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Exhibit 10 (d)
EMPLOYEES' STOCK OWNERSHIP PLAN OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
(As Amended and Restated Effective August 1, 1999)
EMPLOYEES' STOCK OWNERSHIP PLAN OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
(As Amended and Restated Effective August 1, 1999)
Table of Contents
Page
ARTICLE I DEFINITIONS. 1
1.1 Account 1
1.2 Annual Addition 2
1.3 Beneficiary 2
1.4 Board of Directors 2
1.5 Break-in-Service 2
1.6 Code 3
1.7 Committee 3
1.8 Company 3
1.9 Compensation 3
1.10 Defined Benefit Plan 4
1.11 Defined Contribution Plan 4
1.12 Designated Subsidary 4
1.13 Dividend Reinvestment Plan 4
1.14 Effective Date 4
1.15 Employee 4
1.16 Employer 5
1.17 Employment Commencement Date 5
1.18 Employment Recommencement Date 5
1.19 ERISA 5
1.20 Excess Aggregate Contributions 5
1.21 Five-Percent Owner 5
1.22 Fund 5
1.23 Highly Compensated Employee 5
1.24 Hour of Service 6
1.25 Limitation Year 7
1.26 Non-Highly Compensated Employee 7
1.27 Normal Retirement Date 7
1.28 Participant 7
1.29 Participant Contributions 7
1.30 Pension Plan 7
1.31 Period of Service 7
1.32 Plan 7
1.33 Plan Year 7
1.34 Prior Plan 7
1.35 Qualified Matching Contribution 7
1.36 Required Beginning Date 7
1.37 Severance from Service Date 8
1.38 Stock 8
1.39 Subsidiary 8
1.40 Trust 8
1.41 Trustee 8
1.42 Valuation Date 8
1.43 Year of Service 8
ARTICLE II PARTICIPATION. 9
2.1. Eligibility Requirements. 9
2.2. Ineligible Employees. 9
2.3. Time of Participation - Excluded Employees. 10
ARTICLE III CONTRIBUTIONS BY THE COMPANY AND ITS DESIGNATED
SUBSIDIARIES. 10
3.1. Amount of Contributions. 10
3.2. Payment of Company and Designated Subsidiary
Contributions. 10
ARTICLE IV PARTICIPANT CONTRIBUTIONS. 11
4.1. Amount of Participant Contributions. 11
4.2. Election to Change Rate of Participant
Contributions. 11
4.3. Suspension and Resumption of Participant
Contributions. 11
ARTICLE V LIMITATION ON MATCHING AND PARTICIPANT
CONTRIBUTIONS. 12
5.1. Limitation - Code Section 401(m) 12
5.2. Plan Aggregation; Special Rule. 13
ARTICLE VI PURCHASE OF STOCK 14
6.1. Investment in Stock. 14
6.2. Purchase of Shares. 14
6.3. Timing of Purchase. 14
6.4. Cash Balance. 14
ARTICLE VII CREDITS TO ACCOUNTS. 14
7.1. Maintenance of Accounts. 14
7.2. Payment and Allocation of Contributions and
Forfeitures. 15
7.3. Valuation of the Stock. 16
7.4. Limitations on Annual Additions to Participants'
Accounts - Code Section 415. 16
7.5. Elimination of Excess Annual Additions. 17
ARTICLE VIII VESTING. 18
8.1. Rate of Vesting in ESOP, Participant Contribution
and Qualified Matching Accounts. 18
8.2. Rate of Vesting in Basic and Matching Accounts. 18
ARTICLE IX VOTING OF STOCK. 18
9.1. Direction of Participant. 18
9.2. Procedures Requirement. 18
9.3. Voting of Non-Directed or Unallocated Shares. 18
ARTICLE X AMOUNT AND DISTRIBUTION OF BENEFITS. 18
10.1. Distribution of Dividends. 18
10.2. Distributions Upon Termination of Service. 19
10.3. Distribution Upon Death 19
10.4. Death After Termination. 19
10.5. Deferred Distribution. 20
10.6. Form of Distribution. 20
10.7. Purchase of Stock. 20
10.8. Restrictions. 20
10.9. Limitation on Distributions. 20
10.10. Direct Rollovers. 20
10.11. Distributions Pursuant to a Qualified Domestic
Relations Order ("QDRO"). 21
ARTICLE XI WITHDRAWALS BY PARTICIPANTS. 22
11.1. Participant Withdrawals. 22
ARTICLE XII PLAN ADMINISTRATION. 22
12.1. Fiduciary Responsibility. 22
12.2. Appointment and Removal of Committee. 22
12.3. Compensation and Expenses of Committee. 22
12.4. Committee Procedures. 23
12.5. Plan Interpretation. 23
12.6. Exclusive Benefit Rule. 23
12.7. Consultants. 23
12.8. Delegation and Allocation of Responsibility. 23
12.9. Claims Procedure. 23
ARTICLE XIII AMENDMENTS, DISCONTINUANCE AND LIABILITIES. 24
13.1. Amendment. 24
13.2. Termination. 24
13.3. Merger, Consolidation or Transfer of Assets or
Liabilities. 24
13.4. Change in Designated Subsidiary Status. 25
ARTICLE XIV VETERANS' REEMPLOYMENT RIGHTS. 25
ARTICLE XV MISCELLANEOUS. 25
15.1. Limited Purpose of Plan. 25
15.2. Non-alienation. 25
15.3. Facility of Payment. 25
15.4. Impossibility of Diversion. 26
15.5. Provisions Relating to Top-Heavy Plan. 26
15.6. Electronic or Telephonic Means. 26
15.7. Unclaimed Benefits. 26
15.8. Contingent Effectiveness of Plan Amendment and
Restatement. 26
APPENDIX A - Top Heavy Provisions
APPENDIX B - Listing of Designated Subsidiaries
EMPLOYEES' STOCK OWNERSHIP PLAN OF
AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
This is the Employees' Stock Ownership Plan Of American
Water Works Company, Inc. And Its Designated Subsidiaries
("Plan"), amended and restated effective August 1, 1999, except
as otherwise provided, covering the eligible employees of
American Water Works and such of its affiliated entities as have
adopted the Plan for their eligible employees. The rights and
obligations under the Plan with respect to an employee who
terminated employment before the applicable effective date of
this amendment and restatement shall be governed by the terms of
the Plan as in effect on the date of his termination of
employment.
This amendment and restatement of the Plan is effective
August 1, 1999. However, any provision of the Plan that is
required to have an effective date prior to the date indicated
above in order to comply with the Uniformed Services Employment
and Reemployment Rights Act of 1994, the Small Business Job
Protection Act of 1996, the Taxpayer Relief Act of 1997 or other
legislation shall be effective on the earliest date required by
law.
The Plan is intended to be an "employee stock ownership
plan" as defined in section 4975(e)(7) of the Code. As such, the
Plan is designed to invest primarily in qualifying employer
securities.
ARTICLE I DEFINITIONS.
The following words and phrases as used herein have the
following meanings unless a different meaning is plainly required
by the context:
1.1. "Account" means a Participant's Account in the Plan,
including the following sub-Accounts:
1.1.1. "Participant ESOP Account" to hold the amounts
allocated to the Participant's Account through December 31, 1986;
1.1.2. "Participant Contribution Account" to hold the
amounts contributed by the Participant pursuant to Section 4.1 of
the Plan;
1.1.3. "Company Basic Contribution Account" to hold the
Company and Designated Subsidiary basic contributions made
pursuant to Section 3.1(a);
1.1.4. "Company Matching Contribution Account" to hold
the Company and Designated Subsidiary matching contributions made
pursuant to Section 3.1(b); and
1.1.5. "Qualified Matching Contribution Account" to hold
Qualified Matching Contributions, if any, made pursuant to
Section 3.1(c).
1.2. "Annual Addition" means the sum credited to the
Participant under each Defined Contribution Plan for any
Limitation Year, of:
1.2.1. Employer contributions,
1.2.2. Employee contributions (other than Rollover
Contributions), and
1.2.3. forfeitures.
The term "Annual Addition" shall also include the amount
allocated to a separate account of the Participant to provide
post-retirement medical benefits (a) under a Defined Benefit
Plan, as described in section 415(l)(1) of the Code, and (b) with
respect to a Participant who is, or was, a Key Employee for any
Plan Year, under a welfare benefit fund, as described in section
419A(d)(2) of the Code.
1.3. "Beneficiary" means:
1.3.1. the Participant's spouse,
1.3.2. the person, persons or trust designated by the
Participant, with the consent of the Participant's spouse if the
Participant is married, as direct or contingent beneficiary in a
manner prescribed by the Committee, or
1.3.3. if the Participant has no spouse and has made no
effective beneficiary designation, the Participant's heirs under
the intestate law of the state of the Participant's domicile at
his death. A married Participant may designate a person, persons
or trust as beneficiary other than his spouse provided that such
spouse consents to such designation in writing in a manner
prescribed by the Committee. Such consent shall not be required
if the Participant establishes to the satisfaction of the
Committee that the consent cannot be obtained because the spouse
cannot be located. No subsequent spouse of the Participant shall
be bound by any such consent.
1.4. "Board of Directors" means the Board of Directors of
American Water Works Company, Inc.
