<PAGE>
Registration No. 33- ____________
As filed with the Securities and Exchange Commission on January
28, 1994
_________________________________________________________________
________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________
FORM S-8
REGISTRATION STATEMENT(1)
Under
THE SECURITIES ACT OF 1933
_________________________
YANKEE ENERGY SYSTEM, INC.
(Exact name of issuer as specified in its charter)
Connecticut 06-1236430
(State of (I.R.S. Employer
Incorporation) Identification No.)
599 Research Parkway
Meriden, Connecticut 06450-1030
(203) 639-4000
(Address and telephone number of principal executive offices)
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
(Full title of Plan)
__________________________
Charles E. Gooley, Vice President and General Counsel
Yankee Energy System, Inc.
599 Research Parkway
Meriden, Connecticut 06450-1030
(203) 639-4000
(Name, address and telephone number of agent for service)
___________________________
Copies of all communications to:
Winthrop, Stimson, Putnam & Roberts
One Battery Park Plaza
New York, New York 10004-1490
(212) 858-1000
Attention: Susan P. Serota, Esq.
____________________________
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Amount Proposed Proposed Amount of
Securities to be Maximum Maximum Registration
to be Registered(1) Offering Price Aggregate Fee(2)
Registered Per Share(2) Offering Price(2)
_____________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock, 425,000 $23.875 $10,146,875.00 $3498.92
par value $5.00
per share(3)
____________________________________________________________________________
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act
of 1933, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
(2) Pursuant to Rule 457(h) and Rule 457(c), the maximum offering
price per share and the registration fee are based on the
reported average of the high and low prices for Yankee Energy
System, Inc. Common Stock on the New York Stock Exchange on
January 24, 1994.
(3) This Registration Statement also pertains to Rights to Purchase one
share of Common Stock of the Registrant (the "Rights"). Until the
occurrence of certain prescribed events, the Rights are not exercisable,
are evidenced by the certificates for Yankee Energy System, Inc. Common
Stock and will be transferred along with and only with such securities.
<PAGE>
PART I
INFORMATION REQUIRED IN A SECTION 10(a) PROSPECTUS
Item 1. Plan Information
Item 2. Registrant Information and Employee Plan Annual
Information
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have heretofore been filed by
Yankee Energy System, Inc. (the "Company") with the Securities
and Exchange Commission (the "Commission") pursuant to the
Securities Exchange Act of 1934, as amended (the "1934 Act"), are
incorporated by reference herein and shall be deemed to be a part
hereof:
1. The Company's Annual Report on Form 10-K for fiscal year
ended September 30, 1993.
2. The description of the Company's Common Stock contained
in the Registration Statement on Form 10 dated April 14,
1989, filed under the 1934 Act, including any amendment or
report filed for the purpose of updating such description.
3. The description of the Company's Rights contained in the
Company's 1934 Act Registration Statement on Form 8A dated
December 6, 1989, filed with the Commission pursuant to
Section 12(b) of the 1934 Act including any amendment or
report filed for the purpose of updating such description.
4. The Annual Report on Form 11-K for the Plan's fiscal
year ended December 31, 1992.
All documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the 1934 Act
prior to the filing of a post-effective amendment to this
Registration Statement which indicates that all securities
offered have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference
in this Registration Statement and made a part hereof from their
respective dates of filing (such documents, and the documents
enumerated above, being hereinafter referred to as "Incorporated
Documents"); PROVIDED HOWEVER, that the documents enumerated
above or subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the 1934 Act in each year during
which the offering made by this Registration Statement is in
effect prior to the filing with the Commission of the Company's
Annual Report on Form 10-K covering such year shall not be
Incorporated Documents or be incorporated by reference in this
Registration Statement or be a part hereof from and after the
filing of such Annual Report on Form 10-K.
Any statement contained in an Incorporated Document shall be
deemed to be modified or superseded for purposes of this
Registration Statement to the extent that a statement contained
herein or in any other subsequently filed Incorporated Document
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Registration
Statement.
<PAGE>
The information relating to the Company contained in this
Registration Statement summarizes, is based upon, or refers to
information and financial statements contained in one or more
Incorporated Documents; accordingly, such information contained
herein is qualified in its entirety by reference to Incorporated
Documents and should be read in conjunction therewith.
The Company hereby undertakes to provide without charge to
each person to whom this Registration Statement is delivered,
including any beneficial owner, upon written or oral request, a
copy of any and all documents incorporated herein by reference
(other than certain exhibits to such documents) and a copy of the
Company's most recent annual report to shareholders. Written or
oral requests for such copies should be directed to: Sarah K.
Sanders, Assistant Treasurer, Yankee Energy System, Inc.,
599 Research Parkway, Meriden, Connecticut 06450, telephone
number: (203) 639-4462. Additional updating information with
respect to the securities and plan covered hereby may be provided
in the future by means of supplements to the Prospectus.
Item 4. Description of Securities.
See Item 3.
Item 5. Interests of Named Experts and Counsel.
Not Applicable.
Item 6. Indemnification of Directors and Officers.
Section 33-320a of the Stock Corporation Act of Connecticut
("Section 33-320a") requires the Company, in certain
circumstances and subject to certain limitations therein set
forth, to indemnify each of its directors and officers, among
others, made a party to any threatened, pending or completed
legal proceeding by reason of his or her being or having been such
a director or officer against expenses, including attorneys'
fees, incurred by him or her, and, in addition in the case of any
such proceeding other than one by or in the right of the Company,
against judgments, fines and penalties incurred, and settlement
amounts paid, by him or her in connection with such proceeding.
Article VI of the Bylaws of the Company provides for
indemnification of directors and officers, among others, to the
fullest extent now or hereafter permitted by law. The rights and
remedies provided in Section 33-320a are exclusive, so Article VI
of the Bylaws of the Company does not at present add to the
indemnification rights of directors and officers.
Section 33-320a authorizes the Company to procure insurance
providing greater indemnification than that authorized by Section
33-320a. The Company has purchased insurance policies which
insure directors and officers of the Company and of certain of
its subsidiaries against certain liabilities which might be
incurred by them in such capacities and which insure the Company
for amounts which may be paid by it to indemnify the directors
and officers covered by the policies.
Item 7. Exemption from Registration Claimed.
Not applicable.
<PAGE>
Item 8. Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Description
<C> <S>
4(a) Restated Certificate of Incorporation of the Registrant
(filed as an Exhibit in the Registrant's Registration
Statement on Form 10 dated April 14, 1989) ("Form
10").*
4(b) Bylaws of the Registrant, as amended, (filed on Form
10.)*
4(c) Rights Agreement dated as of November 20, 1989, between
the Registrant and Rights Agent named therein, as
amended (filed in Registrant's Registration Statement on
Form 8, dated December 7, 1989), as amended by
Amendment No. 1 dated as of May 10, 1990 (filed in the
Registrant's Form 8, dated May 30, 1990), as further
amended by Amendment No. 2 dated as of January 23, 1991
(filed in the Registrant's Form 8, dated January 31,
1991).*
4(d) Guaranty of the Company with Term Loan Agreement dated
July 20, 1989 between United Bank & Trust Company, as
Trustee of the Trust of the Company's 401(k) Employee
Stock Ownership Plan, and The First National Bank of
Boston (filed in 1989 Form 10-K dated March 20, 1990).*
5(a) Pursuant to Item 8(a) of Form S-8, an opinion as to the
legality of the Company's Common Stock offered under
the Plan is not required as such securities are not
original issuance securities.
5(b) Internal Revenue Service determination letter stating
that the Yankee Energy System, Inc. 401(k)/Employee
Stock Ownership Plan is qualified under Section 401(a)
of the Internal Revenue Code of 1986, as amended.
24 Consent of Independent Accountants, Arthur Andersen & Co.
99 Yankee Energy System, Inc. 401(k)/Employee Stock
Ownership Plan and related Trust.
</TABLE>
______________________________________
* Incorporated herein by reference
Item 9. Undertakings.
(1) The undersigned Registrant hereby undertakes:
(a) to file, during any period in which offers or
sales are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
<PAGE>
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED HOWEVER, that paragraphs (1)(a)(i) and
(1)(a)(ii) do not apply if the registration statement is on Form
S-3 or Form S-8 and the information required to be included in a
post-effective amendment by those paragraphs are contained in
periodic reports filed by the Registrant pursuant to Section
13(a) or Section 15(d) of the 1934 Act that are incorporated by
reference in the registration statement.
(b) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(c) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(2) The undersigned Registrant hereby undertakes that, for
the purpose of determining any liability under the Securities Act
of 1933, each filing of the issuer's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934
(and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein and the
offering of such securities at the time shall be deemed to be the
initial bona fide offering hereof.
(3) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permimitted to directors,
officers and controlling persons of the Registrant pursuant to
the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE>
EXPERTS
The financial statements and schedules included in the
Yankee Energy System, Inc. Annual Report on Form 10-K for the
year ended September 30, 1993 and the Yankee Energy System, Inc.
401(k) Employee Stock Ownership Plan Annual Report on Form 11-K
for the year ended December 31, 1992, incorporated by reference
in this registration statement and related prospectus have been
audited by Arthur Andersen & Co., independent public accountants,
as indicated in their reports with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said reports. Reference is
made to their report on the financial statements included in the
Form 10-K for the year ended September 30, 1993, which includes
an explanatory paragraph with respect to the change in the method
of accounting for municipal property taxes in fiscal 1992 as
discussed in Note 1 to the financial statements.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each officer or
director of Yankee Energy System, Inc. whose signature appears
below constitutes and appoints Philip T. Ashton and Charles E.
Gooley, and each of them singly, his or her true and lawful
attorney-in-fact and agent, with full and several power of
substitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any or all amendments
and supplements to this Registration Statement, and to file the
same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agent full
power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they or he
might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent or his, her or their
substitute or substitutes, may lawfully do or cause to be done by
virtue thereof. Each of said attorneys-in-fact shall have the
power to act hereunder with or without the others.
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Meriden,
and the State of Connecticut, on the 27th day of January, 1994.
YANKEE ENERGY SYSTEM, INC.
By:/s/Philip T. Ashton
President and Chief Executive
Officer
<PAGE>
Pursuant to the requirements of the Securities Act of 1933,
the Registration Statement has been signed below by the following
persons in the capacities indicated and on the 27th day of
January, 1994.
<TABLE>
<CAPTION>
Signature Title
<C> <S>
__________________ Chairman of the Board and Director
(William O. Bailey)
/s/Philip T. Ashton President, Chief Executive Officer
and Director
(Principal Executive Officer)
/s/Michael E. Bielonko Vice President, Treasurer and Chief
Financial Officer
(Principal Financial Officer)
/s/Nicholas A. Rinaldi Controller (Principal Accounting
Officer)
/s/John K. Armstrong Director
/s/Eileen S. Kraus Director
/s/Frederick M. Lowther Director
/s/Thomas H. O'Brien Director
/s/Leonard A. O'Connor Director
/s/Emery G. Olcott Director
/s/Nicholas L. Trivisonno Director
</TABLE>
The Plan. Pursuant to the requirements of the 1933 Act, the Plan
has duly caused this registration statement to be signed on its
behalf by the undersigned, thereto duly authorized, in the city
of Meriden, State of Connecticut, on January 27, 1994.
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
By /s/ Michael E. Bielonko
Chairman of the Pension Committee
Vice President, Treasurer and Chief
Financial Officer
Yankee Energy System, Inc.
-7-
<PAGE>
Registration No. 33-_______________
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________
EXHIBITS
filed with
Form S-8
Registration Statement
Under
The Securities Act of 1933
_________________________
Yankee Energy System, Inc. 401(k)/Employee Stock Ownership Plan
(Full title of Plan)
YANKEE ENERGY SYSTEM, INC.
(Exact name of Issuer as specified in its charter)
_______________________________________________________________
<PAGE>
<TABLE>
<CAPTION>
Exhibit List
Exhibit Page
Number Description Number
<C> <S> <S>
4(a) Restated Certificate of Incorporation
of the Registrant(filed in the
Registrant's Registration Statement
on Form 10 dated April 14, 1989)
("Form 10").*
4(b) Bylaws of the Registrant, as amended,
(filed on Form 10).*
4(c) Rights Agreement dated as of November
20, 1989, between the Registrant and
Rights Agent named therein, as
amended (filed in the Registrant's
Registration Statement on Form 8,
dated December 7, 1989), as amended
by Amendment No. 1 dated as of May
10, 1990 (filed in the Registrant's
Form 8, dated May 30, 1990), as
further amended by Amendment No. 2
dated as of January 23, 1991 (filed
in the Registrant's Form 8, dated
January 31, 1991).*
4(d) Guaranty of the Company with Term
Loan Agreement dated July 20, 1989
between United Bank & Trust Company,
as Trustee of the Trust of the
Company's 401(k) Employee Stock
Ownership Plan, and The First National
Bank of Boston (filed in 1989 Form
10-K dated March 20, 1990).*
5(a) Pursuant to Item 8(a) of Form S-8,
an opinion as to the legality of the
Company's Common Stock offered under
the Plan is not required as such
securities are not original issuance
securities.
5(b) Internal Revenue Service determination
letter stating that the Yankee Energy
System, Inc. 401(k)/Employee Stock
Ownership Plan is qualified under
Section 401(a) of the Internal Revenue
Code of 1986, as amended. 1
24 Consent of Independent Accountants,
Arthur Andersen & Co. 3
99 Yankee Energy System, Inc. 401(k)/
Employee Stock Ownership Plan and
related Trust. 4
</TABLE> ____________________________
* Incorporated herein by reference
<PAGE> EXHIBIT 5(b)
Internal Revenue Service
District Director
G.P.O. Box 1680 Employer Identification Number:
Brooklyn, NY 11202 06-1236430
File Folder Number: 113002419
Person to Contact: MICHAEL GOLDBERG
Date: July 13, 1990 Contact Telephone Number:
(718) 780-6154
YANKEE ENERGY SYSTEM, INC. Plan Name: YANKEE ENERGY SYSTEM,
999 West Street INC. EMPLOYEE STOCK
Rocky Hill, CT 06067 OWNERSHIP PLAN
Plan Number: 001
Dear Applicant:
Based on the information supplied, we have made a favorable
determination on your application identified above. Please keep
this letter in your permanent records.
Continued qualification of the plan will depend on its
effect in operation under its present form. (See section 1.401-
1(b)(3) of the Income Tax Regulations.) The status of the plan
in operation will be reviewed periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that may
affect the qualified status of your employee retirement plan, and
provides information on the reporting requirements for your plan.
It also describes some events that automatically nullify it
without specific notice from us. It is very important that you
read the publication.
This letter relates only to the status of your plan under
the Internal Revenue Code. It is not a determination regarding
the effect of other Federal or local statutes.
This determination letter is applicable for the amendment(s)
adopted on April 23, 1990.
The information on the enclosed addendum is an integral part
of this determination. Please be sure to read and keep it with
this letter.
We have sent a copy of this letter to your representative as
indicated in the power of attorney.
If you have any questions concerning this matter, please
contact the person whose name and telephone number are shown
above.
Sincerely yours,
/s/Eugene D. Alexander
District Director
Enclosures:
Publication 794
PWBA 515
Addendum
1
<PAGE>
This letter shall serve as a determination that this plan is
qualified under the provisions of Code Section 4975(e)(7).This
letter is applicable for the plan adopted on July 7, 1989.
2
<PAGE>
EXHIBIT 24
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
reports dated November 19, 1993 included in the Yankee Energy
System, Inc. Form 10-K for the year ended September 30, 1993 and
of our report dated January 25, 1994, included in the Yankee
Energy System, Inc. 401(k) Employee Stock Ownership Plan's Annual
Report on Form 11-K for the year ended December 31, 1992 and to
all references to our firm included in this Registration
Statement.
ARTHUR ANDERSEN & CO.
Hartford, Connecticut
January 28, 1994
3
<PAGE>
EXHIBIT 99
YANKEE ENERGY SYSTEM, INC.
401 (k) Employee Stock Ownership Plan
Effective July 1, 1989
4
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<C> <S>
ARTICLE I Purpose...................................... 1
</TABLE>
<TABLE>
<CAPTION>
PART I
<C> <S>
ARTICLE II Definitions.................................. 3
ARTICLE III Participation................................9
ARTICLE IV Contributions................................10
ARTICLE V Restrictions on Contributions................15
ARTICLE VI Accounts and Funds...........................31
ARTICLE VII Leveraged ESOP Provisions....................38
ARTICLE VIII Benefit Distributions.......................40
ARTICLE IX Withdrawals..................................44
</TABLE>
<TABLE>
<CAPTION>
PART II
<C> <S>
ARTICLE X Definitions..................................47
ARTICLE XI Participation................................57
ARTICLE XII Contributions................................59
ARTICLE XIII Vesting......................................64
ARTICLE XIV Restrictions on Contributions................65
ARTICLE XV Accounts and Funds...........................72
ARTICLE XVI Benefit Distributions.......................77
ARTICLE XVII Withdrawals..................................81
</TABLE>
<TABLE>
<CAPTION>
PART III
<C> <S>
ARTICLE XVIII Top-Heavy Plan...............................84
ARTICLE XIX Administration of the Plan...................89
ARTICLE XX Amendment and Termination....................93
ARTICLE XXI Miscellaneous Provisions.....................95
5
<PAGE>
ARTICLE I
PURPOSE
Effective as of July 1, 1989, Yankee Energy System, Inc.
established the Yankee Energy System , Inc. 401 (K) Employee
Stock Ownership Plan (the "Plan") to provide benefits for its
eligible employees.
It is intended that the Plan shall be qualified as a profit
sharing plan under Section 401(a) of the Internal Revenue Code,
that the trust established for the Plan shall be a qualified
trust and exempt from taxation under Section 501(a) of such Code
and that the Plan is an employee stock ownership plan under
Section 4975(e)(7) of the Code and that contributions to the
Trust made pursuant to compensation reduction agreements by
Participants shall satisfy the requirements of Section 401(k) of
the Internal Revenue Code.
Part I, Articles II through IX shall apply to the Employees of
the Company except those Employees covered by a bargaining unit
who are covered under Part II of this Plan.
Part II, Articles X through XVII shall apply to the Employees of
the Company or Participating Company who are members of Locals
420 and 457 of the International Brotherhood of Electrical
Workers whose participation in this Plan is covered by a
collective bargaining agreement.
Part III, Articles XVIII through XXI shall apply to all Employees
of the Company or Participating Company.
6
<PAGE>
ARTICLE II
DEFINITIONS
The following words and phrases, as used herein shall have the
following meanings unless a different meaning is clearly required
by the context.
2.01 "Acquisition Loan" shall mean a loan described in Section
7.01.
2.02 "Actual Deferral Percentage" shall mean the average of the
percentages, calculated separately for each Eligible Employee in
any group of Eligible Employees, of:
(A) Basic Contributions and Supplemental Contributions
actually paid to the Plan on behalf of each such Eligible
Employee for a Plan Year, to;
(B) The Eligible Employee's Compensation for such Plan
Year.
2.03 "Affiliated Company" shall mean:
(i) Any corporation (other than the Company) that is a
member of a controlled group of corporations (as defined in
Section 414(b) of the Code) with the Company, (ii) any trade
or business (other than the Company, whether or not
incorporated, that is under common control (as defined in
Section 414(a) of the Code) with the Company, and (iii) any
trade or business (other than the Company) that is a member
of an affiliated service group (as defined in Section 414(m)
of the Code) of which the Company is also a member; provided
that the term "Affiliated Company" shall not include any
corporation or unincorporated trade or business prior to the
date on which such corporation or unincorporated trade or
business satisfies the affiliation or control tests of (i),
(ii) or (iii) above.
2.04 "After-Tax Contributions" shall mean the contributions which
a Participant elects to have the Company make directly to the
Plan on behalf of the Participant, in accordance with Section
4.03.
2.05 "After-Tax Contributions Account" shall mean that portion of
the Trust Fund which, with respect to any Participant, is
attributable to his After-Tax Contributions and any investment
earnings or gains or losses thereon, less any amounts withdrawn
or distributed to the Participant or his Beneficiary from such
account.
7
<PAGE>
2.06 "Annual Additions" shall mean for any Participant for
purposes of Section 5.08, for any Plan Year, the Participant's
Basic Contributions, Supplemental Contributions, Company Matching
Contributions, and After-Tax Contributions for the Plan Year.
For purposes of determining Annual Additions, the allocation of
Company Stock to a Participant's Company Matching Contributions
Account from the Loan Suspense Account shall be valued at the
price of the Company Stock at the time such Company Stock was
initially credited to the Loan Suspense Account.
