File No. 70-8609
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
AMENDMENT NO. 1
TO
FORM U-1
APPLICATION-DECLARATION
WITH RESPECT TO ISSUE AND SALE OF COMMON SHARES
IN CONNECTION WITH AN EMPLOYEES' SAVINGS PLAN
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
EASTERN UTILITIES ASSOCIATES
EASTERN EDISON COMPANY
EUA COGENEX CORPORATION
MONTAUP ELECTRIC COMPANY
P.O. Box 2333, Boston, Massachusetts 02107
BLACKSTONE VALLEY ELECTRIC CORPORATION
Washington Highway, Lincoln, Rhode Island 02865
EUA SERVICE CORPORATION
P.O. Box 543, West Bridgewater, Massachusetts 02379
NEWPORT ELECTRIC CORPORATION
12 Turner Road, Middletown, Rhode Island 02840
EASTERN UTILITIES ASSOCIATES
(Name of top registered holding company parent of
applicant or declarant)
CLIFFORD J. HEBERT, JR., TREASURER
EASTERN UTILITIES ASSOCIATES
P.O. Box 2333, Boston, Massachusetts 02107
(Name and address of agent for service)
The Commission is requested to mail signed copies
of all orders, notices and communications to:
ARTHUR I. ANDERSON, P.C.
McDermott, Will & Emery
75 State Street
Boston, Massachusetts 02109
The application-declaration hereby is amended and restated to
read in its entirety as set forth below. TransCapacity Limited
Partnership has been removed as an applicant-declarant.
Item 1. Description of Proposed Transaction
Background
In December 1981, Eastern Utilities Associates ("EUA")
established the Eastern Utilities Associates Employees' Savings
Plan (the "Plan"), which is intended to meet the requirements of
the Employee Retirement Income Security Act of 1974, as amended,
and has been determined to be qualified and exempt under Sections
401(a) and 501(a) of the Internal Revenue Code of 1986, as
amended from time to time. The purpose of the Plan is to
encourage savings by employees of EUA and its subsidiaries.
By an Order dated March 8, 1991, SEC Release No. 35-25269
(the "1991 Order"), EUA, its direct subsidiaries, Blackstone
Valley Electric Company, EUA Cogenex Corporation and Eastern
Edison Company, and its indirect subsidiary, Montaup Electric
Company, were authorized to contribute to the Plan up to 200,000
common shares of EUA, $5 par value per share, ("Common Shares")
or cash which could be used to purchase up to 200,000 Common
Shares, during the period ending December 15, 1995. The Common
Shares contributed to the Plan may be (i) authorized but unissued
shares issued to the Plan by EUA, (ii) shares purchased on the
open market, or (iii) shares purchased from EUA. Whenever cash
contributions to the Plan by EUA or the subsidiaries are used to
purchase Common Shares from EUA, the proceeds are added to the
general funds of EUA and may be used for, among other corporate
purposes, the payment or prepayment of outstanding short-term
indebtedness.
Proposed Transactions
The number of shares available under the 1991 Order is now
expected to be depleted by July 1995. EUA and its direct
subsidiaries, Blackstone Valley Electric Company, Eastern Edison
Company, EUA Cogenex Corporation (including its subsidiaries),
EUA Service Corporation and Newport Electric Corporation, and its
indirect subsidiary, Montaup Electric Company (said direct and
indirect subsidiaries being hereinafter collectively referred to
as the "Subsidiaries") hereby request authority to contribute to
the Plan an additional 150,000 Common Shares or cash which can be
used to purchase the additional Common Shares during the period
ending December 15, 1997 for the purpose of making such shares
available to the Plan.
Item 2. Fees, Commissions and Expenses
The estimated fees, commissions, and expenses paid or
incurred, or to be paid or incurred, directly or indirectly, by
the applicants-declarants in connection with the proposed
transactions are as follows:
*Securities and Exchange Commission Fee $2,000
Services and Expenses of EUA Service
Corporation (at cost) $1,000
Fees and Expenses of Company Counsel $6,500
Stock Exchange Fees $2,000
Total $11,500
*Actual
Item 3. Applicable Statutory Provisions
Transactions Applicable Section and Rules
Issue and sale of Common Sections 6(a) and 7.
Shares by EUA; contribution of
Common Shares by EUA and/or
the Subsidiaries.
Purchase of Common Shares in Sections 9(a), 10 and 12(c);
the open market by EUA and/or Rule 42.
the Subsidiaries.
Purchase of Common Shares from Section 9(a) and 10.
EUA by the Subsidiaries.
Item 4. Regulatory Approval
No state commission or Federal commission (other than the
Commission) has jurisdiction over the issue and sale of the
Additional Common Shares.
Item 5. Procedure
(a) It is requested that the Commission take action with
respect to this statement without a hearing being held and that
this statement become effective and be granted at the earliest
practicable time.
(b) It is not considered necessary that there be a
recommended decision by a hearing officer or by any other
responsible officer of the Commission. The Office of Public
Utility Regulation may assist in the preparation of the
Commission's decision and it is believed that a 30-day waiting
period between the issuance of the Commission's order and the
date on which it is to become effective would not be appropriate.
Item 6. Exhibits and Financial Statements
(a) Exhibits (*filed herewith).
A-1 Declaration of Trust of EUA, dated April 2, 1928, as
amended (Exhibit A-3, File No. 70-3188; Exhibit 1 to
EUA's 8-K reports for April in each of the years 1957,
1962, 1966, 1968, 1972 and 1973, File No. 1-5366;
Exhibit A-1(a), Amendment No. 2 to Form U-1, File No.
70-5997; Exhibit 4-3, Registration Statement No. 2-72589;
Exhibit 1 to Certificate of Notification, File
No. 70-6713; Exhibit 1 to Certificate of Notification,
File No. 70-7084; and Exhibit 3-2, Form 10-K of EUA for
1987, File No. 1-5366).
A-2 Specimen of Common Share Certificate (Exhibit 2-1,
Registration No. 2-62862).
B-1 Summary of Eastern Utilities Associates Employees'
Savings Plan.*
B-2 Eastern Utilities Associates Employees' Savings Plan as
amended and restated December 21, 1994.*
B-4 Trust Agreement with respect to Eastern Utilities
Associates Employees' Savings Plan (Exhibit 10-3, Form
10-K of EUA for 1992, File No. 1-5366).
F-1 Opinion of counsel.*
H Proposed Form of Notice.
(b) Financial Statements
Item 7. Information as to Environmental Effects
The proposed transactions do not involve a major Federal
action significantly affecting the quality of the human
environment.
SIGNATURE
Pursuant to the requirements of the Public Utility Holding
Company Act of 1935, the undersigned companies have duly caused
this statement to be signed on their behalf by the undersigned
officer thereunto duly authorized.
Dated: May 17, 1995
EASTERN UTILITIES ASSOCIATES
EASTERN EDISON COMPANY
EUA COGENEX CORPORATION
MONTAUP ELECTRIC COMPANY
BLACKSTONE VALLEY ELECTRIC COMPANY
EUA SERVICE CORPORATION
NEWPORT ELECTRIC CORPORATION
By: /s/ Clifford J. Hebert, Jr.
Clifford J. Hebert, Jr.,
Treasurer
SUMMARY OF KEY PROVISIONS: Exhibit B-1
EASTERN UTILITIES ASSOCIATES EMPLOYEES' SAVINGS PLAN
The following summary of key provisions of the Eastern Utilities
Associates Employees' Savings Plan (the "Plan"), as in effect on the date of
this filing, is qualified in its entirety by reference to the Plan which is
filed as Exhibit B-2.
Plan Establishment
Eastern Utilities Associates (the "Employer") established the Plan
effective January 1, 1982. The Plan was amended and restated on December 21,
1994 to comply with the requirements listed under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code") and Internal Revenue
Service regulations promulgated thereunder, which includes changes made by
the Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1986,
the Revenue Act of 1987, the Technical and Miscellaneous Revenue Act of 1988,
the Omnibus Budget Reconciliation Act of 1989, the Omnibus Budget
Reconciliation Act of 1990, the Unemployment Compensation Amendments of 1992
and the Omnibus Budget Reconciliation Act of 1993.
Participating Employers
The Employer is the sponsor of the Plan. Each Affiliate of the Employer
may adopt the Plan with the permission of the Board of Trustees (the "Board")
of the Employer. In addition to the Employer, the following affiliates of
the Employer are Participating Employers under the Plan: Blackstone Valley
Electric Company, Eastern Edison Company, EUA Cogenex Corporation (including
its subsidiaries), EUA Service Corporation, Montaup Electric Company and
Newport Electric Company.
Eligibility to Participate
Employees of a Participating Employer generally are eligible to
participate in the Plan upon completing one year of Service and attaining
eighteen years of age. Leased employees or individuals employed on a
temporary basis cannot elect to participate in the Plan. Employees covered
under a collective bargaining agreement are eligible to participate in the
Plan only as provided under such agreement.
An Employee eligible to participate in the Plan ("Eligible Employee")
may commence participation in the Plan on the first day of the month
coincident with or next following satisfaction of the Plan's eligibility
requirements by completing an election form to make Participant Contributions
(as discussed in Part IV below). An Eligible Employee who contributes to the
Plan is a Participant.
Participant Contributions
Pre-Tax Participant Contributions
An Eligible Employee may elect to reduce his or her Earnings and make a
corresponding Pre-Tax Participant Contribution to the Plan. Pre-Tax
Participant Contributions are not subject to federal income taxation, but may
be subject to Social Security taxation.
Pre-Tax Participant Contributions, also known as "Section 401(k)
contributions," may be made to the Plan in any whole percentage from 1% to
15% of an Eligible Employee's Earnings. Under the Plan, Earnings generally
consist of an Eligible Employee's straight time wages (exclusive of overtime
and bonuses), Pre-Tax Participant Contributions and salary deferral
contributions made to a cafeteria plan maintained by a Participating
Employer.
An Eligible Employee's Pre-Tax Participant Contributions to the Plan for
a calendar year may not exceed a maximum statutory deferral limit which is
indexed for inflation ($9,240 for 1995). Other statutory nondiscrimination
rules may further limit the Pre-Tax Participant Contributions of Eligible
Employees who are treated as highly compensated employees under federal tax
laws.
After-Tax Participant Contributions
An Eligible Employee may also contribute a percentage of his Earnings as
a nondeductible After-Tax Participant Contribution. The amount of Earnings
an Eligible Employee elects to contribute to the Plan as an After-Tax
Participant Contribution is subject to federal income tax in the year
contributed. An After-Tax Participant Contribution is made by payroll
deduction.
After-Tax Participant Contributions may be made to the Plan in any whole
percentage from 1% to 10% of an Eligible Employee's Earnings, provided that
such percentage does not exceed the difference between 15% and the
contribution percentage elected by the Eligible Employee for Pre-Tax
Participant Contributions. Certain statutory nondiscrimination rules may
further limit the After-Tax Participant Contributions of Eligible Employees
who are treated as highly compensated employees under federal tax laws.
Rollover Contributions
An Employee who is or would be an Eligible Employee except for the
Plan's age and service requirements may make a Rollover Contribution subject
to the written consent of the Plan's Committee and applicable federal tax law
requirements. A Rollover Contribution generally is a contribution to the
Plan of all or a portion of the Employee's account balance from (i) another
tax-qualified retirement plan, (ii) a tax-qualified annuity plan or (iii) an
individual retirement account holding payments from a tax-qualified
retirement plan or tax-qualified annuity plan.
The Employer formerly maintained the Eastern Utilities Associates
Employees' Share Ownership Plan (the "ESOP"). In connection with the
termination of the ESOP, participants in that plan were given the right to
elect to make a Rollover Contribution of the EUA Common Shares allocated to
their accounts under the ESOP. A Participant's EUA Common Shares transferred
to the Plan from the ESOP must remain invested in EUA Common Shares prior to
the payment of Plan benefits at termination of employment.
Qualified Voluntary Employee Contributions
For plan years beginning before January 1, 1987, Eligible Employees were
allowed to make tax-deductible cash contributions to the Plan. These
contributions, called Qualified Voluntary Employee Contributions ("QVECs"),
are subject to certain special rules not generally applicable to other types
of Participant Contributions. As required by changes in federal tax laws,
the Plan has not permitted Eligible Employees to make additional QVECs since
January 1, 1987.
Matching Contributions
Each Participating Employer makes a Matching Contribution to the Plan on
behalf of its Eligible Employees who make Pre-Tax Participant Contributions.
The level of Matching Contribution is generally equal to 100% of the first 2%
of Earnings and 50% of the next 1% of Earnings with respect to which the
Participant makes Pre-Tax Participant Contribution(s). The level of Matching
Contributions for any Eligible Employee covered under a collective bargaining
agreement is subject to the terms of such agreement.
Matching Contributions may be made in cash, EUA Common Shares or
partially in cash and EUA Common Shares. Any cash contributed by a
Participating Employer is used to purchase EUA Common Shares except as may be
provided under a collective bargaining agreement.
Participating Employers do not match After-Tax Participant Contributions
made by the Participants under the Plan.
Investment of Contributions
All contributions are invested in a Trust Fund administered by Putnam
Fiduciary Trust Company (the "Trustee"). The Plan offers the following six
investment options to Participants with respect to their Pre-Tax Participant
Contributions, After-Tax Participant Contributions, Rollover Contributions
(other than from the ESOP) and QVECs: the Putnam Stable Value Fund, the
George Putnam Fund of Boston, the Putnam Fund for Growth and Income, the
Putnam Global Growth Fund, the Putnam Voyager Fund and the Putnam Daily
Dividend Trust Fund (collectively, the "Funds"). Participants may elect to
invest Participant Contributions within the Funds in multiples of 5%.
Participants may change the investment of their future contributions (in
multiples of 5%) or transfer a portion (in multiples of 5%) of one Fund to
the other. Changes and transfers may be made on a monthly basis by telephone
in accordance with the rules of the Trustee.
Matching Contributions and Rollover Contributions from the ESOP are
invested wholly in EUA Common Shares. Investment of contributions made on be
half of Eligible Employees who are members of a collective bargaining is
governed by the terms of such agreement.
Dividends, interest, and other distributions received on the assets held
in each Fund are reinvested in the respective Fund.
Valuation of Accounts
The Trustee maintains a separate account (the "Account") for each
Participant, including subaccounts of the Participant's share in each of the
Funds attributable to that Participant's Pre-Tax Participant Contributions,
After-Tax Participant Contributions, Matching Contributions, Rollover
Contributions and QVECs. The current market value of each Fund is separately
determined by the Trustee as of the last business day of each calendar
quarter (the "Valuation Date"). The value of each security traded on a
national stock exchange (including EUA Common Shares) is its closing price as
of the Valuation Date. All other securities are valued using the average of
the latest available bid and ask quotes as of the Valuation Date.
Vesting of Benefits
Participants are fully vested in their contributions and Matching
Contributions. Upon termination of employment, the Participant, or the
Participant' s beneficiary in the case of the Participant's death, is
entitled to receive the full amount in the Participant's Account.
In-Service Withdrawals
Participants may withdraw amounts allocated to their Account in
accordance with rules prescribed by the Plan and applicable law. Pre-Tax
Participant Contributions, After-Tax Participant Contributions and Matching
Contributions may be withdrawn during employment on account of hardship.
Other contributions may be withdrawn during employment without a showing of
hardship, subject to certain conditions. Hardship withdrawals, or
withdrawals of qualified contributions, will not result in a suspension of
participation in the Plan, unless the withdrawal is of Pre-Tax Participant
Contributions.
Loans
Participants actively employed by a Participating Employer may borrow,
with consent of the Committee, up to 50% of the value of the Rollover
Contributions, Pre-Tax Participant Contributions and Matching Contributions
allocated to his Account, not to exceed $50,000. A loan may be made only
from a Participant's Rollover Contributions (but not from any portion
attributable to EUA Common Shares transferred from the ESOP) and/or his Pre-
Tax Participant Contributions.
Payment of Benefits
Distributions upon termination of employment are made in the form of a
lump sum payment. Distributions of EUA Common Shares may be made in the form
of cash or shares as directed by the Participant.
Employees' Savings Plan Committee
The Plan is administered by the Employer through a Committee of not less
than three persons appointed by the Board. The Committee has such powers as
may be necessary to discharge its duties under the Plan, including the power
to interpret and construe the Plan, to determine all questions with regard to
employment, eligibility, service, compensation and similarly related matters
for the purposes of the Plan in its sole discretion.
Indemnification
The Plan provides that the Employer shall indemnify the Board, the
Committee and individual members thereof against any and all expenses, costs
and liabilities arising by reason of any act or failure to act, unless such
act or failure to act is judicially determined to be gross negligence or
willful misconduct. The Plan also provides that the Employer shall indemnify
and hold harmless the other named Fiduciaries, and any Trustee of the
Employer or Employee held to be a Fiduciary with respect to the Plan from any
liability, claim, demand, suit or action of any type arising from any action
or failure to act; provided, however that such person acted in good faith and
in a manner he reasonably believed to be in the best interests of the
Participants and Beneficiaries and consistent with the provisions of the
Plan.
Amendment and Termination
The Plan may be amended or modified by the Board at any time and from
time to time; provided, however, that no such amendment or modification shall
make it possible 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 or Former Participants or their Beneficiaries. No amendment
will deprive a Participant or Beneficiary of any portion of his or her
Account.