1.5. "Break-in-Service" means each 12 month period included
in a Period of Severance during which an Employee fails to
perform one Hour of Service. An individual who is absent from
work for maternity or paternity reasons shall not incur a Break
In Service for the 12 consecutive month period beginning on the
first anniversary of the first day of such absence. For purposes
of this section, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of a birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
1.6. "Code" means the Internal Revenue Code of 1986, as
amended.
1.7. "Committee" means the Retirement Plan Committee
appointed under Article XII as administrator of the Plan.
1.8. "Company" means American Water Works Company, Inc.
1.9. "Compensation."
1.9.1. General Rule. Compensation means, except as
otherwise provided in this Section 1.9, all amounts of regular
cash compensation that are treated as wages for Federal income
tax withholding under section 3401(a) of the Code (determined
without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the
services performed) for the Plan Year, plus amounts that would be
paid to the Employee during the year but for the Employee's
election under a cash or deferred arrangement described in
section 401(k) of the Code, a cafeteria plan described in
section 125 of the Code, a simplified employee pension described
in section 402(h) of the Code or an annuity program described in
section 403(b) of the Code. Notwithstanding the preceding
sentence, Compensation shall not include contributions by the
Employer to this or any other plan or plans for the benefit of
its employees, benefits under any long-term disability plan,
except as otherwise expressly provided in this Section 1.9, or
amounts identified by the Employer as expense allowances or
reimbursements regardless of whether such amounts are treated as
wages under the Code.
1.9.2. Limitations on Annual Additions. For the purpose
of Section 7.3 and Appendix A, Compensation shall include all
amounts that are treated as wages for Federal income tax
withholding under section 3401(a) of the Code (determined without
regard to any rules that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed) and actually paid to the Participant during the
Limitation Year, excluding the following: (i) contributions of
the Company or a Designated Subsidiary to a plan of deferred
compensation that are not includable in the Employee's gross
income for the taxable year in which contributed, or employer
contributions under a simplified employee pension plan to the
extent such contributions are deductible by the Employee, or any
distribution from a plan of deferred compensation; (ii) amounts
realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by the Employee either
becomes freely transferable or is no longer subject to a
substantial risk of forfeiture; (iii) amounts realized from the
sale, exchange or other disposition of stock acquired under a
qualified stock option; and (iv) other amounts that received
special tax benefits, or contributions made by the Company or a
Designated Subsidiary (whether or not under a salary reduction
agreement) towards the purchase of an annuity described in
section 403(b) of the Code, (whether or not the amounts are
actually excludable from the gross income of the Employee).
1.9.3. Highly Compensated Employee, Key Employee. For
the purpose of Section 1.24, defining the term "Highly
Compensated Employee," and for the purpose of the definition of
"Key Employee" in Appendix A, Compensation shall include the
amount determined under Section 1.9.2, plus amounts that would be
paid to the Employee during the year but for the Employee's
election under a cash or deferred arrangement described in
section 401(k) of the Code, a cafeteria plan described in section
125 of the Code, a simplified employee pension described in
section 402(h) of the Code or an annuity program described in
section 403(b) of the Code.
1.9.4. Maximum Annual Dollar Limit. The annual
Compensation of each Employee taken into account for any purpose
under the Plan, other than those described below in this
subsection, shall not exceed $160,000 (as adjusted under
section 401(a)(17) of the Code). This subsection shall not apply
for purposes of determining which individuals are Key Employees
or for purposes of the limitations on Annual Additions to
Accounts under section 415 of the Code.
1.10. "Defined Benefit Plan" means any employee pension plan
maintained by the Employer that is a qualified plan under section
401(a) of the Code and is not a Defined Contribution Plan.
1.11. "Defined Contribution Plan" means an employee
pension plan maintained by the Employer that is a qualified plan
under section 401(a) of the Code and is described in section
414(l) of the Code.
1.12. "Designated Subsidiary" means any Subsidiary named
from time to time by the Board of Directors as such under this
Plan, or any Subsidiary which, prior to September 15, 1977, was a
Designated Subsidiary under the Pension Plan (as defined
therein). A Subsidiary's status as a Designated Subsidiary may
be changed by the Board of Directors from time to time. Set
forth on Appendix B is the list of Designated Subsidiaries.
1.13. "Dividend Reinvestment Plan" means the American
Water Works Company, Inc. Dividend Reinvestment and Stock
Purchase Plan, as set forth in the prospectus of the Company
dated April 16, 1998 filed with the Securities and Exchange the
Commission, and as such Plan may be amended, interpreted or
regulated by the Company from time to time.
1.14. "Effective Date" means January 1, 1976, except as
otherwise specified. The effective date of this amendment and
restatement is August 1, 1999, except as otherwise specified.
1.15. "Employee" means:
1.15.1. an individual who is employed by the Employer;
1.15.2. an individual who is not employed by the Employer
but is a leased employee within the meaning of section 414(n)(2)
of the Code; provided that, if the total number of leased
employees constitutes 20% or less of the Employer's nonhighly
compensated work force, within the meaning of section
414(n)(5)(C)(ii) of the Code, the term "Employee" shall not
include those leased employees covered by a "safe harbor" plan
described in section 414(n)(5)(B) of the Code; and
1.15.3. when required under Section 1.25 for purposes of
crediting Hours of Service, a former Employee.
1.16. "Employer" means the Company and:
1.16.1. any other employer included with the Company in
a controlled group of corporations or trades or businesses within
the meaning of section 414(b) or section (c) of the Code, or an
affiliated service group within the meaning of section 414(m) of
the Code; and
1.16.2. any other entity required to be aggregated with
the Company pursuant to regulations under section 414(o) of the
Code;
provided that any such employer shall be included within the term
"Employer" only while a member of such a group including the
Company.
1.17. "Employment Commencement Date" means the date upon
which an individual was first credited with an Hour of Service,
as defined in Section 1.24.1.
1.18. "Employment Recommencement Date" means the date
upon which an individual was first credited with an Hour of
Service, as defined in Section 1.24.1 after a Severance from
Service Date.
1.19. "ERISA" means the Employee Retirement Income
Security Act of 1974, as amended.
1.20. "Excess Aggregate Contributions" means that amount
of Matching and Participant Contributions made by or on behalf of
a Participant for a Plan Year that exceeds the limitation on
Matching and Participant Contributions set forth in Article V.
1.21. "Five-Percent Owner" means any Employee who owns
(or is considered as owning within the meaning of section 318 of
the Code) more than 5% of the outstanding stock of any
Participating Employer or stock possessing more than 5% of the
total combined voting power of all stock of any Participating
Employer. For purposes of this Section 1.22, section
318(a)(2)(C) of the Code shall be applied by substituting "5%"
for "50%" each time it appears therein.
1.22. "Fund" means the assets and all earnings,
appreciation or additions thereto held by the Trustee under the
Trust for the exclusive benefit of Participants or their
Beneficiaries.
1.23. "Highly Compensated Employee" means any Employee
who:
1.23.1. was a Five-Percent Owner at any time during the
year or the preceding year; or
1.23.2. for the preceding year:
1.23.2.1. had Compensation from the Employer in excess of
$80,000 (as adjusted under section 414(q) of the Code) and
1.23.2.2. if the Employer elects, was in the "top-paid
group" (within the meaning of section 414(q) of the Code) for
such preceding year.
1.24. "Hour of Service" means:
1.24.1. each hour for which an Employee is paid, or
entitled to payment for the performance of duties for the
Employer;
1.24.2. each hour for which an Employee is paid or
entitled to payment by the Employer with respect to a period of
time during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military leave or leave of absence, provided
that no more than 501 Hours of Service shall be credited to an
Employee on account of any single continuous period during which
that Employee performs no duties;
1.24.3. each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer;
1.24.4. if an Employee is absent from employment for any
period because of:
1.24.4.1. the pregnancy of the individual,
1.24.4.2. the birth of a child of the individual,
1.24.4.3. the placement of a child with the individual in
connection with the adoption of such child by the individual, or
1.24.4.4. the provision of care for such child for a period
beginning immediately following such birth or placement,
each hour that normally would have been credited to such Employee
but for such absence; provided that an Employee shall be credited
with no more than 501 Hours of Service on account of any single
period of absence described in this Section 1.24.4.
1.24.5. any other hour required to be credited pursuant
to applicable regulations of the Department of Labor.
Hours of Service shall be credited to the Employee for
the applicable 12 month period or periods in which the duties are
performed, for which the payment is made, or to which the award,
agreement or leave pertains, except that in the case of hours
credited under Section 1.24.4 relating to maternity or paternity
leave such hours shall be credited if the year in which the
absence from work begins if necessary to avoid a Break-in-Service
in that year, or in any other case, in the following year. Hours
of Service under this Section 1.24 shall be calculated and
credited under the provisions of 29 CFR Section 2530.200b-2
issued by the United States Department of Labor, which
regulations are incorporated herein by reference.
1.25. "Limitation Year" means the Plan Year.
1.26. "Non-Highly Compensated Employee" means an
Employee who is not a Highly Compensated Employee.
1.27. "Normal Retirement Date" means the date a
Participant reaches age 65.
1.28. "Participant" means an Employee who has satisfied
the eligibility requirements of Article II.
1.29. "Participant Contributions" means a Participant's
after-tax contributions that he elects to make pursuant to
Section 4.1.
1.30. "Pension Plan" means the Pension Plan for
Employees of American Water Works Company, Inc. and its
Designated Subsidiaries as amended from time to time.
