PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
Amended and Restated, Effective January 1, 2000
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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
TABLE OF CONTENTS
Page
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Article I. Amendment - Purpose............................................. 1
Article II. Definitions.................................................... 1
Article III. Participation................................................. 14
Article IV. Deposits....................................................... 15
Article V. Employer Contributions.......................................... 24
Article VI. Thrift Account Investments..................................... 26
Article VII. Thrift Account Funds.......................................... 30
Article VIII. Thrift Accounts.............................................. 33
Article IX. ESOP Accounts.................................................. 34
Article X. Vesting......................................................... 36
Article XI. Account Distributions and Withdrawals.......................... 37
Article XII. Limits on Benefits and Contributions Under Qualified Plans.... 49
Article XIII. Top-Heavy Requirements....................................... 53
Article XIV. Beneficiary in Event of Death................................. 58
Article XV. Administration................................................. 59
Article XVI. Claims Procedure.............................................. 61
Article XVII. Merger or Consolidation...................................... 62
Article XVIII. Non-Alienation of Benefits.................................. 62
Article XIX. Amendments.................................................... 62
Article XX. Termination.................................................... 63
Article XXI. Plan Confers No Right to Employment........................... 63
Article XXII. Alternate Payees............................................. 63
Article XXIII. Construction................................................ 64
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PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
ARTICLE I
AMENDMENT - PURPOSE
Section 1.1. Amendment of the Plan. Public Service Electric and Gas Company
previously established effective as of July 1, 1981 and currently maintains the
Thrift and Tax-Deferred Savings Plan, a savings, profit-sharing and tax-credit
employee stock ownership plan. Effective December 13, 1999, Public Service
Electric and Gas Company transferred sponsorship of the plan to Public Service
Enterprise Group Incorporated and the plan was renamed the "Public Service
Enterprise Group Incorporated Thrift and Tax Deferred Savings Plan" (the
"Plan"). Effective as of January 1, 2000, or with respect to certain Plan
provisions, such date as may be specifically provided herein, the Plan is
amended as set forth in this document.
Effective as of January 1, 2000, the Arden Engineering Constructors, Inc.
401(k) Plan is merged into this Plan and certain assets from the Fluidics, Inc.
Retirement and 401(k) Plan are transferred to this Plan.
The Plan is intended to constitute a plan described in section 404(c) of
the Employee Retirement Income Security Act of 1974, as amended, and Department
of Labor regulations section 2550.404(c)-1. As a result, fiduciaries of the Plan
may be relieved of liability for any losses that are the direct and necessary
result of investment instructions given by Participants and beneficiaries.
Section 1.2. Purpose. The purpose of the Plan is to encourage and assist
thrift and savings by eligible non-bargaining unit employees of Public Service
Electric and Gas Company and certain of its Affiliates through tax-sheltered
forms of investment.
ARTICLE II
DEFINITIONS
When used herein, the words and phrases hereinafter defined shall have the
following meanings unless a different meaning is clearly required by the context
of the Plan:
Section 2.1. "Account" shall mean the separate account maintained in the
Plan for each Participant which consists of the Participant's Thrift Account
(including, for some Participants, the U.S. Energy Partners Account, the Arden
Engineering Constructors Account, or the Fluidics Account) and/or the
Participant's ESOP Account.
Section 2.2. "Active Participant" shall mean a Participant who is an
Eligible Employee presently making Nondeferred Deposits or for whom Deferred
Deposits are presently being made.
Section 2.3. "Additional Lump Sum Deposits" shall mean that amount which is
contributed to the Plan by a Participant on a lump sum basis. Additional Lump
Sum Deposits shall not be entitled to be matched by Employer Contributions.
Section 2.4. "Affiliate" shall mean any organization which is a member of a
controlled group of corporations (as defined in Code section 414(b) as modified
by Code section 415(h)) which includes the Company, or any trades or businesses
(whether or not incorporated) which are under common control (as defined in Code
section 414(c) as modified by Code section 415(h)) with the Company, or a member
of an affiliated service group (as defined in Code section 414(m)) which
includes the Company, or any other entity required to be aggregated with the
Company pursuant to regulations promulgated pursuant to Code section 414(o).
Section 2.5. "Arden Engineering Constructors Account" shall mean that
separate portion of an Account which evidences the assets transferred to the
Plan for the Account of a Participant, pursuant to the merger of this Plan with
the Arden Engineering Constructors, Inc. 401(k) Plan, and which consists of the
sum of the following subaccounts of such Participant:
(a) Arden Engineering Constructors Deposit Subaccount shall mean
the portion of a Participant's Arden Engineering Constructors
Account which evidences the value of "Elective Deferrals"
credited to the Participant under the Arden Engineering
Constructors, Inc. 401(k) Plan, including the net worth of the
Trust Fund attributable thereto.
(b) Arden Engineering Constructors Employer Contribution
Subaccount shall mean the portion of a Participant's Arden
Engineering Constructors Account which evidences the value of
"Employer Matching Contributions" and "Additional Employer
Contributions" credited to the Participant under the Arden
Engineering Constructors, Inc. 401(k) Plan, including the net
worth of the Trust Fund attributable thereto.
(c) Arden Engineering Constructors Rollover Contribution
Subaccount shall mean the portion of a Participant's Arden
Engineering Constructors Account which evidences the value of
"Rollover Contributions" credited to the Participant under the
Arden Engineering Constructors, Inc. 401(k) Plan, including
the net worth of the Trust Fund attributable thereto.
Section 2.6. "Balanced Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(f).
Section 2.7. "Basic Deposits" shall mean that amount, not less than 1%, nor
more than 8% of a Participant's Compensation, contributed to the Plan through
payroll deduction by or on behalf of a Participant which is entitled to be
matched by Employer Contributions.
Section 2.8. "Board of Directors" shall mean the Board of Directors of the
Company.
Section 2.9. "Bond Fund" shall mean the Fund or Funds established pursuant
to Section 7.1(g).
Section 2.10. "Cash Balance Plan" shall mean the Cash Balance Pension Plan
of Public Service Enterprise Group Incorporated (formerly known as the "Cash
Balance Pension Plan of Public Service Electric and Gas Company") or the Cash
Balance Pension Plan for Represented Employees of Public Service Enterprise
Group Incorporated (formerly known as the "Cash Balance Pension Plan for
Represented Employees of Public Service Electric and Gas Company").
Section 2.11. "Code" shall mean the Internal Revenue Code of 1986, as
amended, or as it may be amended from time to time.
Section 2.12. "Commissioner" shall mean the Commissioner of Internal
Revenue.
Section 2.13. "Committee" or "Employee Benefits Committee" shall mean the
Employee Benefits Committee of the Company appointed by the Board of Directors.
Section 2.14. "Company" shall mean Public Service Enterprise Group
Incorporated.
Section 2.15. "Company Common Stock" shall mean the Common Stock, without
nominal or par value, of the Company.
Section 2.16. "Company Common Stock Fund" shall mean the Fund established
pursuant to Section 7.1(c).
Section 2.17. "Compensation" shall mean the total remuneration paid to a
Participant for services rendered to an Employer excluding the Employer's cost
for any public or private employee benefit plan, but including all Deferred
Basic and Supplemental Deposits made by a Participant or on a Participant's
behalf to this Plan and all elective contributions that are made by an Employer
on behalf of a Participant which are not includible in income under Code section
125, under rules adopted by the Committee which are uniformly applicable to all
Participants similarly situated. However, Compensation shall not include the
following:
(a) any amounts which are deferred under any deferred compensation
plan of the Company or any Affiliate and any payments from any
such plans of any previously deferred amount;
(b) any amounts received as an award pursuant to any of the following
incentive compensation programs:
(1) the Company's Management Incentive Compensation Plan;
(2) the PSEG Global Inc. Executive Long-Term Incentive
Compensation Plan;
(3) the PSEG Global Inc.1987 Stock Appreciation Rights Plan;
(4) the PSEG Energy Technologies Inc. Executive Long-Term
Incentive Compensation Plan;
(5) the Company's 1989 Long-Term Incentive Plan;
(c) any payments received pursuant to the terms of this Plan;
(d) any amounts which constitute reimbursement of expenses;
(e) the following miscellaneous payments:
(1) Separation pay;
(2) Gratuity Payments upon death;
(3) Payment for vacation due at time of death;
(4) Worker's Compensation for permanent partial disability;
(5) Employer contributions for social security, unemployment
compensation or other taxes;
(6) Employer payments toward reimbursement of adoption expenses;
and
(7) Payments made expressly for the purpose of satisfying
withholding tax liabilities on awards earned pursuant to any
employee suggestion program of any Employer;
(f) the following special international payments:
(1) International service premium;
(2) Commodities and services allowance;
(3) Equalization Pay;
(4) Transportation allowance;
(5) Foreign service pay; and
(6) Hardship allowance; and
(g) any amounts received by a Participant as a result of the sale of
vacation entitlements.
In any case, however, Compensation of each Participant taken into account
for any Plan Year shall not exceed the applicable compensation limit for such
year determined under Code section 401(a)(17). The compensation limit for a Plan
Year beginning on or after January 1, 1997 is $160,000 (as indexed), and the
family aggregation rules of Code section 414(q)(6) shall no longer apply as of
such date.
Section 2.18. "Deferred" in reference to Deposits shall mean that such
Deposits are deferred from current Federal income taxation under Code section
401(k).
Section 2.19. "Deposits" shall mean the aggregate of Additional Lump Sum
Deposits, Basic Deposits and Supplemental Deposits made by or on behalf of a
Participant to his or her Thrift Account. The total of all Deposits made by or
on behalf of a Participant in any Plan Year shall not exceed 25% of the
Participant's Compensation for such Plan Year. Deposits shall include "Deferred
Compensation" credited to the Participant under the U.S. Energy Partners 401(k)
Plan, "Elective Deferrals" credited to the Participant under the Arden
Engineering Constructors, Inc. 401(k) Plan, and "Employee Pre-Tax Basic
Contributions" credited to the Participant under the Fluidics, Inc. Retirement
and 401(k) Plan.
Section 2.20. "Disability" shall mean any physical or mental condition
which renders a Participant incapable of performing further work for his or her
Employer, as certified in writing by a Doctor of Medicine designated and
approved by the Committee.
Section 2.21. "Eligible Employee" shall mean any individual not included in
a unit of employees covered by a collective bargaining agreement who is an
Employee of the Company or a Participating Affiliate and who is receiving
remuneration for personal services rendered to the Company or Participating
Affiliate other than (1) solely as a director of the Company or a Participating
Affiliate, (2) as a consultant, (3) as an independent contractor, (4) as an
individual who is a "leased employee" within the meaning of Code section 414(n),
or (5) any other individual engaged by the Company or Participating Affiliate in
a relationship that the Company characterizes as other than an employment
relationship or who has waived his rights to coverage as an employee (regardless
of whether a determination is made by the Internal Revenue Service or other
governmental agency or court after the individual is engaged to perform such
services that the individual is an employee of the Company or Participating
Affiliate for the purposes of the Code or otherwise).
Section 2.22. "Employee" shall mean any individual employed by the Company
or an Affiliate.
Section 2.23. "Employee Savings Plan" shall mean the Public Service
Enterprise Group Incorporated Employee Savings Plan (formerly known as the
"Public Service Electric and Gas Company Employee Savings Plan").
Section 2.24. "Employer" shall mean the Company and any Participating
Affiliate.
Section 2.25. "Employer Contributions" shall mean the amounts contributed
to the Plan on behalf of Participants by an Employer in accordance with Article
V. Employer Contributions shall include "Employer's Matching Contributions"
credited to the Participant under the U.S. Energy Partners 401(k) Plan;
"Employer Matching Contributions" and "Additional Employer Contributions"
credited to the Participant under the Arden Engineering Constructors, Inc.
401(k) Plan; and "Employer Matching Contributions" and Employer "Nonelective
Contributions" credited to the Participant under the Fluidics, Inc. Retirement
and 401(k) Plan.
Section 2.26. "Equities Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(a).
Section 2.27. "Equities Index Fund" shall mean the Fund or Funds
established pursuant to Section 7.1(d).
Section 2.28. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, or as it may be amended from time to time.
Section 2.29. "ESOP Account" shall mean that separate portion of an Account
established pursuant to Section 9.1 which evidences the shares of Company Common
Stock transferred to the Plan for the Account of a Participant, pursuant to the
merger with this Plan with the Public Service Electric and Gas Company Tax
Reduction Act Employee Stock Ownership Plan (TRASOP) and/or the Public Service
Electric and Gas Company Payroll-Based Employee Stock Ownership Plan (PAYSOP),
including the net worth of the Trust Fund attributable thereto.
Section 2.30. "Fixed Income Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(b).
Section 2.31. "Fluidics Account" shall mean that separate portion of an
Account which evidences the assets transferred to the Plan for the Account of a
Participant, pursuant to the transfer of assets from the Fluidics, Inc.
Retirement and 401(k) Plan to this Plan, and which consists of the sum of the
following subaccounts of such Participant:
(a) Fluidics Deposit Subaccount shall mean the portion of a
Participant's Fluidics Account which evidences the value of
"Employee Pre-Tax Basic Contributions" credited to the
Participant under the Fluidics, Inc. Retirement and 401(k) Plan,
including the net worth of the Trust Fund attributable thereto.
(b) Fluidics Employer Contribution Subaccount shall mean the portion
of a Participant's Fluidics Account which evidences the value of
"Employer Matching Contributions" and "Employer Nonelective
Contributions" credited to the Participant under the Fluidics,
Inc. Retirement and 401(k) Plan, including the net worth of the
Trust Fund attributable thereto.
(c) Fluidics Rollover Contribution Subaccount shall mean the portion
of a Participant's Fluidics Account which evidences the value of
"Rollover Contributions" credited to the Participant under
Fluidics, Inc. Retirement and 401(k) Plan, including the net
worth of the Trust Fund attributable thereto."
Section 2.32. "Funds" shall mean the several investment Funds established
pursuant to Section 7.1. As used in the singular, "Fund" shall mean one of such
Funds.
Section 2.33. "General Manager" shall mean the Director - Performance and
Rewards of PSEG Services Corporation.
Section 2.34. "Government Obligations Fund" shall mean the Fund or Funds
established pursuant to Section 7.1(e).
Section 2.35. "Highly Compensated Employee" shall mean:
(a) For any Plan Year, any Employee who:
(1) during the Plan Year or the preceding Plan Year was at any
time a 5% owner; or
(2) for the preceding Plan Year, received Compensation from the
Company or an Affiliate in excess of $80,000 (as adjusted
for cost of living increases); and
(3) if the Company or an Affiliate elects, was in the top-paid
group of Employees for the preceding Plan Year.
(b) For purposes of this Section, an Employee shall be treated as a
5% owner for any Plan Year if at any time during such Plan Year
such Employee was a 5% owner (as defined in Code section
416(i)(1)) of the Company or an Affiliate.
(c) For purposes of this Section, an Employee shall be considered as
being in the top-paid group of Employees for any Plan Year if
such Employee is in the group consisting of the top 20% of
Employees when ranked on the basis of Compensation paid during
such Plan Year.
(d) For purposes of determining the top-paid group under paragraph
(c), the following Employees shall be excluded:
(1) Employees who have not completed six months of service;
(2) Employees who normally work less than 17 1/2 hours per week;
(3) Employees who normally work not more than six months during
any year;
(4) Employees who have not attained age 21; and
(5) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Code section 911(d)(2))
from the Company or an Affiliate which constitutes income
from sources within the United States (within the meaning of
Code section 861(a)(3)).
(e) For purposes of this Section, the term "Compensation" shall mean
Compensation within the meaning of Section 12.1; provided,
however, that for Plan Years beginning prior to January 1, 1998,
the term "Compensation" for purpose of determining Highly
Compensated Employees also included salary reduction
contributions to a cafeteria plan, a 401(k) plan and a simplified
employee pension.
Section 2.36. "Hour of Service" shall mean:
(a) Each hour for which an Employee is directly or indirectly paid
remuneration or entitled to such payment by an Employer for the
performance of duties;
(b) Each hour for which an Employee is paid or entitled to payment by
the Company on account of a period of time during which no duties
are performed (whether or not the employment relationship has
terminated) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military service, or
leave of absence; provided, however, that an Employee shall not
be credited with more than 501 Hours of Service under this
sentence for any continuous period during which he or she
performs no duties for the Company. Notwithstanding the preceding
provisions of this item (b) no credit will be given:
(1) for an Hour of Service for which the individual is directly
or indirectly paid, or entitled to payment, on account of a
period during which no duties are performed if such payment
is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation,
unemployment compensation, or disability insurance laws; or
(2) for an Hour of Service for which a payment is made, which
solely reimburses the individual for medical or medically
related expenses incurred.
(c) Each hour not otherwise credited under the Plan for which back
pay, irrespective of mitigation of damages, is either awarded or
agreed to by an Employer. No more than 501 Hours of Service shall
be credited under this item (c) for a period of time during which
the Employee did not or would not have performed duties.
(d) Hours of Service will be credited for employment with an
Affiliate.
(e) Hours of Service will be credited for employment as a "leased
employee" as that term is defined in Code section 414(n), if such
leased employee participates in the Plan as a result of
subsequent employment with the Company or an Affiliate.
(f) An Employee shall be credited with an Hour of Service for each
month during any period the Employee is absent from work with the
Company or an Affiliate for qualified military service in
accordance with Code section 414(u). Notwithstanding the
foregoing, if the Employee fails to report to work before
reemployment rights expire, the Employee shall not receive credit
for Hours of Service during such military leave.
