraph (B), or subparagraph (F) thereof). For purposes of
this paragraph, a "successor defined contribution plan" is a
defined contribution plan (other than an employee stock ownership
plan as defined in Section 4975(e)(7) of the Code ("ESOP") or a
simplified employee pension as defined in Section 408(k) of the
Code ("SEP)) which exists at the time the Plan is terminated or
within the 12 month period beginning on the date all assets are
distributed. However, in no event shall a defined contribution
plan be deemed a successor plan if fewer than two percent of the
employees who are eligible to participate in the Plan at the time
of its termination are or were eligible to participate under
another defined contribution plan of the Company or an Affiliated
Employer (other than an ESOP or a SEP) at any time during the
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period beginning 12 months before and ending 12 months after the
date of the Plan's termination.
(c) Upon the disposition by the Company of at least 85
percent of the assets (within the meaning of Section 409(d)(2) of
the Code) used by the Company in a trade or business or upon the
disposition by the Company of its interest in a subsidiary
(within the meaning of Section 409(d)(3) of the Code), Pre-Tax
Contributions, with earnings thereon, may be distributed to those
Participants who continue in employment with the employer
acquiring such assets or with the sold subsidiary, provided that
(a) the Company maintains the Plan after the disposition, (b) the
buyer does not adopt the Plan or otherwise become a
participating employer in the Plan and does not accept any
transfer of assets or liabilities from the Plan to a plan it
maintains in a transaction subject to Section 414(l)(1) of the
Code, an (c) payment is made to the Participant in the form of a
lump sum distribution (as defined in Section 402(d)(4) of the
Code, without regard to clauses (i) through (iv) of subparagraph
(A), subparagraph (B), or subparagraph (F) thereof).
11.03 Beneficiaries. Upon the death of a Participant his
entire nonforfeitable accrued benefit under the Plan shall be
payable in a lump sum to his surviving spouse unless there is no
surviving spouse of the Participant or such surviving spouse has
consented, in the manner provided in this Section 11.03, to a
designation of a different Beneficiary and such designation is in
effect at the time of the Participant's death. Each Participant
may designate a Beneficiary or Beneficiaries to receive the
Participant's benefits under the Plan in a lump sum in the event
of death of such Participant prior to distribution of such
benefits, by filing prior to his death, a written designation
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with the Plan on a form furnished by the Plan Administrator or
his delegate, provided that such designation shall be effective
only if (1) such designation is accompanied by the written
consent of the Participant's spouse which acknowledges the effect
on the spouse of the designation and is witnessed by a Notary
Public, or (2) the Participant is not married. Any such
designation made by an unmarried Participant shall become null
and void during any subsequent marriage (unless consented to in
the manner described above by the spouse of that marriage) and
any consent of a spouse shall be effective only with respect to
such spouse. If, at the time of a Participant's death, there is
no surviving spouse of the Participant and no designation of a
Beneficiary by such Participant is in effect, then the
Participant's benefits shall be payable in a lump sum to his
estate or legal representative. A Participant may revoke a
designation made pursuant to this Section 11.03 by signing and
filing with the Plan Administrator a written instrument to that
effect, in such manner and on such conditions as may be
prescribed by the Plan Administrator, or by filing a new
designation pursuant to this Section 11.03. The consent of a
Participant's spouse may not be revoked, but such spouse's
consent shall be required for every designation of a Beneficiary
other than the Participant's spouse and for every change in any
such designation. The requirement for spousal consent may be
waived by the Plan Administrator if he believes there is no
spouse, or the spouse cannot be located, or because of such other
circumstances as may be established by applicable law.
11.04 Assignment of Benefits.
(a) No Participant or Beneficiary shall have the right to
assign, transfer, alienate, pledge, encumber or subject to lien
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any benefits to which he is entitled under the Plan, and benefits
under the Plan shall not be subject to adverse legal process of
any kind, except that nothing in this Section shall preclude
payment of Plan benefits pursuant to a qualified domestic
relations order as defined in Section 414(p) of the Code and
Section 206(d) of ERISA. The Plan Administrator shall establish
a written procedure to determine the qualified status of
domestic relations orders and to administer distributions under
such qualified orders.
(b) Notwithstanding anything herein to the contrary, if the
amount payable to the alternate payee under the qualified
domestic relations order is less that $3,500, such amount shall
be paid in one lump sum as soon as practicable following the
qualification of the order. If the amount exceeds $3,500, it may
be paid as soon as practicable following the qualification of the
order if the alternate payee consents thereto; otherwise it may
not be payable before the earliest of (i) the Participant's
termination of employment, (ii) the time such amount could be
withdrawn under Article 7 or (iii) the Participant's attainment
of age 50.
11.05 Merger. The Plan may not be merged or consolidated
with, or its assets or liabilities may not be transferred to any
other plan unless each person entitled to benefits under the Plan
would, if the resulting plan were then terminated, receive
immediately after the merger or consolidation, or transfer of
assets or liabilities, a benefit which is equal to or greater
than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer if the
Plan had then terminated.
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11.06 Conditions of Employment Not Affected by Plan. The
establishment and maintenance of the Plan shall not confer any
legal rights upon any Employee or other person for a continuation
of employment, nor shall it interfere with the rights of the
Company to discharge any Employee and to treat him without regard
to the effect which that treatment might have upon him as a
Participant or potential Participant of the Plan.
11.07 Facility of Payment. If the Plan Administrator shall
find that a Participant or other person entitled to a benefit is
unable to care for his affairs because of illness or accident or
is a minor, the Plan Administrator may direct that any benefit
due him, unless claim shall have been made for the benefit by a
duly appointed legal representative, be paid to his spouse, a
child, a parent or other blood relative, or to a person with whom
he resides. Any payment so made shall be a complete discharge of
the liabilities of the Plan for that benefit.
11.08 Information. Each Participant, Beneficiary or other
person entitled to a benefit, before any benefit shall be payable
to him or on his account under the Plan, shall file with the Plan
Administrator the information that the Plan Administrator shall
require to establish his rights and benefits under the Plan.
11.09 Additional Participating Employers.
(a) If any company is or becomes a subsidiary of or
associated with the Company, the Board may include the employees
of that subsidiary or associated company in the participation of
the Plan upon appropriate action by that company necessary to
adopt the Plan. In that event, or if any persons become
Employees of the Company as the result of merger or consolidation
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or as the result of acquisition of all or part of the assets or
business of another company, the Board shall determine to what
extent, if any, previous service with the subsidiary, associated
or other company shall be recognized under the Plan, but subject
to the continued qualification of the trust for the Plan as tax-
exempt under the Code.
(b) Any subsidiary or associated company may terminate its
participation in the Plan upon appropriate action by it. In that
event the funds of the Plan held on account of Participants in
the employ of that company, and any unpaid balances of the
Account of all Participants who have separated from the employ of
that company, shall be determined by the Plan Administrator.
Those funds shall be distributed as provided in Section 11.02 if
the Plan should be terminated, or shall be segregated by the
Trustee as a separate trust, pursuant to certification to the
Trustee by the Plan Administrator, continuing the Plan as a
separate plan for the employees of that company under which the
board of directors of that company shall succeed to all the
powers and duties of the Board, including the appointment of the
Named Fiduciaries and Plan Administrator.
11.10 IRS Determination. All contributions made to the
Trust Fund after December 31, 1984, and all loans made pursuant
to Article 9, which are made prior to the receipt by the Company
of a determination from the Internal Revenue Service to the
effect that the Plan, as amended, is a qualified plan under
Sections 401(a) and 401(k) of the Code or the refusal of the IRS
in writing to issue such a determination, shall be made on the
express condition that such determination is received. In the
event the Internal Revenue Service determines that the Plan is
not so qualified or refuses in writing to make such
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determination, such contributions, increased by any earnings
thereon, and reduced by any losses thereon and by the outstanding
balance (principal and interest) on any loans made under Article
9, shall be returned to the Company and Participants, as
appropriate, as promptly as practicable after such determination.
In the event the Internal Revenue Service requires reductions in
such contributions and/or changes in the terms and conditions of
such loans as a condition of its determination that the Plan is
so qualified, the required reductions in contributions, increased
by any earnings and reduced by any losses attributable thereto,
shall be returned to the Company and Participants, as
appropriate, and/or the amounts and terms and conditions of any
such outstanding loans shall be modified to meet Internal Revenue
Service requirements, as promptly as practicable after
notification from the Internal Revenue Service. If all or part
of the Company's deductions under Section 404 of the Code for
Company Contributions to the Plan are disallowed by the Internal
Revenue Service, the portion of the Company Contributions to
which the disallowance applies shall be returned to the Company
without earnings thereon, but reduced by any losses attributable
thereto. The return shall be made within one year after the
denial of qualification or disallowance of deduction, as the case
may be.
11.11 Mistaken Contributions. Any contribution made by
mistake of fact shall be returnable, without any earnings thereon
but reduced by any losses attributable thereto, to the Company
and/or Participants, as appropriate within one year after the
payment of the contribution.
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11.12 Prevention of Escheat. If the Plan Administrator
cannot ascertain the whereabouts of any person to whom a payment
is due under the Plan, the Plan Administrator may, no earlier
than three years from the date such payment is due, mail a notice
of such due and owing payment to the last known address of such
person, as shown on the records of the Plan or Company. If such
person has not made written claim therefor within three months of
the date of the mailing, the Plan Administrator may, if he so
elects and upon receiving advice from counsel to the Plan, direct
that such payment and all remaining payments otherwise due such
person be canceled on the records of the Plan and the amount
thereof applied to reduce the contributions of the Company. Upon
such cancellation, the Plan and the Trust shall have no further
liability therefor except that, in the event such person or his
beneficiary later notifies the Plan Administrator of his
whereabouts and requests the payment or payments due to him under
the Plan, the amount so applied shall be paid to him in
accordance with the provisions of the Plan.
11.13 Limitations Imposed on Insider Participants.
Notwithstanding any other provision of the Plan to the contrary,
an Insider Participant's right to direct investments under the
Plan, and his right to withdrawals and loans under Articles 7 and
9 shall be subject to such limitations and restrictions as may be
imposed by the Plan Administrator from time to time to comply
with the conditions for the employee benefit plan exemptions to
the short-swing trading liability rules of Section 16(b) of the
Securities Exchange Act of 1934.
11.14 Construction. The Plan shall be construed, regulated
and administered under ERISA and the laws of the State of New
York, except where ERISA controls.
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ARTICLE 12
Top-Heavy Provisions
12.01 Application of Top-Heavy Provisions. For any Plan
Year beginning on or after January 1, 1984 in which the Plan
shall on the last day of such Plan Year ("Determination Date"),
be either (i) a Top-Heavy Plan or (ii) a part of a "required
aggregation group" (as defined in Section 12.03) that is a
Top-Heavy Group and not also a part of a "permissive aggregation
group" (as defined in Section 12.03) that is not a Top-Heavy
Group, the provisions of Article 12 shall apply, notwithstanding
any other conflicting provisions of the Plan.
12.02 Minimum Benefit for Top-Heavy Year. For any Plan
Year for which this Section 12 is applicable, each Participant,
who is employed by the Company on the last day of such year and
who is not a Key Employee, shall accrue the Minimum Benefit for
Top-Heavy year provided under paragraph 22 of the Consolidated
Edison Retirement Plan for Management Employees. For purposes of
this Article 12, "Key Employee" means an employee who is in the
category of employees determined in accordance with the
provisions of Sections 416(i)(l) and (5) of the Code and any
regulations thereunder, and where applicable, on the basis of the
Employee's Statutory Compensation from the Company or an
Affiliated Employer.
12.03 Aggregation Groups.
(a) Notwithstanding anything to the contrary herein, this
Plan shall not be a Top-Heavy Plan if it is part of either a
"required aggregation group" or a "permissive aggregation group"
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that is not a Top-Heavy Group.
(b) The "required aggregation group" consists of:
(i) each Defined Contribution Plan or Defined Benefit
Plan in which at least one Key Employee participates; and
(ii) each other Defined Contribution Plan or Defined
Benefit Plan which enables a plan referred to in the preceding
subparagraph (i) to meet the nondiscrimination requirements of
Section 401(a)(4) or 410 of the Code.
(c) A "permissive aggregation group" consists of the plans
included in the "required aggregation group" plus any one or more
other Defined Contribution Plans or Defined Benefit Plans which,
when considered as a group with the "required aggregation group",
would continue to meet the nondiscrimination requirements of
Section 401(a)(4) and 410 of the Code.
12.04 Special Benefit Limits. For any Plan Year for which
this Article 12 is applicable the definitions of "Defined Benefit
Plan Fraction" and "Defined Contribution Plan Fraction" in
Sections 1.22 and 1.24, respectively, shall be modified in each
case by substituting "1.0" for "1.25".
12.05 Special Distribution Rule. For any Plan Year for
which this Article 12 is applicable, Section 7.08(a) shall apply
to Key Employees.
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ARTICLE 13
Tax Reduction Act Stock Ownership Plan
13.01 Purpose; Separate Entity.
(a) TRASOP, which is a stock bonus plan established under
the Act, is intended to give eligible participants an equity
interest in the Company and to encourage them to remain in the
employ of the Company. TRASOP is designed to invest primarily in
Shares. Applicable laws do not permit additional contributions
to TRASOP by the Company or by Employees, but the Company desires
to continue the TRASOP Accounts of Participants having such
accounts. Accordingly, effective as of July 1, 1988, all TRASOP
Accounts were transferred to this Plan, and all TRASOP
provisions which continue to be applicable were added to this
Plan and shall, together with other applicable provisions of this
Plan, govern TRASOP Accounts.
(b) Accounts and TRASOP Accounts shall be administered
separately, although they shall be held as part of the same Trust
Fund. There shall be no transfers between TRASOP Accounts and
Accounts and Sub-Accounts.
(c) All matters relating to TRASOP which relate to or arise
out of facts, circumstances or conditions in effect prior to July
1, 1988, shall be governed by the provisions of TRASOP as in
effect on June 30, 1988 prior to the merger, unless expressly
otherwise provided in this Plan.
13.02 TRASOP Accounts; Application of Dividends.
(a) The TRASOP Account of each Participant in TRASOP who
remained in the employ of the Company on July 1, 1988 was
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transferred to this Plan effective as of July 1, 1988. Each such
Participant shall continue to have a nonforfeitable right to all
Shares allocated and all amounts credited to such Participant's
TRASOP Account.
(b) All dividends received by the Trustee with respect to
Shares allocated to the TRASOP Accounts of Participants shall be
applied to the purchase of additional Shares. Such purchases
shall be made promptly after the receipt of each such dividend.
The Trustee shall purchase, in one or more transactions, the
maximum number of whole Shares obtainable at then prevailing
prices, including brokerage commissions and other reasonable
expenses incurred in connection with such purchases. Such
purchases may be made on any securities exchange where Shares are
traded, in the over-the-counter market, or in negotiated
transactions, and may be on such terms as to price, delivery and
otherwise as the Trustee may determine to be in the best interest
of the Participants. The Trustee shall complete such purchases
as soon as practical after receipt of such dividends, having due
regard for any applicable requirements of law affecting the
timing or manner of such purchases. The additional Shares so
purchased shall be allocated among the respective TRASOP Accounts
of the Participants in proportion to the number of Shares in each
TRASOP Account at the record date for the payment of the dividend
so applied. Such allocation shall be made as promptly as
practicable but for purposes of determining the time at which
such additional Shares shall become distributable pursuant to
Section 13.04, the additional Shares so allocated to each
Participant's TRASOP Account shall be deemed to have been
allocated as of the respective allocation dates of the Shares in
such TRASOP Account at such record date, in proportion to the
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number of such Shares previously allocated as of each such
allocation date.
13.03 Voting Rights; Options; Rights; Warrants.
(a) Each Participant shall be entitled to direct the
Trustee as to the manner in which any Shares or fractional Shares
allocated to the Participant's TRASOP Account are to be voted.
(b) In the event that any option, right, or warrant shall
be granted or issued with respect to any Shares allocated to the
Participant's TRASOP Account, each Participant shall be entitled
to direct the Trustee whether to exercise, sell, or deal with
such option, right, or warrant.
(c) The Trustee shall keep confidential the Participant's
voting instructions and instructions as to any option, right or
warrant and any information regarding a Participant's purchases,
holdings and sales of Shares.
13.04 Distribution of Shares.
A. Each Share allocated to a Participant's TRASOP Account
shall be available for distribution to such Participant promptly
after the earlier of (i) the end of the 84th month beginning
after the month in which such Share was allocated to such
Participant's TRASOP Account, and (ii) the death, disability or
termination of employment of such Participant. No Shares may be
distributed from a TRASOP Account before the end of the 84th
month beginning after the month in which Shares were allocated to
the TRASOP Account, except in the case of termination of
employment, death or disability, and in accordance with this
Section 13.04.
B. Each Share which shall become distributable to a
Participant by reason of clause A.(i) above is herein called,
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from the time such Share shall become so distributable, an
"Unrestricted Share". Notwithstanding the provisions of the
aforesaid clause A.(i), Unrestricted Shares shall be distributed
to Participants as follows:
(a) From time to time, a Participant may request, in
such manner and on such conditions as may be prescribed by the
Company, that Unrestricted Shares held in the Participant's
TRASOP Account be distributed to the Participant. If such
Participant is married, the written application shall include
written consent of the Participant's spouse witnessed by a Notary
Public. Spousal consent shall not be required with respect to
withdrawal requests made on or after March 1, 1994. Applications
made in a calendar month shall be effective as of the last day of
such calendar month. Any such request must be for whole Shares
only and must be for at least ten Shares or the number of whole
Unrestricted Shares in the TRASOP Account, whichever is less.
(b) Certificates for Unrestricted Shares requested in
accordance with the preceding paragraph B(a) shall be delivered,
or a cash distribution in respect of such Unrestricted Shares if
elected by the Participant pursuant to Section 13.04D below shall
be made, to the Participant as soon as practicable after the
effective date of the application.
(c) Any Unrestricted Share which shall become
distributable by reason of any provision of this Plan other than
clause A.(i) above (including, without limitation, provision for
distribution upon the death, disability or termination of
employment of the Participant) shall be distributed in accordance
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with such provision.
C. In the case of death of a Participant, distributions in
respect of Shares allocated to the Participant's TRASOP Account
shall be made to the Participant's Beneficiary. In the case of
disability or termination of employment with the Company of a
Participant, distributions in respect of Shares allocated to the
Participant's TRASOP Account shall be made to the Participant.
All distributions under TRASOP will begin, subject to
Section 7.08 and Subsection 13.04.F, not later than the 60th day
after the close of the Plan Year in which the latest of the
following events occurs: (1) the Participant attains age 65, (2)
the 10th anniversary of the year in which the Participant
commenced participation in TRASOP, or (3) the Participant becomes
disabled, dies or terminates service with the Company.
D. All distributions from a Participant's TRASOP Account
shall be made in Shares; provided, however, that a Participant or
Beneficiary shall have the right to elect, on a form furnished by
and submitted to the Company, to receive a distribution, other
than a distribution upon termination of TRASOP, in cash. Except
in the case of a final distribution from a Participant's TRASOP
Account and a distribution of the Participant's entire TRASOP
Account balance after such time as all Shares in a Participant's
TRASOP Account have become Unrestricted Shares, all distributions
from such TRASOP Account shall be made in respect of whole Shares
only, and any fractional Share which is otherwise distributable
shall be retained in such TRASOP Account until it can be
combined, in whole or in part, with another fractional Share
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which shall subsequently become distributable, so as to make up a
whole Share. In the case of a final distribution from a
Participant's TRASOP Account (except a distribution upon
termination of TRASOP) or in the case of a distribution of the
Participant's entire TRASOP Account balance after such time as
all of the Shares in the Participant's TRASOP Account have become
Unrestricted Shares, such distribution shall be made in respect
of the number of whole Shares then remaining in the Participant's
TRASOP Account, together with a cash payment in respect of any
fractional Share based on the closing price of a Share as
reported on the New York Stock Exchange consolidated tape on the
last trading day of the month immediately preceding the month in
which such final distribution is made. The Trustee, in each such
case, shall purchase such fractional Share from the Participant
at a price equal to the cash payment to be made to the
Participant. Whenever the Trustee requires funds for the
purchase of fractional Shares, such funds shall be drawn from the
accumulated income of the Trust, if any, and otherwise shall be
advanced by the Company upon the Trustee's request, subject to
reimbursement from future income of the Trust. All fractional
Shares so purchased by the Trustee shall be allocated to the
TRASOP Accounts of the remaining Participants at such intervals
as shall be determined by the Plan Administrator, but no later
than the end of the next succeeding Plan Year. The Trustee shall
sell any Shares in respect of which a cash distribution is to be
made. The Trustee may make such sales on any securities exchange
where Shares are traded, in the over-the-counter market, or in
negotiated transactions. Such sales may be on such terms as to
price, delivery and otherwise as the Trustee may determine to be
in the best interests of the Participants. The Trustee shall
complete such sales as soon as practical under the circumstances
having due regard for any applicable requirements of law
affecting the timing or manner of such sales. All brokerage
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commissions and other direct selling expenses incurred by the
Trustee in the sale of Shares under this Subsection 13.04D shall
be paid as provided in Section 10.05.
E. Upon any termination of TRASOP pursuant to Section
11.02, the Trust shall continue until all Shares which have been
allocated to Participants' TRASOP Accounts have been distributed
to the Participants, unless the Board directs an earlier
termination of the Trust. Upon the final distribution of Shares,
or at such earlier time as the Board shall have fixed for the
termination of the Trust, the Plan Administrator shall direct the
Trustee to allocate to the Participants any Shares then held by
the Trustee and not yet allocated, and the Trustee shall
distribute to the Participants any whole Shares which have been
allocated to their TRASOP Accounts but which have not been
distributed, shall sell all fractional Shares and distribute the
proceeds to the respective Participants entitled to such
fractional Shares, shall liquidate any remaining assets (other
than Shares) held by the Trust, and shall apply the proceeds of
such liquidation and any remaining funds held by the Trustee, the
disposition of which is not otherwise provided for, to a
distribution to all Participants then receiving a final
distribution of Shares, in proportion to the whole and fractional
Shares to which each is entitled; and the Trust shall thereupon
terminate.
F. Notwithstanding any other provision of this Plan, unless
a Participant otherwise elects in writing on a form furnished by
the Company:
(a) Distribution of a Participant's TRASOP Account
balance will commence not later than one (1) year after the close
of the Plan Year -
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(i) in which the Participant terminates
employment with the Company by reason of Retirement upon or after
attainment of Normal Retirement Age, death, or disability, or
(ii) which is the fifth Plan Year following the
Plan Year in which the Participant terminates employment with the
Company for any other reason, and the Participant is not
reemployed by the Company before such Plan Year.
AND
(b) Distribution of the Participant's TRASOP Account
balance will be in five (5) annual distributions as promptly as
practicable after the end of each Plan Year; provided, however,
that a TRASOP Account balance that equals $3500 or less shall be
distributed in a single distribution as soon as practicable, but
not later than 60 days after the close of the Plan Year in which
the Participant's termination of employment occurs. Each such
annual distribution shall be in respect of the number of Shares,
rounded down to the nearest number of whole Shares, which most
closely approximates the entire balance in the Participant's
TRASOP Account as of December 31 of the previous year divided by
the number of annual distributions remaining to be made under
this subsection, except that the fifth such distribution shall be
respect of the entire balance in the Participant's TRASOP Account
as of the preceding December 31. Each such annual distribution
shall be taken pro rata from all contribution years in
Participant's TRASOP Account.
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G. A Participant whose employment with the Company is
terminated by reason of Retirement, disability or any other
reason (other than death) may elect in such a manner and on such
conditions as may be prescribed by the Company to have his TRASOP
Account balance distributed in one of the following forms:
(i) a single lump sum distribution as soon as
practicable, but not later than 60 days after the end of the
Calendar Year in which the Participant's termination of
employment occurs; or
(ii) a distribution deferred until the last day of a
calendar month not later than the calendar month in which the
Participant attains age 70, as designated by the Participant, in
which event the distribution of the Participant's TRASOP Account
balance as of the last day of the calendar month so designated by
the Participant shall be made in a single lump sum as soon as
practicable after such calendar month.
13.05 Diversification of TRASOP Accounts.
A. Definitions
The following terms shall have the following meanings for
purposes of this Section 13.05:
(a) "Qualified Participant" shall mean a Participant
who has a TRASOP Account and has attained at least age 55 and
completed at least 10 years of participation in TRASOP.
(b) "Qualified Election Period" shall mean the first
ninety (90) days following the end of Plan Year 1987 and of each
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Plan Year thereafter.
(c) "Eligible Shares" shall mean Shares added to a
Participant's TRASOP Account after December 31, 1986.
(d) "Diversifiable Amount" shall, with respect to any
Qualified Election Period, mean twenty-five percent (25%) of the
number of Eligible Shares in the Participant's TRASOP Account as
of the end of the preceding Plan Year. However, if the
Diversifiable Amount for any Qualified Election Period shall have
a value which may be deemed "de minimis" under regulations issued
by the Secretary of the United States Department of the
Treasury, then there shall be no Diversifiable Amount available
for such Qualified Election Period.
B. Eligibility for Diversification
Each Qualified Participant shall, beginning with the
Qualified Election Period in 1988, have the right to elect to
diversify, by means of a distribution of whole Eligible Shares
only, all or some portion of the Diversifiable Amount in his
TRASOP Account during each of the six (6) consecutive Qualified
Election Periods following the 1987 Plan Year or the later Plan
Year in which such Participant first became a Qualified
Participant, provided, however, that, notwithstanding subsection
13.05.A.(d), the Diversifiable Amount in the sixth Qualified
Election Period for each Qualified Participant shall be fifty
percent (50%) of the number of Eligible Shares in his TRASOP
Account as to the end of the preceding Plan Year. A distribution
pursuant to this Article 13.05 must be a minimum of ten (10)
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Shares, or all Whole Shares comprising the Diversifiable Amount
for such Qualified Election Period if less than 10. Each
Qualified Participant who desires to elect diversification under
this Section shall, during the Qualified Election Period,
complete and execute a diversification election and consent form
provided by the Company. Such election may be revoked or
modified or a new election may be made in its stead within the
Qualified Election Period, upon the expiration of which the
diversification election shall be irrevocable.
Diversification Procedure
(i) TRASOP shall, within the 90 day period following
each Qualified Election Period, distribute to each Qualified
Participant who has elected to diversify under this Section, the
number of whole Eligible Shares which most closely approximates,
but does not exceed, the number of Eligible Shares duly elected
to be diversified by each such Qualified Participant. Failure by
a Qualified Participant to provide required consents to
distribution of any Diversifiable Amount, shall relieve TRASOP of
all obligation to make any such distribution.