2.07 "Associate Company" shall mean any company designated from
time to time by the Board, not less than 10 percent of whose
common stock is held directly or indirectly by Yankee Energy
System, Inc., or whose business activities are coordinated with
those of the Company and any predecessor of or successor to any
such company. Yankee Gas Services, Inc. is currently an
Associate Company under this provision.
2.08 "Basic Contributions" shall mean the contributions which a
Participant elects to have the Company make directly to the Plan
on behalf of the Participant, in accordance with Section 4.01,
which election shall constitute an election under Section
401(k)(2)(A) of the Code.
2.09 "Basic Contribution and Supplemental Contribution Account"
shall mean that portion of the Trust Fund which, with respect to
any Participant, is attributable to his Basic Contributions and
Supplemental Contributions and any investment earnings or gains
or losses thereon, less any amounts withdrawn or distributed to
the Participant or his Beneficiary from such account.
2.10 "Beneficiary" shall mean any person designated under Section
8.02(B) who is entitled to receive benefits which are payable
upon or after a Participant's death pursuant to the provisions of
the Plan.
2.11 "Board" shall mean the Board of Directors of Yankee Energy
System, Inc., or of any successor thereto.
2.12 "Code" shall mean the Internal Revenue Code of 1986, as now
in effect and as hereinafter amended. Reference to any section
or subsection of the Code includes reference to any comparable or
succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.
2.13 "Committee" shall mean the Administrative Committee provided
for in Article XIX.
2.14 "Company" shall mean Yankee Energy System, Inc. or any
successor thereto, or any entity now or hereafter which is an
affiliate or subsidiary of Yankee Energy System, Inc. and which
the Board of Directors has designated as participating in this
8
<PAGE>
Plan and which adopts this Plan. The term "Company" also
includes all of the foregoing as the context may require.
2.15 "Company Matching Contributions" shall mean matching
contributions made by the Company in conjunction with
contributions made to the Participants' Accounts as more fully
described in Section 4.06.
2.16 "Company Matching Contributions Account" shall mean that
portion of the Trust Fund invested in Company Stock, subject to
Section 6.05 which, with respect to any Participant, is
attributable to Company Matching Contributions and any investment
earnings or gains or losses thereon, less any amounts withdrawn
or distributed to the Participant or his Beneficiary from such
account.
2.17 "Company Matching and After-Tax Contribution Percentage"
shall mean the average of the percentages, calculated separately
for each Eligible Employee in any group of Eligible Employees,
of:
(A) Company Matching Contributions and After-Tax
Contributions (if any) actually paid to the Plan on behalf
of each such Eligible Employee for a Plan Year, to,
(B) The Eligible Employee's Compensation for such Plan
Year.
2.18 "Company Stock" shall mean shares of common stock issued by
Yankee Energy System, Inc. which are readily tradeable on an
established securities market or, if such stock is not readily
tradeable, shares of common stock issued by Yankee Energy System,
Inc. which meet the requirements of Section 409(1)(2) of the
Code.
2.19 "Compensation" shall mean
(i) for purposes of Sections 3.03, 4.01, 4.02, 4.03 and
4.05, (A) plus (B) below,
(ii) for purposes of Sections 2.02, 2.17, 2.24 and 5.04(b),
(A) plus (B) plus (C) below,
(iii)for purposes of Section 5.08 and Article XVIII, (A)
plus (C) below;
(A) the entire amount of all salaries, wages, overtime
pay. commissions, bonuses, and similar payments for
services rendered to the Company as reported on Form W-
2, or on any similar form which may be adopted for
Federal Income Tax purposes for the calendar year
ending on or within the Company's fiscal year, but
excluding payments made for the reimbursement of
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expenses and any amounts contributed by the Company
under this Plan or under any other employee benefit
plan of the Company.
(B) amounts subject to salary reduction under the
plans maintained by the Company pursuant to Code
Sections 125 and 401(k).
(C) amounts reported on Form W-2 which are
reimbursement of expenses, relocation pay, any other
similar special payments, any imputed income amounts
which are taxable to the employee based on his
participation in a welfare benefit plan of the Company
or Participating Company and any other amounts
includible in compensation pursuant to Section
415(c)(3) of the Code and regulations thereunder.
"Compensation" to be taken into account under the Plan in any
Plan Year shall not exceed Two Hundred Thousand Dollars
($200,000) or such other amount as may be provided pursuant to
applicable law or regulations. Such maximum dollar limit shall
be determined after aggregating the Compensation of any Covered
Employee who is a 5%
owner (as defined in Section 416(i) of the Code) or one of the
top 10 Employees by pay who are Highly Compensated Employees with
the Compensation of any spouse or lineal descendants who are not
age 19 before the close of the Plan Year and who are also Covered
Employees.
2.20 "Covered Employee" shall mean any employee who is in the on
a leave of absence which has been approved by the Company and
who was a Covered Employee within the meaning of this Section
2.20 on the day before the first day of the leave of absence; but
excluding (i) leased employees (unless otherwise required by
applicable law), and (ii) employees represented by a collective
bargaining unit unless the unit is covered by a collective
bargaining agreement which specifically provides for inclusion in
Part I of the Plan. The employees who are members of Locals 420
and 457 of the International Brotherhood of Electrical Workers
are included in Part II of this Plan.
2.21 "Effective Date" shall mean July 1, 1989.
2.22 "Eligible Employee" shall mean any Covered Employee who is
eligible for participation under the conditions specified in
Section 3.02 whether or not he is actually a Participant.
2.23 "Enrollment Date" shall mean the first day of each month of
the calendar year.
2.24 "Highly Compensated Employee" shall mean any employee who
during the current Plan Year or the Preceding Plan Year:
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(i) was at any time a 5% Owner, as that term is defined in
Section 416(i)(1)(B) of the code and the Regulations
thereunder;
(ii) received Compensation in excess of $81,720 for the
applicable Plan Year (or such amount as further indexed in
accordance with Section 415(d) of the Internal Revenue Code
for the applicable Plan Year);
(iii) received Compensation in excess of $54,480 (or such
amount as further indexed in accordance with Section 415(d)
of the Code for the applicable Plan Year); and was in the
"top 20% group" of employees in compensation as determined
in Section 414(q)(4) of the Code; or
(iv) was at any time during the applicable Plan Year an
officer of the Employer (within the meaning of Section
416(i) of the Internal Revenue Code) and received
Compensation greater than 50% of the dollar limitation in
effect for such years as contained in Section 415(b)(1)(A)
of the code; provided that no more than 50 Employees (or, if
lesser, the greater of 3 Employees or 10% of the Employees)
shall be treated as officers.
For purposes of determining the "top 20% group" of employees or
the number of officers taken into account under subsection (iv),
Employees who have not completed six months of service or who
normally work less than 17 1/2 hours per week or not more than
six months during any year or employees who have not attained age
21 may be excluded.
Notwithstanding the foregoing, an Employee who satisfied one of
the criteria listed above during the current Plan Year shall not
be treated as a Highly Compensated Employee for the purpose of
this Section UNLESS he:
1) was also a Highly Compensated Employee during the
preceding Plan Year by meeting one of the criteria listed
above for such Plan Year;
2) is within the top 100 Employees in Compensation during
the current Plan Year; or
3) is a 5% Owner in the current Plan Year.
2.241 The following will apply in determining Highly Compensated
Employees:
(i) A "Family Member" of an Employee who is a 5% Owner or
who is one of the 10 highest paid Employees during the
applicable Plan Year (before the application of this
paragraph) shall not be considered as a separate Employee
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under this Plan and such Family Member's Basic Contribution,
After-Tax Contribution Company Matching Contributions and
Compensation shall be aggregated with that of the 5% Owner
or the Employee among the 10 highest paid Employees. For
purposed of this Section, a Family Member shall include an
Employee's spouse and lineal ascendants or descendants and
the spouse of such lineal ascendants or descendants or any
one who had such a status at any time during the applicable
Plan Year. However, the aggregation of the Compensation,
Company Matching Contributions, After-Tax Contributions
Basic Contributions of Family Members under this Section
shall be made after the determination of the "top 20% group"
and "top 100 Employees by Compensation" for both the
preceding and current Plan Years.
(ii) A former Employee who terminates employment during the
current or preceding Plan Year shall be excluded unless he
was a Highly Compensated Employee upon termination or at any
time after attaining age 55.
(iii) The determination as to who is a Highly Compensated
Employee shall be made after determining Employees with the
controlled group (as defined in Section 414(b) of the Code)
and after application of the special rules in Section 414(m)
and (n) of the Code.
2.25 "Hour of Service" shall mean each hour for which an employee
is directly or indirectly paid or entitled to payment, for the
performance of duties for the Company or an Affiliated Company.
2.26 "Investment Funds" shall mean the funds described in Section
6.02 and any other funds selected by the Committee for the
investment of assets held in the Trust Fund pursuant to Section
6.02.
2.27 "Investment Manager" shall mean any party that fulfills all
the following conditions:
(A) Is one of the following:
(i) Registered as an investment adviser under the
Investment Advisers Act of 1940, or
(ii) A bank (as defined in the Investment Advisers Act
of 1940), or
(iii) An insurance company qualified to manage, acquire
and dispose of Plan assets under the laws of more than
one state; and
(B) Acknowledges in writing that it is a fiduciary with
respect to the Plan; and
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(C) Is engaged pursuant to Section 19.07 of the Plan.
2.28 "Loan Suspense Account" shall mean that portion of the Trust
Fund to which unallocated Company Shares acquired with the
proceeds of an Acquisition Loan are held.
2.29 "Northeast Utilities TRAESOP/PAYSOP" shall mean the
Northeast Utilities Service Company Payroll-Based Employee Stock
Ownership Plan and the Northeast Utilities Service Company Tax
Reduction Act Employee Stock Ownership Plan.
2.30 "Northeast Utilities Savings Plan" shall mean the Northeast
Utilities Service Company Supplemental Retirement and Savings
Plan.
2.31 "Northeast Utilities Transfer Contribution Account" shall
mean the balance credited to the account of the Covered Employee
to reflect his interest in the Trust Fund which is attributable
to the common shares of Northeast Utilities transferred to the
Plan from the Northeast Utilities TRAESOP/PAYSOP or the Northeast
Utilities Savings Plan.
2.32 "Participant" shall mean any person participating in the
Plan as provided in Article III and who continues to have a Total
Account under the Plan.
2.33 "Participating Company" shall mean Yankee Gas Services, Inc.
and any other Associate Company which has been designated by the
Board to participate in the Plan and whose board of directors has
accepted such designation.
2.34 "Plan" shall mean the Yankee Energy System, Inc. 401(k)
Employee Stock Ownership Plan as set forth in this document, and
as it may be amended from time to time.
2.35 "Plan Administrator" shall be the Company.
2.36 "Plan Year" shall mean July 1,1989 through December 31, 1989
and thereafter the twelve-month period beginning on each January
1 and ending the following December 31.
2.37 "Rollover Contributions" shall mean the amounts rolled over
into the Plan by a Covered Employee, as more fully described in
Section 4.09.
2.38 "Rollover Contribution Account" shall mean the balance
credited to the account of the Covered Employee to reflect his
interest in the Trust Fund which is attributable to his Rollover
Contributions to the Plan, if any, and any investment earnings
and gains or losses thereon, less any amounts withdrawn or
distributed to the Covered Employee or his Beneficiary from such
account.
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2.39 "Service" shall mean an employee's total period of
employment with the Company beginning on the date he first
performs an Hour of Service and ending on his Date of Severance.
If an employee has a break in the continuity of his Service and
is subsequently reemployed, his total period of employment will
be aggregated to the extent provided in the following paragraphs.
Service of an employee shall not be considered broken until the
employee's "Date of Severance", which for purposes of the Plan
means the earlier of (i) the date on which an employee either
quits, retires, dies or is discharged, or (ii) the first
anniversary of the date on which an employee commenced a period
of absence for any other reason.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month period
beginning on the first anniversary of the first date of such
absence shall not constitute a break in Service. For purposes of
this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The person must furnish to the Committee such information as
shall be reasonably required to establish the number of days for
which such absence continued.
If any employee whose Service is broken is subsequently
reemployed and he thereafter meets the definition of employee,
his prior Service shall be reinstated as of his reemployment date
if he fulfills the requirements OF (a), (b) or (c) below:
(a) he is entitled to a benefit under Section 8.01 at his
Date of Severance,
(b) the period between his Date of Severance and his
reemployment date is less than five years, or
(c) the consecutive one year periods of severance between
his Date of Severance and his reemployment date is less than
his period of Service prior to his Date of Severance.
In addition, if such an employee returns to the employ of the
Company within twelve months after his Date of Severance, the
period from his Date of Severance to his reemployment date shall
be included in computing his Service; provided, however, that if
an employee, during any period of absence quits or retires less
than twelve months after the date such period of absence
commenced, his period of severance shall be included in computing
his Service only if he returns to the employ of the Company
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<PAGE>
within twelve months of the date such period of absence
commenced.
2.40 "Supplemental Contributions" shall mean the contributions
which a Participant elects to have the Company make directly to
the Plan on behalf of the Participant, in accordance with Section
4.02, which election shall constitute an election under Section
401(k)(2)(A) of the Code.
2.45 "Trust" shall mean the legal entity established pursuant to
Section 6.11.
2.46 "Trust Agreement" shall mean the agreement or agreements, as
amended from time to time, establishing the Trust.
2.47 "Trust Fund" shall mean the total of contributions made to
the Trust pursuant to the Plan, increased by profits, gains,
income and recoveries received, and decreased by losses,
depreciation, expenses, withdrawals and benefits paid.
2.48 "Trustee" shall mean the party or parties, individual or
corporate, named in the Trust Agreement and any duly appointed
additional or successor Trustee or Trustees acting thereunder.
2.49 "Valuation Date and Allocation of Investment Gain or Loss"
shall mean September 30, 1989 and at the end of each calendar
quarter thereafter so long as the Trust remains in existence.
The Committee may establish more frequent Valuation and
Allocation Dates in its discretion.
2.50 "Year of Service" shall mean each twelve-month period of
employment beginning on the date the employee first performed an
Hour of Service or any Plan Year following the date the employee
first performed an Hour of Service. Years of Service with
Northeast Utilities System Companies shall be credited hereunder
for those Employees who were active participants in the Northeast
Utilities TRAESOP/PAYSOP or Northeast Utilities Savings Plan and
who become active employees of the Company or Associate Company
effective July 1, 1989.
2.51 Wherever used in this instrument, a masculine person shall
be deemed to include the masculine and feminine gender, and a
singular word shall be deemed to include the singular and plural,
in all cases where the context requires.
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ARTICLE III
PARTICIPATION
3.01 Voluntary Participation. Participation in the Plan by a
Covered Employee shall be voluntary except to the extent of
amounts transferred into the Transfer Contribution Account and
the Northeast Utilities Transfer Contribution Account from the
Northeast Utilities Savings Plan and the Northeast Utilities
TRAESOP/PAYSOP.
3.02 Eligibility for Participation.
(A) Participants as of June 30, 1989. Each employee who
was a Participant in the Northeast Utilities Savings
Plan or the Northeast Utilities TRAESOP/PAYSOP on June
30, 1989 and who became employees of the Company or
Participating Company effective July 1, 1989 shall be
eligible for participation in the Plan on July 1, 1989.
(B) Other Participants. Each Covered Employee shall become
eligible for participation on any Enrollment Date
coincident with or following the completion of a Year
of Service.
(C) Former Northeast Utilities Employees. Each former
employee of Northeast Utilities who becomes an Active
Employee of the Company or Participating Company during
July, 1989 and who had at least ten (10) years of
service with Northeast Utilities prior to becoming an
Active Employee shall be immediately eligible to elect
to participate in the plan on the Enrollment Date
coincident with or next following his date of becoming
an Active Employee of the Company or Participating
Company.
3.03 Participant Application. In order to become a Participant,
an Eligible Employee who is eligible for participation under the
conditions specified in Section 3.02 or Section 4.07 must submit
to the Committee an application form, if applicable, on which he:
(A) Designates the percentage of his Compensation to be
contributed as Basic Contributions, if any, pursuant to
Section 4.01, designates the percentage of his
Compensation to be contributed as Supplemental
Contributions, if any, pursuant to Section 4.02 and
designates the percentage of his Compensation to be
contributed as After-Tax Contributions, if any,
pursuant to Section 4.03.
(B) Authorizes reductions from his Compensation of his
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Basic Contributions and Supplemental Contributions.
(C) Chooses one or more of the Investment Funds for the
investment of any contributions made on his behalf.
(D) Designates one or more Beneficiaries pursuant to
Section 8.02(B).
(E) Agrees to be bound by the terms and conditions of the
Plan.
3.04 Participant Status. A Covered Employee who has once become
a Participant shall remain a Participant so long as he remains in
the service of the Company and shall cease to be a Participant
upon his Termination of Employment, except that if he has met the
conditions for entitlement to a benefit. he shall remain a
Participant, so long as he has a credit balance in his Total
Account.
3.05 Participation After Termination of Employment.
(A) If a former Eligible Employee is rehired as a Covered
Employee, he shall be entitled to become a Participant
on the date he is rehired.
(B) Any former Covered Employee who was not an Eligible
Employee prior to his Termination of Employment, and
who is rehired as a Covered Employee of the Company,
shall be eligible for participation on the Enrollment
Date coincident with or immediately following his
reemployment date upon which he meets the qualification
requirements set forth in Section 3.02.
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ARTICLE IV
CONTRIBUTIONS
4.01 Basic Contributions. Subject to the provisions of Article
V, each Participant may elect, pursuant to Section 3.03, to have
the Company contribute a percentage of his Compensation to the
Trust Fund on behalf of such Participant, in an amount equal to
any whole percentage not less than one percent (1%) nor more than
three percent (3%) of his Compensation; provided that such
contribution along with the contribution provided for in Section
4.02, shall not in any calendar year exceed $7,627 (as adjusted
by the Secretary of Treasury or his delegate).
4.02 Supplemental Contributions. Subject to the provisions of
Article V, and after first electing to have the Company
contribute the maximum Basic Contribution amount, each
Participant may elect, pursuant to Section 3.03, to have the
Company contribute a percentage of his Compensation to the Trust
Fund on behalf of such Participant, in an additional amount equal
to any whole percentage not less than one percent (1%) nor more
than seven percent (7%) of his Compensation; provided that such
contribution along with the contribution provided for in Section
4.01 shall not in any calendar year exceed $7,627 (as adjusted by
the Secretary of Treasury or his delegate).
4.03 After-Tax Contributions. Subject to the provisions of
Article V, each Participant may elect, pursuant to Section 3.03,
to contribute a percentage of his Compensation to the Trust Fund,
in an equal amount to any whole percentage not less than one
percent (1%) nor more than ten percent (10%) of his Compensation;
provided, however, that Basic Contributions pursuant to Section
4.01, Supplemental Contributions pursuant to Section 4.02 plus
After-Tax contributions pursuant to this Section 4.03 in the
aggregate may not exceed ten percent (10%) of such Participant's
Compensation.
4.04 Rules for Contributions.
(A) Effective as of any January 1, April 1, July 1 or
October 1 (or such other dates as permitted by the
Committee in its sole discretion), a Participant may
elect to increase, decrease or suspend Basic
Contributions, Supplemental Contributions and/or After-
Tax Contributions; provided that he must notify the
Committee in writing at least thirty (30) days prior to
the effective date of such election.
4.05 Additional Rules. The Committee may promulgate such other
rules as it deems necessary regarding:
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(A) The commencement or recommencement of Basic
Contributions and/or Supplemental Contributions
consistent with the Company's regular payroll periods.
(B) Elections by Participants to increase, decrease or
suspend the percentages of Compensation used to
determine Basic Contributions, Supplemental
Contributions and/or After-Tax Contributions.
(C) Procedures for payroll deduction and remittances of
contributions to the Trust Fund.
(D) Procedures to reduce the amount of Basic Contributions,
Supplemental Contributions and/or After-Tax
Contributions, if the Committee determines such action
is necessary (i) to ensure that a Participant's Annual
Additions will not exceed the limitations of Section
415 of the Code. or (ii) to ensure that the
discrimination tests of Sections 401(k) and 401(m) of
the Code are met for such year.
4.06 Company Matching Contributions.
(A) At the end of each Plan Year, the Company shall
allocate the total number of Company Shares released
under Section 7.02 in the ratio that the Participant's
Basic Contribution bears to the Basic Contributions of
all Participants.