EASTERN UTILITIES ASSOCIATES
EMPLOYEE'S SAVINGS PLAN
Amended and Restated Effective January 1, 1989
(Including Amendments through January 1, 1992)
December, 1994
TABLE OF CONTENTS
Section
PREAMBLE
ARTICLE I - DEFINITIONS
Account 1.1
Affiliated Employer 1.2
After-Tax Participant Contribution(s) 1.3
After-Tax Participant Contribution(s) Account 1.4
Authorized Leave of Absence 1.5
Beneficiary 1.6
Board 1.7
Code 1.8
Committee 1.9
Common Shares 1.10
Disability 1.11
Earnings 1.12
Effective Date 1.13
Eligible Employee 1.14
Employee 1.15
Employer 1.16
Employment Date 1.17
Entry Date 1.18
ERISA 1.19
Fiduciary 1.20
Former Participant 1.21
Highly Compensated Employee 1.22
Highly Compensated Group 1.23
Matching Contribution 1.24
Matching Contribution Account 1.25
Nonparticipating Employer 1.26
One Year Break in Service 1.27
Parental Absence 1.28
Participant 1.29
Participating Employer 1.30
Plan 1.31
Plan Year 1.32
Pre-Tax Participant Contribution(s) 1.33
Pre-Tax Participant Contribution(s) Account 1.34
Qualified Voluntary Employee Contribution(s) 1.35
Qualified Voluntary Employee Contribution(s) Account 1.36
Rollover Contribution 1.37
Rollover Contribution Account 1.38
Service 1.39
Service Termination Date 1.40
Spouse 1.41
Trust or Trust Fund 1.42
Trust Agreement 1.43
Trustee 1.44
Valuation Date 1.45
ARTICLE II - PARTICIPATION
Eligibility to Participate 2.1
Commencement of Participation 2.2
Transfers 2.3
Reemployment of Terminated Employee or Resumption of
Employment Following Leave of Absence 2.4
ARTICLE III - PARTICIPANT CONTRIBUTIONS AND MAXIMUM AMOUNTS
Pre-Tax Participant Contribution(s) 3.1
After-Tax Participant Contribution(s) 3.2
Rollover Contributions 3.3
Change in Level of Contributions 3.4
Suspension and Resumption of Contributions 3.5
Change in Earnings 3.6
Remittance of Participant Contributions 3.7
Limitation on Amount and Return of Pre-Tax Participant
Contribution(s) In Certain Instances 3.8
Limitation on Amount and Return of After-Tax Participant
Contribution(s) In Certain Instances 3.9
Section
ARTICLE IV - MATCHING CONTRIBUTIONS AND OVERALL CONTRIBUTION LIMITS
Matching Contributions 4.1
Remittance of Matching Contributions 4.2
Limitation on Amount of Matching Contributions and
After-Tax Participant Contribution(s) In Certain Instances 4.3
Aggregate Limit Test 4.4
Maximum Total Allocations 4.5
Annual Additions 4.6
Contributions Conditioned on Tax Deductibility 4.7
Return of Contributions 4.8
Payment of Expenses 4.9
ARTICLE V - INVESTMENT OF CONTRIBUTIONS
Committee to Establish Accounts 5.1
Investment Options 5.2
Change in Investment Options 5.3
Investment Rules 5.4
ARTICLE VI - TRUST FUND
Trust Fund 6.1
Valuation of Funds 6.2
Valuation of Participant Accounts 6.3
Responsibilities of the Investment Manager 6.4
Statements of Participant Accounts 6.5
Valuation for Distribution 6.6
ARTICLE VII - DEATH AND DISABILITY
Death Benefit 7.1
Payment of Death Benefit 7.2
Designation of Beneficiary 7.3
Payment Other Than to Beneficiary 7.4
Definition of Disability 7.5
Disability Benefit 7.6
Recovery from Disability 7.7
Section
ARTICLE VIII - VESTING AND TERMINATION OF EMPLOYMENT
Vesting of Contributions 8.1
Vesting Prior to August 1, 1983 8.2
Method of Payment 8.3
ARTICLE IX - LOANS AND WITHDRAWALS
Withdrawals from Matching and Rollover Contribution Accounts 9.1
Withdrawals from After-Tax Participant
Contribution(s) Account 9.2
Withdrawals from Qualified Voluntary
Employee Contribution(s) Account 9.3
Withdrawals from Pre-Tax Participant Contribution(s) Account 9.4
Hardship Withdrawals 9.5
Rules for Withdrawals 9.6
Debiting of Withdrawals 9.7
Participant Loans 9.8
Rules Relating to Loans 9.9
ARTICLE X - PAYMENT OF BENEFITS
Entitlement to Distribution 10.1
Form of Payment 10.2
Time of Payment 10.3
Amount of Distribution 10.4
Death Benefits 10.5
Limitation on Distributions 10.6
Segregated Accounts 10.7
Missing Persons 10.8
ARTICLE XI - EMPLOYEES' SAVINGS PLAN COMMITTEE
Responsibility for Plan and Trust Administration 11.1
Retirement Plan Committee 11.2
Agents of the Committee 11.3
Committee Procedures 11.4
Administrative Powers of the Committee 11.5
Section
Benefit Claims Procedures 11.6
Reliance on Reports and Certificates 11.7
Other Committee Powers and Duties 11.8
Compensation of Committee 11.9
Member's Own Participation 11.10
Liability of Committee Members 11.11
Indemnification 11.12
ARTICLE XII - FIDUCIARY RESPONSIBILITIES
Basic Responsibilities 12.1
Actions of Fiduciaries 12.2
Fiduciary Liability 12.3
Bonding of Fiduciaries 12.4
Indemnification of Fiduciaries 12.5
ARTICLE XIII - AMENDMENT AND TERMINATION
Internal Revenue Service Qualification 13.1
Employer's Right to Amend or Terminate 13.2
Participating Employer's Right to Terminate 13.3
Valuation of Assets 13.4
Distribution of Assets 13.5
ARTICLE XIV - TOP-HEAVY PLAN REQUIREMENTS
General Rule 14.1
Minimum Contribution Provisions 14.2
Limitation on Contributions 14.3
Coordination With Other Plans 14.4
Top-Heavy Plan Definitions 14.5
Key Employee 14.6
Non-Key Employee 14.7
Change from Top-Heavy Status 14.8
ARTICLE XV - GENERAL PROVISIONS
Plan Voluntary 15.1
Payments to Minors and Incompetents 15.2
Non-Alienation of Benefits 15.3
Use of Masculine and Feminine; Singular and Plural 15.4
Merger, Consolidation or Transfer 15.5
Leased Employees 15.6
Governing Law 15.7
PREAMBLE
Effective January 1, 1982, Eastern Utilities Associates (the "Employer")
established a retirement plan referred to as the Eastern Utilities Associates
Employees' Savings Plan (the "Plan") as provided herein. A Trust Agreement has
been adopted by the Employer and is intended to form a part of this Plan. The
purpose of this Plan is to encourage employee savings for retirement and to
provide a tax qualified facility for accumulation of funds to be used to
provide benefits payable to an Employee upon his retirement, death, disability,
termination of employment, or on certain other occasions.
This Plan constitutes an amendment to, restatement of, and continuation of the
Plan as it was originally effective January 1, 1982, and as amended from time
to time thereafter. This amendment and restatement is effective January 1,
1989, except to the extent otherwise specifically provided herein.
Effective January 1, 1992, the Newport Electric Corporation Deferred
Compensation Thrift Plan was merged into and became a part of this Plan. The
merged plans are maintained as a single plan pursuant to Section 414(l) of the
Internal Revenue Code of 1986 (the "Code") and applicable regulations and
rulings. Except as otherwise provided herein, the terms of this Plan shall
govern the participation of and accounts of those employees formerly employed
by Newport Electric Corporation.
It is intended that this Plan be qualified under Section 401(a) of the Code, as
amended from time to time, and meet the requirements of Code Section 401(k) as
a qualified cash or deferred arrangement. It is also intended that the Trust
be exempt from taxation as provided under Code Section 501(a).
ARTICLE I
DEFINITIONS
The following words and phrases when used in the Plan shall have the following
meanings, unless a different meaning is plainly required by the context:
1.1 "Account" shall mean the credit balance of a Participant in the Trust
Fund represented by his Pre-Tax Participant Contribution(s) Account,
Matching Contribution Account, After-Tax Participant Contribution(s)
Account, Qualified Voluntary Employee Contribution(s) Account and his
Rollover Contribution Account, if any.
1.2 "Affiliated Employer" shall mean any corporation which is included
with the Employer in a controlled group of corporations, as
determined in accordance with Code Section 414(b), any unincorporated
trade or business which, as determined under regulations of the
Secretary of the Treasury, is under common control of the Employer
under Code Section 414(c), any organization that includes the
Employer, which is a member of an affiliated service group, as
defined in Code Section 414(m), and any other entity required to be
aggregated with the Employer pursuant to regulations under Code
Section 414(o). For the purposes of Sections 4.5 and 4.6, Code
Sections 414(b) and (c) shall be applied as modified by Code Section
415(h).
1.3 "After-Tax Participant Contribution(s)" shall mean contributions made
to the Plan by a Participant on an after-tax basis pursuant to
Article III.
1.4 "After-Tax Participant Contribution(s) Account" shall mean a
Participant's interest in the Trust Fund attributable to After-Tax
Participant Contribution(s) made to the Plan including investment
experience thereon.
1.5 "Authorized Leave of Absence" shall mean an Employee's temporary
absence from work which is approved and authorized by the Employer or
Participating Employer according to uniform and non-discriminatory
rules. An Authorized Leave of Absence shall include a Parental
Absence as defined in Section 1.28.
1.6 "Beneficiary" shall mean the person or persons designated by the
Participant or Former Participant to receive benefits under the Plan
in the event of the Participant's death. If the Participant is
married and designates someone other than his legal Spouse, his
Beneficiary designation must include the written consent of his
legal Spouse at the time the designation is made in order to be
valid. A former Spouse's consent shall not be binding on a
subsequent Spouse.
Such written consent must approve the specific beneficiary
designated, acknowledge the effect of such designation and be
witnessed by a notary public or a Plan representative. If it is
established to the satisfaction of the Committee that the
Participant has no Spouse, or that the Spouse's consent cannot be
obtained because the Spouse cannot be located, or because of such
other circumstances as may be prescribed in regulations issued
pursuant to Code Section 417, such written consent shall not be
required. If no valid Beneficiary resignation is in effect at the
time of the Participant's death, Section 7.4 shall apply.
1.7 "Board" shall mean the Board of Trustees of the Employer.
1.8 "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and any regulations issued thereunder. Reference to any
Code Section shall include any successor provision thereto.
1.9 "Committee" shall mean the person or persons designated by the
Employer as the Employees' Savings Plan Committee to administer the
Plan in accordance with Article XI.
1.10 "Common Shares" shall mean common shares of the Employer's stock with
voting power and dividend rights no less favorable than the voting
power and dividend rights of any other common shares of stock issued
by the Employer.
1.11 "Disability" shall mean a total and permanent disability as defined
pursuant to Article VII.
1.12 "Earnings" shall mean the regular straight time wages paid by the
Employer to an Employee during a Plan Year, exclusive of overtime,
bonuses, and the Employer's cost for any public or private employee
benefit plan (including this Plan) except that Earnings shall include
any Pre-Tax Participant Contribution(s) made hereunder and any salary
deferrals made by the Employee to a plan maintained by a
Participating Employer which meets the requirements of Code Section
125 during the Plan Year.
A Participant's Earnings taken into account under the Plan for any
Plan Year shall not exceed $200,000 ($150,000 for Plan Years
beginning January 1, 1994) or such amount as indexed pursuant to Code
Sections 401(a)(17) and 415(d) and the applicable regulations
thereunder.
In determining the Earnings of an Employee for purposes of the Code
Section 401(a)(17) limitation, the rules of Code Section 414(q)(6)
shall apply except that the term "family" shall include only the
Spouse of an Employee and any linear descendants of the Employee who
have not attained age 19 before the close of the Plan Year.
If the Earnings of the Employee exceeds the Code Section 401(a)(17)
limitation, then such limitation shall be pro-rated among the
Earnings of the Employee and his family (as determined under this
Section 1.12 prior to the application of the Code Section 401(a)(17)
limitation) in proportion to each such individual's Earnings (as
determined under this Section 1.12 prior to the application of the
Code Section 401(a)(17) limitation).
1.13 "Effective Date" shall mean January 1, 1989, the effective date of
the amendment and restatement of the Plan. The original effective
date of the Plan is January 1, 1982.
1.14 "Eligible Employee" shall mean an Employee who is included in the
eligible class described in Section 2.1.
1.15 "Employee" shall mean any common-law employee of the Employer or an
Affiliated Employer, excluding any individual who is an independent
contractor, a consultant, or a Trustee of Eastern Utilities
Associates unless such Trustee is otherwise an Employee of the
Company.
A leased employee as described in Code Section 414(n)(2) shall be
considered an Employee only to the extent required by Section 15.6.
1.16 "Employer" shall mean Eastern Utilities Associates, a voluntary
association formed under a Declaration of Trust dated April 2, 1928
as amended under the laws of the Commonwealth of Massachusetts or its
successor or successors.
1.17 "Employment Date" shall mean the first day for which an Employee
receives credit for an Hour of Service.
1.18 "Entry Date" shall mean any January 1 or July 1. Effective July 1,
1992, Entry Date shall mean the first day of any calendar month.
1.19 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. References to any section of
ERISA shall include any successor provision thereto.
1.20 "Fiduciary" shall mean any person who exercises any discretionary
authority or discretionary control respecting the management of the
Plan, assets held under the Plan, or disposition of Plan assets; who
renders investment advice for a fee or other compensation, direct or
indirect, with respect to assets held under the Plan or has any
authority or responsibility to do so; or who has any discretionary
authority or discretionary responsibility in the administration of
the Plan. Any person who exercises authority or has responsibility
of a fiduciary nature as described above shall be considered a
Fiduciary under the Plan.
1.21 "Former Participant" shall mean an individual who was a Participant,
has terminated employment with the Employer and all Affiliated
Employers, and has received a distribution of his Account under the
Plan.
1.22 "Highly Compensated Employee" shall mean each Employee who at any
time during the current or preceding Plan Year:
(a) was a 5% owner (as defined in Code Section 416(i)(l)) of the
Employer or an Affiliated Employer;
(b) received compensation from the Employer or an Affiliated
Employer in excess of $75,000 (as indexed pursuant to applicable
regulations under the Code);
(c) received compensation from the Employer or an Affiliated
Employer in excess of $50,000 (as indexed pursuant to applicable
regulations under the Code) and was in the group consisting of
the top 20% of all Employees when ranked on the basis of
compensation received during such Plan Year; or
(d) was at any time an officer of the Employer or Affiliated
Employer who received compensation in excess of 50% of the
amount in effect under Code Section 415(b)(1)(A) for such Plan
Year.
Notwithstanding the foregoing, an Employee not described in paragraph
(b), (c), or (d) above for the preceding Plan Year shall only be a
Highly Compensated Employee for the current Plan Year if he is
described in paragraph (b), (c) or (d) for the current Plan Year and
is one of the top 100 Employees when ranked by compensation for such
Plan Year. For purposes of this Section, "compensation" shall mean
compensation as defined in Code Section 414(q)(7).
In any event, the determination of a Highly Compensated Employee
shall be made pursuant to Code Section 414(q) and regulations issued
thereunder. Accordingly, the Committee may elect to use the calendar
year election to determine Highly Compensated Employees as provided
in Treasury Regulation 1.414(q)-1T Q&A 14(b)1 or the simplified
method as described in Revenue Procedure 93-42, Section 4.
1.23 "Highly Compensated Group" shall mean the group of Highly Compensated
Employees who are also Eligible Employees as defined herein.
1.24 "Matching Contribution" shall mean a contribution by a Participating
Employer made to the Plan on behalf of a Participant pursuant to
Article IV.
1.25 "Matching Contribution Account" shall mean a Participant's interest
in the Trust Fund attributable to Matching Contributions made to the
Plan including investment experience thereon.
1.26 "Nonparticipating Employer" shall mean any Affiliated Employer which
is not a Participating Employer.
1.27 "One Year Break in Service" shall mean a consecutive 12-month period
commencing on an Employee's Service Termination Date (or anniversary
thereof) in which such individual is not employed by the Employer or
an Affiliated Employer.
1.28 "Parental Absence" shall mean an Employee's absence from work which
has commenced after December 31, 1984, for any of the following
reasons:
(a) the pregnancy of the Employee;
(b) the birth of the Employee's child;
(c) the adoption of a child by the Employee; or
(d) the need to care for the Employee's child immediately following
its birth or adoption.
1.29 "Participant" shall mean an Employee who is either currently
contributing to the Plan or who has an Account under the Plan.
1.30 "Participating Employer" shall mean the Employer and any other
Affiliated Employer (or a division or subsidiary of either) which
participates in the Plan with the permission of the Employer. A
Participating Employer may elect, with the consent of the Employer,
to adopt the Plan only with respect to a division or other employment
unit rather than with respect to all of its employees.
1.31 "Plan" shall mean the Eastern Utilities Associates Employees' Savings
Plan as set forth in this document and as amended from time to time.
1.32 "Plan Year" shall mean the 12-month period commencing on January 1
and ending on the next following December 31.
1.33 "Pre-Tax Participant Contribution(s)" shall mean a salary reduction
contribution made to the Plan on behalf of a Participant pursuant to
Article III.