(ii) To the extent a Qualified Participant has Eligible
Shares which are Unrestricted Shares in his TRASOP Account, such
Unrestricted Shares shall be distributed pursuant to this Section
13.05. Only upon exhaustion of all such Unrestricted Shares may
additional Eligible Shares then be distributed hereunder.
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Amendment No. 7 to
Raymond J. McCann Compensation Agreement
WHEREAS, Raymond J. McCann (the "Employee") and Consolidated
Edison Company of New York, Inc. (the "Company") entered into an
Agreement dated February 28, 1989 (the "Agreement"); and
WHEREAS, paragraph 9 of the Agreement provides that the
Agreement may be amended from time to time by a written
instrument executed by the Company and the Employee;
NOW, THEREFORE, in consideration of the foregoing, the
parties hereto agree as follows:
1. The Agreement is amended, effective February 1, 1995, to
increase the Employee's basic salary set forth in clause (i) of
paragraph 1(A) of the Agreement from $318,000 per annum to
$342,000 per annum, subject to all the terms and conditions set
forth in the Agreement relating to basic salary.
2. In all other respects, the Agreement remains in full
force and effect as amended hereby.
IN WITNESS WHEREOF, the Company has caused this Amendment to
be executed by its duly authorized officer and its Corporate seal
to be fixed hereto, and the Employee has hereto set his hand the
day and year set forth below.
CONSOLIDATED EDISON COMPANY
OF NEW YORK, INC.
By: THOMAS J. GALVIN
Thomas J. Galvin
Senior Vice President
RAYMOND J. MCCANN
Raymond J. McCann
Dated: March 1, 1995
Attest:
Approved by the Board of Trustees
the 22nd day of November, 1994.
ARCHIE M. BANKSTON
Archie M. Bankston
Secretary
<PAGE>
<PAGE>
The Consolidated Edison
Retirement Plan for Management Employees
___________________________________________
___________________________________________
As Amended and Restated Effective as of January 1, 1994
Except as Otherwise Noted
12/28/94
<PAGE>
<PAGE>
THE CONSOLIDATED EDISON RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page No.
1. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS AND GUIDE TO CONSTRUCTION . . . . . . . . 2
A. Definitions . . . . . . . . . . . . . . . . . . . 2
B. Guide to Construction . . . . . . . . . . . . . . 13
3. PARTICIPATION . . . . . . . . . . . . . . . . . . . . 13
A. Application of the Management Plan. . . . . . . . 13
B. Maximum Age for Participation . . . . . . . . . . 14
4. MANDATORY RETIREMENT . . . . . . . . . . . . . . . . . 14
5. ELIGIBILITY FOR A RETIREMENT PENSION . . . . . . . . . 14
A. Retirement at Age 60 or Later . . . . . . . . . . 14
B. Early Optional Retirement . . . . . . . . . . . . 15
C. Retirement or Termination for Disability. . . . . 15
D. Termination of Service in the Discretion
of the Company and Voluntary Termination. . . . . 15
E. Cash-Out of Deferred Pension . . . . . . . . . . 16
F. Repayment of Cash-Out . . . . . . . . . . . . . . 16
G. Age and Service Required for
a Retirement Pension. . . . . . . . . . . . . . . 16
H. Entitlement to Retirement Benefits. . . . . . . . 17
6. SURVIVING SPOUSE BENEFITS; OPTIONAL TEN YEAR CERTAIN
PENSION. . . . . . . . . . . . . . . . . . . . . . . . 17
A. Joint & Survivor Annuity. . . . . . . . . . . . . 17
B. Preretirement Surviving Spouse Benefits . . . . . 17
C. Marriage Requirements for Surviving
Spouse Benefits . . . . . . . . . . . . . . . . . 18
D. Optional Ten Year Certain Pension For
Unmarried Retirees. . . . . . . . . . . . . . . . 18
E. Optional Ten Year Certain Pension For
Married Retirees. . . . . . . . . . . . . . . . . 19
- i - 12/28/94
<PAGE>
<PAGE>
THE CONSOLIDATED EDISON RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page No.
F. Optional Ten Year Certain Pension For
Former Participants Eligible For Deferred
Pensions Under Paragraph 5 C(1). . . . . . . . . . 20
7. VESTING. . . . . . . . . . . . . . . . . . . . . . . . 20
A. Vested Rights . . . . . . . . . . . . . . . . . . 20
B. Accrued Pension . . . . . . . . . . . . . . . . . 21
C. Conditions Under Which Vested Benefits
Will Not Be Paid. . . . . . . . . . . . . . . . . 21
8. SERVICE CREDIT . . . . . . . . . . . . . . . . . . . . 21
A. Determination of Vesting Service. . . . . . . . . 21
B. Determination of Accredited Service for
Computation of a Pension. . . . . . . . . . . . . 22
C. Other Service Recognized for Vesting
or Computation of a Pension . . . . . . . . . . . 23
D. Additional Rules for Accumulation of
Service Credit. . . . . . . . . . . . . . . . . . 23
9. EFFECTIVE DATE OF RETIREMENT AND COMMENCEMENT
OF BENEFIT PAYMENTS. . . . . . . . . . . . . . . . . . 25
10. COMPUTATION OF BENEFITS. . . . . . . . . . . . . . . . 27
A. Computation of Annual Pension . . . . . . . . . . 27
B. Computation of Pension, Annuities, or
Benefits Based Upon Annual Pension. . . . . . . . 28
C. 1993 Special Retirement Program . . . . . . . . . 35
D. Fresh Start . . . . . . . . . . . . . . . . . . . 36
11. LIMITATION OF BENEFITS AND DEDUCTIONS FROM BENEFITS. . 36
A. Maximum Benefits. . . . . . . . . . . . . . . . . 36
B. Minimum Benefits. . . . . . . . . . . . . . . . . 40
C. Deductions for Pension or Benefits Under
Other Pension Plans . . . . . . . . . . . . . . . 40
D. Limitation of Deductions. . . . . . . . . . . . . 41
E. Pre-July 1, 1989 Transfers. . . . . . . . . . . . 41
F. Post-June 30, 1989 Transfers. . . . . . . . . . . 42
- ii - 12/28/94
<PAGE>
<PAGE>
THE CONSOLIDATED EDISON RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page No.
12. PAYMENT OF BENEFITS. . . . . . . . . . . . . . . . . . 42
A. Manner of Payment of Benefits . . . . . . . . . . 42
B. Termination of Payments . . . . . . . . . . . . . 43
C. Direct Rollover of Certain Distributions. . . . . 44
13. ASSIGNMENT OR NON-ALIENATION OF BENEFITS . . . . . . . 45
14. NO RIGHT TO EMPLOYMENT . . . . . . . . . . . . . . . . 45
15. TRUST FUND . . . . . . . . . . . . . . . . . . . . . . 45
16. CONTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . 46
A. Payment of Contributions. . . . . . . . . . . . . 46
B. Funding Policy Procedure and Amount
of Contributions. . . . . . . . . . . . . . . . . 46
C. Payment of Expenses . . . . . . . . . . . . . . . 46
D. Restrictions on Recovery by Company
of Contributions. . . . . . . . . . . . . . . . . 46
E. Management Plan is Non-Contributory . . . . . . . 47
17. FIDUCIARIES. . . . . . . . . . . . . . . . . . . . . . 47
A. Named Fiduciaries . . . . . . . . . . . . . . . . 47
B. Fiduciary Responsibilities. . . . . . . . . . . . 48
C. General Provisions Concerning Fiduciaries . . . . 49
18. POWERS AND DUTIES OF PLAN ADMINISTRATOR. . . . . . . . 49
A. Rules and Decisions . . . . . . . . . . . . . . . 49
B. Records and Reports . . . . . . . . . . . . . . . 50
C. Other Plan Administrator Powers and Duties. . . . 50
19. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 51
A. Restriction on Powers . . . . . . . . . . . . . . 51
B. Ascertainment of Benefits . . . . . . . . . . . . 51
C. Claims. . . . . . . . . . . . . . . . . . . . . . 51
- iii - 12/28/94
<PAGE>
<PAGE>
THE CONSOLIDATED EDISON RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page No.
D. Records . . . . . . . . . . . . . . . . . . . . . 52
20. TERMINATION OR MODIFICATION OF THE MANAGEMENT PLAN . . 52
A. Right to Terminate or Modify. . . . . . . . . . . 52
B. Rights Upon Termination . . . . . . . . . . . . . 52
21. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . 53
A. Merger or Consolidation . . . . . . . . . . . . . 53
B. Limitation of Benefits Payable to
Highly Compensated Employees. . . . . . . . . . . 53
C. Forfeitures . . . . . . . . . . . . . . . . . . . 54
22. TOP-HEAVY PROVISIONS . . . . . . . . . . . . . . . . . 54
23. RETIREE HEALTH PROGRAM ("PROGRAM") . . . . . . . . . . 58
A. Effective Date. . . . . . . . . . . . . . . . . . 58
B. Benefits Provided . . . . . . . . . . . . . . . . 58
C. Participants' Contributions . . . . . . . . . . . 58
D. Funding . . . . . . . . . . . . . . . . . . . . . 59
E. Eligibility and Enrollment. . . . . . . . . . . . 59
F. Limitations and Restrictions. . . . . . . . . . . 61
G. Termination or Modification . . . . . . . . . . . 61
24. COST-OF-LIVING ADJUSTMENTS . . . . . . . . . . . . . . 61
A. Effective Date. . . . . . . . . . . . . . . . . . 61
B. Eligibility . . . . . . . . . . . . . . . . . . . 61
C. Pensions and Annuities Adjusted Annually. . . . . 62
D. Percentage of Adjustment. . . . . . . . . . . . . 62
E. Limitation on Adjustments . . . . . . . . . . . . 62
F. Index . . . . . . . . . . . . . . . . . . . . . . 62
G. Cash-Outs . . . . . . . . . . . . . . . . . . . . 63
APPENDIX I - RETIREE HEALTH PROGRAM . . . . . . . . . . . . 64
- iv - 12/28/94
<PAGE>
<PAGE>
THE CONSOLIDATED EDISON RETIREMENT PLAN
FOR MANAGEMENT EMPLOYEES
TABLE OF CONTENTS
Page No.
PART A - BENEFITS. . . . . . . . . . . . . . . . . . . 64
I. HOSPITAL/MEDICAL BENEFITS. . . . . . . . . . 64
II. PRESCRIPTION DRUG BENEFITS . . . . . . . . . 70
III. VISION CARE BENEFITS . . . . . . . . . . . . 72
IV. MODIFICATION OR TERMINATION OF PROGRAM . . . 75
PART B - COSTS . . . . . . . . . . . . . . . . . . . . 76
ACTUARIAL TABLES
Table A. . . . . . . . . . . . . . . . . . . . . . . . 78
Table B. . . . . . . . . . . . . . . . . . . . . . . . 79
Table C. . . . . . . . . . . . . . . . . . . . . . . . 80
Table D. . . . . . . . . . . . . . . . . . . . . . . . 81
Table E. . . . . . . . . . . . . . . . . . . . . . . . 86
Table F. . . . . . . . . . . . . . . . . . . . . . . . 87
- v - 12/28/94
<PAGE>
<PAGE>
The Consolidated Edison
Retirement Plan for Management Employees
________________________________________
1. INTRODUCTION
Effective January 1, 1983, The Consolidated Edison
Retirement Plan for Management Employees (the "Management Plan")
has been adopted by Consolidated Edison Company of New York, Inc.
(the "Company"). The Management Plan establishes the bases upon
which certain benefits, including benefits for service prior to
January 1, 1983, will be provided to employees of the Company on
the management payroll of the Company on or after December 31,
1982, to employees who retired prior to that date as management
employees, and to the eligible surviving spouses of such
employees. Effective January 1, 1983, the Company has amended
The Consolidated Edison Pension and Benefits Plan (the "Weekly
Plan"), which has heretofore included as participants the
employees to be covered by the Management Plan. The Weekly Plan
has been amended so as to avoid duplication of benefits and
coverage. The Management Plan and the Weekly Plan, as amended,
make provision for employees who transfer from the management to
the weekly payroll, or vice-versa.
The Management Plan is intended to qualify under the
requirements of the Internal Revenue Code and to comply with the
provisions of the Employee Retirement Income Security Act of 1974
("ERISA"), any amendments thereto and regulations thereunder;
with the provisions of the Age Discrimination in Employment Act
Amendments of 1978, any amendments thereto and regulations
thereunder; and any other applicable Federal law and regulations.
Effective as of January 1, 1988, the Management Plan is
amended to provide service and benefit accrual beyond Normal
Retirement Age, and to permit persons becoming Employees after
age sixty (60) to participate in the Management Plan and become
entitled to a pension upon attaining Normal Retirement Age. Such
amendments have retroactive effect for all eligible Employees who
terminate their employment with the Company during or after the
month of December 1987. However, the rights of Employees who
terminate employment with the Company prior to December 1987
shall be determined solely by the provisions of the Management
Plan in effect on the date of their termination.
The Management Plan is amended and restated in its entirety,
as amended through December 28, 1994. Except as otherwise
provided herein, this amendment and restatement is effective as
of January 1, 1994, and applies to Employees who have Management
Service on or after that date. Except as so provided, the rights
and benefits of other Employees shall be governed by the prior
provisions of the Management Plan.
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2. DEFINITIONS AND GUIDE TO CONSTRUCTION
A. Definitions
Accredited Service - (a) for service prior to
January 1, 1976, the period of employment by the Company and (b)
for service after December 31, 1975, either: (1) the aggregate
period of employment by the Company prior to Normal Retirement
Date for Employees who terminate such employment prior to
December 1987, or (2) the aggregate period of employment by the
Company to retirement or other termination for Employees who
terminate such employment during or after December 1987;
provided, however, that, unless a Cash-Out or an immediate
pension is elected, a period between cessation of active
employment with the Company by reason of Disability and the
earlier of the end of the Disability or the attainment of Normal
Retirement Age shall also be included in Accredited Service.
Annual Basic Straight-Time Compensation - The
Employee's regular stated rate of pay in the Employee's last pay
period in each calendar year, but shall not include premium
payments, overtime payments, payments under deferred
compensation, incentive or other Company benefit or compensation
plans, or similar payments. In the case of an hourly paid
Employee, the Annual Basic Straight-Time Compensation will be
determined by multiplying the Employee's hourly rate by the
Employee's regular weekly schedule of hours multiplied by
fifty-two (52). Annual Basic Straight-Time Compensation shall be
determined without any deduction for "Pre-Tax Contributions" or
"After-Tax Contributions" made by the Employee pursuant to the
Con Edison Thrift Savings Plan for Management Employees or for
allocations made by or on behalf of the Employee to a Dependent
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Care Reimbursement Account and/or a Health Care Reimbursement
Account pursuant to the Con Edison Flexible Reimbursement Account
Plan. However, effective on and after January 1, 1989 and before
January 1, 1994, Annual Basic Straight-Time Compensation taken
into account for any purpose under the Management Plan shall not
exceed $200,000 per year. Except as provided below, as of
January 1 of each calendar year on and after January 1, 1990 and
before January 1, 1994, the applicable limitation as determined
by the Commissioner of Internal Revenue for that calendar year
shall become effective as the maximum Annual Basic Straight-Time
Compensation to be taken into account for Management Plan
purposes for that calendar year only in lieu of the $200,000
limitation set forth above. Commencing with the Plan Year
beginning in 1994, Annual Basic Straight-Time Compensation taken
into account for any purpose under the Management Plan shall not
exceed $150,000. If for any calendar year after 1994, the cost-
of-living adjustment described in the following sentence is equal
to or greater than $10,000, then the limitation (as previously
adjusted hereunder) for any Plan Year beginning in any subsequent
calendar year shall be increased by the amount of such cost-of-
living adjustment, rounded to the next lowest multiple of
$10,000. The cost-of-living adjustment shall equal the excess of
(i) $150,000 increased by the adjustment made under Section
415(d) of the Code for the calendar year except that the base
period for purposes of Section 415(d)(1)(A) of the Code shall be
the calendar quarter beginning October 1, 1993 over (ii) the
annual dollar limitation in effect for the Plan Year beginning in
the calendar year.
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<PAGE>
In determining the Annual Basic Straight-Time
Compensation of an Employee for purposes of the aforementioned
limitations, if any individual is a member of the family of a 5-
percent owner or of a Highly Compensated Employee in the group
consisting of the 10 Highly Compensated Employees paid the
greatest compensation during the year, then (i) such individual
shall not be considered as a separate employee and (ii) any
Annual Basic Straight-Time Compensation paid to such individual
(and any applicable benefit on behalf of such individual) shall
be treated as if it were paid to (or on behalf of) the 5-percent
owner or Highly Compensated Employee; provided, however, that the
aforementioned term "family" shall include only the spouse of the
Employee and any lineal descendants of the Employee who have not
attained age 19 before the close of the year. If, as a result of
the application of the foregoing family aggregation rules, the
applicable limitation is exceeded, then the limit shall be
prorated among the affected individuals in proportion to each
such individual's Annual Basic Straight-Time Compensation as
determined hereunder prior to the application of the limit.
Annuity - A payment made monthly for the life of
the recipient.
Annuity Starting Date - Unless the Management Plan
expressly provides otherwise, the first day of the first period
for which an amount is due as an annuity or in any other form.
Beneficiary - A lawful spouse of a married
Participant or one or more eligible persons duly designated by a
Participant, who is, are or may become eligible for benefits
under the Management Plan.
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<PAGE>
Benefit Accrual Computation Period - The Plan Year
beginning January 1, 1976 and on each January 1st thereafter.
Break in Service - A period of 12 or more
consecutive months, commencing on a Participant's date of
Severance from Service and ending on the first anniversary of
such date, during which the Participant fails to perform an Hour
of Service. Upon incurring a Break in Service, a Participant's
benefits under this Plan shall be determined using his Accredited
Service at the time the Break in Service is incurred.
Cash-Out - The lump sum distribution, prior to
Normal Retirement Date at the election of the Participant, of the
actuarial equivalent of one hundred percent (100%) of his
nonforfeitable accrued pension benefits under the Management
Plan.
Code - The Internal Revenue Code of 1986, as
amended from time to time.
Defined Benefit Plan - A "defined benefit plan" as
defined in Section 414(j) of the Code which is maintained by the
Company for Employees.
Defined Contribution Plan - A "defined contribution
plan" as defined in Section 414(i) of the Code which is
maintained by the Company for Employees.
Disability - Total and permanent disability which
qualifies the Participant to receive Social Security disability
benefits.
Employee - Any person employed by the Company.
Final Average Salary - The average of Annual Basic
Straight-Time Compensation, to the nearest whole dollar, for the
sixty (60) consecutive months of Accredited Service out of the
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<PAGE>
<PAGE>
last one hundred twenty (120) months of Accredited Service which
produce the highest average. For purposes of this definition
only, a Break in Service shall be ignored and months of
Accredited Service separated by a Break in Service shall be
deemed consecutive.
Highly Compensated Employee - An Employee
classified as a highly compensated employee as determined under
Section 414(q) of the Code and any regulations thereunder.
Notwithstanding the foregoing, for each Plan Year the Plan
Administrator may elect to determine the status of Highly
Compensated Employees under the simplified snapshot method
described in IRS Revenue Procedure 93-42.
Hour of Service - Each Employee will be credited
with an hour of service for:
(1) (a) Each hour for which an Employee is directly or
indirectly paid or entitled to payment by the Company for the
performance of duties and as provided for in paragraph 8 C. These
hours shall be credited to the Employee for the computation
period or periods in which the duties are performed; and
(b) Each hour for which an Employee is directly or
indirectly paid or entitled to payment by the Company for reasons
(such as vacation, sickness or disability) other than for the
performance of duties. These hours shall be credited to the
Employee for the computation period or periods in which payment
is made or amounts payable to the Employee become due; and
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<PAGE>
(c) Each hour for which back pay, irrespective of
mitigation of damage, has been either awarded or agreed to by the
Company. These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment was made; and
(2) the following equivalencies shall be used for the
purpose of crediting hours of service for those Participants for
whom hours of service are not maintained:
(a) one day of employment equals ten (10) Hours of
Service
(b) one week of employment equals forty-five (45) Hours
of Service
(c) one month of employment equals one hundred and
ninety (190) Hours of Service.
For purposes of crediting hours for non-performance of
duties, such hours shall be credited in accordance with
Department of Labor Regulation 2530. 200 b - 2 (c).
Layoff (or laid off) - As used in the Management
Plan, shall mean the separation of an Employee from the active
payroll for lack of work or such other reason, in no way the
fault of the Employee, as may be determined by the Company.
7 12/28/94
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<PAGE>
Leased Employee - Any person who in accordance with
an agreement between the Company and any other person has
performed services of a type historically performed by employees
in the public utility industry, on a substantially full-time
basis for a period of at least one year. A Leased Employee shall
be treated as an employee of the Company but shall not be
eligible for participation in the Management Plan.
Management Employee - An Employee on the Company's
management payroll.
Management Service - (a) Accredited Service as a
Management Employee on or after January 1, 1983.
(b) Accredited Service prior to January 1, 1983 by an
Employee who was a Management Employee on December 31, 1982.
(c) Accredited Service prior to termination by an
Employee whose employment by the Company terminated prior to
January 1, 1983 and who was a Management Employee at the time of
such termination.
1983-1989 Participants - (a) Participants in the
Management Plan who (i) were first hired by the Company on or
after January 1, 1983 and (ii) were on the Company's active
payroll at any time during the period from January 1, 1989
through December 31, 1989, and (b) Participants who (i) were
first hired by the Company on or after January 1, 1983, (ii) were
on the Company's active payroll at any time, and terminated with
vested rights, during the period from January 1, 1989 through
December 31, 1989, and (iii) are thereafter reemployed and either
8 12/28/94
<PAGE>
<PAGE>
regain their vested rights pursuant to paragraph 5 F or did not
begin to receive a pension hereunder prior to such reemployment.
Normal Retirement Age - The later of the
Participant's attaining age sixty-five (65) and the fifth
anniversary of the Participant's participation in the Management
Plan.
Normal Retirement Date - The first day of the month
immediately following the later of the Participant's attainment
of age sixty-five (65) and the fifth anniversary of the
Participant's participation in the Management Plan.
One Year Break in Service - Any Vesting Computation
Period in which a Participant has not completed more than 500
Hours of Service.
Participant - Effective January 1, 1988, an
Employee, or a former Employee with a vested right, who is or
becomes eligible for benefits under the Management Plan.
Pension - A payment made monthly for life to an
eligible Participant.
Plan Year - A twelve month period beginning January
1, 1976 and on each January 1st there- after.
Post-1989 Participants - Participants in the
Management Plan who are first hired by the Company on or after
January 1, 1990.
Pre-1983 Participants - (a) Participants in the
Management Plan who were in the employ of the Company on December
31, 1982 and were on the Company's active payroll at any time
during the period from January 1, 1989 through December 31, 1989,
and (b) Participants who terminated with vested rights prior to
December 31, 1982, are reemployed after the date, and either
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<PAGE>
regain their vested rights pursuant to paragraph 5 F or did not
begin to receive a pension hereunder prior to such reemployment.
Projected Retirement Date - For Participants whose
age plus Accredited Service total at least seventy-five (75) at
date of retirement or termination, the later of:
(a) The first day of the month following actual
retirement or termination.
(b) The first day of the month following attainment of
age sixty-two (62).
For Participants whose age plus Accredited Service
total less than seventy- five (75) at date of retirement or
termination, Projected Retirement Date is the first day of the
month following attainment of age sixty-five (65).
Projected Service - The total of all Management
Service for a Participant assuming he continued in employment
with the Company as a Management Employee to Projected Retirement
Date.
Service - Service as an Employee.
Severance from Service - The earlier of:
(a) the date on which an Employee quits, is
discharged, retires or dies, and
(b) the date 12 months following the first date on
which an Employee is absent for any reason other than quit,
discharge, retirement or death.
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<PAGE>
Social Security Benefit - The estimated amount of
annual primary insurance benefit payable at age sixty-five (65)
under Title II of the Federal Social Security Act, as determined
under reasonable rules uniformly applied in accordance with the
terms of the Management Plan, on the basis of such Act as in
effect at the time of retirement or other termination, to which a
Participant is or would be entitled, even if the Participant does
not receive such benefit because of his failure to apply or
because he is ineligible by reason of earnings he may be
receiving. In determining the Participant's Social Security
Benefit in the event of retirement or termination at or after age
sixty-two (62), it shall be assumed that the Participant has no
further covered earnings after termination of employment. In
determining the Participant's Social Security Benefit in the
event of retirement or termination prior to age sixty-two (62),
it shall be assumed that the Participant continued in service to
age sixty-five (65) at his or her Annual Basic Straight-Time
Compensation at the termination of the Participant's employ- ment
with the Company. If a cost-of- living increase in Social
Security benefits has been put into effect within the 12-month
period preceding the date of determination and such increase
exceeds 3%, it is assumed that the increase is being phased in
over 12 months, beginning with the effective date of the
increase, at the rate of 1/12th of the increase per month. Actual
earnings reported on Form W-2 shall be used for calculating each
Participant's Social Security Benefit. For Participants whose
actual W-2 earnings are not available the Plan Administrator
shall adopt and utilize rules and procedures for estimating such
earnings, provided, however, that any backwards salary scale
projection shall utilize a level percentage per year of not less
11 12/28/94
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than 6%. All Participants shall be notified of their right to
provide their actual salary history from the Social Security
Administration, and of their right to have their benefits
adjusted to reflect a Social Security Benefit based on actual
salary history. Such notice shall also advise Participants that
their Social Security Benefit will be based on salary estimates
calculated by the Company, if they fail to provide actual salary
history. This notice shall be included in the Summary Plan
Description of the Management Plan, and shall also be furnished
to each Participant not later than the later of his Severance
from Service or notification to the Participant of his benefits.
Social Security Retirement Age - Social Security
Retirement Age means age 65 in the case of a Participant born
before January 1, 1938, age 66 for a Participant born after
December 31, 1937 but before January 1, 1955, and age 67 for a
Participant born after December 31, 1954.
Social Security Taxable Wage Base - The
contribution and benefit base in effect under Section 230 of the
Social Security Act at the beginning of the Plan Year in which
the Participant's termination of employment occurs.
Total Salary - The aggregate of the Annual Basic
Straight-Time Compensation, to the nearest whole dollar, of an
Employee for his years of Management Service, not to exceed the
last thirty (30) years of employment, provided, however, that
only years of employment prior to Normal Retirement Date shall be
included for this purpose in the case of an Employee who
terminates employment with the Company prior to December 1987.
