EXHIBIT 4.1
-----------
NIPSCO INDUSTRIES, INC.
TAX DEFERRED SAVINGS PLAN
(Amended and Restated as of January 1, 1989)
TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE I GENERAL . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II DEFINITIONS . . . . . . . . . . . . . . . . . 1
2.1 ACCOUNT OR ACCOUNT BALANCE . . . . . . . . . . . . . . 1
2.2 AFFILIATE . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . 2
2.4 BENEFICIARY . . . . . . . . . . . . . . . . . . . . . . 2
2.5 CODE . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.6 COMMITTEE . . . . . . . . . . . . . . . . . . . . . . . 2
2.7 COMPENSATION . . . . . . . . . . . . . . . . . . . . . 2
2.8 COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 3
2.9 DISABILITY . . . . . . . . . . . . . . . . . . . . . . 3
2.10 EFFECTIVE DATE . . . . . . . . . . . . . . . . . . . . 3
2.11 EMPLOYEE . . . . . . . . . . . . . . . . . . . . . . . 3
2.12 EMPLOYER . . . . . . . . . . . . . . . . . . . . . . . 4
2.13 ENTRY DATE . . . . . . . . . . . . . . . . . . . . . . 4
2.14 HIGHLY COMPENSATED EMPLOYEE . . . . . . . . . . . . . . 4
2.15 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 5
2.16 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . 5
2.17 PARTICIPANT . . . . . . . . . . . . . . . . . . . . . . 5
2.18 PLAN . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.19 PLAN QUARTER . . . . . . . . . . . . . . . . . . . . . 5
2.20 PLAN YEAR . . . . . . . . . . . . . . . . . . . . . . . 5
2.21 PRE-TAX CONTRIBUTION . . . . . . . . . . . . . . . . . 5
2.22 PRIOR PLAN . . . . . . . . . . . . . . . . . . . . . . 5
2.23 ROLLOVER CONTRIBUTIONS . . . . . . . . . . . . . . . . 5
2.24 TRUST (OR TRUST FUND) . . . . . . . . . . . . . . . . . 6
2.25 TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 6
2.26 VALUATION DATE . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III PARTICIPATION . . . . . . . . . . . . . . . . . . 6
3.1 PARTICIPATION . . . . . . . . . . . . . . . . . . . . . 6
3.2 PARTICIPATION UPON REEMPLOYMENT . . . . . . . . . . . . 6
3.3 CHANGE IN JOB CLASSIFICATION . . . . . . . . . . . . . 6
3.4 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 7
3.5 LEAVE OF ABSENCE . . . . . . . . . . . . . . . . . . . 7
ARTICLE IV CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 8
4.1 PRE-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . . 8
4.2 SALARY REDUCTION AGREEMENT . . . . . . . . . . . . . . 8
4.3 MATCHING CONTRIBUTIONS . . . . . . . . . . . . . . . . 9
4.4 AFTER-TAX CONTRIBUTIONS . . . . . . . . . . . . . . . . 9
4.5 MAXIMUM CONTRIBUTIONS . . . . . . . . . . . . . . . . . 9
4.6 ROLLOVERS . . . . . . . . . . . . . . . . . . . . . . . 9
4.7 INVESTMENT INSTRUCTIONS . . . . . . . . . . . . . . . . 10
- i -
ARTICLE V LIMITATIONS ON CONTRIBUTIONS AND BENEFITS . . . . . . . 10
5.1 MAXIMUM DOLLAR LIMITATION ON PRE-TAX CONTRIBUTIONS . . 10
5.2 LIMITATIONS UNDER CODE SECTION 415 . . . . . . . . . . 10
5.3 NONDISCRIMINATION REQUIREMENTS - Definitions . . . . . 13
5.4 401(K) TESTS FOR PRE-TAX CONTRIBUTIONS . . . . . . . . 13
5.5 CORRECTION OF EXCESS CONTRIBUTIONS . . . . . . . . . . 14
5.6 401(M) TESTS FOR AFTER-TAX CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 15
5.7 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS . . . . . 16
5.8 MULTIPLE USE OF ALTERNATIVE LIMITATION . . . . . . . . 17
ARTICLE VI ALLOCATIONS AND INVESTMENTS . . . . . . . . . . . 19
6.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE . . . . . . . . . . 19
6.2 ESTABLISHMENT OF SUBACCOUNTS . . . . . . . . . . . . . 19
6.3 ACCOUNT ADJUSTMENTS . . . . . . . . . . . . . . . . . . 19
6.4 INVESTMENT FUNDS . . . . . . . . . . . . . . . . . . . 20
6.5 INVESTMENT DIRECTED BY PARTICIPANTS . . . . . . . . . . 20
6.6 INVESTMENT OF CONTRIBUTIONS . . . . . . . . . . . . . . 20
ARTICLE VII BENEFITS . . . . . . . . . . . . . . . . . . . . . 21
7.1 TERMINATION OF EMPLOYMENT . . . . . . . . . . . . . . . 21
7.2 DISABILITY . . . . . . . . . . . . . . . . . . . . . . 21
7.3 DEATH . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.4 PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . 21
7.5 DESIGNATION OF BENEFICIARY . . . . . . . . . . . . . . 23
7.6 ROLLOVER DISTRIBUTIONS . . . . . . . . . . . . . . . . 24
7.7 MINIMUM DISTRIBUTION LIMITATIONS . . . . . . . . . . . 25
ARTICLE VIII WITHDRAWALS AND LOANS . . . . . . . . . . . . . . 27
8.1 DISTRIBUTION AT AGE 59-1/2 . . . . . . . . . . . . . . 27
8.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER
CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . 27
8.3 HARDSHIP WITHDRAWALS . . . . . . . . . . . . . . . . . 27
8.4 LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . 29
ARTICLE IX TRUST FUND . . . . . . . . . . . . . . . . . . . . 31
ARTICLE X ADMINISTRATION . . . . . . . . . . . . . . . . . . . . 32
10.1 Allocation of Responsibility Among Fiduciaries for Plan
and Trust Administration . . . . . . . . . . . . . . . 32
10.2 APPOINTMENT OF COMMITTEE . . . . . . . . . . . . . . . 33
10.3 COMMITTEE POWERS AND DUTIES . . . . . . . . . . . . . . 33
10.4 RULES AND DECISIONS . . . . . . . . . . . . . . . . . . 33
10.5 COMMITTEE ACTION . . . . . . . . . . . . . . . . . . . 34
10.6 CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . 34
10.7 FACILITY OF PAYMENT . . . . . . . . . . . . . . . . . . 35
10.8 LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . 35
10.9 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . 35
10.10 SEVERABILITY . . . . . . . . . . . . . . . . . . . 35
- ii -
ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . 36
11.1 ACTION BY COMPANY . . . . . . . . . . . . . . . . . . . 36
11.2 NONGUARANTEE OF EMPLOYMENT . . . . . . . . . . . . . . 36
11.3 NONGUARANTEE OF BENEFITS . . . . . . . . . . . . . . . 36
11.4 RIGHTS TO TRUST ASSETS . . . . . . . . . . . . . . . . 36
11.5 INTEREST NONTRANSFERABLE . . . . . . . . . . . . . . . 36
11.6 NONFORFEITABILITY OF BENEFITS . . . . . . . . . . . . . 37
11.7 CONTROLLING LAW . . . . . . . . . . . . . . . . . . . . 37
ARTICLE XII AMENDMENTS AND TERMINATION . . . . . . . . . . . . 37
12.1 AMENDMENT OR TERMINATION . . . . . . . . . . . . . . . 37
12.2 MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . 38
12.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS . . . . . . . 38
12.4 LIQUIDATION OF THE TRUST FUND . . . . . . . . . . . . . 38
12.5 MANNER OF DISTRIBUTION . . . . . . . . . . . . . . . . 38
ARTICLE XIII TOP HEAVY PROVISIONS . . . . . . . . . . . . . . . 38
13.1 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . 38
13.2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 38
13.3 DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . 41
13.4 MINIMUM BENEFIT . . . . . . . . . . . . . . . . . . . . 41
13.5 NON-DUPLICATION OF MINIMUM BENEFIT . . . . . . . . . . 42
13.6 TOP HEAVY LIMITATION . . . . . . . . . . . . . . . . . 42
13.7 TRANSITION RULE . . . . . . . . . . . . . . . . . . . . 42
13.8 VESTING . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XIV PLAN ADOPTION . . . . . . . . . . . . . . . . . . 43
14.1 ADOPTION PROCEDURE . . . . . . . . . . . . . . . . . . 43
14.2 JOINT EMPLOYERS . . . . . . . . . . . . . . . . . . . . 43
14.3 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 43
14.4 WITHDRAWAL . . . . . . . . . . . . . . . . . . . . . . 43
14.5 SUPERSEDED PLANS . . . . . . . . . . . . . . . . . . . 43
- iii -
NIPSCO INDUSTRIES, INC.
TAX DEFERRED SAVINGS PIAN
ARTICLE I
GENERAL
1.1 PURPOSE Effective May 1, 1984, the Northern Indiana Public
Service Company (the "Company") established the Northern Indiana
Public Service Company Tax Deferred Savings Plan to encourage savings
and provide tax-effective compensation for Participants (as defined
herein). It was amended and restated effective January 1, 1989 in
order to meet the requirements of the Tax Reform Act of 1986 and to
change the name to the NIPSCO Industries, Inc. Tax Deferred Savings
Plan (the "Prior Plan"). It has been further amended and restated
effective January 1, 1989 (except as otherwise indicated) in order to
meet all additional statutory and regulatory requirements applicable
thereto. This document sets forth the provisions of such Plan and is
intended to comply with Sections 401(a) and 501(a) of the Internal
Revenue Code of 1986, as amended, and regulations thereunder, and all
other currently applicable statutory and regulatory requirements.
Except wherever otherwise provided herein, the provisions of this Plan
shall apply only to Participants who are actively employed on or after
January 1, 1989. Except where otherwise provided, the rights and
benefits, if any, of any Participant who terminated employment prior
to January 1, 1989, or who is or will be receiving benefits under the
Prior Plan, shall be determined solely on the basis of the Prior Plan
provisions in effect on the date his employment with the Company and
all Affiliates terminated.
1.2 CONSTRUCTION The masculine gender, where appearing in the Plan,
shall be deemed to include the feminine gender and the singular shall
be deemed to include the plural unless the context clearly indicates
to the contrary. The words "hereof," "herein," "hereunder" and other
similar compounds of the word "here" shall mean and refer to the
entire Plan and not to any particular provision or Article.
ARTICLE II
DEFINITIONS
Where the following words and phrases appear in this Plan, they shall
have the respective meanings set forth below, unless the context
clearly indicates to the contrary.
2.1 ACCOUNT OR ACCOUNT BALANCE The total assets of the combination
of each Participant's Pre-tax Contribution Account, After-tax
Contribution Account, Matching Contribution Account, and Rollover
Account held in accordance with Section 6.2 of the Plan.
2.2 AFFILIATE Any corporation that is a member of a controlled group
of corporations (as defined in Section 414(b) of the Code) that
includes the Company; any trade or business (whether or not
incorporated) that is under common control (as defined in Section
414(c) of the Code) with the Company; any organization (whether or not
incorporated) that is a member of an affiliated service group (as
defined in Section 414(m) of the Code) that includes the Company; any
leasing organization, to the extent that its employees are required to
be treated as if they were employed by the Company pursuant to Section
414(n) of the Code and the regulations thereunder; and any other
entity required to be aggregated with the Company pursuant to
regulations under Section 414(o) of the Code. An entity shall be an
Affiliate only with respect to the existing period as described in the
preceding sentence.
2.3 AFTER-TAX CONTRIBUTIONS The contributions made to the Trust in
accordance with Section 4.4 of the Plan and allocated to an "After-tax
Contribution Account" pursuant to Section 6.2 of the Plan.
2.4 BENEFICIARY A person or persons designated by a Participant in
accordance with the provisions of Section 7.5 to receive any death
benefit that may be payable under this Plan.
2.5 CODE The Internal Revenue Code of 1986, as amended, and any
regulations thereunder.
2.6 COMMITTEE The persons appointed to assist in the administration
of the Plan in accordance with Section 10.2.
2.7 COMPENSATION The aggregate basic annual salary or wage, bonus,
overtime, sick pay and shift differential paid to a Participant by an
Employer for personal services as defined under Code Section
415(c)(3), including Pre-tax Contributions and Code Section 125
deferrals. However, for purposes of applying the limitations under
Code Section 415 as described in Section 5.2 of the Plan, Compensation
shall not include Pre-tax Contributions and Code Section 125
deferrals.
For purposes of Article V and purposes of determining who is a Highly
Compensated Employee, the Company shall have the right to use any
adjustments or alternative definitions of compensation as the Internal
Revenue Service may provide by regulation under Code Section 414(s).
In no event shall the Compensation of a Participant taken into account
under the Plan for any Plan Year commencing after December 31, 1988
and prior to January 1, 1994, exceed $200,000 (or such greater amount
provided pursuant to Section 401(a)(17) of the Code). In addition to
other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account under the Plan
shall not exceed the OBRA '93 annual compensation limit. The OBRA '93
annual compensation limit is $150,000, as adjusted by the Commissioner
2
of Internal Revenue for increases in the cost of living in accordance
with Section 401(a)(17)(B) of the Code. The cost-of-living adjustment
in effect for a calendar year applies to any period, not exceeding 12
months, over which Compensation is determined (determination period)
beginning in such calendar year. If a determination period consists
of fewer than 12 months, the OBRA '93 annual compensation limit will
be multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which is
12. For Plan Years beginning on or after January 1, 1994, any
reference in this Plan to the limitation under Section 401(a)(17) of
the Code shall mean the OBRA '93 annual compensation limit set forth
in this paragraph. If Compensation for any prior determination period
is taken into account in determining a Participant's benefits accruing
in the current Plan Year, the Compensation for that prior
determination period is subject to the OBRA '93 annual compensation
limit in effect for that prior determination period. For this
purpose, for determination periods beginning before the first day of
the Plan Year beginning on January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
2.8 COMPANY The Northern Indiana Public Service Company, a
corporation organized and existing under the laws of the State of
Indiana, or its successor or successors.
2.9 DISABILITY Any Participant who receives long-term disability
benefits from the Company or who receives Social Security disability
payments is presumptively disabled for purposes of this Plan.
2.10 EFFECTIVE DATE The date the amended and restated Plan became
effective which is January 1, 1989.
2.11 EMPLOYEE Any person who is employed by the Employer on a full-
time basis (40 or more hours per week on a regular basis), and on
whose behalf contributions are being made by such Employer under the
Federal Insurance Contribution Act and who is not included in a unit
of employees covered by an agreement between employee representatives
and any Employer, unless the collective bargaining agreement provides
that such Employees are entitled to participate in the Plan or unless
the Employer otherwise directs in a written instrument submitted to
the Trustee.