1.31. "Period of Service" means the period between the
later of (a) the Employee's Employment Commencement Date or (b)
the Employee's Employment Recommencement Date, and the Employee's
Severance from Service Date.
1.32. "Plan" means the Employees' Stock Ownership Plan
of American Water Works Company, Inc. and its Designated
Subsidiaries, as set forth in this document and the related trust
agreement pursuant to which the Trust is established.
1.33. "Plan Year" means the year ending December 31.
1.34. "Prior Plan" means the version of the Plan in
effect on December 31, 1986.
1.35. "Qualified Matching Contribution" means a Matching
Contribution made by a Participating Employer pursuant to Section
3.1(c) and allocated to a Participant's Qualified Matching
Contribution Account that:
1.35.1. is 100% vested and nonforfeitable when made; and
1.35.2. may not be distributed earlier than the
Participant's separation from service
1.36. "Required Beginning Date" means April 1 of the
calendar year following the later of:
1.36.1. the calendar year in which the Active
Participant reaches age 70 1/2; or
1.36.2. the calendar year in which the Participant
retires; provided, that this Section 1.36 shall not apply in the
case of a Participant who is a Five-Percent Owner with respect to
the Plan Year ending in the calendar year in which the
Participant attains age 70 1/2.
1.37. "Severance from Service Date" means the date upon
which an Employee severs his service with the Company or an
Affiliated Company, which date shall be the earlier of:
1.37.1. the date upon which the employee quits, is
discharged, dies, or retires; or
1.37.2. the first anniversary of the first date of such
Employee's absence from service for any other reason; provided
that an Employee who is absent from service beyond that first
anniversary by reason of a maternity or paternity leave resulting
from the Employee's pregnancy, the birth of the Employee's child,
the placement with the Employee of a child for adoption, or the
need to provide care for such a child following its birth or
adoption, that Employee's Severance From Service Date shall be
the second anniversary of the first date of such absence. The
period between the first and second anniversaries of the first
date of such absence shall be considered neither a Period of
Service nor a period of severance.
1.38. "Stock" means voting common stock of the Company of
the same class and having the same voting and dividend rights as
that common stock of the Company which from time to time is
listed for trading on the New York Stock Exchange.
1.39. "Subsidiary" means any corporation, association or
business trust, 50% or more of whose voting stock (not including
shares have voting power only upon the happening of an event of
default) is or was owned, directly or indirectly, by American
Water Works Company, Inc., or by any corporation which was a
constituent in a merger, consolidation, liquidation, transfer or
substantially all of its assets in exchange for stock, or similar
combination of corporations with or into the Company.
1.40. "Trust" means the legal entity created by the
trust agreement between the Company and the Trustee, fixing the
rights and liabilities with respect to controlling and managing
the Fund for the purposes of the Plan.
1.41. "Trustee" means the trustee or trustees hereafter
designated by the Board of Directors and named in the trust
agreement or any amendment thereto.
1.42. "Valuation Date" means any day that the New York
Stock Exchange is open for business or any other date chosen by
the Committee.
1.43. "Year of Service" means a 12 consecutive month
period included within a Period of Service; provided that the
following special rules apply:
1.43.1. If an Employee quits, is discharged or retires
and within 12 months thereafter returns to service and is
credited with an Hour of Service, his Years of Service shall be
computed as though his service had not been severed.
1.43.2. If an Employee who is absent from service for any
reason other than those specified in subparagraph (a) above,
while so absent, quits, is discharged, is placed on indefinite
layoff or retires, within 12 months after the first date upon
which he was absent from service, returns to service and is
credited with an Hour of Service, his Years of Service shall be
computed as though his service has not been severed.
1.43.3. An Employee who is absent by reason of service in
the armed forces of the United States or on a leave of absence
authorized by the Employer and who returns to service with the
Employer within the time during which his reemployment rights are
protected by federal law or at the expiration of his authorized
leave of absence, as applicable, shall be treated as though he
had been actively performing services for the Employer during
such period of absence.
ARTICLE II PARTICIPATION.
2.1. Eligibility Requirements. Except as provided in
Section 2.2, an Employee shall be eligible to participate in the
Plan beginning on the January 1 following his date of hire.
Effective as of January 1, 2000, each new Employee shall be
eligible to participate in the Plan on his date of hire.
2.2. Ineligible Employees. Each of the following Employees
shall be ineligible to participate in the Plan:
2.2.1. an Employee who is employed by an Employer that
is not the Company or a Designated Subsidiary;
2.2.2. an Employee included within a unit of Employees
covered by a collective bargaining agreement, unless that
collective bargaining agreement provides for their participation
in the Plan;
2.2.3. a leased employee, within the meaning of section
414(n)(2) of the Code;
2.2.4. an Employee who is a non-resident alien and who
has no income from sources within the United States;
2.2.5. an individual who has been classified by the
Company as an independent contractor, notwithstanding a contrary
determination by any court or governmental agency; and
2.2.6. an individual who is employed in an ineligible
category, such as a division of the Company or Designated
Subsidiary to which this Plan has not been extended.
2.3. Time of Participation - Excluded Employees. An
Employee otherwise eligible to be a Participant in the Plan, but
excluded under Section 2.2, shall be eligible to become a
Participant beginning on the first day of the month coincident
with or next following the date upon which the applicable
provision of Section 2.2 ceases to apply. A Participant who
becomes subject to any provision of Section 2.2 shall cease to be
eligible to make or receive contributions under the Plan as of
the last day of the payroll period coincident with, or within
which, any such provision becomes applicable.
ARTICLE III CONTRIBUTIONS BY THE COMPANY AND ITS DESIGNATED
SUBSIDIARIES.
3.1. Amount of Contributions.
3.1.1. Basic Contributions. The Company and its
Designated Subsidiaries shall contribute to the Fund, for each
Plan Year, an amount equal to 0.5% of the Compensation for the
immediately preceding Plan Year of each Participant who was an
Employee on the preceding December 31. For Plan Years beginning
on or after January 1, 2000, Basic Contributions for the Plan
Year will be made monthly in an amount equal to 0.5% of a
Participant's current Compensation.
3.1.2. Matching Contributions. The Company and its
Designated Subsidiaries shall contribute to the Fund, for each
Plan Year, on behalf of each Participant who was an Employee on
the preceding December 31, an amount equal to 100% of each
Participant's Contributions made pursuant to Section 4.1. For
Plan Years beginning on or after January 1, 2000, Matching
Contributions for the Plan Year will be made monthly in an amount
equal to 100% of each Participant's Contribution, made during the
month pursuant to Section 4.1.
3.1.3. Qualified Matching Contributions. If the
limitation on Matching and Participant Contributions set forth in
Article V is exceeded, at the direction of the Committee, the
Company and its Designated Subsidiaries shall make Qualified
Matching Contributions to the Qualified Matching Contribution
Account of each Participant who is a Non-Highly Compensated
Employee in the amount necessary to meet the limitation set forth
in such Section. Qualified Matching Contributions shall be
treated as Matching Contributions for all purposes of the Plan.
3.1.4. Form of Contributions. Contributions under
Section 3.1 shall be made in cash, in Stock, or a combination
thereof.
3.2. Payment of Company and Designated Subsidiary
Contributions. Contributions under Section 3.1 shall be made no
earlier than the first day of the Plan Year to which they relate
and no later than the due date (including extensions) for the
Company's federal income tax return for the Plan Year to which
those contributions relate.
ARTICLE IV PARTICIPANT CONTRIBUTIONS.
4.1. Amount of Participant Contributions. Each Participant
who was an Employee on the preceding December 31 may elect to
contribute to the Plan for each Plan Year an amount that does not
exceed 2% of his Compensation for the immediately preceding Plan
Year. Such contributions shall be made at such time and in such
manner as the Committee, in its discretion, may permit. The
Committee shall have the right to vary the time and manner of
Participant contributions from year to year, so long as all such
changes are applied in a nondiscriminatory manner.
For Plan Years beginning on or after January 1, 2000,
each Participant may for any Plan Year elect to have
Contributions withheld from his pay in increments of one percent
(1%) or two percent (2%) of his current Compensation, and the
amount paid into his Participant Contribution Account monthly.
Contributions may only be made by payroll withholding.
Notwithstanding the above, any former Participant who
terminated due to retirement, death, reorganization, or office
closing during the period January 1, 1999 through December 31,
1999 and who would be eligible to participate in the plan in all
other respects, shall be permitted to contribute to the Plan at
such time and in such manner as provided immediately prior to the
effective date of this amendment and restatement. Any
Participant who retires during 2000 but on or before June 30,
2000, or the beneficiary of a Participant who dies during that
same period, shall be permitted to make a one time supplemental
contribution sufficient to bring the total of that Participant's
Contributions for the 2000 Plan Year up to 2% of compensation
received for the immediately preceding Plan Year while an active
Participant.
4.2. Election to Change Rate of Participant Contributions.
The percentage designated by a Participant as a rate of
contribution with respect to Participant Contributions shall
automatically apply to increases and decreases in his rate of
Compensation. Except as provided in Section 4.3, a Participant
may elect to change the rate of his Participant Contributions to
any other permissible rate any time during the year. Any such
election shall be effective not later than the first payroll of
the next following month, provided the Participant makes a timely
election to do so in accordance with procedures established by
the Committee.