(B) The above allocation shall be based on the fair market
value of the Company Shares as of the date of
allocation. Each participant shall have allocated to
his Company Matching Contribution Account an amount
equal to at least one hundred percent (100%) of each
Participant's Basic Contributions taking into account
Compensation up to $54,480 (or such amount as provided
in Section 414(q)(1)(C) as further indexed in
accordance with Section 415(d) of the Code for the
applicable Plan Year).
(C) In the event that the allocation in Section 4 .06(A)
does not equal the amount provided for in Section
4.06(B), the Company shall make an additional
contribution in accordance with Section 7.02.
(D) In the event that the allocation in Section 4.06(A)
exceeds the amount provided for in Section 4.06(B).
there shall be no further adjustment.
4.07 Conditions Applicable to Contributions by the Company. In
no event shall Company contributions for any Plan Year exceed the
amount deductible for such Plan Year for Federal income tax
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purposes as a contribution to a qualified Trust under applicable
provisions of the Code. Company contributions with respect to
any Plan Year shall be made within the time prescribed by law for
the deduction of such contributions for purposes of the Company's
Federal income tax as determined by applicable provisions of the
Code.
Except as otherwise provided in Section 4.11, any and all
contributions made by the Company shall be irrevocable and shall
be transferred to the Trustee and held as provided in Section
6.02 to be used to provide benefits in accordance with the
provisions of this Plan. Neither such contributions nor any
income therefrom shall be used for, or diverted to, purposes
other than for the exclusive benefit of, or on account of,
Participants or their Beneficiaries.
4.08 Transfer Contribution. Upon direction of the Committee, the
Trustee may accept a direct transfer to the Plan of all or a
portion of assets or all or a portion of a Participant's account
balances under another qualified plan or trust maintained by
another employer. The Trustees shall accept a direct transfer to
the Plan of common shares of Northeast Utilities from the
Northeast Utilities TRAESOP/PAYSOP. and of the account balances
from the Northeast Utilities Savings Plan for Participants who
were active participants in such plans as of June 30, 1989 and
become active employees of Yankee Gas Services, Inc. effective
July 1, 1989. The Trustee may rely upon any representation by
the Committee or the Company that the acceptance of any Transfer
Contribution under this Section 4.08, will not adversely impact
the qualified status of the Plan. and the Trustee shall be under
no obligation to make any independent investigation thereof.
4.09 Rollover Contribution. Upon the direction of the Committee,
the Trustee may accept a Rollover Contribution from a Covered
Employee who has received a "Qualifying Rollover Distribution"
(within the meaning of Section 402(a)(5) of the Code) from
another qualified plan and such Rollover Contribution may be a
rollover directly from such other qualified plan or through the
conduit of an Individual Retirement Account established under
Section 408 of the Code, subject to applicable laws and
regulations governing such tax-free rollovers. For purposes of
the rollover of all or any part of a Qualifying Rollover
Distribution, the amount, date of authorization, type of funds
accepted. and other conditions, shall be in accordance with the
provisions of Section 402(a)(5) of the Code. and other applicable
laws and regulations. and the Committee may require whatever
evidence or information from the Covered Employee as it may deem
necessary to comply with said laws or regulations.
A Covered Employee need not be a Participant in order to make a
Rollover Contribution to the Plan and any Covered Employee who
makes a Rollover Contribution prior to the date on which he meets
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the eligibility requirements for participation in the Plan shall,
subject to Section 3.03, become a Participant as of the date the
Rollover Contribution is accepted but his benefits under the Plan
prior to the date on which he elects to participate after having
met the eligibility requirements for participation in the Plan
shall be limited to the amounts credited to his Rollover
Contribution Account.
The Trustee may rely upon any representation by the Committee or
the Company that the acceptance of any Rollover Contribution
under this Section 4.09 will not adversely impact the qualified
status of the Plan, and the Trustee shall be under no obligation
to make any independent investigation thereof.
4.10 Transfer of Accounts.
(A) In the event the Company sells a business unit, or any
portion of a business unit, which results in the
termination of employment of Participants and immediate
employment of such Participants by the succeeding
employer. the Company may direct the Trustee to
transfer a Participant's Total Account to a thrift or
profit sharing plan of such successor employer.
provided such plan is qualified under the Code.
(B) In the event the Company acquires a business unit, or
any portion of a business unit, from another employer
resulting in the immediate employment by the Company of
employees of such other employer. the Plan may accept a
transfer of any account balances which such employees
may have credited under a thrift or profit sharing plan
of such other employer, provided such Plan is qualified
under the Code.
(C) Any transfer of assets shall be subject to (i)
approval, when necessary by the Internal Revenue
Service, (ii) enabling language to accomplish such
transfer in the plan of the other employer, and (iii)
approval by the Committee.
4.11 Return of Contributions Under Certain Circumstances.
(A) The assets of the Trust Fund shall be held for the
exclusive purpose of providing benefits to Participants
and their Beneficiaries and defraying reasonable
expenses of administering the Plan pursuant to Section
19.09 and shall not inure to the benefit of the
Company, except that contributions made by the Company
may be returned to the Company in the following
circumstances:
(i) Mistake - If and to the extent that any
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contribution was made by mistake of fact, the
Committee may direct the Trustee to return the
contribution at any time within one (1) year after
the payment of such contribution, pursuant to the
conditions set forth in Section 4.11(B) below;
(ii) Failure to Obtain Internal Revenue Service
Approval- If the Internal Revenue Service does
not determine that the Plan and Trust initially
qualify under Sections 401(a), 401(k), 4975(e)(7)
and 501(a) of the Code, the Plan shall be deemed
to be null and void and any and all contributions
made by the Company to the Trustee, subsequent to
the effective date, shall be returned to the
Company as soon as practicable;
(iii) Nondeductibility - If and to the extent that the
Internal Revenue Service determines that a
contribution is not deductible under Section 404
of the Code, the Committee may direct the Trustee
to return the contribution within one (1) year
after the date of disallowance. and to make such
other adjustments as may be equitable and
practical. Such return shall be made pursuant to
the conditions set forth in Section 4.11(B) below.
(B) The return of a contribution to the Company pursuant to
Subparagraph (i) or Subparagraph (iii) of Section
4.11(A) above must satisfy each of the following
conditions:
(i) the amount of such contribution which may be so
returned shall not be greater than the excess of
(a) the amount contributed over (b) the amount
that would have been contributed had there been no
mistake in determining the deduction or had there
been no mistake of fact. as the case may be; and
(ii) the amount of such contribution which may be so
returned shall not be increased by earnings
attributable to the investment or reinvestment of
such contribution in the Trust, but shall be
reduced by losses attributable to the investment
or reinvestment of such contribution in the Trust.
(C) In no event may a refund be due which would cause the
Total Account of any Participant to be reduced to less
than what the Participant's Total Account would have
been had the mistaken amount, or the amount determined
to be nondeductible, not been contributed.
4.12 Prior Account Balances as of June 30, 1989. Participant's
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account balances as of June 30, 1989 under the Northeast
Utilities Savings Plan and the Northeast Utilities TRAESOP/PAYSOP
transferred to the Plan shall become fully vested on July 1.
1989. Withdrawal of prior accounts from the Northeast Utilities
TRAESOP/PAYSOP shall be subject to Article IX. However, at the
Participant's direction, common shares of Northeast Utilities may
be sold and the proceeds reinvested under another Investment Fund
under Article VI. Withdrawals of prior accounts from Northeast
Utilities Savings Plan shall be subject to the same withdrawal
rules as provided for amounts under this Plan as provided in
Article IX.
4.13 Vesting. All amounts standing to the credit of a Participant
in the Trust Fund shall at all times be fully vested and
nonforfeitable.
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ARTICLE V
RESTRICTIONS ON CONTRIBUTIONS
5.01 Return of Basic Contributions and Supplemental Contributions
Above Limit. If the Committee determines that during any Plan
Year the total Basic Contributions and/or Supplemental
Contributions for a Participant exceed the dollar limitation in
Section 4.01, such excess amount (adjusted by any gain or loss
determined under the method set forth in Section 5.05) shall be
returned to the Participant by April 15 of the next Plan Year by
first returning Supplemental Contributions. The Participant
shall be responsible for notifying the Committee in writing by
March I of the Plan Year following the Plan Year in which any
excess in the Basic Contributions and/or Supplemental
Contributions made to the Plan (and any other plan to which the
Employee makes salary deferral contributions pursuant to Code
Sections 401(k), 403(b), or 408(k)) arose and the amount of such
excess (together with the income allocable thereto or adjusted
for any losses thereon as set forth in Section 5.05) to be
returned to the Participant from this Plan by the April 15
following such notification. Such distributions shall be made
notwithstanding the requirement of Section 8.03(B) that the
Participant consent to certain distributions.
5.02 Deferral Percentage Test
(A) Subject to the aggregate limitation in Section 5.06, in
order to satisfy the discrimination requirements of
Code Section 401(k)(3). the Actual Deferral Percentage
for any Plan Year for Eligible Employees who are Highly
Compensated Employees may not exceed either (i) or
(ii)(but not both) as follows:
(i) The Actual Deferral Percentage of the Eligible
Employees who are not Highly Compensated Employees
("Other Employees"), times 1.25, or
(ii) The Actual Deferral Percentage for the Other
Employees times 2.0; provided, however, that the
Actual Deferral Percentage for the Highly
Compensated Employees may not exceed the Actual
Deferral Percentage for the Other Employees by
more than two (2) percentage points.
(B) If the Actual Deferral Percentage for Highly
Compensated Employees is more than the amount permitted
under Section 5.02(A), then the Committee, at its sole
discretion, shall take such action as may be permitted
by regulations under Section 401(k) of the Code to
prevent such discrimination, including (i) first
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reducing or limiting the Supplemental Contributions in
respect of Highly Compensated Employees to the extent
necessary to satisfy the deferral percentage test; or
(ii) reducing or limiting the Basic Contributions in
respect of Highly Compensated Employees to the extent
necessary to satisfy the deferral percentage test; or
(iii) taking such other action as may be necessary to
satisfy such test.
5.03 Reduction of Supplemental Contributions and/or Basic
Contributions. In the event the Committee decides pursuant to
Section 5.02(B) to distribute to the Highly Compensated Employee
the amount of any excess Supplemental Contributions and/or Basic
Contributions due to the reduction in Section 5.02, the Committee
shall first reduce the Supplemental Contributions and then the
Basic Contributions made for Highly Compensated Employees whose
Deferral Percentage exceeds the maximum Actual Deferral
Percentage for Highly Compensated Employees. Such adjustment or
reduction shall be performed by reducing the Deferral Percentage
of Highly Compensated Employees in descending order beginning
with the Highly Compensated Employee(s) with the highest Deferral
Percentage until such limitation has been satisfied. In
performing the reduction or adjustment, the reduced Deferral
Percentage of any affected Highly Compensated Employee shall in
no event be lower than the Deferral Percentage of any Highly
Compensated Employee with the next highest Deferral Percentage.
5.04 Return of Excess Supplemental Contributions and/or Basic
Contributions. The Committee shall distribute to each affected
Highly Compensated Employee the amount of any excess Supplemental
Contributions and/or Basic Contribution (together with the income
allocable thereto as determined in Section 5.05) within two and
one-half (2%) months after the end of the Plan Year, but in no
event later than twelve months after the end of the Plan Year (or
the Plan's termination date, if applicable). The excess
Supplemental Contributions and/or Basic Contribution shall be
equal to the amount determined by reducing (a) by (b) where:
(a) is the Highly Compensated Employee's total Supplemental
Contributions and/or Basic Contribution before the
application of Section 5.02; and
(b) is the amount determined by multiplying the Highly
Compensated Employee's Compensation by the Deferral
Percentage after the reduction in Section 5.02.
The distribution of excess Supplemental Contributions and/or
Basic Contributions shall not require the consent of the affected
Highly Compensated Employee.
5.05 Determination of Income on Excess Supplemental Contributions
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Section 5.04 shall include a proportionate share of gain (or
loss) for the Plan Year and for the period from the end of the
Plan Year to the date of distribution. Income allocable to
excess Supplemental Contributions and/or Basic Contributions for
the Plan Year shall be determined by multiplying the income on
all Supplemental Contributions and/or Basic Contributions by a
fraction where:
(a) the numerator is the amount of the excess Supplemental
Contributions and/or Basic Contributions; and
(b) the denominator is the value of the Basic Contribution
and Supplemental Contribution Account as of the end of
the Plan Year, reduced by the gain and increased by the
loss allocable to such amounts for the Plan Year.
Income allocable to excess Supplemental Contributions and/or
Basic Contributions for the period from the end of the Plan Year
to the date of distribution shall be determined by multiplying
the amount of income on excess Supplemental Contributions and/or
Basic Contributions as determined for the Plan Year by the
product of ten percent (10%) times the number of months between
the Plan Year end and the date of distribution (with 15 days
being treated as a full month for the month in which the
distribution occurs).
For purposes of this Section 5.05 income shall be determined by
including dividends, interest, realized gains and appreciation
(whether or not realized). The income allocable to Supplemental
Contributions and/or Basic Contributions shall be the net amount
from all gains and losses to the Supplemental Contributions
and/or Basic Contributions.
5.06 Special Rule for Family Members. Notwithstanding the
foregoing, the Deferral Percentage for a Highly Compensated
Employee who is a 5% Owner or one of the top ten highest paid
Employees shall be determined by including the Basic
Contributions, Supplemental Contributions and/or Compensation of
any Employee who is a Family Member and such Family Members who
are Non-Highly Compensated Employees shall thereafter not be
treated as separate Employees. The Deferral Percentage for the
aggregated group of Family Members shall be equal to the greater
of:
(1) the Deferral Percentage calculated for the Highly
Compensated Employees who are Family Members; or
(2) the Deferral Percentage calculated for the entire group
of Family Members.
The resulting Deferral Percentage for the Family Members shall
then be included in the calculation of the Actual Deferral
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Percentage as provided in Section 5.02 and any excess
Supplemental Contributions and/or Basic Contributions for the
group of Family Members shall be determined and returned in
accordance with Sections 5.03 and 5.04 except that with respect
to the Employees comprising the Family Members the following
ordering procedures shall apply:
(i) if the Deferral Percentage for the Family Members was
determined under (1) above, then the excess shall be
allocated among Family Members who are Highly
Compensated Employees in proportion to their respective
Deferral Contributions; or
(ii) if the Deferral Percentage for the Family Members was
determined under (2) above. then any excess
contributions shall first be determined by reducing the
Deferral Percentage for Family Members who are Highly
Compensated Employees to no lower than the Deferral
Percentage that would exist if determined just for Non-
Highly Compensated Employees who are, Family Members,
and then, if necessary to comply with the Deferral
Percentage limitations in Section 5.02. a second
reduction for all Family Members in proportion to their
respective Deferral Contributions.
5.07 Company Matching and After-Tax Contribution Percentage Test.
Subject to the aggregate limitation in Section 5.09, the Company
Hatching and After-Tax Contribution Percentage Limitation for
Highly Compensated Employees for any Plan Year shall be limited
by applying the same percentage limitations as in Section
5.02(A).
The Company may elect to take into account Basic Contributions
and or Supplemental Contributions in determining Company Matching
and After-Tax Contribution Percentages to the extent permitted
and in accordance with applicable law and regulations. If the
Company Matching and After-Tax Contribution Percentage Limitation
is exceeded, then the Committee. at its sole discretion, shall
take such action as may be permitted by regulations under Section
401(m) of the Code to prevent such discrimination, including but
not limited to the return of such excess contributions to the
Participant. In the event excess Company Matching Contributions
and/or After-Tax Contributions (adjusted by any gain or loss
determined in accordance with the method set forth in Section
5.04 for the allocation of gain or loss on excess amounts) are to
be returned, such excess contributions shall be distributed in
accordance with the procedures in Section 5.03, 5.04 and 5.05
(but substituting excess Company Matching Contributions and
After-Tax Contributions for Supplemental Contribution and Basic
Contribution in such Sections). Excess Company Hatching
Contributions shall be distributed in stock or cash.
5.08 Limits to Contributions.
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(A) Notwithstanding anything herein to the contrary, the
maximum Annual Addition, for any Participant for any
Limitation Year, shall be the lesser of the amount
established under Section 415 of the Code, currently
$30,000, or, if greater, one-fourth of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code, (as increased by the Secretary of the Treasury or
his delegate under Code Section 415(d)), or twenty-five
percent (25%) of the Participant's Compensation (as
defined in Section 415 of the Code) from the Company.
For purposes of this Section 5.08, "Limitation Year"
means the Plan Year.
(B) In any Limitation Year in which no more than one-third
of the Company's contributions are allocated to Highly
Compensated Employees, the amount otherwise described
in 5.08(A)shall be increased by the lesser of the
amount otherwise described in 5.08 (A) or the value of
Company Stock contributed, purchased with cash
contributed, or allocated from the Loan Suspense
Account.
(C) Prior to the end of each Limitation Year, the Committee
shall notify any Participant for whom it determines
that the limitations of this Section 5.08 will prohibit
a full Annual Addition for such Limitation Year on his
behalf. Any reduction in contributions which becomes
necessary due to the requirements of this Section 5.08
shall be returned to the Participant or to the Company
or handled in some other manner, as the Committee shall
decide and as permitted under the Code and regulations
thereunder.
(D) In any case where a Participant also participates in a
defined benefit plan (as defined in Section 414(j) of
the Code) of the Company in addition to being a
Participant in this Plan, the sum of his defined
benefit plan fraction and the defined contribution plan
fraction (both as defined hereafter) for any year may
not exceed 1.0.
(E) The defined benefit plan fraction for any year is a
fraction, the numerator of which is the projected
annual benefit of the Participant under such plan
(determined as of the close of the year), and the
denominator of which is the lesser of:
(i) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(b)(1)(A) of
the Code for such year, or
(ii) the product of 1.4 multiplied by the amount that
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may be taken into account under Section
415(b)(1)(B) of the Code with respect to the
Participant under the Plan for such year.
(F) The defined contribution plan fraction for any year is
a fraction the numerator of which is the sum of the
Annual Additions as of the close of the year, and the
denominator of which is the sum of the lesser of the
following amounts determined for such year and for each
prior year of service with the Company:
(i) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of
the Code for such year, or
(ii) the product of 1.4 multiplied by the amount which
may be taken into account under Section
415(c)(1)(B) of the Code with respect to the
Participant under the Plan for such year.
(G) In the event that the sum of such fractions exceeds
1.0, the benefit otherwise payable to the Participant
or to his Beneficiary under the defined benefit plan
shall be reduced so that neither the defined benefit
plan nor this Plan will be disqualified. If for any
other reason the Annual Addition for any Participant
would otherwise exceed the limits imposed by this
Section 5.08, a Participant's benefits shall be limited
so as not to exceed the limits set forth in this
Section 5.08.
(H) This Section 5.08 is intended to be interpreted
consistently with Section 415 of the Code and the
regulations issued thereunder, and in no event should
this Section 5.08 be interpreted as more restrictive
than Section 415 of the Code and the regulations issued
thereunder.
5.09 Aggregate Limit for Deferral and Company Matching and After-
Tax Contribution Percentage Limitations. In addition to the
separate limitations in Sections 5.02 and 5.07. if the Actual
Deferral Percentage of Highly Compensated Employees exceeds 125
percent of the Actual Deferral Percentage of Other Employees and
the Company Matching and After-Tax Contribution Percentage of
Highly Compensated Employees exceeds 125 percent of the Company
Matching and After-Tax Contribution Percentage of Other
Employees, then the Actual Deferral Percentage and Company
Matching and After-Tax Contribution Percentage for Highly
Compensated Employees, when combined, shall not exceed the sum
of:
(a) 1.25 times the greater of (1) the Actual Deferral
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Percentage for Non-Highly Compensated Employees or (2)
the Company Matching and After-Tax Contribution
Percentage for Non-Highly Compensated Employees; and
(b) 2 plus the lesser of (1) or (2) above, but not in
excess of 2 times (1) or (2) above.
If the aggregate limit determined above is exceeded after first
determining any excess Supplemental Contributions and Basic
Contributions or Company Matching and After-Tax Contributions (as
provided in Sections 5.02 and 5.07, respectively), then an
additional excess Supplemental Contribution and/or Basic
Contribution and/or an additional excess Company Matching and
After-Tax Contribution shall be determined in accordance with the
procedures in Section 5.03 and/or Section 5.07, whichever
applies, until the above aggregate limit is satisfied. Company
Matching Contributions shall be returned on a pro-rata basis
along with Supplemental Contributions and/or Basic Contributions
and/or After-Tax Contributions. The amount of any such
additional excess contributions shall be distributed (together
with any allocable income) along with and in the manner provided
for excess contributions under Sections 5.03, 5.04, 5.05 and
5.06. Notwithstanding the foregoing, application of the aggregate
limitation in this Section 5.09 shall be consistent with the
requirements of Treasury Regulation Section 1.401(m)-2.