Notwithstanding the provisions of this Section 2.11, a person who is
not employed by an Employer, but who performs services for an Employer
pursuant to an agreement between an Employer and a leasing
organization, shall be considered a "leased employee" after such
person performs such services for a twelve-month period and the
services are of a type historically performed by Employees. A person
who is considered a leased employee of an Employer shall not be
considered an Employee for purposes of the Plan. If a leased employee
subsequently became an Employee and thereafter participates in the
Plan, he shall receive credit for participation under Article III, for
his period of employment as a leased employee, except to the extent
3
that Section 414(n)(5) of the Code was satisfied with respect to such
Employee while he was a leased employee.
2.12 EMPLOYER NIPSCO Industries, Inc., the Company and each Affiliate
that adopts the Plan with the consent of NIPSCO Industries, Inc.,
pursuant to the provisions of Article XIV.
2.13 ENTRY DATE The first day of each Plan Quarter.
2.14 HIGHLY COMPENSATED EMPLOYEE Any present or former Employee who,
during the current or immediately preceding year:
(a) was a 5 percent owner of an Employer;
(b) received annual Compensation from an Employer of more than
$75,000 (as adjusted under Code Section 414(q));
(c) received annual Compensation from an Employer of more than
$50,000 (as adjusted under Code Section 414(q) and was in the
top-paid 20% of the Employees; or
(d) was an officer of an Employer receiving annual Compensation
greater than 50% of the limitation then in effect under Code
Section 415(b)(1)(A); provided that for purposes of this
subparagraph (d), no more than 50 Employees of an Employer (or if
lesser, the greater of 3 Employees or 10 percent of the
Employees) shall be treated as officers.
If an Employee described in subparagraph (b), (c) or (d) during the
current Plan Year was not described in subparagraph (b), (c) or (d)
during the preceding Plan Year, such individual shall not be a Highly
Compensated Employee unless the Employee is one of the highest paid
100 highly compensated Employees in the current Plan Year.
If an Employee is, during a determination year or immediately
preceding year, a family member of either a 5 percent owner who is an
active or former employee or a Highly Compensated Employee who is one
of the 10 most Highly Compensated Employees ranked on the basis of
Compensation paid by the Employer during such year, then the family
member and the 5 percent owner or top-ten Highly Compensated Employee
shall be aggregated. In such case, the family member and the 5
percent owner or top-ten Highly Compensated Employees shall be treated
as a single Employee receiving Compensation and Plan contributions or
benefits equal to the sum of such compensation and contributions or
benefits of the family member and 5 percent owner or top-ten Highly
Compensated Employee. For purposes of this section, family member
includes the spouse, lineal ascendants or descendants of the Employee
or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the top-
4
paid group, the top 100 Employees, the number of Employees treated as
officers and the Compensation that is considered, will be made in
accordance with section 414(q) of the Code and the regulations
thereunder.
An Employer for any Plan Year may elect to identify Highly Compensated
Employees based upon only the current Plan Year to the extent
permitted by Section 414(q) of the Code and regulations issued
thereunder.
2.15 INVESTMENT FUNDS The funds in which a Participant may direct the
Trustee to invest the assets of his Account, as described in Section
6.4 of the Plan.
2.16 MATCHING CONTRIBUTIONS Contributions made to the Trust by an
Employer on behalf of eligible Participants, as described under
Section 4.3 and allocated to a Participant's "Matching Contributions
Account" in accordance with Section 6.2.
2.17 PARTICIPANT An Employee participating in the Plan in accordance
with Section 3.1. and any former Employee who has an Account Balance
under the Plan that has not been paid in full. Notwithstanding the
preceding sentence, only actively employed Participants, other than
anyone on an unpaid leave of absence, may contribute Pre-tax or After-
tax Contributions pursuant to Article IV. In any event, an Employee
who has deposited a Rollover Contribution pursuant to Section 4.6 of
the Plan shall be deemed a Participant to the extent that the
provisions of the Plan apply to the Rollover Account of such Employee.
2.18 PLAN The NIPSCO Industries, Inc. Tax Deferred Savings Plan as of
the Effective Date, and as may hereafter be further amended.
2.19 PLAN QUARTER The three month calendar period beginning on
January 1, April 1, July 1, or October 1 of each Plan Year.
2.20 PLAN YEAR The twelve month period commencing on January 1 and
ending on December 31.
2.21 PRE-TAX CONTRIBUTION A contribution made to the Trust in
accordance with Section 4.1 of the Plan and allocated to a "Pre-tax
Contribution Account" in accordance with Section 6.2 of the Plan.
2.22 PRIOR PLAN The Northern Indiana Public Service Company Tax
Deferred Savings Plan, as in effect prior to January 1, 1989.
2.23 ROLLOVER CONTRIBUTIONS The contributions made to the Trust under
Section 4.6, and allocated to a "Rollover Account" as described in
Section 6.2 of the Plan, including a 1989 rollover contribution from
the Northern Indiana Public Service Company Employee Stock Ownership
Plan.
5
2.24 TRUST (OR TRUST FUND) Any and all assets held under the Plan by
the Trustee maintained in accordance with the terms of the trust
agreement, as from time to time amended, that constitutes a part of
this Plan.
2.25 TRUSTEE The corporation, person or persons, bank or trust
company, authorized by the Company to perform custodial and investment
functions with respect to the Trust.
2.26 VALUATION DATE The close of each business day.
ARTICLE III
PARTICIPATION
3.1 PARTICIPATION An Employee who was eligible to participate in the
Prior Plan will continue to be eligible to participate in this Plan.
Each other Employee will become eligible to participate in this Plan
on the date he completes six months of continuous employment with an
Employer, beginning on his Employment Commencement Date subject to the
provisions of Sections 3.2 and 3.3. Once an Employee becomes eligible
to participate, he will remain eligible as long as he remains an
Employee, subject to the provisions of Sections 3.2 and 3.3, and he
may become a Participant as of the first Entry Date following the date
he first becomes eligible or any Entry Date thereafter by completing a
form as described in Section 4.2 or Section 4.4. An Employee who
became a Participant shall remain a Participant until he or his
Beneficiary is paid his entire Account Balance following his Severance
Date, except that any Participant who is on an unpaid leave of absence
shall not be able to make Pre-tax Contributions or After-tax
Contributions to the Plan during his unpaid leave of absence.
3.2 PARTICIPATION UPON REEMPLOYMENT A Participant who incurs a Break
in Service shall be eligible to participate on his Reemployment
Commencement Date and may become a Participant on the first Entry Date
following his Reemployment Commencement Date. Any other Employee must
meet the eligibility requirements of Section 3.1.
3.3 CHANGE IN JOB CLASSIFICATION In the event that a Participant
becomes ineligible to participate in this Plan because his job
classification is one that makes him ineligible under Section 2.11, he
shall continue to have all rights of participation in the Plan as to
his Account Balance, except that he shall not be eligible to make Pre-
tax Contributions or After-tax Contributions to the Plan.
If an Employee's job classification changes such that he meets the
definition of Employee under Section 2.11, he shall become eligible to
participate in the Plan on the date his change in status becomes
effective, and may become a Participant on the first Entry Date
6
following his change in status or any Entry Date pursuant to the
procedures of the Plan.
3.4 DEFINITIONS Where the following words or phrases appear in this
Article III, they shall have the meanings set forth below:
a. BREAK IN SERVICE A 12 consecutive month period commencing on
an individual's Severance Date and ending on his Reemployment
Commencement Date.
b. EMPLOYMENT COMMENCEMENT DATE The first day on which an
individual first performs an Hour of Service for an Employer.
c. HOUR OF SERVICE Each hour for which an individual is paid or
entitled to payment from an Employer for the performance of
duties and for reasons other than for the performance of duties,
including each hour for which back pay, irrespective of
mitigation of damages, has been either awarded or agreed to by an
Employer, determined and credited in accordance with the
Department of Labor Regulation Section 2530.200b-2.
d. REEMPLOYMENT COMMENCEMENT DATE The first day following an
Employee's Severance Date in which he first performs an Hour of
Service for an Employer.
e. SEVERANCE DATE The earlier of:
(1) the date on which an Employee quits, retires, is
discharged or dies or;
(2) the first anniversary of the first day of the period in
which an Employee remains absent from service (with or
without pay) for any reason other than quitting, retirement,
discharge or death. Notwithstanding the prior sentence, the
Severance Date of an individual who is absent from service
beyond the first anniversary of the first day of absence by
reason of a maternity or paternity absence as described in
Code Section 410(a)(5)(E)(i) is the second anniversary of
the first day of such absence. The period between the first
and second anniversaries of the first day of absence is
neither a period of service nor a Break in Service.
3.5 LEAVE OF ABSENCE Employment for purposes of this Article III
shall include a leave of absence granted by an Employer to an Employee
on and after August 5, 1993 pursuant to the Family and Medical Leave
Act if the Employee returns to work for an Employer at the end of such
leave of absence.
7
ARTICLE IV
CONTRIBUTIONS
4.1 PRE-TAX CONTRIBUTIONS A Participant may elect to have his
Employer make Pre-tax Contributions to the Trust on his behalf by
executing a salary reduction agreement as described in Section 4.2.
Prior to January 1, 1995, the amount of Pre-tax Contributions that may
be made on behalf of a Participant for any designated period shall be
deducted from his Compensation and shall equal such whole dollar
amount, not less than $10.00 per pay period, as is designated by the
Participant in the salary reduction agreement. On and after January
1, 1995, the amount of Pre-tax Contributions that may be made on
behalf of a Participant for any designated period shall be deducted
from his Compensation and shall equal either (1) such whole percentage
of his Compensation, or (2) such whole dollar amount not less than
$10.00 per pay period, as is designated by the Participant in the
salary reduction agreement. The Participant may also elect in a
separate writing to have his Employer contribute on his behalf, as a
Pre-tax Contribution to the Trust, (a) any lump sum amount payable to
the Participant in lieu of vacation days in accordance with the
vacation policy of his Employer, or (b) any amount resulting from
unused credits from a plan established by his Employer under Code
Section 125. All Pre-tax Contributions made pursuant to the first two
sentences of this Section shall be transmitted to the Trust within 30
days after the date on which such Pre-tax Contributions were deducted
from the Participant's Compensation and all Pre-tax Contributions made
pursuant to the third sentence of this Section shall be transmitted to
the Trust within 30 days after the date on which such Pre-tax
Contributions become available for transmission. All Pre-tax
Contributions will be 100% vested and nonforfeitable at all times.
4.2 SALARY REDUCTION AGREEMENT The salary reduction agreement
represents a legally binding agreement by a Participant with his
Employer to accept a reduction in Compensation in consideration of a
contribution to the Trust by such Employer on the Participant's behalf
in the same amount. For each Plan Year a Participant may enter into
such an agreement with his Employer by indicating his election
according to the provisions of Section 4.1 on a form provided by the
Employer. Subject to the provisions of Article V, such election shall
remain in force until changed in writing by the Participant. A
Participant may elect to (i) commence, (ii) resume, (iii) change or
(iv) eliminate the amount of future Pre-tax Contributions made on his
behalf effective as of each Entry Date by filing a written change in
election with the Company at least 15 days prior to the applicable
Entry Date. Any election made pursuant to this paragraph shall apply
to any regular payroll check dated on or after the Entry Date in which
the election becomes effective. A Participant may not change his
election with respect to Pre-tax Contributions already made by payroll
deduction.
8
4.3 MATCHING CONTRIBUTIONS Beginning January 1, 1991, each Employer
shall make a Matching Contribution to the Trust on behalf of each of
its Participants who elected to make Pre-tax Contributions pursuant to
Section 4.1, and who elected to invest such Pre-tax Contributions in
the Employer Common Stock Fund according to the provisions of Section
6.5. The amount of the Matching Contribution shall equal 1/9th of the
amount of Pre-tax Contributions contributed to the Employer Common
Stock Fund. All Matching Contributions shall be transmitted to the
Trust within 30 days after the date on which the Contributions were
made. All Matching Contributions will be 100% vested and
nonforfeitable at all times.
4.4 AFTER-TAX CONTRIBUTIONS A Participant may elect to have the
Company make After-tax Contributions to the Trust on his behalf by
executing a written election for each Plan Year on a form furnished by
the Company. Prior to January 1, 1995, such After-tax Contributions
shall be in such whole dollar amounts, not less than $10.00 per pay
period, as designated by the Participant, but not to exceed 10% of his
Compensation for any pay period. On and after January 1, 1995, such
After-tax Contributions shall be either (1) in such whole percentages
of Compensation, or (2) in such whole dollar amounts not less than
$10.00 per pay period, as designated by the Participant, but not to
exceed 10% of his Compensation for any pay period. All After-tax
Contributions shall be transmitted to the Trust within 30 days after
the date on which the After-tax Contributions were deducted from the
Participant's Compensation, and no later than 30 days following the
end of the Plan Year in which such Contributions were made. All
After-tax Contributions will be 100% vested and nonforfeitable at all
times.
4.5 MAXIMUM CONTRIBUTIONS Notwithstanding anything in the Plan to
the contrary, the sum of a Participant's Pre-tax Contributions made
pursuant to Section 4.1 plus the Participant's After-tax Contributions
made pursuant to Section 4.4 shall not exceed twenty percent (20%) of
such Participant's Compensation.
4.6 ROLLOVERS Effective February 1, 1991, a Participant who has
participated in any other qualified plan described in Section 401(a)
of the Code shall be permitted, in accordance with such rules as
established by the Committee, to make a Rollover Contribution to the
Trust of an amount received by the Participant that is attributable to
participation in such plan. A Rollover Contribution may be made only
within 60 days following the date the Employee receives the
distribution from such other plan (or within such additional period as
may be provided under Section 408 of the Code if the Participant shall
have made a timely deposit of the distribution in an individual
retirement account). The Trustee may also receive directly from the
trustee under such other plan all or any portion (as designated by
such Employee in writing to the Committee) of the amount that would
otherwise be distributable to the Participant by reason of his
termination of participation in such other plan. Such Rollover
Contribution shall be allocated to his Rollover Account, which may
9
include a 1989 Rollover Contribution from the Northern Indiana Public
Service Company Employee Stock Ownership Plan. A Rollover
Contribution may not be made to the Trust by a former Employee.
4.7 INVESTMENT INSTRUCTIONS Notwithstanding the preceding provisions
of this Article, in no event may any contribution be made or
authorized by a Participant unless such Participant has delivered
investment instructions with respect to such contributions pursuant to
the provisions of Section 6.5 on or prior to the date such
contributions are authorized or delivered by the Participant.
ARTICLE V
LIMITATIONS ON CONTRIBUTIONS AND BENEFITS
5.1 MAXIMUM DOLLAR LIMITATION ON PRE-TAX CONTRIBUTIONS
(a) In no event shall the sum of (i) a Participant's Pre-tax
Contributions for any calendar year and (ii) any other "elective
deferrals" as defined in Code Section 402(g)(3) for any calendar
year, exceed $9,240 (as indexed under Code Section 402(g)).
(b) In the event that the aggregate amount of Pre-tax
Contributions by a Participant exceeds the maximum dollar
limitation as determined under (a) above, the amount of such
excess Pre-tax Contributions, increased by any income and
decreased by any losses attributable thereto, shall be returned
to the Participant no later than April 15th of the calendar year
following the calendar year for which the Pre-tax Contributions
were made.