4.3. Suspension and Resumption of Participant Contributions.
A Participant may suspend his Participant Contributions as of the
first day of any payroll period of the next following month,
provided the Participant makes a timely election to do so in
accordance with procedures established by the Committee. Such
Participant may not resume Participant Contributions until the
first payroll period of the next following month. Such
Participant may elect to resume Participant Contributions by
following the procedures established by the Committee, and making
a timely election to do so.
ARTICLE V LIMITATION ON MATCHING AND PARTICIPANT
CONTRIBUTIONS.
5.1. Limitation - Code Section 401(m)
5.1.1. Notwithstanding any provision of this Plan to
the contrary, Matching and Participant Contributions shall be
limited as provided in section 401(m) of the Code, so that the
"average contribution percentage," as defined below, for the
eligible Highly Compensated Employees for the current Plan Year
shall bear a relationship to the "average contribution
percentage" for the eligible Non-Highly Compensated Employees
that meets one of the alternative tests described in
section 401(m) of the Code and summarized below, as the Committee
shall determine:
5.1.1.1. the average contribution percentage for the
eligible Highly Compensated Employees for such Plan Year shall
not exceed 125% of the average contribution percentage for the
eligible Non-Highly Compensated Employees for the preceding Plan
Year; or
5.1.1.2. the average contribution percentage for the
eligible Highly Compensated Employees for such Plan Year shall
not exceed the lesser of:
(i) 200% of the average contribution percentage
for the eligible Non-Highly Compensated Employees for the preceding Plan
Year, or
(ii) the average contribution percentage for the eligible
Non-Highly Compensated Employees for the preceding Plan Year plus
two percentage points.
5.1.1.3. At the election of the Sponsor, Section 5.1.1.1
may be applied by substituting "for the Plan Year" in place of
"for the preceding Plan Year" in Section 5.1.1.1; provided,
however, such an election, once made, may not be changed except
in accordance with procedures established by the Internal Revenue
Service.
5.1.2. The term "average contribution percentage" means
the average of each eligible Employee's actual contribution
percentage that is equal to the following ratio:
5.1.2.1. the amount of the Matching and Participant
Contribution allocated on behalf of each eligible Employee for
the Plan Year, to
5.1.2.2. the Employee's Compensation for the Plan Year.
5.1.3. Treatment of Excess Aggregate Contributions. If
neither test described in Section 5.1.1 is met, or in the
Committee's opinion will be met, the Committee, at its
discretion, shall:
5.1.3.1. cause the Participating Employer to make Qualified
Matching Contributions to the Qualified Matching Contribution
Account of each Participant who is a Non-Highly Compensated
Employee to the extent necessary to meet one of the tests,
provided such Participating Employer authorizes such
contribution; or
5.1.3.2. cause Excess Aggregate Contributions, adjusted for
income or loss thereon, to be forfeited, if otherwise forfeitable
under the terms of the Plan, or if not forfeitable, distributed
as additional compensation to Participants on whose behalf the
Excess Aggregate Contributions were contributed within two and
one-half months after the end of the Plan Year for which they
were contributed.
5.1.4. Determination of Amount of Excess Aggregate
Contributions. The amount of a Highly Compensated Employee's
Excess Aggregate Contributions for a Plan Year is the amount
necessary to reduce the amount of his Matching and Participant
Contributions to a maximum adjusted percentage, which shall be
the highest percentage that would cause one of the tests in
Section 5.1.1 to be met if each such Highly Compensated Employee
who had an actual contribution percentage greater than the
maximum adjusted percentage had, instead, such lower percentage.
The aggregate amount of Excess Aggregate Contributions on behalf
of all Highly Compensated Employees shall be distributed as
follows:
5.1.4.1. the Matching and Participant Contributions of the
Highly Compensated Employee(s) with the highest dollar amount of
Matching and Participant Contributions are reduced by the amount
required to cause that Highly Compensated Employee's Matching and
Participant Contributions to equal the dollar amount of Matching
and Participant Contributions of the Highly Compensated
Employee(s) with the next highest dollar amount of Matching and
Participant Contributions; provided, however, if a lesser
reduction, when added to the total dollar amount already
distributed under this Section, would equal the aggregate Excess
Aggregate Contributions the lesser reduction amount shall be
distributed; and
5.1.4.2. if the total amount adjusted under Section 5.1.5.1
is less than the aggregate Excess Aggregate Contributions, the
process set forth in Section 5.1.5.1 shall be repeated.
5.1.5. Determination of Income or Loss. The Committee
shall determine the income or loss allocable to Excess Aggregate
Contributions by using any reasonable method it selects, provided
that the method does not violate section 401(a)(4) of the Code,
is used consistently for all Participants and all corrective
distributions under the Plan for the Plan Year, and is used by
the Plan for allocating income to Participant Accounts.
5.2. Plan Aggregation; Special Rule.
5.2.1. The actual contribution percentage under Section
5.1.2 for an eligible Employee who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Matching
Contributions or Participant Contributions allocated to his
accounts under two or more plans described in section 401(a) or
arrangements described in section 401(m) of the Code that are
maintained by the Employer, shall be determined as if all such
Matching Contributions and Participant Contributions were made
under a single arrangement.
5.2.2. For purposes of satisfying the limitation on
Matching and Participant Contributions of Section 5.1, in the
event that this Plan satisfies the requirements of section 410(b)
of the Code only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of section
410(b) of the Code only if aggregated with this Plan, then actual
contribution percentages of eligible Employees shall be
determined as if all such plans were a single plan.
5.2.3. The determination and treatment of the actual
contribution percentage of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of the
Treasury.
ARTICLE VI PURCHASE OF STOCK
6.1. Investment in Stock. The Trustee shall invest and
reinvest all contributions to the Fund in Stock in accordance
with this Article VI and the terms of the Trust Agreement.
6.2. Purchase of Shares. All contributions to the Fund
shall be used by the Trustee to purchase shares of Stock, at the
time specified by Section 6.3, from the Company, on the open
market, or in a private transaction from a shareholder of the
Company who is neither a "disqualified person" within the meaning
of section 4975 of the Code nor a "party in interest" within the
meaning of section 3(14) of ERISA.
6.3. Timing of Purchase. Purchases of Stock with
contributions made pursuant to Section 3.1 and Section 4.1 shall
be made by the Trustee on or before the 30th day following the
receipt of such contributions.
6.4. Cash Balance. Notwithstanding any other provision of
the Plan, the Trustee may at all times maintain a balance of cash
in an amount not in excess of the amount which it reasonably
anticipates will be necessary to make cash distributions to
Participants in lieu of shares or fractional shares over the next
12 months. The Company may advance to the Trustee, in any Plan
Year, the amount which the Company anticipates will be necessary
for the purposes of this Section 6.4. All advances made under
this Section 6.4 shall be credited against the contribution
required under Section 3.1 for the Plan Year during which the
advance is made.
ARTICLE VII CREDITS TO ACCOUNTS.
7.1. Maintenance of Accounts. The Committee shall
maintain, or cause to be maintained, for each Participant a
Participant Contribution Account, a Matching Contribution
Account, and a Qualified Matching Contribution Account.
7.2. Payment and Allocation of Contributions and
Forfeitures.
7.2.1. Participant Contributions. Participant
Contributions shall be paid over by the Employer to the Trustee
as of the earliest date on which such Participant Contributions
can reasonably be segregated from the Employer's general assets.
Participant Contributions shall be allocated to Participants'
Accounts as soon as administratively feasible after they are
received by the Trustee.
7.2.2. Company Basic Contributions. Company Basic
Contributions shall be paid to the Trustee at the same time that
Company Matching Contributions are paid. Such Contributions
shall be allocated to Participants' Accounts as soon as
administratively feasible after they are received by the Trustee,
but in no event later than the last Valuation Date of the Plan
Year to which such contributions relate.
7.2.3. Company Matching Contributions. Company Matching
Contributions shall be paid to the Trustee at the same time that
Participant Contributions to which they relate are paid. Such
Contributions shall be allocated to Participants' Accounts as
soon as administratively feasible after they are received by the
Trustee, but in no event later than the last Valuation Date of
the Plan Year to which such contributions relate.
7.2.4. Qualified Matching Contributions. Payment of the
Company's Qualified Matching Contributions shall be made within
the time prescribed by the Code as the time within which
contributions must be made in order to constitute an allowable
Federal income tax deduction for the Employer's taxable year for
which the contribution is made. Such contributions shall be
allocated to Participants' Accounts no later than the last
Valuation Date of the Plan Year to which they relate.
7.2.5. Fractional Shares of Stock. Subject to 7.3, all
shares of Stock purchased by the Trustee shall be allocated to
Participants' Accounts even though the result may be the
allocation of fractional shares, computed to at least the nearest
two decimal places.
7.2.6. Disposition of Forfeitures. Any amounts released
from a Participant's Basic, Matching and Qualified Matching
Accounts upon a termination of employment before January 1, 2000
before the Participant has been credited with a 100% vested
interest in those Accounts shall be placed in a suspense account
and held for five complete calendar years, at which time the
amounts shall be forfeited. During that five year period,
dividends paid on Stock held in the suspense account shall be
accumulated in that account and held in cash. If the Participant
again becomes an Employee before he incurs five consecutive
Breaks-in-Service, the amounts held in the suspense account shall
be restored to him. After the Participant has incurred five
consecutive Breaks-in-Service amounts held in the suspense
account shall be released and used to reduce Basic and then
Matching Contributions of the Company or Designated Subsidiary
employing such Participant at the time of his termination of
employment for the Plan Year in which such amounts are released
from the suspense account or any succeeding Plan Year.