(g) The number of Hours of Service to be credited an Employee shall
be on the basis of months of employment under which an Employee
is credited with 190 Hours of Service for each month for which
such Employee would be required to be credited with at least one
Hour of Service.
(h) The crediting of Hours of Service under this Plan will be applied
under the rules of paragraph (b) and (c) of the Department of
Labor Regulation 2530.200b-2, which, by this reference, will be
specifically incorporated in full with this Plan..
Section 2.37. "Investment Manager" shall mean an investment manager as
defined in ERISA section 3(38).
Section 2.38. "Lay Off" or Laid Off" shall mean a Participant's involuntary
separation from service with an Employer because of a reduction in work forces
at a time when there is no further work available with the Employer for which
the Participant is qualified.
Section 2.39. "Matured" in reference to Deposits and Employer Contributions
shall mean that the respective amount has been held in the Plan for at least
twenty-four months. The twenty-four month period will include periods during
which Deposits and Employer Contributions held in the Participant's U.S. Energy
Partners Account, Arden Engineering Constructors Account, and Fluidics Account,
were held in the U.S. Energy Partners 401(k) Plan, the Arden Engineering
Constructors, Inc. 401(k) Plan, and the Fluidics, Inc. Retirement and 401(k)
Plan, respectively.
Section 2.40. "Nondeferred" in reference to Deposits shall mean that such
Deposits are not deferred from current Federal income taxation under Code
section 401(k).
Section 2.41. "Participant" shall mean any person who has an interest in
the Trust Fund.
Section 2.42. "Participating Affiliate" shall mean any Affiliate of the
Company which: (a) adopts the Plan with the approval of the Board of Directors;
(b) authorizes the Board of Directors and the Employee Benefits Committee to act
for it in all matters arising under or with respect to the Plan; and (c)
complies with such other terms and conditions relating to the Plan as may be
imposed by the Board of Directors.
Section 2.43. "Personal Choice Retirement Account Fund" shall mean the Fund
or Funds established pursuant to Section 7.1(h).
Section 2.44. "Plan" shall mean this Public Service Enterprise Group
Incorporated Thrift and Tax-Deferred Savings Plan (formerly known as the "Public
Service Electric and Gas Company Thrift and Tax-Deferred Savings Plan"),
including all amendments hereto which may hereafter be made.
Section 2.45. "Plan Year" shall mean the calendar year.
Section 2.46. "Qualified Domestic Relations Order" or "QDRO" shall mean any
judgment, decree or order pursuant to a state domestic relations or community
property law which relates to the provision of child support or marital property
rights, which creates or recognizes the existence of an alternate payee's right
to (or assigns to an alternate payee the right to) receive all or part of a
Participant's Account, and which meets the requirements of (a) and (b) below, as
interpreted in accordance with Code section 414(p):
(a) such order specifies:
(1) the name and last known mailing address of the Participant
and each alternate payee;
(2) the amount or the percentage of the Participant's Account to
be paid to each alternate payee, or the manner in which such
amount or percentage is to be determined;
(3) the number of payments or the period to which the order
applies; and
(4) each plan to which such order applies; and
(b) such order does not require the Plan to:
(1) provide any type or form of benefit or option not otherwise
provided under the Plan;
(2) provide increased benefits; or
(3) pay to an alternate payee amounts required to be paid to
another alternate payee under a prior QDRO.
Section 2.47. "Record Keeper" shall mean the person(s) or entity(ies)
designated by the Committee to maintain the records of the Plan and Plan
Accounts and to perform such other functions as may be designated by the
Committee.
Section 2.48. "Required Beginning Date" shall mean with respect to
distributions to any Participant, no later than the April 1 of the calendar year
following the calendar year in which the Participant attains age 70 1/2;
provided, however, that with respect to distributions to any Participant who
attained age 70 before July 1, 1987 and who was not a "5% owner" as defined in
Section 13.1(f)(3), the Required Beginning Date for such Participant shall be
April 1 of the calendar year following the calendar year in which (1) the
Participant attains age 70 1/2 or (2) the Participant retires, whichever is
later.
Section 2.49. "Retirement" shall mean the termination of employment by a
Participant other than by reason of his or her death:
(a) under circumstances entitling the Participant to an immediately
payable periodic retirement benefit under the Pension Plan of
Public Service Enterprise Group Incorporated, or the Cash Balance
Plans , or
(b) at or after age 65.
Section 2.50. "Retirement Choice Program" shall mean the Public Service
Enterprise Group Incorporated Retirement Choice Program (formerly known as the
"Public Service Electric and Gas Company Retirement Choice Program") or the
Public Service Enterprise Group Incorporated Retirement Choice Program for
Represented Employees (formerly known as the "Public Service Electric and Gas
Company Retirement Choice Program for Represented Employees").
Section 2.51. "Rollover Contributions" shall mean Eligible Employee
contributions transferred to the Plan, in accordance with Section 4.14, from a
trust under another corporate plan, each qualified under Code sections 501(a)
and 401(a), respectively. Rollover Contributions shall also include "Rollover
Contributions" credited to the Participant under the Arden Engineering
Constructors, Inc. 401(k) Plan or the Fluidics, Inc. Retirement and 401(k) Plan.
Section 2.52. "Supplemental Deposits" shall mean the amount, if any, of
Compensation contributed to the Plan through payroll deduction by or on behalf
of a Participant which is greater than the maximum permitted Basic Deposit.
Supplemental Deposits shall include "Deferred Compensation" credited to the
Participant under the U.S. Energy Partners 401(k) Plan; "Elective Deferrals"
credited to the Participant under the Arden Engineering Constructors, Inc.
401(k) Plan, and "Employee Pre-Tax Basic Contributions" credited to the
Participant under the Fluidics, Inc. Retirement and 401(k) Plan.
Section 2.53. "Thrift Account" shall mean that separate portion of an
Account established pursuant to Section 8.1 and which consists of the sum of the
following subaccounts of such Participant:
(a) Basic Deposit Subaccount shall mean that portion of a
Participant's Thrift Account which evidences the value of Basic
Deposits by or on behalf of a Participant under the Plan,
including the net worth of the Trust Fund attributable thereto.
(b) Supplemental Deposit Subaccount shall mean that portion of a
Participant's Thrift Account which evidences the value of
Supplemental Deposits and Additional Lump Sum Deposits under the
Plan, assets transferred by the Participant from his or her ESOP
Account and Rollover Contributions to the Plan by or on behalf of
a Participant, including the net worth of the Trust Fund
attributable thereto, and his or her U.S. Energy Partners Deposit
Subaccount, Arden Engineering Constructors Deposit Subaccount and
Rollover Subaccount, and Fluidics Deposit Subaccount and Rollover
Subaccount.
(c) Employer Contribution Subaccount shall mean that portion of a
Participant's Thrift Account which evidences the value of
Employer Contributions which have been credited to a
Participant's Account under Section 5.1 of the Plan (less any
forfeitures), including the net worth of the Trust Fund
attributable thereto, and his or her U.S. Energy Partners
Employer Contribution Subaccount, Arden Engineering Constructors
Employer Contribution Subaccount, and Fluidics Employer
Contribution Subaccount.
(d) Retirement Choice Program Allocation Subaccount shall mean that
portion of a Participant's Thrift Account which evidences the
value of certain service and age points allocated to this Plan
pursuant to the Cash Balance Plan and the Retirement Choice Plan
and in accordance with Section 5.6 herein, including the net
worth of the Trust Fund attributable thereto.
Section 2.54. "Trust Agreement" shall mean the agreement between the
Company and the Trustee which provides for the management of the Trust Fund and
the investment of Deposits, Employer Contributions and Rollover Contributions to
the Plan and investment of the assets of ESOP Accounts, U.S. Energy Partners
Accounts, Arden Engineering Constructors Accounts, and Fluidics Accounts.
Section 2.55. "Trust Fund" shall mean the aggregate of Additional Lump Sum
Deposits, Basic and Supplemental Deposits made by or on behalf of Participants,
Rollover Contributions and Employer Contributions, together with ESOP Accounts,
U.S. Energy Partners Accounts, Arden Engineering Constructors Accounts, and
Fluidics Accounts, increased by any profits or income thereon, and decreased by
any losses thereon and by any payments made therefrom.
Section 2.56. "Trustee" shall mean any individual(s) or corporation(s) by
whom any assets of the Plan are held under the Trust Agreement.
Section 2.57. "U.S. Energy Partners Account" shall mean that separate
portion of an Account which evidences the assets transferred to the Plan for the
Account of a Participant, pursuant to the merger of this Plan with the U.S.
Energy Partners 401(k) Plan, and which consists of the sum of the following
subaccounts of such Participant:
(a) U.S. Energy Partners Deposit Subaccount shall mean the portion of
a Participant's U.S. Energy Partners Account which evidences the
value of "Deferred Compensation" credited to the Participant
under the U.S. Energy Partners 401(k) Plan, including the net
worth of the Trust Fund attributable thereto.
(b) U.S. Energy Partners Employer Contribution Subaccount shall mean
the portion of a Participant's U.S. Energy Partners Account which
evidences the value of "Employer's Matching Contributions"
credited to the Participant under the U.S. Energy Partners 401(k)
Plan, including the net worth of the Trust Fund attributable
thereto."
Section 2.58. "Year of Service" shall mean the twelve consecutive month
period beginning on the first day of the month in which an Employee commences
employment with the Company or an Affiliate and each succeeding twelve
consecutive month period beginning on the yearly anniversary of such day, during
which the Employee completes not less than 1,000 Hours of Service; and the
determination of whether an Employee shall have completed not less than 1,000
Hours of Service during any such period shall be made by crediting such Employee
with 190 Hours of Service for each calendar month during such period in which
the Employee is entitled to be credited with at least one Hour of Service for
such month. For the purposes of this Section 2.61, there shall be included
service with the Company or an Affiliate as an Employee. In addition, any
Employee with a U.S. Energy Partners Account, Arden Engineering Constructors
Account or Fluidics Account shall, for purposes of determining Year of Service
hereunder, be credited with service with U.S. Energy Partners, Arden Engineering
Constructors, Inc., Fluidics, Inc., as applicable, in accordance with this
Section 2.61.
Furthermore, for purposes of determining Year of Service hereunder, the
following Employees will be deemed to have commenced employment on the dates set
forth below:
(a) Any Employee who as of April 30, 1999 was an employee of Rich
Fire Protection Company, Inc. and who, effective as of May 1,
1999, became an Employee of the Company or an Affiliate, shall
for purposes of this Section 2.61 only, be deemed to have
commenced employment as of May 1, 1999.
(b) Any Employee who as of April 30 1999 was an employee of Liber
Rich & Sons, Inc. and who, effective as of May 1, 1999, became an
Employee of the Company or an Affiliate, shall for purposes of
this Section 2.61 only, be deemed to have commenced employment as
of May 1, 1999.
(c) Any Employee who as of May 20, 1999 was an employee of Struble
Air Conditioning, Inc. and who, effective as of May 21, 1999,
became an Employee of the Company or an Affiliate, shall for
purposes of this Section 2.61 only, be deemed to have commenced
employment as of May 21, 1999.
(d) Any Employee who as of June 30, 1999 was an employee of The Frank
A. McBride Company, Inc. (or one its affiliated entities) and
who, effective as of July 1, 1999, became an Employee of the
Company or an Affiliate, shall for purposes of this Section 2.61
only, be deemed to have commenced employment as of July 1, 1999.
ARTICLE III
PARTICIPATION
Section 3.1. Participation. Each Eligible Employee may become a Participant
by applying with the Record Keeper to establish a Thrift Account or accept a
Rollover Contribution on such Eligible Employee's behalf, when an ESOP Account,
or a U.S. Energy Partners Account was established on his or her behalf, or when
the Eligible Employee elects to make transfers of age and service credits
pursuant to the terms of the Cash Balance Plan and the Retirement Choice
Program. An Eligible Employee who, at the time he/she becomes employed by the
Company or a Participating Affiliate is a participant in the Employee Savings
Plan shall be automatically enrolled in the Plan and account balances held in
that plan shall be transferred to this Plan.
By contacting the Record Keeper and using its automatic voice response
system, the Eligible Employee can (a) arrange for the payment of an Additional
Lump Sum Deposit to the Plan, (b) authorize his or her Employer to withhold an
amount in a specified percentage of his or her Compensation, (c) authorize his
or her Employer to accept a Rollover Contribution from another qualified
corporate plan in accordance with Section 4.12, (d) authorize establishing an
Account to accept transfers of age and service credits pursuant to the terms of
the Cash Balance Plan and the Retirement Choice Program and (e) authorize the
Record Keeper and/or Employer to pay any such amount to the Trustee for
investment in a Thrift Account under the Plan in accordance with the Eligible
Employee's instructions.
An Eligible Employee who has an Arden Engineering Constructors Account or
Fluidics Account established on his or her behalf shall become a Participant
upon the establishment of such Arden Engineering Constructors Account or
Fluidics Account, or if earlier, under any of the methods set forth above in
this Section 3.1, but in no event shall such Eligible Employee become a
Participant prior to January 1, 2000.
Notwithstanding the foregoing, the following Eligible Employees may become
Participants under any of the methods set forth above in this Section 3.1, but
in no event shall any such Eligible Employee become a Participant prior to
January 1, 2000:
(a) Any Eligible Employee who as of April 30, 1999 was an employee of
Rich Fire Protection Company, Inc. and who, effective as of May
1, 1999, became an Eligible Employee of the Company or an
Affiliate;
(b) Any Eligible Employee who as of April 30 1999 was an employee of
Liber Rich & Sons, Inc. and who, effective as of May 1, 1999,
became an Eligible Employee of the Company or an Affiliate;
(c) Any Eligible Employee who as of May 20, 1999 was an employee of
Struble Air Conditioning, Inc. and who, effective as of May 21,
1999, became an Eligible Employee of the Company or an Affiliate;
(d) Any Eligible Employee who as of June 30, 1999 was an employee of
The Frank A. McBride Company, Inc. (or one its affiliated
entities) and who, effective as of July 1, 1999, became an
Eligible Employee of the Company or an Affiliate;
Participation in the Plan is entirely voluntary.
Section 3.2. Effective Date of Participation. Subject to the provisions of
Section 3.1 above, the effective date of participation shall be the earliest of
the following: (a) participation in the Plan shall be effective for an Eligible
Employee and payroll deductions shall commence, as soon as practicable after the
Eligible Employee has applied to the Record Keeper for participation; (b)
participation in the Plan for an Eligible Employee whose account is transferred
from the Savings Plan to this Plan shall be effective as of the date such
individual became an Eligible Employee under the terms of this Plan ; (c)
participation in the Plan for an Eligible Employee making a Rollover
Contribution or a transfer of age and service credits pursuant to the terms of
the Cash Balance Plan and the Retirement Choice Program shall be effective as
soon as practicable after such Eligible Employee's Rollover Contribution or
transferred age and service credits are accepted for transfer; (d) participation
of an Eligible Employee in the Plan with respect to the ESOP Account became
effective upon receipt by the Plan of the assets credited to the account of such
Eligible Employee in 'Public Service Electric and Gas Company's TRASOP and/or
PAYSOP pursuant to a merger of such plan or plans with this Plan; (e)
participation of an Eligible Employee in the Plan with respect to the U.S.
Energy Partners Account became effective December 16, 1996.; (f) participation
of an Eligible Employee in the Plan with an Arden Engineering Constructors
Account or Fluidics Account shall be effective as of the date such Arden
Engineering Constructors Account or Fluidics Account is established, or if
earlier, the date as determined under (a) through (e) herein.
ARTICLE IV
DEPOSITS
Section 4.1. Basic Deposits. An Eligible Employee may elect:
(a) to make Basic Nondeferred Deposits to the Plan in an amount equal
to any integral multiple of 1% of his or her Compensation up to a
total of 8% each pay period; or
(b) to have Basic Deferred Deposits made to the Plan by an Employer
on his or her behalf in an amount equal to any integral multiple
of 1% of his or her Compensation up to a total of 8% each pay
period; or
(c) to make, or have made by an Employer on his or her behalf, any
combination of Deposits under (a) or (b) above, totaling up to 8%
of his or her Compensation each pay period;
subject to the limitations of Sections 4.5 and 5.4. Basic Deposits made by or on
behalf of a Participant shall be paid over by the Employer to the Trustee and
deposited in the Trust Fund as soon as practicable after deduction and, in any
event, within15 days after the end of the month in which such deduction is made.
Such Basic Deposits shall be credited as soon as practicable to such
Participant's Basic Deposit Subaccount in the Plan.
Section 4.2. Supplemental Deposits. Each Participant who is electing the
maximum permitted Basic Deposit to the Plan may also elect:
(a) to make Supplemental Nondeferred Deposits to the Plan in an
amount equal to any integral multiple of 1% of his or her
Compensation to a total of 17% of his or her Compensation each
pay period; or
(b) to have Supplemental Deferred Deposits made by an Employer on his
or her behalf in an amount equal to any integral multiple of 1%
of his or her Compensation up to a total of 17% of his or her
Compensation each pay period; or
(c) to make, or have made by an Employer on his or her behalf, any
combination of the Deposits specified in (a) or (b) above,
totaling up to 17% of his or her Compensation each pay period;
subject to limitations of Sections 4.5 and 5.4. Supplemental
Deposits made by or on behalf of a Participant shall be paid over
by an Employer to the Trustee and deposited in the Trust Fund as
soon as practicable after deduction and, in any event, within 15
days after the end of the month in which such deduction is made.
