SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission File Number 1-973
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
PUBLIC SERVICE ELECTRIC AND GAS COMPANY EMPLOYEE SAVINGS PLAN
80 PARK PLAZA
NEWARK, NEW JERSEY 07101
MAILING ADDRESS: P.O. Box 570
NEWARK, NEW JERSEY 07101-0570
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
See page 2.
<PAGE>
Equities Growth Fund A NEW YORK LIFE INSURANCE COMPANY
TWENTIETH CENTURY INVESTORS, INC. 501 MADISON AVENUE
4500 MAIN STREET NEW YORK, NEW YORK 10010
P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200
AIG LIFE INSURANCE COMPANY
Balanced Fund B ONE ALICO PLAZA
PHOENIX SERIES FUND P.O. BOX 667
101 MUNSON STREET WILMINGTON, DELAWARE 19899
GREENFIELD, MASSACHUSETTS 01301
Stable Value Fund C Enterprise Common Stock Fund D
THE PRUDENTIAL LIFE INSURANCE and ESOP Fund
COMPANY OF AMERICA PUBLIC SERVICE ENTERPRISE GROUP
PRUDENTIAL PLAZA INCORPORATED
NEWARK, NEW JERSEY 07101 80 PARK PLAZA
NEWARK, NEW JERSEY 07101-1171
METROPOLITAN LIFE INSURANCE COMPANY Large Company Stock Index Fund E
ONE MADISON AVENUE BANKERS TRUST COMPANY
NEW YORK, NEW YORK 10010-3690 280 PARK AVENUE
NEW YORK, NEW YORK 10017
PRINCIPAL MUTUAL LIFE INSURANCE Utilities Equities Fund F
COMPANY FIDELITY PORTFOLIOS
THE PRINCIPAL FINANCIAL GROUP 82 DEVONSHIRE STREET
DES MOINES, IOWA 50392-0001 BOSTON, MASSACHUSETTS 02109
JOHN HANCOCK MUTUAL LIFE COMPANY Intermediate Government Securities Fund G
JOHN HANCOCK PLACE VOYAGEUR FUND MANAGERS INC.
P.O. BOX 111 90 SOUTH SEVENTH STREET
BOSTON, MASSACHUSETTS 02117 SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
ALLSTATE LIFE INSURANCE COMPANY International Stock Fund H
ALLSTATE PLAZA WEST T. ROWE PRICE INC.
3100 SANDERS ROAD 100 EAST PRATT STREET
NORTHBROOK, ILLINOIS 60062 BALTIMORE, MARYLAND 21202
PROVIDENT NATIONAL ASSURANCE Mid/Small Company Stock Fund
COMPANY PUTNAM INVESTMENTS
FOUNTAIN SQUARE P.O. BOX 41203
CHATTANOOGA, TENNESSEE 37402 PROVIDENCE, RHODE ISLAND 02940
J.P.MORGAN
60 WALL STREET
NEW YORK, NEW YORK 10260
<PAGE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
INDEX
PAGE
----
INDEPENDENT AUDITORS' REPORT............................................ 4
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996 AND 1995...................................... 5-10
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 and 1995........................ 11-16
NOTES TO FINANCIAL STATEMENTS........................................... 17-26
SIGNATURES.............................................................. 27
EXHIBIT INDEX........................................................... 28
<PAGE>
INDEPENDENT AUDITORS' REPORT
Employee Benefits Committee of
Public Service Electric and Gas Company:
We have audited the accompanying statements of net assets available for benefits
of the Public Service Electric and Gas Company Employee Savings Plan (the
"Plan") as of December 31, 1996 and 1995, and the related statements of changes
in net assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1996
and 1995, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding the net assets available
for benefits and changes in net assets available for benefits of the individual
funds, and is not a required part of the basic financial statements. This
information is the responsibility of the Plan's management. Such information has
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 25, 1997
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1996
(Supplemental Information by Fund)
<CAPTION>
Equities Enterprise
Growth Balanced Stable Value Common Stock
Total Fund A Fund B Fund C Fund D
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value
Plan interest in PSE&G Company
Master Employee Benefit Plan Trust $ 216,734,220 $ - $ - $ 100,834,108 $ 25,100,017
Receivables-Interest
and Dividends 523,198 - - 514,629 8,236
--------------------------------------------------------------------------
Total Assets $ 217,257,418 $ - $ - $ 101,348,737 $ 25,108,253
==========================================================================
LIABILITIES
Accounts Payable $ 193,558 $ - $ - $ 319,521 $ 22,896
Transfer to/from PSE&G Company
Thrift & Tax-Deferred Savings Plan (181,176) - - (168,771) -
Forfeitures 4,830 - - 2,447 355
--------------------------------------------------------------------------
Total Liabilities 17,212 - - 153,197 23,251
--------------------------------------------------------------------------
Net Assets Available for Benefits $ 217,240,206 $ - $ - $ 101,195,540 $ 25,085,002
==========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1996
(Supplemental Information by Fund (Continued))
<CAPTION>
Intermediate
Large Company Utilities Government International Mid/Small
Stock Index Equities Securities Stock Company
Fund E Fund F Fund G Fund H Stock Fund
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value
Plan interest in PSE&G Company
Master Employee Benefit Plan Trust $ 36,476,571 $ - $2,172,925 $ 7,989,413 $ 6,686,242
Receivables-Interest
and Dividends - - - - -
--------------------------------------------------------------------------
Total Assets $ 36,476,571 $ - $2,172,925 $ 7,989,413 $ 6,686,242
==========================================================================
LIABILITIES
Accounts Payable $ 43,629 $ - $ (773) $ (5,186) $ (66,571)
Transfer to/from PSE&G Company
Thrift & Tax-Deferred Savings Plan - - - - -
Forfeitures 911 - 8 123 479
--------------------------------------------------------------------------
Total Liabilities 44,540 - (765) (5,063) (66,092)
--------------------------------------------------------------------------
Net Assets Available for Benefits $ 36,432,031 $ - $2,173,690 $ 7,994,476 $ 6,752,334
==========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1996
(Supplemental Information by Fund (Concluded))
<CAPTION>
Conservative Moderate Aggressive
Pre-Mix Pre-Mix Pre-Mix Holding Trust
Portfolio Portfolio Portfolio ESOP Account Loan Fund
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments, at fair value
Plan interest in PSE&G Company
Master Employee Benefit Plan Trust $2,704,371 $6,801,302 $8,960,644 $8,349,458 $48,053 $10,611,116
Receivables-Interest
and Dividends - - - 146 187 -
-------------------------------------------------------------------------------
Total Assets $2,704,371 $6,801,302 $8,960,644 $8,349,604 $48,240 $10,611,116
===============================================================================
LIABILITIES
Accounts Payable $ 3,906 $ (111,156) $ (10,358) $ 15,147 $26,071 $ (43,568)
Transfer to/from PSE&G Company
Thrift & Tax-Deferred Savings Plan (6,190) (6,215) - - - -
Forfeitures 138 196 173 - - -
-------------------------------------------------------------------------------
Total Liabilities (2,146) (117,175) (10,185) 15,147 26,071 (43,568)
-------------------------------------------------------------------------------
Net Assets Available for Benefits $2,706,517 $6,918,477 $8,970,829 $8,334,457 $22,169 $10,654,684
===============================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1995
(Supplemental Information by Fund)
<CAPTION>
Equities Fixed Enterprise
Growth Balanced Income Common Stock
Total Fund A Fund B Fund C Fund D
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments
Enterprise Common Stock $ 40,166,821 $ - $ - $ - $ 29,530,922
Equities Growth Fund 10,338,793 10,338,793 - - -
Balanced Fund 4,417,994 - 4,417,994 - -
Insurance Annuity Contracts (GICs) 86,241,687 - - 86,241,687 -
Stock Index Equities Fund 21,714,701 - - - -
Utilities Equities Fund 5,059,521 - - - -
Government Securities Fund 1,808,476 - - - -
International Stock Fund 3,505,134 - - - -
-------------------------------------------------------------------------
Total Investments 173,253,127 10,338,793 4,417,994 86,241,687 29,530,922
-------------------------------------------------------------------------
Participant Loans Receivable 9,025,054 - - - -
Receivables-Interest
and Dividends 1,201,963 6,040 1 463,492 524,388
Cash and Temporary Cash
Investments 652,059 - - 318,902 297,917
-------------------------------------------------------------------------
Total Assets $184,132,203 $10,344,833 $4,417,995 $87,024,081 $ 30,353,227
=========================================================================
LIABILITIES
Accounts Payable $ 171,011 $ 42,531 $ (1,002) $ (18,803) $ (3,219)
Purchases of Securities 510,936 - - - 510,936
Forfeitures 6,856 - - - -
-------------------------------------------------------------------------
Total Liabilities 688,803 42,531 (1,002) (18,803) 507,717
-------------------------------------------------------------------------
Net Assets Available for Benefits $183,443,400 $10,302,302 $4,418,997 $87,042,884 $ 29,845,510
=========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1995
(Supplemental Information by Fund (Continued))
<CAPTION>
Stock Index Utilities Government
Equities Equities Securities International
Fund E Fund F Fund G Fund H ESOP Fund
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments
Enterprise Common Stock $ - $ - $ - $ - $ 10,635,899
Equities Growth Fund - - - - -
Balanced Fund - - - - -
Insurance Annuity Contracts (GICs) - - - - -
Stock Index Equities Fund 21,714,701 - - - -
Utilities Equities Fund - 5,059,521 - - -
Government Securities Fund - - 1,808,476 - -
International Stock Fund - - - 3,505,134 -
----------------------------------------------------------------------------
Total Investments 21,714,701 5,059,521 1,808,476 3,505,134 10,635,899
----------------------------------------------------------------------------
Participant Loans Receivable - - - - -
Receivables-Interest
and Dividends 219,503 2,881 10,758 (80) (25,020)
Cash and Temporary Cash
Investments - - - - 129
----------------------------------------------------------------------------
Total Assets $21,934,204 $5,062,402 $ 1,819,234 $ 3,505,054 $ 10,611,008
============================================================================
LIABILITIES
Accounts Payable $ 212,984 $ (2,191) $ 7,348 $ (77) $ (57,829)
Purchases of Securities - - - - -
Forfeitures - - - - -
----------------------------------------------------------------------------
Total Liabilities 212,984 (2,191) 7,348 (77) (57,829)
----------------------------------------------------------------------------
Net Assets Available for Benefits $21,721,220 $5,064,593 $ 1,811,886 $ 3,505,131 $ 10,668,837
============================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1995
(Supplemental Information by Fund (Concluded))
<CAPTION>
Holding Trust
Account Loan Fund
--------------------------------
<S> <C> <C>
ASSETS
Investments
Enterprise Common Stock $ - $ -
Equities Growth Fund - -
Balanced Fund - -
Insurance Annuity Contracts (GICs) - -
Stock Index Equities Fund - -
Utilities Equities Fund - -
Government Securities Fund - -
International Stock Fund - -
----------------------------
Total Investments - -
----------------------------
Participant Loans Receivable - 9,025,054
Receivables-Interest
and Dividends - -
Cash and Temporary Cash
Investments 35,111 -
----------------------------
Total Assets $ 35,111 $9,025,054
============================
LIABILITIES
Accounts Payable $ 17,769 $ (26,500)
Purchases of Securities - -
Forfeitures 6,856 -
----------------------------
Total Liabilities 24,625 (26,500)
----------------------------
Net Assets Available for Benefits $ 10,486 $9,051,554
============================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
(Supplemental Information by Fund)
<CAPTION>
Equities Enterprise
Growth Balanced Stable Value Common Stock
Total Fund A Fund B Fund C Fund D
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Participant Deposits $ 25,446,411 $ 2,124,415 $ 911,782 $ 12,099,306 $ 2,601,655
Employers Contributions 6,832,948 533,038 231,973 3,384,696 723,595
Interfund Transfers - net - (14,049,337) (5,650,428) (1,021,676) (5,400,095)
--------------------------------------------------------------------------------------
Total Deposits and Contributions 32,279,359 (11,391,884) (4,506,673) 14,462,326 (2,074,845)
--------------------------------------------------------------------------------------
Income
Plan Interest in Master Trust
Investment Income 14,157,526 1,552,689 320,176 6,327,021 (1,174,986)
--------------------------------------------------------------------------------------
Total Additions 46,436,885 (9,839,195) (4,186,497) 20,789,347 (3,249,831)
--------------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 11,907,962 390,739 210,594 6,978,593 1,538,490
Dividends Paid 702,350 - - - -
Forfeitures 19,081 2,319 264 8,381 2,128
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan 10,686 70,049 21,642 (350,283) (29,941)
--------------------------------------------------------------------------------------
Total Deductions 12,640,079 463,107 232,500 6,636,691 1,510,677
--------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 33,796,806 (10,302,302) (4,418,997) 14,152,656 (4,760,508)
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 183,443,400 10,302,302 4,418,997 87,042,884 29,845,510
--------------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 217,240,206 $ - $ - $ 101,195,540 $ 25,085,002
======================================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
(Supplemental Information by Fund (Continued))
<CAPTION>
Large Company Utilities Interm. Gov't. International Mid/Small