7.3. Valuation of the Stock.
7.3.1. General Rule. As of each Valuation Date, any
increase or decrease in the fair market value of the Stock since
the preceding Valuation Date shall be computed by the Trustee and
credited to or deducted from the Accounts of all Participants.
Each such Account's share of any increase or decrease shall be
that portion which bears the same ratio to the total as the
portion of:
7.3.1.1. the Participant's Account invested as of the
preceding Valuation Date bears to
7.3.1.2. the total of all Participants' Accounts invested
as of the preceding Valuation Date.
For the purpose of determining such increase or decrease, the
balance at the preceding Valuation Date shall be reduced by
amounts since properly paid from the Fund, and, in any case where
a distribution falls due on a Valuation Date it shall not be
regarded as due until the next day. The Committee shall provide
for the establishment of accounting procedures for the purpose of
making the allocations, valuations and adjustments to
Participants' Accounts provided for in this Article. From time
to time, such procedures may be modified for the purpose of
achieving equitable and nondiscriminatory allocations among the
Participants' Accounts in accordance with the provisions of this
Article. The fair market value of investments held in the Fund
shall be conclusively determined by the Trustee in accordance
with any reasonable method permitted under regulations issued by
the Secretary of the Treasury and such reasonable and uniform
rules as the Trustee may adopt.
7.4. Limitations on Annual Additions to Participants'
Accounts - Code Section 415.
7.4.1. Primary Limit. The maximum Annual Addition to
any Participant's Account for any Limitation Year shall be the
lesser of:
7.4.1.1. $30,000; or
7.4.1.2. 25% of the Participant's Compensation for such
Limitation Year.
7.4.2. Combined Limit. Effective until December 31,
1999 (for calendar year plans), if a Participant participates in
one or more Defined Contribution Plans and one or more Defined
Benefit Plans to which the Employer contributes on his behalf,
the sum of the defined benefit fraction and the defined
contribution fraction shall not exceed 1.0.
7.4.2.1. Defined Benefit Fraction. The defined benefit
fraction for any Limitation Year is a fraction (i) the numerator
of which is the Participant's projected annual benefit
(determined as of the close of the Limitation Year) under all
such Defined Benefit Plans (whether or not terminated), and (ii)
the denominator of which is the lesser of (A) $90,000 or the
applicable dollar limit for such Limitation Year multiplied by
1.25 (1.0 if the Plan is a Super Top-Heavy Plan), or (B) the
Participant's average Compensation for the three consecutive
calendar years of active participation, that produces the highest
average, multiplied by 1.4.
7.4.2.2. Defined Contribution Fraction. The defined
contribution fraction for any Limitation Year is a fraction (i)
the numerator of which is the total of the Participant's Annual
Additions as of the close of the Limitation Year, and (ii) the
denominator of which is the lesser of the following amounts
determined for the Limitation Year and for each prior Limitation
Year for which the Participant was an Employee (regardless of
whether any Plan was in existence during such year):
(i) $30,000 or the applicable dollar limit for
each such Limitation Year multiplied by 1.25 (1.0 if the Plan is a Super
Top-Heavy Plan), or
(ii) 35% of the Participant's Compensation for each such
Limitation Year.
7.4.3. Aggregation Requirement. For purposes of
applying the limitations of this Section 7.4:
7.4.3.1. all Defined Benefit Plans (without regard to
whether such Defined Benefit Plan has been terminated) ever
maintained by the Employer will be treated as one Defined Benefit
Plan; and
7.4.3.2. all Defined Contribution Plans (without regard to
whether such Defined Contribution Plan has been terminated) ever
maintained by the Employer will be treated as one Defined
Contribution Plan.
7.5. Elimination of Excess Annual Additions. If, as a
result of the allocation of forfeitures, a reasonable error in
estimating a Participant's Annual Compensation, or under such
other circumstances as the Internal Revenue Service may
prescribe, the limitations described in Section 7.4.1 would be
exceeded for any Participant, such Participant's excess Annual
Addition shall be eliminated as follows:
7.5.1. any Participant Contributions (plus the earnings
attributable thereto), to the extent they would reduce the Annual
Addition to the maximum permitted amount, shall be returned to
the Participant;
7.5.2. any reallocated forfeitures, to the extent they
would reduce the Annual Addition to the maximum permitted amount
shall be placed in an unallocated suspense account and used to
reduce Employer contributions for all Participants in the next
Plan Year and each succeeding Plan Year, if necessary;
7.5.3. if after applying Section 7.5.1 and 7.5.2, any
amount remains in excess of the maximum permitted Annual
Addition, such amount shall be paced in an unallocated suspense
account and used to reduce Employer contributions for all
Participants in the next Plan Year and each succeeding Plan Year,
if necessary.
7.5.4. If in accordance with this Section 7.5, a suspense
account is in existence during any Plan Year, such account shall
not share in the investment gains and losses of the Fund.
ARTICLE VIII VESTING.
8.1. Rate of Vesting in ESOP, Participant Contribution and
Qualified Matching Accounts. A Participant shall have a 100%
vested interest, at all times, in all shares of Stock or other
assets standing to the credit of his ESOP Account, his
Participant Contribution Account and his Qualified Matching
Contribution Account.
8.2. Rate of Vesting in Basic and Matching Accounts. A
Participant shall have no vested interest in his Basic and
Matching Accounts until he has been credited with five Years of
Service at which time he shall have a 100% vested interest in all
shares of stock or other assets standing to the credit of those
Accounts. In any event, a Participant shall be 100% vested in
his Basic and Matching Accounts on (i) his Normal Retirement Date
if he is employed by the employer on that date, or (ii) upon his
death while employed by the Employer.
Notwithstanding this above, effective January 1, 2000,
active Participants shall be 100% vested in the Basic and
Matching Accounts at all times.
ARTICLE IX VOTING OF STOCK.
9.1. Direction of Participant. The Trustee shall vote all
shares of Stock, including fractional shares, allocated to a
Participant's Account, in the manner directed by the Participant
to whose Account such shares are allocated.
9.2. Procedures Requirement. The Committee shall establish
and maintain a procedure by which Participants will be timely
notified of their right to direct the voting of Stock allocated
to their Accounts and the manner in which any such directions are
to be conveyed to the Trustee.
9.3. Voting of Non-Directed or Unallocated Shares. If a
Participant fails to direct the voting of shares of Stock
allocated to his Account, or if shares of Stock are being held
unallocated, the Trustee shall exercise such voting rights in
accordance with recommendations of the Company as made to all
Shareholders of the Company.
ARTICLE X AMOUNT AND DISTRIBUTION OF BENEFITS.
10.1. Distribution of Dividends. At the election of the
Participant on a form provided by the Committee (until such
election is amended or revoked) any cash dividends received by
the Trustee shall be:
10.1.1. distributed to such Participant as soon as
practical after those amounts are received by the Trustee, less
any taxes required to be withheld under federal or state laws; or
10.1.2. reinvested by the Trustee in Stock pursuant to the
Dividend Reinvestment and Stock Purchase Plan.
If no election is made by the Participant pursuant to this
Section 10.1, dividends will be distributed in accordance with
Section 10.1.1. The amount to be distributed or reinvested shall
be that portion of the total cash dividend which bears the same
ratio to that total dividend as the number of shares of Stock
allocated to the Participant's Account as of the preceding
Valuation Date bears to the number of shares of Stock allocated
to all Participants' Accounts as of that date. Shares of Stock
acquired through the Dividend Reinvestment Plan pursuant to a
Participant's election under this Section 10.1 shall not be
considered assets of this Plan, but rather shall be governed by
the terms of the Dividend Reinvestment Plan.
10.2. Distributions Upon Termination of Service. Upon
termination of service for reasons other than his death, a
Participant shall be entitled to receive the balance of his
account, plus any amount subsequently allocated to his Account
under Section 7.2, as soon as administratively feasible after the
Valuation Date coinciding with or next following the date upon
which the Participant becomes entitled to such benefit.
Notwithstanding the foregoing, if the value of a
Participant's Account exceeds $5,000, payment to such Participant
shall not be made unless the Participant consents in writing to
the distribution. Consent to such distribution shall not be
valid unless the Participant is informed of his right to defer
receipt of the distribution. The consent of the Participant's
spouse, if any, to such distribution shall not be required. A
Participant must have his Account distribution as of the close of
the Plan Year in which he reaches age 65. For the purpose of
this Section 10.2 a Participant's service shall not be deemed to
have terminated by reason of his transfer to an employment status
with the Company or a Designated Subsidiary which is not covered
by this Plan. Notwithstanding the foregoing, the entire value of
a Participant's Accounts must be distributed beginning no later
than the Participant's Required Beginning Date.
10.3. Distribution Upon Death Upon termination of a
Participant's service by reason of his death, the balance of his
Account as of the Valuation date coincident with or next
following the Participant's date of death, plus any amounts
subsequently allocated to his Account under Section 7.2, shall be
distributed to the Participant's Beneficiary, as soon as
administratively feasible following the occurrence of such event.