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ARTICLE VI
ACCOUNTS AND FUNDS
6.01 Participant Accounts.
(A The Committee shall establish and maintain (or cause to
be established and maintained) the following accounts
for each Participant:
(i) A Basic Contribution and Supplemental Contribution
Account, which will reflect the Participant's
interest in the funds credited to him under the
Plan as a result of his Basic Contributions and
Supplemental Contributions in accordance with the
provisions of Sections 4.01 and 4.02.
(ii) An After-Tax Contribution Account, which will
reflect the Participant's interest in the funds
credited to him under the Plan as a result of his
After-Tax Contributions in accordance with the
provisions of Section 4.03.
(iii) A Company Matching Contribution Account, which
will reflect the Participant's interest in the
Company Stock released to him under the Plan as a
result of Company Matching Contributions as
described in Section 4.06.
(iv) The Committee shall also establish and maintain
(or cause to be established and maintained) for
each applicable Participant, the Rollover
Contribution Account described in Section 4.09
hereof on behalf of those Participants for whom a
Rollover Contribution is accepted.
(v) A Transfer Contribution Account, described in
Section 4.08 on behalf of each Participant for
whom a Transfer Contribution is accepted.
(vi) A Northeast Utilities Transfer Contribution
Account, described in Section 4.08 on behalf of
each Participant for whom the common shares of
Northeast Utilities are transferred.
(B) In addition to the accounts described in Section
6.01(A) the Committee may also arrange for the
establishment of any other accounts which may be
necessary or desirable for the proper functioning of
the Plan.
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(C) Each account maintained on behalf of each Participant
shall be credited or debited to the extent required by
the provisions of the Plan. All entries on such
individual accounts shall be conclusive and binding
upon all parties unless patently erroneous. Monies
derived from these accounts shall be held,
administered, invested and disbursed in accordance with
the Plan and Trust Agreement.
(D) The Committee shall establish and maintain (or cause to
be established or maintained) a Loan Suspense Account,
to which will be assigned all Company Stock acquired
with the proceeds of an Acquisition Loan and credited
with dividends in accordance with Section 6.03 and
earnings thereon.
(E) The maintenance of individual accounts is only for
accounting and recordkeeping purposes, and an actual
segregation of the assets of the Trust Fund to each
account shall not be required.
6.02 Investment Funds. The Trust Fund shall consist of the
following four (4) Investment Funds and such other funds as the
Committee shall establish in the future: Fund A - the Guaranteed
Investment Contract, Fund B - the Diversified Common Stock Fund,
Fund C - the Company Stock Fund, and Fund D - the Northeast
Utilities Stock Fund. However, the Trustee shall have the right
to invest in a short term cash fund on an interim short-term
basis.
Fund A - Guaranteed Investment Contract
Fund A means the subfund forming part of the Trust Fund
consisting of the monies which the Committee shall direct
the Trustee to place with an insurance company, or insurance
companies for investment in Guaranteed Investment Contracts
issued by such insurance company or companies.
Fund B - Diversified Common Stock Fund
Fund B means the subfund forming part of the Trust Fund
consisting of the monies which the Committee shall direct
the Trustee to place in such fund which shall be a
commingled fund and such common or capital stocks issued by
corporations and such bonds, debentures, or preferred stocks
issued by corporations which are convertible into common
stocks as shall be selected by the Trustee in its sole
discretion, together with all income and accretions thereon,
and such amounts of cash as the Trustee shall deem necessary
or advisable to maintain as a part of such fund, all within
the limitations specified in the Trust Agreement.
Fund C - Company Stock Fund
Fund C means the subfund forming part of the Trust Fund
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consisting of allocated shares of Company Stock attributable
to the Company Matching Contributions.
Fund D - Northeast Utilities Stock Fund
Fund D means the subfund forming part of the Trust Fund
consisting of common shares of Northeast Utilities
transferred from the Northeast Utilities TRAESOP/PAYSOP or
the Northeast Utilities Savings Plan. No Basic
Contributions, Supplemental Contributions, After-Tax
Contributions, Rollover Contributions and Transfer
Contributions (except as provided above) may be invested in
this Fund.
Dividends issued on the shares in this Fund shall be used to
purchase additional shares of Northeast Utilities.
6.03 Investment Direction. The Committee may adopt rules under
which Participants may elect to have their accounts invested in
the Investment Funds described in Section 6.02. Any rules adopted
by the Committee shall be established and operated in a
nondiscriminatory manner and shall provide that:
(A) Participants may direct the investment of the Basic
Contributions, Supplemental Contributions, After-Tax
Contributions, and Rollover Contributions made by the
Participants or on their behalf in increments of ten
percent (10%) between Fund A and Fund B;
(B) Participants may elect to change the investment
direction in Section 6.03(A) effective as of the
January 1, April 1, July I or October I following
thirty days written notice to the Committee (or such
other dates as permitted by the Committee in its sole
discretion); and
(C) Elections by Participants to transfer amounts from one
Investment Fund to another effective as of the January
1. April 1, July I or October I following thirty days
written notice to the Committee (or such other dates as
permitted by the Committee in its sole discretion);
provided that the Company Matching Contribution Account
may not be transferred except as provided in Section
6.05.
(D) Participants may direct the investment of proceeds from
the sale of any common shares of Northeast Utilities
held in the Northeast Utilities Transfer Contribution
Account in increments of ten percent (10%) between Fund
A and Fund B. If a Participant does not so direct, said
Account shall be invested in Fund D.
If a Participant fails to elect an investment option, the
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Participant's Total Accounts except for the Northeast Utilities
Transfer Contribution Account will be invested in the Guaranteed
Investment Contract.
If a Participant separates from the employment of the Company and
does not receive a distribution of his Total Account, such
terminated Participant may continue to make elections with
respect to changes in the investment of past accumulations and
earnings thereon.
6.04 Dividends on Company Stock.
(A) Any cash dividends on shares of Company Stock allocated
to Company Matching Accounts will be used to repay the
Acquisition Loan in accordance with Section 7.01,
provided that additional shares of Company Stock, which
have a fair market value equal to the cash dividends,
are allocated from the Loan Suspense Account to such
Company Matching Accounts.
(B) Any cash dividends received on unallocated shares of
Company Stock (including Company Stock in the Loan
Suspense Account) shall be used toward the repayment of
the Acquisition Loan in accordance with Section 7.01.
6.05 Diversification. A Participant who has attained age fifty-
five (55) and has completed ten (10) years of participation in
the Plan may elect within ninety (90) days after the close of
each Plan Year in the six (6) Plan Year period beginning with the
Plan Year he attains age fifty-five (55) (or he completes ten
(10) years of Eligibility Service if later) to receive a
distribution of twenty-five percent (25%) of his Company Matching
Account in the Plan (to the extent such portion exceeds the
amount of any prior distribution under this Section). The
Participant may elect to receive a distribution of up to fifty
percent (50%) of his Company Matching Account (to the extent such
portion exceeds the amount of any prior distribution under this
Section) for the last Plan Year such election is available to
him. The distribution of a portion of the Company Matching
Account covered by this election shall be made within ninety (90)
days after the period during which the election may be made.
6.06 Voting - Shares Allocated to Participant's Company Matching
Accounts. Each Participant shall have the right and shall be
afforded the opportunity to instruct the Trustee how to vote at
any meeting of the Company shareholders those shares of Company
Stock allocated to his Company Matching Account. Unless
otherwise required by any provision of ERISA, the Trustee shall
vote said shares in accordance with each Participant's
instructions.
Instructions by a Participant to the Trustee shall be in such
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form and pursuant to such regulations as the Committee may
prescribe and any such instructions shall remain in the strict
confidence of the Trustee. If the Trustee does not receive
instructions from a Participant regarding his shares, the Trustee
shall have the authority to vote such shares in the same
proportion as the shares voted by instruction of the
Participants. The Company shall utilize its best efforts to
timely distribute or cause to be distributed to each Participant
(or Beneficiary) all proxy material pertaining to any vote that
the Participant (or Beneficiary) is eligible to make.
Each Participant (or in the event of his death, his Beneficiary)
shall have the right to instruct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer for any
or all shares of Company Stock credited to such Participant's
Company Matching Account. The Company shall notify each
Participant (or Beneficiary) and utilize its best efforts to
timely distribute or cause to be distributed to him such
information as will be distributed to shareholders of the Company
in connection with any such tender or exchange offer. Upon its
receipt of such instructions, the Trustee shall tender such
shares of Company Stock as and to the extent so instructed.
If the Trustee does not receive instructions from a Participant
(or Beneficiary) regarding any such tender or exchange offer for
Company Stock, the Trustee shall treat such non-action as a
decision by the Participant not to tender or exchange such shares
credited to such Participant's Company Matching Account.
In the event a vote is necessary or a tender or exchange offer is
received prior to the initial year end allocation of the Company
Stock to the Company Matching Account, the Participant shall have
the right to vote or respond based on the accrued Company
Matching Account based on the Basic Contributions made to date.
If the Trustee does not receive instructions from a Participant
regarding his shares for such tender or exchange offer, the
Trustee shall treat such non-action as a decision by the
Participant not to tender or exchange such shares.
6.07 Voting - Shares Assigned to Loan Suspense Account.
(A) The Trustee shall vote at any meeting of the Company
shareholders shares of Company Stock remaining in the
Loan Suspense Account in the same proportion as to the
votes on shares of Company Stock allocated to Company
Matching Accounts.
(B) If a tender or exchange offer is received for any or
all of the shares of Company stock held in the Loan
Suspense Account, unless otherwise required by ERISA,
the Trustee shall respond to the tender or exchange
offer in the same proportion as to the responses of
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Participants attributable to their Company Matching
Accounts.
6.08 Participant's Responsibility.
(A) Each Participant is solely responsible for the
selection of his investments in the Trust Funds. The
fact that a security is available to Participants for
investment under the Plan shall not be construed as a
recommendation for the purchase of that security, nor
shall the designation of any subfund impose any
liability on the Company, its directors, officers or
employees, the Trustee, or the Committee.
(B) Each Participant assumes all risk connected with any
decrease in the market value of any Plan assets held on
his behalf by the Trustee. Neither the Trustee, the
Committee, nor the Company in any way guarantees the
Trust Fund against loss, depreciation or the payment of
any amount which may be or become due to any person
from the Trust Fund nor shall the Trustee, the
Committee or the Company incur any liability therefor
except to the extent required by law.
6.09 Valuation of Accounts.
(A) As of each Valuation Date, the accounts of each
Participant shall be adjusted to reflect any
appreciation or depreciation in the fair market value
and income earned by each subfund in which the
Participant's accounts are invested pursuant to Section
6.02. The fair market value shall be the aggregate fair
market value of all securities or other property held
for each subfund, plus cash and accrued earnings, less
accrued expenses and proper charges against each
subfund, all as of the Valuation Date. Participant
accounts shall be adjusted in proportion to the balance
in each Participant's account on each Valuation Date,
adjusted for distributions, provided, however, that the
Committee may elect to partially or totally reflect
additions and/or withdrawals made to the accounts of
Participants since such Valuation Date.
(B) When determining the value of Participant accounts, any
deposits due which have not been deposited in the Trust
Fund on behalf of the Participant shall be added to his
accounts. Similarly, adjustments of accounts for
appreciation or depreciation of the subfund shall be
deemed to have been made as of the Valuation Date to
which the adjustment relates, even though they are
actually made as of a later date.
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(C) The Committee, with the consent of the Trustee, may
make additional rules, or modifications to the rules
contained in Sections 6.09(A) and 6.09(B) for the
valuation of Participant accounts, provided such rules
are administered in a nondiscriminatory manner.
6.10 Participant Statements. The Committee shall, on a quarterly
basis, furnish or cause to be furnished to each Participant, a
statement of his Total Account and the value of each account
referred to in Section 6.01.
6.11 Trust Agreement. The Trust Agreement shall contain such
provisions as shall render it impossible for any part of the
corpus of the Trust Fund to be at any time used for, or diverted
to, purposes other than for the exclusive benefit of Participants
and their Beneficiaries and administrative expenses of the Plan,
except as provided in Sections 4.11 and 5.08.
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ARTICLE VII
LEVERAGED ESOP PROVISIONS
7.01 Acquisition Loans. At the direction of the Company, the
Trustee may incur Acquisition Loans from time to time to finance
the acquisition of Company Stock (Financed Shares) or to repay a
prior Acquisition Loan. An installment obligation incurred in
connection with the purchase of Company Stock shall be treated as
an Acquisition Loan. An Acquisition Loan shall be for a specific
term, shall bear a reasonable rate of interest and shall not be
payable on demand except in the event of default. An Acquisition
Loan may be secured by a pledge of the Financed Shares so
acquired (or acquired with the proceeds of a prior Acquisition
Loan which is being refinanced). No other Trust Assets may be
pledged as collateral for an Acquisition Loan, and no lender
shall have recourse against Trust Assets other than any Financed
Shares remaining subject to pledge. If the lender is a
disqualified person (as defined in Section 4975(e)(2) of the
Code) the Acquisition Loan must provide for a transfer of Trust
Assets on default only upon and to the extent of the failure of
the Trust to meet the payment schedule of the Acquisition Loan.
Any pledge of Financed Shares must provide for the release of the
shares so pledged as payments on the Acquisition Loan are made by
the Trustee and such Financed Shares are allocated to Company
Matching Contributions Account under Section 4.05. The Company
shall make a contribution and such contribution shall be used by
the Trustee for payments of principal and/or interest on any
Acquisition Loan, such payment shall release shares in accordance
with Section 7.02. However, cash dividends on Company Shares held
in the Loan Suspense Account shall be first used to reduce the
principal and/or interest on the Acquisition Loan. Any
additional Employer contribution shall be made in accordance with
Section 7.02.
7.02 Release of Company Stock. The Company Matching
Contributions Account maintained for each Participant will be
credited annually with his allocable shares of Company Stock
(including fractional shares) purchased and paid for or
contributed in kind under the Plan. Any Financed Shares acquired
by the Trust shall initially be credited to the Loan Suspense
Account and will be allocated to the Company Matching
Contributions Accounts of Participants only as payments on the
Acquisition Loan are made by the Trustee. The number of Financed
Shares to be released from the Loan Suspense Account for
allocation to Participant's Company Stock Accounts for each Plan
Year shall be based on the ratio that the payments of principal
for each Plan Year bear to the total principal amount of the
Acquisition Loan. This method may be used only to the extent
that:
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(1) the Acquisition Loan provides for annual payments of
principal and interest at a cumulative rate that is not
less rapid at any time than level annual payments of
such amounts for ten (10) years;
(2) interest included in any payment on the Acquisition
Loan is disregarded only to the extent that it would be
determined to be interest under standard loan
amortization tables; and
(3) the entire duration of the Acquisition Loan repayment
period does not exceed ten (10) years, even in the
event of a renewal, extension or refinancing of the
Acquisition Loan.
In the event that the market value of the shares of Company Stock
allocated to the Company Matching Contribution Accounts do not
equal the Company Matching Contribution in Section 4.06 as of
such allocation, the Company shall make an additional cash
contribution in an amount equal to the difference between the
Company Matching Contributions and the market value of the
Company Stock allocated. Such additional cash contribution shall
be invested in Company Stock.
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ARTICLE VIII
BENEFIT DISTRIBUTIONS
8.01 Termination of Employment. Upon the Termination of
Employment of a Participant, the Participant's vested Total
Account shall be distributed as provided in Section 8.03.
8.02 Death.
(A) In the event of the death of a Participant prior to
distribution of benefits described in Section 8.01, his
Beneficiary shall be paid an amount equal to the Total
Account of the Participant, distributed in the manner
provided in Section 8.03.
(B) On the application form referred to in Section 3.03, a
Participant may designate a Beneficiary or
Beneficiaries for purposes of the Plan and may change
such designation from time to time by filing a written
designation with the Committee on a form prescribed by
the Committee; provided that the Committee may in its
discretion limit the number of Beneficiaries who may be
designated by a Participant.
(C) Notwithstanding any other provisions of this Section
8.02, the Beneficiary of a married Participant shall be
such Participant's spouse, unless the designation of a
Beneficiary other than the Participant's spouse has
been made in writing and consented to by such spouse.
Further, the consent of such spouse must be witnessed
by a Plan representative or notary public.
Notwithstanding this consent requirement, a
Participant's Beneficiary designation shall be deemed
valid if the Participant establishes to the
satisfaction of the Committee that such written consent
cannot be obtained because there is no spouse or the
spouse cannot be located.
(D) If no Beneficiary has been designated or no Beneficiary
survives the Participant, then the benefit payable in
accordance with Section 8.02(A) shall be distributed to
his surviving spouse or, if none, to his surviving
issue per stirpes or, if none, to the estate of such
deceased Participant.
8.03 Payment of Benefits.
(A) Except as otherwise provided below, all amounts
distributed to a Participant or his Beneficiary
pursuant to this Article VIII shall be made in a single
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lump sum payment as soon as administratively possible.
(B) A Participant who is entitled to receive a distribution
in excess of $3,500 in accordance with this Article
VIII must consent to any distribution prior to
attainment of age 65. If a Participant does not
consent to such distribution, he shall remain a
Participant in the Plan until he actually receives a
distribution, except no further contributions shall be
made by him or on his behalf unless reemployed by the
Company.
(C A Participant who is entitled to receive a distribution
may elect to receive the portion of his Total Account
which is invested in Fund C in the form of Company
Stock or Fund D in the form of common shares of
Northeast Utilities.
(D) If any Participant or his Beneficiary is, in the
judgment of the Committee, legally, physically or
mentally incapable or incompetent, payment may be made
to the guardian or other legal representative of such
Participant or Beneficiary or, if there is none, to
such other person or institution who, or which in the
opinion of the Committee, is then maintaining or has
custody of such Participant or Beneficiary. Such
payments shall constitute a full discharge with respect
thereto.
8.04 Offer to Purchase. The Trustee may, but shall not be
required to, offer to purchase any shares of Company Stock from
Participants who have received a distribution under Section 8.03
at the then fair market value. The terms of payment for any such
purchase of Company Stock may be either in a lump sum or in
installments over a period not exceeding five (5) years, with
interest payable at a reasonable rate on any unpaid installment
balance (as determined by the Trustee).
8.05 Date of Distribution. Notwithstanding the foregoing:
(A) Unless a Participant elects otherwise, the payment of
the Total Account shall begin not later than the 60th
day after the close of the Plan Year in which occurs
the latest of:
(i) the date on which the Participant attains age 65;
(ii) the 10th anniversary of the date on which the
Participant commenced participation in the Plan;
or
(iii) the Participant's Termination of Employment.
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(B) Notwithstanding Section 8.05(A)
(i) the payment of benefits to a Participant shall
begin not later than the April 1 immediately
following the calendar year in which the
Participant attains age seventy and one-half (70-
1/2).
(ii) Special Rule for Distributions to Five-Percent
Owners. If a Participant who was a Five-Percent
Owner during any Plan Year beginning after
December 31, 1979 attained age 70-1/2 before
January 1, 1988, the vested Account balance must
be distributed, or commence to be distributed, on
the first day of April on the later of:
(a) the calendar year in which the Participant
attains age 70-1/2, or
(b) the earlier of the calendar year with or
within which ends the Plan Year which the
Participant becomes a Five-Percent Owner, or
the calendar year in which the Participant
retires.
Once distributions have begun to a Five-
Percent Owner under this section, the
distributions must continue even if the
Participant ceases to be a Five-Percent Owner
in a subsequent year.
(iii) General Rule for Distributions to Non-Five-Percent
Owners. The Participant's required beginning date
shall be the first day of April of the calendar
year following the calendar year in which the
Participant attains age 70-1/2.
(iv) Special Rule for Distributions to Non-Five-Percent
Owners. If a Participant attained age 70-1/2
before January 1, 1988, the Participant's required
beginning date is the first day of April of the
calendar year following the calendar year in which
the later of retirement or attainment of age 70-
1/2 occurs.
8.07 Valuation Date for Distributions.
(A) If a Participant or Beneficiary becomes entitled to a
benefit pursuant to this Article VIII, the value of the
account balances to be distributed shall be determined
as of the Valuation Date that immediately follows the
event giving rise to the distribution, unless the
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valuation of the account balances as of the date of
distribution is available.
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ARTICLE IX
WITHDRAWALS
9.01 General Rule. No withdrawal from the Plan, other than as
provided in Section 9.02, shall be permitted prior to a
Participant's Termination of Employment.