The Annual Basic Straight-Time Compensation for any period of
Management Service shall be considered to be not less than such
12 12/28/94
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<PAGE>
compensation as was applicable to the Employee for the fourteenth
(14th) accredited calendar year prior to the calendar year of his
retirement, but in no event less than three thousand dollars
($3,000); and for an Employee whose Annual Basic Straight-Time
Compensation at the time of retirement is at a rate of three
thousand dollars ($3,000) or less, the Annual Basic Straight-Time
Compensation for any period of Management Service shall be
considered to be not less than an annual amount determined at the
rate of his Annual Basic Straight-Time Compensation at the time
of retirement.
Vesting Computation Period - The Plan Year
beginning January 1, 1976 and on each January 1st thereafter.
Vesting Service - Year of Vesting Service - A Plan
Year during which an Employee has completed at least 1000 Hours
of Service, or as provided in paragraph 8 A(1)(b).
Weekly Employee - An Employee on the Company's
weekly payroll.
Weekly Service - Accredited Service other than
Management Service.
B. Guide to Construction
(1) The masculine gender, where appearing in the
Management Plan, shall be deemed to include the feminine gender.
3. PARTICIPATION
A. Application of the Management Plan
If the effective date of a Participant's retirement, as
determined under paragraph 9, shall be prior to January 1, 1983,
the benefits to which the Participant shall be entitled shall be
determined under The Consolidated Edison Pension and Benefits
Plan as amended through December 31, 1982. The benefits to which
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<PAGE>
all other Participants shall be entitled shall be determined
under the Management Plan as in effect at the time of the
Participant's termination of employment, and such benefits shall
not be affected by the terms of any amendments to the Management
Plan adopted or effective after the Participant's termination of
employment unless otherwise expressly provided by the amendment
or otherwise required by law.
B. Maximum Age for Participation
Effective January 1, 1988, there is no maximum age at which
an Employee may commence participation in the Management Plan.
Any Employee who is on the Company's Management payroll on
January 1, 1988 shall be a Participant in the Management Plan for
all purposes with respect to all service with the Company before,
on and after January 1, 1988, regardless of such Employee's age
at the time his employment commenced.
4. MANDATORY RETIREMENT
Any Employee who is exempt from the provisions of The Age
Discrimination in Employment Act of 1967, as heretofore and
hereafter amended (because he or she is employed in a bona fide
executive or a high policy making position and otherwise
satisfies the conditions permitting exemption), may be
mandatorily retired from the service of the Company after
attaining Normal Retirement Age, and each such Employee's
Mandatory Retirement Date shall be his Normal Retirement Date.
Each Employee not subject to the foregoing paragraph who
shall attain age 70 on or before December 31, 1985 shall be
retired from Service on the last day of the month in which age 70
is attained, and each such Employee's Mandatory Retirement Date
shall be the first day of the month following his attainment of
age 70.
5. ELIGIBILITY FOR A RETIREMENT PENSION
A. Retirement at Age 60 or Later
A Participant who shall have completed such years of
Accredited Service which when added to his years of age total not
less than seventy-five (75), and who shall have attained the age
of 60 years, shall, upon filing a written application with the
Company, be retired hereunder from the service of the Company and
be entitled to a pension computed in accordance with paragraph 10
B(1). Such election shall not be revocable on or after the
Participant's Annuity Starting Date.
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B. Early Optional Retirement
A Participant who shall have attained an age which when
added to his years of Accredited Service shall total not less
than seventy-five (75) shall, upon filing a written application
with the Company, be retired from the service of the Company and
be entitled to a pension computed in accordance with paragraph 10
B(2). Such election shall not be revocable on or after the
Participant's Annuity Starting Date.
C. Retirement or Termination for Disability
(1) A Participant, prior to having attained Normal
Retirement Age, whose active employment with the Company ceases
because of Disability, shall be eligible for a deferred pension
beginning at Normal Retirement Age if the Participant was a
Management Employee at the time of such cessation. Such pension
will be determined as if such Participant had been continuously
employed as a Management Employee for the period from such
cessation to the earlier of the end of the Disability or Normal
Retirement Age at the Annual Basic Straight-Time Compensation in
effect during the last pay period prior to such cessation. A
Participant who is eligible for a deferred pension under this
paragraph 5 C(1) may, if eligible, instead elect a benefit under
paragraph 5 C(2).
(2) A Participant who becomes disabled, but does not
qualify for Social Security disability benefits may, if the
Company shall so determine, be retired or terminated from the
service of the Company. (i) Effective September 1, 1992, if such
Participant becomes disabled after attaining age fifty (50) and
completing at least twenty (20) years of Service, such
Participant shall be entitled to an immediate pension calculated
under paragraph 10 B. based upon Total Salary or Final Average
Salary, as the case may be, and years of Accredited Service to
the date of retirement or termination for disability, but without
reduction because such pension shall commence earlier than age
sixty (60). (ii) If such disabled Participant is not entitled to
an unreduced pension under (i), the Participant may be eligible
for a disability annuity pursuant to paragraph 10 B(3) or a
deferred pension (or a Cash-Out of his deferred pension)
depending on his age and years of Accredited Service, as
hereinafter provided.
D. Termination of Service in the Discretion of the Company
and Voluntary Termination
A Participant who acquires a vested right to his accrued
pension prior to having attained Normal Retirement Age, and who
terminates voluntarily or whose service is terminated by the
Company will be eligible for a pension if his age plus years of
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Accredited Service shall total not less than seventy-five (75),
or a deferred pension (or a Cash-Out of his deferred pension) if
his age plus years of Accredited Service shall total less than
seventy-five (75).
E. Cash-Out of Deferred Pension
A Participant whose age plus years of Accredited Service
equal less than seventy-five (75) and who on termination of
service with the Company has vested rights, may, in lieu of a
deferred pension, elect a Cash-Out or an immediate annuity of the
value of his pension payable at the attainment of Normal
Retirement Age. A Participant who elects a Cash-Out and who is
married at the time of his Annuity Starting Date must provide his
spouse's written consent to the Cash-Out, on a form furnished by
the Plan Administrator which consent must be witnessed by a
Notary Public. Any such election of a Cash-Out or an immediate
annuity and any spousal consent must be made not more than 90
days nor less than 30 days before the Participant's Annuity
Starting Date.
F. Repayment of Cash-Out
A Participant who has Cashed-Out his vested rights and is
subsequently reemployed may regain his vested rights for the
period of Service on which the Cash-Out was based by paying to
the trust the full amount of such Cash-Out with interest at the
rate of interest used for actuarial valuation of the Management
Plan at the time of the Cash-Out, compounded annually from the
date of Cash-Out to the date of repayment. However, in no event
shall such interest rate exceed 120% of the Federal mid-term rate
in effect at the beginning of the Plan Year in which the
repayment is made. Such Participant may make all or part of such
repayment by making a rollover contribution, as defined in
Section 408(d)(3) of the Code, of cash only from an Individual
Retirement Account and/or a transfer of cash only from another
plan qualified under Section 401(a) of the Code.
Vested right for any of such prior Service will be suspended
until the Cash-Out is fully repaid. However, any of the years of
Accredited Service following reemployment will be vested.
G. Age and Service Required for a Retirement Pension
Except as otherwise provided under paragraph 5 C, only a
Participant whose age plus years of Accredited Service equals not
less than seventy-five (75) or a Management Employee who attains
Normal Retirement Age shall be entitled to retire and receive a
retirement Pension under the Management Plan. For any purposes
under the Management Plan for which it is necessary to determine
whether a Participant's age plus years of Accredited Service
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equals seventy-five (75) or more, the Participant's age and years
of Accredited Service shall each be rounded to the nearest whole
number.
H. Entitlement to Retirement Benefits
A Participant shall become one hundred percent (100%)
nonforfeitably vested in his accrued benefits upon his attainment
of Normal Retirement Age, regardless of his Years of Vesting
Service at that time.
6. SURVIVING SPOUSE BENEFITS; OPTIONAL TEN YEAR CERTAIN PENSION
A. Joint & Survivor Annuity
Each Participant who retires under the Management Plan shall
be entitled to receive a Pension calculated under paragraph 10
and upon such retired Participant's death, his surviving spouse,
if any, who meets the requirements set forth in paragraph 6 C.
below shall be entitled to receive an Annuity commencing the
first day of the month following the death. The amount of the
Annuity shall be calculated under paragraph 10 B(4) unless the
Participant has elected the Optional Ten Year Certain Pension
provided below. There shall be no reduction in the Participant's
Pension to provide the surviving spouse Annuity.
B. Preretirement Surviving Spouse Benefits
( i) The surviving spouse of a Participant on the active
payroll or on leave of absence for any reason whose age together
with years of Accredited Service total seventy-five (75) or more,
and the surviving spouse of a Participant who is a former
Employee eligible for an immediate Pension under paragraph 5 D or
5 G, shall be entitled to receive a preretirement survivor
Annuity upon the death of the Participant before commencement of
a Pension. The amount and commencement of payment of the
preretirement survivor Annuity shall be determined as provided
under paragraph 10 B(5)(i).
( ii) The surviving spouse of a Participant on the active
payroll or on leave of absence for any reason whose age together
with years of Accredited Service total less than seventy-five
(75), and the surviving spouse of a Participant who is a former
Employee eligible for a deferred pension under paragraph 5 D and
whose age at death together with years of Accredited Service
total less than seventy-five (75), shall be entitled to receive
the preretirement survivor benefit as provided under paragraph 10
B(5)(ii).
(iii) For purposes of calculating the preretirement
surviving spouse benefits provided under paragraphs 6 B(i) and
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(ii) above, there shall be no reduction in the amount of the
deceased Participant's Pension which is the basis for such
calculation.
C. Marriage Requirements for Surviving Spouse Benefits
(a) In order to qualify for a survivor Annuity upon the
death of a retired Participant who has commenced to receive a
Pension under the Management Plan, a spouse must have been
lawfully married to the retired Participant on the Participant's
Annuity Starting Date and must survive the retired Participant.
(b) In order to qualify for a preretirement survivor
benefit under paragraph 6 B above, a deceased Participant's
spouse must have been lawfully married to the deceased
Participant on the date of death, and must survive the deceased
Participant.
(c) The Plan Administrator may request evidence of marriage
from any surviving spouse, and payments of surviving spouse
benefits shall not commence until satisfactory evidence is
provided by or on behalf of the surviving spouse.
D. Optional Ten Year Certain Pension For Unmarried
Retirees
Effective February 1, 1988, a Participant who is not married
may elect to receive his Pension in the form of a ten year
certain option. Such election must be made not less than 30 days
nor more than 90 days prior to the Participant's Annuity Starting
Date and must be in writing on a form furnished by and filed with
the Plan Administrator. A ten year certain option provides for
the life of the Participant a Pension reduced by the appropriate
factor in Table C, but guarantees that a minimum of one hundred
twenty (120) monthly payments will be made. Any of such one
hundred twenty (120) payments which are payable after the
Participant's death shall be paid to one or more Beneficiaries
designated by such Participant, or to the Participant's estate if
the Participant has failed to designate a Beneficiary or has
failed to designate a new Beneficiary when the designated
Beneficiary predeceases the Participant. The Participant's
estate shall also receive any of the 120 guaranteed payments
which remain to be paid following the death of all designated
Beneficiaries. If the Participant's estate is to receive any
payments under this paragraph 6 D, the Management Plan may, upon
request of the legal representative of the estate, pay to the
estate the present value of all remaining payments, discounted by
the rate utilized to calculate the factors set forth on Table C
as in effect on the date of Participant's death.
The Participant's election to take the ten year certain
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option may be revoked at any time up to, but not after, his
Annuity Starting Date, and shall automatically be revoked if he
marries prior to his Annuity Starting Date. The Participant's
election of the ten year certain option shall become effective on
the Participant's Annuity Starting Date. If the Participant dies
before his Annuity Starting Date, the ten year certain option
will not become effective.
E. Optional Ten Year Certain Pension For Married Retirees
Effective July 1, 1988, a Participant who is married may
elect to receive his Pension in the form of a ten year certain
option. Such election must be made not less than 30 days nor
more than 90 days prior to the Participant's Annuity Starting
Date and must be in writing on a form furnished by and filed with
the Plan Administrator, and must include the written consent of
the Participant's spouse witnessed by a Notary Public. This
option provides for the life of the married Participant a Pension
reduced by the appropriate factor in Table D, but guarantees that
a minimum of one hundred twenty (120) monthly payments will be
made. Any of such 120 payments which are payable after the
Participant's death shall be paid to the Participant's spouse
and, if such spouse does not survive for the full ten years
following the Participant's Annuity Starting Date, to one or more
Beneficiaries designated by such Participant. If the
Participant's spouse dies before all of the 120 payments have
been made and the Participant has failed to designate a
Beneficiary, or if the Participant's spouse and all designated
Beneficiaries die before all of the 120 payments have been made,
any of the 120 payments remaining after the Participant's death
shall be paid to the Participant's estate. If the Participant's
estate is to receive any payments under this paragraph 6 E, the
Management Plan may, upon request of the legal representative of
the estate, pay to the estate the present value of all remaining
payments, discounted by the rate utilized to calculate the
factors set forth on Table D as in effect on the date of the
Participant's death.
At the end of ten years following the married Participant's
Annuity Starting Date, the guarantee of one hundred twenty
payments shall expire, whether or not any payments have been made
to the Participant's spouse and/or Beneficiaries. However, if
the Participant and/or the Participant's spouse survive for more
than ten years after the Participant's Annuity Starting Date and
such spouse survives the Participant, such spouse shall receive
for life, commencing after the later of the expiration of ten
years after the Participant's Annuity Starting Date or the
Participant's death, a surviving spouse annuity equal to fifty
percent of the reduced ten year certain Pension elected by the
Participant with the spouse's consent in accordance with this
paragraph 6 E.
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The Participant's election to take the ten year certain
option may be revoked at any time up to, but not after, his
Annuity Starting Date. The Participant's election of the ten
year certain option shall become effective on the Participant's
Annuity Starting Date. If the Participant dies before his
Annuity Starting Date, the ten year certain option will not
become effective.
F. Optional Ten Year Certain Pension For Former Participants
Eligible For Deferred Pensions Under Paragraph 5 C(1)
Effective July 1, 1988, a Participant who is eligible for a
deferred Pension under paragraph 5 C(1) may elect to receive his
Pension in the form of a ten year certain option. Such election
must be made not less than 30 days nor more than 90 days prior to
the Participant's Annuity Starting Date and must be in writing on
a form furnished by and filed with the Plan Administrator, and,
if the Participant is married at the time the election is made,
must include the written consent of the Participant's spouse
witnessed by a Notary Public. This option provides for the life
of the Participant a Pension reduced by the appropriate factor in
Table C for an unmarried Participant or Table D for a married
Participant, but guarantees that a minimum of one hundred twenty
(120) monthly payments will be made commencing in the month
following the Participant's retirement or death. Any of such 120
payments which are payable after the Participant's death shall be
paid as provided in paragraph 6 D if the Participant was not
married at the time Annuity Starting Date or as provided in
paragraph 6 E if the Participant was married at the Annuity
Starting Date. If the Participant's estate is to receive any
payments under this paragraph 6 F, the Management Plan may, upon
request of the legal representative of the estate, pay to the
estate the present value of all remaining payments, discounted by
the rate utilized to calculate the factors set forth on Table C
or Table D (whichever Table is applicable) as in effect on the
date of the Participant's death.
The Participant's election to take the ten year certain
option may be revoked at any time up to, but not after, his
Annuity Starting Date, and shall automatically be revoked if he
marries prior to his Annuity Starting Date, unless the
Participant's spouse consents to the election. The Participant's
election of the ten year certain option shall become effective on
the Participant's Annuity Starting Date. The election shall
become irrevocable upon the Participant's Annuity Starting Date,
and the amount of the reduced Pension shall be determined as of
the Participant's Annuity Starting Date. If the Participant dies
before the Annuity Starting Date, the ten year certain option
will not become effective.
20 12/28/94
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7. VESTING
A. Vested Rights
In addition to vesting rights described in paragraph 5 H, a
Participant who completes five (5) or more years of Vesting
Service will have a nonforfeitable right of one hundred percent
(100%) of his accrued pension payable at or after his Normal
Retirement Date.
B. Accrued Pension
The accrued pension is a pension which is or would be
payable, based on the Employee's Final Average Salary, or Total
Salary, as the case may be, and years of Accredited Service as of
the date the computation is made.
C. Conditions Under Which Vested Benefits Will Not Be Paid
In no event will a Participant receive a deferred monthly
pension if:
(a) He dies before retirement and his spouse is not
entitled to benefits under paragraph 6, or
(b) He has received a Cash-Out from the Management
Plan.
If a Participant entitled to a deferred pension, or a
Beneficiary, fails to make application for a deferred pension or
a related benefit on or before the date when either the
Participant or Beneficiary would otherwise be entitled to the
benefit, no payment will commence before application is made, but
no such failure to make an application shall result in the
forfeiture of any deferred pension or benefit.
8. SERVICE CREDIT
A. Determination of Vesting Service
Vesting Service shall be determined as follows:
1. (a) Prior to January 1, 1976
Within each calendar year the number of months that the
Employee is employed by the Company in other than a temporary
status will be added and if the total number of months is six (6)
or more, the Employee will be credited with one (1) year of
Vesting Service. A fraction of a month will be counted as one
(1) month.
(b) After December 31, 1975
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In accordance with the definition of Vesting Service,
paragraph 2 A of the Management Plan, or if more favorable to the
Participant, one year of Vesting Service if the Participant is
employed by the Company in continuous employment during any
calendar year for six months during the year.
2. The retention or loss of Vesting Service because of
Breaks in Service shall be determined in accordance with
paragraph 8 D.
B. Determination of Accredited Service for Computation of
a Pension
1. (a) For Service Prior to January 1, 1976
Accredited Service for the computation of pension will
be the total of the months and years of service the Employee was
continuously in the employ of the Company in other than a
temporary status. For the purpose of determining service credit,
a fraction of a month will be credited as one (1) month. Each
period of Accredited Service will be added and the total of such
service will be used in computing the pension.
(b) For Service After December 31, 1975
1. The aggregate period of employment to the date of
Severance from Service, subject to the Rule of Parity provisions
in paragraph 8 D. In addition, if an Employee incurs a Severance
from Service by reason of a quit, discharge or retirement and
subsequently performs an Hour of Service, the period of severance
shall not be counted as Accredited Service.
2. Employees who have acquired five (5) years of
Accredited Service shall be credited with all additional years
and months of service with the Company regardless of a subsequent
Break in Service. However, no period constituting a period of
severance will be included in the period of Accredited Service
for computation of a pension.
3. If an allowance has been paid under the provisions
of the Company's former Pension Plan for Retirement for Age or
the Company's former Employees Security Plan (the "plans"), based
upon Accredited Service performed prior to August 1, 1975 and
such period of Accredited Service is included in the computation
of a pension under the Management Plan, the actuarial present
value of the pension so computed will be reduced by the total of
such allowance payments. The resulting present value, as so
reduced, of the pension will be the basis for determining the
monthly pension.
22 12/28/94
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4. The application of the foregoing provisions solely
as they pertain to Accredited Service prior to the effective date
of the Management Plan shall not be interpreted so as to reduce
the years and months of Accredited Service which would have been
used in the computation of the Employees's pension under the
provisions of the plans.
5. The effect of a Cash-Out of vested rights on
Accredited Service will be to deny credit for such Accredited
Service until the Cash-Out is fully repaid, as provided in
paragraph 5 F.
6. A Participant receiving a pension or annuity under
the Management Plan or the plans will, if reemployed after August
1, 1975, continue to receive such pension or annuity payments
during the period of employment. Upon subsequent retirement,
there will be payable to such participant an addition to his
pension or annuity based on the service accredited from the date
of reemployment. Pension or annuity payments suspended under the
provisions of the plans applicable to employees who were
reemployed prior to August 1, 1975 shall continue to be suspended
and shall otherwise be subject to the provisions of the plans and
Title 29 of the Code of Federal Regulations, Section 2530.203-3.
C. Other Service Recognized for Vesting or Computation of
a Pension
Accredited Service and Vesting Service shall include periods
of interruptions in service due to:
1. To the extent required by law, active military,
naval, marine or related service of the United States or the
State of New York, or leaves of absence granted pursuant to
Company policy for World War II defense employment (1941-1946);
2. Absence because of illness under sick leave
granted; or
3. Absence under leave granted for any other reason,
for time not exceeding a total of six (6) months.
D. Additional Rules for Accumulation of Service Credit
For purposes of this paragraph 8 D, a "period of severance"
means a continuous period of time during which an individual is
not on the active payroll of the Company, which period shall
commence upon such individual's Severance from Service. The
following rules shall govern crediting of Service under the
Management Plan:
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( i) For purposes of determining an Employee's
initial or continued eligibility to participate in the Management
Plan or his nonforfeitable right to a Pension, an Employee will
receive credit for the aggregate of all time period(s) commencing
with the Employee's first day of employment or reemployment by
the Company and ending on the date a Break in Service begins,
except for the periods of Service which may be disregarded on
account of the "rule of parity" described in subsection (iii).
The first day of such employment or reemployment is the first day
the Employee performs an Hour of Service.
( ii) In the case of an individual who is absent from
work for maternity or paternity reasons or for reasons covered by
the Family and Medical Leave Act of 1993 ("FMLA"), the period up
to the first anniversary of the first day of such absence shall
constitute Service for purposes of vesting and eligibility for
benefits under the Management Plan, but shall not constitute
Service for accrual or computation of such benefits. If such
period of absence for maternity or paternity or FMLA reasons
extends beyond the first anniversary of the first day of such
absence, the period up to the second anniversary shall constitute
neither Service nor a Break in Service, and any further absence
shall constitute a period of severance and a Break in Service
commencing on such second anniversary. For purposes of this
paragraph, (x) an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
Employee (2) by reason of the birth of a child of the Employee
(3) by reason of the placement of a child with the Employee in
connection with the adoption of such child by the Employee or (4)
for purposes of caring for such child for a period beginning
immediately following such birth or placement, and (y) an absence
for reasons covered by the FMLA means (1) for the birth of a
child or the placement of a child with the Employee for adoption
or foster care, (2) for purposes of caring for a spouse, child or
parent with a serious health condition, or (3) for the Employee's
own serious health condition, pursuant to the FMLA and
regulations thereunder.
(iii) In the case of a Participant who has 5 or more
consecutive one year Breaks in Service the following "rule of
parity" shall apply:
(a) all Service after such Breaks in Service
will be disregarded for the purpose of vesting any benefits
accrued before such Breaks in Service.
24 12/28/94
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(b) the Participant's pre-break Service will
count in vesting benefits accruing after the Break in Service,
only if either:
(1) such Participant had a vested right to a Pension
at the beginning of the Break in Service; or
(2) upon returning to Service the number of
consecutive one year Breaks in Service is less than the number of
years of Service.
Pre-break Service which, under this "rule of parity", is not
required to be counted for vesting purposes following a
particular Break in Service, shall not be counted for such
purposes following any subsequent Break in Service.
The foregoing notwithstanding, a Participant shall not lose
Vesting Service accrued prior to a Break in Service if the Break
in Service resulted from layoff or disability (whether or not
constituting Disability as defined in paragraph 2 A of the
Management Plan).
9. EFFECTIVE DATE OF RETIREMENT AND COMMENCEMENT OF BENEFIT
PAYMENTS
A. The effective date of a Participant's retirement and,
unless the Participant shall elect otherwise, the date benefit
payments commence, shall be the first day of the calendar month
next following the effective date of the separation of the
Participant from the active payroll, except that, in the case of
Participant entitled to a deferred pension under paragraph 5 C(1)
because of Disability, the effective date of retirement and the
date benefit payments commence shall be such Participant's Normal
Retirement Date.
B. Except as otherwise provided in the Management Plan,
benefit payments shall commence not later than the 60th day after
the close of the Plan Year in which the later of the following
events occurs: (a) the Participant attains his Normal Retirement
Date or (b) the termination of the Participant's service with the
Company. If a Participant's Service continues after his Normal
Retirement Date and such Service constitutes Section 203(a)(3)(B)
Service (as defined below), the Participant's benefits will be
suspended and the Participant shall be notified of the suspension
as provided in Title 29, Code of Federal Regulations Section
2530.203-3. In accordance with such regulations, "Section
203(a)(3)(B) Service" shall be determined on a monthly basis and
a Participant shall be deemed to be in Section 203(a)(3)(B)
Service in any month in which he shall receive payment from the
Company for at least eight days of service during that month.
Benefits which are suspended in accordance with this provision
25 12/28/94
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shall be paid for any month in which the Participant is not
considered to be in Section 203(a)(3)(B) Service.
C. Notwithstanding the foregoing, a Participant not
receiving benefit payments under the Management Plan who attains
age 70 1/2 shall commence receiving benefits as set forth below
in the form of a life annuity and such commencement shall not be
considered the Participant's Annuity Starting Date:
(a) Subject to subdivisions (b) and (c) below, the
first day of April of the calendar year following the calendar
year in which the Participant attains age 70 1/2.
(b) For a Participant who attains age 70 1/2 before
January 1, 1988, the date determined in accordance with (1) and
(2) below:
(1) For a Participant who is not a 5 percent
owner, the first day of April of the calendar year following the
calendar year in which the later of retirement or age 70 1/2
occur.
(2) For a Participant who is a 5 percent owner,
the first day of April following the later of (x) the calendar
year in which the Participant attains age 70 1/2, or (y) the
earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a 5 percent owner, or the
calendar year in which the Participant retires.
(c) The date for a Participant who is not a 5 percent
owner and who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
(d) A Participant is treated as a 5 percent owner for
purposes of this paragraph 9 C if such Participant is a 5 percent
owner (as defined in Section 416(i) of the Code) at any time
during the Plan Year ending with or within the calendar year in
which such owner attains age 66 1/2 or any subsequent Plan Year.
(e) The benefit of any Participant who commences
receiving any benefit payments under the paragraph 9 C and who
nonetheless continues to accrue years of Accredited Service shall
be adjusted each calendar year as of the last day of such year to
account for such accruals; provided, however, that such accruals
shall be offset (but not below zero) by the actuarial equivalent
of the payments made by the Management Plan during such calendar
year.
D. Notwithstanding any provision in the Management Plan to
the contrary, all distributions under the Management Plan shall
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be made in accordance with the requirements of Section 401(a)(9)
of the Code and the regulations thereunder, including the
incidental death benefit provisions of Section 401(a)(9)(G) of
the Code. The provisions of this Section override any provision
of the Management Plan that is inconsistent with Section
401(a)(9) of the Code.