Such Supplemental Deposits shall be credited as soon as
practicable to such Participant's Supplemental Deposit Subaccount
in the Plan.
Section 4.3. Additional Lump Sum Deposits. Within any Plan Year, each
Participant may make one or more Additional Lump Sum Deposits on a Nondeferred
basis in the minimum amount of $250.00 and in such total amounts which, when
aggregated with such Participant's Basic Deposits and Supplemental Deposits, do
not exceed 25% of his or her Compensation for that Plan Year and subject to the
limitations of Sections 4.5, 4.12 and 5.4. Additional Lump Sum Deposits made by
a Participant shall be paid over by the Record Keeper to the Trustee and
deposited in the Trust Fund as soon as practicable, but no later than15 days
after the end of the month in which such Additional Lump Sum Deposit is
received. Such Additional Lump Sum Deposits shall be credited as soon as
practicable to such Participant's Supplemental Deposit Subaccount in the Plan.
Section 4.4. Method of Deposits. Basic Deposits and Supplemental Deposits
by or on behalf of Active Participants shall be made by means of payroll
deduction. For convenience of administration, if the percentage of Compensation
elected to be contributed to the Plan by an Active Participant is not equal to a
whole dollar amount, such amount will be increased to the next whole dollar
amount in establishing the deduction to be made from such Active Participant's
pay. In addition, if an Active Participant's Compensation is changed, the
resulting change in deduction shall be made as soon as practicable after such
change in Compensation.
Additional Lump Sum Deposits shall be paid directly by Participants to the
Record Keeper who shall forward them to the Trustee for investment in the
Participant's Thrift Account in accordance with his or her then current
investment direction.
Section 4.5. Limit on Deferred Deposits. In no event may Deferred Deposits
for any Participant attributable to any taxable year of such Participant
(presumably the calendar year) exceed the amount permitted by Code section
402(g). Where a Participant elects under Section 4.1 to have Deferred Deposits
made by an Employer to the Plan which would otherwise exceed the limit of this
Section 4.5, such excessive Deferred Deposits shall be deemed to be Nondeferred
Deposits to the Plan ("Deemed Nondeferred Deposits") rather than Deferred
Deposits to the Plan; provided, however, that such Deemed Nondeferred Deposits
shall be subject to the limits and rules of Sections 4.1 and 4.2; and provided
further, that such Deemed Nondeferred Deposits shall be deemed to be Basic
Nondeferred Deposits (and, therefore, matched by Employer Contributions as set
forth in Article V) to the extent possible under the limits of Sections 2.6 and
4.1, taking into account other Basic Deferred and Nondeferred Deposits of the
Participant.
Section 4.6. Distribution of Excess Deferral Amounts.
(a) Notwithstanding any other provision of the Plan to the contrary,
an Employer shall distribute any Excess Deferral Amount (as
defined below), adjusted according to Section 4.6(d), to
Participants who claim such allocable Excess Deferral Amounts for
a calendar year. Such distribution shall be made no later than
the April 15th next following the end of the calendar year for
which such claim is made.
(b) For purposes of this Section 4.6, "Excess Deferral Amount" shall
mean the amount of Deferred Deposits for a calendar year that the
Participant allocates to this Plan and claims pursuant to the
election procedure set forth in Section 4.6(c) below.
(c) A Participant's election to claim an Excess Deferral Amount for a
calendar year shall be in writing, shall be submitted to the
Committee no later than the March 1st next following the end of
such calendar year, shall specify the Excess Deferral Amount and
shall state that if such amount is not distributed, such Excess
Deferral Amount, when added to amounts deferred under other plans
or arrangements described in Code sections 401(k), 408(k) or
403(b), exceeds the limit imposed on the Participant by Code
section 402(g) for the taxable year (calendar year) in which the
deferral occurred.
(d) The amount distributed to a Participant pursuant to this Section
4.6 with respect to a calendar year shall be increased or
decreased, as applicable, by investment income or losses
attributable thereto. If a loss is allocable to the Excess
Deferral Amount, the amount distributed shall not be less than
the lesser of (1) the Participant's Deferred Deposit Subaccount
or (2) the Participant's Deferred Deposits for the Plan Year
during which the Excess Deferral Amount occurred.
Section 4.7. Code Section 401(k) Limits on Deferred Deposits.
(a) Effective January 1, 1997, Deferred Deposits for any Plan Year
shall not result in the actual deferral percentage of the group
of Highly Compensated Employees eligible to participate in the
Plan for such Plan Year exceeding the actual deferral percentage
of the group of all other Eligible Employees for the current Plan
Year by more than the greater of: (1) one and one-quarter times;
or (2) the lesser of (A) two times or (B) two percentage points.
However, notwithstanding the above, the Committee may use the actual
deferral percentage for the current Plan Year for the group of
Eligible Employees who are not Highly Compensated Employees by making
an election at a time, and in a manner, prescribed by the Secretary of
the Treasury. Such election may be revoked for a following Plan Year
only in accordance with rules prescribed by the Secretary of the
Treasury. The actual deferral percentage of each group of Eligible
Employees shall be the average of the ratios (calculated separately
for each Eligible Employee in each group) of (i) the Deferred Deposits
made on behalf of each Eligible Employee for the relevant Plan Year to
(ii) such Eligible Employee's Compensation for the relevant Plan Year
(or in the discretion of the Committee, for the portion of the Plan
Year during which the Employee was an Eligible Employee, provided this
alternative is applied uniformly to all Employees for the Plan Year on
a reasonably consistent basis from Plan Year to Plan Year).
(b) "Compensation" for purposes of this Section 4.7 only shall mean
an Eligible Employee's compensation as determined in any manner
that satisfies the requirements of Code section 414(s).
(c) The Committee shall, consistent with regulations under the Code,
establish nondiscriminatory rules to meet the requirements of
this Section 4.7; provided, however, that effective January 1,
1997, any distribution to Highly Compensated Employees of
Deferred Deposits to meet the requirements of this Section 4.7
shall be made on the basis of the dollar amount of Deferred
Deposits on behalf of each such Highly Compensated Employee. Any
distribution of Deferred Deposits made in accordance with this
Section 4.7 shall occur no later than the last day of the Plan
Year following the Plan Year for which such Deferred Deposit was
made.
(d) The amount of Deferred Deposits which must be distributed to any
Highly Compensated Employee under this section for a Plan Year
shall be reduced by "Excess Deferral Amounts" previously
distributed to the Highly Compensated Employee for the taxable
year of such Highly Compensated Employee ending during the Plan
Year. Furthermore, the amount of any Deferred Deposit distributed
under this section must include the income attributable thereto,
but in no event shall the distribution include income
attributable to any period after the end of the Plan Year for
which the Deferred Deposit was made.
(e) Should the Committee determine during the course of any Plan Year
that the nondiscrimination test of Code section 401(k) might not
be met for such Plan Year, the Committee may reduce, at any time,
the percentage of Deferred Deposits that a Highly Compensated
Employee may elect to have contributed to the Plan in accordance
with this Article IV to a percentage that the Committee
determines appropriate to ensure that the test shall be met for
the Plan Year.
(f) Notwithstanding any provision above, in running the actual
deferral percentage test under this Section 4.7, the Committee
may utilize any of the testing alternatives permitted under Code
section 401(k) and Treasury Regulation section 1.401(k)-1(b).
(g) Effective for Plan Years beginning on or after January 1, 1997,
the family aggregation rules of Code section 414(q)(6) shall no
longer apply for all purposes under this Plan.
(h) Special Testing Provisions:
0 (1) For purposes of this Section 4.7, the actual deferral
percentage of a Highly Compensated Employee who is eligible
for Deferred Deposits or similar employer contributions
under two or more plans described in Code section 401(k)
that are maintained by the Company or an Affiliate shall be
determined as if all such contributions were made under a
single Plan, except as otherwise provided in regulations
under Code section 401(k).
1 (2) For purposes of this Section 4.7, actual deferral
percentages shall be determined by considering all
applicable contributions made under any other plans that are
aggregated with this Plan for purposes of Code sections
401(a)(4) and 410(b). If other plans are permissively
aggregated with this Plan for purposes of Code section
401(k), the aggregated plans must satisfy Code sections
401(a)(4) and 410(b) as if they constituted a single plan.
Section 4.8. Unmatched Employer Contributions. If, as the result of the
operation of Sections 4.5, 4.6 and/or 4.7, and before the operation of Section
4.9, the combined Deposits of a Participant are adjusted in such a way that
Employer Contributions previously made on behalf of a Participant for a Plan
Year are no longer matched by such Participant's Basic Deposits, then the
matching Employer Contributions allocated to such Participant's Account for such
Plan Year shall be reduced, under nondiscriminatory rules established by the
Committee, to the extent necessary to equal the percentage of Employer
Contributions (as set forth in Article V) with respect to the Participant's
remaining Basic Deposits for such Plan Year. The amount, if any, of previously
allocated Employer Contributions in excess of the percentage of Employer
Contributions (as set forth in Article V) of the Participant's remaining Basic
Deposits shall be forfeited and applied to reduce future Employer Contributions
to the Plan.
Section 4.9. Code Section 401(m) Limits on Nondeferred Deposits and
Employer Contributions.
(a) Effective January 1, 1997, Nondeferred Deposits together with
Employer Contributions for any Plan Year shall not result in the
actual contribution percentage of the group of Highly Compensated
Employees eligible to participate in the Plan for such Plan Year
exceeding the actual contribution percentage of the group of all
other Eligible Employees for the current Plan Year by more than
the greater of:
(1) one and one-quarter times; or
(2) the lesser of (A) two times or (B) two percentage points.
However, notwithstanding the above, the Committee may use the
actual contribution percentage for the current Plan Year for
the group of Eligible Employees who are not Highly Compensated
Employees by making an election at a time, and in a manner,
prescribed by the Secretary of the Treasury. Such election may be
revoked for a following Plan Year only in accordance with rules
prescribed by the Secretary of the Treasury.
(b) The actual contribution percentage of each group of Eligible
Employees shall be the average of the ratios (calculated
separately for each Eligible Employee in each group) of (i) the
Nondeferred Deposits and Employer Contributions made on behalf of
each Eligible Employee for the relevant Plan Year to (ii) such
Eligible Employee's Compensation for the relevant Plan Year (or
in the discretion of the Committee, for the portion of the Plan
Year during which the Employee was an Eligible Employee, provided
this alternative is applied uniformly to all Employees for the
Plan Year on a reasonably consistent basis from Plan Year to Plan
Year).
(c) "Compensation" for purposes of this Section 4.9 only shall mean
an Eligible Employee's compensation as determined in any manner
that satisfies the requirements of Code section 414(s).
(d) The Committee shall, consistent with regulations under the Code,
establish nondiscriminatory rules to meet the requirements of
this Section 4.9; provided, however, that effective January 1,
1997, any distribution to Highly Compensated Employees of
Nondeferred Deposits and/or Employer Contributions, or any
allowable forfeiture of Employer Contributions, to meet the
requirements of this Section 4.9 shall be made on the basis of
the dollar amount of Nondeferred Deposits by, together with
Employer Contributions on behalf of, each such Highly Compensated
Employee. Any distribution made in accordance with this Section
4.9 shall occur no later than the last day of the Plan Year
following the Plan Year for which such Deferred Deposit was made.
(e) The amount of excess Nondeferred Deposits and Employer
Contributions for a Plan Year shall be determined after the
excess Nondeferred Deposits and Employer Contributions that are
treated as employee contributions due to recharacterization under
Treasury Regulation section 1.401(m)-1(e)(2)(iii). Any Employer
Contribution that is reduced in accordance with this Section 4.9
shall be refunded to the Highly Compensated Employee to the
extent the Highly Compensated Employee is vested in the amount
under Article X, and shall otherwise be treated as a forfeiture
and used to reduce future Employer Contributions. Furthermore,
the income attributable to any Nondeferred Contribution or
Employer Contribution that is distributed to the Highly
Compensated Employee shall include the income attributable
thereto, but in no event shall the distribution include income
attributable to any period after the end of the Plan Year for
which such Nondeferred Contribution or Employer Contribution was
made.
(f) Notwithstanding any provision above, in running the actual
contribution percentage test under this Section 4.9, the
Committee may utilize any of the testing alternatives permitted
under Code section 401(m) and Treasury Regulation section
1.401(m)-1(b)(5).
(g) Effective for Plan Years beginning on or after January 1, 1997,
the family aggregation rules of Code section 414(q)(6) shall no
longer apply for all purposes under this Plan.
(h) Special Testing Provisions:
(1) For purposes of this Section 4.9, the actual contribution
percentage of a Highly Compensated Employee who is eligible
to participate in two or more plans providing for
Nondeferred Contributions and Employer Contributions, or
such other similar contributions within the meaning of Code
section 401(m), that are maintained by the Company or an
Affiliate shall be determined as if all these contributions
are made under a single plan, except as otherwise provided
in regulations under Code section 401(m).
(2) For purposes of this Section 4.9, actual contribution
percentages shall be determined by considering all
applicable contributions made under any other plans that are
aggregated with this Plan for purposes of Code sections
401(a)(4) and 410(b). If other plans are permissively
aggregated with this Plan for purposes of Code section
401(m), the aggregated plans must satisfy Code sections
401(a)(4) and 410(b) as if they constituted a single plan.
(3) If the Plan satisfies the actual deferral percentage test
under Section 4.7(a)(2) and satisfies the actual
contribution percentage test under subsection 4.9(a)(2), the
Plan shall also be subject to the aggregate limit test
described in Treasury regulation section 1.401(m)-2(b). If
the Plan fails this aggregate limit test, the Plan
Administrator shall reduce contributions made on behalf of
Highly Compensated Employees in any the manner permitted
under Treasury Regulation section 1.401(m)-2.
Section 4.10. Changing Deposit Percentages The percentage of Compensation
deposited in the Plan by or on behalf of an Active Participant shall continue in
effect until such Active Participant shall change the rate of such Deposits. An
Active Participant may change the rate of Deposits to a higher or lower
percentage of Compensation within the limitations of Sections 4.1, 4.2 and 4.5
by arranging for such change with the Record Keeper or as otherwise prescribed
by the Committee. Any such change shall become effective as soon as practicable
after receipt of the notice of change by the Record Keeper.
Section 4.11. Suspension of Deposits.
(a) An Active Participant may suspend all of the Deposits to the Plan
made by such Participant or on his or her behalf at any time by
arranging for such suspension with the Record Keeper or as
otherwise prescribed by the Committee. Such suspension shall be
effective as soon as practicable after receipt of the notice of
suspension by the Record Keeper, and shall continue until such
Participant elects to have Deposits resumed by arranging therefor
with the Record Keeper. Payroll deductions under the Plan shall
begin again as soon as practicable after such notice is received
by the Record Keeper.
(b) If, after other required and authorized deductions from an Active
Participant's pay, there is not sufficient money available in any
pay period to make the entire authorized payroll deduction for
such Participant's Nondeferred Deposits, no payroll deduction
shall be made therefor for that pay period.
(c) In case of any such total suspension of Deposits, pursuant to
Section 4.11(a), Employer Contributions on behalf of such
Participant shall be automatically suspended for a like period.
Section 4.12. Limit on Additional Lump Sum Deposits. No further Additional
Lump Sum Deposits may be made by any Participant in any Plan Year in which the
aggregate amount of all of such Participant's Deposits under the Plan exceeds
25% of such Participant's Compensation for that Plan Year. Any Additional Lump
Sum Deposits inadvertently received in excess of this limitation shall be
refunded to the Participant as soon as practicable following determination of
such excess.
Section 4.13. Elections. All elections under this Article IV shall be made
at the time, in the manner and subject to the conditions as are specified by the
Committee. Elections of Deferred Deposits shall in all cases be irrevocably made
prior to the beginning of the payroll period for which such elections shall
apply. In any year in which the Committee deems it necessary to do so to meet
the requirements of Section 4.5, 4.7, 4.9 or 5.4 or the Code and the regulations
thereunder, the Committee may reduce, for that Plan Year, the permissible amount
of Deposits by or on behalf of any or all Active Participants.
Section 4.14. Rollover Contributions.
(a) Subject to such rules as may be established by the Committee, an
Eligible Employee may transfer Rollover Contributions to the
Plan, to be deposited in his or her Supplemental Deposit Account.
The Eligible Employee must certify that such amount to be
transferred as a Rollover Contribution qualifies for such
transfer under the Code and regulations thereunder and must
submit such information or evidence, satisfactory to the
Committee, that it may require in order to approve such transfer.
In addition, Rollover Contributions shall then be subject to all
terms and conditions of this Plan and the Trust Agreement and
shall be treated in the same manner as Supplemental Deposits,
unless the context of the Plan or Trust requires otherwise.
(b) In the event that the Plan accepts a Rollover Contribution from
an Eligible Employee that includes an amount that the Committee
later determines is an "invalid rollover contribution" (as
defined below), the amount of the invalid rollover contribution,
plus any earnings attributable thereto, shall be distributed to
the Eligible Employee as soon as practicable after such
determination.
(c) An "invalid rollover contribution" is an amount that is not an
eligible Rollover Contribution, as described in subsection (a)
above, or that does not satisfy the other requirements of Code
section 401(a)(31), Code section 402(c), or Code section
408(d)(3) for treatment as a rollover or a rollover contribution.