9.02 Permitted Withdrawals. A Participant may, while still
employed by the Company, make withdrawals of the following
amounts:
(A) All or part of his After-Tax Contribution Account plus
earnings;
(B) On account of Hardship (as defined in Section 9.03) of
all or part of the Total Account (but not of the
earnings credited to the Basic Contributions and
Supplemental Contributions Account, or to transferred
elective contributions from the Prior Plan after
January 1, 1989) except no portion of the Company
Matching Contribution Account or Northeast Utilities
Transfer Contribution Account.
(C) Any shares held in the Northeast Utilities Transfer
Contribution Account may be sold and the proceeds
attributable to After-Tax Contributions plus earnings
may be withdrawn in accordance with (A) and proceeds
attributable to other amounts may be withdrawn in
accordance with (B).
9.03 Hardship. A Participant may make a withdrawal pursuant to
Section 9.02(B) on account of the Participant's "qualifying
financial hardship." A "qualifying financial hardship" exists if
both: (a) an immediate and heavy financial need exists, as
described in Section 9.04 and (b) the distribution is necessary
to satisfy such financial need, as described in Section 9.05.
Whether the qualifying conditions in (a) and (b) exist will be
determined in accordance with uniform and nondiscriminatory
procedures established by the Committee and after consideration
of all relevant facts and circumstances.
9.04 An immediate and heavy financial need will be deemed to
exist without further inquiry only if the withdrawal is on
account of:
(a) unreimbursed medical expenses incurred by the
Participant, a spouse, or any dependent of the
Participant;
(b) the purchase (excluding mortgage payments) of the
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Participant's principal residence;
(c) the payment of tuition for the next semester or quarter
of post-secondary education for the Participant, a
spouse, a child or other dependent;
(d) payments necessary to prevent a mortgage foreclosure on
or eviction from the Participant's principal residence;
or
(e) such other specific events which the Internal Revenue
Service constitutes to be an immediate and heavy
financial need.
A financial need shall not fail to qualify merely
because such need was reasonably foreseeable or
voluntarily incurred by the Participant.
9.05 A distribution is necessary to satisfy an immediate and
heavy financial need as determined under Section 9.04 if the
distribution is not in excess of the amount required to meet the
financial need and the financial need cannot be satisfied from
other resources that are reasonably available to the Participant.
A distribution will be treated as necessary to satisfy an
immediate and heavy financial need if the Participant submits to
the Committee a representation that the financial need cannot be
satisfied:
(a) through reimbursement or compensation by insurance;
(b) by cessation of Basic Contributions, Supplemental
Contributions and After-Tax Contributions;
(c) by distributions, withdrawals or nontaxable loans from
the Plan or any other plan maintained by the Company or
any other employer;
(d) by reasonable liquidation of the Participant's assets
to the extent such liquidation would not itself create
an immediate and heavy financial need. A Participant's
assets shall be deemed to include the assets of a
spouse or minor child, except that assets held in an
irrevocable trust or under the Uniform Gifts to Minors
Act for such minor child shall not be included; and
(e) by obtaining a commercial loan on reasonable terms and
conditions.
9.06 Withdrawal Procedures. The Committee shall establish rules
and procedures for withdrawals, including but not limited to the
following:
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(A) Procedures for application by Participants for
withdrawals.
(B) Rules regarding minimum amounts of withdrawals.
(C) Rules regarding the permitted frequency of withdrawals.
(D) Procedures for determining the order in which
withdrawals will be made from the Participant's
accounts and the manner in which subfunds will be
debited in the event of a withdrawal.
Part II, Articles X through XVII shall apply to the Employees of
the Company or Participating Company who are members of Locals
420 and 457 of the International Brotherhood of Electrical
Workers whose participation in this Plan is covered by a
collective bargaining agreement.
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ARTICLE X
DEFINITIONS
The following words and phrases, as used herein shall have the
following meanings unless a different meaning is clearly required
by the context.
10.01 "Actual Deferral Percentage" shall mean the average of the
percentages, calculated separately for each Eligible Employee in
any group of Eligible Employees, of:
(A) Basic Contributions and Supplemental Contributions
actually paid to the Plan on behalf of each such
Eligible Employee for a Plan Year, to;
(B) The Eligible Employee's Compensation for such Plan
Year.
10.02 "Affiliated Company" shall mean:
(i) Any corporation (other than the Company) that is a
member of a controlled group of corporations (as
defined in Section 414(b) of the Code) with the
Company, (ii) any trade or business (other than the
Company, whether or not incorporated, that is under
common control (as defined in Section 414(a) of the
Code) with the Company, and (iii) any trade or business
(other than the Company) that is a member of an
affiliated service group (as defined in Section 414(m)
of the Code) of which the Company is also a member;
provided that the term "Affiliated Company" shall not
include any corporation or unincorporated trade or
business prior to the date on which such corporation or
unincorporated trade or business satisfies the
affiliation or control tests of (i), (ii) or (iii)
above.
10.03 "After-Tax Contributions" shall mean the contributions
which a Participant elects to have the Company make directly to
the Plan on behalf of the Participant, in accordance with Section
12.04.
10.04 "After-Tax Contributions Account" shall mean that portion
of the Trust Fund which, with respect to any Participant, is
attributable to his After-Tax Contributions and any investment
earnings or gains or losses thereon, less any amounts withdrawn
or distributed to the Participant or his Beneficiary from such
account.
10.05 "Annual Additions" shall mean for any Participant, for any
47
<PAGE>
Plan Year, the Participant's Basic Contributions, Supplemental
Contributions, Company Matching Contributions, After-Tax
Contributions and forfeitures for the Plan Year.
10.06 "Associate Company" shall mean any company designated from
time to time by the Board, not less than 10 percent of whose
common stock is held directly or indirectly by Yankee Energy
System, Inc., or whose business activities are coordinated with
those of the Company and any predecessor of or successor to any
such company. Yankee Gas Services, Inc. is currently an
Associate Company under this provision.
10.07 "Basic Contributions" shall mean the contributions which a
Participant elects to have the Company make directly to the Plan
on behalf of the Participant, in accordance with Section 12.01,
which election shall constitute an election under Section
401(k)(2)(A) of the Code.
10.08 "Basic Contribution and Supplemental Contribution Account"
shall mean that portion of the Trust Fund which, with respect to
any Participant, is attributable to his Basic Contributions and
Supplemental Contributions and any investment earnings or gains
or losses thereon, less any amounts withdrawn or distributed to
the Participant or his Beneficiary from such account.
10.09 "Beneficiary" shall mean any person designated under
Section 16.05 who is entitled to receive benefits which are
payable upon or
after a Participant's death pursuant to the provisions of the
Plan.
10.10 "Board" shall mean the Board of Directors of Yankee Energy
System, Inc., or of any successor thereto.
10.11 "Code shall mean the Internal Revenue Code of 1986, as now
in effect and as hereinafter amended. Reference to any section
or subsection of the Code includes reference to any comparable or
succeeding provisions of any legislation which amends,
supplements or replaces such section or subsection.
10.12 "Committee" shall mean the Administrative Committee
provided for in Article XIX.
10.13 "Company" shall mean Yankee Energy System, Inc. or any
successor thereto, or any entity now or hereafter which is an
affiliate or subsidiary of Yankee Energy System, Inc. and which
the Board of Directors has designated as participating in this
Plan and which adopts this Plan. The term "Company" also
includes all of the foregoing as the context may require.
10.14 "Company Matching Contributions" shall mean matching
Contributions made by the Company in conjunction with
48
<PAGE>
contributions made to the Participants' Accounts as more fully
described in Section 12.06.
10.15 "Company Matching Contributions Account" shall mean that
portion of the Trust Fund which, with respect to any Participant,
is attributable to Company Matching Contributions and any
investment earnings or gains or losses thereon, less any amounts
withdrawn or distributed to the Participant or his Beneficiary
from such account.
10.16 "Company Matching and After-Tax Contribution Percentage"
shall mean the average of the percentages, calculated separately
for each Eligible Employee in any group of Eligible Employees,
of:
(A) Company Matching Contributions and After-Tax
Contributions (if any) actually paid to the Plan on
behalf of each such Eligible Employee for a Plan Year,
to,
(B) The Eligible Employee's Compensation for such Plan
Year.
10.17 "Company Stock" shall mean shares of common stock
issued by Yankee Energy System, Inc.
10.18 "Compensation" shall mean:
(i) for purposes of Sections 11.03, 12.01, 12.02, 12.03,
12.05, (A) plus (B) below
(ii) for purposes of Sections 10.01, 10.16, 10.23, 14.04(b)
and 14.06, (A) plus (B) plus (C) below
(iii) for purposes of Section 14.05 and Article XVIII,
(A) plus (C) below;
(A) actual base pay during a Plan Year, excluding
but not necessarily limited to, under rules
uniformly applicable to all Employees
similarly situated, bonuses, pay from
overtime, special pay, and the Company's or
Participating Company's cost for any public
or private employee benefit plan, including
the Plan;
(B) amounts subject to salary reduction under the
plans maintained by the Company or
Participating Company pursuant to Code
Sections 125 and 401(k).
(C) amounts reported on Form W-2 which are
reimbursement of expenses, relocation pay',
49
<PAGE>
any other similar special payments, any
imputed income amounts which are taxable to
the employee based on his participation in a
welfare benefit plan of the Company or
Participating Company and any other amounts
includible in compensation pursuant to
Section 415(c)(3) of the Code and regulations
thereunder.
"Compensation" to be taken into account under the Plan in any
Plan Year shall not exceed Two Hundred Thousand Dollars
($200,000) or such other amount as may be provided pursuant to
applicable law or regulations. Such maximum dollar limit shall
be determined after aggregation the Compensation of any Covered
Employee who is a 5% owner (as defined in Section 416(i) of the
Code) or one of the top 10 Employees by pay who are Highly
Compensated Employees with the Compensation of any spouse or
lineal descendants who are not age 19 before the close of the
Plan Year and who are also Covered Employees.
10.19 "Covered Employee" shall mean any employee who is in the
employ of the Company or Participating Company on or after July
1, 1989 and any person who is on a leave of absence which has
been approved by the Company and who was a Covered Employee
within the meaning of this Section 10.19 on the day before the
first day of the leave of absence; but excluding (i) leased
employees (unless -otherwise required by applicable law), and
(ii) employees represented by a collective bargaining unit unless
the unit is covered by a collective bargaining agreement which
specifically provides for inclusion in the Plan. The employees
who are members of Locals 420 and 457 of the International
Brotherhood of Electrical Workers are included in this Part II of
the Plan.
10.20 "Effective Date" shall mean July 1, 1989.
10.21 "Eligible Employee" shall mean any Covered Employee who is
eligible for participation under the conditions specified in
Section 11.02 whether or not he is actually a Participant.
10.22 "Enrollment Date" shall mean the first day of each month
of the calendar year.
10.23 "Highly Compensated Employee" shall mean any employee who
during the current Plan Year or the Preceding Plan Year:
(i) was at any time a 5% Owner, as that term is defined in
Section 416(i)(1)(B) of the code and the Regulations
thereunder;
(ii) received Compensation in excess of $81,720 for the
applicable Plan Year (or such amount as further indexed
50
<PAGE>
in accordance with Section 415(d) of the Internal
Revenue Code for the applicable Plan Year;
(iii) received Compensation in excess of $54,480 (or such
amount as further indexed in accordance with Section
415(d) of the Internal Revenue Code for the applicable
Plan Year); and was in the "top 20% group" of employees
in compensation as determined in Section 414(q)(4) of
the Code; or
(iv) was at any time during the applicable Plan Year an
officer of the Employer (within the meaning of Section
416(i) of the Internal Revenue Code) and received
Compensation greater than 50% of the dollar limitation
in effect for such years as contained in Section
415(b)(1)(A) of the code; provided that no more than 50
Employees (or, if lesser, the greater of 3 Employees or
10% of the Employees) shall be treated as officers.
For purposes of determining the "top 20% group" of employees or
the number of officers taken into account under section
subsection (iv), Employees who have not completed six months of
service or who normally work less than 17-1/2 hours per week or
not more than six months during any year or employees who have
not attained age 21 may be excluded.
Notwithstanding the foregoing, an Employee who satisfied one of
the criteria listed above during the current Plan Year shall not
be treated as a Highly Compensated Employee for the purpose of
this Section UNLESS he:
1) was also a Highly Compensated Employee during the
preceding Plan Year by meeting one of the criteria
listed above for such Plan Year;
2) is within the top 100 Employees in Compensation during
the current Plan Year; or
3) is a 5% Owner in the current Plan Year.
10.231 The following will apply in determining Highly
Compensated
Employees:
(i) A "Family Member" of an Employee who is a 5% Owner or
who is one of the 10 highest paid Employees during the
applicable Plan Year (before the application of this
paragraph) shall not be considered as a separate
Employee under this Plan and such Family Member's Basic
Contribution, Company Matching Contributions and
Compensation shall be aggregated with that of the 5%
Owner or the Employee among the 10 highest paid
Employees. For purpose of this Section, a Family
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Member shall include an Employee's spouse and lineal
ascendants or descendants and the spouse of such lineal
ascendants or descendants or any one who had such a
status at any time during the applicable Plan Year.
However, the aggregation of the Compensation, Company
Matching Contributions and Pay Basic Contributions of
Family Members under this Section shall be made after
the determination of the "top 20% group" and "top 100
Employees by Compensation" for both the preceding and
current Plan Years.
(ii) A former Employee who terminates employment during the
current or preceding Plan Year shall be excluded unless
he was a Highly Compensated Employee upon termination
or at any time after attaining age 55.
(iii) The determination as to who is a Highly Compensated
Employee shall be made after determining Employees with
the controlled group (as defined in Section 414(b) of
the Code) and after application of the special rules in
Section 414(m) and (n) of the Code.
10.24 "Hour of Service" shall mean each hour for which an
employee is directly or indirectly paid or entitled to payment,
for the performance of duties for the Company or an Affiliated
Company.
10.25 "Investment Funds" shall mean the funds described in
Section 15.02 and any other funds selected by the Committee for
the investment of assets held in the Trust Fund pursuant to
Section 15.02.
10.26 "Investment Manager" shall mean any party that fulfills
all the following conditions:
(A) Is one of the following:
(i) Registered as an investment adviser under the
Investment Advisers Act of 1940, or
(ii) A bank (as defined in the Investment Advisers Act
of 1940), or
(iii) An insurance company qualified to manage, acquire
and dispose of Plan assets under the laws of more
than one state; and
(B) Acknowledges in writing that it is a fiduciary with
respect to the Plan; and
(C) Is engaged pursuant to Section 19.07 of the Plan.
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10.27 "Northeast Utilities TRAESOP/PAYSOP" shall mean the
Northeast Utilities Service Company Payroll-Based Employee Stock
Ownership Plan and the Northeast Utilities Service Company Tax
Reduction Act Employee Stock Ownership Plan.
10.28 "Northeast Utilities Savings Plan" shall mean the
Northeast Utilities Service Company Supplemental Retirement and
Savings Plan.
10.29 "Northeast Utilities Transfer Contribution Account" shall
mean the balance credited to the account of the Covered Employee
to reflect his interest in the Trust Fund which is attributable
to the common shares of Northeast Utilities transferred to the
Plan from the Northeast Utilities TRAESOP/PAYSOP or the Northeast
Utilities Savings Plan.
10.30 "Participant" shall mean any person participating in the
Plan as provided in Article XI and who continues to have a Total
Account under the Plan.
10.31 "Participating Company" shall mean Yankee Gas Services,
Inc. and any other Associate Company which has been designated by
the Board to participate in the Plan and whose board of directors
has accepted such designation.
10.32 "Plan" shall mean the Yankee Energy System, Inc. 401(k)
Employee Stock Ownership Plan as set forth in this document, and
as it may be amended from time to time.
10.33 "Plan Administrator" shall be the Company.
10.34 "Plan Year" shall mean July 1, 1989 through December 31,
1989 and thereafter the twelve-month period beginning on each
January 1 and ending the following December 31.
10.35 "Rollover Contributions" shall mean the amounts rolled
over into the Plan by a Covered Employee, as more fully described
in Section 12.09.
10.36 "Rollover Contribution Account" shall mean the balance
credited to the account of the Covered Employee to reflect his
interest in the Trust Fund which is attributable to his Rollover
Contributions to the Plan, if any, and any investment earnings
and gains or losses thereon, less any amounts withdrawn or
distributed to the Covered Employee or his Beneficiary from such
account.
10.37 "Service shall mean an employee's total period of
employment with the Company beginning on the date he first
performs ah Hour of Service and ending on his Date of Severance.
If an employee has a break in the continuity of his Service and
is subsequently reemployed, his total period of employment will
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be aggregated to the extent provided in the following paragraphs.
Service of an employee shall not be considered broken until the
employee's "Date of Severance", which for purposes of the Plan
means the earlier of (i) the date on which an employee either
quits, retires, dies or is discharged, or (ii) the first
anniversary of the date on which an employee commenced a period
of absence for any other reason.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month period
beginning on the first anniversary of the first date of such
absence shall not constitute a break in Service. For purposes of
this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the
individual, (2) by reason of the birth of a child of the
individual, (3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The person must furnish to the Committee such information as
shall be reasonably required to establish the number of days for
which such absence continued.
If any employee whose Service is broken is subsequently
reemployed and he thereafter meets the definition of employee,
his prior Service shall be reinstated as of his reemployment date
if he fulfills the requirements OF (a), (b) or (c) below:
(a) he is entitled to a benefit under Section 16.01 at his
Date of Severance,
(b) the period between his Date of Severance and his
reemployment date is less than five years, or
(c) the consecutive one year periods of severance between
his Date of Severance and his reemployment date is less
than his period of Service prior to his Date of
Severance.
In addition, if such an employee returns to the employ of the
Company within twelve months after his Date of Severance, the
period from his Date of Severance to his reemployment date shall
be included in computing his Service; provided, however, that if
an employee, during any period of absence quits or retires less
than twelve months after the date such period of absence
commenced, his period of severance shall be included in computing
his Service only if he returns to the employ of the Company
within twelve months of the date such period of absence
commenced.
10.38 "Supplemental Contributions" shall mean the contributions
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which a Participant elects to have the Company make directly to
the Plan on behalf of the Participant, in accordance with Section
12.02, which election shall constitute an election under Section
401(k)(2)(A) of the Code.
10.39 "Termination of Employment" shall mean separation from the
employment of the Company for any reason, including, but not
limited to, retirement, death, Disability, resignation or
dismissal from the Company.
10.40 "Total Account" shall mean the total amount standing to
the credit of a Participant under all accounts maintained on his
behalf, including the balances in his:
(A) After-Tax Contribution Account,
(B) Basic Contribution and Supplemental Contribution
Account,
(C) Company Matching Contribution Account,
(D) Rollover Contribution Account,
(E) Transfer Contribution Account, plus
(F) Northeast Utilities Transfer Contribution Account.
10.41 "Transfer Contributions" shall mean the amounts
transferred into the Plan by a Covered Employee, as more fully
described in Section 12.08.
10.42 "Transfer Contribution Account" shall mean the balance
credited to the account of the Covered Employee to reflect his
interest in the Trust Fund which is attributable to his Transfer
Contributions to the Plan, if any, and any investment earnings
and gains or losses thereon, less any amounts withdrawn or
distributed to the Covered Employee or his Beneficiary from such
account.
10.43 "Trust" shall mean the legal entity established
pursuant to Section 15.07.
10.44 "Trust Agreement" shall mean the agreement or
agreements, as amended from time to time, establishing the Trust.
10.45 "Trust Fund" shall mean the total of contributions made
to the Trust pursuant to the Plan, increased by profits, gains,
income and recoveries received, and decreased by losses,
depreciation, expenses, withdrawals and benefits paid.
10.46 "Trustee" shall mean the party or parties, individual
or corporate, named in the Trust Agreement and any duly appointed
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additional or successor Trustee or Trustees acting thereunder.
10.47 "Valuation Date and Allocation of Investment Gain or
Loss" shall mean September 30, 1989 and at the end of each
calendar quarter thereafter so long as the Trust remains in
existence. The Committee may establish more frequent Valuation
and Allocation Dates in its discretion.
10.48 "Year of Service" shall mean each twelve-month period of
employment beginning on the date the employee first performed an
Hour of Service or any Plan Year following the date the employee
first performed an Hour of Service. Years of Service with
Northeast Utilities System Companies shall be credited hereunder
for those Employees who were active participants on June 30, 1989
in the Northeast Utilities TRAESOP/PAYSOP or the Northeast
Utilities Savings Plan and who become active employees of Yankee
Gas Services, Inc. effective July 1, 1989.