(c) Excess Pre-tax Contributions shall be adjusted for any
income gains or losses pursuant to Section 402(g) of the Code,
for the calendar year in which such Contributions occurred.
5.2 LIMITATIONS UNDER CODE SECTION 415
(a) Notwithstanding anything contained in this Plan to the
contrary, the provisions of this Plan shall at all times comply
with the limitations, adjustments and other requirements
prescribed in Code Section 415 and the regulations thereunder,
the terms of which are specifically incorporated herein by
reference. In the case of a Participant covered by this Plan and
a defined benefit plan sponsored by an Employer, the benefits
provided by the defined benefit plan shall be reduced first in
order to comply with Code Section 415 and the regulations
thereunder.
(b) ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS The amount of
Annual Additions that may be credited to a Participant's Account
10
under this Plan, or that may be credited to such Participant
under any other qualified plan, welfare benefit fund, (as defined
in Code Section 419(e)), or an individual medical account, (as
defined in Code Section 415 (1)(2)), maintained by an Employer,
for any Limitation Year will not exceed the lesser of $30,000 (as
increased by the Commissioner of Internal Revenue under Code
Section 415(d)), or 25 percent of a Participant's Compensation
(the "Maximum Permissible Amount"). If the foregoing limitation
on allocations would be exceeded in any Limitation Year for any
Participant as a result of (i) reasonable error in estimating
such Participant's Compensation, (ii) reasonable error in
determining the amount of elective deferrals within the meaning
of Section 402(g)(3) of the Code (that may be made with respect
to such Participant), or (iii) under such other limited facts and
circumstances that the Commissioner of Internal Revenue (pursuant
to Code Regulations Section 415-6(b)(6)) finds justify the
availability of this paragraph (b), the After-tax Contributions
and Pre-tax Contributions made by or with respect to such
Participant shall be distributed to him, to the extent that any
such distribution would reduce the amount in excess of the limits
of this Section 5.2, and any amount in excess of the limits of
this Section 5.2, remaining after such distribution shall be
placed, unallocated to any Participant, in a Suspense Account.
If a Suspense Account is in existence at any time during a
particular Limitation Year, other than the Limitation Year
described in the preceding sentence, all amounts in the Suspense
Account must be allocated to the Participants' Accounts (subject
to the limits of this Section 5.2) before any contributions which
would constitute Annual Additions may be made to the Plan for
that Limitation Year. The excess amount allocated pursuant to
this Section 5.2(b) shall be used to reduce Matching
Contributions for the next Limitation Year (and succeeding
Limitation Years), as necessary, for that Participant. However,
if that Participant is not covered by the Plan as of the end of
the applicable Limitation Year, then the excess amounts must be
held unallocated in the Suspense Account for the Limitation Year
and allocated and reallocated in the next limitation year to all
of the remaining Participants in the Plan. The Suspense Account
will not share in the valuation of Participant's Accounts, and
the allocation of earnings set forth in Section 6.3 of the Plan,
and the change in fair market value and allocation of earnings
attributable to the Suspense Account shall be allocated to the
remaining Accounts hereunder as set forth in Section 6.3.
(c) Prior to determining a Participant's actual Compensation for
the Limitation Year, the Company may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable
estimate of the Participant's Compensation for the Limitation
Year uniformly determined for all Participants similarly
situated.
11
(d) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(e) If pursuant to Sections 5.2(b) and (d) there is an Excess
Amount, the excess will be disposed of by the Committee as
follows:
(i) If, the Participant is covered by the Plan at the end
of the Limitation Year, After-tax Contributions, adjusted
for earnings, gains and losses allocable thereto, will be
returned to the Participant, to the extent they would reduce
the Excess Amount.
(ii) If, after the application of Section 5.2(e)(i), an
Excess Amount still exists and the Participant is covered by
the Plan at the end of the Limitation Year, Pre-tax
Contributions, adjusted for earnings, gains and losses
allocable thereto, will be returned to the Participant, to
the extent they would reduce the Excess Amount.
(iii) If, after the application of Sections 5.2(e)(i) and
(ii), an Excess Amount still exists, and the Participant is
covered by the Plan at the end of the Limitation Year, the
Excess Amount in the Suspense Account will be used to reduce
Matching Contributions for such Participant in the next
Limitation Year, and each succeeding Limitation Year, if
necessary.
(f) For purposes of this Section 5.2:
(i) "Excess Amount" means for a Participant for each
"Limitation Year" the excess, if any, of (i) the Annual
Additions that would be credited to his Account under the
terms of the Plan without regard to Code Section 415 over
(ii) the maximum Annual Additions allowed under Code Section
415(c)(1)(A).
(ii) "Annual Additions" means the sum of the following
amounts credited to a Participant's Account for the
Limitation Year:
(1) Employer contributions,
(2) Employee contributions,
(3) Forfeitures, and
(4) Amounts described in Section 415(l)(2) and
419(A)(d)(3) of the Code.
(iii) "Limitation Year" means the Plan Year.
12
5.3 NONDISCRIMINATION REQUIREMENTS - Definitions
For purposes of the remainder of this Article:
(a) The "Actual Deferral Percentage" means the average of the
actual deferral ratios, (calculated separately for each Eligible
Employee) of the amount of Pre-tax Contributions actually made by
the Eligible Employee for such Plan Year, to the Eligible
Employee's Compensation for the period of time during such Plan
Year that he participated in the Plan, rounded to the nearest
one-hundredth of one percent.
(b) The "Actual Contribution Percentage" means the average of
the actual contribution ratios, (calculated separately for each
Eligible Employee) of the amount of Matching Contributions
actually made by an Employer for the Eligible Employee for such
Plan Year, plus the amount of After-tax Contributions made by the
Eligible Employee, during such Plan Year, to such Employee's
Compensation for the period of time during such Plan Year in
which he participated in the Plan, rounded to the nearest one-
hundredth of one percent.
(c) "Eligible Employee" means any Participant in the Plan and
any Employee who would be eligible to make Pre-tax Contributions
or After-tax Contributions to the Plan for a Plan Year, but for a
suspension due to a distribution, or a failure to elect to
participate in the Plan.
(d) "Excess Contributions" means, with respect to any Plan Year,
the excess of the aggregate amount of the Pre-tax Contributions
actually made on behalf of Highly Compensated Employees for such
Plan Year, over the maximum amount of such Contributions
permitted under the limitations of Code Section 401(k)(3)(A)(ii).
(e) "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of the aggregate amount of the After-tax
Contributions and Matching Contributions actually made on behalf
of Highly Compensated Employees for such Plan Year, over the
maximum amount of such contributions permitted under the
limitations of Code Section 401(m)(2)(A).
(f) "Highly Compensated Eligible Employee" means an Eligible
Employee who is a Highly Compensated Employee.
5.4 401(K) TESTS FOR PRE-TAX CONTRIBUTIONS
(a) GENERAL REQUIREMENTS The total amount of Pre-tax
Contributions shall comply with either (1) or (2) below for each
Plan Year:
(1) The Actual Deferral Percentage for the Highly
Compensated Eligible
13
Employees shall not exceed the Actual Deferral
Percentage for all other
Eligible Employees multiplied by 1.25; or
(2) The Actual Deferral Percentage for Highly Compensated
Eligible Employees shall not exceed the Actual Deferral
Percentage of all other Eligible Employees multiplied
by 2.0, provided that the Actual Deferral Percentage
for the Highly Compensated Eligible Employees does not
exceed that of all other Eligible Employees by more
than two percentage points.
(b) The Actual Deferral Percentage for the Plan Year for any
Highly Compensated Eligible Employee who is eligible to make Pre-
tax Contributions under two or more plans that are qualified
under Section 401(a) or 401(k) of the Code and that are
maintained by an Employer or an Affiliate, must be determined as
if all such deferrals were made under a single plan; except that
for Plan Years beginning after December 31, 1989, plans may be
aggregated only if they have the same Plan Year.
(c) The Actual Deferral Percentage of any Highly Compensated
Eligible Employee (within the meaning of Section 414(q)(6)(B) of
the Code), as determined in accordance with the preceding
sentence, shall include the contributions of the family members
of such Highly Compensated Eligible Employee.
(d) In determining whether the requirements Section 5.4(a) of
the Plan are met, the Committee may aggregate plans on any basis
as permitted under Code Section 401(a)(4) and regulations
thereunder.
5.5 CORRECTION OF EXCESS CONTRIBUTIONS
(a) If the amount of Pre-tax Contributions made for Highly
Compensated Eligible Employees in a Plan Year would not comply
with either clause (1) or (2) in Section 5.4(a) above, then the
Committee in its discretion may choose either (1), (2) or (3)
below, or any combination in order to comply with such tests:
(1) In determining the Actual Deferral Percentage of
Eligible Employees, the Committee may treat Matching
Contributions, other than Matching Contributions used to
meet the test in Section 5.6(a), as Pre-tax Contributions;
or
(2) The Excess Contributions can, with the consent of the
applicable Highly Compensated Eligible Employees, be
recharacterized as After-tax Contributions solely for the
purposes of Sections 5.4 and 5.6 of the Plan, within 2-1/2
months after the related Plan Year, but only to the extent
14
that it will not cause the limitations in Section 5.6(a) to
be exceeded, or
(3) The Excess Contributions for such Plan Year (including
the income, gains and losses attributable to such
Contributions as provided in (b) below) shall be distributed
by the last day of the following twelve month period to
Highly Compensated Eligible Employees on the basis of the
respective portions of such Excess Contributions
attributable to each Highly Compensated Eligible Employee,
determined according to the following leveling method.
Beginning with the class of Highly Compensated Eligible
Employees that have the highest Actual Deferral Percentage,
reduce the Actual Deferral Percentage of such Highly
Compensated Eligible Employees to the extent required to
cause such Actual Deferral Percentage to equal the Actual
Deferral Percentage of the class of Highly Compensated
Eligible Employees with the next highest Actual Deferral
Percentage. This process is repeated until the Plan
satisfies either of the tests in 5.4(a).
In the event of the complete termination of the Plan during the
Plan Year in which Excess Contributions arose, such distributions
are to be made after termination of the Plan and before the close
of the twelve month period that immediately follows such
termination. Any distribution of Excess Contributions may be
made without regard to any notice or consent requirements of the
Plan.
(b) The income, gains and losses allocable to Excess
Contributions shall be the income, gains and losses attributable
to such Excess Contributions for the Plan Year in which they
occurred, determined pursuant to Section 401(k)(8) of the Code.
(c) For purposes of this Section 5.5, a distribution occurring
on or before the fifteenth day of the month will be treated as
having been made as of the last day of the preceding month and a
distribution occurring after such fifteenth day will be treated
as having been made on the first day of the following month.
5.6 401(M) TESTS FOR AFTER-TAX CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
(a) GENERAL REQUIREMENTS The total amount of Matching
Contributions as described in Section 4.3, except for any
Matching Contributions used to satisfy the test in Section
5.4(a), plus the total amount of After-tax Contributions as
described under Section 4.4, including any amount recharacterized
as an After-tax Contribution under Section 5.5(a)(2) above shall
comply with either (1) or (2) below for each Plan Year:
15
(1) The Actual Contribution Percentage for the Highly
Compensated Eligible Employees shall not exceed the Actual
Contribution Percentage for all other Eligible Employees
multiplied by 1.25; or
(2) The Actual Contribution Percentage for Highly
Compensated Eligible Employees shall not exceed (i) the
Actual Contribution Percentage of all other Eligible
Employees multiplied by 2.0, provided that the Actual
Contribution Percentage for the Highly Compensated Eligible
Employees does not exceed that of all other Eligible
Employees by more than two percentage points.
(b) The Actual Contribution Percentage for the Plan Year for any
Highly Compensated Eligible Employee who is eligible to receive
Matching Contributions or to make After-tax Contributions under
two or more plans that are qualified under Section 401(a) or
401(k) of the Code and that are maintained by an Employer or an
Affiliate, must be determined as if all such Contributions were
made under a single plan; except that for Plan Years beginning
after December 31, 1989 plans may be aggregated only if they have
the same Plan Year.
(c) The Actual Contribution Percentage of any Highly Compensated
Eligible Employee (within the meaning of Section 414(q)(6)(B) of
the Code), as determined in accordance with the preceding
sentence, shall include the Contributions of the family members
of such Highly Compensated Eligible Employee.
(d) In determining whether the requirements in Section 5.6(a)
are met, the Committee may aggregate plans as permitted under
Code Section 401(a)(4) and regulations thereunder.
5.7 CORRECTION OF EXCESS AGGREGATE CONTRIBUTIONS
(a) If the amount of Matching Contributions plus After-tax
Contributions made for Highly Compensated Eligible Employees in a
Plan Year would not comply with either clause (1) or (2) in
Section 5.6(a) above, then the Committee in its discretion will
choose either (1) or (2) below in order to comply with such
tests:
(1) The Pre-tax Contributions of nonhighly compensated
Eligible Employees will be recharacterized as Matching
Contributions to the extent necessary to comply with either
clause (1) or (2) in Section 5.6(a), provided that the
Section 401(k) test for Pre-tax Contributions (as described
in Section 5.4(a)(1) or (2)) and the alternative limitation
set forth in Section 5.8 will still be met both before and
after such recharacterization; or
16
(2) The Excess Aggregate Contributions for such Plan Year
(including any income, gains or losses attributable to such
Contributions as provided in paragraph (b) below) shall be
distributed by the last day of the following twelve month
period to Highly Compensated Eligible Employees on the basis
of the respective portions of such Excess Aggregate
Contributions attributable to each Highly Compensated
Eligible Employees, determined according to the following
leveling method. Beginning with the class of Highly
Compensated Eligible Employees that have the highest Actual
Contribution Percentage, reduce the Actual Contribution
Percentage of such Highly Compensated Eligible Employees to
the extent required to cause their Actual Contribution
Percentage to equal the Actual Contribution Percentage of
the class of Highly Compensated Eligible Employees with the
next highest Actual Contribution Percentage. This process
is repeated until the Plan satisfies either of the tests in
5.6(a).
In the event of the complete termination of the Plan during
the Plan Year in which an Excess Aggregate Contribution
arose, such distributions are to be made after termination
of the Plan and before the close of the twelve month period
that immediately follows such termination. Any distribution
of Excess Aggregate Contributions may be made without regard
to any notice or consent requirements of the Plan.
(b) The income, gains and losses allocable to Excess Aggregate
Contributions shall be such income, gains and losses attributable
to such Excess Aggregate Contributions for the Plan Year in which
they occurred, determined pursuant to Section 401(k)(8) of the
Code.
(c) For purposes of this Section 5.7, a distribution occurring
on or before the fifteenth day of the month will be treated as
having been made as of the last day of the preceding month and a
distribution occurring after such fifteenth day will be treated
as having been made on the first day of the following month.
5.8 MULTIPLE USE OF ALTERNATIVE LIMITATION
(a) If the sum of:
(i) the Actual Deferral Percentage of the entire group of
Highly Compensated Eligible Employees,
plus
(ii) the Actual Contribution Percentage of Highly
Compensated Eligible Employees
17
exceeds the limitation set forth in (b) below (the "Aggregate
Limitation"), it shall be corrected as provided in (c) below.