Stock Index Equities Securities Stock Company
Fund E Fund F Fund G Fund H Stock Fund
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Participant Deposits $ 4,305,948 $ 908,928 $ 418,981 $ 1,147,174 $ 264,750
Employers Contributions 1,091,139 236,244 109,485 275,435 66,725
Interfund Transfers - net 4,795,229 (6,265,669) (127,450) 2,483,959 6,479,440
-------------------------------------------------------------------------------------
Total Deposits and Contributions 10,192,316 (5,120,497) 401,016 3,906,568 6,810,915
-------------------------------------------------------------------------------------
Income
Plan Interest in Master Trust
Investment Income 6,062,703 281,058 55,842 852,322 9,624
-------------------------------------------------------------------------------------
Total Additions 16,255,019 (4,839,439) 456,858 4,758,890 6,820,539
-------------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 1,355,392 199,146 93,157 245,548 67,929
Dividends Paid - - - - -
Forfeitures 2,848 239 18 1,884 276
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan 185,968 25,769 1,879 22,113 -
-------------------------------------------------------------------------------------
Total Deductions 1,544,208 225,154 95,054 269,545 68,205
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 14,710,811 (5,064,593) 361,804 4,489,345 6,752,334
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 21,721,220 5,064,593 1,811,886 3,505,131 -
-------------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 36,432,031 $ - $2,173,690 $ 7,994,476 $ 6,752,334
=====================================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
(Supplemental Information by Fund (Concluded))
<CAPTION>
Conservative Moderate Aggressive
Pre-Mix Pre-Mix Pre-Mix Holding Trust
Portfolio Portfolio Portfolio ESOP Account Loan Fund
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Participant Deposits $ 82,986 $ 218,743 $ 361,743 $ - $ - $ -
Employers Contributions 19,434 62,437 98,747 - - -
Interfund Transfers - net 2,591,459 6,555,161 8,294,731 (498,329) - 1,813,005
-------------------------------------------------------------------------------
Total Deposits and Contributions 2,693,879 6,836,341 8,755,221 (498,329) - 1,813,005
-------------------------------------------------------------------------------
Income
Plan Interest in Master Trust
Investment Income 67,943 167,343 272,023 (636,417) 11,683 (11,498)
-------------------------------------------------------------------------------
Total Additions 2,761,822 7,003,684 9,027,244 (1,134,746) 11,683 1,801,507
-------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 55,167 85,011 56,025 492,326 - 139,845
Dividends Paid - - - 702,350 - -
Forfeitures 138 196 390 - - -
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan - - - 4,958 - 58,532
-------------------------------------------------------------------------------
Total Deductions 55,305 85,207 56,415 1,199,634 - 198,377
-------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 2,706,517 6,918,477 8,970,829 (2,334,380) 11,683 1,603,130
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR - - - 10,668,837 10,486 9,051,554
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $2,706,517 $6,918,477 $8,970,829 $8,334,457 $22,169 $10,654,684
===============================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1995
(Supplemental Information by Fund)
<CAPTION>
Equities Fixed Enterprise
Growth Balanced Income Common Stock
Total Fund A Fund B Fund C Fund D
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Participant Deposits $ 21,842,876 $ 1,835,808 $ 754,556 $11,989,600 $ 2,620,828
Employers Contributions 6,797,565 550,096 241,944 3,777,018 849,664
Interfund Transfers - net - 2,519,830 782,361 (5,058,146) (2,479,248)
-------------------------------------------------------------------------
Total Deposits and Contributions 28,640,441 4,905,734 1,778,861 10,708,472 991,244
-------------------------------------------------------------------------
Income
Interest 5,286,936 - - 5,271,061 15,351
Dividends 5,398,669 1,414,599 304,086 - 2,004,014
Loan Interest Income - 37,488 14,506 271,639 66,069
-------------------------------------------------------------------------
Total Income 10,685,605 1,452,087 318,592 5,542,700 2,085,434
-------------------------------------------------------------------------
Appreciation (Depreciation) of Investments 10,735,738 (503,624) 324,213 - 3,833,515
-------------------------------------------------------------------------
Total Additions 50,061,784 5,854,197 2,421,666 16,251,172 6,910,193
-------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 7,421,656 318,174 142,031 4,503,151 1,288,475
Dividends Paid 771,047 - - - -
Forfeitures 6,856 496 342 4,810 762
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan (469,847) (4,661) 41,453 (269,130) (243,817)
-------------------------------------------------------------------------
Total Deductions 7,729,712 314,009 183,826 4,238,831 1,045,420
-------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 42,332,072 5,540,188 2,237,840 12,012,341 5,864,773
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 141,111,328 4,762,114 2,181,157 75,030,543 23,980,737
-------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $183,443,400 $10,302,302 $4,418,997 $87,042,884 $29,845,510
=========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1995
(Supplemental Information by Fund (Continued))
<CAPTION>
Stock Index Utilities Government
Equities Equities Securities International
Fund E Fund F Fund G Fund H ESOP Fund
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Participant Deposits $ 2,697,700 $ 781,957 $ 358,931 $ 803,496 $ -
Employers Contributions 798,405 239,897 112,777 227,764 -
Interfund Transfers - net 2,413,700 510,292 (166,111) (890,648) (205,743)
-------------------------------------------------------------------------
Total Deposits and Contributions 5,909,805 1,532,146 305,597 140,612 (205,743)
-------------------------------------------------------------------------
Income
Interest - - - - 524
Dividends 496,577 213,284 91,639 103,423 771,047
Loan Interest Income 74,403 15,894 6,348 15,765 -
-------------------------------------------------------------------------
Total Income 570,980 229,178 97,987 119,188 771,571
-------------------------------------------------------------------------
Appreciation (Depreciation) of Investments 4,474,967 714,133 179,458 219,939 1,470,331
-------------------------------------------------------------------------
Total Additions 10,955,752 2,475,457 583,042 479,739 2,036,159
-------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 683,921 153,603 34,550 139,113 526,967
Dividends Paid - - - - 771,047
Forfeitures 27 - 311 108 -
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan 27,346 7,698 16,339 16,048 173
-------------------------------------------------------------------------
Total Deductions 711,294 161,301 51,200 155,269 1,298,187
-------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 10,244,458 2,314,156 531,842 324,470 737,972
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 11,476,762 2,750,437 1,280,044 3,180,661 9,930,865
-------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 21,721,220 $ 5,064,593 $1,811,886 $ 3,505,131 $10,668,837
=========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
<TABLE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1995
(Supplemental Information by Fund (Concluded))
<CAPTION>
Holding Trust
Account Loan Fund
-----------------------------
<S> <C> <C>
ADDITIONS
Participant Deposits $ - $ -
Employers Contributions - -
Interfund Transfers - net - 2,573,713
----------------------------
Total Deposits and Contributions - 2,573,713
----------------------------
Income
Interest - -
Dividends - -
Loan Interest Income - (502,112)
----------------------------
Total Income - (502,112)
----------------------------
Appreciation (Depreciation) of Investments 3,138 19,668
----------------------------
Total Additions 3,138 2,091,269
----------------------------
DEDUCTIONS
Withdrawals (368,329)
Dividends Paid - -
Forfeitures - -
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan (61,296)
----------------------------
Total Deductions - (429,625)
----------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 3,138 2,520,894
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 7,348 6,530,660
----------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 10,486 $9,051,554
============================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF THE PLAN
The Board of Directors of Public Service Electric and Gas Company (PSE&G or the
Company) adopted the Public Service Electric and Gas Company Employee Savings
Plan (Plan) to encourage thrift and savings by eligible bargaining unit
employees of PSE&G (Eligible Employees). It was first offered to Eligible
Employees in November 1987 as a result of collective bargaining, and
contributions began in January 1988. Effective January 1, 1996, the Trust that
held the Plan's assets became the PSE&G Master Employee Benefit Plan Trust,
(Master Trust), a Master Trust covering this Plan and the PSE&G Thrift and
Tax-Deferred Savings Plan (Thrift Plan). (See Note 4. Investment in Master
Trust.) The Plan was last amended September 3, 1996, effective October 1, 1996,
except for changes listed below, which are effective as of January 1, 1997. The
Plan amendments made during 1996 provide the following, effective October 1,
1996: Equities Growth Fund A, Balanced Fund B, and Utilities Equities Fund F
were discontinued; Mid/Small Company Stock Fund, Conservative Pre-Mix Portfolio,
Moderate Pre-Mix Portfolio, and Aggressive Pre-Mix Portfolio were added; Fund C
was renamed Stable Value Fund rather than Fixed Income Fund, Fund E was renamed
Large Company Stock Index Fund rather than Stock Index Equities Fund, and Fund G
was renamed Intermediate Government Securities Fund rather than Government
Securities Fund. The Plan permits, among other things, participation in the Plan
by Affiliates of PSE&G and their bargaining unit employees (each such
participating Affiliate with PSE&G, an "Employer"). Participation in the Plan is
entirely voluntary, except with respect to those employees who participate in
the Employee Stock Ownership Plan (ESOP) Fund as a result of their participation
in the PSE&G Tax Reduction Act Employee Stock Ownership Plan (TRASOP) and/or the
PSE&G Payroll-Based Employee Stock Ownership Plan (PAYSOP), which plans were
merged into this Plan in 1988. An employee may participate in the Plan from the
date of hire. Matching Company Contributions begin when an employee has
completed one Year of Service. Any Employee who, at the time he/she becomes
employed by the Company, is a participant in the Thrift Plan, shall
automatically be enrolled in the Plan and all balances in the Thrift Plan shall
be transferred to the Plan and all contribution and investment elections in
effect for the Thrift Plan shall remain in effect. Certain Eligible Employees
may also elect to have a distribution from another qualified corporate plan
contributed as a rollover contribution with the approval of PSE&G's Employee
Benefits Committee (Committee), the Plan Administrator.
The following changes were effective January 1, 1997:
1. to allow Basic Deposits in any integral multiple of 1% of Compensation to a
total of 7%, rather than 5%;
2. to allow Supplemental Deposits in any integral multiple of 1% of Compensation
to a total of 18%, rather than 20%;
3. all administrative expenses as well as taxes and brokerage costs will be
deducted from the Trust Fund, rather than paid directly by the Company and
its Participating Affiliates.
Under the Plan, each participating employee (Participant) may elect to make
basic deposits to Investment Funds of such Participant's choosing within the
Savings Account Fund of 1% - 7% of his/her compensation (Basic Deposits), and
his/her Employer will contribute an amount equal to 50% thereof, subject to
certain exceptions and limitations (Employer Contributions). Employer
Contributions with respect to Basic Deposits in excess of 5% of Compensation for
Participants who are employed by the Company are made in shares of the Common
Stock of Public Service Enterprise Group Incorporated (Enterprise), the parent
of the Company, and are not available for transfer to any other Fund or
withdrawal from the Plan prior to the Participant's termination of employment.
In addition, a Participant may elect to make supplemental deposits to his/her
Savings Account Fund in increments of 1% of Compensation up to an additional 18%
of Compensation (Supplemental Deposits), subject to certain limitations, without
any corresponding matching Employer Contribution. Participants may designate
such Basic and/or Supplemental Deposits as Nondeferred (post-income tax
contributions) or Deferred (pre-income tax contributions).
Participants employed by CEA Newark Bay Services, Inc., an affiliate of PSE&G,
may elect to make basic deposits to Investment Funds of such Participant's
choosing within the Savings Account Fund of 1% - 6% of their Basic Deposits, and
the Employer will contribute an amount equal to 50% thereof, subject to certain
exceptions and
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
limitations (Employer Contributions). In addition, CEA Newark Bay Services, Inc.