10. COMPUTATION OF BENEFITS
A. Computation of Annual Pension - The annual normal amount
of pension payable upon retirement at a Participant's Normal
Retirement Date will be equal to:
1. For Post-1989 Participants:
1.50% of the Participant's Final Average Salary for
each year of Management Service up to and including 24 years,
plus 2.00% of the Participant's Final Average Salary for each
year of the Participant's Management Service from and including
the 25th to and including the 30th year,
plus
0.35% of the Participant's Final Average Salary in
excess of the Social Security Taxable Wage Base for each year of
Management Service up to a maximum of 30 years,
plus
0.50% of the Participant's Final Average Salary for
each year of Management Service in excess of 30 years.
2. For 1983-1989 Participants, the greater of:
(a) The pension determined in accordance with
paragraph 10 A1. above, or
(b) The pension determined in accordance with the
following formula applied as if the Participant had terminated
employment on the earlier of the date of the Participant's actual
termination of employment or December 31, 1989; provided,
however, that for such Participants who are Highly Compensated
Employees within the meaning of Section 414(q)(1)(B) of the Code,
the formula shall be applied as if the Participant terminated
employment on the earlier of the date of the Participant's actual
termination of employment or December 31, 1988:
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1.833% of the Participant's Final Average Salary
for each year of Management Service up to a maximum of 30 years,
minus
1.666% of the Participant's Social Security Benefit
for each year of Management Service up to a maximum of 30 years,
plus
0.50% of the Participant's Final Average Salary for
each year of Management Service in excess of 30.
3. For Pre-1983 Participants, the greater of:
(a) The pension determined in accordance with
paragraph 10 A2. above, or
(b) The pension determined by computing 2.2% of
Total Salary, and by increasing the resulting pension by 0.125%
for each calendar month of Management Service in excess of 30
years.
B. Computation of Pension, Annuities, or Benefits Based
Upon Annual Pension
The following pensions, annuities or benefits as specified,
will be based upon the annual pension determined in accordance
with paragraph 10 A. In the event a pension, deferred pension or
annuity shall have a present value of $3500 or less, such present
value shall be paid in a single lump sum to the Participant or
surviving spouse in lieu of the pension, deferred pension or
annuity; provided, however, that in no event shall the interest
rate utilized in determining such lump sum amount exceed the
interest rate, either immediate or deferred, utilized by the
Pension Benefit Guaranty Corporation on the first day of the
month immediately preceding the Participant's Annuity Starting
Date for valuing a lump sum distribution upon plan termination.
The following computations apply only to an Employee who
terminates with vested rights but whose age when added to his
years of Accredited Service at termination is equal to
seventy-five (75) or more.
(1) Retirement at Age Sixty (60) or Later
The pension payable to an Employee retiring at age
sixty (60) or later will be the amount determined as follows:
(a) For Post-1989 Participants:
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( i) 1.50% of the Participant's Final
Average Salary for each year of Management Service up to and
including 24 years, plus 2.00% of the Participant's Final Average
Salary for each year of the Participant's Management Service from
and including the 25th to and including the 30th year,
plus
( ii) 0.35% of the Participant's Final
Average Salary in excess of the Social Security Taxable Wage Base
for each year of Management Service up to a maximum of 30 years,
multiplied by the appropriate discount factor in Table E if
payment of the benefit commences prior to the Participant's
Normal Retirement Age,
plus
(iii) 0.50% of the Participant's Final
Average Salary for each year of the Participant's Management
Service in excess of 30 years.
(b) For 1983-1989 Participants, the greater of:
( i) The pension determined in accordance
with paragraph 10 B(1)(a) above, or
( ii) The pension determined in accordance
with the following formula applied as if the Participant had
terminated employment on the earlier of the date of the
Participant's actual termination of employment or December 31,
1989; provided, however, that for such Participants who are
Highly Compensated Employees within the meaning of Section
414(q)(1)(B) of the Code, the formula shall be applied as if the
Participant had terminated employment on the earlier of the date
of the Participant's actual termination of employment or December
31, 1988:
(x) For Participants retiring at age sixty-
two (62) or later 1.833% of the Participant's Final Average
Salary for each year of Management Service up to a maximum of 30
years,
minus
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1.666% of the Participant's Social Security Benefit
for each year of Management Service up to a maximum of 30 years,
plus
0.50% of the Participant's Final Average Salary for
each year of Management Service in excess of 30.
(y) For Participants retiring between age sixty
(60) and prior to age sixty-two (62) - 1.833% of the
Participant's Final Average Salary times Projected Service up to
a maximum of 30 years, multiplied by the ratio of actual
Management Service to Projected Service, and further multiplied
by the appropriate discount factor from column I of Table F,
minus
1.666% of the Participant's Social Security Benefit
times Projected Service up to a maximum of 30 years, multiplied
by the ratio of actual Management Service to Projected Service,
and further multiplied by the appropriate discount factor from
column II of Table F,
plus
0.50% of the Participant's Final Average Salary
times the years, if any, of Projected Service in excess of 30,
multiplied by the ratio of actual Management Service to Projected
Service, and further multiplied by the appropriate discount
factor from column I of Table F.
(c) For Pre-1983 Participants, the greater of:
( i) The pension determined in accordance with
paragraph 10 B(1)(b) above, or
( ii) The pension determined by computing 2.2% of
Total Salary, and by increasing the resulting pension by 0.125%
for each calendar month of Management Service in excess of 30
years.
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(2) Early Optional Retirement and Retirement in the
Discretion of the Company
This category applies to a Participant who retires
prior to age sixty (60). The pension payable to such a
Participant will be the amount determined as follows:
(a) For Post-1989 Participants:
( i) 1.50% of the Participant's Final
Average Salary for each year of Management Service up to and
including 24 years, plus 2.00% of the Participant's Final Average
Salary for each year of the Participant's Management Service from
and including the 25th to and including the 30th year, multiplied
by the appropriate discount factor in Table A,
plus
( ii) 0.35% of the Participant's Final
Average Salary in excess of the Social Security Taxable Wage Base
for each year of Management Service up to a maximum of 30 years,
multiplied by the appropriate discount factor in Table E,
plus
(iii) 0.50% of the Participant's Final
Average Salary for each year of Management Service in excess of
30 years, multiplied by the appropriate discount factor in Table
A;
provided, however that the portion of the
pension payable under clauses (i) and (iii) above to a
Participant who retires at age fifty-five (55) or above and prior
to age sixty (60) and who has at least 30 years of Accredited
Service at retirement shall not be discounted for retirement
below age sixty (60).
(b) For 1983-1989 Participants, the greater of:
( i) The pension determined in accordance
with paragraph 10 B(2)(a) above, or
( ii) The pension determined in accordance
with the following formula applied as if the Participant had
terminated employment on the earlier of the date of the
Participant's actual termination of employment or December 31,
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1989; provided, however, that for such Participants who are
Highly Compensated Employees within the meaning of Section
414(q)(1)(B) of the Code, the formula shall be applied as if the
Participant had terminated employment on the earlier of the date
of the Participant's actual termination of employment and
December 31, 1988:
1.833% of the Participant's Final Average Salary
times Projected Service up to a maximum of 30 years, multiplied
by the ratio of actual Management Service to Projected Service,
and further multiplied by the appropriate discount factor from
column I of Table F,
minus
1.666% of the Participant's Social Security
Benefit times Projected Service up to a maximum of 30 years,
multiplied by the ratio of actual Management Service to Projected
Service, and further multiplied by the appropriate discount
factor from column II of Table F,
plus
0.50% of the Participant's Final Average Salary
times the years, if any, of Projected Service in excess of 30,
multiplied by the ratio of actual Management Service to Projected
Service, and further multiplied by the appropriate discount
factor from column I of Table F.
(c) For Pre-1983 Participants, the greater of:
( i) The pension determined in accordance
with paragraph 10 B(2)(b) above, or
( ii) The pension determined by computing
2.2% of Total Salary, and by increasing the resulting pension by
0.125% for each calendar month of Management Service in excess of
30 years, multiplied by the appropriate discount factor in Table
A; provided, however, that the pension payable to a Participant
who retires at age fifty-five (55) or above and prior to age
sixty (60) and who has at least 30 years of Accredited Service at
retirement shall not be discounted for retirement below age sixty
(60).
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(3) Disability Annuity Prior to Attaining Age Sixty
(60)
The Pension payable to a Participant described in
paragraph 5 C(2)(i) is the Pension determined in accordance with
paragraph 10 B, but without reduction because such Pension shall
commence before age sixty (60). The annuity payable to a
Participant described in paragraph 5 C(2)(ii) will be equal to
the greater of the pension determined in accordance with (x)
paragraph 10 B(2)(c)(i) or (y) paragraph 10 B(2)(c)(ii) plus an
amount which when added to such pension determined in accordance
with paragraph 10 B(2)(c)(ii) will yield an annuity in an amount
calculated by reducing the pension determined in accordance with
10 A3(b) by 0.125% for each calendar month (1 1/2% per year)
between the Participant's projected date of retirement at age
sixty (60) and the date of his retirement for disability.
(4) Joint & Survivor Annuity
A surviving spouse entitled under paragraph 6 A to
receive an Annuity upon surviving a deceased retired Participant
shall receive an Annuity equal to fifty percent (50%) of the
Pension which the deceased Participant had been receiving.
(5) Preretirement Surviving Spouse Benefits
( i) A surviving spouse entitled under paragraph
6 B(i) to receive an Annuity shall receive an Annuity equal to
fifty percent (50%) of the Pension which the deceased Participant
would have begun receiving if such Participant had terminated
employment on the date of death and had applied for a Pension
commencing on the first day of the month following the death.
Payment of the Annuity shall commence on the first day of the
month following the death unless the surviving spouse elects a
later commencement date.
(ii) A surviving spouse entitled under paragraph
6 B(ii) to receive a preretirement survivor benefit shall receive
an immediate lump sum payment equal to fifty percent (50%) of the
Cash-Out the deceased would have received if he had terminated on
the date of death and elected a Cash-Out; provided, however, that
in no event shall the interest rate utilized in determining such
lump sum amount exceed the interest rate, either immediate or
deferred, utilized by the Pension Benefit Guaranty Corporation on
the first day of the month immediately preceding the
Participant's Annuity Starting Date for valuing a lump-sum
distribution upon plan termination. If the lump sum amount
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exceeds $3,500, the surviving spouse must consent to the lump sum
payment in writing on a form provided by the Plan Administrator.
If the surviving spouse does not consent, he or she shall receive
an immediate Annuity equal to fifty percent (50%) of the present
Annuity value of the deceased's vested accrued Pension at Normal
Retirement Age. Payment of the Annuity shall commence on the
first day of the month following the death unless the surviving
spouse elects a later commencement date.
(6) Deferred Pension
A Participant, upon termination of employment, may
elect to have his pension as determined in accordance with
paragraph 10 A deferred to a later date but not beyond Normal
Retirement Age. Upon application for payment of the deferred
pension, the computation of the pension payable in accordance
with paragraph 10 B(1) or (2) will be based on the Participant's
age on the Participant's Annuity Starting Date.
The following computations apply only to a Participant who
terminates with vested rights but whose age at termination when
added to his years of Accredited Service at termination is equal
to less than seventy-five (75).
(7) Deferred Pension at Normal Retirement Age
A Participant who elects to defer his pension to Normal
Retirement Age will be paid the pension determined in accordance
with paragraph 10 A.
(8) Deferred Pension Prior to Normal Retirement Age
A Participant who elects to take his deferred pension
prior to Normal Retirement Age on or after the date when his age
plus years of Accredited Service are equal to seventy-five (75)
will have the pension determined in accordance with paragraph 10
B(2).
(9) Determination of Present Value of Vested Pension
Payable at Normal Retirement Age - Cash-Out
The Cash-Out is a lump-sum payment representing the
present value of the deferred pension payable to the Participant
at Normal Retirement Date and will be computed by multiplying the
pension determined in accordance with paragraph 10 B(7) by the
factor in Table B corresponding to the age of the Participant on
the first day of the month following termination; provided,
however, that in no event shall the interest rate utilized in
determining the factors in Table B exceed the interest rate,
either immediate or deferred, utilized by the Pension Benefit
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Guaranty Corporation on the first day of the month immediately
preceding the Participant's Annuity Starting Date for valuing a
lump-sum distribution upon plan termination. In lieu of the
Cash-Out, the Participant may receive an immediate annuity which
shall equal the deferred pension payable to the Participant at
his Normal Retirement Date, appropriately reduced for
commencement prior to such Normal Retirement Date and shall be
determined by using the same actuarial assumptions as used for
early retirement under Table A or Table F, whichever Table is
applicable, and based on the Participant's age at his Annuity
Starting Date.
(10) Ten Year Certain Optional Pension
The Pension payable to an eligible Participant who
elects a ten year certain option pursuant to paragraphs 6 D, 6 E
or 6 F shall be the Pension determined by the appropriate
subsection of paragraph 10 B above, multiplied by the appropriate
factor in Table C or Table D, whichever Table is applicable,
corresponding to the age of the Participant at the Participant's
Annuity Starting Date.
C. 1993 Special Retirement Program
Notwithstanding any other provision of the Management Plan,
the following provision shall be applicable only to the Final
Average Salary formula set forth in paragraphs 10 A1, 10 B(1)(a),
and 10 B(2)(a) of the Management Plan and shall be available only
to Employees who meet the eligibility criteria and only during
the limited period of time and on the other terms and conditions
set forth below:
(1) Any employee who, prior to February 1, 1993, has
reached at least his fifty-fifth (55th) birthday and whose age
plus years of Accredited Service equal at least 75 prior to such
date and who elects during the period from November 1, 1992
through January 8, 1993 on a form furnished by and filed with the
Company to accept the retirement incentives (a) shall retire with
an effective retirement date of February 1, 1993, (b) shall be
credited with five additional years of Management Service solely
for purposes of calculating the Employee's Pension under the
Final Average Salary formula, and (c) shall not have the early
retirement discount factors applied to the Employee's Pension
calculated under the Final Average Salary formula, except for the
portion of the formula integrated with the Social Security
Taxable Wage Base which portion shall be reduced for retirement
before the Participant's Social Security Retirement Age in
accordance with federal income tax regulations. The additional
years of age shall not be credited for purposes of calculating
the Employee's Final Average Salary or Total Salary and shall not
be added to the Employee's age for purposes of determining
35 12/28/94
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whether the Employee's age plus years of Accredited Service equal
at least 75.
(2) No employee shall be obligated to accept the retirement
incentives, and an Employee's election to accept the retirement
incentives shall be purely voluntary. As a condition to an
Employee's receiving the retirement incentives under (1) above,
the Company shall have the right to obtain from the Employee a
waiver and/or release of claims against the Company consistent
with the requirements of the federal Age Discrimination in
Employment Act, as amended by the Older Workers Benefit
Protection Act.
D. Fresh Start
Notwithstanding any provision in the Management Plan to the
contrary, the annual amount of pension of a Participant who is
affected by the imposition of the $150,000 limitation on Annual
Basic Straight-Time Compensation provided in the definition of
such term in paragraph 2 A shall be equal to the greater of (i)
the Participant's pension calculated under the provisions of the
Management Plan as determined with regard to such limitation or
(ii) the Participant's pension determined as of December 31, 1993
plus the Participant's pension based solely on Accredited Service
after such date under the provisions of the Management Plan as
determined with regard to such limitation. For purposes of the
Management Plan, the Participant's pension determined as of
December 31, 1993 shall be equal to the greater of (x) the
pension calculated under the provisions of the Management Plan as
determined with regard to the $200,000 limitation on Annual Basic
Straight-Time Compensation provided in the definition of such
term in paragraph 2 A or (y) the Participant's pension determined
as of December 31, 1988 plus the Participant's pension based
solely on Accredited Service after such date under the provisions
of the Management Plan as determined with regard to such
limitation. However, the annual normal amount of pension shall
never be less than the greatest amount of reduced early
retirement pension which the Participant could have received
under paragraph 10 before his Normal Retirement Date.
11. LIMITATION OF BENEFITS AND DEDUCTIONS FROM BENEFITS
A. Maximum Benefits
For purposes of this paragraph 11 A, the terms "Annual Basic
Straight-Time Compensation", "Final Average Salary", and
"Compensation" shall exclude amounts contributed by the Company
on the Employee's behalf under other plans of the Company on a
salary reduction basis which are not includible in the gross
income of the Employee under Sections 402(a)(8) and 125 of the
Code. The maximum annual pension payable under the Management
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<PAGE>
Plan and other Company defined benefit plans shall be equal to
the lesser of:
(1) the defined benefit dollar limitation, and
(2) 100% of the Participant's average compensation for
the three consecutive years that produce the highest average.
If the annual benefit commences when the Participant has
less than 10 years of service with the Company, the maximum
benefit payable is reduced by one-tenth for each year of service
less than ten.
The defined benefit dollar limitation is $90,000. Effective
on January 1, 1988, and each January thereafter, the $90,000
limitation above will be automatically adjusted by multiplying
such limit by the cost of living adjustment factor prescribed by
the Secretary of the Treasury under Section 415(d) of the Code in
such manner as the Secretary shall prescribe. The new limitation
will apply to limitation years ending with the calendar year of
the date of the adjustment.
If the annual benefit of the Participant commences before
the Participant's Social Security Retirement Age, but on or after
age 62, the defined benefit dollar limitation shall be determined
as follows:
( i) If a Participant's Social Security Retirement Age
is 65, the dollar limitation for benefits commencing on or after
age 62 is determined by reducing the defined benefit dollar
limitation by 5/9 of one percent for each month by which benefits
commence before the month in which the Participant attains age
65.
(ii) If a Participant's Social Security Retirement Age
is greater than 65, the dollar limitation for benefits commencing
on or after age 62 is determined by reducing the defined benefit
dollar limitation by 5/9 of one percent for each of the first 36
months and 5/12 of one percent for each of the additional months
(up to 24 months) by which benefits commence before the month of
the Participant's Social Security Retirement Age.
If the annual benefit of a Participant commences prior to
age 62, the defined benefit dollar limitation shall be the
actuarial equivalent of an annual benefit beginning at age 62, as
determined above, reduced for each month by which benefits
commence before the month in which the Participant attains age
62.
If the annual benefit of a Participant commences after the
Participant's Social Security Retirement Age, the defined benefit
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<PAGE>
dollar limitation shall be adjusted so that it is the actuarial
equivalent of an annual benefit of such dollar limitation
beginning at the Participant's Social Security Retirement Age.
Annual benefit shall mean a benefit payable annually in the
form of a straight life annuity with no ancillary benefits.
Benefits payable in any other form will be adjusted to the
actuarial equivalent of a straight life annuity.
Actuarial equivalent shall be determined by using an
interest rate assumption equal to the greater of 5%, or the rate
specified in the Management Plan. For benefits payable after a
Participant's Social Security Retirement Age, the word "lesser"
shall be substituted for the word "greater" in the preceding
sentence.
For purposes of the limitations of this paragraph 11,
compensation shall mean all compensation of the Participant from
the Company for the limitation year.
The limitations of this paragraph 11 will be deemed
satisfied if the annual benefit payable to a Participant is not
more than $1,000 multiplied by the Participant's years of service
with the Company (not exceeding 10), and the Participant never
participated in a defined contribution plan maintained by the
Company.
Alternative Maximum Benefit
The annual retirement income payments under the Management
Plan shall be treated as not exceeding the limitations above in
the case of an Employee who was an active Participant before
October 2, 1973 if such annual retirement income (calculated on
the basis of the Straight Life Annuity form) neither exceeds:
(a) 100% of his annual rate of compensation on the
earlier of October 2, 1973 or his termination date, nor
(b) 100% of the annual benefit which would have been
payable to such Participant on retirement assuming
( i) all the terms and conditions of the Plan on
the earlier of October 2, 1973 or his termination date had
continued unchanged, and
(ii) his compensation on October 2, 1973
continued to his termination date.
In the case of an Employee who ceased employment before
October 2, 1973 and who becomes entitled to benefit payments
beginning on or after August 1, 1975, the annual benefit under
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<PAGE>
this paragraph shall not be greater than the deferred vested
benefit to which he was entitled as of his termination date.
Combined Maximum Limits
If the Participant is, or was, covered under a defined
benefit plan and a defined contribution plan maintained by the
Company the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction may not exceed
1.0 in any limitation year.
The defined benefit plan fraction is a fraction, the
numerator of which is the sum of the Participant's projected
annual benefits under all defined benefit plans (whether or not
terminated) maintained by the Company and the denominator of
which is the lesser of (i) 1.25 times the dollar limitation of
Section 415(b)(1)(A) of the Code in effect for the limitation
year, or (ii) 1.4 times the Participant's average compensation
for the three consecutive years that produces the highest
average.
The defined contribution plan fraction is a fraction, the
numerator of which is the sum of the annual additions to the
Participant's account under all defined contribution plans
maintained by the Company (whether or not terminated) for the
current and all prior limitation years, and the denominator of
which is the sum of the lesser of the following amounts
determined for such year and for each prior year of service with
the Company: (i) 1.25 times the dollar limitation in effect
under Section 415(c)(1)(A) of the Code for such year, or (ii) 1.4
times the amount which may be taken into account under Section
415(c)(1)(B) of the Code.
Projected annual benefit means the annual benefit to which
the Participant would be entitled under the terms of the Plan, if
the Participant continued employment until Normal Retirement Age
(or current age, if later) and the Participant's compensation for
the limitation year and all other relevant factors used to
determine such benefit remained constant until Normal Retirement
Age (or current age, if later).
Annual additions means the sum credited to a Participant's
account for any limitation year, of :
a. Company contributions,
b. with respect to limitation years beginning before
1987, the lesser of the amount of Employee Contributions in
excess of 6% of his compensation for the limitation year, or one
half of the Employee contributions for that year, and with
respect to limitation years beginning after 1986, all of the
Employee contributions, and
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<PAGE>
c. forfeitures.
If, in any limitation year, the sum of the defined benefit
plan fraction and the defined contribution plan fraction will
exceed 1.0, the rate of benefit accruals under this Plan will be
reduced so that the sum of the fractions equals 1.0.
B. Minimum Benefits
1. The minimum benefits payable to a Participant
receiving a pension first payable on or after attaining age
sixty-two (62), or a disability annuity after having attained
Normal Retirement Age, subject to other provisions of the
Management Plan, shall be the greater of:
(a) $4.40 per month for each year, up to
twenty-five (25) years, of Management Service.
(b) $110 per month for an Employee having
twenty-five (25) years of Management Service, plus $5.50 per
month for each additional year of Management Service up to thirty
(30) years;
(c) $137.50 per month for an Employee with thirty
(30) or more years of Management Service.
2. The minimum disability annuity payable under the
Management Plan, subject to other provisions of the Management
Plan, shall be $55 per month. The benefit payable to a
Participant, either
(a) in accordance with the Management Plan's
optional early retirement provisions, or
(b) in accordance with the Management Plan's
Normal or Mandatory Retirement Date, shall not be less than the
greatest early retirement income amount which may be calculated
under the optional early retirement provision as of the last day
of any computation period which ended before his retirement date.
C. Deductions for Pension or Benefits Under Other Pension
Plans
There shall be deducted from any benefit for which an
Employee may be eligible under the Management Plan the amount of
each and every payment or benefit received by such Employee by
reason of his retirement on account of service with any other
employer where years of service with such other employer are
included in years of Accredited Service under the Management
Plan, provided that pension payments by Federal, State or
municipal governments for service under those governments shall
not be deducted hereunder.
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<PAGE>
D. Limitation of Deductions
The deductions authorized by paragraph 11 C shall not be
applied or made in such a manner as to reduce below ten dollars
($10.00) in any month the net amount payable to any Employee
receiving a benefit under the Management Plan, nor shall any net
benefit amount payable be reduced below ten dollars ($10.00) in
any month.
E. Pre-July 1, 1989 Transfers
This paragraph 11 E shall apply to a Participant whose
benefit under the Weekly Plan is based upon the Weekly Plan
formula in effect prior to amendments effective July 1, 1989 and
shall not apply to any Participant who has a benefit calculated
under the Weekly Plan based upon the plan formulas adopted on or
after July 1, 1989. Benefits for such Participants shall be
determined as described in paragraph 11 F.
A Participant whose Accredited Service consists of both
Weekly Service and Management Service and who is eligible for a
benefit under the Management Plan shall in any event be entitled
to a benefit under the Management Plan which is not less than the
benefit computed under paragraph 10 A (the "Basic Benefit").
If such Participant was a Management Employee at the time of
termination of the Participant's employment with the Company, the
Participant shall be entitled to the greater of
1. the Basic Benefit, or
2. the benefit which would be payable under the
Management Plan if all of the Participant's Accredited Service
had been Management Service, reduced by the amount of any benefit
to which the Participant shall be entitled under the Weekly Plan.
A Participant who is eligible for a benefit under the
Management Plan, but who is a Weekly Employee at the time of
termination of the Participant's Service with the Company, shall
be paid from the Management Plan a pension benefit equal to the
greater of: (A) the benefit calculated under the formula set
forth in paragraph 10 A utilizing Total Salary or Final Average
Salary for all years of Service with the Company, including
Management and Weekly Service, multiplied by a fraction, the
numerator of which shall be Years of Management Service, and the
denominator of which shall be the sum of Years of Management
Service and Years of Weekly Service, or (B) the benefit
calculated under the formula set forth in paragraph 10 A
utilizing Total Salary or Final Average Salary for Management
Service only.
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<PAGE>
F. Post-June 30, 1989 Transfers
If a Participant whose Accredited Service consists of both
Weekly Service and Management Service and whose Weekly Service
includes periods of employment subsequent to June 30, 1989, such
Participant's benefit under the Management Plan shall be
calculated as described below.
If the Participant is a Management Employee at the time of
termination of the Participant's employment with the Company,
then, notwithstanding the provisions of paragraph 10 hereof, the
Participant shall be entitled only to a benefit calculated under
paragraph 10 of the Management Plan as if all of the
Participant's Accredited Service had been Management Service, and
reduced by the amount of any benefit to which the Participant
shall be entitled under the Weekly Plan.
If the Participant is a Weekly Employee at the time of
termination of the Participant's employment with the Company,
then the benefit under the Management Plan shall be determined
under paragraph 10 based upon Total Salary or Final Average
Salary including Management and Weekly Service, multiplied by a
fraction, the numerator of which shall be Years of Management
Service and the denominator of which shall be the sum of Years of
Management Service and Years of Weekly Service. Notwithstanding
the preceding, the benefit under the Management Plan shall not be
less than the accrued benefit at time of transfer to the Weekly
Plan calculated as if the Participant had then terminated
employment with the Company.