Section 4.15. Transfers from the Employee Savings Plan. Any Eligible
Employee who, at the time he/she becomes employed by the Company or a
Participating Affiliate, is a participant in the Employee Savings Plan, shall
automatically be enrolled in the Plan and all balances in the Employee Savings
Plan shall be transferred to the Plan and all contribution and investment
elections in effect for the Employee Savings Plan shall remain in effect,
subject to change pursuant to the operation of Sections 4.10, 4.11 and 6.2
hereof.
Section 4.16. Qualified Military Service. Notwithstanding any provision in
this Plan to the contrary, effective December 12, 1994, a Participant who is or
was engaged in "qualified military service," as that term is defined in Code
section 414(u), shall be permitted to make additional Basic Deposits,
Supplemental Deposits, and Additional Lump Sum Deposits in accordance with this
Article IV and in an amount as determined under Code section 414(u). Under no
circumstances shall the Deposits provided for in this Section 4.16 exceed the
amount the Participant would have been permitted to contribute had such
Participant remained continuously employed by the Employer throughout the period
of qualified military service.
ARTICLE V
EMPLOYER CONTRIBUTIONS
Section 5.1. Amount and Payment of Employer Contributions. Each Employer
shall contribute to the Plan on behalf of Participants who are Eligible
Employees, who have completed a Year of Service, and who are making or having
their Employer make on their behalf Basic Deposits to the Plan an amount equal
to 50% of the aggregate of such Basic Deposits, except to the extent that such
Basic Deposits are reduced or distributed as provided in Sections 4.5 through
4.9, and except as provided in this Article V and in Section 11.4. Employer
Contributions with respect to a Plan Year shall be paid to the Trustee not later
than the due date (including extensions of time) for filing the Company's
consolidated Federal income tax return for such year. All Employer Contributions
may be made without regard to current or accumulated earnings of the Employer.
Notwithstanding the foregoing, the Plan shall be designated a profit sharing
plan for purposes of Code sections 401(a), 402, 412 and 417.
Section 5.2. Employer Contributions in Company Common Stock. Employer
Contributions with respect to Basic Deposits in excess of 6% of Compensation
shall be made in shares of Company Common Stock. Any such shares credited to a
Participant's Account shall be acquired in the same manner as shares acquired
for the Company Common Stock Fund established pursuant to Section 7.2, be
invested in that Fund and shall not be available for transfer to any other Fund
or withdrawal from the Plan prior to the Participant's termination of employment
by the Company or any Affiliate. Notwithstanding the foregoing, any portion of a
Participant's Account invested in the Company Common Stock Fund that is
apportioned for an alternate payee under a QDRO in accordance with Article XXII
may be transferred out of such Fund or withdrawn from the Plan at any time.
Section 5.3. Reduction of Employer Contributions by Forfeitures. The amount
of an Employer's Contribution shall be reduced by the amount of the reduction of
an unmatched Employer Contribution allocable to a Highly Compensated Employee as
provided in Sections 4.7, 4.8 and 4.9, by the amount of any forfeiture as a
result of termination of the employment of an Active Participant as provided in
Section 11.2, or as a result of the Employer's inability to locate a Participant
or beneficiary to whom a benefit hereunder is due as provided in Section 11.14.
Section 5.4. Maximum Annual Additions. The maximum Annual Addition, as
defined in Section 12.1, for any Plan Year to any Participant's Account may not
exceed the amount provided for by Code section 415(c). The rules governing the
application of this Section 5.4 and other limitations imposed by Code section
415 are more fully set forth in Article XII.
Section 5.5. Return of Employer Contributions.
(a) Notwithstanding any provision of the Plan to the contrary, any
Employer Contribution made to the Plan by reason of mistake of
fact may be returned to the Employer making such Employer
Contribution, provided the return of such Employer Contribution
is made within one year from the date the mistaken payment was
made and any amount so returned shall be disposed of as the
Committee shall direct.
(b) If the Internal Revenue Service determines that any contribution
by an Employer to the Plan is not deductible under Code section
404, such Employer shall have the option, which it may exercise
within one year after the date of the disallowance of such
deduction, to have such contribution returned to the Employer and
any amount so returned shall be disposed of as the Committee
shall direct.
Section 5.6. Allocation from Cash Balance Plan. Pursuant to the Cash
Balance Plan and the Retirement Choice Program, Participants who so elect may
have certain service and age points otherwise allocate to them under the Cash
Balance Plan made as an Employer Contribution to their Accounts under this Plan.
All amounts so elected shall be accepted by the Trustee and invested in
accordance with Section 6.1. No amounts attributable to Employer Contributions
resulting from Participant elections made pursuant to the Cash Balance Plan and
the Retirement Choice Program shall be available for withdrawal from the Plan
until the Participant's termination of employment by the Company or any
Affiliate.
Section 5.7. Qualified Military Service. Notwithstanding any provision in
this Plan to the contrary, effective December 12, 1994, the Employer shall
contribute to the Plan on behalf of a Participant who is or was engaged in
"qualified military service," as that term is defined in Code section 414(u),
and who makes or is having made additional Basic Deposits to the Plan under
Section 4.16 on his or her behalf, the amount of Employer Contributions as
required under this Article V and Code section 414(u) with respect to such
additional Basic Deposits. In addition, a Participant who is or was engaged in
qualified military service shall be entitled to male the election provided for
in Section 5.6 of this Plan, if applicable, for the period set forth in Code
section 414(u).
ARTICLE VI
THRIFT ACCOUNT INVESTMENTS
Section 6.1. Investment of Deposits, Rollover Contributions and Employer
Contributions. Deposits, Rollover Contributions and Employer Contributions to
the Plan shall be invested by the Trustee under the Trust Agreement in the Funds
established pursuant to Section 7.1. Upon enrolling in the Plan, each
Participant shall specify, in such form as shall be prescribed by the Committee,
the percentage (which shall be an integral multiple of 1% - including 0% but not
exceeding 100% in the aggregate) of Deposits to his or her Thrift Account which
shall be invested in each of such Funds. Subject to Section 5.2 with respect to
Employer Contributions related to Basic Deposits in excess of 6% of
Compensation, Employer Contributions shall be invested by the Trustee for the
Account of an Active Participant in the same Funds and in the same percentages
as directed by such Participant with respect to the Basic Deposits to his or her
Thrift Account. Rollover Contributions may be invested in funds under the Plan
in such dollar amounts as shall be designated by the Participant.
Notwithstanding anything to the contrary herein, a Participant who, at the time
he/she becomes an Eligible Employee, is a participant in the Employee Savings
Plan, shall continue the same investment elections as he/she maintained in the
Employee Savings Plan until a change in investment direction is made in
conformity with the Section 6.2 hereof. Each Participant with a U.S. Energy
Partners Account, Arden Engineering Constructors Account, or Fluidics Account
shall specify, in such form as shall be prescribed by the Committee, the
percentage (which shall be an integral multiple of 1% - including 0% but not
exceeding 100% in the aggregate) of his or her U.S. Energy Partners Account,
Arden Engineering Constructors Account, or Fluidics Account, as applicable,
which shall be invested in each of the Funds established pursuant to Section
7.1; provided, however, that if the Participant fails to so specify, the U.S.
Energy Partners Account, Arden Engineering Constructors Account, or Fluidics
Account, as applicable, shall be invested in a Fixed Income Fund.
Section 6.2. Change in Investment Direction. Any investment direction given
by a Participant under Section 6.1 shall continue in effect until changed by the
Participant. A Participant may change any such direction by giving notice of
such change in the form prescribed by the Committee. Any such change shall
become effective as soon as practicable after receipt of the notice of change by
the Record Keeper. A change in investment direction under this Section 6.2 shall
not automatically cause a transfer of investments under Section 6.3.
Section 6.3. Transfer/ Reallocation of Investments. Subject to Section 5.2
with respect to the limitation on the transfer of Employer Contributions made in
shares of Company Common Stock, Section 6.6 regarding transfers into and out of
the Personal Choice Retirement Account Fund, and Section 9.3 regarding transfers
out of the ESOP Account, a Participant may:
(a) direct that all or any part (in integral multiples of 1%) of his
or her interest in any one or more of the Funds be transferred to
any one or more of the other Funds, except that no transfer may
be made into a Participant's ESOP Account. A Participant may also
transfer his or her ESOP Account assets (in integral multiples of
1%, but not exceeding 100% in the aggregate) into any one or
several of the Funds. However, any transfer from a Fund shall be
subject to such contractual limitations regarding transfers from
such Fund as may exist from time to time under the contracts
governing investments held in such Fund. A direction to transfer
all or a portion of a Participant's interest in a Fund shall be
made by giving notice in the form prescribed by the Committee.
Subject to any contractual limitations that may be applicable,
any such transfer shall be made as soon as practicable after
receipt of the notice of such transfer by the Record Keeper; or
(b) reallocate all or any part (in integral multiples of 1%) of his
or her interest among the Funds, except that no funds may be
reallocated into or out of a Participant's ESOP Account. Any such
reallocation shall be subject to such contractual limitations as
may exist from time to time under the contracts governing
investments held in such Funds. A direction to reallocate a
portion of a Participant's interest in a Fund shall be made by
giving notice in the form prescribed by the Committee. Subject to
any contractual limitations that may be applicable, any such
reallocation shall be made as soon as practicable after receipt
of the notice of such reallocation by the Record Keeper.
Section 6.4. Quarterly Automatic Rebalancing. Subject to the limitation
contained in Section 5.2 with respect to the transfer of Employer Contributions
made in shares of Company Common Stock and excluding investments in the
Participant's ESOP Account and in the Personal Choice Retirement Account Fund, a
Participant may elect automatically rebalance his or her Account among some or
all of the Funds at the end of each calendar quarter. Any such rebalancing shall
also be subject to those contractual limitations regarding transfers from
certain Funds as may exist from time to time under the contracts governing
investments held in such Funds. A direction to elect to quarterly automatic
rebalancing of a Participant's Account shall be made by giving notice in the
form prescribed by the Committee and shall be in effect until an election is
made to discontinue such rebalancing. Subject to any applicable contractual
limitations, such rebalancing shall commence as soon as practicable after the
Record Keeper's receipt of the notice of such election and shall occur on, or as
soon as practicable following, the end of each subsequent calendar quarter.
Section 6.5. Loans.
(a) Participants may receive loans from their Thrift Accounts under
the provisions of Section 11.13. A loan to a Participant shall be
considered an investment of such Participant's Thrift Account and
the principal amount of the loan shall be treated as a separate
investment within the various subaccounts. Repayments of the
principal amount of the loan shall reduce such corresponding
investments of each such subaccount in the inverse order of such
investment and repayments of such principal along with any
accrued interest thereon shall be invested in the Funds in
accordance with the Participant's then current investment
direction. Loan amounts shall be taken from subaccounts in the
following order:
\
(1) Deferred Deposits;
(2) Unmatured vested Employer Contributions;
(3) Matured vested Employer Contributions;
(4) Rollover Contributions;
(5) Unmatured Post-1986 Nondeferred Deposits;
(6) Matured Post-1986 Nondeferred Deposits;
(7) Pre-1987 Nondeferred Deposits.
(b) Notwithstanding the foregoing, loan proceeds shall not be taken
from a Participant's ESOP Account, from assets invested in the
Personal Choice Retirement Account Fund, from that portion of a
Participant's Thrift Account attributable to Employer
Contributions made in shares of Company Common Stock or from the
Retirement Choice Program Allocation Subaccount of a
Participant's Account.
(c) Each outstanding loan under the Arden Engineering Constructors,
Inc. 401(k) Plan at the time of merger of such Plan into this
Plan and the Fluidics, Inc. Retirement and 401(k) Plan at the
time certain assets were transferred to this Plan shall continue
to be in effect in accordance with the original terms and
conditions of such loan; provided, however, that the loan
amortization amounts, and corresponding payroll deductions
amounts, shall be modified to the extent necessary to conform to
payroll periods in use under this Plan.
Section 6.6. Special Rules for Investment in the Personal Choice Retirement
Account Fund. Notwithstanding any provision of this Plan to the contrary, the
investment in the Personal Choice Retirement Account Fund shall be subject to
the following restrictions and limitations:
(a) only vested amounts in a Participant's Account may be transferred
into the Personal Choice Retirement Account Fund;
(b) investments shall be in minimum amounts of $1,000 and shall be
accomplished only through Fund transfers in accordance with
Section 6.3 (therefore, no Basic Deposits, Supplemental Deposits,
Additional Lump Sum Deposits, or Employer Contributions may be
made directly into the Personal Choice Retirement Account Fund);
(c) for the period 10/1/99 through 9/30/00, investments shall be
limited to 50% of the vested balance in the Participant's
Account; therefore, the vested balance of the Participant's
Account shall be no less than $2000 to be able to make an initial
investment in the Personal Choice Retirement Account Fund;
(d) for the period 10/1/00 through 9/30/01, investment shall be
limited to 75% of the vested balance in the Participant's
Account;
(e) for the period 10/1/01 and beyond, any Participant maintaining a
balance in the Personal Choice Retirement Account Fund must
maintain a minimum $500 vested balance in the Plan's other Funds;
(f) transfers in to and out of the Personal Choice Retirement Account
Fund shall be in whole dollar amounts only; with the exception of
a 100% transfer out of the Personal Choice Retirement Account
Fund, or a supplemental transfer out of a residual amount after
the Personal Choice Retirement Account Fund is closed.
(g) with respect to transfers out of the Personal Choice Retirement
Account Fund, the Participant must designate the specific
investment(s) which is (are) to be liquidated in order to effect
the requested transfer;
(h) participation shall be subject to an annual participation fee,
initially $50.00, which may be changed by the Committee at any
time and from time to time;
(i) the annual participation fee shall be deducted on the day the
Participant first invests in the Personal Choice Retirement
Account Fund, and first business day of January thereafter,
prorata from the portion of the Participant's Account which is
nonforfeitable and not invested in the Personal Choice Retirement
Account Fund;
(j) all fees related to specific transactions in the Personal Choice
Retirement Account Fund will be deducted directly from the
Participant's Account (first, from the Personal Choice Retirement
Account Fund Balance and then from the balance in the
Participant's other Funds);
(k) all transactions within and from the Personal Choice Retirement
Account Fund shall be in settled cash only and, to the extent
that a transaction has not settled, further transactions and
withdrawals from the Personal Choice Retirement Account Fund will
not be available;
(l) no transfer may be made directly from the Stable Value Fund into
the Personal Choice Retirement Account Fund and any amounts
transferred from the Stable Value Fund must be invested in one of
the Plan's other equity funds for at least 90 days (or such other
applicable requirement as may be imposed from time to time)
before they may be transferred into the Personal Choice
Retirement Account Fund; and
(m) the Record Keeper may take administrative control of the
Participant's Personal Choice Retirement Account Fund solely for
purposes of settling transfers to a Participant's beneficiary and
for apportioning the Participant's Account with respect to a
Qualified Domestic Relations Order in accordance with Article
XXII herein.
ARTICLE VII
THRIFT ACCOUNT FUNDS
Section 7.1. Establishment of Funds. Except as provided in subparagraph
7.1(b), the following Funds shall be established exclusively for the collective
investment of Trust Fund assets attributable to Participant Thrift Accounts, as
directed by Participants:
(a) One or more "Equities Funds," the assets of which shall
principally be invested, directly or indirectly, in common stocks
of domestic or foreign corporations. To the extent practicable,
no Equities Fund shall invest in Company Common Stock.
(b) One or more "Fixed Income Funds" the assets of which shall be (1)
held by an insurance company, banking institution or other
corporate entity pursuant to an agreement containing provisions
for the repayment in full of the amounts transferred to the
insurance company, banking institution or other corporate entity
plus interest at a fixed annual rate for a specified period, or
(2) invested in direct obligations of the United States
Government or agencies thereof, or in obligations guaranteed as
to the payment of principal and interest by the United States
Government or agencies thereof, or in fully insured bank
deposits, or fixed income private or public securities or (3)
invested in assets that meet the criteria in (1) and (2) whose
benefit responsiveness, liquidity and/or maturity date is
provided for by a third party, or (4) invested in short-term
investments, including, in all cases, a commingled fund or common
trust and excluding, in all cases, securities issued by any
Employer, except that this limitation shall not apply to
securities held by any commingled fund or common trust in which
any portion of a "Fixed Income Fund" shall be invested. The terms
of such agreements and the identity of such insurance companies,
banking institutions, other corporate entities and/or third
parties shall be determined by the Committee from time to time.
At the election of the Committee, any Fixed Income Fund
established hereunder may be merged or combined with the fixed
income fund maintained by the Company pursuant to the Employee
Savings Plan.
(c) A "Company Common Stock Fund," the assets of which shall
principally be invested in Company Common Stock.
(d) One or more "Equities Index Funds," the assets of which shall
principally be invested, directly or indirectly, in common stocks
substantially comprising the Standard and Poor's 500 Index.
(e) One or more "Government Obligations Funds," the assets of which
shall principally be invested, directly or indirectly, in debt
obligations issued or guaranteed by the U. S. Government, its
agencies or instrumentalities.
(f) One or more "Balanced Funds," the assets of which shall be
principally invested, directly or indirectly, in a combination of
the common stocks and fixed-income securities of domestic
corporations.
(g) One or more "Bond Funds," the assets of which shall principally
be invested, directly or indirectly, in U.S. taxable,
investment-grade debt obligations.