10.49 Wherever used in this instrument, a masculine person shall
be deemed to include the masculine and feminine gender, and a
singular word shall be deemed to include the singular and plural,
in all cases where the context requires.
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ARTICLE XI
PARTICIPATION
11.01 Voluntary Participation. Participation in the Plan by a
Covered Employee shall be voluntary except to the extent of
amounts transferred into the Transfer Contribution Account and
the Northeast Utilities Transfer Contribution Account from the
Northeast Utilities Savings Plan and the Northeast Utilities
TRAESOP/PAYSOP.
11.02 Eligibility for Participation.
(A) Participants as of June 30, 1989. Each employee who
was a Participant in the Northeast Utilities Savings
Plan or the Northeast Utilities TRAESOP/PAYSOP on June
30, 1989 and who became employees of the Company or
Participating Company effective July 1, 1989 shall be
eligible for participation in the Plan on July 1, 1989.
(B) Other Participants. Each Covered Employee shall become
eligible for participation on any Enrollment Date
coincident with or following the completion of a Year
of Service.
11.03 Participant Application. In order to become a
Participant, an Eligible Employee who is eligible for
participation under the conditions specified in Section 11.02 or
Section 12.07 must submit to the Committee an application form,
if applicable, on which he:
(A) Designates the percentage of his Compensation to be
contributed as Basic Contributions, if any, pursuant to
Section 12.01, designates the percentage of his
Compensation to be contributed as Supplemental
Contributions, if any, pursuant to Section 12.02 and
designates the percentage of his Compensation to be
contributed as After-Tax Contributions, if any,
pursuant to Section 12.03.
(B) Authorizes reductions from his Compensation of his
Basic Contributions and Supplemental Contributions.
(C) Chooses one or more of the Investment Funds for the
investment of any contributions made on his behalf.
(D) Designates one or more Beneficiaries pursuant to
Section 16.05.
(E) Agrees to be bound by the terms and conditions of the
Plan.
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11.04 Participant Status. A Covered Employee who has once
become a Participant shall remain a Participant so long as he
remains in the service of the Company and shall cease to be a
Participant upon his Termination of Employment, except that if he
has met the conditions for entitlement to a benefit, he shall
remain a Participant, so long as he has a credit balance in his
Total Account.
11.05 Participation After Termination of Employment.
(A) If a former Eligible Employee is rehired as a Covered
Employee. he shall be entitled to become a Participant
on the date he is rehired.
(B) Any former Covered Employee who was not an Eligible
Employee prior to his Termination of Employment, and
who is rehired as a Covered Employee of the Company,
shall be eligible for participation on the Enrollment
Date coincident with or immediately following his
reemployment date upon which he meets the qualification
requirements set forth in Section 11.02.
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ARTICLE XII
CONTRIBUTIONS
12.01 Basic Contributions. Subject to the provisions of Article
XII, each Participant may elect, pursuant to Section 11.03, to
have the Company contribute a percentage of his Compensation to
the Trust Fund on behalf of such Participant, in an amount equal
to any whole percentage not less than one percent (1%) nor more
than three percent (3%) of his Compensation; provided that such
contribution along with the contribution provided for in Section
12.02, shall not in any calendar year exceed $7,627 (as adjusted
by the Secretary of Treasury or his delegate).
12.02 Supplemental Contributions. Subject to the provisions of
Article V, and after first electing to have the Company
contribute the maximum Basic Contribution amount, each
Participant may elect, pursuant to Section 11.03, to have the
Company contribute a percentage of his Compensation to the Trust
Fund on behalf of such Participant, in an additional amount equal
to any whole percentage not less than one percent (1%) nor more
than seven percent (7%) of his Compensation; provided that such
contribution along with the contribution provided for in Section
12.01 shall not in any calendar year exceed $7,627 (as adjusted
by the Secretary of Treasury or his delegate).
12.03 After Tax Contributions. Subject to the provisions of
Article XII, each Participant may elect to have. the Company
contribute a percentage of his Compensation to the Trust Fund, in
an amount up to seven percent (7%) of his Compensation; provided,
however, that Basic Contributions pursuant to Section 12.01,
Supplemental Contributions pursuant to 12.02 plus After-Tax
Contributions pursuant to this Section 12.03 in the aggregate may
not exceed ten percent (10%) of such Participant's Compensation.
After-Tax Contributions pursuant to this Section 12.03 shall not
be matched by Company Contributions as provided in Section 12.06.
12.04 Rules for Contributions.
(A) Effective as of any January 1, April 1, July 1 or
October 1 (or such other dates as permitted by the
Committee in its sole discretion), a Participant may
elect to increase, decrease or suspend Basic
Contributions, Supplemental Contributions and/or After
Tax Contributions; provided that he must notify the
Committee in writing at least thirty (30) days prior to
the effective date of such election.
12.05 Additional Rules. The Committee may promulgate such other
rules as it deems necessary regarding:
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(A) The commencement or recommencement of Basic
Contributions and/or Supplemental Contributions
consistent with the Company's regular payroll periods.
(B) Elections by Participants to increase, decrease or
suspend the percentages of Compensation used to
determine Basic Contributions, Supplemental
Contributions and/or After-Tax Contributions.
(C) Procedures for payroll deductions and remittances of
contributions to the Trust Fund.
(D) Procedures to reduce the amount of Basic Contributions,
Supplemental Contributions and/or After-Tax
Contributions, if the Committee determines such action
is necessary (i) to ensure that a Participant's Annual
Additions will not exceed the limitations of Section
415 of the Code, or (ii) to ensure that the
discrimination tests of Sections 401(k) and 401(m) of
the Code are met for such year.
12.06 Company Matching Contributions. The Company shall
contribute to the Trust Fund for the Company Matching Account of
Participants fifty percent (50%) of each Participant's Basic
Contributions. Such Company Matching Contributions shall be made
at such intervals as determined by the Company to be reasonable,
but not less than annually. Forfeitures arising under Section
16.02 shall be treated as Company contributions and shall reduce
the amount that the Company would otherwise contribute to the
Plan pursuant to this Section.
12.07 Conditions Applicable to Contributions by the Company. In
no event shall Company contributions for any Plan Year exceed the
amount deductible for such Plan Year for Federal income tax
purposes as a contribution to a qualified Trust under applicable
provisions of the Code. Company contributions with respect to
any Plan Year shall be made within the time prescribed by law for
the deduction of such contributions for purposes of the Company's
Federal income tax as determined by applicable provisions of the
Code.
Except as otherwise provided in Section 12.11, any and all
contributions made by the Company shall be irrevocable and shall
be transferred to the Trustee and held as provided in Section
15.02 to be used to provide benefits in accordance with the
provisions of this Plan. Neither such contributions nor any
income therefrom shall be used for, or diverted to, purposes
other than for the exclusive benefit of, or on account of,
Participants or their Beneficiaries.
12.08 Transfer Contribution. Upon direction of the Committee,
the Trustee may accept a direct transfer to the Plan of all or a
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portion of assets or all or a portion of a Participant's account
balances under another qualified plan or trust maintained by
another employer. The Trustees shall accept a direct transfer to
the Plan of common shares of Northeast Utilities from the
Northeast Utilities TRAESOP/PAYSOP, and of the account balances
from the Northeast Utilities Savings Plan for Participants who
were active participants in such plans as of June 30, 1989 and
become active employees of Yankee Gas Services, Inc. effective
July 1, 1989. The Trustee may rely upon any representation by
the Committee or the Company that the acceptance of any Transfer
Contribution under this Section 12.08, will not adversely impact
the qualified status of the Plan, and the Trustee shall be under
no obligation to make any independent investigation thereof.
12.09 Rollover Contribution. Upon direction of the Committee,
the Trustee may accept a Rollover Contribution from a Covered
Employee who has received a "Qualifying Rollover Distribution"
(within the meaning of Section 402(a)(5) of the Code) from
another qualified plan and such Rollover Contribution may be a
rollover directly from such other qualified plan or through the
conduit of an Individual Retirement Account established under
Section 408 of the Code, subject to applicable laws and
regulations governing such tax-free rollovers. For purposes of
the rollover of all or any part of a Qualifying Rollover
Distribution, the amount, date of authorization, type of funds
accepted, and other conditions, shall be in accordance with the
provisions of Section 402(a)(5) of the Code, and other applicable
laws and regulations, and the Committee may require whatever
evidence or information from the Covered Employee as it may deem
necessary to comply with said laws or regulations.
A Covered Employee need not be a Participant in order to make a
Rollover Contribution to the Plan and any Covered Employee who
makes a Rollover Contribution prior to the date on which he meets
the eligibility requirements for participation in the Plan shall,
subject to Section 11.03, become a Participant as of the date the
Rollover Contribution is accepted but his benefits under the Plan
prior to the date on which he elects to participate after having
met the eligibility requirements for participation in the Plan
shall be limited to the amounts credited to his Rollover
Contribution Account.
The Trustee may rely upon any representation by the Committee or
the Company that the acceptance of any Rollover Contribution
under this Section 12.09, will not adversely impact the qualified
status of the Plan. and the Trustee shall be under no obligation
to make any independent investigation thereof.
12.10 Transfer of Accounts.
(A) In the event the Company sells a business unit, or any
portion of a business unit, which results in the
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termination of employment of Participants and immediate
employment of such Participants by the succeeding
employer, the Company may direct the trustee to
transfer a Participant's Total Account to a thrift or
profit sharing plan of such successor employer,
provided such plan is qualified under the Code.
(B) In the event the Company acquires a business unit, or
any portion of a business unit, from another employer
resulting in the immediate employment by the Company of
employees of such other employer, the Plan may accept a
transfer of any account balances which such employees
may have credited under a thrift or profit sharing plan
of such other employer, provided such Plan is qualified
under the Code.
(C) Any transfer of assets shall be subject to (i)
approval, when necessary by the Internal Revenue
Service, and (ii) enabling language to accomplish such
transfer in the plan of the other employer, and (iii)
approval by the Committee.
12.11 Return of Contributions Under Certain Circumstances.
(A) The assets of the Trust Fund shall be held for the
exclusive purpose of providing benefits to Participants
and their Beneficiaries and defraying reasonable
expenses of administering the Plan pursuant to Section
19.09 and shall not inure to the benefit of the
Company, except that contributions made by the Company
may be returned to the Company in the following
circumstances:
(i) Mistake - If and to the extent that any
contribution was made by mistake of fact, the
Committee may direct the Trustee to return the
contribution at any time within one (1) year after
the payment of such contribution, pursuant to the
conditions set forth in Section 12.11(B) below;
(ii) Failure to Obtain Internal Revenue Service
Approval- If the Internal Revenue Service does not
determine that the Plan and Trust initially
qualify under Sections 401(a), 401(k) and 501(a)
of the Code, the Plan shall be deemed to be null
and void and any and all contributions made by the
Company to the Trustee, subsequent to the
effective date, shall be returned to the Company
as soon as practicable;
(iii) Non-Deductibility - If and to the extent that the
Internal Revenue Service determines that a
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contribution is not deductible under Section 404
of the Code, the Committee may direct the Trustee
to return the contribution within one (1) year
after the date of disallowance, and to make such
other adjustments as may be equitable and
practical. Such return shall be made pursuant to
the conditions set forth in Section 12.11(B)
below.
(B) The return of a contribution to the Company pursuant to
Subparagraph (i) or Subparagraph (iii) of Section
12.11(A) above must satisfy each of the following
conditions:
(i) the amount of such contribution which may be so
returned shall not be greater than the excess of
(a) the amount contributed over (b) the amount
that would have been contributed had there been no
mistake in determining the deduction or had there
been no mistake of fact, as the case may be; and
(ii) the amount of such contribution which may be so
returned shall not be increased by earnings
attributable to the investment or reinvestment of
such contribution in the Trust, but shall be
reduced by losses attributable to the investment
or reinvestment of such contribution in the Trust.
(C) In no event may a refund be due which would cause the
Total Account of any Participant to be reduced to less
than what the Participant's Total Account would have
been had the mistaken amount, or the amount determined
to be nondeductible, not been contributed.
12.12 Prior Account Balances as of June 30, 1989. Participant's
account balances as of June 30, 1989 under the Northeast
Utilities Savings Plan and the Northeast Utilities TRAESOP/PAYSOP
transferred to the Plan shall become fully vested on July 1,
1989. Withdrawal of prior accounts from the Northeast Utilities
TRAESOP/PAYSOP shall be subject to Article XVII. However, common
shares of Northeast Utilities may be sold and the proceeds
reinvested under another Investment Fund under Article XV.
Withdrawals of prior accounts from Northeast Utilities Savings
Plan shall be subject to the same withdrawal rules as provided
for amounts under this Plan as provided in Article XVII.
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ARTICLE XIII
VESTING
13.01 Vesting Schedule. A Participant shall at all times be
fully vested in the balance of his Basic Contribution and
Supplemental Contribution Account and After-Tax Contribution
Account. The Company Matching Contribution Account shall vest in
accordance with the following schedule:
</TABLE>
<TABLE>
<CAPTION>
Years of Service Nonforfeitable Percentage
<S> <C>
Less than 1 0%
1 20%
2 40%
3 60%
4 80%
5 or more 100%
</TABLE>
Notwithstanding the foregoing, a Participant shall be fully
vested in his Company Matching Contribution Account upon
attaining age sixty-five (65), or in the event of his death or
Total Disability.
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ARTICLE XIV
RESTRICTIONS ON CONTRIBUTIONS
14.01 Return of Basic Contributions and Supplemental
Contributions Above Limit. If the Committee determines that
during any Plan Year the total Basic Contributions and/or
Supplemental Contributions for a Participant exceed the dollar
limitation in Section 12.01, such excess amount (adjusted by any
gain or loss determined under the method set forth in Section
14.05) shall be returned to the Participant by April 15 of the
next Plan Year by first returning Supplemental Contributions.
The Participant shall be responsible for notifying the Committee
in writing by March 1 of the Plan Year following the Plan Year in
which any excess in the Basic Contributions and/or Supplemental
Contributions made to the Plan (and any other plan to which the
Employee makes salary deferral contributions pursuant to Code
Sections 401(k), 403(b), or 408(k)) arose and the amount of such
excess (together with the income allocable thereto or adjusted
for any losses thereon as set forth in Section 14.05) to be
returned to the Participant from this Plan by the April 15
following such notification. Such distributions shall be made
notwithstanding the requirement of Section 16.01 that the
Participant consent to certain distributions.
14.02 Deferral Percentage Test
(A) Subject to the aggregate limitation in Section 14.06,
in order to satisfy the discrimination requirements of
Code Section 401(k)(3), the Actual Deferral Percentage
for any Plan Year for Eligible Employees who are Highly
Compensated Employees may not exceed either (i) or (ii)
(but not both) as follows:
(i) The Actual Deferral Percentage of the Eligible
Employees who are not Highly Compensated Employees
("Other Employees"), times 1.25, or
(ii) The Actual Deferral Percentage for the Other
Employees times 2.0; provided, however, that the
Actual Deferral Percentage for the Highly
Compensated Employees may not exceed the Actual
Deferral Percentage for the Other Employees by
more than two (2) percentage points.
(B) If the Actual Deferral Percentage for Highly
Compensated Employees is more than the amount permitted
under Section 14.02(A), then the Committee, at its sole
discretion, shall take such action as may be permitted
by regulations under Section 401(k) of the Code to
prevent such discrimination, including (i) first
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reducing or limiting the Supplemental Contributions in
respect of Highly Compensated Employees to the extent
necessary to satisfy the deferral percentage test; or
(ii) reducing or limiting the Basic Contributions in
respect of Highly Compensated Employees to the extent
necessary to satisfy the deferral percentage test; or
(iii) taking such other action as may be necessary to
satisfy such test.
14.03 Reduction of Supplemental Contributions and/or Basic
Contributions. In the event the Committee decides pursuant to
Section 14.02(B) to distribute to the Highly Compensated Employee
the amount of any excess Supplemental Contributions and/or Basic
Contributions due to the reduction in Section 14.02, the
Committee shall first reduce the Supplemental Contributions and
then the Basic Contributions made for Highly Compensated
Employees whose Deferral Percentage exceeds the maximum Actual
Deferral Percentage for Highly Compensated Employees. Such
adjustment or reduction shall be performed by reducing the
Deferral Percentage of Highly Compensated Employees in descending
order beginning with the Highly Compensated Employee(s) with the
highest Deferral Percentage until such limitation has been
satisfied. In performing the reduction or adjustment, the
reduced Deferral Percentage of any affected Highly Compensated
Employee shall in no event be lower than the Deferral Percentage
of any Highly Compensated Employee with the next highest Deferral
Percentage.
14.04 Return of Excess Supplemental Contributions and/or Basic
Contributions. The Committee shall distribute to each affected
Highly Compensated Employee the amount of any excess Supplemental
Contributions and/or Basic Contribution (together with the income
allocable thereto as determined in Section 14.05) within two and
one-half (2%) months after the end of the Plan Year, but in no
event later than twelve months after the end of the Plan Year (or
the Plan's termination date, if applicable). The excess
Supplemental Contributions and/or Basic Contribution shall be
equal to the amount determined by reducing (a) by (b) where:
(a) is the Highly Compensated Employee's total Supplemental
Contributions and/or Basic Contribution before the
application of Section 14.02; and
(b) is the amount determined by multiplying the Highly
Compensated Employee's Compensation by the Deferral
Percentage after the reduction in Section 14.02.
The distribution of excess Supplemental Contributions and/or
Basic Contributions shall not require the consent of the affected
Highly Compensated Employee.
14.05 Determination of Income on Excess Supplemental
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Contributions and/or Basic Contributions. The excess amount
distributed under Section 14.04 shall include a proportionate
share of gain (or loss) for the Plan Year and the date of
distribution. Income allocable to excess Supplemental
Contributions and/or Basic Contributions for the Plan Year shall
be determined by multiplying the income on all Supplemental
Contributions and/or Basic Contributions by a fraction where:
(a) the numerator is the amount of the excess Supplemental
Contributions and/or Basic Contributions; and
(b) the denominator is the value of the Basic Contribution
and Supplemental Contribution Account as of the end of
the Plan Year, reduced by the gain and increased by the
loss allocable to such amounts for the Plan Year.
Income allocable to excess Supplemental Contributions and/or
Basic Contributions for the period from the end of the Plan Year
to the date of distribution shall be determined by multiplying
the amount of income on excess Supplemental Contributions and/or
Basic Contributions as determined for the Plan Year by the
product of ten percent (10%) times the number of months between
the Plan Year end and the date of distribution (with 15 days
being treated as a full month for the month in which the
distribution occurs).
For purposes of this Section 14.05 income shall be determined by
including dividends, interest, realized gains and appreciation
(whether or not realized). The income allocable to Supplemental
Contributions and/or Basic Contributions shall be the net amount
from all gains and losses to the Supplemental Contributions
and/or Basic Contributions.
14.06 Special Rule for Family Members. Notwithstanding the
foregoing, the Deferral Percentage for a Highly Compensated
Employee who is a 5% Owner or one of the top ten highest paid
Employees shall be determined by including the Basic
Contributions, Supplemental Contributions and/or Compensation of
any Employee who is a Family Member and such Family Members who
are Non-Highly Compensated Employees shall thereafter not be
treated as separate Employees. The Deferral Percentage for the
aggregated group of Family Members shall be equal to the greater
of:
(1) the Deferral Percentage calculated for the Highly
Compensated Employees who are Family Members; or
(2) the Deferral Percentage calculated for the entire group
of Family Members.
The resulting Deferral Percentage for the Family Members shall
then be included in the calculation of the Actual Deferral
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Percentage as provided in Section 14.02 and any excess
Supplemental Contributions and/or Basic Contributions for the
group of Family Members shall be determined and returned in
accordance with Sections 14.03 and 14.04 except that with respect
to the Employees comprising the Family Members the following
ordering procedures shall apply:
(i) if the Deferral Percentage for the Family Members was
determined under (1) above, then the excess shall be
allocated among Family Members who are Highly
Compensated Employees in proportion to their respective
Deferral Contributions; or
(ii) if the Deferral Percentage for the Family Members was
determined under (2) above, then any excess
contributions shall first be determined by reducing the
Deferral Percentage for Family Members who are Highly
Compensated Employees to no lower than the Deferral
Percentage that would exist if determined just for Non-
Highly Compensated Employees who are Family Members,
and then, if necessary to comply with the Deferral
Percentage limitations in Section 14.02, a second
reduction for all Family Members in proportion to their
respective Deferral Contributions.