12. PAYMENT OF BENEFITS
A. Manner of Payment of Benefits
(1) All benefits provided by the Management Plan shall be
determined on an annual basis and payable, upon application, in
the following manner:
(i) in the case of pensions, annuities and surviving
spouse benefits, monthly payments equal to one-twelfth (1/12th)
of the annual amount;
(ii) in the case of a Cash-Out, there will be a single
payment.
Payments in the case of disability may begin, in the
discretion of the Company, earlier than the effective date of
retirement.
No benefit payable under the Management Plan shall be
reduced after the commencement of payments except to correct an
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error in the determination of the benefits or if required by
ERISA or governmental authority.
(2) Effective January 1, 1981, Participants who retired
from service of the Company prior to January 1, 1978 and are
receiving payments under paragraph A (1) (i) above shall have
their payments increased in accordance with the following:
Increase In
Year Retired Monthly Payment
Prior to 1958 10%
1958 - 1965 8%
1966 - 1971 6%
1972 - 1975 4%
1976 - 1977 2%
Payments to widows and surviving spouses shall be increased,
in accordance with the above schedule, based upon the year in
which the deceased Participant retired.
No monthly payment shall be increased by less than ten
($10.00).
(3) Effective January 1, 1984, Participants who retired
prior to January 1, 1984, and surviving spouses of Participants
who retired or died prior to January 1, 1984, and who receive
payments under paragraph A(1) (i) above, shall have their monthly
payments, as such monthly payments may have been adjusted
pursuant to paragraph A(2) above, increased by a percentage which
shall equal one percent times the difference between 1984 and the
earlier of the year in which the Participant retired or died,
provided that no monthly payment shall be increased by less than
ten dollars ($10.00).
(4) Each participant and surviving spouse who is entitled
to receive a Pension or Annuity from the Management Plan for the
month of November 1986, and who, or in the case of a surviving
spouse of a deceased retired participant, whose deceased spouse,
commenced receiving a Pension or Annuity prior to December 31,
1985, shall have the Pension or Annuity for the month of November
1986 and each month thereafter, until further changed or
terminated in accordance with provisions of the Management Plan,
increased by one percent (1%) of such Pension or Annuity
multiplied by the number of whole or partial calendar years up to
and including 1985 during which the Management Plan was paying a
Pension or Annuity to such participant or surviving spouse, or to
both such surviving spouse and the deceased participant who
retired and commenced to receive a Pension from the Management
Plan.
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<PAGE>
B. Termination of Payments
Payments to a Participant or to a Beneficiary shall
terminate on the last day of the month in which the Participant
or Beneficiary dies.
C. Direct Rollover of Certain Distributions
1. This paragraph applies to certain distributions made on
or after January 1, 1993. Notwithstanding any provision of the
Management Plan to the contrary that would otherwise limit a
distributee's election under the paragraph, a distributee may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
2. The following definitions apply to the terms used in
this paragraph:
(a) An "eligible rollover distribution" is any
distribution of all or any portion of the balance to the credit
of the distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of
the distributee and the distributee's designated beneficiary, or
for a specified period of ten years or more; any distribution to
the extent such distribution is required under Section 401(a)(9)
of the Code; and the portion of any distribution that is not
includible in gross income;
(b) An "eligible retirement plan" is an individual
retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the
Code, an annuity plan described in Section 403(a) of the Code, or
a qualified trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the
surviving spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity;
(c) A "distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former souse who is the alternate payee under a qualified
domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the spouse
or former spouse; and
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(d) A "direct rollover" is a payment by the Management
Plan to the eligible retirement plan specified by the
distributee.
In the event that the provisions of this paragraph C or any
part thereof cease to be required by law as a result of
subsequent legislation or otherwise, this paragraph C or any
applicable part thereof shall be ineffective without the
necessity of further amendment to the Management Plan.
13. ASSIGNMENT OR NON-ALIENATION OF BENEFITS
Except as provided below, benefits payable under the
Management Plan shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, change, garnishment, execution, or levy of any kind,
either voluntary or involuntary, including any such liability
which is for alimony or other payments for the support of a
spouse or former spouse, or for any other relative of the
Employee, prior to actually being received by the person entitled
to the benefit under the terms of the Management Plan except for
a transfer pursuant to a "qualified domestic relations order"
within the meaning of Section 414 (p) of the Code. Any attempt
to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits
payable hereunder, shall be void. The trust fund shall not in
any manner be liable for, or subject to, the debts, contracts,
liabilities, engagement, or torts of any person entitled to
benefits hereunder. The Plan Administrator shall establish a
written procedure to determine the qualified status of domestic
relations orders and to administer distributions under such
qualified orders. If the present value of any series of payments
under a qualified domestic relations order amounts to $3,500 or
less, a lump sum payment of such present value shall be made in
lieu of the series of payments.
After a benefit is in pay status, a Participant receiving
such benefit may make a voluntary and revocable assignment (not
to exceed ten percent (10%) of any benefit payment) provided the
assignment is not for the purpose of defraying administrative
costs.
14. NO RIGHT TO EMPLOYMENT
The Management Plan shall not be construed to give any
Employee the right to be retained in the service of the Company
or the right to be reemployed after termination or retirement.
15. TRUST FUND
All contributions made by the Company under the Management
Plan shall be paid to the trustee or trustees, who shall be
designated by the Company, and deposited in a trust fund or
funds. In accordance with paragraph 19 B, all assets of the
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trust funds, including investment income, shall be retained for
the exclusive benefit of Participants and Beneficiaries, shall be
used to pay benefits to such persons or to pay administrative
expenses to the extent not paid by the Company, and shall not
revert to or inure to the benefit of the Company prior to the
satisfaction of all such benefits.
Payment by the trust in good faith to one who claims to be
entitled to payment of a benefit hereunder shall discharge the
trust from any further liability therefor to any other claimant.
In the discretion of the Company, the assets of the
aforementioned trust fund or funds may be held by a single
trustee, together and commingled with the assets of the trust
fund or funds provided for under the Weekly Plan, provided that
the beneficial interest of each trust fund in the commingled
assets shall be separately accounted for and the beneficial
interest of the trust fund or funds under the Management Plan
shall be applied solely in accordance with the Management Plan
and shall not be available to provide benefits under the Weekly
Plan, or for any other purpose. Expenses and taxes, to the
extent paid from the commingled trust assets, shall be equitably
divided between the trust fund or funds under the Management Plan
and the trust fund or funds under the Weekly Plan.
The Named Fiduciaries of the Management Plan are hereby
authorized to take such action as may be necessary to cause the
respective beneficial interests properly allocable to the Weekly
Plan and to the Management Plan, in the assets of the trust fund
held pursuant to The Consolidated Edison Pension and Benefits
Plan on December 31, 1982, to be determined and thenceforth
accounted for as two separate trust funds.
16. CONTRIBUTIONS
A. Payment of Contributions
The contributions by the Company shall be made at such times
as may be decided upon by the Company.
B. Funding Policy Procedure and Amount of Contributions
In accordance with the funding policy established by the
Company upon recommendation by the Named Fiduciaries based upon
the advice of an enrolled actuary, the Company from time to time
shall make contributions, determined on an annual basis as a
percentage of straight-time annual payroll for Management
Employees, in such amounts as it shall deem necessary to carry
out the objectives of the Management Plan, but in any event the
contributions shall: (1) conform to the funding standards of
Section 302 of ERISA; and (2) not be greater than the maximum
amount deductible for Federal income tax purposes during the year
for which the contribution is made.
C. Payment of Expenses
All expenses of investment and administration of the trust
fund and of administration of the Plan, including any taxes which
may be assessed or levied against the trust fund, shall be paid
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by the Trustee from the trust fund, unless paid by the Company.
D. Restrictions on Recovery by Company of Contributions
Except as provided in paragraphs 20 B and 23 D, under no
circumstances shall amounts of money or other things of value
contributed by the Company to the trust fund be recoverable by
the Company from the trustee or from any Participant or
Beneficiary, or be used for, or diverted to, purposes other than
for the exclusive benefit of the Participants and Beneficiaries
of the Management Plan; provided, however, that if a contribution
is made by the Company by mistake of fact, the contribution shall
be returned to the Company within one (1) year after the payment
of the contribution, or if the Management Plan or the trust (or
trusts) fails to qualify under Sections 401 and 501 of the Code
or (each contribution made to this Plan is expressly conditioned
on its deductibility under Section 404 of the Code) if the
deduction of any part of any contribution is disallowed, the
contribution shall be returned to the Company within one (1) year
after the date of denial of qualification of the Management Plan
or trust (or trusts) or within one (1) year after the
disallowance of the deduction.
E. Management Plan is Non-Contributory
No contributions by Employees shall be required hereunder.
17. FIDUCIARIES
A. Named Fiduciaries
1. Persons from time to time occupying the following
offices of the Company are hereby designated as Named Fiduciaries
and shall have authority jointly to control and manage the
operation and administration of the Management Plan (including
the appointment of the Plan Administrator): Chief Executive
Officer, Chief Financial Officer, and Chief Accounting Officer.
The Company may designate other persons who, upon acceptance of
such designation, shall serve as Named Fiduciaries either instead
of or in addition to those named above. Any such designation and
acceptance shall be in writing and retained by the Plan
Administrator.
2. The Named Fiduciaries may allocate fiduciary
responsibilities (other than trustee responsibilities as defined
in ERISA) among Named Fiduciaries and may designate persons other
than Named Fiduciaries to carry out fiduciary responsibilities
(other than trustee responsibilities as defined in ERISA) under
the Management Plan, in accordance with the following procedure:
The Chief Executive Officer of the Company shall in
writing allocate fiduciary responsibilities among the Named
Fiduciaries, and the acceptance of such responsibilities by the
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Named Fiduciaries shall be in writing. Any designation by a Named
Fiduciary of persons other than Named Fiduciaries to carry out
fiduciary responsibilities (other than trustee responsibilities
as defined in ERISA) shall be in writing, a copy of which shall
be delivered to the designee, and shall specify the fiduciary
responsibilities to be carried out by the designee. Written
notice of any such designation shall be given to all other Named
Fiduciaries by the Named Fiduciary who makes the designation.
Any such allocations and acceptances and designations, shall be
retained by the Plan Administrator.
3. A Named Fiduciary, or a fiduciary designated by a
Named Fiduciary pursuant to the procedure set forth in paragraph
17 A 2., may employ one or more persons to render advice with
regard to any responsibility such fiduciary has under the
Management Plan.
4. A person who is a Named Fiduciary with respect to
control or management of the assets of the Management Plan may
appoint, or terminate the appointment of, an investment manager
or managers to manage (including the power to acquire and dispose
of) any assets of the Management Plan.
5. A majority of the Named Fiduciaries may jointly,
with the prior approval of the Board of Trustees of the Company,
direct any trustee appointed pursuant to paragraph 15 to invest
all or any part of the trust fund held by such trustee in
insurance policies and contracts, including group annuity
contracts, and in tax-exempt group trusts, and from time to time
to liquidate any such investment in whole or in part.
B. Fiduciary Responsibilities
The Named Fiduciaries, and all other persons having
fiduciary responsibilities under the law, shall discharge their
duties with respect to the Management Plan in accordance with the
law, and solely in the interest of the Participants and
Beneficiaries and
1. for the exclusive purpose of:
(a) providing benefits to Participants and their
Beneficiaries; and
(b) defraying reasonable expenses of administering
the Management Plan;
2. with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting in a
like capacity and familiar with such matters would use in the
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conduct of an enterprise of a like character and with like aims;
3. by diversifying the investments of the Management
Plan so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
4. in accordance with the documents and instruments
governing the Management Plan insofar as such documents and
instruments are consistent with the law.
C. General Provisions Concerning Fiduciaries
1. Any person or group of persons may serve in more
than one fiduciary capacity with respect to the Management Plan
(including service both as trustee and administrator).
2. Responsibilities for the operation and
administration of the Management Plan may be allocated in
accordance with the following procedure:
The Chief Executive Officer of the Company shall
allocate responsibilities for operation and administration of the
Management Plan, and shall notify all Named Fiduciaries of any
such allocation. Any such allocation shall be in writing, a copy
of which shall be delivered to the person to whom the
responsibilities are allocated, and shall be retained by the Plan
Administrator.
18. POWERS AND DUTIES OF PLAN ADMINISTRATOR
A. Rules and Decisions
The Plan Administrator may adopt such rules as he deems
necessary, desirable, or appropriate. All rules and decisions of
the Plan Administrator shall be uniform and consistent as to all
Participants and Beneficiaries in similar circumstances. When
making a determination or calculation, the Plan Administrator
shall be entitled to rely upon information furnished by a
Participant or Beneficiary, the Company, the legal counsel of the
Company, the enrolled actuary, any trustee of the trusts, or the
independent qualified public accountant.
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B. Records and Reports
The Plan Administrator shall exercise such authority and
responsibility, and perform such duties, as may be required in
order to comply with ERISA and governmental regulations issued
thereunder relating to records of Participants' service, accrued
benefits, and benefits which are nonforfeitable under the
Management Plan; notifications to participants, annual
registration with the Internal Revenue Service; annual reports to
the Department of Labor; and reports to the Pension Benefit
Guaranty Corporation.
C. Other Plan Administrator Powers and Duties
The Plan Administrator shall have such other duties and
powers as may be necessary to discharge his duties hereunder,
including but not by way of limitation, the following:
1. to decide all claims and questions of eligibility
and determine the amount, manner and time of payment of any
benefits hereunder and to construe and interpret the Management
Plan or the plans as may be necessary in connection therewith;
2. to prescribe procedures to be followed by
Participants or Beneficiaries filing applications for benefits;
3. to prepare and distribute, in such manner as he
determines to be appropriate, information explaining the
Management Plan;
4. to receive from the Company and from Participants
such information as shall be necessary for the proper
administration of the Management Plan;
5. to furnish the Company, upon request, such annual
reports with respect to the administration of the Management Plan
as are reasonable and appropriate;
6. to receive and review the periodic valuation of the
Management Plan made by the enrolled actuary;
7. to receive, review and keep on file (as he deems
convenient or proper) reports of the financial condition, and of
the receipts and disbursements, of the trust fund from the
trustee or trustees;
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8. to appoint or employ individuals to assist in the
administration of the Management Plan and to perform the specific
operational and administrative duties and functions necessary to
plan administration;
9. to receive service of legal process, as agent for
the Management Plan.
The Plan Administrator shall have no power to add to,
subtract from or modify any of the terms of the Management Plan,
or to change or add to any benefits provided by the Management
Plan, or to waive or fail to apply any requirements of
eligibility for a pension under the Management Plan.
19. ADMINISTRATION
A. Restriction on Powers
No rule or regulation under the Management Plan shall be
made and no action under its provision shall be taken which, with
respect to contributions or benefits, or in any other respect,
discriminates in favor of employees who are officers,
shareholders, persons whose principal duties consist in
supervising the work of other employees, or highly compensated
employees.
B. Ascertainment of Benefits
It shall be the duty of the Plan Administrator to examine
into the facts relating to each Employee and determine his rights
under the Management Plan and the amount and extent of the
benefit which shall be payable to him or his spouse and the dates
such benefit shall commence and cease. Such determination, if
made in conformance with the provisions of the Management Plan,
shall be final and binding upon such Employee and Employee's
spouse.
In making such determination, the Plan Administrator shall
follow the provisions of the Management Plan and shall not pay or
cause to be paid any benefit, either during the existence or upon
the discontinuance of the Management Plan, which would cause any
part of the trust fund or funds to be used for or diverted to
purposes other than for the exclusive benefit of the Employees of
the Company or their spouses pursuant to the provisions of the
Management Plan at any time prior to the satisfaction of all
liabilities with respect thereto under the Management Plan.
C. Claims
1. When any claim for benefits by a Participant or a
Beneficiary is denied, the claimant shall be notified in writing
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sent by certified mail of the specific reasons for the denial, in
a manner calculated to be understood by the claimant.
2. If the claim for benefits of a Participant or
Beneficiary is denied, the claimant shall have the right to a
full and fair review of the decision denying such benefits,
provided that the request for review, which shall be in writing
and addressed to the Plan Administrator, shall be made within
ninety (90) days after the claimant receives notice of the denial
of benefits.
D. Records
The Plan Administrator shall maintain or cause to be
maintained accounts showing the fiscal transactions of the
Management Plan, and shall cause to be kept, in convenient form,
such data as may be necessary for actuarial valuations under the
Management Plan and such other matters and records as may be
required to comply with ERISA.
20. TERMINATION OR MODIFICATION OF THE MANAGEMENT PLAN
A. Right to Terminate or Modify
The Company expects to continue the Management Plan
indefinitely and to make contributions to the trust fund or
funds under the Management Plan to meet the costs of all benefits
provided hereunder, as a current charge upon operating expenses.
The Company, however, except as it may have otherwise expressly
agreed, reserves the right in its absolute discretion at any time
and from time to time, and retroactively if deemed necessary or
appropriate by it to conform with governmental regulations or
other policies, by action of its Board of Trustees or pursuant to
authority granted by its Board of Trustees, to amend, modify or
terminate in whole or in part the Management Plan and the
contributions thereunder. No such amendment, modification or
termination, however, shall vest in the Company directly or
indirectly any interest, ownership or control in the trust fund,
except to the extent of any balance remaining after satisfaction
of all liabilities under the Management Plan. No such amendment
or modification shall retroactively decrease or otherwise affect
adversely Employees' accrued benefits under the Management Plan
as in effect on the later of the date on which the amendment is
adopted or becomes effective.
B. Rights Upon Termination
In the event of termination of the Management Plan, each
Participant's interest as of the date of the termination to the
extent then funded or protected by law, if greater, shall be
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nonforfeitable. The funds of the Management Plan shall be used
for the exclusive benefit of persons entitled to benefits under
the Management Plan as of the date of termination, except as
provided in paragraph 16 D. However, any funds not required to
satisfy all liabilities of the Management Plan for benefits
because of erroneous actuarial computation shall be returned to
the Company. The Plan Administrator shall determine on the basis
of actuarial valuation the share of the funds of the Management
Plan allocable to each person entitled to benefits under the
Management Plan in accordance with Section 4044 of ERISA or
corresponding provision of any applicable law in effect at the
time. In the event of a partial termination of the Management
Plan, the provisions of this paragraph 20 B shall be applicable
to the Employees affected by that partial termination.
21. MISCELLANEOUS
A. Merger or Consolidation
In the case of any merger or consolidation with, or transfer
of assets or liabilities to, any other plan, each Participant in
the Management Plan shall (if the Management Plan is terminated)
receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would
have been entitled to receive immediately before the merger,
consolidation, or transfer (if the Management Plan had then
terminated).
B. Limitation of Benefits Payable to Highly
Compensated Employees
(1) The provisions of this paragraph 21 B shall apply
(i) in the event the Management Plan is terminated, to any
Employee who is a highly compensated employee or highly
compensated former employee (as those terms are defined in
Section 414(q) of the Code) of the Company and (ii) in any other
event, to any Employee who is one of the 25 highly compensated
employees or highly compensated former employees of the Company
with the greatest compensation in any Plan Year. The amount of
the annual payments to any one of the Employees to whom this
paragraph 21 B applies shall not be greater than an amount equal
to the annual payments that would be made on behalf of the
Employee during the year under a single life annuity that is of
equivalent actuarial value to the sum of the Employee's accrued
benefit and the Employee's other benefits under the Management
Plan. Equivalent actuarial value means equivalent value
determined on the basis of the same actuarial assumptions as used
for Table A or Table F, whichever Table is applicable.
(2) If, (i) after payment of Pension or other benefits
to any one of the Employees to whom this paragraph 21 B applies,
the value of Management Plan assets equals or exceeds 110 percent
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of the value of current liabilities (as that term is defined in
Section 412(1)(7) of the Code) of the Management Plan, (ii) the
value of the accrued benefit and other benefits of any one of the
Employees to whom this paragraph 21 B applies is less than one
per cent of the value of current liabilities of the Management
Plan, or (iii) the value of the benefits payable to an Employee
to whom this paragraph 21 B applies does not exceed the amount
described in Section 411(a)(11)(A) of the Code, the provisions of
subdivision (1) above will not be applicable to the payment of
benefits to such Employee.
(3) If an Employee to whom this paragraph 21 B
applies elects to receive a lump sum payment in lieu of his
accrued benefit and the provisions of subdivision (2) above are
not met with respect to such Employee, the Employee shall be
entitled to receive his benefit in full provided he shall agree
to repay to the Management Plan any portion of the lump sum
payment which would be restricted by operation of the provisions
of subdivision (1), and shall provide adequate security to
guarantee that repayment.
(4) Notwithstanding subdivision (1) of this paragraph
21 B, in the event the Management Plan is terminated, the
restriction of this paragraph 21 B shall not be applicable if the
benefit payable to any highly compensated employee and any highly
compensated former employee is limited to a benefit that is
nondiscriminatory under Section 401(a)(4) of the Code.
(5) If it should subsequently be determined by
statute, court decision acquiesced in by the Commissioner of
Internal Revenue, or ruling by the Commissioner of Internal
Revenue, that the provisions of this paragraph 21 B are no longer
necessary to qualify the Management Plan under the Code, this
paragraph 21 B shall be ineffective without the necessity of
further amendment to the Management Plan.
C. Forfeitures
Any forfeitures arising under the Management Plan shall be
used to reduce the Company's contribution.
22. TOP-HEAVY PROVISIONS
A. The following definitions apply to the terms used in
this paragraph 22:
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(i) "applicable determination date" means the last day
of the preceding Plan Year;
(ii) "top-heavy ratio" means the ratio of (x) the
present value of the cumulative accrued benefits under the
Management Plan for key employees to (y) the present value of the
cumulative accrued benefits under the Management Plan for all key
employees and non-key employees; provided however, that if an
individual has not performed services for the Company at any time
during the 5-year period ending on the applicable determination
date, any accrued benefit for such individual (and the account of
such individual) shall not be taken into account;
(iii) "applicable valuation date" means the date within
the preceding Plan Year as of which annual Plan costs are or
would be computed for minimum funding purposes;
(iv) "key employee" means an employee who is in a
category of employees determined in accordance with the
provisions of Section 416(i)(1) and (5) of the Code and any
regulations thereunder, and, where applicable, on the basis of
the Employee's remuneration which, with respect to any Employee,
shall mean the wages, salaries and other amounts paid in respect
of such Employee by the Company for personal services actually
rendered, determined before any pre-tax contributions under a
"qualified cash or deferred arrangement" (as defined under
Section 401(k) of the Code and its applicable regulations) or
under a "cafeteria plan" (as defined under Section 125 of the
Code and its applicable regulations), and shall include, but not
by way of limitation, bonuses, overtime payments and commissions;
and shall exclude deferred compensation, stock options and other
distributions which receive special tax benefits under the Code;
(v) "non-key employee" means any employee who is not a
key employee;
(vi) "average remuneration" means the average annual
remuneration of a Participant for the five consecutive years of
his service after December 31, 1983 during which he received the
greatest aggregate remuneration, as limited by Section 401(a)(17)
of the Code, from the Company, excluding any remuneration for
service after the last Plan Year with respect to which the
Management Plan is top-heavy;
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(vii) "required aggregation group" means each other
qualified plan of the Company (including plans that terminated
within the five-year period ending on the determination date) in
which there are participants who are key employees or which
enables the Management Plan to meet the requirements of Section
401(a)(4) or 410 of the Code; and
(viii) "permissive aggregation group" means each plan
in the required aggregation group and any other qualified plan(s)
of the Company in which all members are non-key employees, if the
resulting aggregation group continues to meet the requirements of
Sections 401(a)(4) and 410 of the Code.
B. For purposes of this paragraph 22, the Management Plan
shall be "top-heavy" with respect to any Plan Year beginning on
or after January 1, 1984, if as of the applicable determination
date the top-heavy ratio exceeds 60 percent. The top-heavy ratio
shall be determined as of the applicable valuation date in
accordance with Section 416(g)(3) and (4)(B) of the Code on the
basis of the 1971 TPF&C Forecast Mortality Table and an interest
rate of 5 1/2 percent per year compounded annually. For purposes
of determining whether the Management Plan is top-heavy, the
present value of accrued benefits under the Management Plan will
be combined with the present value of accrued benefits or account
balances under each other plan in the required aggregation group,
and, in the Company's discretion, may be combined with the
present value of accrued benefits or account balances under any
other qualified plan(s) in the permissive aggregation group. The
accrued benefit of a non-key employee under the Management Plan
or any other defined benefit plan in the aggregation group shall
be (i) determined under the method, if any, for accrual purposes
under all plans maintained by the Company or (ii) if there is no
such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule
described in Section 411(b)(1)(C) of the Code.
C. The following provisions shall be applicable to
Participants for any Plan Year with respect to which the
Management Plan is top-heavy:
(i) In lieu of the vesting rights specified in
paragraph 7, a Participant shall be vested in, and have a
nonforfeitable right to, a percentage of his accrued benefit
determined in accordance with the provisions of the Management
Plan and subparagraph (ii) below, as set forth in the following
vesting schedule:
Years of Vesting Service Percentage Vested
Less than 2 years 0%
2 years 20%
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3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
(ii) The accrued benefit of a Participant who is a
non-key employee shall not be less than two percent of his
average remuneration multiplied by the number of years of his
Accredited Service, not in excess of 10, during the Plan Years
for which the Management Plan is top-heavy. That minimum benefit
shall be payable at a Participant's Normal Retirement Date. If
payments commence at a time other than the Participant's Normal
Retirement Date, the minimum accrued benefit shall be of
equivalent actuarial value to that minimum benefit.
(iii) The multiplier "1.25" in Sections 415(e)(2)(B)(i)
and (3)(B)(i) of the Code shall be reduced to "1.0," and the
dollar amount "$51,875" in Section 415(e)(6)(B)(i)(I) of the Code
shall be reduced to "$41,500."
D. If the Plan is top-heavy with respect to a Plan Year and
ceases to be top-heavy for a subsequent Plan Year, the following
provisions shall be applicable.
(i) The accrued benefit in any such subsequent Plan
Year shall not be less than the minimum accrued benefit provided
in paragraph (C)(ii) above, computed as of the end of the most
recent Plan Year for which the Management Plan was top-heavy.
(ii) If a Participant has completed three years of
Vesting Service on or before the last day of the most recent Plan
Year for which the Management Plan was top-heavy, the vesting
schedule set forth in paragraph (C)(i) above shall continue to be
applicable.