(h) One or more "Personal Choice Retirement Account Funds," the
assets of which will be invested in individual stocks, bonds and
mutual funds as directed by the Participant'.
Notwithstanding the foregoing, any or all of the above Funds may be
temporarily maintained in cash, or may be invested directly or indirectly in
certain short-term obligations as permitted by the Trust Agreement. Dividends,
interest and other income in respect of any Fund shall be reinvested in the same
Fund to the extent not used to pay expenses of the Plan. Except as otherwise
limited by the provisions of this Plan, withdrawals, distributions and
forfeitures, except as otherwise specified in the Plan, shall be charged pro
rata against the various Funds in which the subaccounts from which such
withdrawals, distributions or forfeitures are then invested.
Section 7.2. Company Common Stock Fund.
(a) Company Common Stock purchased for the Company Common Stock Fund
shall be purchased by the Trustee on the open market or directly
from the Company should the Company elect to make such sales.
(b) If the Company shall elect to sell shares of Company Common Stock
directly to the Plan, the price to be paid by the Trustee for any
such purchases shall be the average of the high and low sales
prices of Company Common Stock as reported by the New York Stock
Exchange, Inc. on the date of purchase.
(c) All voting discretion, including the power to decide whether or
not to tender Company Common Stock in connection with a tender
offer, with respect to the shares of Company Common Stock held
under the Company Common Stock Fund for the Account of a
Participant (whether vested or not vested) shall be vested in the
Trustee. However, the Trustee shall vote all such shares in
accordance with the directions of such Participant. Within a
reasonable time before voting rights are to be exercised, the
Company or the Trustee shall cause to be sent to each Participant
entitled to give voting instructions all information that the
Company has or will distribute to shareholders of Company Common
Stock regarding the exercise of such voting rights. Shares with
respect to which no voting instructions are received shall not be
voted by the Trustee.
(d) If, during the course of the Plan, the Company should grant to
the holders of Company Common Stock rights to subscribe to an
issue or issues of securities of the Company, any such rights
attaching to the shares of Company Common Stock held by the
Trustee under the Company Common Stock Fund shall be sold by the
Trustee and the net proceeds applied by the Trustee to the
purchase of Company Common Stock on the open market for such
Fund. Stock dividends on shares held by the Company Common Stock
Fund, and stock issued upon any split of such shares, shall be
credited to such Company Common Stock Fund.
ARTICLE VIII
THRIFT ACCOUNTS
Section 8.1. Establishment of Thrift Accounts. The Committee shall maintain
or cause to be maintained a Thrift Account for each Participant which shall
consist of the following subaccounts: Basic Deposit Subaccount, Supplemental
Deposit Subaccount and Employer Contribution Subaccount, the assets of which
shall be invested as provided in Section 5.2 or pursuant to the direction of the
Participant as provided in Article VI. The assets of each such subaccount of the
Thrift Account shall be identified as to Nondeferred or Deferred.
Section 8.2. Measure of Thrift Accounts.
(a) The interests of Participants in the Funds shall be measured by
participating units in the particular Fund, the number and value
of which shall be determined as of each business day as provided
in the next paragraph. Each participating unit shall have an
equal beneficial interest in the Fund, and none shall have
priority or preference over any other.
(b) As soon as practicable at the end of each business day, the
Trustee shall determine the value of each such Fund as of such
business day in the manner prescribed in Section 8.3. The value
so determined shall be divided by the total number of
participating units allocated to the Accounts of Participants
participating in such Fund in accordance with subsection (a) as
of the prior business day. The resulting quotient shall be the
value of a participating unit as of such business day and
participating units shall be allocated, as such value, to and
from the Fund subaccounts of Participants for all transactions by
them or on their behalf with respect to the current business day.
The value of all participating units allocated to Participants'
Fund subaccounts shall be redetermined in a similar manner each
succeeding business day and participating units shall be
allocated to and from the Accounts of Participants participating
in such Fund at such value for all transactions with respect to
such business day. Fractional units shall be calculated to such
number of decimal places as shall be determined by the Committee
from time to time.
(c) If a Participant shall direct pursuant to Section 6.3 that his or
her interest in a Fund or any part thereof shall be transferred
to another Fund or Funds, or if such Participant's interest in a
Fund or any part thereof is distributed, withdrawn, borrowed or
forfeited under Articles IV or XI, the number of participating
units representing such interest or portion thereof as of the
applicable business day shall be cancelled for purposes of any
subsequent determination of the number of and value of the
participating units in such Fund.
Section 8.3. Valuation of Funds. The value of a Fund as of any business day
shall be the market value of all assets (including any uninvested cash) held by
the Fund as determined by the Trustee, reduced by the amount of any accrued
liabilities of the Fund on such business day and increased by Deposits, Rollover
Contributions and Employer Contributions with respect to such business day. The
Trustee's determination of market value shall be binding and conclusive upon all
parties.
Section 8.4. Valuation of Thrift Accounts. The value of a Participant's
subaccount for any Fund as of any business day shall be the value of the
participating units allocated to the Participant's subaccount for such Fund as
of such business day. The value of a Participant's Account as of any business
day shall be the aggregate of the values of such subaccounts, determined as
provided in the preceding Sections of this Article VIII.
Section 8.5. Separate Accounting. The amounts of Deferred Deposits in a
Participant's Thrift Account shall at all times be separately accounted for from
other amounts in such Thrift Account, by allocating investment gains and losses
on Deferred Deposit amounts on a reasonable pro rata basis and by adjusting the
Deferred and other portions of the subaccounts of a Participant's Thrift Account
for withdrawals, distributions, borrowings and contributions. Gains, losses,
withdrawals, distributions, borrowings, forfeitures and other credits or charges
shall be separately allocated between such Deferred Deposit amounts and other
portions of the subaccounts on a reasonable and consistent basis.
ARTICLE IX
ESOP ACCOUNTS
Section 9.1. Maintenance of Separate Accounts. Each ESOP Account shall be
maintained on the basis of shares of Company Common Stock allocated to such ESOP
Account, with each ESOP Account being credited with the number of full and
fractional shares of Company Common Stock so allocated.
Section 9.2. Allocation of Distributions. Any distributions received by the
Plan with respect to Company Common Stock allocated to a Participant's ESOP
Account shall be allocated to such ESOP Account.
Section 9.3. Withdrawals or Transfers.
(a) Notwithstanding any provision in the Plan to the contrary, a
Participant may withdraw in accordance with Sections 11.3 or 11.4
or transfer in accordance with Section 6.3, the shares of Company
Common Stock allocated to Participant's ESOP Account or the cash
value thereof.
(b) With respect to an election of a Participant to withdraw Company
Common Stock from such Participant's ESOP Account, the shares of
Company Common Stock, or the cash value at the election of the
Participant, shall be distributed in accordance with Article XI,
provided that such Participant elects to withdraw all full and
fractional shares of Company Common Stock allocated to such ESOP
Account or the cash value thereof. Such distribution shall be
made as soon as practicable after receipt by the Record Keeper of
the Participant's election to withdraw.
(c) With respect to an election of a Participant to transfer the
Company Common Stock held in the Participant's ESOP Account to
the Participant's Thrift Account, such election must be with
respect to the cash value only of all full and fractional shares
of Company Common Stock allocated to the Participant's ESOP
Account.' Such transfer shall be made as soon as practicable
after receipt by the Record Keeper of the Participant's election
to transfer, shall be deposited in the Participant's Thrift
Account, shall be invested in one or more (in multiples of 1% up
to an aggregate of 100%) of the Thrift Account Funds as such
Participant shall designate and thereafter shall be deemed a
Rollover Contribution and treated accordingly. The cash value of
each share of Company Common Stock so transferred shall be equal
to the price of a share of Company Common Stock actually received
by the Trustee.
(d) A Participant may not borrow from his or her ESOP Account.
Section 9.4. Dividends and Other Income. Unless otherwise directed as
hereinafter provided, dividends paid in cash with respect to Company Common
Stock allocated to a Participant's ESOP Account shall be distributed to the
Participant as soon thereafter as practicable and, in any event, not later than
90 days after the close of the Plan Year in which paid. Company Common Stock
delivered to the Trustee pursuant to a stock dividend, stock split or
reorganization, shall be allocated to the ESOP Account of Participants in that
proportion which the shares of each Participant's ESOP Account bears to the
total shares of all Participants' ESOP Accounts.
Section 9.5. Voting of ESOP Account Common Stock. As provided in Section
7.2 with respect to the Company Common Stock Fund, all voting discretion with
respect to stock held in a Participant's ESOP Account, including the power to
decide whether or not to tender Company Common Stock in connection with a tender
offer, shall be vested in the Trustee. Each Participant shall be entitled to
direct the Trustee as to the manner in which voting rights attributable to
Company Common Stock (including fractional shares or fractional rights to
shares) allocated to such Participant's ESOP Account are to be exercised. Within
a reasonable time before voting rights are to be exercised, the Trustee or the
Company shall cause to be sent to each Participant entitled to give voting
instructions all information that the Company has or will distribute to
shareholders of Company Common Stock regarding the exercise of such voting
rights. Such voting rights shall be exercised by the Trustee but only to the
extent directed by a Participant. Shares with respect to which no voting
instructions are received shall not be voted by the Trustee.
ARTICLE X
VESTING
Section 10.1. Vesting of Employer Contributions. Effective for Plan Years
beginning on or after January 1, 2000, all Active Participants shall have a 100%
vested interest in his or her Thrift Account attributable to Employer
Contributions for all Plan Years, except as set forth in Section 10.2 below.
Furthermore, an Active Participant with a U.S. Energy Partners Account, Arden
Engineering Constructors Account, or Fluidics Account, shall have a 100% vested
interest in his or her U.S. Energy Partners Employer Contribution Subaccount,
Arden Engineering Constructors Employer Contribution Subaccount, or Fluidics
Employer Contribution Subaccount, as applicable, effective January 1, 2000.
Section 10.2. Vesting of Retirement Choice Program Allocation Subaccount.
(a) Notwithstanding the foregoing, amounts held in the Retirement
Choice Program Allocation Subaccount of a Participant's Account
shall vest in accordance with Section 5.5 of the Cash Balance
Plan, which provides in pertinent part that a Participant who
terminates employment with the Company prior to Retirement but
after he or she has completed five or more Years of Service shall
have a 100% vested interest in his or her Retirement Choicer
Program Allocation Subaccount. In addition, if a Participant is
eligible for Retirement, suffers a Disability, is Laid Off or
dies, such Participant shall have a 100% vested interest in his
or her Retirement Choice Program Allocation Subaccount.
(b) Effective December 12, 1994, for purposes of determining Years of
Service for vesting under this Article X, a Participant shall be
credited with any period of absence from employment as a result
of such Participant's qualified military service in accordance
with Code section 414(u).
Section 10.3. Vesting of Deposits, Rollover Contributions and the ESOP
Account. A Participant's interest in his or her Thrift Account, U.S. Energy
Partners Account, Arden Engineering Constructors Account, or Fluidics Account
attributable to Deposits and Rollover Contributions for all Plan Years and in
his or her ESOP Account shall be 100% vested at all times.
ARTICLE XI
ACCOUNT DISTRIBUTIONS AND WITHDRAWALS
Section 11.1. Distribution Upon Retirement, Disability, Lay Off or Death.
If a Participant terminates employment on account of Retirement or Disability,
is Laid Off or dies, then, in that event, the Participant's Thrift Account,
determined as of the business day coinciding with or next following the date of
the last Deposit made by or which would have been made on behalf of such
Participant, together with the Participant's ESOP Account, shall:
(a) if the value of such Accounts as so determined is $5,000 (or such
other amount established by law) or less, be distributed, subject
to the provisions of Section 11.10(c), as soon as practicable to
the Participant, or in the case of death of the Participant, to
the Participant's beneficiary as determined in accordance with
Article XIV or, if none, to the Participant's estate. The
Committee or its designee shall review the Participants' Accounts
at least once every 6 months and distribute, as allowed by
applicable law, those Accounts not exceeding $5,000 (or such
other amount established by law) regardless if the vested balance
in the Participant's Accounts at the time of any previous
distribution exceeded $5,000; or
(b) if the value of such Accounts as so determined shall exceed
$5,000 (or such other amount established by law), be distributed
upon the earliest of the Participant's Required Beginning Date,
the death of such Participant or the receipt by the Record Keeper
of an application for distribution (which may be for less than
all of the Participant's Account balance provided, however, that
the amount of distribution shall be at least $200, unless such
distribution is of 100% of the remaining value of such
Participant's Account) in a form prescribed by the Committee.
Section 11.2. Distribution Upon Other Termination of Employment. Upon
termination of a Participant's employment with an Employer or for reasons other
than Retirement, Disability, Lay Off or death, the vested portion of the
Participant's Account, determined as of the business day coinciding with or next
following the date of the last Deposit made by or which would have been made on
behalf of such Participant, or, if none, the business day coinciding with or
next following the date of termination, shall:
(a) if the value of the vested portion of such Account as so
determined is $5,000 (or such other amount established by law) or
less, be distributed, subject to the provisions of Section
11.10(c), as soon as practicable to the Participant, or, in the
case of death of the Participant after termination of employment
but prior to such distribution, to the Participant's beneficiary,
or, if none, to the Participant's estate. The Committee or its
designee shall review the Participants' Accounts at least once
every 6 months and distribute, as allowed by applicable law,
those Accounts not exceeding $5,000 (or such other amount
established by law) regardless if the vested balance in the
Participant's Accounts at the time of any previous distribution
exceeded $5,000; or
(b) if the value of the vested portion of such Account as so
determined shall exceed $5,000 (or such other amount established
by law) be distributed upon the earliest of the Participant's
Required Beginning Date, the death of the Participant, or the
receipt by the Record Keeper of an application for distribution
(which may be for less than all of the Participant's Account
balance provided, however, that the amount of distribution shall
be at least $200, unless such distribution is of 100% of the
remaining value of such Participant's Account) in a form
prescribed by the Committee.
Any nonvested portion of the Participant's Account, determined as of the
date of termination, shall be forfeited and shall be applied thereafter to
reduce a subsequent contribution or contributions of the Employer as provided in
Section 5.2. If such former Participant is rehired by an Employer on or before
the end of and is employed by an Employer at the end of the fifth Plan Year
after the Plan Year in which such termination occurred, then such nonvested
portion of the Participant's Account shall be reinstated by the Employer and the
Participant's right thereto shall be determined as if the Participant had not
terminated employment, provided that the Participant repays to the Plan the
amount of any distribution paid to him or her on account of the termination of
employment.
The nonvested portion of the Participant's Account, determined as of the
date of termination, shall be forfeited as of the earlier of (i) the date the
Participant receives a cash-out distribution as described in Treasury Regulation
section 1.411(a)-7(d) or (ii) the time at which the terminated Participant
experiences five consecutive one-year Breaks in Service (as defined below), and
shall be applied thereafter to reduce a subsequent contribution or contributions
of the Employer as provided in Section 5.2.
For purposes of this Section 11.2, a Break in Service shall mean a
consecutive twelve-month period described in Section 2.59 in which an Employee
is not credited with at least 501 Hours of Service, which shall be treated as
commencing on the date of termination of employment with the Company or an
Affiliate. Notwithstanding any provision in this Plan to the contrary, effective
December 12, 1994, a Participant shall not incur a Break in Service for any
period during which the Participant is or was engaged in "qualified military
service," in accordance with Code section 414(u).
Section 11.3. Partial Distributions Following Termination of Employment. A
Participant who elects pursuant to Section 11.1(b) or 11.2(b) to continue
participation in the Plan following termination of employment may, subsequent to
such Participant's termination of employment but prior to his or her Required
Beginning Date, upon application to the Committee in such format as it may
determine, withdraw all or part of such Participant's Account in minimum amounts
of $200.00 per withdrawal. A Participant must specifically request a withdrawal
from such Participant's ESOP Account, and such withdrawal must be 100% of the
full and fractional shares of Company Common Stock allocated to such ESOP
Account or the cash value thereof, in accordance with Section 9.3 of the Plan.
Otherwise, withdrawals shall be taken from a Participant's Thrift Plan
subaccounts in the following order:
(a) If the request is limited to after-tax withdrawals, as it may be,
then:
(1) Pre-87 Nondeferred Deposits;
(2) Post-86 Nondeferred Deposits and earnings thereon;
(3) Earnings on Pre-87 Nondeferred Deposits.
(b) For all other partial withdrawals:
(1) Pre-1987 Nondeferred Deposits;
(2) Post-1986 Nondeferred Deposits and earnings thereon;
(3) Rollover Contributions and earnings thereon;
(4) Earnings on pre-1987 Nondeferred Deposits;
(5) Matured vested Employer cash Contributions and earnings
thereon;
(6) Matured vested Employer stock Contributions and earnings
thereon;
(7) Matured vested Employer Cash Balance Contributions and
earnings thereon;
(8) Deferred Deposits and earnings thereon.
Section 11.4. Withdrawal of Nondeferred Deposits and Employer Contributions
During Employment.
(a) A Participant may, by application to the Record Keeper in the
form prescribed by the Committee, request to withdraw from the
Plan any or all of his or her Nondeferred Deposits and earnings
thereon, Rollover Contributions and earnings thereon and Vested
Employer Contributions (except for Employer Contributions
resulting from Participant elections made pursuant to the Cash
Balance Plan) shall be available for withdrawal as well as
earnings thereon; provided, however, that the amount withdrawn
shall be at least $200, unless such withdrawal is of 100% of the
value of such Participant's Thrift Account.