Participants may elect to make supplemental deposits to their Savings Account
Fund in increments of 1% of Compensation up to an additional 19% of Compensation
(Supplemental Deposits), subject to certain limitations, without any
corresponding matching Employer Contribution. Participants may designate such
Basic and/or Supplemental Deposits as Nondeferred (post-income tax
contributions) or Deferred (pre-income tax contributions).
Each Participant may also, within any Plan Year, make one or more Additional
Lump Sum Deposits on a Nondeferred basis in the minimum amount of $250 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.
The maximum amount of Deferred Deposits to a Participant's Savings Account may
have to be limited to less than 25% of Compensation to meet requirements of the
Internal Revenue Code of 1986, as amended (IRC). The extent of any such
limitation will be determined from time to time by the Committee based on the
actual pattern of Deferred Deposits by all Participants. If the maximum
permitted percentage of Compensation for Savings Account Deferred Deposits is
reduced, then all Deferred Deposits in excess of such percentage will
automatically be treated as Nondeferred Deposits. This will result in taxable
income to the affected Participants for Deferred Deposits in excess of any limit
so established. The Committee will attempt to assure that any such limitation
will apply only to future contributions, but it is possible that, in order to
meet requirements of the IRC, the limitation will, in some circumstances, have
to be applied retroactively. Deferred Deposits may not generally be withdrawn
until age 59-1/2. Nondeferred Deposits, on the other hand, may be withdrawn at
any time subject to certain penalties and restrictions.
Savings Account Deposits are made through payroll deductions by the Employer,
rollover contributions from other qualified plans and Additional Lump Sum
Deposits. Deposits by Participants and Employer Contributions are transferred to
a Trustee and separately held in the Plan's Savings Account Fund of the Trust
Fund for investment and other transactions, as directed by Participants.
Participants are entitled to choose which funds to invest Deposits and Employer
Contributions in from among the Investment Funds offered under the Plan.
Bankers Trust Company is the Trustee of the Master Trust established pursuant to
the Plan.
Loan Provisions
The Trustee may, subject to the approval of PSE&G's Director Performance and
Rewards, lend a Participant an amount up to 50% of the value of the vested
portion of such Participant's Savings Account and ESOP Fund, but no more than
the aggregate value of such Participant's Savings Account or $50,000, whichever
is less. Any Participant loan must be for a principal amount of $1,000 or more
and no Participant may have more than two loans outstanding at any time. All
loans, including interest thereon, must be repaid by payroll deductions in equal
monthly installments of 12 to 60 months as selected by the Participant. However,
a Participant may prepay any such loan in full or in part in a lump sum in
accordance with such rules as may be prescribed by the Committee. A Participant
may not apply for more than one loan in any calendar year. A loan to a
Participant is considered an investment of such Participant's Savings Account
and repayments of principal of any loan, together with interest thereon, are
invested in the Savings Account Investment Funds of the Plan in accordance with
the Participant's then-current investment direction for Deposits and Employer
Contributions.
Each loan bears interest at a rate fixed from time to time by the Committee
taking into consideration the then-current interest rates being charged. The
rate of interest applicable to any loan at its inception remains in effect for
the duration of such loan. During 1996, the rate of interest on loans granted to
Participants, by quarter and starting with the first quarter, was 8-1/2%,
8-1/4%, 8-1/4%, 8-1/4%. (See Note 2. SIGNIFICANT ACCOUNTING POLICIES - Loans.)
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Dividends and Interest
Dividends, interest, and other income attributable to each Investment Fund of
the Plan are reinvested in that Investment Fund to the extent not used to pay
direct expenses of that Fund. (See Expenses of Plan, below.) All Deposits and
Employer Contributions in the Stable Value Fund C are invested in either
traditional Guaranteed Investment Contracts (Traditional GICs) issued by
insurance companies, or Benefit Responsive Agreements (Synthetic GICs) which are
similar to traditional GICs in terms of their ability to preserve principal and
provide a stable rate of return. Synthetic GICs are different in that they are
backed or secured by a separate portfolio of high-quality fixed income
securities that are directly owned by the Fund. The portfolio is wrapped by a
"book value wrapper", usually a financial institution other than the manager of
the Synthetic GIC, which provides a crediting rate and which guarantees that
benefit repayments will be made at book value. Deposits and Employer
Contributions earn interest at the composite rate of all GICs in which the
assets of such fund are then invested. Such rate varies as such Traditional and
Synthetic GICs mature or are entered into, and as Deposits and Employer
Contributions are made to and withdrawn from such contracts. Under the contracts
in effect during 1996, the composite rate of interest earned by such assets so
invested was not less than 6.74%. ESOP Fund Participants receive quarterly
payments directly from the Trustee equal to the dividends paid to the Trustee on
the shares of Enterprise Common Stock held for their ESOP Fund.
Valuation of Investments
Investments of Equities Growth Fund A, Balanced Fund B, Enterprise Common Stock
Fund D, Large Company Stock Index Fund E, Utilities Equities Fund F,
Intermediate Government Securities Fund G, International Stock Fund H, and the
shares of Enterprise Common Stock held by the ESOP Fund are based upon quoted
market values. The value of Stable Value Fund C is based on the contract value
of all GICs in which the assets of the fund are invested. Temporary investments
are valued at cost which approximates fair market value. Securities transactions
are accounted for on the trade date. The Plan's financial statements have been
prepared in accordance with financial reporting requirements of the Employee
Retirement Income Security Act of 1974, as amended, (ERISA) as permitted by the
applicable rules. Under such requirements, realized gains and losses from
securities transactions are computed using an adjusted cost basis as prescribed
by the Department of Labor's (DOL) Rules and Regulations for Reporting and
Disclosure. The adjusted cost is the fair value of the security at the beginning
of the Plan year, or cost if acquired since that date. Unrealized gains and
losses on securities held for investment are computed on the basis of the change
in fair value between the beginning and end of the Plan year.
Reclassifications
Certain reclassifications of prior year data have been made to conform with the
current presentation.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
Expenses of Plan
Effective January 1, 1997, all expenses incurred with the administration of the
Plan, including taxes and brokerage costs, will be deducted from the Trust Fund.
However, in 1996 and 1995, all expenses incurred in connection with the
administration of the Plan, including expenses of the Trustee, but excluding
brokerage commissions and taxes relating to the sale of shares of Enterprise
Common Stock at the direction of Participants, were paid directly by PSE&G and
its Participating Affiliates.
The assets of Common Stock Fund D and the ESOP Fund are invested in shares of
Enterprise Common Stock. Shares of Enterprise Common Stock required for Fund D
are purchased by the Trustee either directly from Enterprise at its sole
discretion, on the open market through a broker or from the ESOP Fund. In
situations where the ESOP is in a "sell" position and Fund D is in a "buy"
position, Fund D will buy from the ESOP at the closing price on the N.Y. Stock
Exchange. In such case, no brokerage commissions will be charged on the
transaction. Otherwise, all shares sold for Common Stock Fund D and the ESOP
Fund are sold by the Trustee on the open market through a broker. Brokerage
commissions and transfer taxes are paid by the Trust Fund.
Loans
A loan to a Participant is considered an investment of such Participant's
Savings Account and the principal amount of the loan is treated as a separate
investment within the various sub-accounts of the Participant's Savings Account.
Repayments of the principal amount of the loan are credited to each such
sub-account, and repayments of principal along with any accrued interest thereon
are invested in the Plan's Investment Funds in the same manner as the
Participant's then current-investment direction for Deposits and Employer
Contributions.
Loan amounts are taken from sub-accounts of a Participant's Savings Account in
the following order:
(a) Deferred Deposits
(b) Unmatured vested Employer Contributions
(c) Matured vested Employer Contributions
(d) Rollover Contributions
(e) Unmatured post-1986 Nondeferred Deposits
(f) Matured post-1986 Nondeferred Deposits
(g) Pre-1987 Nondeferred Deposits
Each loan is 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 (See Note 1. SUMMARY OF THE PLAN - Loan Provisions).
Interfund Transfers - ESOP Fund to Savings Account
Participants are permitted to transfer all, but not less than all, shares from
their ESOP Funds to their Savings Accounts. To effect such transfers, the
Trustee will sell the shares of Enterprise Common Stock held in the ESOP Fund
and invest the proceeds in the Savings Account Funds designated by the
Participant. The cash value of each share of Enterprise Common Stock transferred
will be equal to the price per share of Enterprise Common Stock actually
received by the Trustee. Any such transfer is treated as a rollover
contribution.
Holding Account
The Holding Account is a vehicle to record the transactions from either one fund
to another fund or to an outside source. Daily balances which remain in the
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
account are invested in temporary cash accounts until disbursement. Activity
within the Holding Account includes inflows and outflows of cash related to fund
transfers, employee and employer contributions, withdrawals, receipts of
dividends and interest, benefit payments and loan transactions.
Vesting
Employer Contributions to a Participant's Savings Account are immediately
vested upon a Participant's completion of five years of service with an
Employer, or when a Participant is eligible for retirement, is disabled, laid
off or dies. All amounts credited to a Participant's ESOP Fund are fully vested.
Penalties Upon Withdrawal
If a Participant withdraws vested Employer Contributions and/or Deposits before
they have been in the Plan for twenty-four months, such Participant loses the
matching Employer Contributions on Deposits made during the subsequent three
months. Distributions to Participants electing to withdraw Nondeferred Deposits
and Employer Contributions are made as soon as practicable after such elections
are received by the Plan's Record Keeper. Nondeferred Deposits may be withdrawn
at any time but certain penalties may apply. Deferred Deposits may not be
withdrawn during employment prior to age 59-1/2 except for reasons of
extraordinary financial hardship and to the extent permitted by the IRC.
Distributions to Participants of approved hardship withdrawals are made as soon
as practicable after such approval.
Benefits Payable
As of December 31, 1996, and 1995, the net assets available for benefits
included benefits due to Participants who have elected to withdraw from the Plan
in the amounts of $337,562 and $70,644, respectively. Such amounts are not
reflected as liabilities in the financial statements of the Plan.
3. INVESTMENTS
The financial statements of the Plan include the following:
a. Savings Account Investment Funds
(1) Effective October, 1996, the Equities Growth Fund A
was discontinued. Prior to that date, the assets of
Equities Growth Fund A were invested in the capital
stock of the Twentieth Century Investors Inc. Growth
Fund (the "Twentieth Century Growth Fund") a no-load,
open-ended mutual fund. The prospectus for the
Twentieth Century Growth Fund indicated that such
fund invests primarily in the common stock of
companies considered by its investment manager to
have above average potential for capital
appreciation.
(2) Effective October 1996, the Balanced Fund B was
discontinued. Prior to that date, the assets of
Balanced Fund B were invested in the capital stock of
Phoenix Balanced Fund a no-load, open-ended mutual
fund. The prospectus for the Phoenix Balanced Fund
indicated that such fund invests primarily in a
combination of equity and fixed income debt
securities that its investment manager expects to
provide current income along with long-term capital
growth and conservation of capital.
(3) The assets of Stable Value Fund C are invested in
GICs and similar investment instruments issued by
insurance companies or other financial institutions
which contractually provide for a guarantee of
principal and interest for the respective contract
periods. All contract values approximate fair value.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
The following GICs are continuing:
(i) A four and one-half year contract
expiring June 30, 1997, with
Provident National Assurance
Company, effective interest rate of
6.80%, contract value of
$11,668,348;
(ii) A four-year and four and one-half
year contract expiring December 31,
1997 and December 31, 1999,
respectively, with Metropolitan Life
Insurance Company, effective
interest rates of 5.72% and 8.12%,
contract values of $5,881,080 and
$5,842,467, respectively;
(iii) A five-year contract expiring
January 1, 1997, with Principal
Mutual Life Insurance Company,
effective interest rate of 6.80%,
contract value of $8,363,527;
(iv) A five-year contract expiring
January 4, 1999, with Allstate Life
Insurance Company, effective
interest rate of 5.65%, contract
value of $14,118,795;
(v) A five-year contract expiring June
30, 1999, with New York Life
Insurance Company, effective
interest rate of 7.07%, contract
value of $8,274,200;
(vi) A five-year contract expiring
December 31, 1999, with Prudential
Life Insurance Company, effective
interest rate of 8.01%, contract
value of $13,398,532; and
(vii) A five-year contract expiring June
30, 2000, with AIG Life Insurance
Company, effective interest rate of
6.14%, contract value of $7,970,698.