1.34 "Pre-Tax Participant Contribution(s) Account" shall mean a
Participant's interest in the Trust Fund attributable to Pre-Tax
Participant Contribution(s) made to the Plan including investment
experience thereon.
1.35 "Qualified Voluntary Employee Contribution(s) (QVEC)" shall mean a
Participant's tax-deductible contributions made under the Plan prior
to January 1, 1987. Qualified Voluntary Employee Contribution(s)
shall not be made to the Plan after December 31, 1986.
1.36 "Qualified Voluntary Employee Contribution(s) Account" shall mean a
Participant's interest in the Trust Fund attributable to Qualified
Voluntary Employee Contribution(s) made to the Plan including
investment experience thereon.
1.37 "Rollover Contribution" shall mean a contribution made to the Plan by
a Participant pursuant to Section 3.3.
1.38 "Rollover Contribution Account" shall mean a Participant's interest
in the Trust Fund attributable to Rollover Contributions made to the
Plan including investment experience thereon.
1.39 "Service" shall mean the completed years and months of an Employee's
employment with the Employer and Affiliated Employers measured from
the individual's date of hire with the Employer or Affiliated
Employer.
Service shall include the following:
(a) the first 12 months of layoff;
(b) any period during which the Employee is on an Authorized Leave
of Absence, with or without pay;
(c) any period of absence because of service in the Armed Forces of
the United States provided the Employee returns to employment
with the Employer or Affiliated Employer within 90 days (or such
longer period as may be provided by law for the protection of
reemployment rights) after his discharge or release from active
duty in the Armed Forces;
(d) any other authorized period of absence, including paid holidays
paid vacations, and sick leaves; and
(e) any other period of absence not in excess of one year, provided
the Employee returns to work within such one-year period.
For the purpose of determining an Employee's Service, a full calendar
month of employment shall be deemed one month of Service and 12
months of employment shall be deemed one year of Service. All
periods of employment with the Employer and Affiliated Employers
shall be taken into consideration for the purpose of determining an
Employee's Service.
For an Employee who was an employee of Newport Electric Corporation
on December 31, 1991, and who became an Employee hereunder on January
1, 1992, all periods of employment with Newport Electric Corporation
will be deemed Service to the extent such period of employment with
Newport Electric Corporation would have been deemed Service in
accordance with the provisions of this Section 1.39.
1.40 "Service Termination Date" shall mean the earliest of the following:
(a) the date on which the Employee resigns, is discharged, or
retires from Service with the Employer and all Affiliated
Employers;
(b) the date the Employee dies;
(c) the first anniversary of the date on which the Employee is laid
off, starts an Authorized Leave of Absence, or is absent from
work for any other reason other than a Parental Absence; and
(d) the second anniversary of the date on which the Employee
commenced a Parental Absence, if such Employee has not yet
returned to work with the Employer or an Affiliated Employer.
1.41 "Spouse" shall mean the legal spouse to whom a Participant is married
under applicable state law on the date benefits commence. However,
if the Participant should die before the date benefits are to
commence, then the Spouse shall be the legal spouse to whom the
Participant was married on the Participant's date of death. A former
spouse will be treated as the Spouse or surviving Spouse to the
extent required under a qualified domestic relations order as defined
in Code Section 414(p).
1.42 "Trust" or "Trust Fund" shall mean all assets held by the Trustee in
accordance with the Trust Agreement.
1.43 "Trust Agreement" shall mean the trust agreement between the Employer
and a Trustee as provided for in Article XI.
1.44 "Trustee" shall mean the individual, individuals or institution
appointed by the Board of Trustees of the Employer to act in
accordance with the Trust Agreement.
1.45 "Valuation Date" shall mean March 31, June 30, September 30, and
December 31. Effective July 1, 1992, Valuation Date shall mean any
date as of which the investment funds offered under the Plan are
valued, provided that in any event such funds shall be valued no less
frequently than quarterly.
ARTICLE II
PARTICIPATION
2.1 Eligibility to Participate. Each Employee shall be an Eligible
Employee upon satisfying the following requirements:
(a) he is employed by a Participating Employer;
(b) he has completed one year of Service;
(c) he has attained age 18;
(d) he is not a "leased employee" as defined under Code Section
414(n)(2);
(e) in the case of an Employee covered by a collective bargaining
agreement, the bargaining agreement provides for his
participation herein;
(f) effective July 1, 1992, he is not a temporary Employee (an
Employee is a temporary Employee if he is hired for a position
which is expected to terminate in the foreseeable future; and
(g) Notwithstanding the foregoing, an Employee who was an employee
of Newport Electric Corporation as of December 31, 1991, and who
was a participant of the Newport Electric Corporation Deferred
Compensation Thrift Plan on such date shall be considered an
Eligible Employee hereunder as of January 1, 1992. All other
Employees who were employees of Newport Electric Corporation
shall become Eligible Employees upon satisfying the
aforementioned requirements of this Section 2.1.
2.2 Commencement of Participation. Except as provided in Section 2.4,
each Eligible Employee shall become a Participant (or if his
participation has terminated, shall again become a Participant) on
the Entry Date coinciding with or next following the date on which
he:
(a) meets the requirements of Section 2.1; and
(b) enrolls in the Plan by completing an election form to initiate
contributions pursuant to Article III. However, if an Eligible
Employee fails to enroll when first eligible to do so, such
Employee shall be eligible to enroll on any following Entry Date
providing he is then an Eligible Employee.
2.3 Transfers. The following provisions shall govern in the case of an
Employee who changes employment status:
(a) In the event that an Eligible Employee directly transfers to an
ineligible class of Employees, he shall be deemed to continue as
a Participant for all purposes of the Plan except that he shall
not be permitted to direct any further Pre-Tax Participant
Contribution(s) or make any further After-Tax Participant
Contribution(s) on his behalf under the Plan nor shall he
receive any further Matching Contributions unless he again
becomes an Eligible Employee. Such an Employee shall continue
to accrue Service pursuant to Section 1.39.
(b) In the event that an Employee in an ineligible class (i.e.
temporary or leased employees) transfers to an employment
classification as an Eligible Employee, his Service earned
during his employment with all Participating and
Nonparticipating Employers shall be credited under this Plan.
Such Employee shall be eligible to become a Participant on the
first day of the month coinciding with or next following the
transfer or, if later, the Entry Date coinciding with or next
following the date when he meets the requirements of Section
2.1.
2.4 Reemployment of Terminated Employee or Resumption of Employment
Following Leave of Absence. A terminated Employee or an Employee on
an Approved Leave of Absence who resumes active employment with a
Participating Employer as an Eligible Employee may elect to become a
Participant (or shall continue participation if already a
Participant) on the first day of the month coinciding with or next
following his reemployment date, provided he meets the requirements
of Section 2.1 on such reemployment date, or if later, the Entry
Date coinciding with or next following the date on which he meets
such requirements.
ARTICLE III
PARTICIPANT CONTRIBUTIONS AND MAXIMUM AMOUNTS
3.1 Pre-Tax Participant Contribution(s). Each Eligible Employee may
elect, in writing, to authorize a Participating Employer to reduce
his Earnings and make a corresponding Pre-Tax Participant
Contribution(s) on his behalf commencing on any Entry Date. This
reduction in Earnings shall be in any whole percentage from 1% to 12%
(15% effective July 1, 1992) of such Earnings or, if permitted by the
Committee, in a flat dollar amount not less than 1% and not to exceed
12% (15% effective July 1, 1992) of such Earnings. Authorization to
reduce Earnings shall be in writing and shall be delivered to the
Committee no later than 30 days prior to the date as of which the
Pre-Tax Participant Contribution(s) becomes effective, unless the
Committee agrees to accept a later authorization according to such
uniform and nondiscriminatory rules as it may adopt. Such Earnings
reduction shall continue unchanged until the Participant terminates
employment, changes or suspends the Pre-Tax Participant
Contribution(s) in accordance with Section 3.4 or 3.5 or transfers to
the employment of a Nonparticipating Employer or an ineligible class
of Employees.
Pre-Tax Participant Contribution(s) made under this Section 3.1 shall
be subject to the limitations of Sections 3.8, 4.4, and 4.5.
3.2 After-Tax Participant Contribution(s). Each Eligible Employee may
elect, in writing, to contribute a percentage of his Earnings as
nondeductible After-Tax Participant Contribution(s) commencing on any
Entry Date. The contribution rate must be in any whole percentage
from 1% to 10% of such Earnings or, if permitted by the Committee, in
a flat dollar amount not less than 1% and not to exceed 10% of such
Earnings, provided that such After-Tax Participant Contribution(s)
shall not exceed the difference between 12% (15% effective July 1,
1992) and the contribution percentage such Eligible Employee has
currently authorized for Pre-Tax Participant Contribution(s).
Authorization to make After-Tax Participant Contribution(s) shall be
in writing and shall be delivered to the Committee no later than 30
days prior to the date as of which the After-Tax Participant
Contribution(s) becomes effective, unless the Committee agrees to
accept a later authorization according to such uniform and
nondiscriminatory rules it may adopt. Such contributions will be
made on an after-tax basis by payroll deduction which shall continue
unchanged until the Participant terminates employment, changes or
suspends his After-Tax Participant Contribution(s) election in
accordance with Section 3.4 or 3.5 or transfers to the employment of
a Nonparticipating Employer or an ineligible class of Employees.
After-Tax Participant Contribution(s) made under this Section 3.2
shall be subject to the limitations of Sections 4.3, 4.4, and 4.5.
3.3 Rollover Contributions. An Employee who is or who would be an
Eligible Employee except for the Service or age requirement under
Section 2.1 may elect, subject to the written consent of the
Committee, to make a Rollover Contribution to the Trust Fund to the
extent permitted under Code Section 402(c) and other applicable Code
sections and related rulings and regulations. A Rollover Contri-
bution shall be subject to the following rules:
(a) A Rollover Contribution shall consist of a distribution of all
or a portion of the balance to the credit of the Employee:
(i) from a qualified trust under Code Section 401(a), which
trust is exempt from tax under Code Section 501(a) (or
from an annuity plan qualified under Code Section
403(a)), or
(ii) from an individual retirement account, or an individual
retirement annuity (in each case within the meaning of
Code Section 408), all of the assets of which arose from
a distribution described in (i) which was transferred to
such account or annuity within 60 days from the date of
the distribution.
Notwithstanding the foregoing, a Rollover Contribution shall not
consist of: any distribution that is one of a series of
substantially equal periodic payments (not less frequently than
annually) made for the life (or the life expectancy) of the
Employee or the joint lives (or joint life expectancies) of the
Employee and the Employee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the
extent such distribution is required under Code Section
401(a)(9); and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
Employer securities).
(b) A Rollover Contribution shall not exceed the fair market value
of the amount described in (a) above;
(c) A Rollover Contribution shall be made in cash;
(d) In the event a Rollover Contribution consists of an amount which
has been paid directly to the individual, such Rollover
Contribution shall be made no later than 60 days following the
date the Participant receives the amount distributed;
(e) A Rollover Contribution must be submitted with supporting
documentation that the Rollover Contribution meets the
requirements of this Section 3.3.
An Employee who makes a Rollover Contribution shall be considered a
Participant under the Plan solely with respect to such Rollover
Contribution until he otherwise becomes a Participant pursuant to
Sections 2.1 and 2.2.
3.4 Change in Level of Contributions. The Pre-Tax and After-Tax
Participant Contribution(s) percentages as designated by the
Participant shall continue in effect, notwithstanding any change in
his Earnings, until he elects to change such percentage. Subject to
the requirements of Sections 3.1 and 3.2, a Participant may change
the rate of such contributions as of any Entry Date by providing 30
days' prior written notice to the Committee or such lesser notice as
the Committee may approve according to such uniform and
nondiscriminatory rules as it may adopt. Notice of any such change
shall be given on a form to be provided by the Committee for this
purpose and shall be signed by the Participant and delivered to
the Committee.
3.5 Suspension and Resumption of Contributions. A Participant may
suspend the making of Pre-Tax Participant Contribution(s) and/or
After-Tax Participant Contribution(s) as of any pay period by
providing at least 30 days' prior written notice to the Committee or
such lesser notice as the Committee may approve according to such
uniform and nondiscriminatory rules as it may adopt. A suspension of
Pre-Tax and/or After-Tax Participant Contribution(s) pursuant to this
Section shall continue for a period of no less than three months.
Providing he is still an Eligible Employee, a Participant who
suspends his contributions pursuant to the above rules may resume
such contributions effective as of the first day of any month
following the required three month suspension period, with 30 days'
prior written notice to the Committee or such lesser notice as the
Committee may approve according to uniform and nondiscriminatory
rules it may adopt.
3.6 Change in Earnings. In the event of a change in the Earnings of a
Participant, the percentage of his Earnings that he has authorized as
his Pre-Tax Participant Contribution(s) and/or After-Tax Participant
Contribution(s) shall be applied as soon as practicable with respect
to such changed Earnings without action by the Participant. In the
case of a Participant who has elected a flat dollar contribution,
such contribution shall not change on account of a change in his
Earnings.
3.7 Remittance of Participant Contributions. Pre-Tax and After-Tax
Participant Contribution(s) will be remitted to the Trustee by the
Participating Employers as soon as practicable following the date
such contributions are made but in no event later than 30 days
following the end of the Plan Year in which such contributions
are made.
Rollover Contributions shall be remitted to the Trustee as soon as
practicable after they are delivered to a Participating Employer.
All Pre-Tax, After-Tax, and Rollover Contributions shall be invested
in accordance with the Participant's investment direction pursuant to
Article V.
Notwithstanding the foregoing, a Participant's Pre-Tax and After-Tax
Participant Contribution(s) will stop for any period of time during
which he is on an unpaid authorized leave of absence or layoff.
3.8 Limitation on Amount and Return of Pre-Tax Participant
Contribution(s) In Certain Instances.
(a) In no event shall a Participant's Pre-Tax Participant
Contribution(s) for a taxable year under this Plan and any other
cash or deferred arrangement (such as any other plan permitting
contributions under Section 401(k) of the Code) maintained by
the Employer exceed the dollar limit on excludable salary
deferrals under Code Section 402(g)(1) ($9,240 for 1994) as
adjusted for increases in the cost of living pursuant to Code
Section 402(g)(5). In the event a Participant's Pre-Tax
Participant Contribution(s) should exceed such dollar limit for
a taxable year, the excess, together with any investment
earnings attributable thereto, shall be returned to the
Participant no later than April 15 following the close of the
taxable year for which the excess contribution was made.
(b) In the event a Participant's Pre-Tax Participant Contribution(s)
for a taxable year under this Plan, together with his salary
reduction amounts under any other plan which meets the
requirements of Code Section 401(k), exceed the limits set forth
in (a) above, the Participant may treat a portion of such excess
as having been contributed to this Plan and request a return of
such excess together with any investment earnings attributable
thereto. Any such request shall be made no later than March 1
following the close of the taxable year for which the excess
contribution was made, and the return of such excess shall be
made no later than the immediately following April 15.
(c) Effective January 1, 1987, for each Plan Year, the "average
deferral percentage" authorized by the Highly Compensated Group
as Pre-Tax Participant Contribution(s) must meet one of the
following tests:
(i) The "average deferral percentage" of the Highly
Compensated Group may not exceed 1.25 multiplied by the
"average deferral percentage" of all other Eligible
Employees who are not in such group, or
(ii) The "average deferral percentage" of the Highly
Compensated Group may not exceed 2.0 multiplied by the
"average deferral percentage" of all other Eligible
Employees, who are not in such group, subject to a
maximum differential of two percentage points.
(d) The "average deferral percentage" for a specified group for a
Plan Year shall mean the average of the ratios (calculated
separately for each Employee in such group) of (i) over (ii)
where:
(i) equals the sum of the Pre-Tax Participant Contribution(s)
made on behalf of each Eligible Employee for the Plan
Year pursuant to Section 3.1; and
(ii) equals the Eligible Employee's compensation for such Plan
Year as provided under Code Section 414(s), including any
alternative definitions thereunder.
For purposes of the foregoing, only Pre-Tax Participant
Contribution(s) allocated to the Participant's Account on a date
within a Plan Year and paid to the Trust Fund within 12 months
following the close of such Plan Year shall be considered in
determining his "deferral percentage" for such Plan Year. In
addition, only Pre-Tax Participant Contribution(s) which are
attributable to the Earnings an Employee receives from the
Employer during a Plan Year or within two and one-half months
following the close of such Plan Year shall be considered in
determining the Employee's "deferral percentage" for such Plan
Year.
If the Participating Employer sponsors two or more plans which
include a cash or deferred arrangement but are considered one
plan for purposes of Code Section 401(a)(4) or 410(b), the cash
or deferred arrangements included in such plans shall be treated
as one plan for purposes of determining the "average deferral
percentage".
If any Eligible Employee who is a member of the Highly
Compensated Group is participating in two or more cash or
deferred arrangements (such as any other plan permitting
contributions under Section 401(k) of the Code) sponsored by the
Employer or an Affiliated Employer, such cash or deferred
arrangements shall be treated as one arrangement for purposes of
determining the "deferral percentage" for such Eligible
Employee.