(b) If a withdrawal includes Deposits that are not Matured, Employer
Contributions with respect to such Participant shall be suspended
for a period of three months.
(c) A Participant must specifically request a withdrawal from such
Participant's ESOP Account, and such withdrawal must be of 100%
of the full and fractional shares of Company Common Stock
allocated to such ESOP Account or the cash value thereof, in
accordance with Section 9.3 of the Plan; otherwise, withdrawals
shall be taken from a Participant's Thrift Plan subaccounts in
the following order:
(1) Pre-1987 Nondeferred Deposits;
(2) Matured Post-1986 Nondeferred Deposits and earnings thereon;
(3) Unmatured Post-1986 Nondeferred Deposits and earnings
thereon;
(4) Rollover Contributions and earnings thereon;
(5) Earnings on pre-1987 Nondeferred Deposits;
(6) Matured vested Employer Contributions and earnings thereon;
(d) Any withdrawal made by a Participant pursuant to this Section
11.4 shall be made from all Funds in which the Nondeferred
Deposits, Rollover Contributions and Employer Contributions by or
on behalf of such Participant are invested and shall be charged
pro rata against such subaccounts in the Participant's Thrift
Account. Notwithstanding the foregoing, there shall be no
withdrawal from the Personal Choice Retirement Account Fund.
(e) The amount of any withdrawal made by a Participant pursuant to
this Section 11.4 shall be determined as of the close of the
business day on which the notice of withdrawal is received by the
Record Keeper.
(f) Notwithstanding any of the foregoing, no withdrawals of Employer
Contributions made in shares of Company Common Stock or resulting
from Participant elections made pursuant to the Cash Balance Plan
and the Retirement Choice Program shall be permitted prior to the
date that the Participant terminates his or her employment.
Section 11.5. Withdrawals of Deferred Deposits During Employment After Age
591/2.
(a) A Participant over the age 59 1/2 may withdraw all or a portion
of the value of his or her Thrift Account attributable to
Deferred Deposits. The value of such Deferred Deposits for the
purpose of such withdrawal shall be determined as of the close of
the business day in which the notice of withdrawal is received by
the Record Keeper. The minimum withdrawal permitted shall be
$200, unless such withdrawal is 100% of the current value of the
Deferred portion of a Participant's Thrift Account.
(b) A Participant with an Arden Engineering Constructors Account who
is over the age of 59 1/2 may elect to withdraw all or a portion
of the value of such Arden Engineering Constructors Account. The
value of such Arden Engineering Constructors Account for purposes
of such withdrawal shall be determined as of the close of the
business day in which the notice of withdrawal is received by the
Record Keeper.
Section 11.6. Hardship Withdrawals.
(a) Upon the application of any Participant, or his or her legal
representative, the Committee, in accordance with a uniform
nondiscriminatory policy, shall permit such Participant to
withdraw such portion of the value of his or her vested Thrift
Account as deemed to be necessary for the purpose of:
(1) Expenses for medical care described in Code section 213(d)
previously incurred by the Participant, the Participant's
spouse or any dependents (as defined in Code section 152) of
the Participant or necessary for these persons to obtain
medical care described in Code section 213(d);
(2) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence of the Participant;
(3) Payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant,
the Participant's spouse, children or any dependents (as
defined in Code section 152) of the Participant; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure on
the mortgage of the Participant's principal residence.
(b) A Participant or legal representative making application under
this Section 11.6 shall have the burden of presenting to the
Committee satisfactory proof of such need. The Committee shall
not permit withdrawal under this Section without first receiving
such proof as it shall deem necessary to demonstrate such
hardship.
(c) The amount which may be withdrawn shall be withdrawn, as
necessary, in the following order:
(1) Nondeferred Deposits together with vested Employer
Contributions, in the order prescribed by Section 11.4, but
without regard to the limitations on withdrawals of Section
11.4;
(2) Deferred Supplemental Deposits; and
(3) Deferred Basic Deposits.
(d) A withdrawal will be deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant if all of the
following requirements are satisfied:
(1) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the Participant,
(2) The Participant has obtained all distributions, other than
hardship withdrawals, and all nontaxable loans currently
available under all plans maintained by his or her Employer,
(3) The Participant is prohibited under the terms of the Plan or
an otherwise legally enforceable agreement from making
elective contributions and employee contributions to the
Plan and all other plans maintained by the Company or an
Affiliate for at least 12 months after receipt of the
hardship withdrawal, and
(4) The Plan and all other plans maintained by the Employer,
provide that the Participant may not make elective
contributions for the Participant's taxable year immediately
following the taxable year of the hardship withdrawal in
excess of the applicable limit under Code section 402(g) for
such next taxable year less the amount of such Participant's
elective contributions for the taxable year of the hardship
withdrawal. A Participant shall not fail to be treated as an
eligible Participant for purposes of paragraph (b) of this
Section merely because he is suspended in accordance with
this provision.
(e) If a Participant shall make a withdrawal pursuant to this Section
11.6, then
(1) the Participant shall not be permitted to make Deposits
(including Additional Lump Sum Deposits) to the Plan during
the one year period beginning on the date of receipt of such
withdrawal; and
(2) a Participant's Deferred Deposits for the Participant's
taxable year next following the taxable year of the hardship
withdrawal may not exceed the limit established under Code
section 402(g) less the amount of Deferred Deposits made by
the Participant in the year of such withdrawal.
(f) Amounts available for hardship withdrawals with respect to
Deferred Deposits will be limited to the amount of a
Participant's Deferred Deposits, plus earnings allocable thereto
which were credited to Participant's Accounts as of December 31,
1988, less the amount of any previous hardship withdrawals.
(g) A hardship withdrawal from the Thrift Account shall not be
permitted unless and until a Participant has withdrawn, pursuant
to Section 9.3, all Company Common Stock from his or her ESOP
Account.
(h) The hardship withdrawal shall be paid to the Participant in the
amount approved as soon as practicable after his or her
application is approved by the Committee.
(i) Notwithstanding any of the foregoing, no withdrawals of Employer
Contributions made in shares of Company Common Stock or resulting
from Participant elections made pursuant to the Cash Balance Plan
and the Retirement Choice Program shall be permitted prior to the
date that the Participant terminates his or her employment.
Section 11.7. Suspension of Participation. If a Participant shall cease to
be an Eligible Employee, Deposits and Employer Contributions to his or her
Thrift Account shall be suspended and no Additional Lump Sum Deposits shall be
permitted to be made during the period of ineligibility. Distribution of such
Participant's Account shall be deferred until such Participant's termination of
employment with an Employer, whereupon the Participant's Thrift Account shall be
distributed in accordance with the applicable provisions of this Article XI.
Such Participant shall continue to be deemed a Participant for all purposes
other than for Articles IV and V during such period of ineligibility.
Section 11.8. Transfer of Employment. If a Participant shall be transferred
to the employ of an Affiliate which is not an Employer, distribution of such
Participant's Account shall be deferred until the Participant is no longer in
the employ of the Employer or any Affiliate, whereupon the Participant's Account
shall be distributed in accordance with the applicable provisions of this
Article XI. Such transferred Participant shall continue to be deemed a
Participant for all purposes other than for Articles IV and V during such period
of deferral of distribution.
Section 11.9. Form of Distributions.
(a) All distributions from the Plan shall be made in money by check,
except that in the case of a lump sum distribution only, other
than a hardship withdrawal in accordance with Section 11.6, a
Participant may, by notice to the Record Keeper in the form
prescribed by the Committee, (i) elect to have any whole shares
of Company Common Stock held for such Participant's Company
Common Stock Fund subaccount and/or ESOP Account distributed in
shares of Company Common Stock (the value of any fractional
shares shall be paid in money by check). In addition, should the
Participant elect not to liquidate the particular assets held in
the Personal Choice Retirement Account Fund upon a distribution,
such assets shall be transferred in-kind to an individual
retirement account with the vendor administering the Personal
Choice Retirement Account Fund. Any such election may be made at
any time prior to the distribution under Sections 11.1 and 11.2
or prior to receipt by the Record Keeper of the notice of
withdrawal in the case of a distribution under Sections 11.3 or
11.4. If no such election is made, the entire value of the amount
of the Participant's Account being distributed shall be
distributed in money by check.
(b) All distributions from the Plan shall be made in one lump sum,
with the following exceptions:
(1) In the case of a distribution from a Participant's Account
on account of a Participant's Retirement, such Participant
may elect to have his or her Account, including the ESOP
Account, which is to be transferred into one of the Thrift
Account Funds, the U.S. Energy Partner's Account, the Arden
Engineering Constructors Account, and the Fluidics Account,
distributed in annual or quarterly payments in money by
check by the Trustee in amounts as nearly equal as possible
for a specified number of years up to ten years. Each
payment shall be an amount equal to the Participant's Thrift
Account as of the applicable date divided by the number of
payments remaining.
(2) In the case of a distribution from a Participant's U.S.
Energy Partners Account, if any, the Participant may elect
to have his or her U.S. Energy Partners Account distributed
in one of the following forms:
(A) in the form of a joint and survivor annuity with a
benefit following the Participant's death continuing to
the Participant's spouse during the spouse's lifetime
at a rate equal to 100% (or, at the Participant's
election, 50%) of the rate at which benefits were
payable to the Participant.
(B) in the form of a single life annuity, provided that the
Participant's spouse consents.
(3) In the case of a distribution from a Participant's Arden
Engineering Constructors Account, if any, the Participant
may elect to have his or her Arden Engineering Constructors
Account distributed in the form of a single lump sum payment
or in the form of installment payments, payable at least
annually over a specific number of years, as elected by such
Participant. Notwithstanding the foregoing, such installment
payments shall not exceed a period extending beyond the life
expectancy or joint life expectancy of such Participant and
such Participant's beneficiary.
(c) Except as set forth below, if a Participant shall die prior to
complete distribution of his or her Thrift Account pursuant to
subsection (b)(1), the value of the Participant's Thrift Account
shall be distributed as soon as practicable in a lump sum to the
Participant's beneficiary, or, if none, to the Participant's
estate. The amount so distributed after a Participant's death
shall be the remaining value of Participant's Thrift Account
determined as of the business day coinciding with or next
following the date of the Participant's death. Notwithstanding
the foregoing:
(1) If a Participant who has a U.S. Energy Partners Account dies
before amounts have become distributable under subsection
(b), his or her surviving spouse, if any, may elect to have
the U.S. Energy Partners Account paid in the form of a pre
retirement survivor annuity. In addition, if a Participant
who has a U.S. Energy Partners Account dies after amounts
have become distributable under paragraph (2) of subsection
(b), survivor benefits, if any, will be paid in accordance
with the annuity elected.
(2) If a Participant who has an Arden Engineering Constructors
Account dies prior to complete distribution of his or her
Arden Engineering Constructors Account, then his or her
beneficiary may elect to have the Arden Engineering
Constructors Account paid in one of the forms set forth
under paragraph (3) of subsection (b) above.
(d) If no election is made under subparagraph (b) above, and the
value of a Participant's Thrift Account, when aggregated with the
value of any ESOP Account, U.S. Energy Partners Account, Arden
Engineering Constructors Account, or Fluidics Account of the
Participant, determined in accordance with Article IX, exceeds
effective January 1, 1998, $5,000, a distribution will be made in
one lump sum at the time provided for in Section 11.1, Section
11.2, or Section 11.6.
Section 11.10. Time of Distributions.
(a) All distributions from the Plan shall commence as soon as
practicable, and in any event no later than 60 days after the
later of the close of the Plan Year in which the Participant
terminates employment, reaches his or her Required Beginning
Date, dies, or, if applicable, requests distribution under
Section 11.1 and 11.2, or 60 days after the close of the Plan
Year in which the Participant elects to withdraw funds from
the Plan in the case of distributions under Sections 9.3, 9.4,
11.3, 11.4 and 11.5.
(b) In the case of a distribution over a period of years under
subparagraph (b) of Section 11.9, the initial payment shall be
made at a time determined in accordance with subparagraph (a)
of this Section 11.10. In the case of annual distributions,
the remaining annual payments shall be made in successive
calendar years on such date each year as shall be determined
by the Committee, subject to the provisions of subparagraph
(b) of Section 11.9 in the case of the Participant's death. In
the case of quarterly distributions, the remaining payments
shall be made each successive three month period on such day
during the period as may be established by the Committee,
subject to the provisions of subparagraph (b) of Section 11.9
in the case of the Participant's death.
(c) In the case of a distribution on account of a Participant's
Retirement, subject to the provisions of subsection 11.11, the
Participant may elect to have his or her Account distributed
as a lump sum during (1) the Plan Year next following the Plan
Year of his or her Retirement or (2) the next succeeding Plan
Year thereafter or (3) if the Account value exceeds $5,000, at
any time up to the Participant's Required Beginning Date. If
no such election is made, distribution shall commence in
accordance with Section 11.1 and subparagraph (a) above.
Section 11.11. Limitation on Post Age 701/2Distributions.
Notwithstanding the provisions of Sections 11.9 and 11.10:
(a) the entire interest of a Participant must:
(1) be distributed not later than the Participant's Required
Beginning Date, or,
(2) commence no later than such Required Beginning Date and be
payable in accordance with regulations under the Code over a
period not extending beyond the life expectancy of such
Participant.
(b) If a Participant dies before his or her entire interest has been
distributed, then such entire interest (or the remaining part of
such interest if distribution thereof has commenced) shall be
distributed within five years after the Participant's death, and,
if distribution has commenced prior to death, shall be
distributed at least as rapidly as the method of distribution
being used as of the date of such Participant's death.
(c) The amount of the distribution required by this Section 11.11 is
to be determined by Treasury Regulations Section 1.72-9, Table V
using the attained age of the Participant as provided in
regulations without recalculation of the life expectancy;
provided, however, that the amount of the distribution required
by this Section 11.11 with respect to a Participant's U.S. Energy
Partners Account, Fluidics Account, and Arden Engineering
Constructors Account, if any, is to be determined by Treasury
Regulations Section 1.72-9, using the attained age or ages of the
Participant and his or her designated beneficiary as provided in
regulations with recalculation of the life expectancies as the
Participant may elect. Distribution will be made in accordance
with the regulations under Code section 401(a)(9), including the
minimum distribution incidental death benefit requirement of
section 1.401(a)(9)-2, and such regulations shall override any
inconsistent Plan provisions.
Section 11.12. Distribution in the Case of Certain Disabilities. In the
event that the Committee shall find that any person entitled to a distribution
under the Plan is unable to care for his or her affairs because of illness or
accident or because the person is a minor or has died, the Committee may direct
that any distribution due such person, unless claim shall have been made
therefor by a duly appointed legal representative, be paid or applied to or for
the benefit of such person, or his or her spouse, any child of such person
(including an adopted child), any parent or other blood relative of such person,
or a person with whom the person resides, or any of them, and any such payment
or application so made shall be a complete discharge of the liabilities of the
Plan therefor.
Section 11.13. Loans.
(a) The Committee shall have complete authority to establish and
administer a loan program to provide loans to Participants. The
loan program shall include the following:
(1) A procedure for applying for loans;
(2) The basis on which loans will be approved or denied;
(3) Limitations (if any) on the types and amounts of loans
offered;
(4) The procedure under the loan program for determining a
reasonable rate of interest;
(5) The types of collateral which may secure a loan; and
(6) The events constituting default and the steps that will be
taken to preserve plan assets in the event of such default.
The rules and applicable limitations established by the loan
program shall be such as to prevent any loan from
constituting a prohibited transaction under Code section
4975 and ERISA section 406, or a Plan distribution under
Code section 72(p).
(b) The Trustee shall, subject to the approval of the General Manager
and compliance with the written loan program and the provisions
of the Code, lend a Participant, who is employed by an Employer,
an amount up to 50% of the vested portion of his or her Account,
including the ESOP Account, but not more than $50,000 in the
aggregate as of the date on which the loan is approved reduced by
the highest outstanding loan balance during the preceding twelve
months. However, no amount may be loaned directly from any ESOP
Account, from any portion of the Company Common Stock Fund
attributable to Employer Contributions made in shares of stock,
from Employer Contributions resulting from Participant elections
made pursuant to the Cash Balance Plan and the Retirement Choice
Program or from investments held in the Personal Choice
Retirement Account Fund. The General Manager shall review each
application for a loan in a nondiscriminatory manner and in
accordance with such rules as may be prescribed by the Committee.
Loans, if approved, shall be made as soon thereafter as
practicable.
(c) In addition to such rules and regulations as the Committee may
adopt, all loans shall comply with the following terms and
conditions:
(1) An application for a loan by an eligible Participant shall
be made by making application therefor to the Record Keeper
in the form prescribed by the Committee.
(2) An eligible Participant may not apply for more than one loan
in any calendar year nor for a loan with an initial
principal amount of less than $1,000 and, in any event, may
not have more than two (2) loans outstanding at any one
time.
(3) All loans, including interest thereon, shall be repaid by
payroll deduction in equal monthly installments over a
period of 12 to 60 months as selected by the Participant.
Nothing herein, however, shall prohibit a Participant from
prepaying such loan in whole or in part in a lump sum in
accordance with such rules as may be established from time
to time by the Committee.
(4) Each loan shall be secured by an assignment of the
Participant's entire right, title and interest in and to the
Trust Fund to the extent of the loan and accrued interest
thereon and shall be evidenced by the Participant's
promissory note for the amount of the loan, including
interest, payable to the order of the Trustee.