The determination of the Actual Deferral Percentage for Highly
Compensated Eligible Employees and the Actual Contribution
Percentage for Highly Compensated Eligible Employees shall be
made after the determinations and corrections in Section 5.3
through 5.7 have been made. If plans have been aggregated as
permitted under Sections 5.4(d) and 5.6(d), such plans may also
be aggregated for purposes of this Section 5.8.
(b) The Aggregate Limitation shall be the greater of (1) or (2)
below
(1) the sum of:
(i) 1.25 multiplied by the lesser of:
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Employees
Plus
(ii) 2 points plus the greater of
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees,
but not exceeding 200% of the greater of (A) or (B).
(2) the sum of:
(i) 1.25 multiplied by the greater of:
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees
Plus
(ii) 2 points plus the lesser of:
(A) the Actual Deferral Percentage for the group
of nonhighly compensated Eligible Employees, or
(B) the Actual Contribution Percentage for the
group of nonhighly compensated Eligible Employees,
but not exceeding 200% of the lesser of (A) or (B).
(c) In accordance with Treasury Regulation Section 1.401(m)-2, as
revised by IRS Revenue Procedure 89-65, the Committee may reduce
18
the Actual Deferral Percentage of Highly Compensated Eligible
Employees by the leveling method described in Section 5.5(a)(3),
or reduce the Actual Contribution Percentage of Highly
Compensated Eligible Employees by the leveling method described
in Section 5.7(a)(2), or by any other method allowed by the
Internal Revenue Service in subsequent guidance.
ARTICLE VI
ALLOCATIONS AND INVESTMENTS
6.1 RECEIPT OF CONTRIBUTIONS BY TRUSTEE. All contributions to the
Trust that are received by the Trustee, together with any earnings
thereon, shall be held, managed and administered by the Trustee in
accordance with the terms and conditions of this Plan and the Trust
agreement.
6.2 ESTABLISHMENT OF SUBACCOUNTS
(a) With respect to each Participant, the Committee shall
maintain: (1) a Pre-tax Contribution Account to record any
contributions made on behalf of a Participant as of the end of a
Plan Year, (2) an After-tax Contribution Account to record any
After-tax Contributions made on behalf of a Participant as of the
end of a Plan Year, (3) a Matching Contribution Account to record
Matching Contributions described under Section 4.3 made on behalf
of a Participant as of the end of a Plan Year, and (4) a Rollover
Account to record any Rollover Contributions made by a
Participant pursuant to Section 4.6 of the Plan.
(b) The maintenance of subaccounts under this Section 6.2 is for
accounting purposes only. Any distribution to a Participant, or
his Beneficiary under Section 7.4 shall be charged to the
appropriate subaccounts of the Participant as of the date of the
distribution.
6.3 ACCOUNT ADJUSTMENTS As of each Valuation Date the value of each
Account shall be adjusted on the basis of their then fair market value
in accordance with the following rules:
(a) CONTRIBUTIONS All contributions made during each pay period
(pursuant to Sections 4.1, 4.3, 4.4 or 4.6) shall be added to the
proper Account of each Participant as of the Valuation Date
received by the Trustee.
(b) WITHDRAWALS Any withdrawal made pursuant to Section 8.3 may
be made from any Investment Fund, based on the value as of
Valuation Date on which the withdrawal is made, after adding the
contributions in (a) above.
19
(c) EARNINGS, LOSSES AND LOAN REPAYMENTS As of each Valuation
Date, the net earnings or losses shall be determined for each of
the Investment Funds described in Section 6.4, adjusted for any
costs or expenses payable from the Trust. The amount of such
determination shall be allocated as of each Valuation Date to the
subaccounts of Participants invested in the respective Investment
Funds who had unpaid balances in their subaccounts on such date,
but after first adding any loan repayments, any contributions, as
described in (a) above, and after reducing each such beginning
balance by any loans, and any withdrawals as specified in (b)
above.
(d) DISTRIBUTIONS Subject to Section 6.5, as of each Valuation
Date, after (a), (b) and (c) above, any distributions that may be
made from any Investment Fund shall be deducted from the proper
subaccount of the Participant.
6.4 INVESTMENT FUNDS Contributions made under this Plan shall be
deposited in the Trust for purposes of investment. The Trust may
consist of four or more separate Investment Funds reflecting various
types of investments that the Committee may from time to time
designate, such as an Equity Fund, a Fixed Income Fund, a Money Market
Fund, an Employer Common Stock Fund and a Growth and Income Fund.
Notwithstanding any other provisions of the Plan, assets of the Trust
may be invested in any collective investment fund or funds, including
common and group trust funds presently in existence or hereafter
established. The assets so invested shall be subject to all the
provisions of the instruments establishing such funds as they may be
amended from time to time, and which are hereby incorporated by
reference.
6.5 INVESTMENT DIRECTED BY PARTICIPANTS The Trustees shall invest
and reinvest the subaccounts (other than his Matching Contributions
subaccount) as the Participant shall instruct the Committee, and
according to the provisions of Section 6.6, by such means of
instructions provided by the Committee. The instructions of a
Participant shall remain in force until altered by him. As set forth
in Section 4.7, no contributions may be authorized by or made for a
Participant unless an investment instruction with respect to such
contributions is provided by him prior to the date such contributions
are authorized or delivered. A Participant shall not be allowed to
withdraw all prior investment instructions unless simultaneous
therewith he delivers new investment instructions. All amounts in all
Matching Contribution subaccounts shall be invested in the Employer
Common Stock Fund.
6.6 INVESTMENT OF CONTRIBUTIONS
(a) Except as provided in subparagraph (c) below, a Participant
may change his investment designation for new contributions
(other than Matching Contributions) as follows:
20
(i) changes made during the first 15 days of any
calendar month shall be effective on the valid trading date
occurring on or next following the 27th day of that calendar
month; and
(ii) changes made on or after the 16th day of any
calendar month shall be effective on the valid trading date
occurring on or next following the 6th day of the next
following calendar month.
(b) A Participant may transfer portions of his existing
subaccounts (other than his Matching Contributions Subaccount)
among the permitted funds in any amount that equals or exceeds
the lesser of (1) $250, and (2) the balance of the applicable
existing subaccount from which the transfer is made. Any such
transfer shall be effective as of the next following Valuation
Date except as provided in subparagraph (c) below.
(c) Changes in investment designation in the Employer Common
Stock Fund may only be made effective as of the first business
day of each Plan Quarter, except that any amounts attributable to
Matching Contributions, including any earnings thereon, can never
be transferred.
ARTICLE VII
BENEFITS
7.1 TERMINATION OF EMPLOYMENT If a Participant's employment with all
Employers and Affiliates is terminated for any reason other than death
or Disability, he shall be entitled to receive his entire Account
Balance (reduced by any amount attributable to an outstanding loan
made by the Participant pursuant to Section 8.4), subject to the
provisions of Section 7.4.
7.2 DISABILITY Upon incurring a Disability, a Participant shall be
entitled to receive his entire Account Balance (reduced by any amount
attributable to an outstanding loan made by the Participant pursuant
to Section 8.4), subject to the provisions of Section 7.4.
7.3 DEATH In the event a Participant's employment with all Employers
and Affiliates is terminated because of death, the Participant's
Beneficiary shall be entitled to receive his entire Account Balance
(reduced by any amount attributable to an outstanding loan made by the
Participant pursuant to Section 8.4), subject to the provisions of
Section 7.4.
7.4 PAYMENT OF BENEFITS
(a) FORM All amounts distributed from a Participant's Account
following termination of employment shall be distributed in one
21
lump sum amount, in cash, or, if elected by the Participant or
Beneficiary, in shares of Employer Common Stock based on the
numbers of whole shares allocated to the Employer Common Stock
Fund for the Participant. The Committee shall provide each
recipient receiving such payment a notice which specifies certain
information regarding the federal income tax treatment of Plan
benefits.
(b) COMMENCEMENT OF DISTRIBUTIONS Distributions to a
Participant, or his Beneficiary, entitled to payments under the
Plan shall commence as soon as practicable following the later of
the date on which the elections specified in paragraph (a) above
and (c) below occurs or the date of termination of employment,
retirement, death, or upon incurring a Disability.
Notwithstanding the foregoing, distributions shall commence no
later than 120 days after the later of the Participant's 65th
birthday or termination of employment, subject to the following
rules:
(i) Payments due under the Plan shall not be made later
than April 1 of the calendar year following the year in
which the Participant attains age 70-1/2.
(ii) If the amount payable under the Plan to any
Participant or Beneficiary is less than or equal to $3,500,
the Committee will direct that such amount be paid in a lump
sum, as soon as practicable, in full satisfaction and
release of all further rights of the Participant or
Beneficiary to receive any benefits under the Plan.
(c) Notwithstanding the preceding provisions of this Section, if
a Participant's Account Balance at the time for distribution
exceeds $3,500, then neither such distribution nor any subsequent
distribution shall be made to the Participant at any time prior
to the first to occur of his 65th birthday and the date of his
death without his written consent. The preceding sentence shall
not apply with respect to the distribution of the Account Balance
of a deceased Participant. A Participant who does not consent to
a distribution shall be entitled to request a distribution of all
of his Account Balance, at any time prior to the first to occur
of his 65th birthday and the date of his death by written
instrument delivered to the Committee at least 120 days prior to
the Valuation Date as to which such requested distribution is to
be determined.
(d) If a distribution is one to which Sections 401(a)(11) and
417 of the Code do not apply, distribution of the Participant's
Account may, pursuant to the preceding clauses of this paragraph,
commence less than thirty (30) days after the notice required
under Section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that:
22
(1) the Committee clearly informs the Participant that
the Participant has a right to a period of at least thirty
(30) days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option); and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
7.5 DESIGNATION OF BENEFICIARY
(a) PROCEDURE Subject to the provisions of paragraph (b), each
Participant may designate any person or person (who may be
designated primarily, contingently or successively and who may be
an entity other than a natural person) as his Beneficiary to whom
his Plan benefits are paid if he dies before receipt of such
benefits. Each designation shall be in a form prescribed by the
Committee, and will be effective only when filed with the
Committee during the Participant's lifetime.
Each Beneficiary designation filed with the Committee will cancel
all Beneficiary designations previously filed with the Committee.
The revocation of a Beneficiary designation shall not require the
consent of any designated Beneficiary except as provided in
paragraph (b) below.
(b) SPOUSAL CONSENT No Beneficiary designation shall be
effective under the Plan unless the Participant's spouse consents
in writing to such designation, and the spouse's signature is
witnessed by a Plan representative or a notary public.
Consequently, any Beneficiary designation previously made by a
Participant shall be automatically revoked upon the marriage or
remarriage of a Participant.
A spouse's consent shall be valid under this Plan only with
respect to the specified Beneficiary designated. If the
Beneficiary is subsequently changed, a new consent by the spouse
will be required unless the spouse's previous consent permits the
Participant to change the designation without the spouse's
further consent.
Notwithstanding the above, spousal consent shall not be required
if:
(1) the spouse is designated as the sole primary
Beneficiary by the Participant or
(2) it is established to the satisfaction of the Committee
that spousal consent cannot be obtained because there is no
spouse or because the spouse cannot be located. If the
spouse is legally incompetent to give consent, the spouse's
legal guardian, even if the guardian is the Participant, may
23
give consent. Also if the Participant is legally separated
or the Participant has been abandoned (within the meaning of
local law) and the Participant has a court order to such
effect, spousal consent is not required unless a Qualified
Domestic Relations Order provides otherwise.
(c) If a Participant fails to designate a Beneficiary, if such
designation is for any reason illegal or ineffective, or if no
Beneficiary survives the Participant, his benefits otherwise
payable pursuant to this Section shall be paid:
(1) to his surviving spouse, or if none,
(2) to his descendants, PER STIRPES, or if none,
(3) to his father and mother, in equal parts, or if none,
(4) to his brothers and sisters, in equal parts, or if
none,
(5) to his estate.
(d) The Committee may determine the identity of the distributees
of any benefit payable under the Plan and in so doing may act and
rely upon any information it may deem reliable upon reasonable
inquiry, and upon any affidavit, certificate, or other paper
believed by it to be genuine, and upon any evidence believed by
it sufficient. Any payment made in accordance with this Section
7.5 shall be a complete discharge of obligations of the Committee
and the Employers to the extent of such payment without regard to
the application of any payment so made.
7.6 ROLLOVER DISTRIBUTIONS
(a) This Section 7.6 applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the Plan to
the contrary that would otherwise limit a Distributee's election
under this section, a Distributee may elect, at the time and in
the manner prescribed by the Committee, to have any portion of an
Eligible Rollover Distribution paid directly to an Eligible
Retirement Plan specified by the Distributee in a Direct
Rollover.
(b) Definitions.
(i) "Eligible Rollover Distribution" is any distribution of
all or any portion of the balance to the credit of the
Distributee, except that an Eligible Rollover Distribution
does not include: any distribution that is one of a series
of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
24
life expectancies) of the Distributee and the Distributee's
designated Beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Section 401(a)(9) of the
Code; and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(ii) "Eligible Retirement Plan" is an individual retirement
account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section 403(a) of the
Code, or a qualified trust described in Section 401(a) of
the Code, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to a surviving spouse, an Eligible Retirement
Plan is an individual retirement account or individual
retirement annuity.
(iii) "Distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are Distributees with regard to the
interest of the spouse or former spouse.
(D) "Direct Rollover" is a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.
7.7 MINIMUM DISTRIBUTION LIMITATIONS. Notwithstanding anything to
the contrary contained elsewhere in the Plan:
(i) The payment of benefits under the Plan to any Participant
will:
(A) be distributed to him not later than the Required
Distribution Date (as defined in paragraph (iii), or
(B) be distributed to him commencing not later than the
Required Distribution Date in accordance with regulations
prescribed by the Secretary of the Treasury over a period
not extending beyond the life expectancy of the Participant
or the joint life expectancy of the Participant and his
Beneficiary.
(ii) (A) If the Participant dies after distribution to him has
commenced pursuant to subparagraph (i)(B) but before his entire
interest in the Plan has been distributed to him, the remaining
portion of that interest will be distributed at least as rapidly
25
as under the method of distribution being used under subparagraph
(i)(B) at the date of his death.
(B) If the Participant dies before distribution to him has
commenced pursuant to subparagraph (i)(B), then, except as
provided in paragraphs (ii)(C) and (ii)(D), his entire interest
in the Plan will be distributed within five years after his
death.
(C) Notwithstanding the provisions of subparagraph (ii)(B),
if the Participant dies before distribution to him has commenced
pursuant to subparagraph (i)(B), and if any portion of his
interest in the Plan is payable (I) to or for the benefit of a
Beneficiary, (II) in accordance with regulations prescribed by
the Secretary of the Treasury over a period not extending beyond
the life expectancy of the Beneficiary, and (III) beginning not
later than one year after the date of the Participant's death or
such later date as the Secretary of the Treasury may prescribe by
regulations, then the portion of his interest referred to in this
subparagraph (ii)(C) shall be treated as distributed on the date
on which such distributions begin.