For purposes of determining the "deferral percentage" of an
Eligible Employee who is a 5% owner or one of the ten most
highly-paid Highly Compensated Employees, the Pre-Tax
Participant Contribution(s) and compensation of such Eligible
Employee shall include the Pre-Tax Participant Contribution(s)
and compensation for the Plan Year of "family members" (as
defined in Code Section 414(q)(6)) as may be required pursuant
to the family aggregation rules of Code Section 401(k) and
pertinent regulations issued thereunder. To such extent as
required by regulations, family members, with respect to such
Highly Compensated Employees, shall be disregarded as separate
Employees in determining the "average deferral percentage" both
for Eligible Employees who are non-highly compensated Employees
and for Eligible Employees who are Highly Compensated Employees.
(e) From time to time, the Committee shall review the Pre-Tax
Participant Contribution(s) authorized by Eligible Employees.
If, upon such review, the Committee determines that the average
percentage of such contributions applicable to the Highly
Compensated Group exceeds or is likely to exceed the maximum
average percentage necessary to comply with the above rules,
the Committee may reduce the Pre-Tax Participant Contribution(s)
of the Highly Compensated Group, to the extent necessary to
comply with such rules. Such reduction shall be effected by
successive reductions of the highest Pre-Tax Participant
Contribution(s) percentage authorized by one or more members of
the Highly Compensated Group until the average percentage
applicable to the Highly Compensated Group does not exceed the
maximum average percentage referred to above. Notwithstanding
the foregoing sentence, the Committee may impose a maximum
dollar limitation which is less than the amount specified in
Code Section 402(g) or a maximum percentage which is less than
the percentage in Section 3.1 to all Pre-Tax Participant
Contribution(s) made by the Highly Compensated Group.
(f) If, after the end of the Plan Year, the Committee determines
that the Pre-Tax Participant Contribution(s) made on behalf of
Highly Compensated Employees are in excess of the amounts
allowed under (c)(i) and (c)(ii) above, the Committee shall
return any Pre-Tax Participant Contribution(s) in excess of the
amount permitted above, together with any investment earnings or
losses allocable thereto to the affected Participants until the
rules in either (c)(i) or (c)(ii) above are met. The return of
such "excess contributions" shall be made in the same manner as
described in paragraph (e) above. Such "excess contributions"
shall be distributed within 2-1/2 months, if at all possible,
following the end of the Plan Year in which such Pre-Tax Parti-
cipant Contribution(s) were made and in no event later than the
close of the following Plan Year. The return of any excess Pre-
Tax Participant Contribution(s) shall be made on a pro rata
basis from the funds in which the Pre-Tax Participant
Contribution(s) are then invested, unless the Committee shall
permit the Participant to elect such other method of return
based on such uniform and nondiscriminatory rules as it may
adopt.
In the case of an Eligible Employee who is subject to the family
aggregation rules of Code Section 414(q)(6) because he is a
member of a family of a 5% owner of the Employer or of one of
the ten most highly paid Highly Compensated Employees, the
determination of and return of excess Pre-Tax Participant
Contribution(s) under this Section shall be made in accordance
with the family aggregation rules of Code Section 401(k) and
pertinent regulations issued thereunder.
(g) For purposes of determining the investment earnings or loss to
be distributed pursuant to paragraphs (a) and (f) hereunder, the
following rules shall apply:
The earnings or loss allocable to Pre-Tax Participant
Contribution(s) is the earnings or losses allocable to the
Participant's Pre-Tax Participant Contribution(s) Account for
the Plan Year multiplied by a fraction, the numerator of which
is the Pre-Tax Participant Contribution(s) to be distributed to
the Participant for the year and the denominator is the
Participant's Account balance attributable to Pre-Tax
Participant Contribution(s) without regard to any earnings or
loss occurring during such Plan Year.
(h) In the event that the Participating Employer made a Matching
Contribution with respect to any Pre-Tax Participant
Contribution(s) returned pursuant to this Section, such Matching
Contribution shall be distributed or forfeited to the affected
members of the Highly Compensated Group, as determined by the
Committee according to such uniform and nondiscriminatory rules
as it may adopt.
3.9 Limitation on Amount and Return of After-Tax Participant
Contribution(s) in Certain Instances. The limitation on the amount
and return of After-Tax Participant Contribution(s) is described in
Article IV.
ARTICLE IV
MATCHING CONTRIBUTIONS AND OVERALL CONTRIBUTION LIMITS
4.1 Matching Contributions. Each Participating Employer shall make a
Matching Contribution on behalf of each of its Participants in an
amount equal to 100% of the first 2% of Earnings and 50% of the next
1% of Earnings with respect to which such Participant makes Pre-Tax
Participant Contribution(s). The level of Matching Contributions for
any Employee whose terms of employment are governed by a collective
bargaining agreement shall be subject to the terms of such collective
bargaining agreement with respect to a Plan Year. Matching Contribu-
tions made under this Section 4.1 shall be subject to the limitations
of Sections 4.3, 4.4, and 4.5.
The Board may change the Matching Contribution from time to time.
In the event Matching Contributions on behalf of a Participant for a
Plan Year would otherwise cease because his Pre-Tax Participant
Contribution(s) for such Year cease on account of the dollar limit
set forth in Section 402(g)(1) of the Code, Matching Contributions
shall be continued on his behalf for the remainder of the Plan Year
in accordance with this Section during his continued employment as
long as his actual Pre-Tax Participant Contribution(s) for the Plan
Year are at least equal to 3% of his Earnings for the Year or such
other amount as eligible for the maximum Matching Contribution.
4.2 Remittance of Matching Contributions. Matching Contributions will be
paid by the Participating Employers to the Trustee no later than 30
days following the end of the Plan Year in which the corresponding
Pre-Tax Participant Contribution(s) are made, but in no event later
than the Participating Employer's tax filing deadline for its fiscal
year in which such Plan Year ends. Matching Contributions shall be
invested in EUA Common Shares pursuant to Article V, except as may
otherwise be provided under the terms of a collective bargaining
agreement. As such, Matching Contributions may be contributed in
cash, common shares or partially in cash and common shares.
4.3 Limitation on Amount of Matching Contributions and After-Tax
Participant Contribution(s) In Certain Instances. Effective January
1, 1987, for each Plan Year, the "average contribution percentage" of
the Highly Compensated Group must meet one of the following tests:
(a) The "average contribution percentage" of the Highly Compensated
Group may not exceed 1.25 multiplied by the "average
contribution percentage" of all other Eligible Employees who are
not in such group.
(b) The "average contribution percentage" of the Highly Compensated
Group may not exceed 2.0 multiplied by the "average contribution
percentage" of all other Eligible Employees who are not in such
group, subject to a maximum differential of two percentage
points.
The "average contribution percentage" for a specified group for
a Plan Year shall mean the average of the ratios (calculated
separately for each Employee in such group) of (i) over (ii)
where:
(i) equals the sum of the Eligible Employee's After-Tax
Participant Contribution(s) for the Plan Year pursuant to
Section 3.2 plus the Matching Contribution made on behalf
of the Eligible Employee for the Plan Year pursuant to
Section 4.1; and
(ii) equals the Eligible Employee's compensation for such Plan
Year as provided in Code Section 414(s), including any
alternative definitions thereunder.
For purposes of determining the "contribution percentage" of an
Eligible Employee who is a 5% owner or one of the ten most
highly- paid Highly Compensated Employees, the After-Tax
Participant Contribution(s), Matching Contributions and
compensation of such Eligible Employee shall include the After-
Tax Participant Contribution(s), Matching Contributions and
compensation for the Plan Year of "family members" (as defined
in Code Section 414(q)(6)) as may be required pursuant to the
family aggregation rules of Code Section 401(m) and pertinent
regulations issued thereunder. To such extent as required by
regulations, family members with respect to Highly Compensated
Employees shall be disregarded as separate Employees in
determining the "contribution percentage" both for Eligible
Employees who are non-highly compensated Employees and for
Eligible Employees who are Highly Compensated Employees.
If the Participating Employer sponsors two or more plans to
which After-Tax and matching Employer Contributions are made and
which are subject to Code Section 401(m), but are considered one
plan for purposes of Code Section 401(a)(4) or 410(b), such
plans shall be treated as one plan for purposes of determining
the "average contribution percentage".
If any Eligible Employee who is a member of the Highly
Compensated Group is participating in two or more plans
sponsored by the Employer or an Affiliated Employer that include
After-Tax and/or matching Employer Contributions subject to Code
Section 401(m), all such contributions will be treated as made
under one plan for purposes of this paragraph (b).
(c) If for any Plan Year the "average contribution percentage" for
the Highly Compensated Group exceeds the limits set forth in (a)
and (b) above, the "excess aggregate contributions" (as defined
in Code Section 401(m)(6)(B)) shall be distributed to the Highly
Compensated Group within 2-1/2 months, if at all possible,
following the end of the Plan Year in which such contributions
were made and in no event later than the close of the following
Plan Year. The distribution of such "excess aggregate
contributions" shall be effected by successive reductions of the
After-Tax and/or Matching Contribution percentage(s) of one or
more members of the Highly Compensated Group with the highest
"average contribution percentage" until the "average
contribution percentage" applicable to the Highly Compensated
Group does not exceed the maximum "average contribution
percentage" referred to above. The distributable amount for
each affected member of the Highly Compensated Group shall be
determined in accordance with the following provisions:
(i) After-Tax Participant Contribution(s) made during the Plan
Year shall be returned to the Highly Compensated Employee
until he has no remaining "excess aggregate contributions"
or until all of his After-Tax Participant Contribution(s)
for the Plan Year have been distributed; then
(ii) Matching Contributions made during the Plan Year to the
Highly Compensated Employee shall be distributed to such
Highly Compensated Employee or forfeited at the
Committee's discretion until he has no remaining "excess
aggregate contributions" or until all of his Matching
Contributions for the Plan Year have been
distributed/forfeited. In the event that any "excess
aggregate contributions" are forfeited, such amounts shall
be used to reduce future Matching Contributions to the
Plan.
The return of any "excess aggregate contributions" shall be made
on a pro rata basis from the funds in which the "excess
aggregate contributions" are then invested, unless the Committee
shall permit the Participant to elect such other method of
return based on such uniform and nondiscriminatory rules as it
may adopt.
In the case of an Eligible Employee who is subject to the family
aggregation rules of Code Section 414(q)(6) because he is a
member of a family of a 5% owner of the Employer or of one of
the ten most highly paid Highly Compensated Employees, the
determination of and return of "excess aggregate contributions"
under this Section shall be made in accordance with the family
aggregation rules of Code Section 401(m) and pertinent
regulations issued thereunder.
(d) The "excess aggregate contributions" to be distributed to a
Participant shall be adjusted for investment earnings or losses
applicable thereto.
(e) For purposes of determining the investment earnings or losses to
be distributed pursuant to the foregoing paragraphs, the
following rules shall apply:
The earnings or loss is the sum of earnings or losses allocable
to the Participant's After-Tax Participant Contribution(s)
Account and Matching Contribution Account for the Plan Year
multiplied by a fraction, the numerator of which is After-Tax
Participant Contribution(s) and Matching Contributions to be
returned to the Eligible Employee for the year and the
denominator is the Eligible Employee's Account balance(s)
attributable to After-Tax Participant Contribution(s) and
Matching Contributions without regard to any earnings or loss
occurring during such Plan Year.
4.4 Aggregate Limit Test.
(a) For any Plan Year commencing on or after January 1, 1989, in
which the "average deferral percentage" (as defined in Section
3.8) and the "average contribution percentage" (as defined in
Section 4.3) of the Highly Compensated Group can only satisfy
the limitations set forth in Sections 3.8(c)(ii) and 4.3(b)
respectively, but neither can satisfy the limitations set forth
in Sections 3.8(c)(i) and 4.3(a), respectively, and all
corrective measures have been taken under Sections 3.8 and 4.3
to ensure compliance with the provisions of Code Sections 401(k)
and 401(m), the "aggregate limit test" prescribed under proposed
Treasury Regulation 1.401 (m)-2(b)(3), or pertinent final
regulations shall be applicable. The "aggregate limit test"
shall be deemed met if (i) below is greater than or equal to
(ii) below where:
(i) equals the sum of (A) and (B) below where:
(A) equals 1.25 multiplied by the greater of (1) and (2)
where:
(1) equals the "average deferral percentage" of the
non-highly compensated group of Eligible
Employees; and
(2) equals the "average contribution percentage" of
the non-highly compensated group of Eligible
Employees;
(B) equals the lesser of (1) and (2) above plus two
percentage points. In no event, however, shall this
amount exceed 2.0 multiplied by the lesser of (1) and
(2) above.
(ii) equals the sum of (C) and (D) below where:
(C) equals the "average deferral percentage" of the
Highly Compensated Group; and
(D) equals the "average contribution percentage" of the
Highly Compensated Group.
(b) An "alternative aggregate limit test" may be used in place of
the "aggregate limit test" set forth in (a) above for any Plan
Years commencing on or after January 1, 1989, as long as such
test is permitted by the Internal Revenue Service. This
"alternative aggregate limit test" shall be deemed met if (i)
below is greater than or equal to (ii) below where:
(i) equals the sum of (A) and (B) below where:
(A) equals 1.25 multiplied by the lesser of (1) and (2)
where:
(1) equals the "average deferral percentage" of the
non-highly compensated group of Eligible
Employees; and
(2) equals the "average contribution percentage" of
the non-highly compensated group of Eligible
Employees;
(B) equals the greater of (1) and (2) above plus two
percentage points. In no event, however, shall this
amount exceed 2.0 multiplied by the greater of (1)
and (2) above.
(ii) equals the sum of (C) and (D) below where:
(C) equals the "average deferral percentage" of the
Highly Compensated Group; and
(D) equals the "average contribution percentage" of the
Highly Compensated Group.
(c) The Committee shall determine each Plan Year the appropriate
reductions, distributions, or forfeitures to be made in order to
satisfy the applicable limits set forth in this Section 4.4 and
in Sections 3.8 and 4.3. Any such reductions, distributions or
forfeitures shall be made in accordance with the applicable
provisions of Sections 3.8 and 4.3 and the nondiscrimination
requirements of Code Section 401(a)(4).
(d) In the event that the "average deferral percentage", the
"average contribution percentage" and the "aggregate limit" of
the Highly Compensated Group does not satisfy the requirements
set forth in Sections 3.8, 4.3, and this 4.4, respectively, the
Employer may for any Plan Year perform such testing by
restructuring the Plan into component plans as may be permitted
in regulations under Code Section 401(a)(4), provided such
component plans meet the coverage requirements of Code Section
410(b).
4.5 Maximum Total Allocations.
(a) Effective January 1, 1987, anything to the contrary herein
notwithstanding, in no event shall the Annual Additions, as
defined in Section 4.6, for any Employee for any Plan Year
exceed the lesser of:
(i) $30,000 or, if greater, 1/4 of the dollar limitation in
effect under Code Section 415(b)(1)(A) (which amount shall
be subject to adjustments as provided by Treasury
regulations under Code Section 415), or
(ii) 25% of the Employee's compensation (as defined by Treasury
regulations under Code Section 415(c)) from the
Participating Employer.
For purposes of this Section 4.5(a), the Plan Year shall be the
limitation year.
In the event an Annual Addition in excess of the lesser of (i)
or (ii) above is allocated to an Employee for a Plan Year, such
excess shall be corrected in the following order to the extent
required to eliminate the excess:
(iii) After-Tax Participant Contribution(s) plus any allocable
interest shall be refunded to the Employee, if such
contributions were made to this Plan or any other
qualified plan of the Employer for the Plan Year.
(iv) Matching Contributions shall be reduced. Any reduction in
Matching Contributions shall be credited to a suspense
account and treated as the first allocation of Matching
Contributions on behalf of such Employee for the following
Plan Year and, if not fully utilized for such allocation,
the remainder shall be allocated prorata to the Matching
Contribution Accounts of the other Employees on the last
day of the following Plan Year.
(v) Pre-Tax Participant Contribution(s) shall be reduced. Any
reduction of Pre-Tax Participant Contribution(s) shall be
credited to a suspense account and treated as the first
allocation of Pre-Tax Participant Contribution(s) on
behalf of such Employee for the following Plan Year (and
succeeding Plan Years as necessary) or, any such
contribution shall be refunded in accordance with Section
415 of the Code. In the event that any Pre-Tax
Participant Contribution(s) in the suspense account have
not been allocated as Pre-Tax Participant Contribution(s)
to the Employee as of his Service Termination Date, the
Employer shall directly reimburse the Employee for such
remaining amounts, including any investment earnings
thereon as may be required under pertinent regulations.
No contributions shall be made to the Plan on behalf of an
Employee for any period during which a suspense account is in
existence for such Employee.
(b) In the case of an Employee who has participated in a defined
benefit plan maintained by the Employer or an Affiliated
Employer, the sum of the "defined benefit plan fraction" and the
"defined contribution plan fraction," determined as of the close
of any Plan Year, shall not exceed one. An Employee's defined
benefit plan fraction and defined contribution plan fraction
shall be determined as follows:
(i) The "defined benefit plan fraction" is a fraction with a
numerator equal to the Employee's projected annual
retirement benefit determined (other than any benefit
attributable to Employee contributions) under the defined
benefit plan and a denominator equal to the lesser of (A)
1.25 multiplied by the dollar limitation in effect under
Code Section 415(b)(1)(A) for such Plan Year, or (B) 1.4
multiplied by 100% of the Employee's compensation which
may be taken into account for such Plan Year.