14.07 Company Matching and After-Tax Contribution Percentage
Test. Subject to the aggregate limitation in Section 14.09, the
Company Matching and After-Tax Contribution Percentage Limitation
for Highly Compensated Employees for any Plan Year shall be
limited by applying the same percentage limitations as in Section
14.02(A).
The Company may elect to take into account Basic Contributions
and or Supplemental Contributions in determining Company Matching
and After-Tax Contribution Percentages to the extent permitted
and in accordance with applicable law and regulations. If the
Company Matching and After-Tax Contribution Percentage Limitation
is exceeded, then the Committee. at its sole discretion, shall
take such action as may be permitted by regulations under Section
401(m) of the Code to prevent such discrimination, including but
not limited to the return of such excess contributions to the
Participant. In the event excess Company Matching Contributions
and/or After-Tax Contributions (adjusted by any gain or loss
determined in accordance with the method set forth in Section
14.04 for the allocation of gain or loss on excess amounts) are
to be returned, such excess contributions shall be distributed in
accordance with the procedures in Section 14.03, 14.04 and 14.05
(but substituting excess Company Matching Contributions and
After-Tax Contributions for Supplemental Contribution and Basic
Contribution in such Sections). Excess Company Matching
Contributions shall be distributed in stock or cash.
14.08 Limits to Contributions.
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(A) Notwithstanding anything herein to the contrary, the
maximum Annual Addition, for any Participant for any
Limitation Year, shall be the lesser of the amount
established under Section 415 of the Code, currently
$30,000, or, if greater, one-fourth of the dollar
limitation in effect under Section 415(b)(1)(A) of the
Code, (as increased by the Secretary of the Treasury or
his delegate under Code Section 415(d)), or twenty-five
percent (25%) of the Participant's Compensation (as
defined in Section 415 of the Code) from the Company.
For purposes of this Section 14.08, "Limitation Year"
means the Plan Year.
B) Prior to the end of each Limitation Year, the Committee
shall notify any Participant for whom it determines
that the limitations of this Section 14.08 will
prohibit a full Annual Addition for such Limitation
Year on his behalf. Any reduction in contributions
which becomes necessary due to the requirements of this
Section 14.08 shall be returned to the Participant or
to the Company or handled in some other manner, as the
Committee shall decide and as permitted under the Code
and regulations thereunder.
(C) In any case where a Participant also participates in a
defined benefit plan (as defined in Section 414(j) of
the Code) of the Company in addition to being a
Participant in this Plan, the sum of his defined
benefit plan fraction and the defined contribution plan
fraction (both as defined hereafter) for any year may
not exceed 1.0.
(D) The defined benefit plan fraction for any year is a
fraction, the numerator of which is the projected
annual benefit of the Participant under such plan
(determined as of the close of the year), and the
denominator of which is the lesser of:
(i) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(b)(1)(A) of
the Code for such year, or
(ii) the product of 1.4 multiplied by the amount that
may be taken into account under Section
415(b)(1)(B) of the Code with respect to the
Participant under the Plan for such year.
(E) The defined contribution plan fraction for any year is
a fraction the numerator of which is the sum of the
Annual Additions as of the close of the year, and the
denominator of which is the sum of the lesser of the
following amounts determined for such year and for each
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<PAGE>
prior year of service with the Company:
(i) the product of 1.25 multiplied by the dollar
limitation in effect under Section 415(c)(1)(A) of
the Code for such year, or
(ii) the product of 1.4 multiplied by the amount which
may be taken into account under Section
415(c)(1)(B) of the Code with respect to the
Participant under the Plan for such year.
(F) In the event that the sum of such fractions exceeds
1.0, the benefit otherwise payable to the Participant
or to his Beneficiary under the defined benefit plan
shall be reduced so that neither the defined benefit
plan nor this Plan will be disqualified. If for any
other reason the Annual Addition for any Participant
would otherwise exceed the limits imposed by this
Section 14.08, a Participant's benefits shall be
limited so as not to exceed the limits set forth in
this Section 14.08.
(G) This Section 14.08 is intended to be interpreted
consistently with Section 415 of the Code and the
regulations issued thereunder, and in no event should
this Section 14.08 be interpreted as more restrictive
than Section 415 of the Code and the regulations'
issued thereunder.
14.09 Aggregate Limit for Deferral and Company Matching and
After-Tax Contribution Percentage Limitations. In addition to
the separate limitations in Sections 14.02 and 14.07, if the
Actual Deferral Percentage of Highly Compensated Employees
exceeds 125 percent of the Actual Deferral Percentage of Other
Employees and the Company Matching and After-Tax Contribution
Percentage of Highly Compensated Employees exceeds 125 percent of
the Company Matching and After-Tax Contribution Percentage of
Other Employees, then the Actual Deferral Percentage and Company
Matching and After-Tax Contribution Percentage for Highly
Compensated Employees, when combined, shall not exceed the sum
of:
(a) 1.25 times the greater of (1) the Actual Deferral
Percentage for Non-Highly Compensated Employees or (2)
the Company Matching and After-Tax Contribution
Percentage for Non-Highly Compensated Employees; and
(b) 2 plus the lesser of (1) or (2) above, but not in
excess of 2 times (1) or (2) above.
If the aggregate limit determined above is exceeded after first
determining any excess Supplemental Contributions and Basic
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Contributions or Company Matching and After-Tax Contributions (as
provided in Sections 14.02 and 14.04, respectively), then an
additional excess Supplemental Contribution and/or Basic
Contribution and/or an additional excess Company Matching and
After-Tax Contribution shall be determined in accordance with the
procedures in Section 14.03 and/or Section 14.07, whichever
applies, until the above aggregate limit is satisfied. Company
Matching Contributions shall be returned on a pro-rata basis
along with Supplemental Contributions and/or Basic Contributions
and/or After-Tax Contributions. The amount of any such
additional excess contributions shall be distributed (together
with any allocable income) along with and in the manner provided
for excess contributions under Sections 14.03, 14.04, 14.05 and
14.06. Notwithstanding the foregoing, application of the
aggregate limitation in this Section 14.09 shall be consistent
with the requirements of Treasury Regulation Section 1.401(m)-2.
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ARTICLE XV
ACCOUNTS AND FUNDS
15.01 Accounts. The Committee shall establish and maintain (or
cause to be established and maintained) the following accounts
for each Participant:
(A) A Basic Contribution and Supplemental Contribution
Account, which will reflect the Participant's interest
in the funds credited to him under the Plan as a result
of his Basic Contributions and Supplemental
Contributions in accordance with the provisions of
Sections 12.01 and
12.02.
(B) An After-Tax Contribution Account, which will reflect
the Participant's interest in the funds credited to him
under the Plan as a result of his After-Tax
Contributions in accordance with the provisions of
Section 12.03.
(C) A Company Matching Contribution Account, which will
reflect the Participant's interest in the funds
credited to him as a result of Company Matching
Contributions in accordance with the provisions of
Section 12.06.
(D) The Committee shall also establish and maintain (or
cause to be established and maintained) for each
applicable Participant, the Rollover Contribution
Account described in Section 12.09 hereof on behalf of
those Participants for whom a Rollover Contribution is
accepted.
(E) A Transfer Contribution Account, described in Section
12.08 on behalf of each Participant for whom a Transfer
Contribution is accepted.
(F) A Northeast Utilities Transfer Contribution Account,
described in Section 12.08 on behalf of each
Participant for whom the common shares of Northeast
Utilities are transferred.
(G) In addition to the accounts described in Sections
15.01(A), (B), (C), (D), (E) and (F) the Committee may
also arrange for the establishment of any other
accounts which may be necessary or desirable for the
proper functioning of the Plan.
(H) Each account maintained on behalf of each Participant
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shall be credited or debited to the extent required by
the provisions of the Plan. All entries on such
individual accounts shall be conclusive and binding
upon all parties unless patently erroneous. Monies
derived from these accounts shall be held,
administered, invested and disbursed in accordance with
the Plan and Trust Agreement.
(I) The maintenance of individual accounts is only for
accounting and recordkeeping purposes, and an actual
segregation of the assets of the Trust Fund to each
account shall not be required.
15.02 Investment Funds. The Trust Fund shall consist of the
following four (4) Investment Funds and such other funds as the
Committee shall establish in the future: Fund A - the Guaranteed
Investment Contract, Fund B - the Diversified Common Stock Fund,
Fund C - the Company Stock Fund, and Fund D - the Northeast
Utilities Stock Fund. However, the Trustee shall have the right
to invest in a short term cash fund on an interim short term
basis.
Fund A - Guaranteed Investment Contract
Fund A means the subfund forming part of the Trust Fund
consisting of the monies which the Committee shall direct
the Trustee to place with an insurance company, or insurance
companies for investment in Guaranteed Investment Contracts
issued by such insurance company or companies.
Fund B - Diversified Common Stock Fund
Fund B means the subfund forming part of the Trust Fund
consisting of the monies which the Committee shall direct
the Trustee to place in such fund which shall be a
commingled fund and such common or capital stocks issued by
corporations and such bonds, debentures, or preferred stocks
issued by corporations which are convertible into common
stocks as shall be selected by the Trustee in its sole
discretion, together with all income and accretions thereon,
and such amounts of cash as the Trustee shall deem necessary
or advisable to maintain as a part of such fund, all within
the limitations specified in the Trust Agreement.
Fund C - Company Stock Fund
Reserved
Fund D - Northeast Utilities Stock Fund
Fund D means the subfund forming part of the Trust Fund
consisting of common shares of Northeast Utilities
transferred from the Northeast Utilities TRAESOP/PAYSOP or
the Northeast Utilities Savings Plan. No Basic
Contributions, Supplemental Contributions, After-Tax
Contributions, Rollover Contributions and Transfer
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Contributions (except as provided above) may be invested in
this Fund.
Dividends issued on the shares in this Fund shall be used to
purchase additional shares of Northeast Utilities.
15.03 Investment Direction. The Committee may adopt rules under
which Participants may elect to have their accounts invested in
the Investment Funds described in Section 15.02. Any rules
adopted by the Committee shall be established and operated in a
nondiscriminatory manner and shall provide that:
(A) Participants may direct the investment of the Basic
Contributions, Supplemental Contributions, After-Tax
Contributions, and Rollover Contributions made by the
Participants or on their behalf in increments of ten
percent (10%) between Fund A and Fund B;
(B) A Participants Company Matching Contributions Account
shall be invested in the same proportion as the
Participant has elected with respect to Basic
Contributions and Supplemental Contributions.
(C) Participants may elect to change the investment
direction in Section 15.03(A) once in each Plan Year
following thirty days written notice to the Committee
(or such other dates as permitted by the Committee in
its sole discretion); and
(D) Participants may direct the investment of proceeds from
the sale of any common shares of Northeast Utilities
held in the Northeast Utilities Transfer Contribution
Account in increments of 10% between Fund A and Fund B.
(E) Elections by Participants to transfer amounts from one
Investment Fund to another may be made once in each
Plan Year following thirty days written notice to the
Committee (or such other dates as permitted by the
Committee in its sole discretion).
If a Participant fails to elect an investment option, the
Participant's Total Accounts except for the Northeast Utilities
Transfer Contribution Account will be invested in the Guaranteed
Investment Contract. If a Participant separates from the
employment to the Company and does not receive a distribution of
his Total Account, such terminated Participant may continue to
make elections with respect to changes in the investment of past
accumulations and earnings thereon.
15.04 Participant's Responsibility.
(A) Each Participant is solely responsible for the
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selection of his investments in the Trust Funds. The
fact that a security is available to Participants for
investment under the Plan shall not be construed as a
recommendation for the purchase of that security, nor
shall the designation of any subfund impose any
liability on the Company, its directors, officers or
employees, the Trustee, or the Committee.
(B) Each Participant assumes all risk connected with any
decrease in the market value of any Plan assets held on
his behalf by the Trustee. Neither the Trustee, the
Committee, nor the Company in any way guarantees the
Trust Fund against loss, depreciation or the payment of
any amount which may be or become due to any person
from the Trust Fund nor shall the Trustee, the
Committee or the Company incur any liability therefor
except to the extent required by law.
15.05 Valuation of Accounts.
(A) As of each Valuation Date, the accounts of each
Participant shall be adjusted to reflect any
appreciation or depreciation in the fair market value
and income earned by each subfund in which the
Participant's accounts are invested pursuant to Section
14.02. The fair market value shall be the aggregate
fair market value of all securities or other property
held for each subfund, plus cash and accrued earnings,
less accrued expenses and proper charges against each
subfund, all as of the Valuation Date. Participant
accounts shall be adjusted in proportion to the balance
in each Participant's account on each Valuation Date,
adjusted for distributions, provided, however, that the
Committee may elect to partially or totally reflect
additions and/or withdrawals made to the accounts of
Participants since such Valuation Date.
(B) When determining the value of Participant accounts, any
deposits due which have not been deposited in the Trust
Fund on behalf of the Participant shall be added to his
accounts. Similarly, adjustments of accounts for
appreciation or depreciation of the subfund shall be
deemed to have been made as of the Valuation Date to
which the adjustment relates, even though they are
actually made as of a later date.
(C) The Committee, with consent of the Trustee may make
additional rules, or modifications to the rules
contained in Sections 15.05(A) and 15.05(B) for the
valuation of Participant accounts, provided such rules
are administered in a nondiscriminatory manner.
15.06 Participant Statements. The Committee shall, on a
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quarterly basis, furnish or cause to be furnished to each
Participant, a statement of his Total Account and the value of
each account referred to in Section 15.01.
15.07 Trust Agreement. The Trust Agreement shall contain such
provisions as shall render it impossible for any part of the
corpus of the Trust Fund to be at any time used for, or diverted
to, purposes other than for the exclusive benefit of Participants
and their Beneficiaries and administrative expenses of the Plan,
except as provided in Section 12.11 and 14.08.
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ARTICLE XVI
BENEFIT DISTRIBUTIONS
16.01 Distribution Account of Termination of Employment. If a
Participant terminates his employment other than by reason of
death, retirement or total disability, the Total Account of such
Participant (calculated as of the Valuation Date next preceding
the date of the distribution) that is vested as provided in
Section 13.01 hereof shall be paid to the Participant in a lump
sum. The lump sum distribution shall be paid no later than the
close of the Plan Year following the Plan Year in which
termination of employment occurs, except as provided in the
following sentence. Unless the Participant is fully vested in
his Company Matching Contribution Account, if the amount of the
distribution derived from the Participant's Company Matching
Contribution Account exceeds $3,500 (or such greater amount that
may be established by Treasury Regulations under Section
411(a)(7)(B) of the Code), the payment of the distribution shall
be delayed until the Participant incurs five consecutive One-Year
Breaks in Service following his termination of employment, unless
the Participant elects in writing to receive an earlier payment
of benefits.
16.02 Forfeitures. A Participant who terminates employment
other than by reason of death, retirement or total disability and
who receives a distribution of the vested portion of his Company
Matching Contribution Account pursuant to Section 13.01 hereof
shall forfeit the non-vested portion of his Account. This
forfeited amount shall be restored to his Total Account if he
returns to work with the Company before incurring five
consecutive One-Year Breaks in Service and repays the entire
amount of the distribution within two years after his resumption
of employment. The amount restored shall be the exact amount
forfeited without adjustment for gains or losses incurred
subsequent to the distribution.
16.03 Distribution at Retirement. Any Participant shall be
eligible to terminate his employment by retiring at any time in
accordance with the provisions of the Yankee Energy System, Inc.
Retirement Plan. In the event of such retirement, the Total
Account of the Participant (calculated as of the Valuation Date
next preceding the date of the distribution) shall be paid to
such former Participant in a lump sum.
16.04 Distribution upon Death. In the event of the death of a
Participant prior to retirement, the Total Account of the
Participant (calculated as of the Valuation Date next preceding
the date of the distribution) shall be paid to his Beneficiary in
a lump sum not later than five (5) years after the date of his
death.
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16.05 Designation of Beneficiary. In the event of the death of
a Participant or former Participant, any benefits payable
hereunder shall be paid to the Participant's surviving spouse, if
any, or to any other Beneficiary who may be designated by the
Participant as hereinafter provided if such surviving spouse
consents thereto or if there is no surviving spouse. For
purposes of entitlement to receive benefits pursuant to the
foregoing sentence, only a spouse who has been married to the
Participant for the One-Year period ending on the date of the
Participant's death shall be considered a surviving spouse unless
otherwise specifically provided by a qualified domestic relations
order pursuant to Section 414(P)(5) of the Code.
The consent of a surviving spouse to the designation of any other
Beneficiary shall be made in writing on a form provided by the
Committee, which form shall contain the surviving spouse's
acknowledgement of the effect of such consent and shall be
witnessed by a Plan Representative Administrator or notary
public.
Notwithstanding the foregoing, such written consent shall not be
required if it is established to the satisfaction of the
Committee that such consent may not be obtained because there is
no spouse, because the spouse cannot be located, or because of
such other circumstances as the Secretary of the Treasury may be
regulations prescribe.
Subject to the foregoing paragraphs of this Section, each
Participant and former Participant shall have the right at any
time to designate a Beneficiary to receive any benefits payable
hereunder on the death of the Participant, and from time to time
to change any such designation. Any designation or change made
pursuant to the first sentence of this paragraph shall take
effect as of the date of execution of such written instrument,
whether or not the Participant is living at the time of such
filing, but without prejudice to the Trust Fund on account of any
payments made before receipt of such written instrument by the
Committee.
16.06 Distribution upon Total Disability. In the event of a
Participant's total Disability, the Total Account (calculated as
of the Valuation Date next preceding the date of the
distribution) shall be paid to such former Participant in a lump
sum.
16.07 Manner of Payment. Except as hereinafter provided to the
contrary, all payments of benefits under the Plan shall be paid
in cash and, to the extent of a Participant's interest in Fund C
and Fund D, in full shares of Common Shares or common shares of
Northeast Utilities as the case may be, with any balance
representing fractional shares being paid in cash. A Participant
may request that his entire interest in the Common Shares Fund be
paid in cash. All withdrawals pursuant to Section 16.01 hereof
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shall be paid in cash.
16.08 Commencement of Benefit Payments. A Participant who
terminates service by reason of retirement shall have the right
to elect to defer the benefit commencement date for as long as
five (5) years after his date of termination of service.
Notwithstanding the foregoing, unless a Participant elects a
later date by submitting a signed election form to the
Administrator setting forth the date on which the payment of
benefits shall be made, the payment of benefits under the Plan
shall be made not later than the sixtieth (60th) day after the
close of the Plan Year in which the later of the following events
occurs: (1) the Participant attains age 65; or (2) the
Participant terminates his service with the Employer.
(B) Notwithstanding the above,
i) the payment of benefits to a Participant shall
begin not later than the April 1 immediately
following the calendar year in which the
Participant attains age seventy and one-half (70-
1/2).
(ii) Special Rule for Distributions to Five-Percent
Owners. If a Participant who was a Five-Percent
Owner during any Plan Year beginning after
December 31, 1979 attained age 70-1/2 before
January 1, 1988, the vested Account balance must
be distributed, or commence to be distributed, on
the first day of April on the later of:
(a) the calendar year in which the Participant
attains age 70-1/2, or
(b) the earlier of the calendar year with or
within which ends the Plan Year which the
Participant becomes a Five-Percent Owner, or
the calendar year in which the Participant
retires.
Once distributions have begun to a Five-Percent Owner under this
section, the distributions must continue even if the Participant
ceases to be a Five-Percent Owner in a subsequent year.
(iii) General Rule for Distributions to Non-Five-Percent
Owners. The Participant's required beginning date
shall be the first day of April of the calendar
year following the calendar year in which the
Participant attains age 70-1/2.
(iv) Special Rule for Distributions to Non-Five-Percent
Owners. If a Participant attained age 70-1/2
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before January 1, 1988, the Participant's required
beginning date is the first day of April of the
calendar year following the calendar year in which
the later of retirement or attainment of age 70-
1/2 occurs.
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ARTICLE XVII
WITHDRAWALS
17.01 Permitted Withdrawals. A Participant may, while still
employed by the Company or Participating Company, make
withdrawals but not more than once in any Plan Year, of the
following amounts:
(A) from that part of his After-Tax Contribution Account
equal to the aggregate amount of his After-Tax
Contributions;
(B) from that part of his After-Tax Contribution Account
equal to the earnings on the amounts described in (A);
(C) from that part of his Company Matching Contribution
Account equal to the aggregate amount of his vested
Company Matching Contributions, including earnings
thereon; provided, however, that if the Employee has
not participated in the Plan for at least five (5)
complete Plan Years, Company Matching Contributions may
not be withdrawn unless the Participant has suffered a
total Disability or is able to demonstrate hardship
pursuant to Section 17.03; and
(D) from that part of his Basic Contribution Account equal
to the aggregate amount of his Basic Contributions,
excluding earnings after January 1, 1989 thereon;
provided, however, that no withdrawal of such amount
shall be permitted unless the Participant has suffered
a total Disability or is able to demonstrate hardship
pursuant to Section 17.03.