(D) Notwithstanding the provisions of subparagraphs (ii)(B)
and (ii)(C), if the Beneficiary referred to in subparagraph
(ii)(C) is the spouse of the Participant, then:
(I) the date on which the distributions are required
to begin under subparagraph (ii)(C)(III) shall not be
earlier than the date on which the Participant would have
attained age 70-1/2, and
(II) if the spouse dies before the distributions to
that spouse begin, then this subparagraph (ii)(D) shall be
applied as if the spouse were the Participant.
(iii) For purposes of this Section, the Required Distribution
Date means April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2 provided, however, if the
Participant attained age 70-1/2 in calendar year 1988, the Required
Distribution Date means April 1, 1990, and further provided if the
Participant attained age 70-1/2 prior to January 1, 1988, the Required
Distribution Date means the April 1 following the later of the
calendar year in which the Participant: (A) attains age 70-1/2, or (B)
terminates service with all Employers and Affiliates, unless he is a
5% owner (as defined in Section 416 of the Code) of an Employer with
respect to the Plan Year ending in the calendar year in which he
attains age 70-1/2, in which case clause (B) shall not apply.
(iv) For purposes of this Section, the life expectancy of a
Participant and his spouse may be redetermined, but not more
frequently than annually. This paragraph (iv) shall not apply in the
case of a single life annuity.
26
ARTICLE VIII
WITHDRAWALS AND LOANS
8.1 DISTRIBUTION AT AGE 59-1/2 A Participant may elect an in-service
distribution of any amount up to his entire Account Balance on or
after he has attained age 59-1/2, subject to the provisions of Section
7.4.
8.2 WITHDRAWAL OF AFTER-TAX CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS
A Participant may, upon written request to the Committee, make
withdrawals in cash from either his After-tax Contribution Account or
his Rollover Contribution Account as of the end of any calendar month
but only once in any twelve-month period. No such withdrawal shall be
less than $1,000 in amount unless it is for the entire balance
withdrawable.
8.3 HARDSHIP WITHDRAWALS
(a) A Participant may withdraw all or any part of the amount
credited to his Pre-tax Contribution Account (excluding on and
after January 1, 1989, any earnings credited to his Pre-tax
Contributions) to meet a financial hardship as described in this
Section. Such withdrawals may not be made more frequently than
once a year, except withdrawals for tuition payments may be made
as indicated in clause (b)3. The Participant's request for a
withdrawal shall be in writing on a form prescribed by the
Committee. All rules governing withdrawal privileges shall be
administered by the Committee in a uniform manner, and are
subject to the claims procedure described in Section 10.6.
(b) Financial hardship shall be determined in accordance with
rules established by the Committee, and shall include the
following list of events or circumstances:
(1) The purchase (excluding mortgage payments) of a
principal residence;
(2) Medical expenses (described in Code Section 213(d))
previously incurred by the Participant, the Participant's
spouse or any dependents of the Participant (as defined in
Code Section 152) or necessary for any of those persons to
obtain medical care described in Code Section 213(d);
(3) Payment of tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant, his spouse, his children or dependents;
(4) The need to prevent the eviction of the Participant
from his principal residence or foreclosure on the mortgage
of the Participant's principal residence;
27
(5) Any other need as the Committee determines to be a
hardship expressly specified in rules announced by the
Commissioner of Internal Revenue issued under Section 401(k)
of the Code; and
(6) Amounts necessary to pay any federal, state or local
income taxes or penalties reasonably anticipated to result
from the distribution.
(c) A distribution that is not for one of the specified reasons
set forth in the preceding paragraph (b) will be deemed due to a
financial hardship if the Committee reasonably determines, based
on written representations and evidence received from the
Participant, that the distribution is for a financial hardship
and that the amount requested does not exceed the amount needed
to meet the financial hardship. In making such determination,
the Committee shall rely upon the Participant's written
representation that the need cannot reasonably be relieved:
(1) through reimbursement or compensation by insurance or
otherwise;
(2) by liquidation of the Participant's assets, including
assets of his spouse or children to the extent available to
him, to the extent liquidation of such assets will not
itself create a financial need;
(3) from amounts available from the Participant's After-tax
Contribution Account; and
(4) by other distributions or non-taxable (at the time of
the loan), loans from plans maintained by the Employer and
its Affiliates, or by any other employer, or by borrowing
from commercial sources on reasonable commercial terms in an
amount sufficient to satisfy the need.
A need cannot reasonably be relieved by any action described
in clauses (1) through (4) if the effect of such action would be
to increase the amount of the need.
(d) In no event may any distribution be made for a financial
hardship pursuant to this Section unless the following conditions
have been satisfied:
(1) The Participant has first obtained all distributions,
other than hardship distributions, and all non-taxable loans
currently available under the Plan and all other plans
maintained by the Employer and its Affiliates;
(2) The Participant is prohibited from making any Pre-tax
Contributions or After-tax Contributions to this Plan, or
contributions to any other plan of the Employer or its
28
Affiliates (excluding health and welfare plans) during the
12 month period beginning with the date of receipt of a
hardship distribution under this Section; and
(3) The Participant is prohibited from making Pre-tax
Contributions for his taxable year immediately following the
taxable year of the hardship distribution in excess of the
limit described in Section 5.1, reduced by the amount of the
Participant's Pre-tax Contributions for the taxable year of
the hardship distribution.
8.4 LOANS TO PARTICIPANTS
(a) The Trustee may loan any Participant who has participated in
the Plan for at least twelve months (and any former Participant
who is a Party-in-Interest as defined in Section 3(14) of ERISA
whose Account Balance has not been distributed), up to the amount
described in paragraph (b) below, upon written application
according to such rules as the Committee may from time to time
establish that are hereby incorporated and made a part of this
Plan, and subject to paragraphs (c) through (f) below.
(b) The maximum amount of the loan, when added to the
outstanding balance of all other loans made to the Participant
from all qualified Plans maintained by the Employer and all
Affiliates, shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of:
(A) the highest outstanding balance during the one-
year period ending immediately preceding the date
of the loan, over
(B) the outstanding balance on the date of the loan,
of all such loans from all such plans;
(2) 50% of the amount to which the Participant would be
entitled under such Participant's Pre-tax Contribution
Account, Matching Contribution Account and Rollover
Account maintained on behalf of the Participant under
the Plan if he were to terminate his employment with
all Employers and Affiliates on the date of the loan.
(c) The minimum amount of the loan is at least $1,000.
(d) Loans may not be made from any amount held in the
Participant's Matching Contribution Account or his After-tax
Contribution Account.
(e) Each loan must be evidenced by a written note in a form
approved by the Committee, shall bear interest at a reasonable
rate commensurate with the interest rates charged by persons in
29
the business of lending money for loans that would be made under
similar circumstances, and shall require substantially level
amortization (with payments at least quarterly) over the term of
the loan. The note shall be evidence of the Participant's
indebtedness, which indebtedness shall be secured by such
Participant's Account under the Plan in an amount not to exceed
50% of the present value of the Participant's Pre-tax
Contribution Account, Matching Contribution Account and Rollover
Account Balance as determined immediately after the origination
of the loan to the Participant.
(f) Each loan shall specify a repayment period that shall not
extend beyond five years. However, a repayment period of up to
30 years may be established for a loan used to acquire any
dwelling unit that within a reasonable amount of time is to be
used (determined at the time the loan is made) as the principal
residence of the Participant.
(g) Each Participant shall agree to make loan repayments through
automatic salary deductions throughout the repayment period.
(h) A Participant may have only one outstanding loan at any
given time and only one loan may be granted to a Participant in
any twelve month period. An outstanding loan shall be considered
in default if, at the end of three consecutive months, no loan
payment has been made, except for any Participant on an unpaid
leave of absence. A loan default of a Participant on an unpaid
leave of absence shall not occur until 1 year following the date
of the first delinquent payment.
(i) The provisions of this Section 8.4 shall apply to former
Participants who are Parties In Interest (as defined in Section 3(14)
of ERISA) and who retain Account Balances in the Plan following
termination of employment. Payments of principal and interest on
a loan to such former Participant shall be made by personal check
in equal quarterly (or more frequent) installments. A loan to a
former Participant shall become payable in full on the date such
Participant receives a final distribution of his Account Balance.
(j) Each such loan shall be a first lien against the Account of
the borrowing Participant. If (i) any portion of the loan is
outstanding and (ii) an event occurs pursuant to which the
Participant, his estate, or his Beneficiaries will receive a
distribution from the Participant's Account under the provisions
of the Plan, then the Participant, if living, shall pay to the
Trustee an amount equal to the portion of the loan then
outstanding, including all accrued interest thereon, and the
Participant shall then receive the full amount of the
distribution under the provisions of the Plan to which he is
otherwise entitled. If the Participant is not then living, or if
the Participant does not make full payment of the portion of the
loan then outstanding within 90 days after the date of the event
30
pursuant to which the distribution is to be made, then such
distribution, to the extent necessary to liquidate the unpaid
portion of the loan, shall be made to the Trustee as payment on
the loan. No distribution shall be made to a Participant, his
estate, or his Beneficiaries in an amount greater than the excess
of the portion of his Account otherwise distributable over the
aggregate of the amounts owing with respect to such loan plus
interest, if any, thereon, taking into consideration any portion
of the loan paid by the Participant pursuant to the provisions of
this paragraph.
ARTICLE IX
TRUST FUND
All contributions made by an Employer under this Plan shall be paid to
the Trustee and deposited in the Trust Fund. However, contributions
made by an Employer are expressly conditioned upon the initial
qualification of the Plan under the Internal Revenue Code, and are
expressly conditioned upon the deductibility under Section 404 of the
Internal Revenue Code.
All assets of the Trust Fund, including investment income, shall be
retained for the exclusive benefit of Participants and Beneficiaries
and shall be used to pay benefits to such persons or to pay
administrative expenses of the Plan and Trust Fund to the extent not
paid by an Employer.
No Employer shall have any right, title, or interest in or to the
contributions made to the Trustee, and no part of the Trust Fund shall
ever revert or be repaid to any Employer, either directly or
indirectly, except as provided in Section 12.4. However, without
regard to the foregoing provisions of this section:
(a) If a contribution under the Plan is conditioned on initial
qualification of the Plan under Section 401(a) of the Code, and
the Plan receives an adverse determination with respect to its
initial qualification, the Trustee shall, upon written request of
an Employer, return to the Employer the amount of such
contribution (increased by earnings attributable thereto and
reduced by losses attributable thereto) within one calendar year
after the date that qualification of the Plan is denied, provided
that the application for the determination is made by the time
prescribed by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such later date as
the Secretary of the Treasury may prescribe;
(b) If a contribution is conditioned upon the deductibility of
the contribution under Section 404 of the Code, then, to the
extent the deduction is disallowed, the Trustee shall, upon
31
written request of an Employer, return the contribution (to the
extent disallowed) to the Employer within one year after the date
the deduction is disallowed;
(c) If a contribution or any portion thereof is made by an
Employer by a mistake of fact, the Trustee shall, upon written
request of the Employer, return the contribution or such portion
to the Employer within one year after the date of payment to the
Trustee; and
(d) Earnings attributable to amounts to be returned to an
Employer pursuant to subsection (b) or (c) above shall not be
returned, and losses attributable to amounts to be returned
pursuant to subsection (b) or (c) shall reduce the amount to be
so returned.
ARTICLE X
ADMINISTRATION
10.1 Allocation of Responsibility Among Fiduciaries for Plan and Trust
Administration The fiduciaries shall have only those specific powers,
duties, responsibilities and obligations as are specifically given
them under this Plan or the Trust. Each Employer shall have the sole
responsibility for the Matching Contributions provided for under
Section 4.3. The Company shall have the sole authority to appoint and
remove the Trustee, and members of the Committee and to amend or
terminate, in whole or in part, the Plan or the Trust. The Company
shall have the responsibility for the administration of the Plan, with
the assistance of the Committee, which responsibility is specifically
described in the Plan and the Trust. The Trustee shall have the sole
responsibility to perform custodial responsibilities with respect to
the Trust and shall have the sole responsibility for the management of
the assets held under the Trust, all as specifically provided in the
Trust.
Each fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the
provisions of the Plan or the Trust, as the case may be, authorizing
or providing for such direction, information, or action. Furthermore,
each fiduciary may rely upon any such direction, information, or
action of another fiduciary as being proper under the Plan or the
Trust, and is not required under the Plan or the Trust to inquire into
the propriety of any such direction, information, or action. It is
intended under the Plan and the Trust that each fiduciary shall be
responsible for the proper exercise of its own powers, duties,
responsibilities, and obligations under the Plan and the Trust and
shall not be responsible for any act or failure to act of another
fiduciary. No fiduciary guarantees the Trust Fund in any manner
against investment loss or depreciation in asset value.
32
10.2 APPOINTMENT OF COMMITTEE A Committee consisting of from one to
seven persons shall be appointed by and serve at the pleasure of the
Board of Directors of the Company to assist in the administration of
the Plan. All usual and reasonable expenses of the Committee may be
paid in whole or in part by the Company, and any expenses not paid by
the Company shall be paid by the Trustee out of the principal or
income of the Trust Fund. Any members of the Committee who are
Employees shall not receive compensation with respect to their
services for the Committee.
10.3 COMMITTEE POWERS AND DUTIES The Committee shall have such duties
and powers as may be necessary to discharge its duties hereunder,
including, but not by way of limitation, the following:
(a) to construe and interpret the Plan in their complete
discretion in a nondiscriminatory manner, decide all questions of
eligibility and determine the amount, manner and time of payment
of any benefits hereunder;
(b) to prescribe procedures to be followed by Participants or
Beneficiaries filing applications for benefits;
(c) to prepare and distribute, in such manner as the Committee
determines to be appropriate, information explaining the Plan;
(d) to receive from the Employers and from Participants such
information as shall be necessary for the proper administration
of the Plan;
(e) to furnish the Participants, upon request, such annual
reports with respect to the administration of the Plan as are
reasonable and appropriate;
(f) to receive, review and keep on file (as it deems convenient
or proper) reports of benefit payments by the Trustee and reports
of disbursements for expenses directed by the Committee;
(g) to appoint or employ individuals to assist in the
administration of the Plan and any other agents it deems
advisable, including legal and actuarial counsel.
10.4 RULES AND DECISIONS The Committee may adopt such rules as it
deems necessary, desirable or appropriate. All rules and decisions of
the Committee shall be uniformly and consistently applied to all
Participants in similar circumstances. When making a determination or
calculation, the Committee shall be entitled to rely upon information
furnished by a Participant or Beneficiary, an Employer, the legal
counsel of an Employer or the Trustee. Any determination by the
Committee shall presumptively be conclusive and binding on all
persons. The regularly kept records of the Company shall be
conclusive and binding upon all persons with respect to an Employee's
date and length of employment, time and amount of Compensation and the
33
manner of payment thereof, type and length of any absence from work
and all other matters contained therein relating to Employees.
10.5 COMMITTEE ACTION The Committee may act at a meeting or in
writing without a meeting. The Committee may adopt such bylaws and
regulations as it deems desirable for the conduct of its affairs. All
decisions of the Committee shall be made by the vote of the majority,
including actions in writing taken without a meeting. By appropriate
action the Committee may authorize one or more of its members to
execute documents on its behalf, and the Trustee, upon written
notification of such authorization, shall accept and rely upon such
documents until notified in writing that such authorization has been
revoked by the Committee.