The following Synthetic GIC is continuing in effect:
An open-ended contract with J.P. Morgan as the book
value wrapper and Pacific Investment Management
Company managing the underlying portfolio providing
an effective credit rate, as of December 31, 1996,
of 7.26% and contract value of $11,614,911. The
credit rate for the Synthetic GIC effective January
1, 1997 through March 31, 1997 was 7.22%.
(4) The assets of Enterprise Common Stock Fund D are
invested by the Trustee in Enterprise Common Stock.
(5) The assets of Large Company Stock Index Fund E are
invested by the Trustee in Bankers Trust
Institutional Equity 500 Index Fund ("Stock Index
Equities Fund"), a no-load mutual fund managed by
Bankers Trust Company so as to achieve the
approximate return of the Standard and Poor's 500
Composite Stock Price Index.
(6) Effective October, 1996, the Utilities Equities Fund
F was discontinued. Prior to that date, the assets of
Utilities Equities Fund F were invested in the
capital stock of Fidelity Income Fund Utilities (the
"Fidelity Utilities Fund"), a no-load, open-ended
mutual fund. The prospectus for the Fidelity
Utilities Fund indicated that such fund invests
primarily in equity securities of gas and electric
utility companies and companies engaged in the
communications field. The Fidelity Utilities Fund
may, from time to time, include shares of Enterprise
Common Stock or PSE&G Preferred Stock.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
(7) The assets of Intermediate Government Securities Fund
G are invested in the capital stock of Voyageur U.S.
Government Securities Fund (the "Voyageur U.S.
Government Securities Fund"), an open-ended mutual
fund. The prospectus of the Voyageur U.S. Government
Securities Fund indicates that such fund invests
primarily in U.S. Treasury bills, notes, bonds and
other obligations issued or unconditionally
guaranteed by the U.S. Government, or otherwise
backed by the full faith and credit of the U.S.
Government, and repurchase agreements fully secured
by such obligations.
(8) The assets of International Stock Fund H are invested
in the capital stock of T. Rowe Price International
Funds Inc. (the "T. Rowe Price International Stock
Fund"), a no-load, open-ended investment company or
mutual fund. The prospectus for T. Rowe Price
International Stock Fund indicates that such fund
invests primarily in common stocks of established,
non-U.S. companies.
(9) The assets of Mid/Small Company Stock Fund, a new
investment option in 1996, are invested in the Putnam
Vista Fund, an open-ended, diversified management
investment company. The prospectus for the Putnam
Vista Fund indicates that such fund invests in a
diversified portfolio of common stocks which may
include widely-traded common stocks of larger
companies as well as common stocks of smaller, less
well-known companies.
(10) The assets of the Conservative Pre-Mix Portfolio, a
new investment option in 1996, are invested in
specific percentages within a mix of five existing
funds: 40% Stable Value, 20% Intermediate Government
Securities, 20% Large Company Stock Index, 10%
International Stock, and 10% Mid/Small Company Stock.
Every quarter the Trustee re-aligns this portfolio to
match its conservative (risk and return) investment
strategy of 60% in bonds and 40% in stocks.
(11) The assets of the Moderate Pre-Mix Portfolio, a new
investment option in 1996, are invested in specific
percentages within a mix of five existing funds: 25%
Large Company Stock Index, 20% Stable Value, 20%
International Stock, 20% Intermediate Government
Securities, and 15% Mid/Small Company Stock. Every
quarter the Trustee re-aligns this portfolio to match
its moderate (risk and return) investment strategy of
60% in stocks and 40% in bonds.
(12) The assets of the Aggressive Pre-Mix Portfolio, a new
investment option in 1996, are invested in specific
percentages within a mix of four existing funds: 30%
Large Company Stock Index, 25% International Stock,
25% Mid/Small Company Stock, and 20% Intermediate
Government Securities. Every quarter the Trustee
re-aligns this portfolio to match its aggressive (risk
and return) investment strategy of 80% in stocks and
20% in bonds.
b. ESOP FUND
Shares of Enterprise Common Stock held as assets of the Plan's
ESOP Fund were transferred to the Plan in 1988 as a result of
the spin-off and merger with the Plan of the bargaining unit
portions of PSE&G's former TRASOP and PAYSOP. No additional
contributions in or transfers into the ESOP Fund are presently
permitted or were allowed during 1996.
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
c. PARTICIPANTS
Participants
As of December 31,
------------------
1996 1995
Total Plan Participants 7,704 7,585
- ----------------------- ----- -----
Participants by Fund
--------------------
Equities Growth Fund A (1) --- 1,700
Balanced Fund B (1) --- 921
Stable Value Fund C 1,968 4,740
Enterprise Common Stock Fund 1,812 2,659
Large Company Stock Index Fund E 1,251 2,243
Utilities Equities Fund F (1) --- 1,014
Interm. Government Securities Fund G 245 493
International Stock Fund H 630 688
Mid/Small Company Stock Fund (2) 454 ---
Conservative Pre-Mix Portfolio (2) 144 ---
Moderate Pre-Mix Portfolio (2) 326 ---
Aggressive Pre-Mix Portfolio (2) 446 ---
ESOP Fund 1,176 1,328
- ---------------------------------------------
(1) Fund discontinued in 1996
(2) New Investment Fund in 1996
4. INVESTMENT IN MASTER TRUST
Effective January 1, 1996, the Plan's investments are included in the Master
Trust which was established for the investment of assets of the Plan and the
Thrift Plan. Accordingly, a ratio is used to separate the Thrift Plan balances
from the Savings Plan balances based on the Statement of Net Assets Available
for Plan Benefits. The ratio is calculated by dividing individual fund totals
from one Plan by the Master Trust totals. Each percentage has been carried out
to the eighth decimal. As of December 31, 1996, the Plan's interest in the net
assets of the Master Trust was approximately 33%. The following table presents
the fair values of investments for the Master Trust.
December 31, 1996
Investments at fair value:
Participant Loans $ 22,451,539
Cash and Cash equivalents 41,413,758
Common Stock of Public Service Enterprise Group 75,274,227
Mutual Funds 218,696,575
Guaranteed Insurance Contracts 308,079,794
------------
$665,915,893
============
Investment income for the Master Trust is as follows:
Net appreciation in fair value of Mutual Funds $ 30,374,351
Net depreciation in fair value of Common Stock
of Enterprise (11,569,069)
Interest from Mutual Funds 45,265
Interest from Common Stock of Enterprise Funds 154,745
Interest from Guaranteed Insurance Contracts 20,845,795
Dividends from Mutual Funds 2,148,761
Dividends from Common Stock of Enterprise 6,676,501
------------
$ 48,676,349
============
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Continued)
5. UNIT VALUE INFORMATION - SAVINGS ACCOUNT INVESTMENT FUNDS
Unit values of the Investment Funds are determined at the end of each business
day (Valuation Day) by dividing the market value of net assets available for
benefits by the number of units allocated to all Participants as of the
respective Valuation Date.
New units are allocated to each Participant's Savings Account at the end of each
business day by dividing Deposits made by, or on behalf of, such Participant for
such business day and the related Employer Contributions, if any, together with
repayment of the principal amount of any loan to the Participant's Savings
Account including interest earned thereon by the unit value determined as of the
end of the Valuation Date. If a Participant makes a transfer between Investment
Funds, makes a withdrawal, receives a distribution or a loan, or makes a
rollover contribution, the amount so transferred, withdrawn, distributed,
loaned, or rolled over is also determined by the unit value of each Investment
Fund as of the applicable Valuation Date for such transaction.
The unit information of investments by Investment Fund as of the last business
day of each year is as follows:
Unit Value
Investment Fund Year (Dollars) Number of Units
- ---------------- ---- ----------- ---------------
Equities Growth Fund A (1) 1996 10.000000 ---
1995 19.390000 533,202.321
Equities Fund B (1) 1996 10.000000 ---
1995 16.800000 262,975.833
Stable Value Fund C 1996 12.098876 8,350,095.525
1995 11.335599 7,608,039.681
Enterprise Common Stock Fund D 1996 9.916231 2,526,215.433
1995 11.755127 2,512,173.794
Large Company Stock Index Fund E 1996 11.659470 3,124,673.082
1995 13.970000 1,554,380.888
Utilities Equities Fund F (1) 1996 10.000000 ---
1995 16.160000 313,089.171
Intermediate Government Securities
Fund G 1996 10.507339 206,692.815
1995 10.783011 167,715.307
International Stock Fund H 1996 10.966759 728,973.380
1995 12.230000 286,601.308
Mid/Small Company Stock Fund (2) 1996 9.984863 676,256.863
Conservative Pre-Mix Portfolio (2) 1996 10.316356 261,752.007
Moderate Pre-Mix Portfolio (2) 1996 10.370244 666,547.701
Aggressive Pre-Mix Portfolio (2) 1996 10.399420 861,443.643
- -----------------------------------
(1) Fund discontinued in 1996
(2) New Investment Fund in 1996
<PAGE>
NOTES TO FINANCIAL STATEMENTS -(Concluded)
ESOP FUND VALUATION
Enterprise Common Stock share value is determined by using the closing market
price on the New York Stock Exchange as reported in the Wall Street Journal as
Composite Transactions. If a Participant withdraws shares, the shares are, at
the Participant's election, either distributed to such Participant or sold by
the Trustee and the proceeds, net of commissions and taxes, are distributed to
the Participant. The ESOP Fund information as of the last business day of each
year is as follows:
Year Price per share Number of Shares
---- --------------- ----------------
ESOP Fund 1996 $27.250 306,402
1995 $30.625 347,295
5. FEDERAL INCOME TAXES
The Company believes that the Plan and its related Trust, including the portions
of the former TRASOP and PAYSOP applicable to bargaining unit Participants,
which portions were spun-off and merged with the Plan effective January 1, 1988,
are qualified under Sections 401(a) and 501(a) of the IRC and, as such, the Plan
is exempt from taxation on its earnings. A determination letter to such effect,
dated December 29, 1995, was obtained from the Internal Revenue Service.
Participants are not taxed on Company Contributions, Deferred Deposits, or on
the earnings credited to their Savings Account, until distribution of such
Savings Account.
6. COMPLIANCE WITH ERISA
The Plan is generally subject to the provisions of Titles I and II of ERISA,
including the provisions with respect to reporting, disclosure, participation,
vesting and fiduciary responsibility. However it is not subject to the funding
requirements of Title I, and benefits under the Plan are not guaranteed by the
Pension Benefit Guarantee Corporation under Title IV of ERISA.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
Public Service Electric and Gas Company
Employee Savings Plan
---------------------------------------------------
(Name of Plan)
By M. PETER MELLETT
---------------------------------
M. PETER MELLETT
Chairman of the Employee
Benefits Committee
Date: June 30, 1997
<PAGE>
EXHIBIT INDEX
Exhibit Number
- --------------
1 Public Service Electric and Gas Company Employee
Savings Plan, as amended as of September 3, 1996, and
effective October 1, 1996.