(ii) The "defined contribution plan fraction" is a fraction
with a numerator equal to the sum of the Annual Additions
to the Employee's Account and a denominator equal to the
sum for each calendar year of the Employee's employment
with the Employer, any predecessor of the Employer, or an
Affiliated Employer of the lesser of (A) 1.25 multiplied
by the amount determined in accordance with Code Section
415(e)(3)(B)(i) for each such Plan Year, or (B) 1.4 multi-
plied by 25% of the Employee's compensation (as defined by
Treasury Regulations under Code Section 415) which may be
taken into account for each such Plan Year.
For the purpose of applying this Section 4.5(b), all defined benefit
plans and all defined contribution plans maintained by the Employer
and all Affiliated Employers shall be aggregated.
It is intended that this Section 4.5 shall be applied in a manner
which will be in the best interest of an Employee, as determined by
the Committee. Accordingly, the Committee shall reduce an Employee's
Annual Additions under this Plan so that such fraction equals one
only if the terms of the defined benefit plan in which the Employee
is participating does not allow for a reduction of the Employee's
benefit so that such fraction equals one.
4.6 Annual Additions. Effective January 1, 1987, the Annual Addition
with respect to an Employee for any Plan Year shall be the sum of the
following amounts allocated to his Account for the Plan Year:
(a) All After-Tax Participant Contribution(s) made subsequent to
December 31, 1986, and prior to January 1, 1987, the lesser of
one-half of an Employee's After-Tax Participant Contribution(s),
or the amount of his After-Tax Participant Contribution(s) in
excess of 6% of his Earnings, plus
(b) Matching Contributions plus any other Employer contributions
made to a qualified plan, plus
(c) Pre-Tax Participant Contribution(s), plus
(d) Any forfeitures allocated to the Employee's Account, plus
(e) Any amount applied from the suspense account (pursuant to
Section 4.5), plus
(f) Excess contributions and excess aggregate contributions as
defined in Code Sections 401(k)(8)(B) and 401(m)(6)(B),
respectively, plus (g) Excess deferrals, as defined in Code
Section 402(g), to the extent such excess deferrals have not
been returned to the affected Employee by the April 15 following
the taxable year in which such excess deferral was made; plus
(h) Amounts described in Code Sections 415(l)(1) and 419A(d)(2).
For purposes of applying this Section 4.6, all defined contribution
plans maintained by the Employer and all Affiliated Employers shall
be aggregated.
The term Annual Additions shall not include any Rollover
Contributions.
4.7 Contributions Conditioned on Tax Deductibility. All Pre-Tax
Participant Contribution(s) and Matching Contributions shall be
conditioned upon their deductibility by the Participating Employer
for federal income tax purposes; provided, however, that no
contributions shall be returned to a Participating Employer, except
as provided in Section 4.8.
4.8 Return of Contributions. Notwithstanding any other provision of this
Plan, a Pre-Tax Participant Contribution(s), or Matching Contribution
upon request by the Participating Employer may be returned to the
Participating Employer who made the contribution if:
(a) the contribution was made by reason of a mistake of fact; or
(b) the contribution was conditioned upon its deductibility for
income tax purposes and the deduction was disallowed; and
Such contribution shall be returned to the Participating Employer
within one year of the mistaken payment of the contribution or the
disallowance of such deduction, as the case may be.
The amount which may be returned to the Participating Employer is the
excess of the amount contributed over the amount that would have been
contributed had there not occurred the circumstances causing the
excess. Earnings attributable to the excess contribution may not be
returned to the Participating Employer, but losses thereto shall
reduce the amount to be returned. Furthermore, if the withdrawal of
the amount attributable to the excess contribution would cause the
balance of the Account of any Participant to be reduced to less than
the balance which would have been in the Account had the excess
amount not been contributed, then the amount to be returned to the
Participating Employer shall be limited to avoid such reduction. In
the event any Pre-Tax Participant Contribution(s) are returned to a
Participating Employer pursuant to this Section 4.8, the
Participating Employer shall directly reimburse affected Participants
for the amounts so returned. Any After-Tax Participant
Contribution(s) (exclusive of earnings) made by mistake of fact shall
be returned to the affected Participants.
4.9 Payment of Expenses. In addition to its contributions, the Employer
(or Participating Employer, if applicable) may elect to pay the
administrative expenses of the Plan and fees and retainers of the
Plan's Trustees, consultants, administrators, recordkeepers,
auditors, counsel, and other advisors or service providers so long as
the Plan or Trust Fund remains in effect. If the Employer does not
elect to pay all or part of such expenses, the Trustee may pay these
expenses and charge the payment thereof against the Trust Fund for
the Plan Year in which the expenses were incurred. All investment
expenses including investment management fees, brokerage fees, taxes
and other expenses associated with Plan investments shall be paid
from the investment fund assets.
The Trustee, if so authorized by the Committee, may apportion the
administrative expenses to be paid from the Trust Fund. Such
expenses will be allocated to Participants according to procedures
and methodologies to be established by the Committee so long as such
procedures and methodologies of apportioning the expenses are
executed under rules uniformly applied in a nondiscriminatory manner.
ARTICLE V
INVESTMENT OF CONTRIBUTIONS
5.1 Committee to Establish Accounts. The Committee shall establish and
maintain a separate accounting in the name of each Participant,
Former Participant or, if applicable, Beneficiary which shall reflect
all contributions by the Participant or Former Participant, all
amounts contributed by the Participating Employer under the Plan on
his behalf, investment experience on all such contributions, any
distributions, withdrawals, and any expenses charged against such
contributions. The separate accounting in the name of each
Participant, Former Participant or Beneficiary shall include a
separate accounting for Pre-Tax Participant Contribution(s), After-
Tax Participant Contribution(s), Qualified Voluntary Employee
Contribution(s), Rollover Contributions, and Matching Contributions.
5.2 Investment Options. Subject to the provisions of Sections 5.3 and
5.4, a Participant, (including any Employee who is a Participant
solely with respect to Rollover Contributions) and any Former
Participant shall direct the Committee to invest his Pre-Tax
Participant Contribution(s), After-Tax Participant Contribution(s),
Qualified Voluntary Employee Contribution(s) and Rollover
Contributions, if any, in Funds available under the Plan as described
below other than EUA Common Shares. Matching Contributions and any
Rollover Contributions from a terminated plan maintained by the
Employer which were invested in Common Shares of Eastern Utilities
Associates shall be invested wholly in EUA Common Shares. For
Participants who are members of a collective bargaining agreement,
the investment of contributions hereunder shall be governed by the
terms of such collective bargaining agreement.
Fund shall mean the amounts held by any insurance company and/or
Trustee in accordance with this Plan. The Employer shall maintain:
(a) Capital preservation funds consisting of a money market fund or
similar fund invested primarily in short-term fixed income
securities, including investment contracts and annuity contracts
(issued by insurance companies) or certificates of deposit
issued by banks.
(b) Growth and income funds invested primarily in stocks and/or
bonds selected to offer the potential for capital growth and
current income.
(c) Growth funds invested primarily in domestic and foreign
securities designed to achieve above average capital growth by
assuming above average investment risk.
(d) EUA Common Shares is an unsegregated investment together with
earnings thereon invested in Common Shares of Eastern Utilities
Associates. Contributions made to and dividends received by
this Fund shall, to the extent practicable, be reinvested
through the Dividend Reinvestment and Common Share Purchase Plan
of Eastern Utilities Associates.
For periods prior to July 1, 1992 (the date the above described Funds
were offered under the Plan) the investment options and the rules
applicable thereto, as described in the predecessor to this document,
shall apply.
The Committee may, with the approval of the Board, eliminate one or
more investment funds, offer additional investment funds, or alter
the underlying investments of one or more funds from time to time.
Participants shall be notified of any changes in investment funds
prior to the effective date of such changes.
5.3 Change in Investment Options. Subject to Section 5.4, a Participant
may change the investment allocation of his future Pre-Tax
Participant Contribution(s), After-Tax Participant Contribution(s),
Rollover Contributions, if any, on a monthly basis by phone in
accordance with the rules of the Trustee. Subject to Sections 5.2
and 5.4, a Participant or Former Participant may also change the
investment allocation of his existing Pre-Tax Participant
Contribution(s) Account, After-Tax Participant Contribution Account,
Qualified Contribution Account and Rollover Contribution(s) Account,
on a daily basis by phone in accordance with the rules of the
Trustee.
The Committee may elect to change the Trustee and/or recordkeeper
relationship at any time. Upon such change, the Committee may
temporarily suspend the right of Participants to change or make
elections regarding the investment of Accounts and the Committee may
temporarily direct the investment of all or a portion of their
Accounts into a money market fund or similar fund consisting
primarily of short term fixed income securities or other fund deemed
appropriate to effect an efficient transition to the new recordkeeper
and investment funds. Notice of such suspension will be provided to
all eligible participants.
5.4 Investment Rules. The following rules shall govern all aspects of
this Article V:
(a) A Participant shall direct the Committee to invest his current
Pre-Tax Participant Contribution(s), After-Tax Participant
Contribution(s), and Rollover Contributions, if any, in
multiples of 5%, in Funds A, B, C, D, E, or F. Reallocation of
the Participant's or Former Participant's existing Account
pursuant to Section 5.3 shall also be made to Funds A, B, C, D,
E, or F in multiples of 5%.
(b) A Participant's or Former Participant's Matching Contribution
Account and Rollover Contribution Account attributable to
amounts distributed from a terminated plan maintained by the
Employer which was invested in Common Shares of Eastern
Utilities Associates shall be invested exclusively in EUA Common
Shares.
Notwithstanding the foregoing, for Participants who are members
of a collective bargaining agreement, the investment rules with
respect to Employee and Employer contributions hereunder shall
be governed by the terms of such collective bargaining
agreement.
(c) Any investment direction given by a Participant or Former
Participant shall continue in effect until changed by such
Participant or Former Participant as provided hereunder.
(d) In the absence of any written designation of investment
preference by the Participant or Former Participant, Pre-Tax
Participant Contribution(s), After-Tax Participant
Contribution(s), Qualified Voluntary Employee Contribution(s),
Rollover Contributions (other than Rollover Contributions
described in (b) above), if any, shall be invested 100% in
short-term fixed income investments.
(e) Notwithstanding any instruction from any Participant or Former
Participant for investment of funds as provided in this Article
V, the Trustee shall have the right to hold uninvested, or
invested in short-term fixed income investments, any funds
intended for investment or reinvestment as otherwise provided in
this Article for such time as the Trustee, in its sole
discretion, deems advisable.
(f) The Committee may limit changes otherwise permitted hereunder in
the investment allocation of a Participant's or Former
Participant's Account to the extent a change is precluded as a
result of a temporary period of adverse liquidity with respect
to an investment fund or to the extent a change would adversely
affect the investment return of Accounts of other Participants
or Former Participants.
(g) For periods prior to July 1, 1992 (the date the Funds described
in Section 5.2 were offered under the Plan) the investment
options, and the rules applicable thereto, as described in the
predecessor to this document shall apply.
ARTICLE VI
TRUST FUND
6.1 Trust Fund. All Accounts shall be held in the Trust Fund and each
Participant's and Former Participant's interest in the investment
funds shall be valued in accordance with the further provisions of
this Article VI.
The Trust Fund shall be held and administered under a Trust Agreement
between the Employer and the Trustee. The Employer, in its sole
discretion, shall have the right to change the method of funding or
the designation of Trustee, subject only to any contractual
restrictions of the existing method of funding. The Trust shall
hold all contributions made under the Plan and all earnings and other
income attributable thereto. All amounts payable under the Plan
shall be disbursed from the Fund.
6.2 Valuation of Funds. The current market value of each Fund shall be
separately determined by the Trustee as of every Valuation Date.
(a) For those securities traded on a national stock exchange, the
current market value shall be the closing price on the Valuation
Date.
(b) For those securities not traded on a national stock exchange,
the current market value shall be the average of the latest
available bid and ask quotes as of the Valuation Date.
If there is no trading of a security on a national stock exchange on
the Valuation Date or if bid and ask quotes are not available for a
security for a substantial amount of time, the current market value
of such security shall be determined on the basis of such market
quotations or other method as the Trustee shall deem appropriate.
6.3 Valuation of Participant Accounts. The Trustee shall maintain a
separate account for each Participant and Former Participant,
including a separate record of the share of each Participant or
Former Participant in each Fund attributable to contributions by the
Employer and to Pre-Tax, After-Tax, Qualified and Rollover
Contributions by the Participant. Each Participant's or Former
Participant's share in a Fund shall be determined as of each
Valuation Date and shall reflect contributions credited to his
Account and all withdrawals and forfeitures from his Account
since the last Valuation Date.
6.4 Investment Responsibilities of the Committee Relating to Investments.
The Committee, with the approval of the Board, shall invest and
reinvest the Trust Fund in such securities and other property in
accordance with the provisions of this Plan; provided, however, that
the Committee shall not engage in any "prohibited transaction" as
defined under ERISA. The Committee shall have such powers as may be
necessary to discharge its duties under the Plan, including, but not
limited to, the power:
(a) to make, execute, acknowledge, and deliver any and all deeds,
leases, assignments, and instruments;
(b) to cause any investments from time to time held by it to be
registered in, or transferred into, its name or in the name of
its nominee or nominees or to retain them unregistered or in
form permitting transferability by delivery, but the books and
records of the Committee shall at all times show that such
investments are part of the Fund;
(c) except in the case of Common Shares of Eastern Utilities
Associates, to vote in person or by proxy on any stocks, bonds
or other securities held by it; to exercise any options
appurtenant to any stocks, bonds, or other securities for
the conversion thereof into other stocks, bonds or securities,
or to exercise any rights to subscribe for additional stocks,
bonds, or other securities and to make any and all necessary
payments therefore; to join in, or to dissent from, and to
oppose, the reorganization, recapitalization, consolidation,
liquidation sale, or merger of corporations or properties in
which it may be interested as investment manager, upon such
terms and conditions as it may deem wise;
(d) in the case of Common Shares of Eastern Utilities Associates, to
carry out, or cause to be carried out, the voting instructions
of Participants respecting their interests in such Shares;
(e) to select depositories for the care, custody, and safekeeping of
any and all securities or other property of the Fund;
(f) to select, replace and/or eliminate one or more of the
investment funds offered under the Plan;
(g) to delegate investment management responsibilities to one or
more persons;
(h) to perform all acts which they deem necessary or proper for the
protection of the property of the Fund.
6.5 Statements of Participant Accounts. No less frequently than is
practicable after the completion of a Plan Year, an individual
statement will be issued to each Participant showing the value of his
interests in any of the investment funds which may be offered under
the Plan.
6.6 Valuation for Distribution. All withdrawals and distributions shall
be valued as of a Valuation Date and paid out as soon as practicable
thereafter or at such other time as the Committee may permit under
uniform and nondiscriminatory rules it may adopt.
ARTICLE VII
DEATH AND DISABILITY
7.1 Death Benefit. Upon the death of a Participant or Former
Participant, his Beneficiary shall be entitled to 100% of the
Participant's or Former Participant's remaining Account. Such
Account shall be held and maintained for the benefit of the
Beneficiary and the Beneficiary shall be entitled to exercise the
Participant's or Former Participant's rights respecting investment of
such Account and full and immediate repayment of any outstanding
loan, provided that the Beneficiary may not elect to take a new loan
from such Account or to make a partial withdrawal.
7.2 Payment of Death Benefit. After receipt by the Committee of due
notice of the death of the Participant, the benefit payable under
this Article shall be paid in one lump sum in accordance with the
provisions of Article X.
7.3 Designation of Beneficiary. Each Participant shall have the right,
by written notice to the Committee, to designate or to change the
Beneficiary to receive any benefit payable in the event of his death,
subject to the spousal consent requirements of Section 1.6, if he is
then married.
7.4 Payment Other Than to Beneficiary. If a Participant has not
designated a Beneficiary, or the Participant's designated Beneficiary
dies before the Participant, or if the Beneficiary dies after the
death of the Participant, but prior to receiving the full death
benefit hereunder, any remaining benefit shall be paid to the Benefi-
ciary's designated beneficiary. In the absence of such designation,
any remaining benefit will be paid to the Beneficiary's estate,
unless specified otherwise by the Participant.
7.5 Definition of Disability. A Participant will be deemed to have
suffered a total and permanent disability for purposes of the Plan if
he is eligible to receive Social Security disability benefits or
disability benefits under a long-term disability plan sponsored by
the Employer or an Affiliated Employer.
7.6 Disability Benefit. A Participant who has suffered a Disability
shall be entitled to distribution of 100% of the value of his Account
upon written request pursuant to the provisions of Article X.
7.7 Recovery from Disability.
(a) If it is subsequently determined that a Participant who had
become permanently disabled is no longer disabled, and if he
should return to employment with a Participating Employer
immediately upon recovery from Disability, he shall resume
membership in the Plan pursuant to Article II. In the event
his Account has not been distributed prior to his recovery from
Disability, he shall not be entitled to a distribution of his
Account prior to his Service Termination Date except as may be
permitted under Article IX.
(b) If it is subsequently determined that a Participant who had
become permanently disabled is no longer disabled, and if he
should fail to return to employment with a Participating
Employer or an Affiliate immediately upon recovery from
Disability, he shall be considered to have a Service Termina-
tion Date upon such recovery. In the event his Account has not
been distributed upon his recovery from Disability, his Account
shall be distributed pursuant to the provisions of Article X.