(iii) If a Participant has completed at least two, but
less than three, years of Vesting Service on or before the last
day of the most recent Plan Year for which the Management Plan
was top-heavy, the vesting provisions of paragraph 7 shall again
be applicable; provided, however, that in no event shall the
vested percentage of a Participant's accrued benefit be less than
the percentage determined under paragraph (C)(i) above as of the
last day of the most recent Plan Year for which the Management
Plan was top-heavy.
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23. RETIREE HEALTH PROGRAM ("PROGRAM")
A. Effective Date
This paragraph 23 shall become effective on January 1, 1986.
Prescription drug benefits coverage is extended to dependents (as
defined in Appendix I, Part A), effective May 1, 1988. Vision
care benefits described in Appendix I, Part A are added to the
Program effective June 1, 1988.
B. Benefits Provided
Appendix I, Part A to the Management Plan specifies the
benefits to be provided under this paragraph 23 to eligible
participants; provided, however, that the Plan Administrator
shall have authority to maintain the benefit limits so specified
at levels the Plan Administrator determines to be reasonable and
customary. The company or companies selected by the Plan
Administrator to provide medical/hospital benefits and/or to
administer medical/hospital claims and benefit payments and to
provide prescription drugs and/or to administer prescription drug
and vision care claims and benefit payments shall have final
authority to decide all claims and the amount of benefit payments
under provisions of Appendix I, Part A.
A participant in the Program shall not be entitled to
reimbursement for medical/hospital, vision care or prescription
drug benefits under the Program to the extent that similar
benefits have actually been paid under any other group coverage
provided by or through the Company or a Voluntary Employees'
Beneficiary Association (VEBA), as defined in Section 501(c)(9)
of the Code, sponsored by the Company. In the event that
benefits shall have been paid with respect to such participant by
or through the Company or such VEBA, the amount payable under
this Program shall be the difference, if any, between the amount
that would have been payable under the Program after application
of all deductibles, coinsurance and benefit limits, and the
amount actually paid by or through the Company or such VEBA.
C. Participants' Contributions
Appendix I, Part B sets forth the monthly contribution for
each covered person for medical/hospital and vision care benefits
coverage, which is required to be paid by a participating retired
Employee or surviving spouse. The contribution for a month shall
be reduced by any contribution for the same month made by the
Employee or surviving spouse for similar medical/ hospital and
vision care benefits coverage under any other group coverage
provided by or through the Company or a VEBA sponsored by the
Company. Participants' contributions shall be deducted monthly
from their Pension or Annuity payments, unless another form of
payment is approved by the Plan Administrator.
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Participants need not contribute toward the cost of
prescription drug benefits but are required to pay an annual
deductible and to make a copayment for each prescription or
refill as set forth in Appendix I, Part B.
D. Funding
The cost of the Program set forth in this paragraph 23 and
in Appendix I shall be funded by the contributions of
participants and of the Company through the Trust Fund described
in paragraph 15. All such contributions may be commingled with
Pension- and Annuity-related assets for investment and custody
purposes, but all Program contributions and earnings thereon, if
any, together with all disbursements under the Program, shall be
recorded and accounted for in one or more separate accounts
relating solely to this Program.
In the event the Company shall make a contribution to the
Trust Fund which includes contributions allocable both to Pension
and Annuity benefits and to the Program, the Company shall
clearly specify the portion of such contribution allocable to
Pension and Annuity Benefits and the portion allocable to the
Program.
In the event that all liabilities of the Program shall have
been fully satisfied and there are no persons participating in
the Program or eligible therefor, the entire balance in the
separate account relating to the Program shall be paid by the
Trustee to the Company.
E. Eligibility and Enrollment
(a) Only Employees who retire and immediately commence
receiving a retirement Pension from the Management Plan, their
spouses and dependents (as defined in Appendix I, Part A), and
surviving spouses who are receiving Annuities from the Management
Plan and their dependents (as defined in Appendix I, Part A)
shall be eligible for medical/ hospital benefits, and only such
retirees, their spouses and surviving spouses shall be eligible
for prescription drug benefits; provided, however, that former
Employees whose employment terminated because of disability and
who are eligible for an immediate Pension under the Management
Plan but have deferred commencement of such pension to continue
to receive Long Term Disability benefits, shall also be eligible
to enroll in the Program. Effective May 1, 1988, dependents (as
defined in Appendix I, Part A) shall be eligible for prescription
drug benefits, and, effective June 1, 1988, all persons enrolled
for medical/hospital benefits shall be eligible for vision care
benefits. Retirees and surviving spouses and their eligible
dependents are eligible for prescription drug benefits whether or
not they enroll for medical/hospital benefits. A person not
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otherwise eligible to participate in the Retiree Health Program
shall not become eligible to so participate solely by reason of
receiving payments as a Beneficiary pursuant to paragraphs 6 D, 6
E or 6 F.
(b) Each eligible retired Employee and surviving spouse
must enroll and commence participation in the Program upon the
earlier of the Effective Date or the earliest date she or he may
participate. However, an Employee who retires and immediately
commences receiving a retirement Pension from the Management
Plan, and/or the spouse of such Employee, who at that time
participates in a group (not individual) medical/hospital benefit
program provided by any source other than the Company and the
surviving spouse of such retired Employee whose death terminates
such other group coverage for such surviving spouse, may delay
commencement of participation in this Program until expiration of
such other group coverage, provided that such retired Employee or
surviving spouse continues to receive a Pension or Annuity from
the Management Plan at the time participation in this Program is
to commence. Any such retired Employee, spouse or surviving
spouse who desires to participate in this Program shall so notify
the Plan Administrator and shall furnish to the Plan
Administrator proof of such other group coverage and of its
expiration. In addition, a surviving spouse who is receiving an
annuity from the Management Plan, but who is also actively
employed by the Company and/or covered by its group coverage,
must delay commencement of participation in this Program until
termination of employment with the Company or other
discontinuance of participation in the Company's group coverage.
FAILURE BY AN ELIGIBLE PERSON TO ELECT TO PARTICIPATE SHALL
BE DEEMED TO BE A DECLINATION BY SUCH PERSON. IF AN ELIGIBLE
PERSON DECLINES TO PARTICIPATE OR IS DEEMED TO HAVE DECLINED TO
PARTICIPATE, SUCH PERSON AND SUCH PERSON'S SURVIVING SPOUSE AND
DEPENDENTS SHALL NOT PARTICIPATE IN THE PROGRAM AND SHALL NOT BE
ELIGIBLE TO PARTICIPATE AT A LATER DATE.
(c) Each retiree or surviving spouse eligible for
medical/hospital benefits beginning on the Effective Date shall
be notified, not less than 90 days before the Effective Date, of
such eligibility and of the terms and conditions of such
benefits. After the Program is effective, each Employee or
surviving spouse shall be notified not more than 90 days prior to
the earliest date she or he may participate, of such eligibility
and of the terms and conditions of such benefits. Such notice
shall be in writing and written in such manner as to be
understood by a person of average intellect and ability. Each
eligible person desiring to participate shall elect to
participate by completing and signing enrollment forms provided
by the Plan Administrator not later than 30 days before the
earliest day she or he may commence participation (or within 60
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days after receipt of notification in the case of a surviving
spouse of a suddenly deceased Employee). Each retiree or
surviving spouse eligible for vision care benefits shall receive
instructions for securing such benefits.
(d) Each retiree or surviving spouse eligible for
prescription benefits shall receive an identification card and
instructions for securing such benefits.
F. Limitations and Restrictions
Except as provided in paragraph 23 D., all contributions to
the Program and earnings thereon, if any, shall be for the
exclusive benefit of enrolled participants, and no part of such
assets shall be diverted to any other purpose. In no event shall
assets of the Management Plan relating to Pension and Annuity
benefits be utilized for health benefits, and in no event shall
assets of the Program be utilized for Pension or Annuity
benefits.
The Program shall be administered in such manner that it
shall not discriminate in favor of shareholders, officers and
highly compensated Employees of the Company. Any Employee who
during any Plan Year was a Key Employee, as defined in Section
416(i) of the Code, shall not be eligible to participate in the
Program.
G. Termination or Modification
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION AT
ANY TIME AND FROM TIME TO TIME AND WITHOUT PRIOR NOTICE TO
PARTICIPANTS, BY ACTION OF ITS BOARD OF TRUSTEES OR PURSUANT TO
AUTHORITY GRANTED BY ITS BOARD OF TRUSTEES, TO AMEND, MODIFY OR
TERMINATE IN WHOLE OR IN PART THE RETIREE HEALTH PROGRAM SET
FORTH ABOVE AND IN APPENDIX I AND TO REDUCE, CEASE OR INCREASE
ITS CONTRIBUTIONS TO THE PLAN FOR THE PROGRAM. NO SUCH
AMENDMENT, MODIFICATION, TERMINATION OR CHANGE IN COMPANY
CONTRIBUTIONS SHALL RETROACTIVELY AFFECT ADVERSELY ANY
PARTICIPANT'S BENEFIT UNDER THE PROGRAM.
24. COST-OF-LIVING ADJUSTMENTS
A. Effective Date
This paragraph 24 is effective as of January 1, 1987.
B. Eligibility
All Pensions and Annuities payable under the Plan for the
month of April in a calendar year, which Pensions and Annuities
commenced to be paid prior to December 31 of the prior calendar
year, shall be eligible for an adjustment hereunder. In the case
of an Annuity payable to a surviving spouse of a retired
participant, the surviving spouse's Annuity shall be deemed to
have commenced on the date the retired participant's Pension
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commenced.
C. Pensions and Annuities Adjusted Annually
Beginning with 1987, all eligible Pensions and Annuities
being paid from time to time under the Management Plan shall be
increased annually by the percentage determined under paragraph
24 D. Such adjustment shall be made for the month of April each
year and for each month thereafter, until further changed or
terminated in accordance with provisions of this Plan.
D. Percentage of Adjustment
Each annual adjustment shall equal seventy five percent
(75%) of the percentage increase rounded to the nearest one-tenth
percent (1/10%), in the Index specified in paragraph 24 F for the
preceding December over the Index for the next-preceding
December; provided, however, that such annual adjustment shall
not:
( i) exceed three percent (3%) or
(ii) be less than zero percent (0%), of the eligible
Pension or Annuity.
E. Limitation on Adjustments
No adjustment in a Pension or Annuity provided under this
paragraph 24 may cause such Pension or Annuity, as adjusted, to
be greater than the product of (A) the amount of such Pension or
Annuity paid for the month of December 1986 or the later month in
which the Pension or Annuity commenced ("Commencement Month"),
multiplied by (B) a fraction, the numerator of which shall be the
Index for the December immediately preceding the month of April
in which the adjustment is to be made, and the denominator of
which shall be the Index for the December immediately preceding
the Commencement Month. For all purposes of calculating this
limitation, the Annuity of a surviving spouse of an employee who
retired and commenced to receive a Pension, shall be 50% of such
retired employee's initial Pension, and the denominator of (B)
shall be the Index for December 1985 or the Index for the
December preceding the later month in which the retired employee
commenced to receive the Pension. Any increase pursuant to this
paragraph 24 shall be reduced to the extent required to satisfy
the limitation set forth in this paragraph 24E.
F. Index
The Index to be used for purposes of this paragraph 24 shall
be the Consumer Price Index, all urban consumers-U.S. city
average, as published by the United States Department of Labor.
If at any time such Index is revised or discontinued, or if the
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Named Fiduciaries determine that a different index, device or
other form of measurement more accurately measures the impact of
inflation on the purchasing power of retirees, the Named
Fiduciaries, with the advice of the Plan's Actuary, may
substitute such other index, device or other form of measurement
as they, in their discretion, determine to be appropriate.
G. Cash-Outs
In converting the deferred pension otherwise payable to an
Employee to a Cash-Out, the actuarial assumptions underlying such
conversion shall reflect 75 percent of the anticipated inflation
related component of long term interest rates, which shall be
calculated by subtracting an assumed real interest rate of 5.5
percent from the single interest rate that would produce a value
equal to the value produced by the interest rates used under
Section 417(e) of the Code, except that in no event shall the
rate of the assumed postretirement cost of living adjustment
exceed 3 percent or be less than zero.
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APPENDIX I - RETIREE HEALTH PROGRAM
PART A - BENEFITS
I. HOSPITAL/MEDICAL BENEFITS
Description:
A hospital and medical plan for eligible retirees, and
spouses, eligible surviving spouses of retirees, and unmarried
dependent children to the end of the calendar year in which they
attain age 19, or to the end of the calendar month in which they
attain age 23 if full-time unmarried students, or unmarried
handicapped children fully dependent on the eligible retiree or
surviving spouse for support and maintenance regardless of age,
provided such handicap was suffered prior to attaining age 19 or
while covered by this plan. Benefits will be provided to those
not eligible for Medicare and those eligible for Medicare except
that benefits provided shall, for those Participants who are
eligible for Medicare Parts A and B benefits, exclude benefits
available under Medicare Parts A and B, whether or not such
Participants have enrolled in Part A and/or Part B. Coverage
will be provided through a combination of three premium rates
established for: Single person not eligible for Medicare, single
person eligible for Medicare, and coverage for dependents (spouse
and/or children).
Annual Deductibles:
HOSPITAL - 50% of the Part A Medicare annual per person
deductible amount in effect at the time of the hospitalization
(subject to a maximum $50 per person annual out-of-pocket expense
for home health care expenses).
MEDICAL - $200 per person per year (includes the Medicare
Part B deductible). For families with 4 or more persons covered,
the maximum annual deductible is $600 and no more than $200 of
any one person's covered medical expenses will be applied toward
the family deductible.
Medical Expense Reimbursement Level:
Reasonable and customary charges as determined by the
company providing or administering medical expense benefits.
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Medical Expense Copayments:
20% for expenses from $200 to $7,500 per person per year.
None for expenses over $7,500 per person per year.
Medical Expense Lifetime Maximum Reimbursement:
$1,000,000 paid by the Plan for each individual.
Benefits:
HOSPITAL (Paid-in-Full)
A. Up to 365 days for semiprivate room and board and other
usual charges in a legally constituted hospital, skilled nursing
facility approved by Medicare, or hospice.
B. Up to 100 days of rehabilitative care in a JCHA
rehabilitation institution per person per year.
C. 30 days per person per year for treatment of mental,
psychoneurotic, or personality disorders in semiprivate room in
an approved facility.
D. Up to 200 home health care visits per person per year
by a licensed approved Home Health Care Agency.
E. Emergency room charges for accidental injury or sudden
and serious illness (not subject to deductible).
F. Outpatient preadmission testing (not subject to the
deductible).
G. Pregnancy is treated the same as any other sickness.
H. Precertification for hospital admission for a person
who is not Medicare-eligible and concurrent review of length of
hospital stay. The precertification program will review the
medical necessity and length of hospital stays. If a participant
does not call the insurance carrier administering the program for
precertification before a scheduled hospital admission or within
two business days after an emergency hospital admission, the
participant will be responsible for $100 per day of the hospital
charges normally covered under the plan, up to a maximum cost to
the participant of $500. This amount shall be in addition to the
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plan's hospital deductible. If a participant stays in the
hospital for more days than the insurance carrier has certified,
the participant may be responsible for the full cost of the
uncertified days.
I. Inpatient diagnosis and treatment in a hospital or in
an alcohol or substance abuse treatment center of alcoholism or
alcohol abuse and substance abuse or substance dependence subject
to the following limitations as to days of care:
- Up to 7 days of alcohol detoxification in any
calendar year and up to 30 days of alcohol rehabilitation in any
calendar year, but not more than 60 days in a lifetime.
- Up to 14 days of substance detoxification in any
calendar year and up to 30 days of substance rehabilitation in
any calendar year, but not more than 60 days in a lifetime.
MEDICAL
A. Payment of 100% of reasonable and customary charges
(not subject to the deductible) for:
- Charges for outpatient surgery, provided a second
opinion has been obtained, if required by the Plan
- Mandatory second opinion, which is required by
the Plan for the following elective surgical procedures:
- All foot surgery, including bunionectomy,
arthrotomy, phalangectomy, capsulotomy, arthrodesis,
arthroplasty, and straightening of hammer toe.
- Varicose vein ligation and stripping
- Knee surgery, including arthrectomy,
arthrotomy, arthroscopy with partial meniscectomy, and
arthroplasty.
- Coronary Bypass procedures
- Dilation and Curettage
- Cataract surgery
- Varicocelectomy
- Hysterectomy
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- Mastectomy
- Prostate surgery
- Intervertebral disc or spinal surgery
- Hemorrhoidectomy
- Deviated septum repair or reconstruction
B. Payment of 50% of reasonable and customary charges,
subject to deductible, for:
- Elective surgical procedures for which mandatory
second opinion has not been obtained
- Outpatient treatment of mental, psychoneurotic and
personality disorders (subject to a $1,500 annual maximum per
person provided, however, that a minimum reimbursement of $30 a
visit will apply).
- Routine foot care ($250 maximum per person per
year)
- Licensed Chiropractor services ($500 maximum per
person per year)
C. Payment of reasonable and customary charges, subject to
deductibles and copayments, for:
- Hospital services and supplies not covered under
Hospital benefits
- Physician's services and supplies furnished as part
of those services
- Inpatient surgical charges, provided a second
opinion has been obtained, if required by the Plan
- X-Rays; X-Ray, Radium and Radioactive isotope
therapies; Chemotherapy
- Laboratory services and diagnostic testing
- Surgical dressings, casts, splints, and other
devices used for reductions, fractures and dislocations
- Anesthetics and their administration
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- Rental or purchase of durable medical equipment
when medically necessary
- Inpatient and outpatient private duty nursing care
at a level determined to be appropriate and medically necessary
by the insurance company insuring the benefits under the Plan
- Medically necessary ambulance services
- Artificial limbs, larynxes, eyes and other
non-dental prosthetic devices
- Braces, trusses and crutches
- Heart pacemakers
- Treatment of accidentally injured natural teeth
within 12 months of accident, including dental surgery and
prosthetic devices
- Manual manipulation of the spine to correct a
subluxation demonstrated by X-ray
- Oxygen
- Examination, purchase, and fitting of hearing aids,
not subject to 20% copayment, but subject to a maximum of $300
per ear per lifetime
- Physical, speech, and occupational therapy when
medically necessary
- Transfusions of blood and blood components and
charges for the administration of the same
- Renal dialysis
D. Payment of 80% of reasonable and customary charges,
subject to deductible, for diagnostic and medically necessary
outpatient treatment of alcoholism or alcohol abuse and substance
abuse or substance dependence for up to 60 outpatient visits per
person in a calendar year. Up to an aggregate of 20 of the
visits may be used for counseling covered family members.
Exclusions:
- Injuries arising out of, or in the course of,
employment for pay
- Injury or sickness caused by an act of war
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- Prescription drugs and medications (except those
dispensed during a hospital stay)
- Custodial Care
- Doctor's services or X-rays relating to teeth
(except for treatment of accidental injury to natural teeth or
removal of malignant mouth tumor)
- Services and supplies provided by any government
agencies, or covered by worker's compensation, governmental
agencies, no-fault insurance, or where there is no obligation to
pay
- Routine check-ups
- Eyeglasses, contact lenses, eye examinations,
vision training, and eye surgery to correct near- or
far-sightedness or astigmatism
- Immunizations
- Acupuncture except when medically necessary and
provided by a licensed physician
- Cosmetic surgery (except reconstructive surgery
required as a result of injury, infection, disease or bodily
function impairment due to birth disease or defect)
- Personal comfort items
- Experimental procedures or therapies
- Orthotic devices
- Blood or blood plasma replaced by or for the
patient
- Actual or attempted impregnation or fertilization
- Nursing or any therapy provided by the retiree, or
retiree's spouse, child, brother, sister, parent or parent-in-law
- Services or supplies not reasonable or customary or
not medically necessary
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II. PRESCRIPTION DRUG BENEFITS
Description:
A prescription drug payment Plan for retirees and their
spouses, or surviving spouses of retirees, and, effective May 1,
1988, for their unmarried dependent children to the end of the
calendar year in which they attain age 19, or to the end of the
calendar month in which they attain age 23 if they are full-time
students, and for their unmarried handicapped children who are
fully dependent on the retiree or surviving spouse for support
and maintenance regardless of age, provided such handicap was
suffered prior to attaining age 19 or while covered by this Plan.
Benefits are processed and administered by one or more companies
selected by the Plan Administrator from time to time.
Cost to Participants:
There is an annual deductible per family set forth in
Appendix I, Part B, that must be met before the Plan will
reimburse a participant for prescriptions obtained under the
prescription card program. The annual deductible shall not apply
to prescriptions obtained under the mail service program.
Each prescription or refill requires the copayment set forth
in Part B (the "required copayment") to be made by the retiree,
but the Plan pays the entire balance of the cost for
prescriptions filled under mail service coverage and, after the
annual deductible is met, the entire balance of the cost of
prescriptions filled at pharmacies designated as participating
pharmacies for basic benefits.
Participants using non-participating pharmacies must pay for
their prescriptions and submit reimbursement claims to the Plan.
After the annual deductible is met, the Plan will reimburse
participants an amount equal to one hundred percent (100%) of the
average wholesale price of the prescription less the applicable
co-payment.
Basic Coverage:
Virtually all legend drugs and medicines requiring a
prescription from a doctor are eligible for payment. Compounded
medication must include at least one prescription legend drug. A
quantity sufficient for 34 days may be dispensed. Included are
insulin and drugs prescribed for chronic conditions. Certain
chronic prescription drugs may be dispensed in amounts up to 100
unit doses.
Refills of prescriptions are also covered. Authorized
refills may be filled only up to one year from the date of the
original prescription. After one year, the Plan requires a new
prescription from the physician.
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There is no limit to the number of prescriptions that may be
filled, but the Participant must make the required co-payment for
each prescription and each refill.
Prescription costs are covered whether the prescribing
doctor is a doctor of medicine, a doctor of osteopathy, a dentist
or a podiatrist.
Mail Service Coverage:
Prescription drugs taken on an ongoing basis are available
in up to 180 day supply quantities by mail from the provider
selected by the Plan Administrator. The same drugs are included
for mail service benefits as for basic coverage.
Exclusions:
- Medicines and drugs ordinarily available without a
doctor's prescription.
- Charges for the administration or injection of any
drug.
- Therapeutical devices or appliances, including
hypodermic needles, syringes, support garments and other
non-medical substances, regardless of intended use (except that
hypodermic needles and syringes are covered under the mail
service program).
- Investigational or experimental drugs.
- Immunization agents, biological sera, blood or
blood plasma.
- Medication taken or administered to an individual,
while he or she is a patient in a licensed hospital, rest home,
sanitarium, extended care facility, convalescent facility,
nursing home, etc., which operates on its premises a facility for
dispensing pharmaceutical.
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Securing Basic Benefits:
Eligible participants will receive from the firm
administering the benefits an identification card to be presented
with the required co-payment at participating pharmacies. If
prescriptions are purchased at nonparticipating pharmacies, the
pharmacist must complete an approved Prescription Drug Claim Form
for submission to the firm administering the benefits.
Securing Mail Service Benefits:
Eligible participants should submit a Patient Profile
Questionnaire to the firm selected by the Plan Administrator to
administer mail service prescriptions together with the first
prescription for up to a 180 day supply (refillable if
applicable), and the required co-payment for each prescription.
Only the required co-payment for each prescription or refill must
be submitted with all future prescriptions or refills.
III. VISION CARE BENEFITS
Description
Vision care benefits provided within the medical/hospital
benefit plan for retirees and their spouses, or surviving spouses
of retirees, and for their dependent children who are eligible
for medical/hospital benefits under the Program. Benefits are
processed and administered by one or more companies selected by
the Plan Administrator from time to time.
SCHEDULE OF BENEFITS
The maximum reimbursable amounts are:
I. Vision Care Examination $20
II. A. or B.:
A. Pair of eyeglass lenses $25
Eyeglass frames $20
B. Contact Lenses $45
Covered Vision Care:
Each eligible Participant is entitled to one eye examination
and one pair of eyeglasses or contact lenses once in every 24
consecutive calendar months, as follows:
1. Eye Examination:
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Vision examination when performed by a physician
licensed to perform vision examinations and prescribe lenses, an
ophthalmologist, or optometrist who evaluate the health and
visual status of the eyes. An examination usually includes: case
history, visual acuity (clearness of vision), external
examination and measurement, interior examination with
ophthalmoscope, pupillary reflexes and eye movements, retinoscopy
(shadow test), subjective refraction, coordination measurements
(far and near), tonometry (glaucoma test), medicating agents for
diagnostic purposes, if applicable, and an analysis of the
findings with recommendations and a prescription, if required.
2. Either A. or B.:
A. Eyeglasses, including:
(i) Two glass or plastic lenses, when they are
prescribed by an ophthalmologist, a physician licensed to perform
vision examinations and prescribe lenses or an optometrist.
Lenses must meet the standards of the American National Standards
Institute.
(ii) Frames adequate to hold lenses.
B. Contact Lenses
3. Dispensing Services
The allowances stated above include dispensing services
performed by an ophthalmologist, a physician licensed to perform
vision examinations and prescribe lenses, an optometrist or an
optician who, based on a prescription prepares or orders the
eyeglasses or contact lenses selected, verifies the accuracy of
the lenses and assures that the eyeglasses or contact lenses fit
properly.
Limitations and Exclusions:
Benefits are not payable for:
- The difference between the actual charge for services,
lenses and/or frames, and the maximum amount therefor in the
schedule of benefits.
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- Service or supplies for which the covered person is
entitled to or receives benefits under any other plan or program,
insured or uninsured, for which the covered person's employer
directly or indirectly pays all or part of the cost;
- Drugs or any other medication not administered for
the purpose of a vision examination;
- Services and supplies in connection with medical or
surgical treatment of the eye;
- Services and supplies in connection with special
procedures such as, but not limited to, orthoptics, vision
training, subnormal vision aids, aniseikonic lenses and
tonography;
- Vision examination rendered and lenses or frames
ordered:
1. before the person became eligible for vision
care benefits coverage; or
2. after termination of vision care benefits
coverage;
- Services or supplies not prescribed as necessary by
a licensed physician, optometrist or optician;
- Charges for services or supplies that are
experimental in nature;
- Replacement of lenses or frames that are lost or
broken unless at the time of replacement the covered person is
otherwise eligible under the frequency of services provision;
- Services or supplies that are covered by any
worker's compensation laws or similar legislation;
- Services or supplies for which no charge is made
that the covered person is legally obligated to pay or for which
no charge would be made in the absence of vision care benefits
coverage;
- Sunglasses or other tinted glasses of any kind,
photosensitive or anti-reflective lenses and aniseikonic lenses,
to the extent any such charges exceed the charges for clear white
plastic or glass lenses;
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- Services or supplies required by an employer as a
condition of employment, or which the employer is required to
provide directly to the employee according to the terms of a
labor contract;
- Services or supplies required by a government body;
- Services or supplies furnished by any government
and any charges to the extent benefits are provided by government
programs.