(5) Each loan shall bear interest at a reasonable rate (which
rate may be a variable rate) to be established from time to
time by the Committee, not in violation of any applicable
usury laws. In determining the interest rate, the Committee
shall take into consideration interest rates being charged
by other lenders at the time of such determination.
(d) No distribution shall be made to any Participant or beneficiary
thereof unless and until all unpaid loans, including interest
thereon, have been repaid.
Section 11.14. Inability to Locate Payee. Any benefit payable to a
Participant or beneficiary shall be forfeited if the Employer, after reasonable
effort, is unable to locate such Participant or beneficiary to whom payment is
due. The amount of any such forfeited benefit shall be applied to reduce the
amount of Employer Contributions required under the Plan as provided in Section
5.3. However, any such forfeited benefit shall be reinstated and become payable
if a claim therefor is made by such Participant or beneficiary.
Section 11.15. Federal Income Tax Withholding on Distributions and
Withdrawals. Distributions and withdrawals under this Plan shall be subject to
Federal income tax withholding as prescribed by Code section 3405 and the
regulations thereunder.
Section 11.16. Direct Rollover to Another Plan or IRA On or after January
1, 1993, at the election of a Participant or his spouse or former spouse
entitled to a distribution under Section 22.1 or the foregoing provisions of
this Article XI, the Committee shall direct the Trustee to make a direct
rollover to the trustee or other custodian of an "eligible retirement plan" by
any reasonable means (including providing the Participant or spouse or former
spouse with a check made payable only to the trustee or custodian) of all, or a
specified portion, of an "eligible rollover distribution," subject to the
following restrictions:
(a) An "eligible rollover distribution" is any distribution of all or
any portion of the Participant's Account, except that an
"eligible rollover distribution" does not include
(1) any distribution that is one of a series of substantially
equal periodic payments (made not less frequently than
annually) made for the life (or life expectancy) of the
recipient or the joint lives (or joint life expectancies) of
the recipient and the recipient's designated beneficiary, or
for a specified period of at least ten years; or
(2) any distribution made pursuant to Code section 401(a)(9); or
(3) any portion of a hardship distribution made to such
Participant in accordance with Section 11.6 of the Plan that
represents a distribution of Deferred Deposits.
(b) An "eligible retirement plan" is an individual retirement account
described in Code section 408(a), an individual retirement
annuity described in Code section 408(b), an annuity plan
described in Code section 403(a), or a qualified trust described
in Code section 401(a), that accepts the recipient's "eligible
rollover distribution." If the recipient is the Participant's
surviving spouse, but not an alternate payee receiving a
distribution pursuant to a Qualified Domestic Relations Order, an
"eligible retirement plan" is an individual retirement account
described in Code section 408(a) or an individual retirement
annuity described in Code section 408(b) that accepts the
surviving spouse's "eligible rollover distribution," but not an
annuity plan described in Code section 403(a) nor a qualified
trust described in Code section 401(a).
(c) The Participant or his or her spouse or former spouse must
specify, in such form and at such time as the Committee may
prescribe, the "eligible retirement plan" to which the
distribution is to be paid and may specify more than one
"eligible retirement plan.
(d) The Participant or his or her spouse or former spouse must
provide to the Committee in a timely manner adequate information
regarding the designated "eligible retirement plan".
Section 11.17 Payments upon Sale or other Disposition by Company or an
Affiliate.
Effective for transactions involving the sale by the Company or an
Affiliate of a subsidiary or substantially all the assets used in a trade or
business occurring on or after January 1, 2000, a Participant may elect to have
his or her entire Account distributed as a lump sum payment should the
circumstances of such sale or disposition meet the requirements set forth in
Code section 401(k)(10). The Committee shall determine whether the circumstances
of the sale of a subsidiary or substantially all the assets used in a trade or
business meet the requirements of Code section 401(k)(10).
ARTICLE XII
LIMITS ON BENEFITS AND CONTRIBUTIONS UNDER QUALIFIED PLANS
Section 12.1. Definitions. For purposes of this Article XII, the following
definitions and rules of interpretation shall apply:
(a) "Annual Additions" to a participant's account under a defined
benefit plan or a defined contribution plan is the sum, credited
to a participant's account for any Limitation Year, of:
(1) Company contributions,
(2) Forfeitures, if any,
(3) Employee contributions and
(4) Amounts, if any, attributable to medical benefits
allocated to an account established under Code section
419A(d)(2) on behalf of such Participant.
(b) "Company" shall mean the Company, as described in Section 2.11
and any Affiliate as defined in Section 2.4.
(c) "Compensation" with respect to a Limitation Year -
(1) includes amounts paid to a Participant (regardless of
whether he or she was such during the entire Limitation
Year);
(i) as wages, salaries, fees for professional services and
other amounts received (without regard to whether or
not an amount is paid in cash) for personal services
actually rendered in the course of employment with any
Company including but not limited to commissions,
compensation for services on the basis of a percentage
of profits, fringe benefits, reimbursements and other
expense allowances under nonaccountable plans (as
described in Treasury Regulation 1.b2-2(c)) and
bonuses;
(ii) earned income from sources from outside the United
States (as defined in Code section 911(b)), whether or
not excludable from gross income under Code section 911
or deductible under Code sections 931 and 933;
(iii)amounts described in Code sections 104(a)(3), 105(a)
and 105(h) but only to the extent that these amounts
are includible in the gross income of the Participant;
(iv) in the case of an employee within the meaning of Code
section 401(c)(1) and the regulations thereunder, the
Participant's earned income (as described in Code
section 401(c)(2) and the regulations thereunder);
(v) amounts paid or reimbursed by the Company for moving
expenses incurred by the Participant, but only to the
extent that these amounts are not deductible by the
Participant under Code section 217.
(vi) The value of a nonqualified stock option granted to a
Participant by a Company, but only to the extent that
the value of the option is includible in the gross
income of the Participant for the taxable year in which
granted.
(vii)The amount includible in the gross income of a
Participant upon making the election described in Code
section 83(b).
(2) Compensation does not include -
(i) notwithstanding subsection (1)(i) of this Section
12.1(c), for Plan Years prior to January 1, 1998, there
shall be excluded from Compensation amounts contributed
to a plan qualified under section 401(k) of the Code as
salary reduction contributions (and not recharacterized
as employee contributions thereunder);
(ii) other contributions made by the Company to a plan of
deferred compensation to the extent that, before the
application of the Code section 415 limitations to the
plan, the contributions are not includible in the gross
income of the Participant for the taxable year in which
contributed. In addition, Company contributions made on
behalf of a Participant to a simplified Participant
pension described in Code section 408(k) are not
considered as Compensation for the taxable year in
which contributed to the extent such contributions are
deductible by the Participant under Code section
219(b)(7). Additionally, any distributions from a plan
of deferred compensation are not considered as
Compensation, regardless of whether such amounts are
includible in the gross income of the Participant when
distributed. However, any amounts received by a
Participant pursuant to an unfunded nonqualified plan
shall be considered as Compensation in the year such
amounts are includible in the gross income of the
Participant;
(iii)amounts realized from the exercise of a nonqualified
stock option or when restricted stock (or property)
held by a Participant either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture (see Code section 83 and the
regulations thereunder);
(vi) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option;
(v) other amounts which receive special tax benefits, such
as premiums for group term life insurance (but only to
the extent that the premiums are not includible in the
gross income of the Participant);
(d) "Limitation Year" - the Plan Year;
(e) "Maximum Permissible Defined Contribution Amount" - for a
Limitation Year the Maximum Permissible Defined Contribution
Amount with respect to any Participant shall be the lesser of:
(1) $30,000, or if greater, one fourth of the limitation in
effect under Code section 415(b)(1)(A) (as adjusted by Code
section 415(d)(1)(A)).
(2) 25% of the Participant's Compensation for the Limitation
year.
Notwithstanding the foregoing, or anything herein to the
contrary, the percentage of compensation limitation of this
Section 12.1(g)(2) shall not apply to any Annual Additions
pursuant to Section 12.1(a)(4) above.
Section 12.2. Annual Addition Limits. The amount of the Annual Addition
which may be credited under this Plan to any Participant's Account as of any
allocation date shall not exceed the Maximum Permissible Defined Contribution
Amount (based upon his or her Compensation up to such allocation date) reduced
by the sum of any credits of Annual Additions made to the Participant's Account
under all defined contribution plans as of any preceding allocation date within
the Limitation Year. If an allocation date of this Plan coincides with an
allocation date of any other qualified defined contribution plan maintained by
the Company, the amount of the Annual Additions which may be credited under this
Plan to any Participant's Account as of such date shall be an amount equal to
the product of the amount to be credited under this Plan without regard to this
Section 12.2 multiplied by the lesser of one or a fraction, the numerator of
which is the amount described in this Section 12.2 during the Limitation Year
and the denominator of which is the amount that would be otherwise credited on
this allocation date under all defined contribution plans without regard to this
Section 12.2. However, if a security is not allocated to a Participant's Account
under any qualified tax credit employee stock ownership plan of the Company
because of the operation of the limitations of Code section 415 and the
provisions of this Section 12.2, no other amount may be allocated to the
Participant's Account under this Plan after the allocation date for such tax
credit employee stock ownership plan's plan year, until all such unallocated
securities have been allocated in accordance with the provisions of such tax
credit employee stock ownership plan. If contributions to this Plan on behalf of
a Participant are to be reduced as a result of this Section 12.2, such reduction
shall be effected by reducing contributions in the following order: Supplemental
Nondeferred Deposits, Basic Nondeferred Deposits and corresponding matching
Company Contributions, Supplemental Deferred Deposits and finally, if necessary,
Basic Deferred Deposits and corresponding remaining matching Company
Contributions. If, as a result of a reasonable error in estimating a
Participant's Compensation, or under the limited facts and circumstances which
the Commissioner finds justify the availability of the rules set forth in
paragraphs (a)-(c) of this Section 12.2, the allocation of Annual Additions
under the terms of the Plan for a particular Participant would cause the
limitations of Code section 415 applicable to that Participant for the
Limitation Year to be exceeded, the excess amounts shall not be deemed to be
Annual Additions in that Limitation Year if they are treated as follows:
(a) To the extent necessary, Deferred Deposits to the Plan shall be
recharacterized as Nondeferred Deposits and the Participant's
Nondeferred Deposits to the Plan (including Deferred Deposits
recharacterized as Nondeferred Deposits hereunder) and earnings
thereon shall be returned to the Participant.
(b) The excess amounts in the Participant's Account consisting of
Company Contributions shall be used to reduce Company
Contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for all Participants in the Plan.
For purposes of this subdivision, except as provided in (a) of
this Section 12.2, excess amounts may not be distributed to
Participants or former Participants.
(c) In the event of a termination of the Plan, the suspense account
described in (b) of this Section 12.2 shall revert to the Company
to the extent it may not then be allocated to any Participant's
Account.
(d) Notwithstanding any other provision in this Section 12.2, the
Company shall not contribute any amount that would cause an
allocation to the suspense account as of the date the
contribution is allocated. If the contribution is made prior to
the date as of which it is to be allocated, then such
contribution shall not exceed an amount that would cause an
allocation to the suspense account if the date of contribution
were an allocation date.
Section 12.3. Overall Limit. Notwithstanding any provision of this Plan to
the contrary, effective for Limitation Years beginning on or after January 1,
2000, the requirements contained in Code section 415(e) shall no longer apply.
ARTICLE XIII
TOP-HEAVY REQUIREMENTS
Section 13.1. Definitions. For purposes of this Article XIII, the following
accordance with the provisions of Code section 416 and the regulations
thereunder:
(a) "Aggregation Group" shall mean a plan or group of plans which
includes all plans maintained by the Employers in which a Key
Employee is a Participant or which enables any plan in which a
Key Employee is a Participant to meet the requirements of Code
section 401(a)(4) or Code section 410, as well as all other plans
selected by the Company for permissive aggregation inclusion of
which would not prevent the group of plans from continuing to
meet the requirements of such Code sections.
(b) "Compensation" with respect to a Plan Year shall be as defined in
Section 12.1(c).
(c) "Determination Date" shall mean, with respect to any Plan Year,
(1) the last day of the preceding Plan Year, or, (2) in the case
of the first Plan Year of any Plan, the last day of such Plan
Year.
(d) "Employee" shall mean, for purposes of this Article XIII, any
person employed by an Employer and shall also include any
beneficiary of such person, provided that the requirements of
Sections 13.3, 13.4 and 13.5 shall not apply to any person
included in a unit of Employees covered by an agreement which the
Secretary of Labor finds to be a collective bargaining agreement
between Employee representatives and one or more Employers if
there is evidence that retirement benefits were the subject of
good faith bargaining between such Employee representatives and
such Employer or Employers.
(e) "Employer" shall mean, any corporation which is a member of a
controlled group of corporations (as defined in Code section
414(b)) which includes the Company or any trades or business
(whether or not incorporated) which are under common control (as
defined in Code section 414(c)) with the Company, or a member of
an affiliated service group (as defined in Code section 414(m))
which includes the Company.
(f) "Key Employee" shall mean, any Employee or former Employee who
is, at any time during the Plan Year, or was, during any one of
the four preceding Plan Years any one or more of the following:
(1) An officer of an Employer having an annual Compensation
greater than 50% of the amount in effect under Code section
415(b)(1)(A) for any Plan Year unless 50 other such officers
(or, if lesser, a number of such officers equal to the
greater of three or 10% of the Employees) have higher annual
Compensation.
(2) One of the 10 persons employed by an Employer having annual
Compensation greater than the limitation in effect under
Code section 415(c)(1)(A) for any Plan Year, and owning (or
considered as owning within the meaning of Code section 318)
the largest interests in the Employers. For purposes of this
paragraph (2), if two Employees have the same interest, the
one with the greater Compensation shall be treated as owning
the larger interest.
(3) Any person owning (or considered as owning within the
meaning of Code section 318) more than 5% of the outstanding
stock of an Employer or stock possessing more than 5% of the
total combined voting power of such stock. (4) A person who
would be described in paragraph (3) above if "1%" were
substituted for "5%" each place it appears in paragraph (3)
above, and who has annual Compensation of more than
$150,000. For purposes of determining ownership under this
Section 13.11(f), Code section 318(a)(2)(C) shall be applied
by substituting "5%" for "50%" and the rules of subsections
(b), (c) and (m) of Code section 414 shall not apply.
(g) "Year of Service" shall mean, a year which constitutes a "Year of
Service" under the rules of paragraphs (4), (5) and (6) of Code
section 411(a) to the extent not inconsistent with the provisions
of this Article XIII.
Section 13.2. General Requirements. For any Plan Year beginning after 1983
in which the Plan is a Top-Heavy Plan, the requirements of this Article XIII
must be met in accordance with Code section 416 and the regulations thereunder.
The provisions of this Article XIII shall be inapplicable unless and until the
Plan is a Top-Heavy Plan.
Section 13.3. Maximum Compensation. Compensation for any Employee shall not
be taken into account under the Plan in excess of the amount provided for
pursuant to Code section 401(a)(17) and the regulations thereunder.
Section 13.4. Vesting. A Participant who is credited with an Hour of
Service while the Plan is Top-Heavy, or in any Plan Year after a Plan Year in
which the Plan is Top-Heavy, and who has completed at least three Years of
Service shall have a nonforfeitable right to 100% of his or her accrued benefit
derived from Employer Contributions and no such amount may become forfeitable if
the Plan later ceases to be Top-Heavy nor may such amount be forfeited under the
provisions of Code sections 411(a)(3)(B) or 411 (a)(3)(D). Such accrued benefit
shall include benefits accrued before the Plan becomes Top-Heavy, including
benefits accrued prior to January 1, 1984. Notwithstanding any other provisions
of this Plan to the contrary, once the vesting requirements of this Section 13.4
become applicable, they shall remain applicable even if the Plan later ceases to
be Top-Heavy.
Section 13.5. Minimum Contributions. Minimum Employer Contributions for a
Participant (not including a beneficiary of any Participant) who is not a Key
Employee shall be required under the Plan for the Plan Year as follows:
(a) The amount of the minimum contribution shall be the lesser of the
following percentages of Compensation:
(1) four percent, or,
(2) the highest percentage at which such contributions are made
under the Plan for the Plan Year on behalf of a Key
Employee.
(i) For purposes of this paragraph (2), all defined
contribution plans required to be included in an
Aggregation Group shall be treated as one plan.
(ii) This paragraph (2) shall not apply if the Plan is
required to be included in an Aggregation Group and the
Plan enables a defined benefit plan required to be
included in the Aggregation Group to meet the
requirements of Code sections 401(a)(4) or 410.
(iii)For purposes of this paragraph (2), the calculation of
the percentage at which Employer Contributions are made
for a Key Employee shall be based only on his or her
Compensation not in excess of maximum counted
compensation as provided in Section 13.3.
(b) There shall be disregarded for purposes of this Section 13.5,
contributions or benefits under Code section 3111, Title II of
the Social Security Act or any other federal or state law, and
for Plan Years beginning before December 31, 1984, there shall
also be disregarded any contributions attributable to a salary
reduction or a similar arrangement.
(c) For purposes of this Section 13.5, the term "Participant" shall
be deemed to refer to all Participants who have not separated
from service at the end of the Plan Year including, without
limitation, individuals who:
(1) failed to complete 1000 Hours of Service during the Plan
Year, or
(2) declined to make mandatory contributions to the Plan, or
(3) are excluded from the Plan because their Compensation is
less than a stated amount but who must be considered
Participants for the Plan to satisfy the coverage
requirements of Code section 410(b) in accordance with Code
section 401(a)(5).