2 Independent Auditors' Consent.
EXHIBIT I
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
Effective October 1, 1996
Amended as of September 3, 1996
<PAGE>
i
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
TABLE OF CONTENTS
Page
ARTICLE I AMENDMENT - PURPOSE............................................1
Section 1.1. Amendment of the Plan...................................1
Section 1.2. Purpose.................................................1
ARTICLE II DEFINITIONS....................................................1
Section 2.1. "Account"..............................................1
Section 2.2. "Active Participant"...................................1
Section 2.3. "Additional Lump Sum Deposits".........................1
Section 2.4. "Affiliate"............................................1
Section 2.5. "Balanced Fund"........................................2
Section 2.6. "Basic Deposits".......................................2
Section 2.7. "Board of Directors" ..................................2
Section 2.8. "Code".................................................2
Section 2.9. "Commissioner".........................................2
Section 2.10. "Committee" or "Employee Benefits Committee"............2
Section 2.11. "Company"...............................................2
Section 2.12. "Compensation"..........................................2
Section 2.13. "Deferred"..............................................3
Section 2.14. "Deposits"..............................................3
Section 2.15. "Disability"............................................3
Section 2.16. "Effective Date"........................................3
Section 2.17. "Eligible Employee".....................................4
Section 2.18. "Employee"..............................................4
Section 2.19. "Employer"..............................................4
Section 2.20. "Employer Contributions"................................4
Section 2.21. "Enrollment Date".......................................4
Section 2.22. "Enterprise"............................................4
Section 2.23. "Enterprise Common Stock"...............................4
Section 2.24. "Enterprise Common Stock Fund"..........................4
Section 2.25. "Equities Fund".........................................4
Section 2.26. "Equities Index Fund"...................................4
Section 2.27. "ERISA".................................................4
Section 2.28. "ESOP Account"..........................................4
Section 2.29. "Fixed Income Fund".....................................5
Section 2.30. "Funds".................................................5
Section 2.31. "General Manager".......................................5
Section 2.32. "Government Obligations Fund"...........................5
Section 2.33. "Highly Compensated Employee" ..........................5
Section 2.34. "Highly Compensated Participant"........................7
Section 2.35. "Hour of Service".......................................7
Section 2.36. "Investment Manager"....................................7
Section 2.37. "Lay Off" or Laid Off"..................................7
Section 2.38. "Leased Employee".......................................8
Section 2.39. "Matured"...............................................8
Section 2.40. "Nondeferred"...........................................8
Section 2.41. "Participant"...........................................8
Section 2.42. "Participating Affiliate"...............................8
Section 2.43. "Plan"..................................................8
Section 2.44. "Plan Year".............................................8
Section 2.45. "Qualified Domestic Relations Order" or "QDRO"..........8
Section 2.46. "Record Keeper".........................................9
Section 2.47. "Required Beginning Date"...............................9
Section 2.48. "Retirement"............................................9
Section 2.49. "Rollover Contributions"................................9
Section 2.50. "Savings Account"......................................10
Section 2.51. "Supplemental Deposits"................................10
Section 2.52. "Thrift and Tax-Deferred Savings Plan".................10
Section 2.53. "Trust Agreement"......................................10
Section 2.54. "Trust Fund"...........................................10
Section 2.55. "Trustee"..............................................11
Section 2.56. "Year of Service"......................................11
ARTICLE III PARTICIPATION.........................................11
Section 3.1. Participation..........................................11
Section 3.2. Effective Date of Participation........................12
ARTICLE IV DEPOSITS...............................................12
Section 4.1. Basic Deposits.......................................12
Section 4.2. Supplemental Deposits................................13
Section 4.3. Additional Lump Sum Deposits.........................14
Section 4.4. Method of Deposits...................................15
Section 4.5. Limit on Deferred Deposits...........................15
Section 4.6. Distribution of Excess Deferral Amounts..............15
Section 4.7. Code Section 401(k) Limits on Deferred Deposits......16
Section 4.8. Unmatched Employer Contributions.....................17
Section 4.9. Code Section 401(m) Limits on Nondeferred Deposits
and Employer Contributions...........................17
Section 4.10. Changing Deposit Percentages..........................17
Section 4.11. Suspension of Deposits................................18
Section 4.12. Limit on Additional Lump Sum Deposits.................18
Section 4.13. Elections.............................................18
Section 4.14. Rollover Contributions................................19
Section 4.15. Transfer from the Thrift Plan.........................19
ARTICLE V EMPLOYER CONTRIBUTIONS.................................19
Section 5.1. Amount and Payment of Employer Contributions...........19
Section 5.2. Employer Contributions in Enterprise Common Stock .....20
Section 5.3 Reduction of Employer Contributions by Forfeitures.....20
Section 5.4. Maximum Annual Additions...............................20
Section 5.5. Return of Employer Contributions.......................20
ARTICLE VI SAVINGS ACCOUNT INVESTMENTS............................21
Section 6.1. Investment of Deposits, Rollover Contributions
and Employer Contributions.......................21
Section 6.2. Change in Investment Direction.......................21
Section 6.3. Transfer of Investments..............................22
Section 6.4. Loans................................................22
ARTICLE VII SAVINGS ACCOUNT FUNDS.........................................23
Section 7.1. Establishment of Funds...............................23
Section 7.2. Enterprise Common Stock Fund.........................24
ARTICLE VIII SAVINGS ACCOUNTS..............................................25
Section 8.1. Establishment of Savings Accounts....................25
Section 8.2. Measure of Savings Accounts..........................26
Section 8.3. Valuation of Funds...................................27
Section 8.4. Valuation of Savings Accounts........................27
Section 8.5. Separate Accounting..................................27
ARTICLE IX ESOP ACCOUNTS..........................................27
Section 9.1. Maintenance of Separate Accounts.....................27
Section 9.2. Allocation of Distributions..........................28
Section 9.3. Withdrawals or Transfers During Employment...........28
Section 9.4. Dividends and Other Income...........................29
Section 9.5. Voting of ESOP Account Common Stock..................29
ARTICLE X VESTING................................................29
Section 10.1. Vesting of Employer Contributions.....................29
Section 10.2. Vesting of Deposits, Rollover Contributions and
the ESOP Account......................................30
ARTICLE XI ACCOUNT DISTRIBUTIONS AND WITHDRAWALS..................30
Section 11.1. Distribution Upon Retirement, Disability,
Lay Off or Death......................................30
Section 11.2. Distribution Upon Other Termination of Employment.....31
Section 11.3. Withdrawal of Nondeferred Deposits and Employer
Contributions During Employment.................32
Section 11.4. Withdrawals of Deferred Deposits
During Employment After Age 59 1/2..............33
Section 11.5. Hardship Withdrawals..................................33
Section 11.6. Suspension of Participation...........................36
Section 11.7. Transfer of Employment................................36
Section 11.8. Form of Distributions.................................36
Section 11.9. Time of Distributions.................................38
Section 11.10 Limitation on Post Age 701/2Distributions.............39
Section 11.11 Distribution in the Case of Certain Disabilities......39
Section 11.12. Loans.................................................40
Section 11.13. Inability to Locate Payee.............................42
Section 11.14. Federal Income Tax Withholding on
Distributions and Withdrawals.........................42
Section 11.15. Direct Rollover to Another Plan or IRA................42
ARTICLE XII LIMITS ON BENEFITS AND CONTRIBUTIONS UNDER QUALIFIED PLANS....43
Section 12.1. Definitions...........................................43
Section 12.2. Annual Addition Limits................................52
Section 12.3. Overall Limit.........................................55
Section 12.4. Special Rules.........................................55
ARTICLE XIII TOP-HEAVY REQUIREMENTS........................................56
Section 13.1. Definitions...........................................56
Section 13.2. General Requirements..................................58
Section 13.3. Maximum Compensation..................................58
Section 13.4. Vesting...............................................58
Section 13.5. Minimum Contributions.................................59
Section 13.6. Participants Under Defined Benefit Plans..............60
Section 13.7. Super Top-Heavy Plans.................................60
Section 13.8. Determination of Top-Heaviness........................61
Section 13.9. Determination of Super Top-Heaviness. ................61
Section 13.10. Calculation of Top-Heavy Ratios. ....................61
Section 13.11. Cumulative Accounts and Cumulative Accrued Benefits. 61
ARTICLE XIV BENEFICIARY IN EVENT OF DEATH.................................63
Section 14.1. Designation and Change of Beneficiary.................63
ARTICLE XV ADMINISTRATION................................................64
Section 15.1. Named Fiduciary.......................................64
Section 15.2. Administration........................................64
Section 15.3. Control and Management of Assets......................66
Section 15.4. Benefits to be Paid from Trust........................66
Section 15.5. Expenses..............................................66
ARTICLE XVI CLAIMS PROCEDURE..............................................67
Section 16.1. Filing of Claims......................................67
Section 16.2. Appeal of Claims......................................67
Section 16.3. Review of Appeals.....................................67
ARTICLE XVII MERGER OR CONSOLIDATION.......................................68
Section 17.1. Merger or Consolidation...............................68
ARTICLE XVIII NON-ALIENATION OF BENEFITS....................................68
Section 18.1. Non-Alienation of Benefits............................68
ARTICLE XIX AMENDMENTS....................................................68
Section 19.1. Amendment Process.....................................68
ARTICLE XX TERMINATION...................................................69
Section 20.1. Authority to Terminate................................69
Section 20.2. Distribution Upon Termination.........................69
ARTICLE XXI PLAN CONFERS NO RIGHT TO EMPLOYMENT...........................69
Section 21.1. No Right to Employment................................69
ARTICLE XXII ALTERNATE PAYEES..............................................69
Section 22.1. Alternate Payees Under QDROs..........................70
ARTICLE XXIII CONSTRUCTION..................................................70
Section 23.1. Governing Law.........................................70
Section 23.2. Headings..............................................70
<PAGE>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
ARTICLE I
AMENDMENT - PURPOSE
Section 1.1. Amendment of the Plan. Public Service Electric and Gas Company
hereby further amends, on September 3, 1996 and effective October 1, 1996, its
Employee Savings Plan, a savings, profit-sharing and tax-credit employee stock
ownership plan for its Employees and those of its Affiliates.
Section 1.2. Purpose. The purpose of the Plan is to encourage and assist
thrift and savings by eligible bargaining unit employees of Public Service
Electric and Gas Company and 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 Savings 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. "Balanced Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(f).
Section 2.6. "Basic Deposits" shall mean that amount, not less than 1%, nor
more than 5% (7% effective January 1, 1997), except that Participants who are
Employees of CEA Newark Bay Services, Inc. shall be entitled to elect maximum
Basic Deposits of 6%, (or such lower maximum percentages as may be established
by the Committee) 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 2.7. "Board of Directors" shall mean the Board of Directors of the
Company.
Section 2.8. "Code" shall mean the Internal Revenue Code of 1986, as
amended, or as it may be amended from time to time.
Section 2.9. "Commissioner" shall mean the Commissioner of Internal
Revenue.
Section 2.10. "Committee" or "Employee Benefits Committee" shall mean the
Employee Benefits Committee of the Company appointed by the Board of Directors.
Section 2.11. "Company" shall mean Public Service Electric and Gas Company.
Section 2.12. "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 includable 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 any Employer and any payments from any such plans of any previously
deferred amount; (b) any amounts which constitute a reimbursement of expenses;
(c) 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; and (5) Employer contributions
for social security, unemployment compensation or other taxes; and (d) the
following special international payments: (1) International service premium; (2)
Cost of living allowance; (3) Equalization Pay; (4) Foreign service pay; and (5)
Hardship allowance. (6) Employer reimbursement towards adoption expenses; In any
case, however, for the purposes of the Plan, Compensation for any Plan Year
shall not exceed the limit imposed by Code section 401(a)(17).
Section 2.13. "Deferred" in reference to Deposits shall mean that such
Deposits are deferred from current federal income taxation under Code section
401(k).
Section 2.14. "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 Savings 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.
Section 2.15. "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 2.16. "Effective Date" shall mean February 1, 1994.
Section 2.17. "Eligible Employee" shall mean any Employee who has
completed at least one Year of Service whether or not he or she actually elects
to make any Deposits.
Section 2.18. "Employee" shall mean any individual in the employ of an
Employer who is included in a unit of employees covered by a collective
bargaining agreement. The term "Employee" shall not include a consultant or
independent contractor doing work for an Employer or a person employed by a
consultant or independent contractor doing work for an Employer.
Section 2.19. "Employer" shall mean the Company and any Participating
Affiliate.
Section 2.20. "Employer Contributions" shall mean the amounts contributed
to the Plan on behalf of Participants by an Employer in accordance with Article
V.
Section 2.21. "Enrollment Date" shall mean the earliest of: (a) the first
day of the first payroll period in which payroll deductions from a Participant's
Compensation are made for Deposits under the Plan; (b) the date an Additional
Lump Sum Deposit is accepted by the Plan from a Participant; (c) the date a
Rollover Contribution is accepted from a Participant for payment to the Trustee
for investment in the Plan in accordance with Section 4.14; or (d) the date an
ESOP Account is established on behalf of a Participant.
Section 2.22. "Enterprise" shall mean the Company's parent, Public Service
Enterprise Group Incorporated.
Section 2.23. "Enterprise Common Stock" shall mean the Common Stock,
without nominal or par value, of Enterprise.
Section 2.24. "Enterprise Common Stock Fund" shall mean the Fund
established pursuant to Section 7.1(c).
Section 2.25. "Equities Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(a).
Section 2.26. "Equities Index Fund" shall mean the Fund established
pursuant to Section 7.1(d).
Section 2.27. "ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, or as it may be amended from time to time.