10.6 CLAIMS PROCEDURE Claims for benefits under the Plan shall be
made in writing to the Committee. If the Committee wholly or
partially denies a claim for benefits, the Committee shall, within a
reasonable period of time, but no later than 90 days after receiving
the claim, notify the claimant in writing of the denial of the claim.
If the Committee fails to notify the claimant in writing of the denial
of the claim within 90 days after the Committee receives it, the claim
shall be deemed denied. A notice of denial shall be written in a
manner calculated to be understood by the claimant, and shall contain:
(a) the specific reason or reasons for denial of the claim;
(b) a specific reference to the pertinent Plan provisions upon
which the denial is based;
(c) a description of any additional material or information
necessary for the claimant to perfect the claim, together with an
explanation of why such material or information is necessary; and
(d) an explanation of the Plan's review procedure. Within 60
days of the receipt by the claimant of the written notice of
denial of the claim, or within 60 days after the claim is deemed
denied as set forth above, if applicable, the claimant may file a
written request with the Committee that it conduct a full and
fair review of the denial of the claimant's claim for benefits,
including the conducting of a hearing, if the Committee deems one
necessary. In connection with the claimant's appeal of the
denial of his benefit, the claimant may review pertinent
documents and may submit issues and comments in writing. The
Committee shall render a decision on the claim appeal promptly,
but not later than 60 days after receiving the claimant's request
for review, unless, in the discretion of the Committee, special
circumstances (such as the need to hold a hearing) require an
extension of time for processing, in which case the sixty-day
period may be extended to 120 days. The Committee shall notify
the claimant in writing of any such extension. The decision upon
review shall (i) include specific reasons for the decision, (ii)
be written in a manner calculated to be understood by the
34
claimant, and (iii) contain specific references to the pertinent
Plan provisions upon which the decision is based.
10.7 FACILITY OF PAYMENT Whenever, in the Committee's opinion, a
person entitled to receive any payment of a benefit or installment
thereof hereunder is under a legal disability or is incapacitated in
any way so as to be unable to manage his financial affairs, the
Committee may direct the Trustee to make payments to such person or to
his legal representative or to a relative or friend of such person for
his benefit, or the Committee may direct the Trustee to apply the
payment for the benefit of such person in such manner as the Committee
considers advisable. Any payment of a benefit or installment thereof
in accordance with the provisions of this Section shall be a complete
discharge of any liability for the making of such payment under the
provisions of the Plan.
10.8 LIMITATION OF LIABILITY Notwithstanding any other provision of
the Plan or the Trust, no Employer nor member of the Committee, or an
individual acting as an employee or agent of any of them, shall be
liable to any Participant or former Participant, or any Beneficiary or
spouse of any Participant or former Participant, for any claim, loss,
liability or expense incurred in connection with the Plan or the
Trust, except when the same shall have been judicially determined to
be due to the willful misconduct of such person.
10.9 INDEMNITY. The Company shall indemnify and hold harmless each
member of the Committee, or any employee of an Employer or any
individual acting as an employee or agent of any of them or of an
Employer (to the extent not indemnified or saved harmless under any
liability insurance or any other indemnification arrangement with
respect to the Plan or the Trust) from any and all claims, losses,
liabilities, costs and expenses (including attorneys' fees) arising
out of any actual or alleged act or failure to act with respect to the
administration of the Plan or the Trust, except that no
indemnification or defense shall be provided to any person with
respect to any conduct that has been judicially determined, or agreed
by the parties, to have constituted willful misconduct on the part of
such person, or to have resulted in his receipt of personal profit or
advantage to which he is not entitled. In connection with the
indemnification provided by the preceding sentence, expenses incurred
in defending a civil or criminal action, suit or proceeding, or
incurred in connection with a civil or criminal investigation, may be
paid by the Company in advance of the final disposition of such
action, suit, proceeding, or investigation, as authorized by the
Committee in the specific case, upon receipt of an undertaking by or
on behalf of the party to be indemnified to repay such amount unless
it shall ultimately be determined that he is entitled to be
indemnified by the Company pursuant to this paragraph.
10.10 SEVERABILITY. Each of the Sections contained in the Plan,
and each provision in each Section, shall be enforceable independently
of every other Section or provision in the Plan, and the invalidity or
35
unenforceability of any Section or provision shall not invalidate or
render unenforceable any other Section or provision contained herein.
If any Section or provision in a Section is found invalid or
unenforceable, it is the intent of the parties that a court of
competent jurisdiction shall reform the Section or provision to
produce its nearest enforceable economic equivalent.
ARTICLE XI
MISCELLANEOUS
11.1 ACTION BY COMPANY Any action required or permitted to be taken
by the Company under this Plan shall be by resolution of its Board of
Directors, or by any person or persons duly authorized by resolution
of said Board to take such action.
11.2 NONGUARANTEE OF EMPLOYMENT Nothing contained in this Plan shall
be construed as a contract of employment between an Employer and any
Employee, or as a right of any Employee to be continued in the
employment of the Employer, or as a limitation of the right of an
Employer to discharge any of its Employees, with or without cause.
11.3 NONGUARANTEE OF BENEFITS Nothing contained in the Plan or the
Trust shall constitute a guaranty by an Employer, the Committee or the
Trustee that the assets of the Trust Fund will be sufficient to pay
any benefit under the Plan to any person.
11.4 RIGHTS TO TRUST ASSETS No Employee or Beneficiary shall have the
right to, or interest in, any assets of the Trust Fund upon
termination of his employment or otherwise, except as provided from
time to time under this Plan, and then only to the extent of the
benefits payable under the Plan to such Employee or Beneficiary out of
the assets of the Trust Fund. All payments of benefits as provided
for in this Plan shall be made solely out of the assets of the Trust
Fund and none of the fiduciaries shall be liable therefor in any
manner.
11.5 INTEREST NONTRANSFERABLE
(a) Except as provided in this Section, no interest of any
person or entity in, or right to receive distributions from, the
Trust Fund shall be subject in any manner to sale, transfer,
assignment, pledge, attachment, garnishment, or other alienation
or encumbrance of any kind; nor may such interest or right to
receive distributions be taken, either voluntarily or
involuntarily, for the satisfaction of the debts of, or other
obligations or claims against, such person or entity, including
claims in bankruptcy proceedings. The Account of any
Participant, however, shall be subject to and payable in
accordance with the applicable requirements of any qualified
36
domestic relations order, as that term is defined in Section
414(p) of the Code, and the Committee shall direct the Trustee to
provide for payment from a Participant's Account in accordance
with such order and with the provisions of Section 414(p) of the
Code and any regulations promulgated thereunder. A payment from
a Participant's Account may be made to an alternate payee (as
defined in Section 414(p)(8) of the Code) prior to the date the
Participant reaches his earliest retirement age (as defined in
Section 414(p)(4)(B) of the Code) if such payments are made
pursuant to a qualified domestic relations order. All such
payments pursuant to a qualified domestic relations order shall
be subject to reasonable rules and regulations promulgated by the
Committee respecting the time of payment pursuant to such order
and the valuation of the Participant's Account or Accounts from
which payment is made; provided, that all such payments are made
in accordance with such order and Section 414(p) of the Code. An
alternate payee shall receive his distribution in a lump sum
payable within ninety (90) days after the date such qualified
domestic relations order is received by the Committee. The
balance of an Account that is subject to any qualified domestic
relations order shall be reduced by the amount of any payment
made pursuant to such order.
(b) Notwithstanding the preceding paragraph of this Section, if
any Participant borrows money from the Trustee pursuant to
Section 8.4 of the Plan, the Trustee and the Committee shall have
all rights to collect upon such indebtedness as are granted
pursuant to Section 8.4 and any agreements or documents executed
in connection with such loan.
11.6 NONFORFEITABILITY OF BENEFITS Subject only to the specific
provisions of this Plan, nothing shall be deemed to divest a
Participant during his lifetime of his right to the nonforfeitable
benefit to which he becomes entitled in accordance with the provisions
of this Plan.
11.7 CONTROLLING LAW Except to the extent superseded by the laws of
the United States, the laws of the state of Indiana will be
controlling in all matters relating to this Plan.
ARTICLE XII
AMENDMENTS AND TERMINATION
12.1 AMENDMENT OR TERMINATION The Company reserves the right to
alter, amend, modify or revoke or terminate this Plan and any Trust
that may be established by it that do not cause any part of the Trust
Fund to be used for, or diverted to, any purpose other than for the
exclusive benefit of Participants or their Beneficiaries; provided,
however, that the Company may make any amendment it determines
37
necessary or desirable, with or without retroactive effect, to comply
with applicable law.
12.2 MERGER OR CONSOLIDATION In the case of any merger or
consolidation with, or transfer of assets or liabilities to, any other
plan, each Participant or Beneficiary shall receive a benefit
immediately after the merger, consolidation or transfer that is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if this Plan
had then terminated).
12.3 DISCONTINUANCE OF EMPLOYER CONTRIBUTIONS In the event of a
permanent discontinuance of contributions to the Plan by an Employer,
the Accounts of all Participants employed by such Employer shall, as
of the date of such discontinuance, be 100% vested and nonforfeitable.
12.4 LIQUIDATION OF THE TRUST FUND Upon termination of the Plan, the
Accounts of all Participants affected thereby shall be fully vested,
and the Committee may direct the Trustee: (a) to continue to
administer the Trust Fund and pay Account Balances in accordance with
Section 7.4 to Participants affected by the termination upon their
termination of employment or to their Beneficiaries upon such a
Participant's death, until the Trust Fund has been liquidated, or (b)
to distribute the assets remaining in the Trust Fund, after payment of
any expenses properly chargeable thereto, to Participants and
Beneficiaries in proportion to their respective Account Balances.
12.5 MANNER OF DISTRIBUTION Upon termination of the Plan,
distribution shall be made in cash or Employer Common Stock in a
manner consistent with the requirements of Section 7.4.
ARTICLE XIII
TOP HEAVY PROVISIONS
13.1 GENERAL Notwithstanding anything herein to the contrary, the
provisions of this Article XIII shall apply during any Top Heavy Plan
Year.
13.2 DEFINITIONS For purposes of this Article XIII, the following
terms shall have the meanings specified unless the context clearly
indicates another meaning:
(a) "Aggregate Account" as of the Determination Date means with
respect to a Participant the sum of:
(1) the entire amount in each of his Accounts as of the
most recent Valuation Date occurring within a twelve (12)
month period ending on the Determination Date;
38
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount of
any contributions actually made after the Valuation Date but
before the Determination Date, except for the first Plan
Year when such adjustment shall also reflect the amount of
any contributions made after the Determination Date that are
allocated as of a date in that first Plan Year;
(3) any Plan distribution made within the Plan Year that
includes the Determination Date or within the four preceding
Plan Years. However, in the case of distributions made
after the Valuation Date and prior to the Determination
Date, such distributions are not included as distributions
for top heavy purposes to the extent that such distributions
are already included in the Participant's Aggregate Account
Balance as of the Valuation Date.
(4) any Employee contributions, whether voluntary or
mandatory.
(b) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter
determined:
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of an Employer in
which a Key Employee is a participant, and each other plan
of an Employer which enables any plan in which a Key
Employee participates to meet the requirements of Code Sec-
tions 401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in
the group will be considered a Top Heavy Plan if the
Required Aggregation Group is a Top Heavy Group. No plan in
the Required Aggregation Group will be considered a Top
Heavy Plan if the Required Aggregation Group is not a Top
Heavy Group.
(2) Permissive Aggregation Group: The Employers may also
include any other plan not required to be included in the
Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions
of Code Sections 401(a)(4) or 410. Such group shall be
known as a Permissive Aggregation Group. In the case of a
Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is a Top
Heavy Group. No plan in the Permissive Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is not a Top Heavy Group.
39
(3) Only those plans of the Employers in which the
Determination Dates fall within the same calendar year shall
be aggregated in order to determine whether such plans are
Top Heavy Plans.
(c) "Determination Date," as applied to any Plan Year, means the
last day of the preceding Plan Year with respect to this Plan and
each Aggregated Plan; provided, however, that the Present Value
of Accrued Benefits for any defined benefit plan shall be
determined as of the Top Heavy Valuation Date. In the case of
the first Plan Year, the Determination Date shall be the last day
of such Plan Year.
(d) "Key Employee" means any Employee meeting the definition of
"key employee" contained in Section 416(i)(1) of the Code and
Treasury Regulations.
(e) "Non-Key Employee" means any Employee who is not a Key
Employee.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, a Participant's Present Value of Accrued Benefit
shall be as determined under the provisions of such defined
benefit plan.
(g) "Super Top Heavy Plan" means that, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees
or (2) the sum of the Aggregate Accounts of Key Employees under
this Plan and any plan of an Aggregation Group, exceeds ninety
percent (90%) of the Present Value of Accrued Benefits or the
Aggregate Accounts of all Participants under this Plan and any
plan of an Aggregation Group.
(h) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group, exceeds
sixty percent (60%) of a similar sum determined for all
Participants.
(i) "Top Heavy Plan" means, for any Plan Years, that, as of the
Determination Date, (1) the Present Value of Accrued Benefits of
Key Employees or (2) the sum of the Aggregate Accounts of Key
Employees under this Plan and any plan of an Aggregation Group,
exceeds sixty percent (60%) of the Present Value of Accrued
Benefits or the Aggregate Accounts of all Participants under this
Plan and any plan of an Aggregation Group.
40
(j) "Top Heavy Plan Year" means that, for a particular Plan
Year, the Plan is a Top Heavy Plan.
(k) "Top Heavy Valuation Date" means the most recent Valuation
Date which is within a 12-month period ending on the
Determination Date.
13.3 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees or (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and any plan of an
Aggregation Group, exceeds sixty percent (60%) of the Present
Value of Accrued Benefits or the Aggregate Accounts of all
Participants under this Plan and any plan of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group).
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees or (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and any plan of an
Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits or the Aggregate Accounts of all
Participants under this Plan and any plan of an Aggregation
Group.
13.4 MINIMUM BENEFIT
(a) Notwithstanding the provisions of Article IV, for any Top
Heavy Plan Year, a Non-Key Employee Participant shall be entitled
to an allocation to his account equal to three percent (3%) of
his Compensation; provided, however, that such allocation
percentage shall not exceed the percentage at which Employer
contributions (not attributable to a salary reduction or similar
arrangement) are made (or required to be made) under the Plan for
the Key Employee for whom the percentage is highest for the Plan
Year.
(b) For purposes of determining the percentage at which
contributions are made for Key Employees:
(1) the sum of contributions (including those attributable
to a salary reduction or similar arrangement) and
forfeitures made on behalf of each Key Employee shall be
41
divided by so much of his total Compensation for the Top-
Heavy Plan Year as does not exceed $150,000 (or such other
amount as may be prescribed by regulations under Section 416
of the Internal Revenue Code), and
(2) all defined contribution plans of the Employers
required to be aggregated under Section 416 (g)(2)(A)(i)
shall be treated as one plan and the contributions
thereunder aggregated as to each Key Employee.