ARTICLE VIII
VESTING AND TERMINATION OF EMPLOYMENT
8.1 Vesting of Contributions. Subject to the further provisions of this
Article VIII, a Participant shall at all times be 100% vested in his
Account hereunder.
8.2 Vesting Prior to August 1, 1983.
(a) Any Participant who is actively employed on or after August 1,
1983 shall be 100% vested in his Account, except to the extent
that any portion of his Account may have been forfeited pursuant
to the further provisions of this Article.
(b) Any Participant who terminated employment with the Employer and
all Affiliated Employers prior to August 1, 1983 and who does
not subsequently return to employment with the Employer or an
Affiliated Employer shall not have any interest in that portion
of his Account that may have been forfeited as a result of such
termination of employment.
(c) If an Employee has a Service Termination Date prior to August 1,
1983, and is reemployed on or after August 1, 1983 by a
Participating Employer or an Affiliated Employer:
(i) before he has incurred a number of consecutive One Year
Breaks in Service equal to the greater of five and his
Service as of his Service Termination Date, or, if he was
at least partially vested pursuant to the provisions of
the Plan as in effect prior to August 1, 1983 on his
Service Termination Date, he shall be reinstated in the
portion of his Matching Contribution Account that may have
been forfeited pursuant to the Plan as in effect prior to
August 1, 1983. Any amounts reinstated in accordance with
this paragraph shall be paid by the applicable
Participating Employer with an additional contribution to
the Plan. Upon reemployment, the Employee shall be 100%
vested in his Account.
(ii) after he has incurred a number of consecutive One Year
Breaks in Service equal to the greater of five and his
Service as of his Service Termination Date, and he was not
partially or fully vested pursuant to the provisions of
the Plan as in effect prior to August 1, 1983 on his
Service Termination Date, he shall have no further right
to the portion of his Matching Contribution Account that
may have been forfeited pursuant to the Plan as in effect
prior to August 1, 1983. The Employee shall be 100%
vested in his Matching Contribution Account attributable
to contributions made subsequent to his return to
employment only.
8.3 Method of Payment. When a Participant incurs a Service Termination
Date, his Account shall be distributed pursuant to the provisions of
Article X.
ARTICLE IX
WITHDRAWALS
9.1 Withdrawals from Matching and Rollover Contribution Accounts.
Subject to the further provisions of this Article IX, a Participant
who has been a Participant in the Plan for at least five full years
shall have the right to withdraw any portion of his Account
attributable to Matching and Rollover Contributions at any time. A
Participant who has not completed five full years of participation
may withdraw at any time any amount from the vested portion of his
Matching and Rollover Contribution Accounts other than Matching and
Rollover Contributions made during the 24 months preceding the date
of such withdrawal.
Notwithstanding the foregoing, subject to the further provisions of
this Article IX, a Participant may withdraw all or a portion of his
Matching and Rollover Contributions to the extent necessary to meet a
financial hardship.
9.2 Withdrawals from After-Tax Participant Contribution(s) Account.
Subject to the further provisions of this Article IX, a Participant
may withdraw any portion of his Account attributable to After-Tax
Participant Contribution(s) for any reason. Any hardship withdrawal
made from a Participant's After-Tax Account shall be subject to the
provisions of Sections 9.5 and 9.6.
9.3 Withdrawals from Qualified Voluntary Employee Contribution(s)
Account. Subject to the further provisions of this Article IX, a
Participant may withdraw all or a portion of his Account attributable
to Qualified Voluntary Employee Contribution(s) for any reason.
9.4 Withdrawals from Pre-Tax Participant Contribution(s) Account.
Subject to the further provisions of this Article IX, specifically
with reference to Section 9.6, a Participant may withdraw all or a
portion of his Account attributable to Pre-Tax Participant
Contribution(s) to the extent necessary to meet a financial hardship
as outlined in Section 9.5.
9.5 Hardship Withdrawals. For the purposes of this Article IX, a
"financial hardship" shall mean an immediate and heavy financial need
which cannot be met from any other available resource and which is
due to:
(a) unreimbursed medical expenses described in Code Section 213(d)
for which payment is necessary in advance in order to obtain
medical services for the Participant, his Spouse, or dependents
or for such medical expenses already incurred by the
Participant, his Spouse, or dependents;
(b) the purchase of the Participant's principal residence (not
including mortgage payments, remodeling or investment property
purchase);
(c) the need to prevent eviction from, or foreclosure on the
Participant's principal residence;
(d) tuition payments and related educational expenses for the next
12 months, semester, or quarter of post-secondary education for
the Participant, his Spouse or dependents; or
(e) such additional immediate and heavy financial needs as may be
approved by the Committee on a uniform and nondiscriminatory
basis.
The Committee shall determine in its sole discretion whether a
financial hardship exists to warrant a withdrawal, and if such
hardship exists, the amount of the withdrawal necessary to meet the
hardship. Such determination shall be made on the basis of written
documentation, provided by the Participant, which demonstrates the
existence and amount of the financial hardship. In any event, the
Committee's determination shall be made according to such uniform and
non-discriminatory rules as it may adopt.
A Participant shall be deemed to lack other resources to satisfy the
"financial hardship" if the following conditions are satisfied:
(f) the Participant has withdrawn all After-Tax, Matching, Rollover
and Qualified Voluntary Employee Contribution(s) available
hereunder and all amounts available to him under all other of
the Employer's (or Affiliated Employer's) qualified plans;
(g) the Participant has borrowed, through a loan, any amounts
available to him from any qualified plans of the Employer and
Affiliated Employers, unless the repayment of the amount
borrowed would constitute a "financial hardship" to the
Participant; and
(h) the amount of the withdrawal does not exceed the amount
necessary to meet the Participant's "financial hardship".
9.6 Rules For Withdrawals. The following rules shall apply to
withdrawals made pursuant to this Article IX:
(a) No more than one non-hardship withdrawal may be made in any
three-month period unless otherwise permitted in accordance with
such uniform and nondiscriminatory rules as the Committee may
adopt.
(b) The minimum amount of any non-hardship withdrawal from the Plan
shall be $500 or, if less, 100% of the amount in the
Participant's Account that is available as a withdrawal under
the provisions of this Article.
(c) A Participant who has not attained age 59-1/2 may not withdraw
that portion of his Pre-Tax Participant Contribution(s) Account
which is attributable to investment earnings which are credited
to such Account after December 31, 1988.
(d) In the event of a non-hardship withdrawal from the Participant's
After-Tax Participant Contribution(s) Account or from his
Matching and/or Rollover Contribution Account that does not
exceed 50% of the value of the Participant's Account, exclusive
of his Qualified Voluntary Employee Contribution(s) Account, the
Participant shall be suspended from making any further Pre-Tax
or After-Tax Participant Contribution(s) under the Plan for a
period of six months from the date of the withdrawal. No
Employer Matching Contributions will be made during the
suspension period.
(e) In the event of a non-hardship withdrawal from the Participant's
After-Tax Participant Contribution(s) Account or from his
Matching and/or Rollover Contribution Account that exceeds 50%
of the value of the Participant's Account, exclusive of his
Qualified Voluntary Employee Contribution(s) Account, the
Participant shall be suspended from making any further Pre-Tax
or After-Tax Participant Contribution(s) under the Plan for a
period of 12 months from the date of the withdrawal. No
Employer Matching Contributions will be made during the
suspension period.
(f) In the event a withdrawal is on account of a financial hardship,
the Participant shall be suspended from making any further Pre-
Tax or After-Tax Participant Contribution(s) under the Plan for
a period of 3 months from the date of the withdrawal. No
Employer Matching Contributions will be made during the
suspension period.
(g) In the event a withdrawal consists of a withdrawal from more
than one of a Participant's investment funds within his Account,
such withdrawal shall be considered a single withdrawal for the
purpose of applying paragraph (d) or (e) above.
(h) Any suspension of Pre-Tax and After-Tax Participant
Contribution(s) resulting from the application of paragraph (d),
(e) or (f) above shall be in addition to rather than coincident
with any suspension which may apply pursuant to Article III. No
more than one 12-month suspension shall be required, however,
for a single withdrawal under this Article IX.
(i) Any withdrawal made from a Participant's After-Tax Participant
Contribution(s) and/or investment earnings thereon shall be made
in a manner which corresponds with the tax treatment of such a
withdrawal under the Code.
(j) A Participant shall request a withdrawal hereunder by providing
the Committee with at least 30 days' advance written request of
the withdrawal, except that the Committee may agree to accept a
later request in the case of a withdrawal for "financial
hardship". The Participant will receive such payment as soon as
practicable after the Committee receives the request.
(k) Withdrawals shall be effective as of the Valuation Date next
following the date the Committee approves the withdrawal
request, unless the Committee agrees to another date according
to uniform and nondiscriminatory rules it may adopt.
(l) Any withdrawal shall be paid in cash, except that a Participant
electing a non-hardship withdrawal may elect to receive Common
Shares of Eastern Utilities Associates for such non-hardship
withdrawal with respect to the portion of his Account invested
in such Shares.
(m) If the Participant has made a withdrawal from his Pre-Tax
Participant Contribution(s) Account, the Participant's Pre-Tax
and After-Tax Contributions to the Plan are suspended for the 3-
month period immediately following the date of the hardship
withdrawal.
(n) The Participant's maximum Pre-Tax Participant Contribution(s)
permitted under Section 3.8(a) for the Plan Year following the
Plan Year in which the hardship withdrawal was made is reduced
by the amount of the Participant's Pre-Tax Participant
Contribution(s) made during the Plan Year in which the hardship
withdrawal occurred.
9.7 Debiting of Withdrawals. To the extent otherwise permitted by this
Article IX, all withdrawals shall be debited to a Participant's
Account in the following hierarchy; first from his After-Tax
Participant Contribution(s) Account, next from his Rollover
Contribution Account, next from his Qualified Voluntary Employee
Contribution(s) Account, next from his Matching Contribution Account.
In the case of Hardship withdrawals only, after the above sources
have been exhausted, withdrawals shall be debited next to a
Participant's Pre-Tax Contribution Account.
In the event that the provisions of this Article IX prohibit a
withdrawal from a Participant's Account in the sequence described in
the preceding sentence, the amounts withdrawn shall follow such
sequence only to the extent otherwise permitted by the provisions of
this Article IX. Except in the case of a withdrawal from a
Participant's Matching Contribution Account, a withdrawal will be
debited to his interest in the Funds offered under this Plan on a
pro-rata basis.
9.8 Participant Loans. The Plan may lend a Participant who is actively
employed an amount not in excess of the lesser of (a) $50,000 reduced
by the Participant's highest outstanding loan balance from the Plan
during the preceding 12-month period; and (b) 50% of the value of his
Rollover, Pre-Tax and Matching Contribution Accounts as of the date
on which the loan is approved. A loan may be made only from a
Participant's Rollover Account (but not from any portion of such
Account invested in Common Shares of Eastern Utilities Associates)
and/or his Pre-Tax Participant Contribution(s) Account.
9.9 Rules Relating to Loans. All loans shall comply with the following
terms and conditions:
(a) The minimum amount that may be borrowed under the Plan is
$1,000.
(b) Loans may be applied for as of any date with prior written
notice as the Committee may approve according to uniform and
nondiscriminatory rules it may adopt.
(c) No more than one regular loan (a loan for a purpose other than
the purchase of the Participant's principal residence) and one
housing loan (a loan for the purpose of purchasing the
Participant's principal residence) may be outstanding to a
Participant at any time.
(d) An application for a loan by a Participant shall be made in
writing to the Committee whose action thereon shall be final.
Furthermore, appropriate documentation for the purchase of a
home, such as a purchase and sale agreement, must be provided.
(e) Repayment of a loan shall be made based on level amortization of
the loan amount, including interest, and shall be made no less
frequently than quarterly over the term of the loan. The
Participant shall authorize the Participating Employer to deduct
from his pay the level amount sufficient to accomplish the
repayment. A Participant who is on an Authorized Leave of
Absence or layoff shall continue to repay any outstanding loan
by submitting payments to the committee responsible for plan
administration.
(f) The period of repayment for any loan shall be arrived at by
mutual agreement between the Committee and the Participant, but
subject to a maximum repayment period of five years for a
regular loan and 20 years for a housing loan.
(g) Loans may be prepaid in full at any time without penalty, but at
no time will a partial payment of principal or interest only be
allowed.
(h) Each loan shall be made against the collateral assignment of the
Participant's right, title and interest in the portion of his
Account against which the loan is taken, evidenced by such
Participant's collateral promissory note for the amount of the
loan, including interest, payable to the order of the Plan.
(i) Each loan shall bear a reasonable rate of interest, which shall
be the highest prime rate of interest, as published in the
"money rate" section of the Wall Street Journal as of the last
day of the calendar quarter preceding the effective date of the
loan. The Committee shall review from time to time the rate of
interest to determine if it is consistent with commercial rates
for similar loans, and if not, the Committee shall have the
authority to modify such rate of interest for new loans to be
consistent with such commercial rates.
(j) In the event a loan repayment is not made or is not paid at
maturity, the loan shall be deemed to be in default and the
Committee shall give written notice of such default to such
Participant to his last known address. If the default is not
cured within a reasonable period of time from the date of such
notice as determined by the Committee, according to uniform and
nondiscriminatory rules it may adopt and set forth in the
notice, the Participant's Account shall be reduced by the amount
of the unpaid balance of the loan, together with the interest at
the time of default thereon, and the Participant's indebtedness
shall thereupon be discharged. This reduction shall occur as
soon as the Participant could have received a distribution
of the portion of the Account balance so reduced under
applicable law, disregarding the provisions of (k) below.
(k) Upon termination or retirement, no distribution shall be made to
any Participant or Former Participant or to a Beneficiary of any
such Participant or Former Participant unless and until all
unpaid loans, including accrued interest thereon, have been
liquidated; provided, however, if any unpaid balance is due on a
loan of such Participant or Former Participant at the time of
such distribution which has not been satisfied through
collection or liquidation of his Account, the Plan shall
distribute to such Participant or Former Participant or
Beneficiary the collateral promissory note evidencing the loan,
and his Account, reduced by the unpaid balance of the loan,
including accrued interest thereon, shall be distributed.
(l) All loans shall be debited to a Participant's Account first from
his Rollover Contribution Account and next from his Pre-Tax
Participant Contribution(s) Account.
(m) Subject to the provisions of paragraph (l) above, all loans
shall be debited on a pro-rata basis to the investment funds in
which the Account is invested, provided that the proceeds for a
loan shall in no event be withdrawn from amounts invested in
Common Shares of Eastern Utilities Associates or any other
Company Matching Contributions.
(n) Upon receipt of a loan repayment and associated interest, the
Trustee shall deposit such repayment in the investment funds in
accordance with the Participant's investment designation at the
time of the repayment. The Trustee shall also credit such
repayment to the Participant's Accounts in the same proportion
as the Participant's investment designation at the time of the
repayment.
(o) The Committee shall make loans available hereunder on a
reasonably equivalent basis. The Committee shall apply
objective criteria in a uniform and nondiscriminatory manner to
determine whether a loan application should be approved. Such
criteria shall be limited to those factors which would be
considered by a commercial lender in the business of making
similar types of loans. Decisions by the Committee regarding
loans shall be final and shall be communicated to the
Participant as soon as practicable.
(p) The Committee may adopt such other rules and regulations
relating to loans as it may deem appropriate, including imposing
reasonable loan expense charges to the Accounts of Participants
electing loans.
ARTICLE X
PAYMENT OF BENEFITS
10.1 Entitlement to Distribution. A Participant (or, if applicable, his
Beneficiary) shall be entitled to a distribution upon his termination
of employment, his total and permanent disability or his death as
provided herein.
10.2 Form of Payment.
(a) An Account whose value is $3,500 or less must be distributed in
one lump sum payment, upon completion of written instructions by
the Participant.
(b) The normal form of payment for an Account whose value is more
than $3,500 shall also be one lump sum payment. The
distribution of any Account, the value of which exceeds $3,500,
shall require the written consent of the Participant.
10.3 Time of Payment.
(a) To the extent practicable, and unless otherwise elected by the
Participant or Former Participant pursuant to Section 10.3(c)
(or, if applicable, his Beneficiary pursuant to Section 10.5)
any distributions shall be made as soon as practicable after the
event which gave rise to the distribution or after all
contributions are credited. The value of the Participant's or
Former Participant's Account for this purpose shall be
determined as of the Valuation Date immediately preceding the
date of distribution. Notwithstanding the foregoing,
distributions shall not commence prior to the applicable date
described in Section 10.3(b), unless otherwise required under
Section 10.6, until the Participant, Former Participant or
Beneficiary returns a completed form to the Committee with 30
days prior written notice or such lesser notice as the Committee
shall approve according to uniform and nondiscriminatory rules
it may adopt. However, if the Participant, Former Participant
or Beneficiary fails to return the completed election form to
the Committee, benefits will automatically commence within the
period described in Section 10.3(b), unless prior commencement
is required under Section 10.6.
(b) Unless a Participant or Former Participant elects a deferred
payment in accordance with Section 10.3(c), distribution shall
commence no later than 60 days after the close of the Plan Year
in which: (i) the Participant or Former Participant attains age
65, or (ii) the 10th anniversary of the Participant's or Former
Participant's commencement of participation occurs, or (iii) the
Participant or Former Participant terminates employment,
whichever is latest.