Securing Benefits
To file a claim a Participant should obtain a Retiree Health
Plan claim form from the Company. The Participant should fill in
the Participant portion of the claim form and have the form
completed by the provider. The Participant should then send the
completed form to the benefit processor who will reimburse
Participant for the actual charge paid by the Participant for
covered vision expenses but not for more than the amounts set
forth in the schedule for maximum reimbursement amounts.
Alternatively, the Participant may on the Retiree Health
Plan claim form request an assignment of the benefits to the
provider, in which event the benefits processor will
send the reimbursement check directly to the provider. The
Participant is responsible for paying the full difference between
the actual charges and the amount reimbursed.
IV. MODIFICATION OR TERMINATION OF PROGRAM
THE COMPANY RESERVES THE RIGHT IN ITS ABSOLUTE DISCRETION AT
ANYTIME AND FROM TIME TO TIME AND WITHOUT PRIOR NOTICE TO
PARTICIPANTS, BY ACTION OF ITS BOARD OF TRUSTEES OR PURSUANT TO
AUTHORITY GRANTED BY ITS BOARD OF TRUSTEES, TO AMEND, MODIFY OR
TERMINATE IN WHOLE OR IN PART THE RETIREE HEALTH PROGRAM SET
FORTH IN THIS APPENDIX I, AND TO REDUCE, CEASE OR INCREASE ITS
CONTRIBUTIONS TO THE PLAN FOR THE PROGRAM. NO SUCH AMENDMENT,
MODIFICATION, TERMINATION OR CHANGE IN COMPANY CONTRIBUTIONS
SHALL RETROACTIVELY AFFECT ADVERSELY ANY PARTICIPANT'S BENEFITS
UNDER THE PROGRAM.
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PART B - COSTS
Retiree Monthly Contribution for Medical/Hospital Benefits
Effective October 1, 1994 the following amounts for each
participating eligible individual shall be deducted from the
monthly Pension or Annuity payments to the retiree or surviving
spouse:
A. Where Employee Retired Before June 1, 1988:
Not Eligible Eligible
for Medicare for Medicare
Retiree $ 48 $ 19
One or more
Dependents $ 72 $ 29
Surviving Spouse $ 48 $ 19
B. Where Employee Retired After May 31, 1988:
Not Eligible Eligible
for Medicare for Medicare
Retiree $ 72 $ 19
One or more
Dependents $ 108 $ 29
Surviving Spouse $ 72 $ 19.
Required Deductible and Copayment For Prescription Drugs
Effective May 1, 1992, a $25 annual deductible per family
must be met before the Plan pays for any prescriptions obtained
under the prescription card program. Effective May 1, 1992, the
required copayment for basic coverage shall be $6.00 for brand
name products and $3.00 for generic products, and there shall be
no copayment for prescription drugs obtained under the mail
service program.
Company Contribution
Each plan year, the Company will contribute an amount equal
to the excess of the actuarially determined cost over total
retiree contributions.
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Effective Dates
The contribution and prescription drug annual deductible and
co-payment levels set forth above are effective for the time
periods indicated. New contribution, deductible and co-payment
levels will be established by the Company from time to time, and
Participants will be notified in advance of the effective date
thereof. ANY INCREASES IN COSTS SHALL BE THE SOLE RESPONSIBILITY
OF PARTICIPATING INDIVIDUALS, except to the extent the Company,
in its sole discretion, elects to increase its contribution over
levels in effect upon the dates indicated above.
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<TABLE>
TABLE A
EARLY RETIREMENT DISCOUNT FACTORS
APPLIED TO THE EMPLOYEE'S ACCRUED PENSION FOR RETIREMENTS PRIOR
TO THE ATTAINMENT OF THE OPTIONAL RETIREMENT DATE
(MONTHS PRIOR IS THE NUMBER OF MONTHS BETWEEN AN EMPLOYEE'S RETIREMENT DATE
AFTER HIS SIXTIETH BIRTHDAY AND THE DATE OF RETIREMENT)
(ALSO APPLIED IN CALCULATION OF SURVIVING SPOUSE BENEFIT)
<S> <C> <C> <C> <C> <C> <C> <C>
Months Discount Months Discount Months Discount Months Discount
Prior Factor Prior Factor Prior Factor Prior Factor
1 0.99875 49 0.93875 97 0.46900 145 0.36200
2 0.99750 50 0.93750 98 0.46600 146 0.36000
3 0.99625 51 0.93625 99 0.46300 147 0.35800
4 0.99500 52 0.93500 100 0.46000 148 0.35600
5 0.99375 53 0.93375 101 0.45700 149 0.35400
6 0.99250 54 0.93250 102 0.45400 150 0.35200
7 0.99125 55 0.93125 103 0.45100 151 0.35000
8 0.99000 56 0.93000 104 0.44800 152 0.34800
9 0.98875 57 0.92875 105 0.44500 153 0.34600
10 0.98750 58 0.92750 106 0.44200 154 0.34400
11 0.98625 59 0.92625 107 0.43900 155 0.34200
12 (59) 0.98500 60 (55) 0.92500 108 (51) 0.43600 156 (47) 0.34000
13 0.98375 61 0.57700 109 0.43400 157 0.33800
14 0.98250 62 0.57400 110 0.43200 158 0.33600
15 0.98125 63 0.57100 111 0.43000 159 0.33400
16 0.98000 64 0.56800 112 0.42800 160 0.33200
17 0.97875 65 0.56500 113 0.42600 161 0.33000
18 0.97750 66 0.56200 114 0.42400 162 0.32800
19 0.97625 67 0.55900 115 0.42200 163 0.32600
20 0.97500 68 0.55600 116 0.42000 164 0.32400
21 0.97375 69 0.55300 117 0.41800 165 0.32200
22 0.97250 70 0.55000 118 0.41600 166 0.32000
23 0.97125 71 0.54700 119 0.41400 167 0.31800
24 (58) 0.97000 72 (54) 0.54400 120 (50) 0.41200 168 (46) 0.31600
25 0.96875 73 0.54100 121 0.41000 169 0.31400
26 0.96750 74 0.53800 122 0.40800 170 0.31200
27 0.96625 75 0.53500 123 0.40600 171 0.31000
28 0.96500 76 0.53200 124 0.40400 172 0.30800
29 0.96375 77 0.52900 125 0.40200 173 0.30600
30 0.96250 78 0.52600 126 0.40000 174 0.30400
31 0.96125 79 0.52300 127 0.39800 175 0.30200
32 0.96000 80 0.52000 128 0.39600 176 0.30000
33 0.95875 81 0.51700 129 0.39400 177 0.29800
34 0.95750 82 0.51400 130 0.39200 178 0.29600
35 0.95625 83 0.51100 131 0.39000 179 0.29400
36 (57) 0.95500 84 (53) 0.50800 132 (49) 0.38800 180 (45) 0.29200
37 0.95375 85 0.50500 133 0.38600
38 0.95250 86 0.50200 134 0.38400
39 0.95125 87 0.49900 135 0.38200
40 0.95000 88 0.49600 136 0.38000
41 0.94875 89 0.49300 137 0.37800
42 0.94750 90 0.49000 138 0.37600
43 0.94625 91 0.48700 139 0.37400
44 0.94500 92 0.48400 140 0.37200
45 0.94375 93 0.48100 141 0.37000
46 0.94250 94 0.47800 142 0.36800
47 0.94125 95 0.47500 143 0.36600
48 (56) 0.94000 96 (52) 0.47200 144 (48) 0.36400
Exact ages shown in parenthesis Retirement Plan for Management Employees - 1989
</TABLE>
- 78 -
<PAGE>
<PAGE>
TABLE B
LUMP-SUM DISTRIBUTION FACTORS
(Present Value Factors)
Factor Corresponding to Age of Employee at Termination
Which When Applied to Vested Pension Payable at Age 65
Will Determine "Cashout" Value
Age * Factor Age * Factor
20 0.6969 45 2.7271
21 0.7335 46 2.8859
22 0.7743 47 3.0552
23 0.8173 48 3.2359
24 0.8628 49 3.4289
25 0.9108 50 3.6354
26 0.9615 51 3.8566
27 1.0151 52 4.0937
28 1.0717 53 4.3482
29 1.1315 54 4.6216
30 1.1947 55 4.9158
31 1.2614 56 5.2325
32 1.3320 57 5.5737
33 1.4066 58 5.9415
34 4.4855 59 6.3387
35 1.5689 60 6.7692
36 1.6571 61 7.2372
37 1.7504 62 7.7472
38 1.8492 63 8.3042
39 1.9538 64 8.9143
40 2.0645
41 2.1817
42 2.3060
43 2.4379
44 2.5781
* Age at termination is age nearest birthday.
(Age 43 and 6 months = Age 44)
Mortality: 1971 TPF&C Forecast
Interest: 5.50%
- 79 -
<PAGE>
<PAGE>
TABLE C
10 Year Certain Annuity
Conversion Factors
Age Factor Age Factor
45 .9916 61 .9547
46 .9905 62 .9488
47 .9894 63 .9420
48 .9881 64 .9344
49 .9868 65 .9259
50 .9854 66 .9166
51 .9839 67 .9064
52 .9823 68 .8954
53 .9806 69 .8835
54 .9878 70 .8706
55 .9765 71 .8566
56 .9741 72 .8412
57 .9713 73 .8245
58 .9681 74 .8062
59 .9643 75 .7865
60 .9598
Based on:
7 1/2% Discount Rate
1983 Group Annuity Mortality Table
- 80 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 25 26 27 28 29 30 31 32 33 34
15 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
16 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
17 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
18 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
19 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
20 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
21 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
22 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
23 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
24 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
25 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
26 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
27 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
28 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
29 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
30 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
31 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
32 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
33 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
34 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
35 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
36 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
37 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
38 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
39 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
40 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
41 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
42 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
43 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
44 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
45 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
46 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
47 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
48 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
49 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
50 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
51 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
52 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
53 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
54 1.000 .999 .999 .999 .999 .999 .999 .999 .999 .999
55 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
56 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
57 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
58 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
59 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
60 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
61 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
62 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
63 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
64 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
65 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
66 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
67 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
68 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
69 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 81 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 25 26 27 28 29 30 31 32 33 34
70 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
71 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
72 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
73 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
74 .999 .999 .999 .999 .999 .999 .999 .999 .999 .999
75 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998
76 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998
77 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998
78 .999 .999 .999 .999 .999 .999 .999 .999 .999 .998
79 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998
80 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998
81 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998
82 .999 .999 .999 .999 .999 .999 .999 .999 .998 .998
83 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998
84 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998
85 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998
86 .999 .999 .999 .999 .999 .999 .999 .998 .998 .998
87 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998
88 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998
89 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998
90 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998
91 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998
92 .999 .999 .999 .999 .999 .999 .998 .998 .998 .998
93 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
94 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
95 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
96 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
97 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
98 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
99 .999 .999 .999 .999 .999 .998 .998 .998 .998 .998
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 82 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 35 36 37 38 39 40 41 42 43 44
15 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
16 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
17 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
18 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
19 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
20 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
21 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
22 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
23 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
24 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
25 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
26 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
27 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
28 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
29 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
30 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
31 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
32 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
33 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
34 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
35 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
36 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
37 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
38 .999 .999 .999 .998 .998 .998 .998 .997 .997 .997
39 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
40 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
41 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
42 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
43 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
44 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
45 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
46 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
47 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
48 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
49 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
50 .999 .999 .999 .998 .998 .998 .998 .997 .997 .996
51 .999 .999 .998 .998 .998 .998 .998 .997 .997 .996
52 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
53 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
54 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
55 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
56 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
57 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
58 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
59 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
60 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
61 .999 .999 .998 .998 .998 .998 .997 .997 .997 .996
62 .999 .999 .998 .998 .998 .998 .997 .997 .996 .996
63 .999 .999 .998 .998 .998 .998 .997 .997 .996 .996
64 .999 .998 .998 .998 .998 .998 .997 .997 .996 .996
65 .999 .998 .998 .998 .998 .998 .997 .997 .996 .996
66 .999 .998 .998 .998 .998 .997 .997 .997 .996 .996
67 .999 .998 .998 .998 .998 .997 .997 .997 .996 .996
68 .999 .998 .998 .998 .998 .997 .997 .997 .996 .996
69 .999 .998 .998 .998 .998 .997 .997 .997 .996 .996
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 83 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 35 36 37 38 39 40 41 42 43 44
70 .998 .998 .998 .998 .998 .997 .997 .997 .996 .995
71 .998 .998 .998 .998 .998 .997 .997 .996 .996 .995
72 .998 .998 .998 .998 .998 .997 .997 .996 .996 .995
73 .998 .998 .998 .998 .997 .997 .997 .996 .996 .995
74 .998 .998 .998 .998 .997 .997 .997 .996 .996 .995
75 .998 .998 .998 .998 .997 .997 .997 .996 .996 .995
76 .998 .998 .998 .998 .997 .997 .997 .996 .996 .995
77 .998 .998 .998 .998 .997 .997 .996 .996 .995 .995
78 .998 .998 .998 .998 .997 .997 .996 .996 .995 .995
79 .998 .998 .998 .997 .997 .997 .996 .996 .995 .995
80 .998 .998 .998 .997 .997 .997 .996 .996 .995 .994
81 .998 .998 .998 .997 .997 .997 .996 .996 .995 .994
82 .998 .998 .998 .997 .997 .997 .996 .996 .995 .994
83 .998 .998 .998 .997 .997 .996 .996 .995 .995 .994
84 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994
85 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994
86 .998 .998 .997 .997 .997 .996 .996 .995 .995 .994
87 .998 .998 .997 .997 .997 .996 .996 .995 .994 .994
88 .998 .998 .997 .997 .997 .996 .996 .995 .994 .994
89 .998 .998 .997 .997 .997 .996 .996 .995 .994 .994
90 .998 .998 .997 .997 .997 .996 .996 .995 .994 .993
91 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
92 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
93 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
94 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
95 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
96 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
97 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
98 .998 .997 .997 .997 .996 .996 .995 .995 .994 .993
99 .998 .997 .997 .997 .996 .996 .995 .994 .994 .993
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 84 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 45 46 47 48 49 50 51 52 53 54
15 .996 .996 .995 .995 .994 .993 .993 .992 .991 .991
16 .996 .996 .995 .995 .994 .993 .993 .992 .991 .991
17 .996 .996 .995 .995 .994 .993 .993 .992 .991 .991
18 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
19 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
20 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
21 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
22 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
23 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
24 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
25 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
26 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
27 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
28 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
29 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
30 .996 .996 .995 .995 .994 .993 .993 .992 .991 .990
31 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
32 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
33 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
34 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
35 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
36 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
37 .996 .996 .995 .994 .994 .993 .993 .992 .991 .990
38 .996 .996 .995 .994 .994 .993 .992 .992 .991 .990
39 .996 .996 .995 .994 .994 .993 .992 .992 .991 .990
40 .996 .996 .995 .994 .994 .993 .992 .992 .991 .990
41 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990
42 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990
43 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990
44 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990
45 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990
46 .996 .995 .995 .994 .994 .993 .992 .992 .991 .990
47 .996 .995 .995 .994 .994 .993 .992 .991 .991 .990
48 .996 .995 .995 .994 .994 .993 .992 .991 .991 .990
49 .996 .995 .995 .994 .994 .993 .992 .991 .991 .990
50 .996 .995 .995 .994 .994 .993 .992 .991 .991 .990
51 .996 .995 .995 .994 .993 .993 .992 .991 .990 .990
52 .996 .995 .995 .994 .993 .993 .992 .991 .990 .990
53 .996 .995 .995 .994 .993 .993 .992 .991 .990 .996
54 .996 .995 .995 .994 .993 .993 .992 .991 .990 .989
55 .996 .995 .995 .994 .993 .993 .992 .991 .990 .989
56 .996 .995 .995 .994 .993 .993 .992 .991 .990 .989
57 .996 .995 .995 .994 .993 .993 .992 .991 .990 .989
58 .996 .995 .994 .994 .993 .992 .992 .991 .990 .989
59 .996 .995 .994 .994 .993 .992 .992 .991 .990 .989
60 .996 .995 .994 .994 .993 .992 .992 .991 .990 .989
61 .995 .995 .994 .994 .993 .992 .991 .991 .990 .989
62 .995 .995 .994 .994 .993 .992 .991 .990 .990 .989
63 .995 .995 .994 .994 .993 .992 .991 .990 .989 .988
64 .995 .995 .994 .993 .993 .992 .991 .990 .989 .988
65 .995 .995 .994 .993 .993 .992 .991 .990 .989 .988
66 .995 .995 .994 .993 .992 .992 .991 .990 .989 .988
67 .995 .995 .994 .993 .992 .992 .991 .990 .989 .988
68 .995 .994 .994 .993 .992 .991 .991 .989 .989 .987
69 .995 .994 .994 .993 .992 .991 .990 .989 .988 .987
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 85 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 45 46 47 48 49 50 51 52 53 54
70 .995 .994 .994 .993 .992 .991 .990 .989 .988 .987
71 .995 .994 .993 .993 .992 .991 .990 .989 .988 .987
72 .995 .994 .993 .992 .992 .991 .990 .989 .988 .987
73 .995 .994 .993 .992 .991 .991 .990 .989 .987 .986
74 .994 .994 .993 .992 .991 .990 .989 .988 .987 .986
75 .994 .994 .993 .992 .991 .990 .989 .988 .987 .986
76 .994 .993 .993 .992 .991 .990 .989 .988 .987 .985
77 .994 .993 .993 .992 .991 .990 .989 .988 .986 .985
78 .994 .993 .992 .991 .991 .990 .988 .987 .986 .985
79 .994 .993 .992 .991 .990 .989 .988 .987 .986 .984
80 .994 .993 .992 .991 .990 .989 .988 .987 .985 .984
81 .994 .993 .992 .991 .990 .989 .988 .986 .985 .984
82 .993 .993 .992 .991 .990 .989 .987 .986 .985 .983
83 .993 .992 .992 .991 .990 .988 .987 .986 .985 .983
84 .993 .992 .991 .990 .989 .988 .987 .986 .984 .983
85 .993 .992 .991 .990 .989 .988 .987 .986 .984 .983
86 .993 .992 .991 .990 .989 .988 .987 .985 .984 .982
87 .993 .992 .991 .990 .989 .988 .986 .985 .984 .982
88 .993 .992 .991 .990 .989 .987 .986 .985 .983 .982
89 .993 .992 .991 .990 .989 .987 .986 .985 .983 .981
90 .993 .992 .991 .990 .988 .987 .986 .984 .983 .981
91 .992 .992 .991 .989 .988 .987 .986 .984 .983 .981
92 .992 .991 .991 .989 .988 .987 .986 .984 .983 .981
93 .992 .991 .990 .989 .988 .987 .985 .984 .982 .981
94 .992 .991 .990 .989 .988 .987 .985 .984 .982 .980
95 .992 .991 .990 .989 .988 .986 .985 .984 .982 .980
96 .992 .991 .990 .989 .988 .986 .985 .983 .982 .980
97 .992 .991 .990 .989 .988 .986 .985 .983 .982 .980
98 .992 .991 .990 .989 .987 .986 .985 .983 .982 .980
99 .992 .991 .990 .989 .987 .986 .985 .983 .981 .980
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 86 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 55 56 57 58 59 60 61 62 63 64
15 .990 .989 .988 .986 .985 .983 .981 .979 .976 .973
16 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
17 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
18 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
19 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
20 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
21 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
22 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
23 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
24 .990 .989 .987 .986 .985 .983 .981 .978 .976 .973
25 .990 .989 .987 .986 .984 .983 .981 .978 .976 .973
26 .990 .989 .987 .986 .984 .983 .981 .978 .976 .973
27 .990 .988 .987 .986 .984 .983 .981 .978 .976 .973
28 .989 .988 .987 .986 .984 .983 .981 .978 .976 .973
29 .989 .988 .987 .986 .984 .983 .980 .978 .975 .972
30 .989 .988 .987 .986 .984 .983 .980 .978 .975 .972
31 .989 .988 .987 .986 .984 .983 .980 .978 .975 .972
32 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
33 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
34 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
35 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
36 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
37 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
38 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
39 .989 .988 .987 .986 .984 .982 .980 .978 .975 .972
40 .989 .988 .987 .986 .984 .982 .980 .977 .975 .972
41 .989 .988 .987 .985 .984 .982 .980 .977 .975 .971
42 .989 .988 .987 .985 .984 .982 .980 .977 .974 .971
43 .989 .988 .987 .985 .984 .982 .980 .977 .974 .971