(c) For purposes of this Section only, Non-Key Employee
Participants shall be those Participants who have not separated
from service with an Employer by the end of the Top Heavy Plan
Year and, in addition, shall also mean those Employees who have
failed to complete 1,000 Hours of Service or the equivalent. A
Non-Key Employee Participant will not be excluded from an
allocation pursuant to this Section for a Plan Year merely
because his Compensation is less than a stated amount or because
he has declined to make Pre-tax Contributions for such Plan Year.
13.5 NON-DUPLICATION OF MINIMUM BENEFIT Notwithstanding the Minimum
Benefit provision of Section 13.4, a Non-Key Employee who would
otherwise be entitled to a minimum benefit under the top heavy
provisions of any defined benefit plan maintained by the Employers but
for his participation in this plan, shall, in lieu of such other
defined benefit plan minimum benefit, be entitled to a minimum benefit
under this Plan equal to five percent (5%) of his Compensation for
each Top Heavy Plan Year in which he is Participant, up to a maximum
of ten (10) Top Heavy Plan Years, and thereafter a minimum
contribution equal to three percent (3%) of his Compensation for each
additional Top Heavy Plan Year in which he is a Participant.
13.6 TOP HEAVY LIMITATION For any Top Heavy Plan Year, with respect
to each Key Employee who is a Participant in both this Plan and any
defined benefit plan included in a Top Heavy Group, the aggregate
limit of 1.25% described in Section 5.2 shall be reduced to 1.00%.
13.7 TRANSITION RULE In the event the aggregate limit calculated
pursuant to Section 5.2 shall be exceeded with respect to any
individual for a Top Heavy Plan Year, there shall be no Employer
contributions, forfeitures, voluntary nondeductible contributions, or
benefit accruals for such individual until such time as the aggregate
limit is not exceeded.
13.8 VESTING Notwithstanding the provisions of Section 7.3, for any
Top Heavy Plan Year, any Participant who separates from the service of
all Employers and all Affiliates shall have, as of the date thereof, a
vested right to his entire Account Balance.
42
ARTICLE XIV
PLAN ADOPTION
14.1 ADOPTION PROCEDURE With the written consent of NIPSCO
Industries, Inc., any Affiliate may adopt the Plan and the Trust for
its eligible employees by appropriate resolution, that shall specify
the effective date of such adoption and that may contain such changes
and variations in Plan terms as NIPSCO Industries, Inc. approves. Any
such adoption shall be contingent upon a determination by the Internal
Revenue Service that such resolution, in conjunction with this Plan
and with the Trust, constitutes a qualified plan and trust under
applicable provisions of the Code. An Employer adopting the Plan
shall compile and submit all information required by the Trustee with
reference to its Eligible Employees.
14.2 JOINT EMPLOYERS If an Employee receives Compensation
simultaneously from more than one participating Employer, the total
amount of such Compensation shall be considered for the purposes of
the Plan as having been paid by one participating Employer and the
respective participating Employers shall share proratably in
contributions to the Plan on account of said Employee.
14.3 EXPENSES Each participating Employer shall pay such part of
actuarial and other necessary expenses incurred in the administration
of the Plan as the Trustee shall determine.
14.4 WITHDRAWAL A participating Employer may withdraw from the Plan
at any time by giving written notice of its intention to NIPSCO
Industries, Inc. and the Trustee prior to the effective date of
withdrawal; provided, however that such withdrawal may be subject to
the provisions of Article XII.
14.5 SUPERSEDED PLANS If an Employer adopting the Plan already
maintains a pension plan covering employees who will be covered by the
Plan, it may, with the consent of NIPSCO Industries, Inc., provide in
its resolution adopting this Plan for the merger, restatement and
continuation, without discontinuance or termination, of its plan by
this Plan.
43
IN WITNESS WHEREOF, this Amendment and Restatement of the Plan is
hereby executed on this 29th day of December, 1994, by the duly
authorized officer of the Company, to be effective as of January 1,
1989.
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By: /s/ Patrick J. Mulchay
---------------------------------------
Its: Executive Vice President and Chief
Operating Officer
----------------------------------------
44
FIRST AMENDMENT
TO
NIPSCO INDUSTRIES, INC.
TAX DEFERRED SAVINGS PLAN
-------------------------
WHEREAS, Northern Indiana Public Service Company (the "Company")
established the Northern Indiana Public Service Company Tax Deferred
Savings Plan effective May 1, 1984 ("Plan"), and amended and restated
the Plan effective January 1, 1989, as the NIPSCO Industries, Inc. Tax
Deferred Savings Plan; and
WHEREAS, the Company has reserved the right to amend the Plan;
and
WHEREAS, it is desirable to amend the Plan in certain respects;
NOW THEREFORE, the Plan is hereby amended, effective January 1,
1989 (except where otherwise indicated), as follows:
1. The following sentences are added at the end of Section 2.7:
In determining the Compensation of a Participant for
purposes of the foregoing limitation set forth in Section
401(a)(17) of the Code, the rules of Section 414(q)(6) of
the Code shall apply with respect to family members of the
Participant, except that in applying such rules, the term
"family" shall include only the spouse of the Participant
and any lineal descendants of the Participant who have not
attained age 19 before the close of the applicable Plan
Year. If, as a result of the application of such rules, the
adjusted limitation set forth in Section 401(a)(17) of the
Code is exceeded, then the limitation shall be prorated
among the affected individuals in proportion to each such
individual's Compensation as determined under this section
prior to the application of such limitation.
2. The first paragraph of Section 2.11 is amended, effective
May 1, 1996, to read as follows:
2.11 EMPLOYEE. Any person who is employed by an
Employer and on whose behalf contributions are being made by
such Employer under the Federal Insurance Contribution Act
and who is not included in a unit of employees covered by an
agreement between employee representatives and any Employer
unless the collective bargaining agreement provides that
such Employees are entitled to participate in the Plan or
unless the Employer otherwise directs in a written
instrument submitted to the Trustee.
3. The last sentence of Section 2.11 is amended to read as
follows:
If a leased employee subsequently becomes an Employee
and thereafter participates in the Plan, he shall receive
credit for participation under Article III for his period of
employment as a leased employee, except to the extent that
the following requirements are satisfied with respect to
such Employee while he was a leased employee:
(a) the Employee was covered by a plan that was
maintained by the leasing organization and that meets
the requirements of the following sentence, and
(b) leased employees do not constitute more than
20% of the work force of the Employer that consists of
Employees who are not Highly Compensated Employees.
A plan referred to in the preceding sentence must (a) be a
money purchase pension plan with a nonintegrated employer
contribution rate for each participant of at least 10% of
compensation, (b) provide for full and immediate vesting,
and (c) provide for immediate participation by each employee
of the leasing organization (other than employees who
perform substantially all of their services for the leasing
organization).
4. The following sentence is added at the end of Section 2.14:
For purposes of this Section, a former Employee shall
be treated as a Highly Compensated Employee if:
(a) such former Employee was a Highly Compensated
Employee when he terminated employment with the
Employer, or
(b) such former Employee was a Highly Compensated
Employee at any time after he attained the age of 55
years.
5. Clause (2) of paragraph e of Section 3.4 is amended to read
as follows:
2. the first anniversary of the first day of the
period in which an Employee remains absent from service
(with or without pay) for any reason other than quitting,
retirement, discharge or death). Notwithstanding the prior
sentence, the Severance Date of an individual who is absent
from service beyond the first anniversary of the first day
2
of absence by reason of a maternity or paternity absence is
the second anniversary of the first day of such absence.
The period between the first and second anniversaries of the
first day of absence is neither a period of service nor a
Break in Service. A maternity or paternity absence is the
absence of an Employee from work for any period:
(i) by reason of the pregnancy of the Employee;
(ii) by reason of the birth of a child of the
Employee;
(iii) by reason of the placement of a child with
the Employee in connection with the adoption of such
child by such Employee; or
(iv) for purposes of caring for such child for a
period beginning immediately following such birth or
placement.
6. The following paragraphs are added at the end of Section
5.4:
(e) Pre-tax Contributions will be taken into account
for purposes of determining the Actual Deferral Percentage
of any Eligible Employee for a Plan Year only if such Pre-
tax Contributions relate to Compensation that either (1)
would have been received by the Eligible Employee in such
Plan Year (but for the election to make the Pre-tax
Contributions), or (2) is attributable to services performed
by the Eligible Employee in such Plan Year and would have
been received by the Eligible Employee within two and one-
half months after the end of such Plan Year (but for the
election to make such Pre-tax Contributions).
(f) Pre-tax Contributions will be taken into account
for purposes of determining the Actual Deferral Percentage
of an Eligible Employee for a Plan Year only if such Pre-tax
Contributions are allocated to the Pre-tax Contributions
Account of the Eligible Employee as of a date that occurs
within such Plan Year. For this purpose, Pre-tax
Contributions are considered allocated as of a date within a
Plan Year if the allocation is not contingent upon
participation or performance of services after such date and
the Pre-tax Contributions are actually paid to the Trustee
no later than 12 months after the end of the Plan Year to
which the Pre-tax Contributions relate.
7. Clause (3) of paragraph (a) of Section 5.5 is amended to
read as follows:
3
(3) The Excess Contributions for such Plan Year
(including the income, gains and losses attributable to such
Contributions as provided in paragraph (b) below), shall be
distributed by the last day of the following twelve month
period to Highly Compensated Eligible Employees on the basis
of the respective portions of such Excess Contributions
attributable to each Highly Compensated Eligible Employee,
determined according to the following leveling method: the
Actual Deferral Percentage of the Highly Compensated
Eligible Employee with the highest Actual Deferral
Percentage shall be reduced to the extent necessary to
satisfy either of the tests set forth in paragraph (a) of
Section 5.4, or to cause such Actual Deferral Percentage to
equal the Actual Deferral Percentage of the Highly
Compensated Eligible Employee with the next highest Actual
Deferral Percentage. This process shall be repeated until
the Plan satisfies either of the tests set forth in
paragraph (a) of Section 5.4. Following completion of this
process the amount of Excess Contributions for each Highly
Compensated Eligible Employee shall be equal to the total of
the Pre-tax Contributions and Matching Contributions taken
into account in determining his Actual Deferral Percentage
minus the product of the Highly Compensated Eligible
Employee's reduced Actual Deferral Percentage and the Highly
Compensated Eligible Employee's Compensation.
8. The following paragraphs are added at the end of Section
5.5:
(d) The amount of Excess Contributions to be
distributed to, or recharacterized with respect to, a Highly
Compensated Eligible Employee for a Plan Year, shall be
reduced by any Excess Contributions previously distributed
to the Highly Compensated Eligible Employee for the taxable
year of the Highly Compensated Eligible Employee ending with
or within the same Plan Year, and Excess Contributions to be
distributed to a Highly Compensated Eligible Employee for a
taxable year of the Highly Compensated Eligible Employee
shall be reduced by Excess Contributions previously
distributed, or recharacterized with respect to, such Highly
Compensated Eligible Employee for the Plan Year beginning in
such taxable year.
(e) Excess Contributions that are recharacterized
pursuant to clause (2) of paragraph (a) of Section 5.5 shall
be nonforfeitable and fully vested and shall be subject to
the distribution limitations set forth in Section 8.5 that
are applicable to Pre-tax Contributions.
9. Clause (2) of paragraph (a) of Section 5.7 is amended to
read as follows:
4
(2) The Excess Aggregate Contributions for such Plan
Year (including any income, gains or losses attributable to
such Contributions as provided in paragraph (b) below) shall
be distributed on the last day of the following twelve month
period to Highly Compensated Eligible Employees on the basis
of the respective portions of such Excess Aggregate
Contributions attributable to each Highly Compensated
Eligible Employee, determined according to the following
leveling method: The Actual Contribution Percentage of the
Highly Compensated Eligible Employee with the highest Actual
Contribution Percentage shall be reduced to the extent
necessary to satisfy either of the tests set forth in
paragraph (a) of Section 5.6, or to cause such Actual
Contribution Percentage to equal the Actual Contribution
Percentage of the Highly Compensated Eligible Employee with
the next highest Actual Contribution Percentage. This
process shall be repeated until the Plan satisfies either of
the tests set forth in paragraph (a) of Section 5.6. The
amount of Excess Aggregate Contributions for a Plan Year
shall be determined only after first determining the Excess
Contributions that are recharacterized as After-tax
Contributions pursuant to clause (2) of paragraph (a) of
Section 5.5. The amount of Excess Aggregate Contributions
to be distributed to each Highly Compensated Eligible
Employee pursuant to this clause (2) for a Plan Year shall
be distributed on a pro-rata basis from the After-tax
Contributions made by such Highly Compensated Eligible
Employee for such Plan Year and the Matching Contributions
allocable to the Matching Contribution Account of the Highly
Compensated Eligible Employee for such Plan Year.
10. The first sentence and the portion of the second sentence of
paragraph (b) of Section 7.4 ending with the colon, are amended,
effective May 1, 1996, to read as follows:
Distributions to a Participant or his Beneficiary
entitled to payments under the Plan shall commence as soon
as practicable following the later of (1) the date on which
the elections specified in paragraphs (a) above and (c)
below occur, or (2) the date twelve months after the date of
termination of employment, retirement, death, or occurrence
of a Disability. Notwithstanding the foregoing, (1) a
distribution will occur as soon as practicable after the
date requested by a Participant or Beneficiary during the
aforementioned twelve month period by written instrument
delivered to the Committee, and (2) distributions shall
commence no later than 60 days after the latest of the close
of the Plan Year in which (a) the Participant attains the
age of 65 years, (b) the tenth anniversary of the date on
which the Participant commenced participation in the Plan
5
occurs, or (c) the date the Participant's termination of
employment with the Employer occurs, subject to the
following rules:
11. The first sentence of paragraph (c) of Section 7.4 is
amended to read as follows:
Notwithstanding the preceding provisions of this
Section, if a Participant's Account Balance at the time for
distribution, or at the time of any prior distribution,
exceeds or exceeded $3,500, then neither such distribution
nor any subsequent distribution shall be made to the
Participant at any time prior to the first to occur of his
65th birthday and the date of his death without his written
consent.
12. The following clause (v) is added at the end of Section 7.7:
(v) All distributions under the Plan shall be made in
accordance with the requirements of Section 401(a)(9) of the
Code and the regulations issued thereunder, including the
minimum distribution incidental benefit requirements of
proposed Treasury Regulations Section 1.401(a)(9)-2.
13. The following sentence is added at the end of paragraph (g)
of Section 8.4:
The automatic salary deductions referred to in the
preceding sentence shall be sufficient to amortize the
principal and interest payments pursuant to the loan during
the term thereof on a substantially level basis in equal
quarterly (or more frequent) installments.