(c) A Participant or Former Participant who has an Account balance
which is greater than $3,500 may elect, in writing, to defer the
commencement of a distribution under this Article X to a date
which is not later than the April 1 which follows the year in
which he attains age 70-1/2. In the event a Participant or
Former Participant elects to defer receipt of his Account
pursuant to this paragraph, his Account shall continue to be
valued in accordance with Article VI and shall be invested in
accordance with the Participant's or Former Participant's
election under Article V.
(d) If a Participant or Former Participant has elected a deferred
payment under Section 10.3(c), he may at any time thereafter
elect to change the time or manner of payment of the unpaid
portion of his Account in accordance with the further provisions
of this Article X, provided that 60 days advance written notice,
or lesser period if agreed upon by the Committee, is given to
the Committee.
10.4 Amount of Distribution. The amount of any distribution shall be
determined by the amount in the Participant's or Former Participant's
Account as of the Valuation Date coinciding with or otherwise
immediately preceding the distribution.
10.5 Death Benefits. In the event of the death of a Participant prior to
the date his Account has been distributed, his remaining Account
shall be paid to his Beneficiary in one lump sum pursuant to the
following rules:
(a) In the event the value of the Account is $3,500 or less, such
Account shall be paid to the Beneficiary as soon as practicable
following the Participant's or Former Participant's death.
(b) Except as otherwise provided in (a) above, in the event the
Beneficiary is the Participant's or Former Participant's Spouse,
the Beneficiary may elect to defer payment to a date no later
than April 1 following the calendar year in which the
Participant or Former Participant would have attained age 70-
1/2.
(c) Except as otherwise provided in (a) above, in the event the
Beneficiary is not the Spouse of the Participant or Former
Participant, the Beneficiary may elect to defer payment to a
date no later than five years following the Participant's or
Former Participant's death.
Upon the death of a Participant, his Beneficiary shall be considered
a Participant of the Plan, subject to the rules of the Plan
hereunder.
10.6 Limitation on Distributions. Distribution of benefits to a
Participant or Former Participant shall not be deferred beyond the
April 1 following the calendar year in which the Participant attains
age 70-1/2. In any event, distributions hereunder shall be made in
accordance with Code Section 401(a)(9), including the incidental
death benefit requirements of such Code Section, and regulations
thereunder, including Treasury Regulation 1.401(a)(9)-2. Such
regulations and applicable rulings or announcements, including any
grandfather provisions or provisions delaying the effective date of
Code Section 401(a)(9), are hereby incorporated by reference.
10.7 Segregated Accounts. If a Participant or Beneficiary has elected to
have his Account distribution deferred to a later date pursuant to
Section 10.3(c) or Section 10.6, the Account of the Participant will
continue to be invested in accordance with the most recent investment
direction on file with the Committee. If there is no investment
direction on file, the Committee shall direct the Trustee to
segregate the Participant's or Beneficiary's interest in the Plan and
invest such interest in Fund A as described in Section 5.2. Amounts
invested in this manner shall share the earnings, on a pro rata
basis, attributable to such fund. Effective July 1, 1992, the
investment of any Account whose distribution has been deferred shall
be made according to the rules relating to investments as established
by the Committee and investment funds.
10.8 Missing Persons. If the Committee shall be unable, within five years
after any amount becomes due and payable from the Plan to a
Participant, Former Participant or Beneficiary, to make payment
because the identity or whereabouts of such person cannot be
ascertained, the Committee may mail a notice by registered mail
to the last known address of such person outlining the action to be
taken unless such person makes written reply to the Committee within
60 days from the mailing of such notice. The Committee may direct
that such amount and all further benefits with respect to such person
shall be forfeited and all liability for the payment thereof shall
terminate. However, in the event of the subsequent reappearance of
the Participant, Former Participant or Beneficiary prior to
termination of the Plan, the benefit which was forfeited (but not any
earnings attributable to such forfeiture) shall be reinstated in
full. Any benefits forfeited shall be applied to reduce future
Matching Contributions to the Plan, or to pay expenses under the Plan
as determined by the Committee.
Reinstatement of any benefit forfeited under this Section 10.8 shall
be made by the applicable Participating Employer with an additional
contribution to the Plan.
ARTICLE XI
EMPLOYEES' SAVINGS PLAN COMMITTEE
11.1 Responsibility for Plan and Trust Administration. The Board shall
have the sole authority to appoint and remove the Trustee, appoint
and remove members of the Committee, approve any investment fund
which may be provided for under the Trust, and to amend or terminate,
in whole or in part this Plan or the Trust. The Employer, through
its Committee, shall have the responsibility for the administra-
tion of this Plan, which is specifically described in this Plan and
the related Trust Agreement. The Employer shall be the "named
fiduciary" for purposes of the Code and ERISA.
11.2 Employee Savings Plan Committee. The Plan shall be administered by
the Employer through a Committee of not less than three persons to be
appointed by and to serve at the pleasure of the Board. Any person
appointed as a member of the Committee may resign from the Committee
by delivering his written resignation to both the Board and the
Secretary of the Committee. The Committee shall be the "Plan
Administrator" within the meaning of Section 3(16)A of ERISA.
11.3 Agents of the Committee. The Committee may delegate specific
responsibilities to other persons as the Committee shall determine.
The Committee may authorize one or more of their number, or any
agent, to execute or deliver any instrument or to make any payment in
their behalf. The Committee may employ and rely on the advice of
counsel, accountants, and such other persons as may be necessary in
administering the Plan.
11.4 Committee Procedures. The Committee may adopt such rules as it deems
necessary, desirable, or appropriate. All rules and decisions of the
Committee shall be uniformly and consistently applied to all
Participants in similar circumstances. When making a determination
or calculation, the Committee shall be entitled to rely upon
information furnished by a Participant, Former Participant or Benefi-
ciary, the Employer, the legal counsel of the Employer or the
Trustee.
The Committee may act at a meeting or in writing without a meeting.
The Committee shall elect one of its members as chairman, appoint a
secretary, who may or may not be a Committee member, and advise the
Trustee of such actions in writing. The secretary shall keep a
record of all meetings and forward all necessary communications to
the Employer and the Trustee. The Committee may adopt such bylaws
and regulations as it deems desirable for the conduct of its affairs.
All decisions of the Committee shall be made by the vote of the
majority including actions in writing taken without a meeting.
11.5 Administrative Powers of the Committee. The Committee may from time
to time establish rules for the administration of the Plan. Except
as otherwise herein expressly provided, the Committee will have the
exclusive right and discretionary authority, to the fullest extent
provided by law, to interpret the Plan and decide any matters arising
hereunder in the administration and operation of the Plan, and any
interpretations or decisions so made will be conclusive and binding
on all persons having an interest in the Plan; provided, however,
that all such interpretations and decisions will be applied in a
uniform and nondiscriminatory manner to all Employees. The Committee
shall have no right to modify any provisions of the Plan as herein
set forth.
11.6 Benefit Claims Procedures. All claims for benefits under the Plan
shall be in writing and shall be submitted to the Committee member
designated as Committee Secretary by the Committee. If any
application for payment of a benefit under the Plan shall be denied,
the Committee shall notify the claimant within 90 days of such
application setting forth the specific reasons therefor and shall
afford such claimant a reasonable opportunity for a full and fair
review of the decision denying his claim. If special circumstances
require an extension of time for processing the claim, the claimant
will be furnished with a written notice of the extension prior to the
termination of the initial 90-day period. In no event shall such
extension exceed a period of 90 days from the end of such initial
period. The extension notice shall indicate the special
circumstances requiring an extension of time and the date by which
the Committee expects to render its decision.
Notice of such denial shall set forth, in addition to the specific
reasons for the denial, the following:
(a) reference to pertinent provisions of the Plan;
(b) such additional information as may be relevant to the denial of
the claim;
(c) an explanation of the claims review procedure; and
(d) notice that such claimant may request the opportunity to review
pertinent Plan documents and submit a statement of issues and
comments.
Within 60 days following notice of denial of his claim, upon written
request made by any claimant for a review of such denial to the
Committee Secretary, the Committee shall take appropriate steps to
review its decision in light of any further information or comments
submitted by such claimant.
The Committee shall render a decision within 60 days after the
claimant's request for review and shall advise said claimant in
writing of its decision on such review, specifying its reasons and
identifying appropriate provisions of the Plan. If special
circumstances require an extension of time for processing, a decision
will be rendered as soon as possible, but not later than 120 days
after receipt of a request for the review. If the extension of time
for review is required because of special circumstances, written
notice of the extension shall be furnished to the claimant prior to
the commencement of the extension. If the decision is not furnished
within such time, the claim shall be deemed denied on review. The
decision on review shall be in writing and shall include specific
reasons for the decision, written to the best of the Committee's
ability in a manner calculated to be understood by the claimant
without legal counsel, as well as specific references to the
pertinent Plan provisions on which the decision is based.
11.7 Reliance on Reports and Certificates. The Employer (or the Committee
if so designated by the Employer) will be entitled to rely
conclusively upon all valuations, certificates, opinions, and reports
which may be furnished by the recordkeeper, or any accountant,
controller, counsel, or other person who is employed or engaged for
such purposes and shall exercise the authority and responsibility as
it deems appropriate to comply with all of the legal and governmental
regulations affecting this Plan.
11.8 Other Committee Powers and Duties. The Committee shall have such
duties and powers as may be necessary to discharge its duties
hereunder, including, but not by way of limitation, the following:
(a) to prescribe written procedures to be followed by Participants,
Former Participants, or Beneficiaries filing applications for
benefits;
(b) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(c) to receive from the Employer, Participants and Former
Participants such information as shall be necessary for the
proper administration of the Plan;
(d) to furnish the Employer, upon request, such annual reports with
respect to the administration of the Plan as are reasonable and
appropriate;
(e) to receive and review the periodic valuations of the Plan made
by the recordkeeper;
(f) to receive, review and keep on file (as it deems convenient or
proper) reports of benefit payments by the Trustee and reports
of disbursements for expenses directed by the Committee; and
(g) to invest and reinvest the Trust Fund, to select, replace and/or
eliminate one or more of the investment funds offered under the
Plan, and to exercise certain other powers respecting the
investment of the Trust Fund, in each case in accordance with
Section 6.4 hereof.
The Committee shall have no power to add to, subtract from or modify
any of the terms of the Plan, or to change or add to any benefits
provided by the Plan, or to waive or fail to apply any requirements
of eligibility for a benefit under the Plan.
11.9 Compensation of Committee. No member of the Committee who is an
Employee will receive any compensation for his services as such, but
will be reimbursed for reasonable expenses incident to the
performance of such services. The reimbursement of expenses shall be
paid in whole or in part by the Employer, and any expenses not paid
by the Employer shall be paid by the Trustee out of the principal or
income of the Trust Fund.
11.10 Member's Own Participation. No member of the Committee may act,
vote, or otherwise influence a decision of the Committee specifically
relating to his own participation under the Plan.
11.11 Liability of Committee Members. No member of the Committee will be
liable for any act of omission or commission except as provided by
federal law.
11.12 Indemnification. The Board, the Committee and the individual members
thereof shall be indemnified by the Employer and not the Trust Fund
against any and all expenses, costs, and liabilities arising by
reason of any act or failure to act, unless such act or failure to
act is judicially determined to be gross negligence or willful
misconduct.
ARTICLE XII
FIDUCIARY RESPONSIBILITIES
12.1 Basic Responsibilities. Any Plan Fiduciary, whether specifically
designated or not, shall:
(a) discharge all duties solely in the interest of Participants,
Former Participants, and Beneficiaries and for the exclusive
purpose of providing benefits and defraying reasonable
administrative expenses under the Plan;
(b) discharge his responsibilities with the care, skill, prudence,
and diligence a prudent man would use in similar circumstances;
and
(c) conform with the provisions of the Plan.
No person who is ineligible by law will be permitted to serve as
Fiduciary.
12.2 Actions of Fiduciaries. Any Plan Fiduciary:
(a) may serve in more than one fiduciary capacity with respect to
the Plan;
(b) may employ one or more persons to render advice with regard to
or to carry out any responsibility that such Fiduciary has under
the Plan; and
(c) may rely upon any discretion, information, or action of any
other Plan Fiduciary, acting within the scope of its
responsibilities under the Plan, as being proper under the Plan.
12.3 Fiduciary Liability. No Fiduciary shall be personally liable for any
losses resulting from his action except as provided by federal law.
Each Fiduciary shall have only the authority and duties which are
specifically allocated to him, shall be responsible for the proper
exercise of his own authority and duties, and shall not be respon-
sible for any act or failure to act of any other Fiduciary.
12.4 Bonding of Fiduciaries. Notwithstanding any other provision of the
Plan to the contrary, every Fiduciary shall be bonded to the extent
required by law.
12.5 Indemnification of Fiduciaries. The Employer shall indemnify and
hold harmless the other named Fiduciaries, and any Trustee of the
Employer or Employee held to be a Fiduciary with respect to the Plan
from any liability, claim, demand, suit or action of any type arising
from any action or failure to act; provided, however, that such
person acted in good faith and in a manner he reasonably believed to
be in the best interests of the Participants and Beneficiaries and
consistent with the provisions of the Plan and, with respect to any
criminal action or proceeding, that he had no reasonable cause to
believe his conduct was unlawful.
ARTICLE XIII
AMENDMENT AND TERMINATION
13.1 Internal Revenue Service Qualification. It is the intention of the
Employer that the Plan shall be and remain qualified and exempt under
Code Sections 401(a) and 501(a) and meet the requirements of Code
Sections 401(k) and 401(m). The Employer may authorize any
modification or amendment of this Plan, which is deemed necessary or
appropriate to qualify or maintain the qualification and exemption of
the Plan within the requirements of Code Sections 401(a), 401(k),
401(m), and 501(a), or any other applicable provisions of the Code as
now in effect or hereafter amended or adopted.
13.2 Employer's Right to Amend or Terminate. The Employer, with the
written approval of the Board of Directors, reserves the right to
modify, suspend or terminate the Plan in whole or in part (including
the provisions relating to contributions). Any modification,
suspension, or termination of the Plan shall be set forth in a
written Plan amendment executed by an officer of the Employer. The
Employer shall not have the power to modify, suspend, amend or
terminate the Plan in such manner as will cause or permit any part of
the Trust Fund to be used for or diverted to purposes other than the
exclusive benefit of Participants, Former Participants or their
Beneficiaries, or for the payment of expenses pursuant to the
provisions of the Plan. Further, except as otherwise specifically
provided in Sections 4.5 and 4.8, no portion of the Trust Fund may
revert to or become the property of the Employer, so as to divest a
Participant or Former Participant from or deprive him of any benefits
which may have accrued to him. Upon termination or partial
termination of the Plan or "complete discontinuance of contributions
as such term is defined in Code Section 411, the amounts credited to
the Accounts of Participants affected by such termination or partial
termination shall be nonforfeitable.
Notwithstanding anything to the contrary contained herein, upon such
termination of the Plan, the Employer shall have no obligation or
liability whatsoever to make any further payments to the Trustee.
13.3 Participating Employer's Right to Terminate. Each Participating
Employer by action of its Board of Directors or other governing
authority, subject to the approval of the Board, shall have the right
to terminate, as to itself, the Plan hereby created, by delivering
written notice authorizing the termination to the Board, the
Committee, and the Trustee.
13.4 Valuation of Assets. In determining the value of the Accounts of the
Participants or Former Participants as of the date of the termination
of the Plan, the assets of the Trust Fund shall be valued by the
Trustee at fair market value as of the close of business on the
distribution date. The Accounts of the Participants and Former
Participants shall be adjusted in the manner provided in Article VI.
13.5 Distribution of Assets. If the Plan is terminated, the Trustee, at
the direction of the Employer shall continue to maintain the Trust
Fund, as permitted by applicable law, until all assets remaining in
the Trust Fund after payment of any expenses properly chargeable to
the Trust Fund are distributed to Participants, Former Participants
or their Beneficiaries. Such distribution shall be equal to the
value of the Accounts of the Participants as of the date of the
termination of the Plan adjusted for any earnings and expenses of the
Trust Fund and Plan between such date and the date of distribution.
Payment will be made in cash or in kind, or partly in cash and partly
in kind, in such manner as the Committee shall determine and as may
be required by applicable law. The Committee's determination shall
be final and binding on all persons.
ARTICLE XIV
TOP-HEAVY PLAN REQUIREMENTS
14.1 General Rule. For any Plan Year for which this Plan is a Top-Heavy
Plan as defined in Section 14.4, any other provisions of the Plan to
the contrary notwithstanding, the Plan shall be subject to the
following provisions:
(a) The minimum contribution provisions of Section 14.2, and
(b) The limitation on contributions set by Section 14.3.
14.2 Minimum Contribution Provisions. Subject to the provisions of
Sections 14.3 and 14.4, each Eligible Employee who (a) is a Non-Key
Employee (as defined in Section 14.7) and (b) is employed on the last
day of the Plan Year shall be entitled to have an Employer
Contribution (exclusive of any Matching Contributions) allocated to
his Account of not less than 3% (the "Minimum Contribution
Percentage") of his compensation (as defined for purposes of applying
the limits of Code Section 415) or such other amount, if any, as may
be necessary to comply with the rules established by the Internal
Revenue Service.
The Minimum Contribution Percentage set forth above shall be reduced
for any Plan Year to the percentage at which contributions are made
(or required to be made) under the Plan for the Plan Year for the Key
Employee (as defined in Section 14.6) for whom such percentage is the
highest for such Plan Year.