Section 13.6. Participants Under Defined Benefit Plans. If any Plan
Participant other than a Key Employee is also a Participant under a defined
benefit plan of an Employer, then Section 13.5(a) shall not apply and the
required minimum annual Employer Contribution for such Participant (not
including a beneficiary of a Participant) under this Plan shall be 7 1/2% of
Compensation, or such lesser amount as may be required to satisfy the
requirements of the Code related to Top-Heavy Plans. Such Employer Contribution
shall be made without regard to the amount of contributions, if any, made to the
Plan on behalf of Key Employees.
Section 13.7. Super Top-Heavy Plans. If for any Plan Year in which the Plan
is a Top-Heavy Plan it is also a Super Top-Heavy Plan, then for purposes of the
limitations on Employer Contributions and benefits provided in Code section 415,
and Section 5.3. and Article XII of the Plan, the dollar limitations in the
defined benefit plan fraction and the defined contribution plan fraction shall
be multiplied by 1.0 rather than 1.25. However, if the application of the
provisions of this Section 13.7 would cause any Participant to exceed the
combined Code section 415 limitations on Employer Contributions and benefits,
then the application of the provisions of this Section 13.7 shall be suspended
as to such Participant until such time as he or she no longer exceeds such
limitations as modified by this Section 13.7. During the period of such
suspension, there shall be no Employer Contributions, forfeitures or
Non-Deferred Supplemental Deposits allocated to such Participant under this or
any other defined contribution plan of the Employers and there shall be no
accruals for such Participant under any defined benefit plan of the Employers.
For Plan Years beginning on or after January 1, 2000, this Section 13.7 shall no
longer be applicable.
Section 13.8. Determination of Top-Heaviness. The determination of whether
this Plan is Top-Heavy shall be made as follows:
(a) If the Plan is not required to be included in an Aggregation
Group with other plans, then it shall be Top-Heavy only if when
considered by itself it is a Top-Heavy Plan and it is not
included in a permissive Aggregation Group that is not a
Top-Heavy Group.
(b) If the Plan is required to be included in an Aggregation Group
with other plans, it shall be Top-Heavy only if the Aggregation
Group, including any permissively aggregated plans is Top-Heavy.
(c) If a plan is not a Top-Heavy Plan and is not required to be
included in an Aggregation Group, then it shall not be Top-Heavy
even if it is permissively aggregated in an Aggregation Group
which is a Top-Heavy Group.
Section 13.9. Determination of Super Top-Heaviness. This Plan shall be a
Super Top-Heavy Plan if it would be a Top-Heavy Plan under the provisions of
Section 13.8, but substituting "90%" for "60%" in the ratio test of Section
13.10.
Section 13.10. Calculation of Top-Heavy Ratios. A Plan shall be Top-Heavy
and an Aggregation Group shall be a Top-Heavy Group with respect to any Plan
Year as of the Determination Date if the sum as of the Determination Date of the
Cumulative Accrued Benefits and the Cumulative Accounts of Employees who are Key
Employees for the Plan Year exceeds 60% of a similar sum determined for all
Employees, excluding former Key Employees.
Section 13.11. Cumulative Accounts and Cumulative Accrued Benefits. The
Cumulative Accounts and Cumulative Accrued Benefits for any Employee shall be
determined as follows:
(a) "Cumulative Account" shall mean the sum of the amount of an
Employee's Account under a defined contribution plan (for an
unaggregated Plan) or under all defined contribution plans
included in an Aggregation Group (for aggregated plans)
determined as of the most recent plan valuation date within a
12-month period ending on the Determination Date, increased by
any contributions due after such valuation date and before
Determination Date.
(b) "Cumulative Accrued Benefit" shall mean the sum of the present
value of an Employee's accrued benefits under a defined benefit
plan (for an unaggregated plan) or under all defined benefit
plans included in an Aggregation Group (for aggregated plans),
determined under the actuarial assumptions set forth in such Plan
or Plans, as of the most recent plan valuation date used by the
Plan actuary within the 12-month period ending on the
Determination Date as if the Employee voluntarily terminated
service as of such valuation date. The accrued benefit of any
Employee who is not a Key Employee shall be determined under the
method used for accrual purposes for all plans in the Aggregation
Group 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).
(c) Accounts and benefits shall be calculated to include all amounts
attributable to both Employer and Employee contributions but
excluding amounts attributable to voluntary deductible Employee
contributions.
(d) Accounts and benefits shall be increased by the aggregate
distributions during the five-year period ending on the
Determination Date made with respect to an Employee under the
Plan or Plans as the case may be or under a terminated plan
which, if it had not been terminated, would have been required to
be included in the Aggregation Group.
(e) Rollover Contributions and direct plan to plan transfers shall be
handled as follows:
(1) If the transfer is initiated by the Employee and made from a
plan maintained by one employer to a plan maintained by
another employer, the transferring plan continues to count
the amount transferred under the rules for counting
distributions. The receiving plan does not count the amount
if accepted after December 31, 1983, but does count it if
accepted prior to December 31, 1983.
(2) If the transfer is not initiated by the Employee or is made
between plans maintained by the Employers, the transferring
plan shall no longer count the amount transferred and the
receiving plan shall count the amount transferred.
(3) For purposes of this subsection (e), all Employers
aggregated under the rules of Code sections 414(b), (c) and
(m) shall be considered a single employer.
(f) For plan years beginning after December 31, 1984, the accrued
benefits and Accounts of any Employee who has not performed
services for any Employer at any time during the five-year period
ending on the Determination Date shall not be taken into account.
ARTICLE XIV
BENEFICIARY IN EVENT OF DEATH
Section 14.1. Designation and Change of Beneficiary. Upon the death of a
married Participant, the spouse of the Participant shall be deemed the
designated beneficiary of the Participant, unless such spouse has consented, in
writing, to the designation of another beneficiary or beneficiaries (which may
include the estate of the Participant) or any change thereof. If such other
designated beneficiary or beneficiaries predecease a married Participant, such
Participant's spouse shall be deemed the designated beneficiary of the
Participant. If, in such case, the Participant's spouse has also predeceased the
Participant, the value of the Participant's Account shall be paid to his or her
estate.
Each unmarried Participant shall have the right to designate a beneficiary
or beneficiaries to receive any distributions to be made under Article XI upon
the death of such Participant. An unmarried Participant may from time to time,
without the consent of any beneficiary, change or cancel any such designation.
If no beneficiary has been named by a deceased unmarried Participant, or the
designated beneficiary has predeceased such Participant, the value of the
Participant's Account shall be paid to his or her estate as beneficiary.
Any spousal consent, beneficiary designation and any change therein shall
be made in the form and manner prescribed by the Committee and shall be filed
with the General Manager. Any distribution made to a beneficiary of a deceased
Participant under the Plan shall be made to the beneficiary as soon as
practicable after such Participant's death and shall be in the form of a lump
sum payment, regardless of the form of benefit selected by the deceased
Participant. The beneficiary may elect to have such payment made in money by
check, or may elect to have any whole shares of Company Common Stock held for
the deceased Participant's Company Common Stock Fund subaccount and ESOP Account
distributed in shares of Company Common Stock and the balance of the deceased
Participant's Account (including the value of any fractional shares of Company
Common Stock) paid in money by check. If no election is made, the entire
distribution to the beneficiary shall be made in money by check.
ARTICLE XV
ADMINISTRATION
Section 15.1. Named Fiduciary. The Committee (and each member of the
Committee acting as such) shall be the named fiduciary of the Plan with
authority to control and manage the operation and administration of the Plan.
Section 15.2. Administration.
(a) The Committee shall have full discretionary authority to
interpret the Plan and to answer all questions which arise
concerning the application, administration and interpretation of
the Plan. The Committee shall adopt such rules and procedures as
in its opinion are necessary and advisable to administer the Plan
and to transact its business. Subject to the other requirements
of this Article XV, the Committee may --
(1) Employ agents to carry out non-fiduciary responsibilities;
(2) Employ agents to carry out fiduciary responsibilities (other
than trustee responsibilities as defined in ERISA Section
405(c)(3));
(3) Consult with counsel, who may be of counsel to an Employer
or an Affiliate; and
(4) Provide for the allocation of fiduciary responsibilities
(other than trustee responsibilities as defined in ERISA
Section 405(c)(3)) among its members. However, any action
described in subparagraphs (2) or (4) of this subparagraph
(a) and any modification or rescission of any such action,
may be effected by the Committee only by a resolution
approved by a majority of the Committee.
(b) The Committee shall keep written minutes of all its proceedings,
which shall be open to inspection by the Board of Directors. In
the case of any decision by the Committee with respect to a claim
for benefits under the Plan, the Committee shall include in its
minutes a brief explanation of the grounds upon which such
decision was based.
(c) In performing their duties, the members of the Committee shall
act solely in the interest of the Participants in the Plan and
their beneficiaries and:
(1) for the exclusive purpose of providing benefits to the
Participants and their beneficiaries;
(2) with the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent man or woman
acting in like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and
with like aims; and
(3) in accordance with the documents and instruments governing
the Plan insofar as such documents and instruments are
consistent with the provisions of Title I of ERISA. In
addition to any other duties the Committee may have, the
Committee shall periodically review the performance of the
Trustee and any Investment Managers and the performance of
all other persons to whom fiduciary duties have been
delegated or allocated pursuant to the provisions of this
Article XV.
(d) The Company agrees to indemnify and reimburse, to the fullest
extent permitted by law, members of the Committee, directors and
Employees of an Employer and all such former members, directors
and Employees, for any and all expenses, liabilities or losses
arising out of any act or omission relating to the rendition of
services for or the management and administration of the Plan.
(e) No member of the Committee nor any of its delegates shall be
personally liable by virtue of any contract, agreement or other
instrument made or executed by him or her or on his or her behalf
in such capacity.
Section 15.3. Control and Management of Assets. The assets of the Plan
shall be held by the Trustee, in trust, and shall be managed by the Trustee
and/or one or more Investment Managers appointed from time to time by the
Committee; provided, however, that the Committee shall have investment authority
with respect to loans approved pursuant to Section 11.13, and may, from time to
time, determine that the Trustee shall be subject to the direction of the
Committee with respect to certain other investments, in which case the Trustee
shall be subject to proper directions of the Committee which are in accordance
with the terms of the Plan and which are not contrary to applicable law.
Section 15.4. Benefits to be Paid from Trust. Benefits under the Plan shall
be payable only from the Trust Fund and only to the extent that such Trust Fund
shall suffice therefore and each Participant assumes all risk connected with any
decrease in market price of any securities in the respective Funds. Neither the
Company nor any Affiliate shall have any liability to make or continue from its
own funds the payment of any benefits under the Plan.
Section 15.5. Expenses. There shall be paid from the Trust Fund all
expenses incurred in connection with the administration of the Plan, including
but not limited to the compensation of the Trustee, record keeping fees, the
reasonable fees of counsel for the Trustee for legal services rendered to the
Trustee and the fees of Investment Managers appointed with respect to the
investment and reinvestment of the Trust Fund, except to the extent that such
expenses and fees are paid by the Employer. There shall be paid from the Trust
Fund all taxes of any and all kinds whatsoever that may be levied or assessed
under existing or future laws upon or in respect of the Trust Fund or any
property of any kind forming a part thereof and all expenses, including
brokerage costs and transfer taxes, incurred in connection with the investment
and reinvestment of the Trust Fund.
Section 15.6. Overpayments. Any overpayment made to a Participant may be
withheld from subsequent payments made to such Participant or from payments made
to his/her surviving spouse or beneficiary until the overpayment has been
recouped.
ARTICLE XVI
CLAIMS PROCEDURE
Section 16.1. Filing of Claims. Claims for benefits under the Plan shall be
filed in writing on such form or forms as may be prescribed by the Committee
with the General Manager.
Section 16.2. Appeal of Claims. Written notice shall be given to the
claiming Participant or beneficiary of the disposition of such claim, setting
forth specific reasons for any denial of such claim in whole or in part. If a
claim is denied in whole or in part, the notice shall state that such
Participant or beneficiary may, within sixty days of the receipt of such denial,
request in writing that the decision denying the claim be reviewed by the
Committee and provide the Committee with information in support of his or her
position by submitting such information in writing to the Secretary of the
Committee.
Section 16.3. Review of Appeals. The Committee shall review each claim for
benefits which has been denied in whole or in part and for which such review has
been requested and shall notify, in writing, the affected Participant or
beneficiary of its decision and of the reasons therefor. All decisions of the
Committee shall be final and binding upon all of the parties involved.
ARTICLE XVII
MERGER OR CONSOLIDATION
Section 17.1. Merger or Consolidation. In the case of any merger or
consolidation of the Plan with, or transfer of assets or liabilities to, any
other plan, each Participant or beneficiary shall be entitled to receive a
benefit immediately after the merger, consolidation or transfer (if the Plan had
been terminated) which is equal to or greater than the benefit he or she would
have been entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated). A merger or consolidation of the
Plan with, or transfer of assets or liabilities to, any other plan shall not be
deemed to be a termination or discontinuance of deposits and contributions
having the effect of such termination of the Plan.
ARTICLE XVIII
NON-ALIENATION OF BENEFITS
Section 18.1. Non-Alienation of Benefits. Except as provided under Sections
11.13 and 22.1, no benefit or right under the Plan shall in any manner or to any
extent be assigned, alienated or transferred by any Participant or beneficiary
under the Plan or be subject to attachment, garnishment or other legal process.
Notwithstanding the foregoing, a Participant's benefit under the Plan may be
offset by any amount such Participant is ordered or required to pay as a result
of crimes involving the Plan, or a breach of a fiduciary duty owed by the
Participant with respect to the Plan, as set forth in Code section 401(a)(13),
on or after August 5, 1997.
ARTICLE XIX
AMENDMENTS
Section 19.1. Amendment Process. The Company reserves the right, by action
of the Board of Directors, but subject to applicable law, at any time and from
time to time, to modify, suspend or amend in whole or in part any or all of the
provisions of the Plan, provided that no modification, suspension or amendment
shall make it possible to deprive any Participant or beneficiary of a previously
acquired right; and provided further that no such modification, suspension or
amendment shall make it possible for any part of the assets of the Plan to be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their beneficiaries under the Plan and for the payment of
expenses of the Plan.
ARTICLE XX
TERMINATION
Section 20.1. Authority to Terminate. The Plan may be terminated in whole
or in part at any time by the Board of Directors, but only upon condition that
such action is taken as shall render it impossible for any part of the corpus or
income of the Trust Fund to be used for or diverted to purposes other than for
the exclusive benefit of the Participants or their beneficiaries and for the
payment of expenses of the Plan.
Section 20.2. Distribution Upon Termination. Upon termination or partial
termination of the Plan or upon the complete discontinuance of Deposits and
Employer Contributions under the Plan, the assets of the Trust Fund shall be
administered and distributed to the Participants or their beneficiaries at such
time or times and in such nondiscriminatory manner as is determined by the
Committee. Upon termination or partial termination of the Plan or upon the
complete discontinuance of Deposits and Employer Contributions under the Plan,
the rights of all affected Participants as of the date of such termination,
partial termination or discontinuance of Deposits and Employer Contributions
shall be nonforfeitable.
ARTICLE XXI
PLAN CONFERS NO RIGHT TO EMPLOYMENT
Section 21.1. No Right to Employment. Nothing contained in the Plan shall
be construed as conferring any legal rights upon any Employee for a continuation
of employment or shall interfere with the rights of an Employer or an Affiliate
to discharge any Employee or otherwise to treat him or her without regard to the
effect which such treatment might have upon such Employee with respect to the
Plan, except as may be limited by applicable law.
ARTICLE XXII
ALTERNATE PAYEES
Section 22.1. Alternate Payees Under QDROs. In the event that a domestic
relations order of any State is received by the Plan and thereafter determined
to be a Qualified Domestic Relations Order (QDRO) within the meaning of Code
section 414(p), the vested portion of the Account of the Participant to which
such QDRO is directed shall be apportioned as specified in such QDRO, valued as
of the business day preceding the date specified in such QDRO. Upon notice to
the Committee that a QDRO is being sought with respect to a Participant's
Account, no distribution or loan shall be made to a Participant until such time
as the status of the QDRO is determined. The alternate payee of the
Participant's Account shall thereafter participate in the Plan in accordance
with its terms, except such person shall not have the rights or benefits
provided in Article IV, Article V and in Section 11.13. If a QDRO is issued and
the amount awarded the alternate payee exceeds the value of the Participant's
Account less the outstanding loan balance, such loan shall be deemed to be in
default and the Participant shall immediately repay the loan. Notwithstanding
the provisions of this Article, the Plan may, without the consent of any such
alternate payee, pay to such alternate payee the value of his or her respective
share of the apportioned Account of the Participant, if the value thereof as so
determined is $5,000.00 or less. If a QDRO so provides, benefits may be paid to
an alternate payee before they would otherwise be distributable under the Plan,
and no such distribution to an alternate payee shall be treated as a withdrawal
by the Participant for purposes of Article XI.
ARTICLE XXIII
CONSTRUCTION
Section 23.1. Governing Law. The Plan shall be governed by and construed
and administered under the laws of the State of New Jersey, except to the extent
superseded by ERISA.
Section 23.2. Headings. The headings are for reference only. In the event
of a conflict between a heading and the content of an Article or Section, the
content shall control.