44 .989 .988 .987 .985 .984 .982 .979 .977 .974 .971
45 .989 .988 .987 .985 .984 .982 .979 .977 .974 .971
46 .989 .988 .987 .985 .983 .981 .979 .977 .974 .971
47 .989 .988 .986 .985 .983 .981 .979 .977 .974 .970
48 .989 .988 .986 .985 .983 .981 .979 .976 .974 .970
49 .989 .988 .986 .985 .983 .981 .979 .976 .973 .970
50 .989 .988 .986 .985 .983 .981 .979 .976 .973 .970
51 .989 .987 .986 .985 .983 .981 .979 .976 .973 .970
52 .989 .987 .986 .985 .983 .981 .978 .976 .973 .969
53 .988 .987 .986 .984 .983 .981 .978 .976 .973 .969
54 .988 .987 .986 .984 .983 .990 .978 .975 .972 .969
55 .988 .987 .986 .984 .982 .990 .978 .975 .972 .969
56 .988 .987 .986 .984 .982 .990 .978 .975 .972 .968
57 .988 .987 .986 .984 .982 .990 .978 .975 .972 .968
58 .988 .987 .985 .984 .982 .990 .977 .974 .971 .968
59 .988 .987 .985 .984 .982 .990 .977 .974 .971 .967
60 .988 .986 .985 .983 .982 .979 .977 .974 .970 .967
61 .988 .986 .985 .983 .981 .979 .976 .973 .970 .966
62 .987 .986 .985 .983 .981 .979 .976 .973 .970 .966
63 .987 .986 .984 .983 .981 .978 .976 .973 .969 .965
64 .987 .986 .984 .982 .980 .978 .975 .972 .969 .965
65 .987 .986 .984 .982 .980 .978 .975 .972 .968 .964
66 .987 .985 .984 .982 .980 .977 .974 .971 .968 .963
67 .986 .985 .983 .982 .979 .977 .974 .971 .967 .963
68 .986 .985 .983 .981 .979 .977 .974 .970 .966 .962
69 .986 .985 .983 .981 .979 .976 .973 .970 .966 .961
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 87 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 55 56 57 58 59 60 61 62 63 64
70 .986 .984 .983 .981 .978 .976 .973 .969 .965 .961
71 .985 .984 .982 .980 .978 .975 .972 .968 .964 .960
72 .985 .984 .982 .980 .977 .975 .971 .968 .964 .959
73 .985 .983 .981 .979 .977 .974 .971 .967 .963 .958
74 .985 .983 .981 .979 .976 .974 .970 .966 .962 .957
75 .984 .983 .981 .978 .976 .973 .969 .966 .961 .956
76 .984 .982 .980 .978 .975 .972 .969 .965 .960 .955
77 .983 .982 .980 .978 .975 .972 .968 .964 .959 .954
78 .983 .981 .979 .977 .974 .971 .967 .963 .958 .953
79 .983 .981 .979 .977 .974 .970 .967 .962 .957 .952
80 .982 .981 .979 .976 .973 .970 .966 .962 .957 .951
81 .982 .980 .978 .976 .973 .969 .965 .961 .956 .950
82 .982 .980 .978 .975 .972 .969 .965 .960 .955 .949
83 .981 .979 .977 .975 .972 .968 .964 .959 .954 .948
84 .981 .979 .977 .974 .971 .968 .963 .959 .953 .947
85 .981 .979 .976 .974 .971 .967 .963 .958 .952 .946
86 .980 .978 .976 .973 .970 .966 .962 .957 .952 .945
87 .980 .978 .976 .973 .970 .966 .962 .957 .951 .944
88 .980 .978 .975 .973 .969 .965 .961 .956 .950 .944
89 .980 .978 .975 .972 .969 .965 .961 .955 .949 .943
90 .979 .977 .975 .972 .968 .965 .960 .955 .949 .942
91 .979 .977 .974 .972 .968 .964 .960 .954 .948 .941
92 .979 .977 .974 .971 .968 .964 .959 .954 .948 .941
93 .979 .976 .974 .971 .967 .963 .959 .953 .947 .940
94 .978 .976 .974 .971 .967 .963 .958 .953 .947 .940
95 .978 .976 .973 .970 .967 .963 .958 .952 .946 .939
96 .978 .976 .973 .970 .967 .962 .958 .952 .946 .939
97 .978 .976 .973 .970 .966 .962 .957 .952 .945 .938
98 .978 .975 .973 .970 .966 .962 .957 .951 .945 .938
99 .978 .975 .973 .969 .966 .962 .957 .951 .944 .937
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 88 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 65 66 67 68 69 70 71 72 73 74 75
15 .970 .966 .963 .959 .954 .950 .945 .940 .934 .928 .921
16 .970 .966 .963 .959 .954 .950 .945 .939 .934 .927 .921
17 .970 .966 .963 .959 .954 .950 .945 .939 .934 .927 .921
18 .970 .966 .962 .958 .954 .950 .945 .939 .934 .927 .921
19 .970 .966 .962 .958 .954 .950 .945 .939 .934 .927 .921
20 .970 .966 .962 .958 .954 .950 .945 .939 .933 .927 .920
21 .970 .966 .962 .958 .954 .949 .945 .939 .933 .927 .920
22 .970 .966 .962 .958 .954 .949 .944 .939 .933 .927 .920
23 .970 .966 .962 .958 .954 .949 .944 .939 .933 .927 .920
24 .969 .966 .962 .958 .954 .949 .944 .939 .933 .927 .920
25 .969 .966 .962 .958 .954 .949 .944 .939 .933 .927 .920
26 .969 .966 .962 .958 .954 .949 .944 .939 .933 .927 .920
27 .969 .966 .962 .958 .954 .949 .944 .939 .933 .926 .920
28 .969 .966 .962 .958 .954 .949 .944 .938 .933 .926 .919
29 .969 .966 .962 .958 .953 .949 .944 .938 .932 .926 .919
30 .969 .966 .962 .958 .953 .949 .944 .938 .932 .926 .919
31 .969 .966 .962 .958 .953 .949 .943 .938 .932 .926 .919
32 .969 .965 .962 .957 .953 .948 .943 .938 .932 .926 .919
33 .969 .965 .961 .957 .953 .948 .943 .938 .932 .925 .918
34 .969 .965 .961 .957 .953 .948 .943 .938 .932 .925 .918
35 .969 .965 .961 .957 .953 .948 .943 .937 .931 .925 .918
36 .969 .965 .961 .957 .953 .948 .943 .937 .931 .925 .918
37 .969 .965 .961 .957 .952 .948 .942 .937 .931 .924 .917
38 .968 .965 .961 .957 .952 .947 .942 .937 .931 .924 .917
39 .968 .965 .961 .956 .952 .947 .942 .936 .930 .924 .917
40 .968 .964 .961 .956 .952 .947 .942 .936 .930 .923 .916
41 .968 .964 .960 .956 .952 .947 .941 .936 .930 .923 .916
42 .968 .964 .960 .956 .951 .946 .941 .935 .929 .922 .915
43 .968 .964 .960 .956 .951 .946 .941 .935 .929 .922 .915
44 .968 .964 .960 .955 .951 .946 .940 .935 .928 .922 .914
45 .967 .964 .959 .955 .950 .945 .940 .934 .928 .921 .914
46 .967 .963 .959 .955 .950 .945 .940 .934 .927 .920 .913
47 .967 .963 .959 .954 .950 .945 .939 .933 .927 .920 .912
48 .967 .963 .959 .954 .949 .944 .939 .933 .926 .919 .912
49 .966 .963 .958 .954 .949 .944 .938 .932 .926 .919 .911
50 .966 .962 .958 .953 .949 .943 .938 .932 .925 .918 .910
51 .966 .962 .958 .953 .948 .943 .937 .931 .924 .917 .909
52 .966 .962 .957 .953 .948 .942 .937 .930 .924 .916 .909
53 .965 .961 .957 .952 .947 .942 .936 .930 .923 .916 .908
54 .965 .961 .957 .952 .947 .941 .935 .929 .922 .915 .907
55 .965 .961 .956 .951 .946 .941 .935 .928 .921 .914 .906
56 .964 .960 .956 .951 .946 .940 .934 .928 .921 .913 .905
57 .964 .960 .955 .950 .945 .939 .933 .927 .920 .912 .904
58 .964 .959 .955 .950 .944 .939 .932 .926 .919 .911 .902
59 .963 .959 .954 .949 .944 .938 .932 .925 .917 .909 .901
60 .963 .958 .954 .948 .943 .937 .931 .924 .916 .908 .899
61 .962 .958 .953 .948 .942 .936 .929 .922 .915 .906 .898
62 .962 .957 .952 .947 .941 .935 .928 .921 .913 .905 .896
63 .961 .956 .951 .946 .940 .934 .927 .920 .912 .903 .894
64 .960 .956 .950 .945 .939 .933 .926 .918 .910 .901 .892
65 .960 .955 .950 .944 .938 .931 .924 .917 .908 .899 .890
66 .959 .954 .949 .943 .937 .930 .923 .915 .906 .897 .887
67 .958 .953 .948 .942 .935 .928 .921 .913 .904 .895 .885
68 .957 .952 .947 .940 .934 .927 .919 .911 .902 .893 .882
69 .956 .951 .945 .939 .933 .925 .918 .909 .900 .890 .880
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 89 -
<PAGE>
<PAGE>
<TABLE>
TABLE D
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
FACTORS FOR CONVERTING A 50% JOINT LIFE
INTO A 50% JOINT LIFE & 10 YEAR CERTAIN ANNUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AGE OF AGE OF EMPLOYEE
SPOUSE 65 66 67 68 69 70 71 72 73 74 75
70 .956 .950 .944 .938 .931 .924 .916 .907 .898 .888 .877
71 .955 .949 .943 .937 .930 .922 .914 .905 .896 .885 .874
72 .954 .948 .942 .935 .928 .920 .912 .903 .893 .882 .871
73 .953 .947 .941 .934 .926 .919 .910 .901 .890 .880 .868
74 .952 .946 .939 .932 .925 .917 .908 .898 .888 .876 .864
75 .950 .944 .938 .931 .923 .915 .906 .896 .885 .873 .861
76 .949 .943 .936 .929 .921 .912 .903 .893 .882 .870 .857
77 .948 .942 .935 .927 .919 .910 .901 .890 .879 .867 .854
78 .947 .940 .933 .926 .917 .908 .898 .888 .876 .864 .850
79 .946 .939 .932 .924 .915 .906 .896 .885 .873 .860 .847
80 .945 .938 .930 .922 .913 .904 .894 .883 .870 .857 .843
81 .943 .936 .929 .921 .912 .902 .892 .880 .868 .854 .840
82 .942 .935 .927 .919 .910 .900 .889 .878 .865 .851 .836
83 .941 .934 .926 .917 .908 .898 .887 .875 .862 .848 .833
84 .940 .933 .925 .916 .907 .896 .885 .873 .860 .845 .830
85 .939 .932 .923 .915 .905 .894 .883 .871 .857 .843 .827
86 .938 .931 .922 .913 .903 .893 .881 .869 .855 .840 .824
87 .937 .930 .921 .912 .902 .891 .879 .867 .853 .837 .821
88 .936 .928 .920 .911 .900 .889 .878 .865 .850 .835 .818
89 .936 .928 .919 .909 .899 .888 .876 .863 .848 .833 .816
90 .935 .927 .918 .908 .898 .886 .874 .861 .846 .830 .813
91 .934 .926 .917 .907 .896 .885 .873 .859 .844 .828 .811
92 .933 .925 .916 .906 .895 .884 .871 .858 .843 .826 .809
93 .932 .924 .915 .905 .894 .883 .870 .856 .841 .824 .807
94 .932 .923 .914 .904 .893 .881 .869 .855 .839 .823 .805
95 .931 .923 .913 .903 .892 .880 .867 .853 .838 .821 .803
96 .931 .922 .913 .902 .891 .879 .866 .852 .836 .820 .801
97 .930 .921 .912 .902 .890 .878 .865 .851 .835 .818 .800
98 .930 .921 .911 .901 .890 .877 .864 .850 .834 .817 .798
99 .929 .920 .911 .900 .889 .877 .863 .849 .833 .815 .797
MORTALITY: 1983 GROUP ANNUITY MORTALITY TABLE - NO MARGINS
INTEREST: 7.5% PER YEAR TOWERS, PERRIN, FORSTER & CHOSBY
</TABLE>
- 90 -
<PAGE>
<PAGE>
<TABLE>
TABLE E
EARLY RETIREMENT FACTORS - EXCESS FORMULA
Applied to the Portion of the Pension Formula Calculated on Final Average Salary
in Excess of the Social Security Wage Base
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MONTHS MONTHS MONTHS MONTHS MONTHS
PRIOR PRIOR PRIOR PRIOR PRIOR
TO TO TO TO TO
AGE AGE AGE AGE AGE
65 FACTOR 65 FACTOR 65 FACTOR 65 FACTOR 65 FACTOR
0 (65) 1.00000 48 (61) 0.73100 96 (57) 0.57700 144 (53) 0.42566 192 (49) 0.32511
1 0.99358 49 0.72775 97 0.57300 145 0.42315 193 0.32343
2 0.98717 50 0.72450 98 0.56900 146 0.42063 194 0.32176
3 0.98075 51 0.72125 99 0.56500 147 0.41812 195 0.32008
4 0.97433 52 0.71800 100 0.56100 148 0.41561 196 0.31841
5 0.96792 53 0.71475 101 0.55700 149 0.41309 197 0.31673
6 0.96150 54 0.71150 102 0.55300 150 0.41058 198 0.31506
7 0.95508 55 0.70825 103 0.54900 151 0.40807 199 0.31338
8 0.94867 56 0.70500 104 0.54500 152 0.40555 200 0.31170
9 0.94225 57 0.70175 105 0.54100 153 0.40304 201 0.31003
10 0.93583 58 0.69850 106 0.53700 154 0.40053 202 0.30835
11 0.92942 59 0.69525 107 0.53300 155 0.39801 203 0.30668
12 (64) 0.92300 60 (60) 0.69200 108 (56) 0.52900 156 (52) 0.39550 204 (48) 0.30500
13 0.91658 61 0.68883 109 0.52542 157 0.39299 205 0.30332
14 0.91016 62 0.68567 110 0.52183 158 0.39047 206 0.30165
15 0.90374 63 0.68250 111 0.51825 159 0.38796 207 0.29997
16 0.89732 64 0.67933 112 0.51467 160 0.38544 208 0.29830
17 0.89090 65 0.67617 113 0.51108 161 0.38293 209 0.29662
18 0.88448 66 0.67300 114 0.50750 162 0.38041 210 0.29495
19 0.87806 67 0.66983 115 0.50392 163 0.37790 211 0.29327
20 0.87164 68 0.66667 116 0.50033 164 0.37539 212 0.29159
21 0.86522 69 0.66350 117 0.49675 165 0.37287 213 0.28992
22 0.85880 70 0.66033 118 0.49317 166 0.37036 214 0.28824
23 0.85238 71 0.65717 119 0.48958 167 0.36784 215 0.28657
24 (63) 0.84600 72 (59) 0.65400 120 (55) 0.48600 168 (51) 0.36533 216 (47) 0.28489
25 0.83958 73 0.65075 121 0.48349 169 0.36365 217 0.28321
26 0.83316 74 0.64750 122 0.48097 170 0.36198 218 0.28154
27 0.82674 75 0.64425 123 0.47846 171 0.36030 219 0.27986
28 0.82032 76 0.64100 124 0.47594 172 0.35863 220 0.27819
29 0.81390 77 0.63775 125 0.47343 173 0.35695 221 0.27651
30 0.80748 78 0.63450 126 0.47091 174 0.35528 222 0.27484
31 0.80106 79 0.63125 127 0.46840 175 0.35360 223 0.27316
32 0.79464 80 0.62800 128 0.46589 176 0.35192 224 0.27148
33 0.78822 81 0.62475 129 0.46337 177 0.35025 225 0.26981
34 0.78180 82 0.62150 130 0.46086 178 0.34857 226 0.26813
35 0.77538 83 0.61825 131 0.45834 179 0.34690 227 0.26646
36 (62) 0.76900 84 (58) 0.61500 132 (54) 0.45583 180 (50) 0.34522 228 (46) 0.26478
37 0.76583 85 0.61183 133 0.45332 181 0.34354 229 0.26310
38 0.76266 86 0.60867 134 0.45080 182 0.34187 230 0.26143
39 0.75949 87 0.60550 135 0.44829 183 0.34019 231 0.25975
40 0.75632 88 0.60233 136 0.44577 184 0.33852 232 0.25808
41 0.75315 89 0.59917 137 0.44326 185 0.33684 233 0.25640
42 0.74998 90 0.59600 138 0.44074 186 0.33517 234 0.25473
43 0.74681 91 0.59283 139 0.43823 187 0.33349 235 0.25305
44 0.74364 92 0.58967 140 0.43572 188 0.33181 236 0.25137
45 0.74047 93 0.58650 141 0.43320 189 0.33014 237 0.24970
46 0.73730 94 0.58333 142 0.43069 190 0.32846 238 0.24802
47 0.73413 95 0.58017 143 0.42817 191 0.32679 239 0.24635
240 (45) 0.24467
Exact Ages in ( ). Retirement Plan for Management Employees - January 1990
</TABLE>
- 91 -
<PAGE>
<PAGE>
<TABLE>
TABLE F
EARLY RETIREMENT DISCOUNT FACTORS
APPLIED TO THE EMPLOYEE'S ACCRUED PENSION AND SOCIAL SECURITY OFFSET FOR
RETIREMENTS PRIOR TO THE ATTAINMENT OF THE OPTIONAL RETIREMENT DATE
(MONTHS PRIOR IS THE NUMBER OF MONTHS BETWEEN AN EMPLOYEE'S RETIREMENT DATE
AFTER HIS SIXTY-SECOND BIRTHDAY AND THE THE DATE OF RETIREMENT)
(ALSO APPLIED IN CALCULATION OF SURVIVING SPOUSE BENEFIT)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COLUMN I COLUMN II COLUMN I COLUMN II COLUMN I COLUMN II COLUMN I COLUMN II
MONTHS DISCOUNT DISCOUNT MONTHS DISCOUNT DISCOUNT MONTHS DISCOUNT DISCOUNT MONTHS DISCOUNT DISCOUNT
PRIOR FACTOR FACTOR PRIOR FACTOR FACTOR PRIOR FACTOR FACTOR PRIOR FACTOR FACTOR
1 0.99358 0.99000 52 0.93500 0.70700 103 0.52300 0.52300 154 0.39200 0.39200
2 0.99750 0.98000 53 0.93375 0.70300 104 0.52000 0.52000 155 0.39000 0.39000
3 0.99625 0.97000 54 0.93250 0.70000 105 0.51700 0.51700 156 (49) 0.38800 0.38800
4 0.99500 0.96000 55 0.93125 0.69700 106 0.51400 0.51400 157 0.38600 0.38600
5 0.99375 0.95000 56 0.03000 0.69300 107 0.51100 0.51100 158 0.38400 0.38400
6 0.99250 0.94000 57 0.92875 0.69000 108 (53) 0.50800 0.50800 159 0.38200 0.38200
7 0.99125 0.92900 58 0.92750 0.68700 109 0.50500 0.50500 160 0.38000 0.38000
8 0.99000 0.91900 59 0.92625 0.68300 110 0.50200 0.50200 161 0.37800 0.37800
9 0.98875 0.90900 60 (57) 0.92500 0.68000 111 0.49900 0.49900 162 0.37600 0.37600
10 0.98750 0.89900 61 0.92375 0.67600 112 0.49600 0.49600 163 0.37400 0.37400
11 0.98625 0.88900 62 0.92250 0.67100 113 0.49300 0.49300 164 0.37200 0.37200
12 (61) 0.98500 0.87900 63 0.92125 0.66700 114 0.49000 0.49000 165 0.37000 0.37000
13 0.98375 0.87200 64 0.92000 0.66300 115 0.48700 0.48700 166 0.36800 0.36800
14 0.98250 0.86600 65 0.91875 0.65800 116 0.48400 0.48400 167 0.36600 0.36600
15 0.98125 0.85900 66 0.91750 0.65400 117 0.48100 0.48100 168 (48) 0.36400 0.36400
16 0.98000 0.85300 67 0.91625 0.65000 118 0.47800 0.47800 169 0.36200 0.36200
17 0.97875 0.84600 68 0.91500 0.64500 119 0.47500 0.47500 170 0.36000 0.36000
18 0.97750 0.84000 69 0.91375 0.64100 120 (52) 0.47200 0.47200 171 0.35800 0.35800
19 0.97625 0.83300 70 0.91250 0.63700 121 0.46900 0.46900 172 0.35600 0.35600
20 0.97500 0.82600 71 0.91125 0.63200 122 0.46600 0.46600 173 0.35400 0.35400
21 0.97375 0.82000 72 (56) 0.91000 0.62800 123 0.46300 0.46300 174 0.35200 0.35200
22 0.97250 0.81300 73 0.90875 0.62400 124 0.46000 0.46000 175 0.35000 0.35000
23 0.97125 0.80600 74 0.90750 0.62000 125 0.45700 0.45700 176 0.34800 0.34800
24 (60) 0.97000 0.80000 75 0.90625 0.61600 126 0.45400 0.45400 177 0.34600 0.34600
25 0.96875 0.79700 76 0.90500 0.61200 127 0.45100 0.45100 178 0.34400 0.34400
26 0.96750 0.79300 77 0.90375 0.60800 128 0.44800 0.44800 179 0.34200 0.34200
27 0.96625 0.79000 78 0.90250 0.60400 129 0.44500 0.44500 180 (47) 0.34000 0.34000
28 0.96500 0.78600 79 0.90125 0.60000 130 0.44200 0.44200 181 0.33800 0.33800
29 0.96375 0.78300 80 0.90000 0.59600 131 0.43900 0.43900 182 0.33600 0.33600
30 0.96250 0.78000 81 0.89875 0.59200 132 (51) 0.43600 0.43600 183 0.33400 0.33400
31 0.96125 0.77600 82 0.89750 0.58800 133 0.43400 0.43400 184 0.33200 0.33200
32 0.96000 0.77300 83 0.89625 0.58400 134 0.43200 0.43200 185 0.33000 0.33000
33 0.95875 0.76900 84 (55) 0.89500 0.58000 135 0.43000 0.43000 186 0.32800 0.32800
34 0.95750 0.76600 85 0.57700 0.57700 136 0.42800 0.42800 187 0.32600 0.32600
35 0.95625 0.76200 86 0.57400 0.57400 137 0.42600 0.42600 188 0.32400 0.32400
36 (59) 0.95500 0.75900 87 0.57100 0.57100 138 0.42400 0.42400 189 0.32200 0.32200
37 0.95375 0.75600 88 0.56800 0.56800 139 0.42200 0.42200 190 0.32000 0.32000
38 0.95250 0.75300 89 0.56500 0.56500 140 0.42000 0.42000 191 0.31800 0.31800
39 0.95125 0.74900 90 0.56200 0.56200 141 0.41800 0.41800 192 (46) 0.31600 0.31600
40 0.95000 0.74600 91 0.55900 0.55900 142 0.41600 0.41600 193 0.31400 0.31400
41 0.94875 0.74300 92 0.55600 0.55600 143 0.41400 0.41400 194 0.31200 0.31200
42 0.94750 0.74000 93 0.55300 0.55300 144 (50) 0.41200 0.41200 195 0.31000 0.31000
43 0.94625 0.73600 94 0.55000 0.55000 145 0.41000 0.41000 196 0.30800 0.30800
44 0.94500 0.73300 95 0.54700 0.54700 146 0.40800 0.40800 197 0.30600 0.30600
45 0.94375 0.73000 96 (54) 0.54400 0.54400 147 0.40600 0.40600 198 0.30400 0.30400
46 0.94250 0.72700 97 0.54100 0.54100 148 0.40400 0.40400 199 0.30200 0.30200
47 0.94125 0.72300 98 0.53800 0.53800 149 0.40200 0.40200 200 0.30000 0.30000
48 (58) 0.94000 0.72000 99 0.53500 0.53500 150 0.40000 0.40000 201 0.29800 0.29800
49 0.93875 0.71700 100 0.53200 0.53200 151 0.39800 0.39800 202 0.29600 0.29600
50 0.93750 0.71300 101 0.52900 0.52900 152 0.39600 0.39600 203 0.29400 0.29400
51 0.93625 0.71000 102 0.52600 0.52600 153 0.39400 0.39400 204 (45) 0.29200 0.29200
Exact ages shown in parenthesis
Column I is applicable to Employee's Gross Pension. Column II is applicable to Employee's Social Security
Offset - 92 -
</TABLE>
<PAGE>
<PAGE>
<TABLE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
Computation in Support of
Ratio of Earnings to Fixed Charges
Years 1990 to 1994
(Thousands of Dollars)
<CAPTION>
1994 1993 1992 1991 1990
</CAPTION>
<S> <C> <C> <C> <C> <C>
EARNINGS
Net Income $734,270 $658,522 $604,088 $566,910 $571,493
Federal Income Tax 374,500 270,800 252,600 209,900 225,600
Federal Income Tax Deferred 73,710 106,470 81,670 94,950 77,460
Investment Tax Credits Deferred (9,620) (12,260) (13,800) (13,800) (13,800)
Total Earnings Before
Federal Income Tax 1,172,860 1,023,532 924,558 857,960 860,753
Fixed Charges* 327,352 320,554 315,305 314,661 280,053
Total Earnings Before
Federal Income Tax
and Fixed Charges $1,500,212 $1,344,086 $1,239,863 $1,172,621 $1,140,806
*FIXED CHARGES
Interest on Long-Term Debt $277,684 $272,781 $270,468 $269,420 $234,058
Amortization of Debt Discount,
Premium and Expenses 11,376 8,975 3,974 1,941 1,627
Interest Component of Rentals 18,439 19,077 19,175 20,778 22,340
Other Interest 19,853 19,721 21,688 22,522 22,028
Total Fixed Charges $327,352 $320,554 $315,305 $314,661 $280,053
Ratio of Earnings
to Fixed Charges 4.58 4.19 3.93 3.73 4.07
</TABLE>
<PAGE>
<PAGE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference of our report
dated February 28, 1995, appearing on page 70 of this Annual
Report on Form 10-K in (i) the Prospectus constituting part of
the Registration Statement on Form S-8 (No. 33-15725) relating to
The Consolidated Edison Discount Stock Purchase Plan, (ii) the
Prospectus constituting part of the Registration Statement on
Form S-3 (No. 33-62266) relating to $665 million principal amount
of the Company's unsecured debt securities, and (iii) the
Prospectus constituting part of the Registration Statement on
Form S-3 (No. 33-51157) relating to the Company's Automatic
Dividend Reinvestment and Cash Payment Plan.
PRICE WATERHOUSE LLP
Price Waterhouse LLP
New York, New York
March 28, 1995
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 29th day of March, 1995.
EUGENE R. MCGRATH
EUGENE R. MCGRATH
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 24th day of March, 1995.
RAYMOND J. MCCANN
RAYMOND J. MCCANN
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 27th day of March, 1995.
JOAN S. FREILICH
JOAN S. FREILICH
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 21st day of March, 1995.
E. VIRGIL CONWAY
E. VIRGIL CONWAY
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 17th day of March, 1995.
GORDON J. DAVIS
GORDON J. DAVIS
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 28th day of March, 1995.
RUTH M. DAVIS
RUTH M. DAVIS
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 24th day of March, 1995.
ELLEN V. FUTTER
ELLEN V. FUTTER
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 17th day of March, 1995.
ARTHUR HAUSPURG
ARTHUR HAUSPURG
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 21st day of March, 1995.
SALLY HERNANDEZ-PINERO
SALLY HERNANDEZ-PINERO
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 19th day of March, 1995.
PETER W. LIKINS
PETER W. LIKINS
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 20th day of March, 1995.
FREDERICK P. ROSE
FREDERICK P. ROSE
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 23rd day of March, 1995.
DONALD K. ROSS
DONALD K. ROSS
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 28th day of March, 1995.
ROBERT G. SCHWARTZ
ROBERT G. SCHWARTZ
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 16th day of March, 1995.
RICHARD A. VOELL
RICHARD A. VOELL
<PAGE>
<PAGE>
CONSOLIDATED EDISON COMPANY OF NEW YORK, INC.
POWER OF ATTORNEY
WHEREAS Consolidated Edison Company of New York, Inc., a New York
corporation (the "Company"), intends to file with the Securities
and Exchange Commission, under the Securities Exchange Act of
1934, as amended (the "Act"), its Annual Report on Form 10-K for
the fiscal year ended December 31, 1994 with any and all exhibits
and other documents having relation thereto, as prescribed by the
Securities and Exchange Commission pursuant to the Act and the
rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
NOW, THEREFORE,
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned, in his
or her capacity as a Trustee or Officer or both, as the case may
be, of the Company, does hereby constitute and appoint Raymond J.
McCann, T. Bowring Woodbury, II and Travis F. Epes, and each of
them severally, his or her true and lawful attorneys-in-fact,
with power to act with or without the others and with full power
of substitution and resubstitution, to execute in his or her
name, place and stead, in his or her capacity as a Trustee or
Officer or both, as the case may be, of the Company, said Annual
Report on Form 10-K, and any and all amendments thereto, and all
instruments necessary or incidental in connection therewith, and
to file or cause to be filed the same, with all exhibits thereto
and other documents having relation thereto, with the Securities
and Exchange Commission. Each of said attorneys shall have full
power and authority to do and perform, in the name and on behalf
of the undersigned, in any and all capacities, every act
whatsoever necessary or desirable to be done in the premises, as
fully to all intents and purposes as the undersigned might or
could do in person, the undersigned hereby ratifying and
confirming all that said attorneys-in-fact or any of them, or
their or his substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this instrument
this 15th day of March, 1995.
MYLES V. WHALEN, JR.
MYLES V. WHALEN, JR.
<TABLE> <S> <C>
<PAGE>
<PAGE>
<ARTICLE> UT
<LEGEND> THE SCHEDULE CONTAINS
SUMMARY FINANCIAL
INFORMATION EXTRACTED
FROM CONSOLIDATED
BALANCE SHEET, STATEMENT OF
CAPITALIZATION, INCOME
STATEMENT, RETAINED EARNINGS
STATEMENT AND STATEMENT OF
CASH FLOWS AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS
AND THE NOTES THERETO
<MULTIPLIER> 1,000
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> YEAR
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 10,561,208
<OTHER-PROPERTY-AND-INVEST> 111,523
<TOTAL-CURRENT-ASSETS> 1,174,786
<TOTAL-DEFERRED-CHARGES> 774,856
<OTHER-ASSETS> 1,105,991
<TOTAL-ASSETS> 13,728,364
<CAPITAL-SURPLUS-PAID-IN> 837,724
<RETAINED-EARNINGS> 3,888,010
<TOTAL-COMMON-STOCKHOLDERS-EQ> 5,312,997
<COMMON> 587,263
100,000
540,310
<LONG-TERM-DEBT-NET> 4,030,464
<SHORT-TERM-NOTES> 0
<PAGE>
<PAGE>
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 10,889
0
<CAPITAL-LEASE-OBLIGATIONS> 47,805
<LEASES-CURRENT> 2,550
<OTHER-ITEMS-CAPITAL-AND-LIAB> 3,683,349
<TOT-CAPITALIZATION-AND-LIAB> 13,728,364
<GROSS-OPERATING-REVENUE> 6,373,086
<INCOME-TAX-EXPENSE> 438,160
<OTHER-OPERATING-EXPENSES> 4,898,743
<TOTAL-OPERATING-EXPENSES> 5,336,903
<OPERATING-INCOME-LOSS> 1,036,183
<OTHER-INCOME-NET> 3,324
<INCOME-BEFORE-INTEREST-EXPEN> 1,039,507
<TOTAL-INTEREST-EXPENSE> 305,237
<NET-INCOME> 734,270
35,587
<EARNINGS-AVAILABLE-FOR-COMM> 698,683
<COMMON-STOCK-DIVIDENDS> 469,561
<TOTAL-INTEREST-ON-BONDS> 289,060
<CASH-FLOW-OPERATIONS> 1,249,899
<EPS-PRIMARY> 2.98
<EPS-DILUTED> 2.98
</TABLE>