Section 2.28. "ESOP Account" shall mean that separate portion of an Account
established pursuant to Section 9.1 which evidences the shares of Enterprise
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 2.29. "Fixed Income Fund" shall mean the Fund or Funds established
pursuant to Section 7.1(b).
Section 2.30. "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 2.31. "General Manager" shall mean the Director, Performance and
Rewards of the Company.
Section 2.32. "Government Obligations Fund" shall mean the Fund or Funds
established pursuant to Section 7.1(e).
Section 2.33. "Highly Compensated Employee" shall mean: (a) For any Plan
Year, any Employee who, during the Plan Year or the preceding Plan Year-- (1)
was at any time a 5% owner; (2) received Compensation for such Plan Year from
the Company or an Affiliate in excess of the amount provided for by Code section
414(q)(1)(B); (3) received Compensation for such Plan Year from the Company or
an Affiliate in excess of the amount provided for by Code section 414(q)(1)(C)
and was in the top-paid group of Employees; or (4) was at any time an officer of
the Company or of an Affiliate and received Compensation for such Plan Year
greater than 50% of the amount provided for by Code section 415(b)(1)(A). (b) In
the case of the Plan Year for which the relevant determination is being made, an
Employee not described in subparagraph (a)(2), (a)(3) or (a)(4) of this Section
for the preceding Plan Year (without regard to this paragraph) shall not be
treated as described in such subparagraphs (a)(2), (a)(3) or (a)(4) unless such
Employee is a member of the group consisting of the 100 Employees paid the
greatest Compensation during the year for which such determination is being
made. (c) 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.
(d) 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 the Employees when ranked on the basis of
Compensation paid during such Plan Year. (e) For purposes of determining the
top-paid group under paragraph (d), the following Employees shall be excluded:
(1) Employees who have not completed 6 months of service; (2) Employees who
normally work less than 17 1/2 hours per week; (3) Employees who normally work
during 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)). (f) For purposes of subparagraph
(a)(4) of this Section, no more than 50 Employees (or, if lesser, the greater of
three Employees or 10% of the Employees) shall be treated as officers. If for
any year no officer of the Company or an Affiliate is described in subparagraph
(a)(4) of this Section, the highest paid of the officers of the Company or an
Affiliate for such Plan Year shall be treated as described in such subparagraph.
(g) If any individual is a member of the family of a 5% owner or of a Highly
Compensated Employee in the group consisting of the 10 Highly Compensated
Employees paid the greatest Compensation during the Plan Year, then: (1) except
for purposes of Section 4.5, such individual shall not be considered a separate
Employee; and (2) any Compensation paid to such individual (and any applicable
contribution on behalf of such individual) shall be treated as if it were paid
to (or on behalf of) the 5% owner or Highly Compensated Employee. For purposes
of this subparagraph (g), the term "family" shall mean, with respect to any
Employee, such Employee's spouse and lineal ascendants or descendants and
spouses of such lineal ascendants or descendants; provided, however, that for
purposes of determining whether the limit on includable Compensation contained
in Code section 401(a)(17) (see Section 2.13) has been exceeded, the term
"family" shall mean, with respect to any Employee, such Employee's spouse and
the children of such Employee who have not attained age 19 by the close of the
Plan Year. (h) For purposes of this Section, the term "Compensation" shall mean
Compensation within the meaning of Section 12.1, but including salary reduction
contributions to a cafeteria plan, a 401(k) plan and a simplified employee
pension. (i) A former Employee shall be treated as a Highly Compensated Employee
if (1) such Employee was a Highly Compensated Employee when such Employee
separated from service or (2) such Employee was a Highly Compensated Employee at
any time after attaining age 55.
Section 2.34. "Highly Compensated Participant" shall mean: (a) those Highly
Compensated Employees who are Participants or (b) those Highly Compensated
Employees who are Eligible Employees, who have satisfied all conditions for
participation under Section 3.1, whether or not they actually elect to make any
Deposits or Rollover Contributions to the Plan.
Section 2.35. "Hour of Service" shall mean each hour for which an Employee
is directly or indirectly paid remuneration or entitled to such payment by an
Employer including any hours for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by an Employer.
Section 2.36. "Investment Manager" shall mean an investment manager as
defined in ERISA section 3(38).
Section 2.37. "Lay 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 an Employer for which the
Participant is qualified.
Section 2.38. "Leased Employee" shall mean an individual who is not an
Employee but who would be a leased employee as defined in Code section 414(n),
but for the one year service requirement of Code section 414(n)(2)(B).
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.
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. "Plan" shall mean this Public Service Electric and Gas
Company Employee Savings Plan, including all amendments hereto which may
hereafter be made.
Section 2.44. "Plan Year" shall mean the calendar year.
Section 2.45. "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 2.46. "Recordkeeper" 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 2.47. "Required Beginning Date" shall mean with respect to
distributions to any Participant, 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 2.48. "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 Electric and Gas Company; and (b) at or
after age 65.
Section 2.49. "Rollover Contributions" shall mean 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.
Section 2.50. "Savings 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 Savings 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 Savings 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.
(c) Employer Contribution Subaccount shall mean that portion of a
Participant's Savings 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.
Section 2.51. "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 more than the maximum permitted Basic Deposit.
Section 2.52. "Thrift Plan" shall mean the Public Service Electric and Gas
Company Thrift and Tax-Deferred Savings Plan"; and
Section 2.53. "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.
Section 2.54. "Trust Fund" shall mean the aggregate of Basic and
Supplemental Deposits made by or on behalf of Participants, Rollover
Contributions and Employer Contributions, together with ESOP Accounts, increased
by any profits or income thereon, and decreased by any losses thereon and by any
payments made therefrom.
Section 2.55. "Trustee" shall mean any individual or individuals or
corporation or corporations by whom any assets of the Plan are held under the
Trust Agreement.
Section 2.56. "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 an Employer 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, there shall be included service with an Employer as an Employee
or as a Leased Employee.
ARTICLE III
PARTICIPATION
Section 3.1. Participation. Each Employee may become a Participant by
applying with the Recordkeeper to establish a Savings Account, accept a Rollover
Contribution on such Employee's behalf or when an ESOP Account was established
on his or her behalf. An Employee who, at the time he/she becomes employed by
the Company or a Participating Affiliate is a participant in the Thrift Plan,
may transfer account balances held in that plan to this Plan.
By contacting the Recordkeeper and using its automatic voice response
system, the 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 the
Recordkeeper and/or Employer to pay such amount to the Trustee for investment in
a Thrift Account under the Plan in accordance with the Employee's instructions
and (d) authorize his or her Employer to accept a Rollover Contribution from
another qualified corporate plan in accordance with Section 4.12 and to pay such
amount to the Trustee for investment under the Plan in accordance with such
Employee's instructions.
Participation in the Plan is entirely voluntary.
Section 3.2. Effective Date of Participation. Participation in the Plan
shall be effective for an Employee and payroll deductions shall commence, as
soon as practicable after the Employee has applied to the Recordkeeper for
participation. Participation in the Plan for an Employee who, at the time he/she
becomes employed by the Company or a Participating Affiliate, is a participant
in the Thrift Plan, shall be effective from the date he/she first becomes an
Employee. Participation in the Plan for an Employee making a Rollover
Contribution shall be effective as soon as practicable after such Employee's
Rollover Contribution is accepted for transfer in accordance with Section 4.12.
Participation of an 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
Employee in the Company's TRASOP and/or PAYSOP pursuant to a merger of such plan
or plans with this Plan.
ARTICLE IV
DEPOSITS
Section 4.1. Basic Deposits.
(a) An Eligible Employee who is employed by the Company may elect:
(1) 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 5% (7% effective January 1,
1997) each pay period; or
(2) to have Basic Deferred Deposits made to the Plan by the
Company 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 5% (7% effective January 1, 1997) each pay
period; or
(3) to make, or have made by the Company on his or her behalf,
any combination of Deposits under (1) or (2) above,
totaling up to 5% (7% effective January 1, 1997) of his or
her Compensation each pay period;
(b) An Eligible Employee who is employed by CEA Newark Bay Services,
Inc. may elect:
(1) to make Basic Nondeferred Deposits to the Plan in an
amount equal to any integral multiple of 1%, up to 6%, of
his or her Compensation each pay period; or
(2) to have Basic Deferred Deposits made to the Plan by his or
her Employer on his or her behalf in an amount equal to
any integral multiple of 1%, up to 6%, of his or her
Compensation each pay period; or
(3) to make, or have made by his or her Employer on his or her
behalf, any combination of Deposits under (1) or (2)
above, totaling up to 6% 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 an Employer to the Trustee and
deposited in the Trust Fund as soon as practicable after deduction and, in any
event, within 90 days of deduction. 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.
(a) Each Participant who is employed by the Company and who is
electing the maximum permitted Basic Deposit to the Plan may also
elect:
(1) to make Supplemental 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 20% (18%, effective
January 1, 1997) of his or her Compensation each pay
period; or
(2) to have Supplemental Deferred Deposits made by the Company
on his or her behalf in an amount equal to any integral
multiple of 1% up to a total of 20% (18%, effective
January 1, 1997) of his or her Compensation each pay
period; or
(3) to make, or have made by the Company on his or her behalf,
any combination of the Deposits specified in (1) or (2)
above, totaling up to 20% (18%, effective January 1, 1997)
of his or her Compensation each pay period;
(b) who is employed by CEA Newark Bay Services, Inc. and who is
electing the maximum permitted Basic Deposit to the Plan may also
elect:
(1) 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 19% of his or her
Compensation each pay period; or
(2) 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
19% of his or her Compensation each pay period; or
(3) to make, or have made by an Employer on his or her behalf,
any combination of the amounts specified in (1) or (2)
above, totaling up to 19% 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 90 days of deduction. 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 Recordkeeper to the Trustee and
deposited in the Trust Fund as soon as practicable, but no later than 90 days
after receipt. 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 Recordkeeper who shall forward them to the Trustee for
investment in the Participant's Savings Account in accordance with his or her
then current investment direction.
Section 4.5. Limit on Deferred Deposits. In no event may the sum of a
Participant's Deferred Deposits (including all other deferrals under other
plans, contracts, or arrangements maintained by the Company or an Affiliate on
such Participant's behalf) attributable to any taxable year of such Participant
(presumably the calendar year) exceed the amount permitted by Code section
402(g) for the calendar year in which such taxable year commences. 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; provided,
however, that the "Excess Deferral Amount" to be distributed for
a taxable year will be reduced by excess Deferred Deposits
previously distributed to the Participant during the Plan Year
beginning in such taxable year of the Participant.
(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) Limitation. Deferred Deposits on behalf of Highly Compensated
Participants for a Plan Year shall not exceed the amount
permissible to meet the nondiscrimination test of Code section
401(k).
(b) Distribution of Excess Contributions. The Committee shall,
consistent with regulations under the Code, establish
nondiscriminatory rules to meet the requirements of this Section
4.7; provided, however, that the amount of Deferred Deposits
which must be distributed to any Participant under this section
for a Plan Year shall be reduced by "Excess Deferral Amounts"
previously distributed to the Participant for the taxable year of
such Participant ending during the Plan Year.
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) Limitation. Nondeferred Deposits by, together with Employer
Contributions on behalf of, Highly Compensated Participants for a
Plan Year shall not exceed the amount permissible to meet the
nondiscrimination tests of Code section 401(m).
(b) Distribution of Excess Contributions. The Committee shall,
consistent with regulations under the Code, establish
nondiscriminatory rules to meet the requirements of this Section
4.9.
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 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 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 that
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. Subject to such rules as may be
established by the Committee, an Employee may transfer Rollover Contributions to
the Plan, to be deposited in his or her Supplemental Deposit Account. The
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. The Committee
may impose such nondiscriminatory requirements on such transfer as it deems
necessary or desirable. 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.
Section 4.15 Transfers from the Thrift Plan. Any Employee who, at the time
he/she becomes employed by the Company or a Participating Affiliate, is a
participant in the Thrift Plan, shall automatically be enrolled in the Plan and
all balances in the Thrift Plan shall be transferred to the Plan and all
contribution and investment elections in effect for the Thrift Plan shall remain
in effect, subject to change pursuant to the operation of Sections 4.10, 4.11
and 6.2 hereof.
ARTICLE V
EMPLOYER CONTRIBUTIONS
Section 5.1. Amount and Payment of Employer Contributions.
(a) The Company shall contribute to the Plan on behalf of
Participants who are Eligible Employees, who are its Employees
and who are making or having Basic Deposits to the Plan made on
their behalf, 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 11.3.