14. The following Section 8.5 is added at the end of Article
VIII:
8.5 DISTRIBUTIONS FROM PRE-TAX CONTRIBUTION ACCOUNTS.
Notwithstanding anything to the contrary contained elsewhere
in the Plan, a Participant's Pre-tax Contribution Account
shall not be distributable other than upon:
(a) the Participant's separation from service, death
or Disability;
(b) termination of the Plan without establishment or
maintenance of another defined contribution plan (other than
an employee stock ownership plan as defined in Section
4975(e)(7) of the Code or a simplified employee plan as
defined in Section 408(k) of the Code);
(c) the date of the sale or other disposition by an
Employer to an unrelated entity of substantially all of the
6
assets (within the meaning of Section 409(d)(2) of the Code)
used by the Employer in a trade or business of the Employer
where (i) the Participant is employed by such trade or
business and continues employment with the entity acquiring
such assets, and (ii) the Employer continues to maintain the
Plan after the sale or other disposition. The sale of 85%
of the assets used in the trade or business shall be deemed
a sale of "substantially all" of the assets used in such
trade or business;
(d) the date of sale or other disposition by an
Employer of the Employer's interest in a subsidiary (within
the meaning of Section 409(d)(3) of the Code) to an
unrelated entity, where (i) the Participant is employed by
such subsidiary and continues employment with such
subsidiary following such sale or other disposition, and
(ii) the Employer continues to maintain the Plan after the
sale or other disposition;
(e) the Participant's attainment of age 59-1/2; or
(f) the Participant's hardship as defined in Section 8.3.
Notwithstanding anything to the contrary contained herein,
an event shall not be treated as described in clauses (b)(c)
or (d) above with respect to any Participant, unless the
Participant receives a lump sum distribution (as defined in
Section 401(k)(10)(B)(ii) of the Code) by reason of the
event.
15. Section 12.4 is amended to read as follows:
12.4 LIQUIDATION OF THE TRUST FUND. Upon termination
or a partial termination of the Plan, the Accounts of all
Participants affected thereby shall be fully vested, and the
Committee may direct the Trustee:
(a) to continue to administer the Trust Fund and
pay Account Balances in accordance with Section 7.4 to
each Participant affected by the termination or partial
termination upon his termination of employment or to
his Beneficiary upon such Participant's death, until
the Trust Fund, or the portion thereof applicable to
the Participants affected by the partial termination,
has been liquidated, or
(b) to distribute the assets remaining in the
Trust Fund, or the portion thereof attributable to
Participants affected by the partial termination, after
payment of any expenses properly chargeable thereto, to
7
the applicable Participants and Beneficiaries in
proportion to the respective Account Balances.
16. The first sentence of clause (2) of paragraph (b) of Section
13.2 is amended to read as follows:
PERMISSIVE AGGREGATION GROUP: The Employers may also
include any other Plan not required to be included in the
Required Aggregation Group, provided the resulting group,
taken as a whole, would continue to satisfy the provisions
of Code Sections 401(a)(4) and 410.
17. The following clause (4) is added at the end of paragraph
(b) of Section 13.2:
(4) Plans referred to in clause (1) that shall be part
of the Required Aggregation Group shall include any
terminated plan that was maintained by an Employer within
the last five years ending on the Determination Date for the
applicable Plan Year, and that would, but for the fact that
it terminated, be part of the Required Aggregation Group for
such Plan Year. For this purpose, a terminated plan is one
that has been formally terminated, has ceased crediting
service for benefit accruals and vesting, and has been or is
distributing all plan assets to participants or their
beneficiaries as soon as administratively feasible.
IN WITNESS WHEREOF, this First Amendment to the Plan has been
adopted on this 26 day of June, 1996.
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By:/s/ Gwen C. Johnson
------------------------------------------
Its: Vice President Human Resources
----------------------------------------
8
AMENDMENT II
TO
NIPSCO INDUSTRIES, INC.
TAX DEFERRED SAVINGS PLAN
-------------------------
WHEREAS, Northern Indiana Public Service Company ("Company")
adopted the NIPSCO Industries, Inc. Tax Deferred Savings Plan, as
amended and restated as of January 1, 1989 ("Plan"); and
WHEREAS, pursuant to the terms of the Plan, the Company deems it
appropriate to further amend the Plan;
NOW THEREFORE, the Company hereby amends the Plan, effective
December 1, 1995, by the addition of the following paragraph to
Section 8.4:
(k) Notwithstanding the preceding provisions of this Section,
any loan made to a Participant employed by the Information
Technology Group of the Company, whose employment with the
Company terminated on or about December 31, 1995 and who
commenced employment with Integrated Systems Solutions
Corporation on or about January 1, 1996, that is outstanding
at the date of termination of employment with the Company,
will not be payable in full at the date of such termination
of employment. Any such loan shall continue in effect
pursuant to the terms thereof, from and after the date of
termination of employment and loan repayments of principal
and interest shall be made by such Participant by personal
check in equal quarterly (or more frequent) installments
until such loan has been paid in full. No such Participant
shall be entitled to receive any new loan pursuant to this
Section from and after the date of such termination of
employment. The balance of the Account of such Participant,
except for the portion secured by such loan, shall be
distributed pursuant to the applicable terms of the Plan.
IN WITNESS WHEREOF, the Company has caused this Amendment II to
be executed on its behalf by its duly authorized officer on this 12th
day of September, 1996, effective as of December 1, 1995.
NORTHERN INDIANA PUBLIC SERVICE COMPANY
By: /s/ Gwen C. Johnson
------------------------------------------
AMENDMENT III
TO
NIPSCO INDUSTRIES, INC.
TAX DEFERRED SAVINGS PLAN
WHEREAS, Northern Indiana Public Service Company adopted the
NIPSCO Industries, Inc. Tax Deferred Savings Plan, as amended and
restated as of January 1, 1989 ("Plan"); and
WHEREAS, pursuant to the terms of the Plan, the Plan has been
subsequently amended and it is now appropriate to further amend the
Plan;
NOW THEREFORE, the Plan is hereby amended, effective January 1,
1997, by the addition of the following Article XV at the end thereof:
ARTICLE XV
PROFIT SHARING CONTRIBUTION
15.1 PROFIT SHARING CONTRIBUTION. Each Affiliate set forth on
Schedule 1 attached hereto ("Participating Affiliate") shall,
beginning on the applicable Effective Date set forth on Schedule 1,
make a Profit Sharing Contribution to the Trust on behalf of each
person employed by such Participating Affiliate and on whose behalf
contributions are being made by such Participating Affiliate under the
Federal Insurance Contribution Act and who is not included in a unit
of employees covered by an agreement between employee representatives
and the Participating Affiliate, unless the collective bargaining
agreement provides that such employees are entitled to participate in
the Profit Sharing Contribution ("Profit Sharing Participant"). The
Committee from time to time may add additional Affiliates to the group
of Participating Affiliates entitled to make Profit Sharing
Contributions and to delete Participating Affiliates from such group.
Any such additions and deletions shall be reflected in appropriate
revisions to Schedule 1. Except as otherwise set forth herein, all of
the applicable provisions of the Plan shall also apply with respect to
Profit Sharing Contributions and the allocation, maintenance,
investment and distribution of Profit Sharing Account Balances. If
the Effective Date shown on Schedule 1 applicable to a Participating
Affiliate is not the first day of a Plan Year, the initial Plan Year
with respect to such Participating Affiliate for purposes of this
Article shall begin on such Effective Date and end on the last day of
the Plan Year.
15.2 AMOUNT OF PROFIT SHARING CONTRIBUTION. The Profit Sharing
Contribution made by a Participating Affiliate for a Plan Year shall
be a stated percentage (not to exceed 8%) of the Compensation of the
Profit Sharing Participants of such Participating Affiliate entitled
to receive allocations of such Profit Sharing Contribution for such
Plan Year. The applicable percentage for each Participating Affiliate
for each Plan Year shall be designated by the Committee, in its
discretion exercised on a non-discriminatory basis, no later than the
last day of the first quarter of the Plan Year following the Plan Year
for which such percentage is applicable. For purposes of Profit
Sharing Contributions, Compensation shall mean the aggregate basic
annual salary or wage, incentive pay, overtime, and sick pay paid by
the applicable Participating Affiliate to a Profit Sharing
Participant, including Pre-tax Contributions and Code Section 125
deferrals, and excluding signing bonuses and unusual or extraordinary
amounts of remuneration. Notwithstanding the preceding sentence,
Compensation shall only include amounts paid by a Participating
2
Affiliate to a Profit Sharing Participant while he is employed by, and
attributable to service with, the Participating Affiliate as a Profit
Sharing Participant. In no event shall a Profit Sharing Contribution
be made with respect to any Profit Sharing Participant for any Plan
Year to the extent such Profit Sharing Contribution would cause the
limitations of Code Section 415 to be exceeded for such Profit Sharing
Participant for such Plan Year.
15.3 ALLOCATIONS. A Profit Sharing Contribution shall be
allocated to the Profit Sharing Accounts maintained for the Profit
Sharing Participants eligible to receive such allocations. A Profit
Sharing Contribution shall be allocated as of the last day of the Plan
Year to which such Profit Sharing Contribution is attributable, and
shall be allocated to the applicable Profit Sharing Accounts during
the first calendar quarter of the following Plan Year. A Profit
Sharing Participant will be entitled to an allocation of a Profit
Sharing Contribution for a Plan Year only if he is employed as a
Profit Sharing Participant by the applicable Participating Affiliate
on the last day of the applicable Plan Year, and only with respect to
Compensation paid to him as a Profit Sharing Participant by the
Participating Affiliate during such Plan Year.
15.4 VESTING. The Vested Percentage of each Profit Sharing
Participant in his Profit Sharing Account Balance will be determined
in accordance with the following formula:
3
YEARS OF SERVICE VESTED PERCENTAGE FORFEITABLE
PERCENTAGE
Less than 2 years 0% 100%
2 years or more 100% 0%
The Vested Percentage of a Profit Sharing Participant's Profit
Sharing Account shall in any event be 100% on the first to occur of
(1) the date of his death, (2) the date his employment with the
Company and all Affiliates terminates because of Disability, and (3)
the date upon which the Plan is terminated or all contributions to the
Plan by all Employers are permanently discontinued. For purposes of
this section a Year of Service will be a full 12-month period
commencing on the date on which a Profit Sharing Participant was hired
by the Company or any Affiliate, and on each anniversary thereof. A
Profit Sharing Participant shall receive credit for Years of Service
while he is on an Authorized Leave of Absence, or while he is
performing service in the Armed Forces of the United States if he has
re-employment rights from such service under Federal or State law and
complied with the requirements of these laws as to re-employment and
is reemployed by the Company or any Affiliate. An Authorized Leave of
Absence is any absence (with or without Compensation) authorized by
the Company or any Affiliate under its standard personal practices,
provided that all persons under similar circumstances must be treated
alike in the granting of such Authorized Leaves of Absence, and
provided further that the person returns within the period specified
4
in the Authorized Leave of Absence. An Authorized Leave of Absence
shall include a leave of absence authorized by the Company or an
Affiliate pursuant to the provisions of the Family and Medical Leave
Act. If the employment of a Profit Sharing Participant with the
Company and all Affiliates terminates after he completes two (2) Years
of Service and he is subsequently reemployed at any time by the
Company or an Affiliate, or if the employment of a Profit Sharing
Participant with the Company and all Affiliates terminates before he
completes two (2) Years of Service and he is subsequently reemployed
by the Company or an Affiliate prior to the fifth (5th) anniversary of
his date of termination of employment, his Years of Service both
before and after his date of reemployment shall be credited for
purposes of determining the Vested Percentage of his Profit Sharing
Account Balance and in such event his Years of Service from and after
his date of reemployment shall mean each full 12-month period of
employment commencing on the date of his reemployment and on each
anniversary thereof. If the employment of a Profit Sharing
Participant with the Company and all Affiliates terminates before he
completes two (2) Years of Service and he is subsequently reemployed
by the Company or an Affiliate on or after the fifth (5th) anniversary
of his date of termination of employment, only his Years of Service
after his date of reemployment shall be credited for purposes of
determining the Vested Percentage of his Profit Sharing Account
Balance, and in such event his Years of Service from and after his
date of reemployment shall mean each full 12-month period of
5
employment commencing on the date of his reemployment and on each
anniversary thereof.
15.5 FORFEITURES. The Forfeitable Percentage of a Participant's
Profit Sharing Account Balance shall be deemed a forfeiture for the
Plan Year in which the Participant's employment with the Company and
all Affiliates terminates, and shall be used to reduce the Profit
Sharing Contribution allocated to the Profit Sharing Accounts of other
Profit Sharing Participants of the applicable Participating Affiliate
in the Plan Year in which such forfeiture occurs, and in subsequent
Plan Years, to the extent necessary. If a former Profit Sharing
Participant is reemployed by the Company or an Affiliate prior to the
fifth (5th) anniversary of his date of termination of employment, the
Forfeitable Percentage of his Profit Sharing Account Balance shall be
restored to such Profit Sharing Account as of the date of
reemployment, and shall thereafter be held, invested, administered and
distributed together with Profit Sharing Contributions allocated to
such Account from and after the date of reemployment. If a former
Profit Sharing Participant is reemployed by the Company or an
Affiliate, on or after the fifth (5th) anniversary of his date of
termination of employment, the Forfeitable Percentage of his Profit
Sharing Account Balance shall not be restored to such Profit Sharing
Account.
15.6 INVESTMENTS. The Trustees shall invest and re-invest the
Profit Sharing Account of a Profit Sharing Participant as such Profit
Sharing Participant shall instruct the Committee with respect to his
Pre-tax Contribution Account pursuant to the provisions of Sections
6
6.5 and 6.6. If a Pre-tax Contribution Account is not maintained for
a Profit Sharing Participant, the Trustees shall invest and reinvest
his Profit Sharing Account as he shall instruct the Committee pursuant
to the provisions of Sections 6.5 and 6.6. The Profit Sharing
Participant shall be entitled to direct the investment of his Profit
Sharing Account among the same Investment Funds set forth in Section
6.4 in which he can direct the investment of his Pre-tax Contribution
Account.
15.7 DISTRIBUTIONS. If a Profit Sharing Participant's employment
with the Company and all Affiliates is terminated for any reason,
including death or Disability, the Vested Percentage of his Profit
Sharing Account Balance shall be distributed to him, or in the event
of his death to his Beneficiary, in a lump sum pursuant to the
provisions of Article VII applicable to the distribution of his other
Account Balances.
The provisions of Article VIII with respect to Participant loans,
and distributions prior to termination of employment, shall not be
applicable with respect to a Profit Sharing Account.
IN WITNESS WHEREOF, NIPSCO Industries, Inc. has caused this
Amendment III to be executed on its behalf, by its duly authorized
officer, on this 10th day of February, 1998, effective as of January
1, 1997.
NIPSCO INDUSTRIES, INC.
By:/s/ Jeffrey W. Yundt
--------------------------------
7
SCHEDULE 1
NAME OF PARTICIPATING AFFILIATE EFFECTIVE DATE
1. NIPSCO Energy Services, Inc. January 1, 1997
2. NESI Energy Marketing, LLC January 1, 1997
3. Green Fuels, Inc. January 1, 1997
4. Crossroads Pipeline Company January 1, 1997
5. RIC, Inc. January 1, 1997
6. NI Product Development Company September 1, 1997
7. Parkway Engineering & Distributing Co., Inc. February 1, 1998
8. NESI Integrated Energy Resources, Inc. April 1, 1998