To the extent practicable, the Committee shall insure that any
distribution pursuant to this Section 10.3 is completed within
the recipient's taxable year in which it begins.
10.4. Death After Termination. If a Participant dies
following his termination of service, but before any distribution
is made pursuant to Section 10.2, the balance of his Account, as
of the Valuation Date coincident with or next following his
termination of service plus any amounts subsequently allocated to
his Account under Section 7.2, shall be distributed to the
Participant's Beneficiary, as soon as administratively feasible
following the occurrence of such event. To the extent
practicable, the Committee shall insure that any distribution
pursuant to this Section 10.4 is completed within the recipient's
taxable year in which it begins.
10.5. Deferred Distribution. A Participant who elected
to defer distribution of his Account pursuant to Section 10.2 may
subsequently elect a distribution of his Account upon providing
notice of his election in accordance with procedures established
by the Committee. A Participant may not elect a partial
distribution of his Account pursuant to this Section 10.5.
10.6. Form of Distribution. A Participant, or in the
case of a distribution under Section 10.3 or 10.4 as to which the
Participant has made no election, a Participant's Beneficiary,
may elect to receive distribution pursuant to this Article X in
cash or in Stock. If the Participant or beneficiary elects
distribution in cash, the Trustee shall convert all shares of
Stock allocated to the Participant's Account, including
fractional shares, to cash, at the price at which such Stock is
traded on the New York Stock Exchange on the conversion date and
shall distribute the proceeds to the Participant or Beneficiary.
10.7. Purchase of Stock. Before a distribution of a
Participant's Account pursuant to this Article X is made to a
Participant or Beneficiary who has elected to receive the
distribution in Stock, any cash, or assets other than Stock,
allocated to such Account shall be applied to the purchase of
Stock, either in the manner and at the price specified in Section
6.2 or from an unallocated account established pursuant to
Section 7.3 at the price at which such Stock could currently be
purchased on the New York Stock Exchange, so that all
distributions will be made in shares of Stock, except that cash
shall be distributed in lieu of fractional shares of Stock. For
the purpose of this Article X, a fractional share of Stock
allocated to a Participant's Account shall be valued at its pro
rata share of the closing price of a whole share of Stock on the
New York Stock Exchange on the deemed distribution date preceding
the date upon which the Participant's Account is to be
distributed.
10.8. Restrictions. Any shares of Stock distributed
pursuant to the terms of this Plan shall be subject to such
restrictions on their transfer as shall be necessary or
appropriate, in the opinion of counsel for the Company and the
Trust, to comply with applicable federal and state securities
laws.
10.9. Limitation on Distributions. No distribution of
all or any part of any Participant's Account under this Plan
shall be made except in accordance with this Article X, or the
withdrawal provisions of Article XI.
10.10. Direct Rollovers. This Section 10.10 will apply
to distributions from a Participant's Account made after December
31, 1992. If one or more distributions from a Participant's
Account constitutes an "eligible rollover distribution," within
the meaning of sections 402(c)(2) and (4) of the Code and
regulations thereunder, the Participant may elect to have all or
a portion of the distribution paid directly to an individual
retirement account or annuity (an "IRA") or a plan qualified
under Code Section 401(a) or 403(a) (collectively, an "eligible
retirement plan"). The Participant may not elect to have
portions of an eligible rollover distribution paid directly to
more than one eligible retirement plan. In addition, the
Participant will not be permitted to elect a direct rollover with
respect to eligible rollover distributions that are reasonably
expected to total less than $200 during the year. The Committee
shall make such payment upon receipt from the Participant of the
name of the eligible retirement plan to which such payment is to
be made, a representation that the eligible retirement plan is an
IRA or a plan qualified under section 401(a) or 403(a) of the
Code, and such other information and/or documentation as the
Committee may reasonably require to make such payment. If the
Participant fails to elect whether or not a distribution is to be
paid in a direct rollover, the Participant will be deemed to have
elected not to have any portion of the distribution paid in a
direct rollover. This Section shall apply, to the extent
required by law, to a Beneficiary who is the Participant's
surviving spouse and to a spouse or former spouse who is an
alternate payee under a qualified domestic relations order as
defined in section 414(p) of the Code, except that only an IRA
will be deemed to be an eligible retirement plan with respect to
a surviving spouse or a deceased Participant.
10.11. Distributions Pursuant to a Qualified Domestic
Relations Order ("QDRO"). Any benefit payable from a
Participant's Account to an Alternate Payee pursuant to the terms
of a Qualified Domestic Relations Order ("QDRO"), as those terms
are defined in section 414(p) of the Code, shall, at the
Alternate Payee's election, provided such election is consistent
with the terms of the QDRO, be paid:
10.11.1. in a lump sum as soon as administratively
reasonable after the determination that the QDRO satisfies the
provisions of section 414(p) of the Code, without regard to
whether the Participant is then eligible to receive benefits
under the Plan; or
10.11.2. at any other time and in any manner permitted by
the Plan and the terms of the QDRO, provided that such benefit
must be paid, or begin to be paid, no later than the
Participant's Normal Retirement Date.
10.11.3. If a QDRO requires the division of an Account
balance as of a date earlier than the date of payment to or
establishment of a separate account for an Alternate Payee, with
earnings credit from such date, the amount to be paid to, or set
aside for, the Alternate Payee shall be:
10.11.3.1. the percentage of the Account as of the
Valuation Date nearest such earlier determination date awarded to
the Alternate Payee by the QDRO, plus an amount of gain or loss
determined by:
(i) reducing the current date balance of the
Account by the sum of the earlier determination date balance and any
contributions made since that date;
(ii) multiplying the result by the percentage determined by
dividing the earlier determination date balance by the sum of the
earlier determination date balance and the contributions since
that date; and
(iii) multiplying the result obtained in (ii) by the
percentage of the earlier determination date balance awarded to
the Alternate Payee by the QDRO.
10.11.3.2. Determination under this section 10.11.3 will
be made on the basis of the cash value of the Participant's
account based on the number of shares as of the relevant dates
and the amount distributed will be made in cash and or shares in
accordance with Sections 10.6 and 10.7
ARTICLE XI WITHDRAWALS BY PARTICIPANTS.
11.1. Participant Withdrawals. Effective September 1, 1999,
a Participant who has completed five (5) or more Years of Service
may, by written election, in the form prescribed by the Committee
and filed with the Committee, elect to withdraw any of the shares
of Stock (except Stock attributable to Qualified Matching
Contributions) which have been allocated to his Account. Such
withdrawal may be made in cash or shares as elected by the
Participant. Cash shall be paid in lieu of fractional shares.
ARTICLE XII PLAN ADMINISTRATION.
12.1. Fiduciary Responsibility. The Plan shall be
administered by the Committee, which shall be deemed to be the
Plan's "named fiduciary" and "administrator", as those terms are
defined by the Employee Retirement Income Security Act of 1974,
as amended. All matters relating to the administration of the
Plan, including the duties imposed upon the Plan administrator by
law, except those duties relating to the control or management of
Plan assets, shall be the responsibility of the Committee. All
matters relating to the control or management of Plan assets
shall, except to the extent delegated in accordance with the
trust agreement, be the sole exclusive responsibility of the
Trustee.
12.2. Appointment and Removal of Committee. The
Committee shall consist of not less than three persons who shall
be appointed and may be removed by the Board of Directors.
Persons appointed to the Committee may be, but need not be,
employees of the Company or a Designated Subsidiary. Any
Committee member may resign by giving written notice to the Board
of Directors, which notice shall be effective 30 days after
delivery. A Committee member may be removed by the Board of
Directors by written notice to such Committee member, which
notice shall be effective upon delivery. The Board of Directors
shall promptly select a successor following the resignation or
removal of any Committee member.
12.3. Compensation and Expenses of Committee. Members
of the Committee who are employees of the Company shall serve
without compensation. Members of the Committee who are not
employees of the Company or a Designated Subsidiary may be paid
reasonable compensation for services rendered to the Plan. Such
compensation, if any, and all ordinary and necessary expenses of
the Committee shall be paid by the Company.
12.4. Committee Procedures. The Committee may enact
such rules and regulations for the conduct of its business and
for the administration of the Plan as it may deem desirable. The
Committee may act either at meetings at which a majority of its
members are present or by a writing signed by a majority of its
members without the holding of a meeting. Records shall be kept
of the meetings and actions of the Committee. No member of the
Committee who is a Participant in the Plan shall vote upon any
matter affecting only his Account.
12.5. Plan Interpretation. The Committee shall have the
authority and responsibility to interpret and construe the Plan
and to decide all questions arising thereunder, including without
limitation, questions of eligibility for participation,
eligibility for benefits, Account balance, and the timing of the
distribution thereof, and shall have the authority to deviate
from the literal terms of the Plan to the extent the Committee
shall determine to be necessary or appropriate to operate the
Plan in compliance with the provisions of applicable law.
12.6. Exclusive Benefit Rule. The Committee shall
administer and interpret the Plan for the exclusive benefit of
Participants and their Beneficiaries.
12.7. Consultants. The Committee may, and to the extent
required for the preparation of reports shall, employ such
accountants, actuaries, attorneys, consultants and other advisors
or agents, as necessary. The fees charged by such accountants,
actuaries, attorneys, consultants or other advisors and agents
shall be paid by the Company.