(b) CEA Newark Bay Services, Inc. shall contribute to the Plan on
behalf of Participants who are Eligible Employees who are its
Employees and who are making or having Basic Deposits to the Plan
made on their behalf an amount equal to 50% of such aggregate
Basic Deposits, except to the extent that such Basic Deposits are
reduced or distributed as provided on Sections 4.5 through 4.9,
and except as provided in this Article V and in Section 11.3.
Employer Contributions shall be allocated as Nondeferred. 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 Enterprise's
consolidated Federal income tax return for such year. All Employer Contributions
may be made without regard to current or accumulated earnings of the Company or
any Affiliate. 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 Enterprise Common Stock. Employer
Contributions with respect to Basic Deposits in excess of 5% of Compensation for
Participants who are employed by the Company shall be made in shares of
Enterprise Common Stock. Any such shares credited to a Participant's account
shall be acquired in the same manner as shares acquired for the Enterprise
Common Stock Fund established pursuant to Section 7.2, be invested in that Fund
and 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.
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 Participant
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 11.13.
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 the Employer to the Plan is not deductible under Code section
404, the 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.
ARTICLE VI
SAVINGS 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 Savings 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 5% of Compensation
of Participants who are Employees of the Company, Employer Contributions with
respect to Basic Deposits shall be invested by the Trustee for the Account of
the 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 Savings
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 Employee, is a participant in the Thrift Plan, shall continue the same
investment elections as he/she maintained in the Thrift Plan until a change in
investment direction is made in conformity with Section 6.2 hereof.
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 of Investments. Subject to the limitation contained
in Section 5.2 with respect to the transfer of Employer Contributions made in
shares of Enterprise Common Stock, a Participant may 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 1% multiples 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.
Section 6.4. Loans. Participants may receive loans from their Savings
Accounts under the provisions of Section 11.12. A loan to a Participant shall be
considered an investment of such Participant's Savings 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:
(a) Deferred Deposits;
(b) Unmatured Vested Employer Contributions;
(c) Matured Vested Employer Contributions;
(d) Rollover Contributions;
(e) Unmatured Post-1986 Nondeferred Deposits;
(f) Matured Post-1986 Nondeferred Deposits;
(g) Pre-1987 Nondeferred Deposits.
Loan proceeds shall not be taken from a Participant's ESOP Account nor from
that portion of a Participant's Savings Account attributable to Employer
Contributions made in shares of Enterprise Common Stock.
ARTICLE VII
SAVINGS ACCOUNT FUNDS
Section 7.1. Establishment of Funds. The following Funds shall be
established exclusively for the collective investment of Trust Fund assets
attributable to Participant Savings 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 Enterprise 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 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.
(c) An "Enterprise Common Stock Fund", the assets of which shall
principally be invested in Enterprise Common Stock.
(d) An "Equities Index Fund", 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.
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. Enterprise Common Stock Fund.
(a) Enterprise Common Stock purchased for the Enterprise Common Stock
Fund shall be purchased by the Trustee on the open market or
directly from Enterprise should Enterprise elect to make such
sales.
(b) If Enterprise shall elect to sell shares of Enterprise 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 Enterprise Common Stock as reported by the New
York Stock Exchange on the date of purchase.
(c) All voting discretion, including the power to decide whether or
not to tender Enterprise Common Stock in connection with a tender
offer, with respect to the shares of Enterprise Common Stock held
under the Enterprise 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
Employer or the Trustee shall cause to be sent to each
Participant entitled to give voting instructions all information
that Enterprise has or will distribute to shareholders of
Enterprise 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, Enterprise should grant to the
holders of Enterprise Common Stock rights to subscribe to an
issue or issues of securities of Enterprise, any such rights
attaching to the shares of Enterprise Common Stock held by the
Trustee under the Enterprise Common Stock Fund shall be sold by
the Trustee and the net proceeds applied by the Trustee to the
purchase of Enterprise Common Stock on the open market for such
Fund. Stock dividends on shares held by the Enterprise Common
Stock Fund, and stock issued upon any split of such shares, shall
be credited to such Enterprise Common Stock Fund.
ARTICLE VIII
SAVINGS ACCOUNTS
Section 8.1. Establishment of Savings Accounts. The Committee shall
maintain or cause to be maintained a Savings 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 Savings Account shall be identified as to Nondeferred or
Deferred.
Section 8.2. Measure of Savings 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 canceled 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 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 Savings 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 Savings Account shall at all times be separately accounted for
from other amounts in such Savings 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
Savings 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 Enterprise Common Stock allocated to such
ESOP Account, with each ESOP Account being credited with the number of full and
fractional shares of Enterprise Common Stock so allocated.
Section 9.2. Allocation of Distributions. Any distributions received by the
Plan with respect to Enterprise Common Stock allocated to a Participant's ESOP
Account shall be allocated to such ESOP Account.
Section 9.3. Withdrawals or Transfers During Employment.
(a) Notwithstanding any provision in the Plan to the contrary, a
Participant may withdraw in accordance with Section 11.3 or
transfer in accordance with Section 6.3, the shares of Enterprise
Common Stock allocated to Participant's ESOP Account or the cash
value thereof.
(b) With respect to an election of a Participant to withdraw
Enterprise Common Stock from Participant's ESOP Account, the
shares of Enterprise 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 Enterprise 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 Recordkeeper of the Participant's election to
withdraw.
(c) With respect to an election of a Participant to transfer the cash
value of all full and fractional shares of Enterprise Common
Stock from the Participant's ESOP Account to the Participant's
Savings Account, such transfer shall be made as soon as
practicable after receipt by the Recordkeeper of the
Participant's election to transfer, shall be deposited in the
Participant's Savings Account, shall be invested in one or more
(in multiples of 1% up to an aggregate of 100%) of the Savings
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 Enterprise Common Stock so
transferred shall be equal to the price of a share of Enterprise
Common Stock actually received by the Trustee.
(e) 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 Enterprise 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. Enterprise 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 Enterprise 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 Enterprise 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
Enterprise 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
Employer shall cause to be sent to each Participant entitled to give voting
instructions all information that Enterprise has or will distribute to
shareholders of Enterprise 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.
(a) Upon completion of five Years of Service, a Participant
shall have a 100% vested interest in his or her Savings
Account attributable to Employer Contributions made on
behalf of such Participant during any Plan Year. 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 Savings Account attributable to Employer Contributions
for all Plan Years.
(b) For purposes of determining Years of Service, a
Participant shall not be considered to have interrupted
his or her continuous service as a result of a leave of
absence or as a result of a termination of employment;
provided, however, that the periods of absence from
employment for these reasons shall not be counted toward
Years of Service for vesting purposes.
Section 10.2. Vesting of Deposits, Rollover Contributions and the ESOP
Account. A Participant's interest in his or her Savings 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
(a) terminates employment on account of Retirement or Disability;
(b) is Laid Off; or
(c) dies, then, in that event, the Participant's Savings 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:
(1) if the value of such Account as so determined is $3,500 or less,
be distributed, subject to the provisions of Section 11.9(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; or
(2) if the value of such Account as so determined shall exceed
$3,500, be distributed upon the earliest of the Participant's
Required Beginning Date, the death of such Participant or the
receipt by the Recordkeeper of an application for distribution 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 date coinciding with or next
following the date of termination, shall:
(a) if the value of such Account as so determined is $3,500 or less,
be distributed, subject to the provisions of Section 11.9(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; or
(b) if the value of such Account as so determined shall exceed
$3,500, be distributed upon the earliest of the Participant's
Required Beginning Date, the death of the Participant or the
receipt by the Recordkeeper of an application for distribution in
a form prescribed by the Committee. The 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.
Any Participant who receives a distribution under this Section 11.2 shall
be prohibited from participating in the Plan for the period of three months
following such distribution.
Section 11.3. 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 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
Savings 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) Withdrawals shall be taken from a Participant's Savings 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;
(7) Unmatured Vested Employer Contributions and earnings
thereon.
(d) Any withdrawal made by a Participant pursuant to this Section
11.3 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 Savings
Account.
(e) The amount of any withdrawal made by a Participant pursuant to
this Section 11.3 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 Enterprise Common Stock shall be
permitted prior to the date that the Participant terminates his
or her employment.
Section 11.4. Withdrawals of Deferred Deposits During Employment After Age
59 1/2 Withdrawals of Deferred Deposits During Employment After Age 59 1/2. A
Participant over the age 59 1/2 may withdraw all or a portion of the value of
his or her Savings Account attributable to the 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 Recordkeeper. The minimum withdrawal permitted shall be $200, unless such
withdrawal is 100% of the current value of the Deferred portion of a
Participant's Savings Account.
Section 11.5. 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 Savings
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 11.5 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 11.3,
but without regard to the limitations on withdrawals of
Section 11.3;
(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 the
Company or an Affiliate,
(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
11.5, 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 Savings Account shall not be
permitted unless and until a Participant has withdrawn, pursuant
to Section 9.3, all Enterprise 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 Enterprise Common
Stock shall be permitted prior to the date that the
Participant terminates his or her employment.
Section 11.6. Suspension of Participation. If a Participant shall cease to
be an Eligible Employee, Deposits and Employer Contributions to his or her
Savings 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 Savings 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 11.7. Transfer of Employment. If a Participant shall be transferred
to the employ of an Affiliate of the Company, distribution of such Participant's
Account shall be deferred until the Participant is no longer in the employ of
the Company 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 11.8. 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 11.5, a
Participant may, by notice to the Recordkeeper in the form
prescribed by the Committee, elect to have any whole shares of
Enterprise Common Stock held for such Participant's Enterprise
Common Stock Fund subaccount and/or ESOP Account distributed in
shares of Enterprise Common Stock. The value of any fractional
shares shall be paid in money by check. Such an election may be
made at any time prior to the distribution under Section 11.1 and
11.2 or prior to receipt by the Recordkeeper of the notice of
withdrawal in the case of a distribution under Section 11.3. 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,
except that 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 Savings
Account Funds, 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 Savings
Account as of the applicable date divided by the number of
payments remaining. If a Participant shall die prior to complete
distribution of his or her Savings Account pursuant to this
subparagraph (b), the value of the Participant's Savings 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 Savings Account
determined as of the business day coinciding with or next
following the date of the Participant's death.
(c) If no election is made under subparagraph (b) above, and the
value of a Participant's Savings Account, when aggregated with
the value of any ESOP Account of the Participant, determined in
accordance with Article IX, exceeds $3,500, a distribution will
be made in one lump sum at the time provided for in Section 11.1
or Section 11.2, except as otherwise provided in Section 11.5.
(d) Anything to the contrary notwithstanding, any Savings Account
distribution to be made to a Participant under subparagraph (b)
above shall be made in such a manner that the present value of
the payments to be made to the Participant during his or her life
expectancy are calculated to be more than 50% of the present
value of the total payments to be made to the Participant and any
beneficiaries.
Section 11.9. 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
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, and 11.4.
(b) In the case of a distribution over a period of years under
subparagraph (b) of Section 11.8, the initial payment shall be
made at a time determined in accordance with subparagraph (a) of
this Section 11.9. 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 11.8 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 11.8 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 11.10, 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 $3,500, 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 11.10. Limitation on Post Age 70 1/2 Distributions.
Notwithstanding the provisions of Sections 11.8 and 11.9:
(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 11.10 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.
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 11.11. 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 11.12. Loans.
(a) The Committee shall have complete authority to establish and
administer a loan program to provide loans to Participants. The
loan program shall be contained in a separate written document
which shall constitute part of the Plan, and 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, subject to 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 nor from any portion of the
Enterprise Common Stock Fund attributable to Employer
Contributions made in shares of stock. The Director 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
Recordkeeper on a 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 11.13. 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 11.14. 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 11.15 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
(i) 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
(ii) any distribution required under Code section 401(a)(9).
(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."
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 419 A (d)(2) on
behalf of such Participant.
(b) "Annual Benefit"
(1) A benefit which is payable annually in the form of a
straight life annuity under a defined benefit plan. Such
benefit does not include any benefits attributable to either
employee contributions or rollover contributions. If the
defined benefit plan provides for a benefit which is not
payable in the form of a straight life annuity, the benefit
is adjusted in accordance with Section 12.1(b)(5) below.