For this purpose, the percentage with respect to a Key Employee shall
be determined by dividing the contributions made for such Key
Employee by his total compensation for the Plan Year not to exceed
$200,000 ($150,000 for the Plan Year beginning January 1, 1994)
adjusted in the same manner as set forth in Section 1.12.
Contributions taken into account under the immediately preceding
sentence shall include contributions under this Plan and under all
other defined contribution plans required to be included in an
Aggregation Group (as defined in Section 14.5), but shall not include
any plan required to be included in such Aggregation Group if such
plan enables a defined benefit plan required to be included in such
Group to meet the requirements of the Code prohibiting discrimination
as to contributions or benefits in favor of Employees who are
officers, shareholders or the highly-compensated or prescribing the
minimum participation standards.
Contributions taken into account under this Section 14.2 shall not
include any contributions under the Social Security Act or any other
federal or state law.
14.3 Limitation on Contributions. In the event that the Employer also
maintains a defined benefit plan providing benefits on behalf of
Participants of this Plan, one of the two following provisions shall
apply:
(a) If for the Plan Year this Plan would not be a Top-Heavy Plan if
"90%" were substituted for "60%," then Section 14.2 shall apply
for such Plan Year as if amended so that "4%" were substituted
for the "3%".
(b) If for the Plan Year (i) this Plan is subject to paragraph (a)
above but does not provide the required additional minimum
contribution or (ii) this Plan would continue to be a Top-Heavy
Plan if "90%" were substituted for "60%," then the denominator
of both the defined contribution plan fraction and the defined
benefit plan fraction shall be calculated as set forth in
Section 4.5 for the limitation year ending in such Plan Year by
substituting "1.0" for "1.25" in each place such figure appears,
except with respect to any individual for whom there are no
Matching Contributions, forfeitures or voluntary nondeductible
contributions allocated or any accruals for such individual
under the defined benefit plan.
14.4 Coordination With Other Plans. In the event that another defined
contribution or defined benefit plan maintained by the Employer or an
Affiliated Employer provides contributions or benefits on behalf of
Participants in this Plan, such other plan shall be treated as a part
of this Plan pursuant to the applicable principles set forth in
Revenue Ruling 81-202 in determining whether the plans are providing
benefits at least equal to the minimum benefit required under the
defined benefit plan. If the Plan is subject to Section 14.3(b) but
the Employer does not substitute "1.0" for "1.25" as required, the
applicable percentage under the defined benefit plan shall be
increased by one percentage point (up to a maximum of ten percentage
points). Such determination shall be made by the Committee.
14.5 Top-Heavy Plan Definitions. This Plan shall be a Top-Heavy Plan for
any Plan Year if, as of the Determination Date, the aggregate of the
Accounts under the Plan for Participants and Former Participants who
are Key Employees exceeds 60% of the present value of the aggregate
of the Accounts for all Participants, or if this Plan is required to
be in an Aggregation Group which for such Plan Year is a Top-Heavy
Group. For purposes of making this determination, the present value
of the aggregate of the Accounts for a Participant who is not a Key
Employee, but who was a Key Employee in a prior year, or who has not
performed any service for the Employer at any time during the five-
year period ending on the Determination Date, shall be disregarded.
(a) "Determination Date" shall mean for any Plan Year the last day
of the immediately preceding Plan Year (except that for the
first Plan Year the Determination Date means the last day of
such Plan Year).
(b) "Aggregate of the Accounts" shall mean the sum of (i) the
Accounts determined as of the most recent Valuation Date that is
within the 12-month period ending on the Determination Date, and
(ii) the adjustment for contributions due as of the
Determination Date, and as described in the regulations under
the Code.
(c) "Aggregation Group" shall mean the group of plans, if any, that
includes both the group of plans that are required to be
aggregated and, if the Committee so elects, the group of plans
that are permitted to be aggregated.
(i) The group of plans that are required to be aggregated (the
"Required Aggregation Group") includes: (a) each plan of
the Employer in which a Key Employee is a Participant,
including collectively-bargained plans, and (b) each other
plan of the Employer or an Affiliated Employer including
collectively-bargained plans, which enables a plan in
which a Key Employee is a Participant to meet the
requirements of the Code prohibiting discrimination as to
contributions or benefits in favor of Employees who are
officers, shareholders or the highly-compensated or
prescribing the minimum participation standards.
(ii) The group of plans that are permitted to be aggregated
(the "Permissive Aggregation Group") includes the Required
Aggregation Group plus one or more plans of the Employer
or an Affiliated Employer that is not part of the Required
Aggregation Group and that the Committee certifies as
constituting a plan within the Permissive Aggregation
Group. Such plan or plans may be added to the Permissive
Aggregation Group only if, after the addition, the
Aggregation Group as a whole continues not to discriminate
as to contributions or benefits in favor of Employees who
are officers, shareholders or the highly-compensated and
to meet the minimum participation standards under the
Code.
(d) "Top-Heavy Group" shall mean the Aggregation Group, if as of the
applicable Determination Date, the sum of the present value of
the cumulative accrued benefits for Key Employees under all
defined benefit plans included in the Aggregation Group plus the
aggregate of the accounts of Key Employees under all defined
contribution plans included in the Aggregation Group exceeds 60%
of the sum of the present value of the cumulative accrued
benefits for all Employees under all such defined benefit plans
plus the aggregate accounts for all Employees under such defined
contribution plans. For purposes of making this determination,
the present value of the accrued benefits for a Participant (i)
who is not a Key Employee, but who was a Key Employee in a prior
year or (ii) who has not performed services for the Employer at
any time during the five-year period ending on the Determination
Date, shall be disregarded. If the Aggregation Group that is a
Top-Heavy Group is a Required Aggregation Group, each plan in
the Group will be Top-Heavy. If the Aggregation Group that is a
Top-Heavy Group is a Permissive Aggregation Group, only those
plans that are part of the Required Aggregation Group will be
treated as Top-Heavy. If the Aggregation Group is not a Top-
Heavy Group, no plan within such Group will be Top-Heavy.
(e) In determining whether this Plan constitutes a Top-Heavy Plan,
the Committee shall make the following adjustments in connection
therewith:
(i) When more than one plan is aggregated, the Committee shall
determine separately for each plan as of each plan's
determination date the present value of the accrued
benefits or the sum of Account balances. Such accrued
benefits shall be determined by using the method which is
used for accrual purposes for all plans of the Employer,
or, if there is no such method, as if such benefit accrued
not more rapidly than the slowest accrual rate permitted
under Code Section 411(b)(1)(C).
(ii) In determining the present value of the cumulative accrued
benefit or the amount of the Account of any Employee, such
present value or Account shall include the dollar value of
the aggregate distributions made to such Employee under
the applicable plan during the five-year period ending on
the determination date, unless reflected in the value of
the accrued benefit or account balance as of the most
recent valuation date. Such amounts shall include
distributions to Employees which represented the entire
amount credited to their Accounts under the applicable
plan, and distributions made on account of the death of a
Participant to the extent such death benefits do not
exceed the present value of the accrued benefit or
Account.
(iii) Further, in making such determination, such present value
or such Account shall include any rollover contribution
(or similar transfer), as follows:
(A) If the rollover contribution (or similar transfer) is
initiated by the Employee and made to or from a plan
maintained by another employer, the plan providing
the distribution shall include such distribution in
the value of such account; the plan accepting the
distribution shall not include such distribution in
the value of such account unless the plan accepted it
before December 31, 1983.
(B) If the rollover contribution (or similar transfer) is
not initiated by the Employee or made from a plan
maintained by another employer, the plan accepting
the distribution shall include such distribution in
the present value of such account, whether the plan
accepted the distribution before or after December
31, 1983; the plan making the distribution shall not
include the distribution in the present value of such
account.
(f) Solely for the purpose of determining if the
Plan, or any other plan included in the required
aggregation group of which this Plan is a part, is
top-heavy (within the meaning of Code Section 416(g))
the accrued benefit of an Employee other than a "Key
Employee" (as defined in Section 14.6 below) shall be
determined under the method, if any, that uniformly
applies for accrual purposes under all plans
maintained by the Employer.
14.6 Key Employee. The term "Key Employee" shall mean any Employee (and
any Beneficiary of an Employee) under this Plan who is a key employee
as determined in accordance with Code Section 416(i)(1), excluding in
any event individuals who have not performed services for the
Employer during the five-year period ending on the date on which the
Top-Heavy determination is made.
14.7 Non-Key Employee. The term "Non-Key Employee" shall mean any
Employee (and any Beneficiary of an Employee) who is not a Key
Employee, excluding in any event individuals who have not performed
services for the Employer during the five-year period ending on the
date on which the Top-Heavy determination is made.
14.8 Change from Top-Heavy Status. In the event the Plan should become a
Top-Heavy Plan for a Plan Year and subsequently reverts to a Plan
which is not Top-Heavy, the change from a Top-Heavy Plan to a Plan
which is not Top-Heavy shall not reduce a Participant's Account.
ARTICLE XV
GENERAL PROVISIONS
15.1 Plan Voluntary. Although it is intended that the Plan shall be
continued and that contributions shall be made as herein provided,
this Plan is entirely voluntary on the part of the Employer and the
continuance of this Plan and the payment of contributions hereunder
are not to be regarded as contractual obligations of any
Participating Employer, and no Participating Employer guarantees or
promises to pay or to cause to be paid any of the benefits provided
by this Plan. Each person who shall claim the right to any payment
or benefit under this Plan shall be entitled to look only to the Fund
for any such payment or benefit and shall not have any right, claim,
or demand therefore against any Employer, except as provided by
federal law. The Plan shall not be deemed to constitute a contract
between any Participating Employer and any Employee or to be a
consideration for, or an inducement for, the employment of any
Employee by any Participating Employer. Nothing contained in the
Plan shall be deemed to give any Employee the right to be retained in
the service of any Employer or to interfere with the right of any
Employer to discharge or to terminate the service of any Employee at
any time without regard to the effect such discharge or termination
may have on any rights under the Plan.
15.2 Payments to Minors and Incompetents. If any Participant, Former
Participant, or Beneficiary entitled to receive any benefits
hereunder is a minor or is deemed by the Committee or is adjudged to
be legally incapable of giving valid receipt and discharge for such
benefits, they will be paid to such person or institution as the
Committee may designate or to the duly appointed guardian. Such
payment shall, to the extent made, be deemed a complete discharge of
any liability for such payment under the Plan.
15.3 Non-Alienation of Benefits. No amount payable to, or held under the
Plan for the account of, any Participant or Former Participant shall
be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to so
anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; nor shall any amount payable to, or
held under the Plan for the account of, any Participant be in any
manner liable for his debts, contracts, liabilities, engagements, or
torts, or be subject to any legal process to levy upon or attach,
except as may be provided under a qualified domestic relations order
as defined in Code Section 414(p).
The Committee shall establish a procedure to determine the status of
a judgement, decree or order as a qualified domestic relations order
and to administer Plan distributions in accordance with qualified
domestic relations orders. Such procedure shall be in writing, shall
include a provision specifying the notification requirements
enumerated in Code Section 414(p), shall permit an alternate payee
to designate a representative for receipt of communications from the
Committee and shall include such other provisions as the Committee
shall determine, including provisions describing the interest rate to
be used in making present value determinations as well as provisions
required under regulations promulgated by the Secretary of the
Treasury.
15.4 Use of Masculine and Feminine; Singular and Plural. Wherever used in
this Plan, the masculine gender will include the feminine gender and
the singular will include the plural, unless the context indicates
otherwise.
15.5 Merger, Consolidation or Transfer. In the event that the Plan is
merged or consolidated with any other plan, or should the assets or
liabilities of the Plan be transferred to any other plan, each
Participant shall be entitled to a benefit immediately after such
merger, consolidation, or transfer if the Plan should then terminate
equal to or greater than the benefit he would have been entitled to
receive immediately before such merger, consolidation, or transfer if
the Plan had then terminated.
15.6 Leased Employees. Any individual who performs services for the
Employer or an Affiliated Employer and who, by application of Code
Section 414(n)(2) and regulations issued pursuant thereto, would be
considered a "leased employee", shall, for purposes of determining
the number of Employees of the Employer and its Affiliated Employers
and for purposes of the requirements enumerated in Code Section
414(n)(3), be considered an Employee with regard to services
performed after December 31, 1986.
When the total of all leased employees constitutes less than 20% of
the Employer's non-highly compensated work force within the meaning
of Code Section 414(n)(5)(c)(ii), however, a "leased employee" shall
not be considered an Employee if the organization from which the
individual is leased maintains a qualified safe harbor plan (as
defined in Code Section 414(n)(5)) in which such individual
participates.
"Leased employees" who are deemed to be Employees for purposes of
this Section 15.6 shall not be eligible to participate in the Plan
unless specifically provided for in Article II.
15.7 Governing Law. The Plan shall be administered, construed, and
enforced according to the laws of the State of/Commonwealth of
Massachusetts; provided, however, wherever applicable, the provisions
of ERISA shall govern and in such event the laws of the United States
of America shall be applied and to the extent necessary, its courts
shall have competent jurisdiction.
IN WITNESS WHEREOF, Eastern Utilities Associates has caused this instrument to
be executed by its officers thereunto duly authorized and its corporate seal to
be hereunto affixed, as of the 21st day of December, 1994.
EASTERN UTILITIES ASSOCIATES
By: /s/ John R. Stevens
ATTEST: /s/ William F. O'Connor John R. Stevens
William F. O'Connor President
Secretary
(CORPORATE SEAL)
Exhibit F-1
May 17, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D.C. 20549
Re:File No. 70-8609
Eastern Utilities Associates, et al. --
Issue and Sale of Common Shares in Connection
with an Employees' Savings Plan
Ladies and Gentlemen:
As counsel for Eastern Utilities Associates ("EUA"), we are
furnishing this opinion to be used in connection with the joint
application-declaration on Form U-1 under the Public Utility
Holding Company Act of 1935 (the "Application-Declaration") filed
on behalf of EUA, Eastern Edison Company ("Eastern Edison"),
Blackstone Valley Electric Company ("Blackstone"), Newport
Electric Corporation ("Newport"), Montaup Electric Company
("Montaup"), EUA Cogenex Corporation and its subsidiaries ("EUA
Cogenex") and EUA Service Corporation ("EUA Service") (EUA and
these subsidiaries are referred to hereinafter collectively as
the "Applicants") with the Securities and Exchange Commission
(the "SEC"), dated April 4, 1995, File No. 70-8609, as amended,
concerning the issuance and sale by EUA of up to 150,000
additional common shares, $5.00 par value per share (the
"Additional Shares"), and/or the purchase of Additional Shares by
the Applicants in accordance with the Eastern Utilities
Associates Employees' Savings Plan, all as more fully described
in the Application-Declaration (the "Proposed Transactions").
It is our opinion, subject to the additional assumptions,
exceptions and qualifications hereinafter stated, that in the
event that the Proposed Transactions are consummated in
accordance with the Application-Declaration:
(a) All State laws applicable to the Proposed Transactions
will have been complied with by EUA, Eastern Edison,
Blackstone, Newport, Montaup, EUA Cogenex and EUA
Service.
(b) EUA, the issuer of the Additional Shares in accordance
with the Application-Declaration, is a validly
organized and duly existing voluntary association under
the laws of the Commonwealth of Massachusetts and the
common shares issued by EUA will be validly issued,
fully paid and nonassessable and the holders thereof
will be entitled to the rights and privileges
appertaining thereto in accordance with their terms.
(c) The Applicants will legally acquire Additional Shares
in accordance with the Plan.
(d) The consummation of the Proposed Transactions will not
violate the legal rights of the holders of any of the
securities of EUA, Eastern Edison, Blackstone, Newport,
Montaup, EUA Cogenex or EUA Service, or of EUA Energy
Investment Corporation ("EUA Energy"), Eastern Unicord
Corporation ("Unicord"), EUA TransCapacity, Inc. ("EUA
TransCapacity"), TransCapacity Limited Partnership
("TCLP"), EUA Ocean State Corporation ("EUA Ocean
State"), Ocean State Power I ("OSP I"), Ocean State
Power II ("OSP II") and OSP Finance Corporation ("OSP
Finance"), associate companies of EUA.
This opinion, in addition to being subject to the
consummation of the Proposed Transactions in accordance with the
Application-Declaration, is also subject to the following
additional assumptions, exceptions and qualifications:
(1) that the Additional Shares issued by EUA will be duly
authorized, executed and delivered;
(2) compliance with such order or orders as the SEC may
issue from time to time upon the Application-
Declaration; and
(3) the accuracy of information furnished to us (a) as to
the outstanding securities of EUA, Eastern Edison, Blackstone,
Newport, Montaup, EUA Cogenex, EUA Energy, Unicord, EUA
TransCapacity, TCLP, EUA Ocean State, OSP I, OSP II,
OSP Finance and EUA Service and (b) that there is no
provision or condition in any note or other document in
connection with outstanding short-term borrowings of
any of those companies limiting any of the Proposed
Transactions.
This opinion relates only to federal law and the laws of the
Commonwealth of Massachusetts and we express no opinion with
respect to any other jurisdiction. To the extent certain matters
addressed herein may involve the laws of other jurisdictions, we
have assumed that such laws are not materially different from the
laws of the Commonwealth of Massachusetts.
We consent to the use of this opinion in connection with the
Application-Declaration.
Very truly yours,
McDermott, Will & Emery