12.8. Delegation and Allocation of Responsibility. The
Committee may delegate any of its responsibilities to any officer
of the Company, and may allocate any of its responsibilities to
one or more members of the Committee. In the event of any such
delegation or allocation the Committee shall establish procedures
for the thorough and frequent review of the performance of such
duties. Persons to whom responsibilities have been delegated may
not delegate to others any discretionary authority or
discretionary control with respect to the management or
administration of the Plan.
12.9. Claims Procedure. The Committee shall administer
a claims procedure as follows:
12.9.1. If a claim for benefits is denied by the
Committee either in whole or in part, the Committee shall notify
any Participant or Beneficiary adversely affected by such denial
by a written notice setting forth the specific reason or reasons
for the denial, a specific reference to the provisions of the
Plan upon which the denial is based, a description of any
additional material or information necessary for the Participant
or Beneficiary to obtain a review of the decision denying the
claim in whole or in part together with an explanation of the
reasons such material or information may be necessary for these
purposes, and an explanation of the claim review procedures for
the Plan.
12.9.2. The Participant or Beneficiary whose claim has
been denied in whole or in part (or the authorized representative
of the Participant or Beneficiary) may, within 60 days after
receipt of the written notification described in (a) above,
appeal the denial of the claim by delivering to a member of the
Committee a written request for a review of the denial. Such
written request for a review may be supplemented, within 30 days
following delivery of the request for a review, by written
comments prepared by the claimant or his duly authorized
representative, and the claimant or his duly authorized
representative shall for purposes of preparing the request for a
review or the additional written comments have made available to
him any pertinent documents.
12.9.3. Within 60 days following the later of receipt of a
request for review by a member of the Committee or receipt of any
additional written comments, the Committee shall give notice to
the claimant of its decision on review, which decision shall
include specific reasons for the decision and specific references
to the provisions of the Plan upon which the decision on review
is based.
ARTICLE XIII AMENDMENTS, DISCONTINUANCE AND LIABILITIES.
13.1. Amendment. This Plan may be amended at any time, and
from time to time, by the Company's Retirement Plan Committee,
provided that such amendment does not materially increase the
cost of the Plan. The Plan may also be amended at any time and
from time to time by the Board of Directors. No amendment shall
divest any vested interest of any Participant or Beneficiary nor
be effective unless the Plan, as so amended, continues to be
maintained for the exclusive benefit of the Participants and
their Beneficiaries.
13.2. Termination. The Company reserves the right to
discontinue the Plan at any time by action of the Board of
Directors. If the Plan is so discontinued the Fund shall
continue to be held for distribution as provided in Article X and
Article XI. No new Participants may thereafter be admitted to
the Plan and the Company shall make no further contributions to
the Fund.
13.3. Merger, Consolidation or Transfer of Assets or
Liabilities. The Company reserves the right, by action of the
Board of Directors, to merge or consolidate this Plan with any
other employee stock ownership plan qualified under section
401(a) of the Code, or to transfer Plan assets and liabilities to
any other such plan qualified under section 401(a) of the Code,
including such a transfer in connection with the termination of a
Subsidiary's status as a Designated Subsidiary, provided that the
amount standing to the credit of each Participant's Account
immediately after any such merger, consolidation or transfer of
assets and liabilities shall be at least equal to the amount
standing to the credit of the Participant's Account immediately
before such merger, consolidation or transfer.
13.4. Change in Designated Subsidiary Status. In the
event a Subsidiary ceases to be a Designated Subsidiary, but
continues in existence as a corporate entity, no further
allocations shall be made to the Accounts of the Participants
employed by that Subsidiary, other than Stock, money or other
property distributed with respect to Stock held in those
Accounts, for any Plan Year beginning after the Subsidiary ceases
to be a Designated Subsidiary. Those Participants' Accounts
shall either be:
13.4.1. transferred-to another qualified plan, in
accordance with Section 13.3, or
13.4.2. completely distributed to the Participants
entitled thereto in accordance with the provisions of Article X.
ARTICLE XIV VETERANS' REEMPLOYMENT RIGHTS.
Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect
to Qualified Military Service will be provided in accordance with
section 414(u) of the Code.
For purposes of determining an Employee's service under
the Plan, any military service in the Armed Forces of the United
States during which an Employee's employment and reemployment
rights with the Employer are guaranteed by federal law (including
the Uniformed Services Employment and Reemployment Rights Act of
1994) shall be recognized as service, provided such Employee
applies for reemployment with the Employer after such separation
from military service within the time prescribed by such law.
ARTICLE XV MISCELLANEOUS.
15.1. Limited Purpose of Plan. The establishment or
existence of the Plan shall not confer upon any Employee the
right to be continued in the employ of the Company or any
Designated Subsidiary. The Company and its Designated
Subsidiaries expressly reserve the right to discharge any
Employee whenever in their judgment their best interests so
require.
15.2. Non-alienation. No benefit payable under the Plan
shall be subject in any manner to anticipation, assignment, or
voluntary or involuntary alienation. This section shall not
preclude the Trustee from complying with the terms of any
qualified domestic relations order under section 414(p) of the
Code.
15.3. Facility of Payment. If the Committee, in its
sole discretion, deems a Participant or Beneficiary who is
entitled to receive any payment hereunder to be incompetent to
receive the same by reason of age, illness or any infirmity or
incapacity of any kind, the Committee may direct the Trustee to
apply such payment directly for the benefit of such person, or to
make payment to any person selected by the Committee to disburse
the same for the benefit of the Participant or Beneficiary. The
receipt given by such a person shall be complete discharge
therefor. Payments made pursuant to this section shall operate
as a discharge, to the extent thereof, of all liabilities of the
Company, any Designated Subsidiary, the Committee, the Trustee,
and the Fund to the person for which benefit the payments are
made.
15.4. Impossibility of Diversion. All Plan assets shall
be held, in trust, as part of the Fund, until paid to provide
benefits to Participants or their Beneficiaries or to pay
reasonable Plan expenses. It shall be impossible for any part of
the Fund to be used for, or diverted to, purposes other than the
exclusive benefit of the Participants or their beneficiaries, and
the Trust shall continue for such time as may be necessary to
accomplish the purpose for which it is created.
15.5. Provisions Relating to Top-Heavy Plan.
Notwithstanding anything in the Plan to the contrary, if the Plan
is determined to be a Top-Heavy Plan within the meaning of
Section A.12 of Appendix A and Code section 416(g) for any Plan
Year, then Article B of Appendix A shall apply.
15.6. Electronic or Telephonic Means. Notwithstanding
any provisions of this Plan to the contrary, salary reduction
agreements and suspensions or changes thereto, withdrawal
decisions and any other election by any Participant under this
Plan may be made by electronic or telephonic means that are not
otherwise prohibited by law and that are in accordance with
procedures and/or systems approved or arranged by the Committee.
15.7. Unclaimed Benefits. If a Participant or
Beneficiary to whom a benefit is payable under the Plan cannot be
located following a reasonable effort to so by the Committee,
such benefit shall be forfeited but will be reinstated if a claim
therefor is filed by the Participant or Beneficiary.
15.8. Contingent Effectiveness of Plan Amendment and
Restatement. The effectiveness of this amendment and
restatement, including but not limited to the contributions made
by the Company and its Designated Subsidiaries, shall be subject
to and contingent upon a determination of the District Director
of Internal Revenue that the Plan and Trust continue to meet the
requirements for qualification under the applicable provisions of
the Code. If the amendment and restatement should be determined
by the District Director not to continue to meet the requirements
for qualification, then, upon notice to the Trustee, the Company
shall have the right further to amend the Plan or to rescind the
amendment and restatement.
To record the adoption of the amendment and restatement
of the Plan, the Company and its Designated Subsidiaries have
caused this document to be executed, on their behalf, by the
appropriate officer of the Company on this 1st day of August,
2000.
[CORPORATE SEAL] AMERICAN WATER WORKS COMPANY, INC.
AND ITS DESIGNATED SUBSIDIARIES
By:___________________________________
APPENDIX A
TOP-HEAVY PROVISIONS
ARTICLE A. TOP-HEAVY PLAN DEFINITIONS.
The following words and phrases as used herein have the
following meanings unless a different meaning is plainly required
by the context:
A.1 "Account Balance" means, for all plans included in an
Aggregation Group, the sum of:
A.1.1 the balance, as of the Top-Heavy Valuation
Date, standing to the credit of a Participant (including a
Beneficiary of such Participant) in his Account, including
contributions that would be allocated as of the Top-Heavy
Valuation Date, even though these amounts are not yet required to
be contributed, except for amounts maintained in a subaccount
attributable to "unrelated" rollover contributions or plan-to-
plan transfers; and
A.1.2 the aggregate distributions made with respect
to such Participant (including a Beneficiary of such Participant)
under the Plan during the five-year period ending on the
Determination Date.
The term "Account Balance" shall not include any amount held or
distributed on behalf of any Participant who is a Former Key
Employee, or who has not received compensation from the Employer
(other than benefits under qualified plans maintained by the
Employer) at any time during the five-year period ending on the
Determination Date.
A.2 "Aggregation Group" means:
A-2.1 a Required Aggregation Group, or
A.2.2 a Permissive Aggregation Group.