(2) Where a defined benefit plan provides for mandatory employee
contributions (as defined in Code section 411(c)(2)(C)), the
Annual Benefit attributable to such contributions is not
taken into account. The Annual Benefit attributable to
mandatory contributions is determined by using the factors
described in Code section 411(c)(2)(B) and the regulations
thereunder. However, mandatory employee contributions and
any voluntary employee contributions are all considered a
separate defined contribution plan maintained by the
Company.
(3) If rollover contributions are made to a defined benefit
plan, the Annual Benefit attributable to these contributions
is determined on the basis of reasonable actuarial
assumptions.
(4) When there is a transfer of assets or liabilities from one
qualified defined benefit plan to another, the Annual
Benefit attributable to the assets transferred shall not be
taken into account by the transferee plan in applying the
limitations of Code section 415. The Annual Benefit payable
on account of the transfer for any individual that is
attributable to the assets transferred will be equal to the
Annual Benefit transferred on behalf of such individual
multiplied by a fraction, the numerator of which is the
total assets transferred and the denominator of which is the
total liabilities transferred.
(5) If a defined benefit plan provides a retirement benefit in
any form other than a straight life annuity, the plan
benefit is adjusted to a straight life annuity beginning at
the same age which is the actuarial equivalent of such
benefit in accordance with the rules determined by the
Commissioner. However, the following values are not taken
into account:
(i) The value of a qualified joint and survivor annuity (as
defined in Code section 417 and the regulations
thereunder) provided by the plan to the extent that
such value exceeds the sum of (A) the value of a
straight life annuity beginning on the same date and
(B) the value of any post-retirement death benefits
which would be payable even if the annuity was not in
the form of a joint and survivor annuity.
(ii) The value of benefits that are not directly related to
retirement benefits (such as pre-retirement disability
and death benefits and post-retirement medical
benefits).
(iii)The value of benefits provided by the plan which
reflect post-retirement cost of living increases to the
extent that such increases are in accordance with Code
section 415(d) and the regulations thereunder.
(6) Where a defined benefit plan provides a retirement benefit
beginning before a participant has attained the Social
Security Retirement Age, the plan benefit shall, in
accordance with rules determined by the Commissioner, be
adjusted to the actuarial equivalent of a benefit commencing
at the Social Security Retirement Age. This adjustment is
only for purposes of applying the dollar limitation
described in Code section 415(b)(1)(A) and Section
12.1(f)(1) to the Annual Benefit of the participant.
(7) Where a participant has less than 10 Years of Service with
the Company at the time the Participant begins to receive
retirement benefits under the defined benefit plan, the
benefit limitations described in Code sections 415(b)(1)(B)
and 415(b)(4) and Section 12.1(f)(2) are to be reduced by
multiplying the otherwise applicable limitation by a
fraction: (i) the numerator which is the Years of Service
(and fractions thereof) with the Company as of, and
including the current Limitation Year, and
(ii) the denominator of which is 10. The preceding sentence
shall also apply for purposes of reducing the benefit
limitation described in Code section 415(b)(1)(A) and
Section 12.1(f)(1), by substituting years of
participation for Years of Service wherever it appears
in such sentence.
(8) If the retirement benefit under a defined benefit plan
begins after the Participant has attained the Social
Security Retirement Age, the determination as to whether the
Maximum Permissible Defined Benefit Amount limitation has
been satisfied shall be made in accordance with regulations
prescribed by the Commissioner by adjusting such benefit so
that it is actuarially equivalent to such a benefit
beginning at the Social Security Retirement Age. This
adjustment is only for purposes of applying the limitation
described in Code section 415(b)(1)(A) and Section
12.1(f)(1) to the Annual Benefit of the participant.
(9) The Annual Benefit to which a participant is entitled at any
time under all defined benefit plans maintained by the
Company shall not, during the Limitation Year, exceed the
Maximum Permissible Defined Benefit Amount.
(10) In determining the actuarial equivalency for purposes of
Sections 12.1(b)(5), 12.1(b)(6) and 12.1(b)(8) above, the
interest rate shall be 5%.
(c) "Company" shall mean the Company, as described in Section 2.11
and any Affiliate as defined in Section 2.4.
(d) "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) for purposes of (A) above, 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 includable 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 includable in the gross
income of the Participant for the taxable year in which
granted.
(vii)The amount includable 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)(A) of this Section
12.1(d), 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 includable 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
includable 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 includable 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);
(iv) 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 includable in the
gross income of the Participant);
(e) "Limitation Year" - the Plan Year;
(f) "Maximum Permissible Defined Benefit Amount" - for a limitation Year
the Maximum Permissible Defined Benefit Amount with respect to any
Participant shall be the lesser of: (1) $90,000, or, (2) 100% of the
Participant's average Compensation for his or her high three
consecutive Years of Service, subject to the following rules:
(i) As of January 1 of each calendar year commencing with
the calendar year 1988, the dollar limitation set forth
in Paragraph (1) above shall be adjusted automatically
to equal the dollar limitation as determined by the
Commissioner for that calendar year under Code section
415(d)(1)(A). This adjustment dollar limitation applies
for the Limitation Year ending with or within the
calendar year. It is applicable to Employees who are
Participants in the Plan and to Employees who have
retired or otherwise terminated their service under the
Plan with a nonforfeitable right to accrued benefits,
regardless of whether they have actually begun to
receive such benefits. The Annual Benefit payable to a
terminated Participant which is otherwise limited by
the dollar limitation shall be increased to take into
account the adjustment of the dollar limitation.
(ii) With regard to Participants who have separated from
service with a nonforfeitable right to an accrued
benefit, the compensation limitation described in
paragraph (2) above applicable to Limitation Years
commencing on and after January 1, 1976 shall be
adjusted annually to take into account increases in the
cost of living. For any Limitation Year beginning after
the separation occurs, the adjustment of the
compensation limitation is made as specified in
regulations and rules prescribed by the Commissioner.
In the case of a Participant who separated from service
prior to January 1, 1976, the cost of living adjustment
of the compensation limitation under this paragraph for
all Limitation Years prior to January 1, 1976, is to be
determined as provided by the Commissioner.
(iii)Anything herein to the contrary notwithstanding, in
the case of an individual who was a Participant in the
Plan before January 1, 1983, if such Participant's
"current accrued benefit" (as defined in section
235(g)(4) of the Tax Equity and Fiscal Responsibility
Act of 1982 ("TEFRA")) under the Plan as of the close
of the last Limitation Year beginning before January 1,
1983 exceeded the dollar limitation with respect to
such Participant under Section 12.1(g)(1), below, the
dollar limitation with respect to such Participant
under Section 12.1(g)(1) shall be equal to such current
accrued benefit.
(iv) Anything herein to the contrary notwithstanding, for
any individual who was a Participant in the Plan on
January 1, 1987, if such Participant's "current accrued
benefit" under the Plan, as that term is defined in
section 1106(i)(3)(B) of the Tax Reform Act of 1986, as
of the close of the last Limitation Year beginning
before January 1, 1987 exceeded the limitation
described in Section 12.1(f)(1) above, the dollar
limitation with respect to such Participant under
Section 12.1(f)(1) shall be equal to such current
accrued benefit.
(g) "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)); or (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.
(h) "Projected Annual Benefit" - the Annual Benefit to which a Participant
would be entitled under the Plan on the assumption that he or she
continues employment until the normal retirement age (or current age,
if that is later) thereunder, that his or her Compensation continues
at the same rate as in effect for the Limitation Year under
consideration until such age, and that all other relevant factors used
to determine benefits under the Plan remain constant as of the current
Limitation Year for all future Limitation Years;
(i) "Social Security Retirement Age" - the age used as the retirement age
under Social Security Act section 216(1) except that such section
shall be applied: (1) without regard to the age increase factor, and,
(2) as if the early retirement age under Social Security Act section
216(1)(2) were 62.
(j) For purposes of applying the limitations of Code sections 415(b), (c)
and (e) to a Participant for a particular Limitation Year, all
qualified defined benefit plans (without regard to whether a plan has
been terminated) ever maintained by the Company will be treated as one
defined benefit plan and all qualified defined contribution plans
(without regard to whether a plan has been terminated) ever maintained
by the Company will be treated as part of this Plan.
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 that Participant if that Participant is covered by the Plan as of
the end of the Limitation Year. However, if that Participant is not
covered by the Plan as of the end of the Limitation Year then the
excess amounts must be held unallocated in a suspense account for the
Limitation Year and allocated and reallocated in the next Limitation
Year to all of the remaining Participants in the Plan. If a suspense
account is in existence at any time during a particular Limitation
Year, other than the first Limitation Year described in the preceding
sentence, all amounts in the suspense account must be allocated and
reallocated to Participants' Accounts (subject to the limitations of
Code section 415) before any Company Contributions, may be made to the
Plan for that Limitation Year. Furthermore, the excess amounts must be
used to reduce Company Contributions for the next Limitation Year (and
succeeding Limitation Years, as necessary) for all of the remaining
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. For any Participant of this Plan who at any
time participated in a defined benefit plan maintained by the Company, the rate
of benefit accrual by such Participant in each defined benefit plan in which the
Participant participates during the Limitation Year will be reduced to the
extent necessary to prevent the sum of the following fractions, computed as of
the close of the Limitation Year, from exceeding 1.0: (a) Defined Benefit Plan
Fraction. Projected Annual Benefit of the Participant under all defined benefit
plans divided by: the lesser of (1) the product of 1.25, multiplied by the
dollar limitation in effect under Code section 415(b)(1)(A) for such Limitation
Year, or (2) the product of 1.4 multiplied by the amount which may be taken into
account under Code section 415(b)(1)(B) with respect to such Participant for
such Limitation Year; and (b) Defined Contribution Plan Fraction. Sum of Annual
Additions to such Participant's Account under all defined contribution plans in
such Limitation Year and for all prior Limitation Years divided by: the sum of
the lesser of the following amounts determined for such year and for each prior
Year of Service with the Company: (1) the product of 1.25, multiplied by the
dollar limitation in effect under Code section 415(c)(1)(A) for such Limitation
Year, or (2) the product of (a) 1.4, multiplied by (b) 25% of the Participant's
Compensation for such Limitation Year.
Section 12.4. Special Rules.
(a) For purposes of applying the Defined Contribution Plan Fraction in
Section 12.3 for any Limitation Year beginning after December 31, 1975
to Limitation Years before January 1, 1976, the aggregate amount taken
into account in determining the numerator of such fraction is deemed
not to exceed the aggregate amount taken into account in determining
the denominator of the fraction.
(b) In any case where the sum of the fractions in Section 12.3 is greater
than 1.0, calculated as of the close of the last Limitation Year
beginning before January 1, 1983 for a Participant, in accordance with
regulations prescribed by the Commissioner pursuant to TEFRA section
235(g)(3), an amount shall be subtracted from the numerator of the
defined contribution plan fraction so that the sum of such fractions
does not exceed 1.0 for such Limitation Year.
(c) If the sum of the fractions in Section 12.3 would exceed 1.0,
calculated as of the close of the last Limitation Year beginning
before January 1, 1987 for a Participant, in accordance with
regulations prescribed by the Commissioner pursuant to section
1106(i)(4) of the Tax Reform Act of 1986, an amount shall be
subtracted from the numerator of the defined contribution plan
fraction (not exceeding such numerator) so that the sum of such
fractions does not exceed 1.0. This numerator, as adjusted herein,
will be used for the calculation of the defined contribution plan
fraction for Limitation Years commencing on or after January 1, 1987.
ARTICLE XIII
TOP-HEAVY REQUIREMENTS
Section 13.1. Definitions. For purposes of this Article XIII, the following
definitions shall apply, to be interpreted in 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 XII without regard to Section 12.1(d)(2)(A).
(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.
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.
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 Enterprise Common Stock held for
the deceased Participant's Enterprise Common Stock Fund subaccount and ESOP
Account distributed in shares of Enterprise Common Stock and the balance of the
deceased Participant's Account (including the value of any fractional shares of
Enterprise 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 the Company 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 11.12, 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.
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
11.12 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.
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, subject to collective
bargaining, 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 the Company 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 414p, 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 Accounting Period 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 11.12. 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 $3,500.00 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.
EXHIBIT 2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statements Nos.
33-18417 and 33-44582 on Forms S-8 of Public Service Enterprise Group
Incorporated of our report dated June 25, 1997 appearing in this Annual Report
on Form 11-K of the Public Service Electric and Gas Company Employee Savings
Plan for the year ended December 31, 1996.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 30, 1997