A.3 "Determination Date" means:
A.3.1 if the Plan is not included in an Aggregation
Group, the last day of the preceding Plan Year; or
A.3.2 if the Plan is included in an Aggregation Group,
the Determination Date as determined under Section A.3.1 that
falls within the same calendar year as does the determination
date of each other plan included in such Aggregation Group.
A.4 "Employer" means the Company and any Designated
Subsidiary.
A.5 "Former Key Employee" means a Participant who is a Non-
Key Employee with respect to the Plan for the Plan Year if such
Participant was a Key Employee with respect to the Plan for any
prior Plan Year.
A.6 "Key Employee" means an Employee, including a
deceased former Employee, with respect to the Plan Year, who at
any time during the Plan Year that includes the Determination
Date or any of the four preceding Plan Years is (or was):
A.6.1 An officer of the Employer having annual
compensation greater than 150% of the amount in effect under Code
section 415(b)(1)(A) for the calendar year in which such Plan
Year ends, provided that in no event shall the number of
individuals treated as officers exceed 50 employees, or, if
lesser, the greater of three employees or 10% of the total number
of employees:
If more than the maximum number of employees who may be treated
as officers are officers, only those officers who had the largest
annual compensation in any one of the five Plan Years ending on
the Determination Date shall be treated as officers.
A.6.2 One of the 10 Employees having annual
Compensation from the Employer of more than the maximum dollar
limitation of Code section 415(c)(1)(A) and owning (or considered
as owning within the meaning of Code section 318) the largest
interest in the Employer, provided that such interest is more
than 0.5% of the ownership interest in the Employer. If an
Employee's ownership interest change, during a Plan Year, his
ownership interest for the year is the largest interest owned at
any time during the year. If two Employees have the same
ownership interest in the Employer during the five Plan Years
ending on the Determination Date, the Employee having the larger
annual compensation from the Employer for the Plan Year during
any part of which that ownership interest existed shall be
treated as having a larger interest;
A.6.3 If the Employer is a corporation, an
Employee who owns (or is considered as owning within the meaning
of Code section 318) more than 5% of the outstanding stock of the
Employer or more than 5% of the total combined voting power of
all stock of the Employer; if the Employer is not a corporation,
an Employee who owns more than 5% of the capital or profits
interest in the Employer; or
A.6.4 A person who has annual compensation
from the Employer of more than $150,000 and who would be
described in Section A.3.3 if "1%" were substituted for "5%" each
time it appears in Section A.6.3.
For purposes of this Section A.6, Code section 318(a)(2)(C) shall
be applied by substituting "5%"' for "50%". In addition, for
purposes of determining ownership in the Employer under this
Section A.3, Section A.4 shall not apply.
A.7 "Non-Key Employee" means any Employee, including a
deceased former Employee who is not a Key Employee with respect
to the Plan for the Plan Year.
A.8 "Permissive Aggregation Group" means:
A.8.1 each plan of the Employer included in a Required
Aggregation Group; and
A.8.2 each other plan of the Employer if the group of
plans consisting of such plan and the plan or plans described in
Section A.8.1, when considered as a single plan, meets the
requirements of Code section 401(a)(4) and Code section 410.
A.9 "Required Aggregation Group" means:
A.9.1 each plan of the Employer in which a Key
Employee participated during the five Plan Years ending on the
Determination Date; and
A.9.2 each other plan of the Employer that enables
any plan described in Section A.9.1 to meet the requirements of
Code section 401(a)(4) or Code section 410.
A.10 "Super Top Heavy Plan" means the Plan if it would be a
Top-Heavy Plan if "90%" were substituted for "60%" each time it
appears in Section A-11 and Section A-12.
A-11 "Top-Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
A.11.1 the aggregate of the Account Balances of Key
Employees under all Defined Contribution Plans included in an
Aggregation Group, and
A.11.2 the aggregate of the present value of
cumulative accrued benefits for Key Employees under all Defined
Benefit Plans included in an Aggregation Group, exceeds 60% of
the sum of such aggregate determined for all Employees.
A.12. "Top-Heavy Plan" means the Plan, if as of the
Determination Date:
A.12.1 the aggregate of the Account Balances of
Participants who are Key Employees exceeds 60% of the aggregate
of the Account Balances of all Participants; or
A.12.2 the Plan is part of a Required Aggregation
Group which is a Top-Heavy Group.
Notwithstanding Section A.12.1 and Section A.12.2, the Plan shall
not be considered a Top-Heavy Plan for any Plan Year in which the
Plan is a part of a Required Aggregation Group or a Permissive
Aggregation Group which is not a Top-Heavy Group.
A.13 "Top-Heavy Valuation Date" means the Determination
Date.
ARTICLE B. PROVISIONS RELATING TO TOP-HEAVY PLAN.
Notwithstanding anything in the Plan to the contrary,
if the Plan is a Top-Heavy Plan within the meaning of Section
A.12 and Code section 416(g) for any Plan Year, then the Plan
shall meet the requirements of Section B.1, Section B.2 and
Section B.3 for any such Plan Year. If the Plan is a Super Top-
Heavy Plan for any Plan Year, then in addition to meeting the
requirements of Sections B.1 through B.4, it shall also meet the
requirements of Section B.4.
B.1 Minimum Vesting Requirements. The vested interest of a
Participant who is credited with an Hour of Service after the
Plan becomes a Top-Heavy Plan will be determined under a schedule
that is not less favorable to the Participant than the following:
Years of Service Vested
Interest
Less than two 0%
Two but less than 20%
three
Three but less 40%
than four
Four but less 60%
than five
Five but less 80%
than six
Six or more 100%
B.2 Minimum Contribution Requirement.
B.2.1 The Employer will meet the minimum benefit
and contribution requirements of Code section 416(g) by providing
a minimum benefit that complies with Code section 416(c) (1)
under the Pension Plan for such Plan Year for each Participant
who is a Non-Key Employee and participates in the Pension Plan.
B.2.2 For each Participant who is a Non-Key
Employee, but who does not participate in the Pension Plan, this
Plan shall provide a minimum contribution allocation for such
Plan Year for each Participant who is a Non-Key Employee in an
amount equal to at least 3% of such Participant's Compensation
for such Plan Year. Such 3% minimum contribution requirement
shall be increased to 4% for any Plan Year in which the Employer
also maintains a Defined Benefit Plan if necessary to avoid the
application of Code section 416(h)(1), relating to special
adjustments to the Code section 415 limits for Top-Heavy Plans,
if the adjusted limitations of Code section 416(h)(1) would
otherwise be exceeded if such minimum contribution were not so
increased.
B.2.3 The minimum contribution requirements set
forth above shall be reduced in the following circumstances:
B.2.3.1 The percentage minimum contribution
required hereunder shall in no event exceed the percentage
contribution made for the Key Employee for whom such
percentage is the highest for the Plan Year after taking
into account contributions or benefits under other qualified
plans in an Aggregation Group of which the Plan is a part;
and
B.2.3.2 No minimum contribution will be required
(or the minimum contribution will be reduced, as the case
may be) for a Participant under this Plan for any Plan Year
if the Employer maintains another qualified plan under which
a minimum benefit or contribution is being accrued or made
for such year in whole or in part for the Participant in
accordance with Code section 416(c).
B.2.3.3 The minimum contribution shall be made
for each Non-Key Employee who is employed at the end of the
Plan Year in question, regardless of whether such Non-Key
Employee has been credited with 1,000 Hours of Service in
such Plan Year and regardless of such Non-Key Employee's
level of Compensation and whether such Non-Key Employee
elected to make contributions under Section 4.1 of the Plan
for such Plan Year.
B.3 Change in Top-Heavy Status. If the Plan becomes a Top-
Heavy Plan and subsequently ceases to be a Top-Heavy Plan, the
vesting schedule in Section B.1 shall continue to apply in
determining the vested percentage of the Account of any
Participant who had at least three Years of Service as of the
last day of the last Plan Year in which the Plan was a Top-Heavy
Plan. For all other Participants, the vesting schedule in
Section B.1 shall apply only to their Accounts as of such last
day.
B.4 Adjustment for Super Top-Heavy Plan. If the Plan is a
Super Top-Heavy Plan for any Plan Year, then for purposes of
Section 7.3 the defined contribution fraction and the defined
benefit fraction shall be adjusted in the manner described in
Code section 416(h)(1).
APPENDIX B
LIST OF DESIGNATED SUBSIDIARIES
American Water Works Company, Inc.
American Commonwealth Company
American Water Resources, Inc.*
American Water Services, Inc.*
American Water Works Service Company, Inc.
Arizona-American Water Company
California-American Water Company
Greenwich Water System, Inc.
Connecticut-American Water Company
Hampton Water Works Company
Massachusetts-American Water Company
New York-American Water Company, Inc.
The Salisbury Water Supply Company
Hawaii American Water Company
Illinois-American Water Company
Indiana-American Water Company, Inc.
Iowa-American Water Company
Kentucky-American Water Company
Maryland-American Water Company
Michigan American Water Company
Missouri-American Water Company
Jefferson City Water Works Company, Inc.
New Jersey-American Water Company, Inc.
New Mexico-American Water Company, Inc.
Ohio-American Water Company
Pennsylvania-American Water Company
Tennessee-American Water Company
Virginia-American Water Company
United Water Virginia, Inc.
West Virginia-American Water Company
Bluefield Valley Water Works Company
_______________________________
* Participating only with respect to certain grandfathered
employees.