(E) No part of the Northeast Utilities Transfer
Contribution Account may be withdrawn except as
provided in Article
xvi.
17.02 Hardship A Participant may make a withdrawal pursuant to
Section 17.02 on account of the Participant's "qualifying
financial hardship." A "qualifying financial hardship" exists if
both: (a) an immediate and heavy financial need exists, as
described in Section 17.04 and (b) the distribution is necessary
to satisfy such financial need, as described in Section 17.05.
Whether the qualifying conditions in (a) and (b) exist will be
determined in accordance with uniform and nondiscriminatory
procedures established by the Committee and after consideration
of all relevant facts and circumstances.
17.03 An immediate and heavy financial need will be deemed to
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exist without further inquiry only if the withdrawal is on
account of:
(a) unreimbursed medical expenses incurred by the
Participant, a spouse, or any dependent of the
Participant;
(b) the purchase (excluding mortgage payments) of the
Participant's principal residence;
(c) the payment of tuition for the next semester or quarter
of post-secondary education for the Participant, a
spouse, a child or other dependent;
(d) payments necessary to prevent a mortgage foreclosure on
or eviction from the Participant's principal residence;
or
(e) such other specific events which the Internal Revenue
Service determines to be an immediate and heavy
financial need.
A financial need shall not fail to qualify merely because such
need was reasonably foreseeable or voluntarily incurred by the
Participant.
17.04 A distribution is necessary to satisfy an immediate and
heavy financial need as determined under Section 17.04 if the
distribution is not in excess of the amount required to meet the
financial need and the financial need cannot be satisfied from
other resources that are reasonably available to the Participant.
A distribution will be treated as necessary to satisfy an
immediate and heavy financial need if the Participant submits to
the Committee a representation that the financial need cannot be
satisfied:
(a) through reimbursement or compensation by insurance;
(b) by cessation of Basic Contributions, Supplemental
Contributions and After-Tax Contributions;
(c) by distributions, withdrawals or nontaxable loans from
the Plan or any other plan maintained by the Company or
any other employer;
(d) by reasonable liquidation of the Participant's assets
to the extent such liquidation would not itself create
an immediate and heavy financial need. A Participant's
assets shall be deemed to include the assets of a
spouse or minor child, except that assets held in an
irrevocable trust or under the Uniform Gifts to Minors
Act for such minor child shall not be included; and
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(e) by obtaining a commercial loan on reasonable terms and
conditions.
17.05 Withdrawal Procedures. The Committee shall establish
rules and procedures for withdrawals, including but not limited
to the following:
(A) Procedures for application by Participants for
withdrawals.
(B) Rules regarding minimum amounts of withdrawals.
(C) Rules regarding the permitted frequency of withdrawals.
(D) Procedures for determining the order in which
withdrawals will be made from the Participant's
accounts and the manner in which subfunds will be
debited in the event of a withdrawal.
Part III, Article XVIII through XXI shall apply to all Employees
of the Company or Participating Company.
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ARTICLE XVIII
TOP-HEAVY PLAN
18.01 Applicability. The provisions of this Article XVIII shall
apply to any Plan Year if, as of the applicable Determination
Date, the Plan constitutes a Top-Heavy Plan.
18.02 Definitions. The following definitions apply to this
Article XVIII and unless otherwise specifically stated in another
section hereof do not apply to any other section of this Plan.
(A) Affiliated Company. Any corporation or other business
entity which is required to be aggregated with the
Company by reason of Section 414(b), 414(c), or 414(m)
of the Code.
(B) Determination Date. In the case of the first Plan
Year, the Determination Date shall be the final day of
such Plan Year and with respect to each Plan Year
thereafter, the Determination Date shall be the final
day of the immediately preceding Plan Year.
(C) Key Employee. "Key Employee" shall mean any individual
currently or formerly employed by the Company or any
Affiliated Company who, at any time during the Plan
Year containing the Determination Date for the Plan
Year in question, or any of the four (4) preceding Plan
Years, is (in accordance with Code Section 416(i) and
the regulations promulgated thereunder):
(i) An officer of the Company or any Affiliated
Company with total annual compensation (within the
meaning of Section 415(c) of the Code) from the
Company or any Affiliated Company greater than
fifty percent (50%) of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code for
the calendar year in which such Plan Year ends,
provided that in no event shall more than the
lesser of fifty (50) employees or ten percent
(10%) of all employees be considered officers
hereunder (but in no event less than three (3)
employees).
(ii) One of the ten (10) employees of the Company or
any Affiliated Company owning or considered as
owning (within the meaning of Section 318 of the
Code) both more than a one-half percent (1/2%)
ownership interest in the value and the largest
percentage ownership of the Company or any
Affiliated Company, excluding, however, any
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Employee who earns an amount equal to or less than
the maximum dollar limitation under Section
415(c)(1)(A) as in effect for the calendar year in
which such Plan Year ends, but treated as owning
the greater interest, any such employee who, among
others with the same interest, has the greatest
annual compensation (within the meaning of Section
415(c) of the Code) from the Company or any
Affiliated Company for the Plan Year during which
any part of that ownership interest existed;
(iii) An employee of the Company or any Affiliated
Company who owns (or is considered as owning
within the meaning of Section 318 of the Code)
more than 5 percent (5%) of the outstanding stock
of the Company or of stock possessing more than
five percent (5%) of the total combined voting
power of all stock of the Company; or
(iv) An employee of the Company or Affiliated Company
who owns (or is considered as owning within the
meaning of Section 318 of the Code) more than one
percent (1%) of the outstanding stock of the
Company or more than one percent (1%) of the total
combined voting power of all stock of the Company,
and who receives annual compensation (within the
meaning of Section 415(c) of the Code) from the
Company or any Affiliated Company in excess of One
Hundred Fifty Thousand Dollars ($150,000).
(v) For the purpose of applying Section 318 of the
Code under subparagraphs (ii), (iii) and (iv) of
this Section 18.02(C), the phrase "50 percent" in
Section 318(a)(2) of the Code shall be replaced
with the phrase "5 percent".
(D) Non-Key Employee. Any individual currently or formerly
employed by the Company or any Affiliated Company who
is not a Key Employee, and has never been a Key
Employee.
(E) Aggregated Plans. "Aggregated Plans" shall mean all
plans of the Company and any Affiliated Company that
(i) are qualified under Code Section 401(a) and are
required to be aggregated pursuant to Code Section
416(g)(2), and (ii) which may be taken into account
under the permissive aggregation rules of Code Section
416(g)(2)(A)(ii) if such permissive aggregation thereby
eliminates the status as a Top-Heavy Plan of the plans
required to be aggregated pursuant to (i) above and
such inclusion will not result in the Aggregated Plans
ceasing to meet the requirements of Code Sections
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401(a)(4) and 410. Notwithstanding the foregoing, the
Committee may elect to exclude any Plan that is
permitted, but not required, to be aggregated if such
plan is a collectively bargained plan and the necessary
information as to participants and benefits is not
available.
(F) Top-Heavy Plan. The Plan shall constitute a "Top-Heavy
Plan" for any Plan Year if, as of the Determination
Date, the present value of the cumulative accrued
benefits and aggregate accounts of Key Employees under
any Aggregated Plan exceeds sixty percent (60%) of the
present value of the cumulative accrued benefits and
aggregate accounts of all Key Employees and Non-Key
Employees under any Aggregated Plan. The above
determinations shall be made in accordance with Code
Section 416(g).
Solely for the purpose of determining if the Plan, or
any other plan included in a required aggregation group
of which this Plan is a part, is a Top-Heavy Plan, the
accrued benefit of an employee other than a Key
Employee shall be determined under (a) the method, if
any, that uniformly applies for accrual purposes under
all plans maintained by the Affiliated Companies, or
(b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Internal Revenue Code.
(G) Super Top-Heavy Plan. The Plan shall constitute a
"Super Top-Heavy Plan" for any Plan Year if, as of the
applicable Determination Date, the present value of the
cumulative accrued benefits and aggregate accounts of
Key Employees under any Aggregated Plan exceeds ninety
percent (90%) of the present value of the cumulative
accrued benefits and aggregate accounts of all Key
Employees and Non-Key Employees under the Aggregated
Plan. The above determination shall be made in
accordance with Code Section 416(g).
(H) Non-Compensated Participants. For purposes of the
tests in subparagraphs (F) and (G) of this Section, the
cumulative accrued benefits and aggregate accounts
shall exclude such benefits and accounts for all
Participants who have not performed any service for the
Company at any time during the five-year period ending
on the applicable Determination Date.
(I) Top-Heavy Compensation. "Top-Heavy Compensation" shall
mean compensation of the Participant from the Company
within the meaning of Section 415 of the Code.
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18.03 Minimum Contribution. Each Participant and each Eligible
Employee who is not a Participant, other than a Key Employee
(regardless of whether such Participant or Eligible Employee has
completed a year of Service in such Plan Year and regardless of
such Participant's or Eligible Employee's level of compensation),
who has not terminated his employment as of the last day of such
Plan Year, shall be credited with, in each Plan Year in which the
Plan is a Top-Heavy Plan, an additional Company contribution to
the extent required to assure that such Participant has credited
from this Plan and all other defined contribution plans of the
Company for such Plan Year in which the Plan is a Top-Heavy Plan,
a Company contribution not less than the lesser of:
(A) Three percent (3%) of the Participant's or Eligible
Employee's total compensation for the Plan Year; or
(B) A percentage of the Participant's or Eligible
Employee's Top-Heavy Compensation for the Plan Year
which equals the total Company contribution stated as a
percentage of Top-Heavy Compensation (including any
Basic Contributions under the Plan) for the Key
Employee for which such percentage is the highest.
Notwithstanding the foregoing, if the Plan is determined to be
top-heavy for a Plan Year for which it is part of an aggregation
group which includes a qualified defined benefit plan which is
also top-heavy, the requirements of Code Section 416(c) shall be
satisfied for such Plan Year by providing the minimum benefit
required by said Section under such defined benefit plan to each
Participant or Eligible Employee who is also covered under the
defined benefit plan in lieu of the minimum contribution under
this Plan.
18.04 Adjustment to Maximum Limitations. In the event that a
Participant or an Eligible Employee of the Plan also participates
in a defined benefit plan of the Company or any Affiliated
Company during a Plan Year in which the Plan is a Top-Heavy Plan
or a Super Top-Heavy Plan, the limitations under Article V and
Article XIV of the Plan shall apply, except that the factor of
1.0 shall be substituted for the factor of 1.25 as set forth
under such Article with regard to the defined benefit plan and
defined contribution plan fractions. If the Top-Heavy Plan is
not a Super Top-Heavy Plan, the preceding sentence shall apply
only if:
(a) the Participant's or Eligible Employee's minimum
contribution under Section 18.03 of the Plan is not
increased to four percent (4%) of his compensation or
such lesser amount as may be permitted under applicable
law; or
(b) the Participant's or Eligible Employee's minimum
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benefit under the defined benefit plan is not increased
to equal the product of (i) and (ii) below:
(i) the lesser of:
(A) three percent (3%) multiplied by his years of
service (up to a maximum of 10 years); or
(B) thirty percent (30%); multiplied by:
(ii) his highest average compensation determined under
the top-heavy provisions of such plan.
18.05 Termination of Top-Heavy Status. If the Plan has been
deemed to be top-heavy for one of more Plan Years and thereafter
ceases to be top-heavy, the provisions of this Article XVIII
shall cease to apply to the Plan effective as of the day
following the Determination Date on which it is determined to no
longer be top-heavy.
18.06 Employees Covered by a Collective Bargaining Agreement.
The requirements of Section 18.03 shall not apply with respect to
any employee included in a unit of employees covered by an
agreement which the Secretary of Labor finds to be a collective
bargaining agreement between employee representatives and the
Company if there is evidence that retirement benefits were the
subject of good faith bargaining between such employee
representatives and the Company.
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ARTICLE XIX
ADMINISTRATION OF THE PLAN
19.01 Committee. The general administration of the Plan and the
responsibility for carrying out the provisions of the Plan shall
be Placed in an Administrative Committee (the Committee"), the
members of which shall be appointed by the Board of Directors.
The membership of the Committee may be changed by the Board of
Directors at any time and from time to time hereafter; provided,
however, that the Committee at all times shall consist of at
least three (3) individuals and provided further, that any
changes in the membership of the Committee shall be certified to
the Trustee in writing by the Board of Directors. Any member of
the Committee may resign at any time by delivery of a written
notice of resignation to the chairman or secretary of the Board
of Directors.
19.02 Chairman, Secretary, Records. The members of the
Committee shall elect a Chairman from among their members and a
Secretary who may, but need not, be one of the members of the
Committee. The Committee may also designate other positions
within the membership of the Committee. The Secretary shall keep
minutes of the Committee's proceedings and all dates, records and
documents pertaining to the administration of the Plan.
19.03 Majority Vote, Execution of Certificates. The action
of the Committee shall be determined by the vote or by agreement
in writing or by other affirmative expression of a majority of
its members; provided, however, that the Committee may, by
majority vote, designate one of its members to execute all
documents for and on behalf of the Committee. Any certificate or
other written direction on behalf of the Committee shall be
signed by those individuals granted authority by the Committee to
sign documents on its behalf.
19.04 Powers.
(A) The Committee may appoint such agents, who need not be
members of the Committee, as it may deem necessary for
the effective exercise of its duties, and may delegate
to such agents any powers and duties, both ministerial
and discretionary, as the said Committee may deem
expedient or appropriate.
(B) Except as to matters required by the terms of the Plan
or of the Trust Agreement, the Committee shall have
complete control of the administration of this Plan,
with all powers necessary to enable it properly to
carry out its duties in that respect. Not in
limitation, but in amplification of the foregoing, the
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Committee shall have power to construe this Plan and to
determine all questions that may arise hereunder. It
shall determine all questions relating to the
eligibility of employees to participate in this Plan
and the amount of benefit to which any person may
become entitled hereunder.
(C) To the extent not covered by any applicable insurance
policy, the Company shall indemnify each member of the
Committee against any and all claims, loss, damages,
expense, and liability arising from any action or
failure to act, except when the same is judicially
determined to be due to the gross negligence or willful
misconduct of such member.
19.05 Rules and Regulations. Subject to the limitations of this
Article XIX of the Plan, the Committee from time to time shall
establish such supplemental rules and regulations for the
administration of the Plan and the transaction of its business as
it deems necessary.
19.06 Other Fiduciary Capacity. Nothing contained in this
Article XIX of the Plan shall prevent a member of the Committee
from serving the Plan in other fiduciary capacities.
19.07 Employment of Professional Assistance. The Committee is
empowered, on behalf of the Trust, to engage auditors, Investment
Managers, accountants, actuaries, legal counsel and such other
personnel as it deems necessary or advisable to assist it in the
performance of its duties under the Plan. The functions of any
such persons engaged by the Committee shall be limited to the
specific services and duties for which they were engaged, and
such persons shall have no other duties, obligations or
responsibilities under the Plan or Trust.
19.08 Reliance. The Committee shall be entitled to rely
conclusively upon all advice, counsel and opinions provided by
accountants, actuaries, legal counsel and other professional
assistants engaged pursuant to Section 19.07.
19.09 Expenses of Administration.
(A) Direct charges and expenses arising out of the purchase
or sale of securities, and taxes levied on or measured
by such transactions shall be charged against the Fund
or subfund, for which the transactions took place.
(B) The Company shall pay all other expenses reasonably
incurred in administering the Plan, including expenses
of the Committee and the Trustee, such compensation to
the Trustee as from time to time may be agreed between
the Committee and Trustee, fees for legal services, and
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all taxes, if any, other than those charged to the
Trust under Section 19.09(A), provided that, at the
discretion of the Committee, such expenses may be paid
from the Trust. Any members of the Committee who are
employees shall not receive compensation with respect
to their services for the Committee.
19.10 Allocation of Fiduciary Responsibility. The Trustee shall
be a "named fiduciary" of the Plan as defined in Section 402(a)
of the Employee Retirement Income Security Act of 1974. The
named fiduciaries shall have only those specific powers, duties,
responsibilities, and obligations as are specifically given under
the Plan or the Trust Agreement.
(A) Committee. The general administration of the Plan, and
the responsibility for carrying out the provisions
hereof, shall be placed in the Committee which is
authorized and required to take all action necessary to
ensure that the Plan meets the requirements of the
Employee Retirement Income Security Act of 1974 as now
in effect and as it may hereafter be amended from time
to time.
(B) Company. The Company shall have the sole
responsibility for making contributions required under
the Plan. The Company shall have the sole authority to
appoint and remove the Trustee and members of the
Committee and shall be the "plan administrator" as
defined under the Employee Retirement Income Security
Act of 1974. Moreover, the Company shall have the sole
authority to terminate or amend the Plan or to merge or
consolidate the Plan with another employee benefit
plan.
(C) The Trustee and Investment Manager. The Trustee and
the Investment Manager, if any, shall have the sole
responsibility of administering the Trust Fund and of
managing the assets held in the Trust Fund, all as
specifically provided under the Plan, the Trust
Agreement and any applicable agreement with the
Investment Manager.
19.11 No Joint Fiduciary Responsibilities. The Plan, the Trust
Agreement and any applicable investment management agreement are
intended to allocate to each named fiduciary the individual
responsibility for the prudent execution of the functions
assigned to him, and none of such responsibilities or any other
responsibility shall be shared by two or more of such named
fiduciaries unless such sharing shall be provided by a specific
provision of the Plan, the Trust Agreement or any applicable
investment management agreement. Whenever one named fiduciary is
required by the Plan, the Trust Agreement or any applicable
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investment management agreement to follow the directions of
another named fiduciary, the two named fiduciaries shall not be
deemed to have been assigned a shared responsibility, but the
responsibility of the named fiduciary giving the directions shall
be deemed his sole responsibility, and the responsibility of the
named fiduciary receiving those directions shall be to follow
them insofar as such instructions are on their face proper under
applicable law.
19.12 Claims Procedure.
(A) The right of any Participant, Beneficiary or other
person claiming a benefit shall be initially determined
by the Committee or its appointed agent. Any denial by
the Committee or agent of the claim for benefits under
the Plan shall be stated in writing and delivered or
mailed to the claimant. Such notice of denial shall
set forth the reasons therefor, including specific
reference to the pertinent provisions of the Plan on
which the denial is based, a description of any
additional material or information necessary to perfect
the claim with an explanation of why such material or
information is necessary, and an explanation of the
procedure for appeal of the denial.
(B) A claimant or his duly authorized representative may
(i) request a review by written application to the
Committee,(ii) review pertinent documents, and (iii)
submit issues and comments in writing. Such request
for review shall be filed with the Committee within
sixty (60) days after receipt by the claimant of the
notice of denial; and within sixty (60) days after
receipt of such request, or, if special circumstances,
such as the need to hold a hearing, require an extended
period for processing, as soon thereafter as possible,
but not later than one-hundred twenty (120) days after
receipt of such request, the Committee shall render its
decision in writing, setting forth the specific reasons
therefor, including specific references to the
pertinent provisions of the Plan on which the decision
is based.
(C) Any notice or decision by the Committee or its agent
shall be written in a manner calculated to be
understood by the claimant. Such decisions shall be
final and binding upon the person claiming an interest
in the Plan.
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ARTICLE XX
AMENDMENT AND TERMINATION
20.01 Plan Amendment.
(A) The Company, by action of its Board of Directors, shall
have the power to amend this Plan from time to time in
any respect; provided, however, that no such amendment
shall operate, without the written consent of a
Participant, to deprive him of a vested interest
accrued at the effective date of such amendment, unless
such amendment is one which is necessary to obtain or
retain qualification of this Plan under the pertinent
provisions of the Code.
(B) No amendment shall divest any Participant or
Beneficiary of his interest herein, except as may be
required by the District Director of the Internal
Revenue Service or other governmental authority, or
give any Participant any assignable or exchangeable
interest or any right or thing of exchangeable value in
advance of the time distribution is to be made to such
Participant or Beneficiary.
(C) No amendment permitted under this Section shall
increase the duties of the Trustee without the
Trustee's consent.
20.02 Termination of the Plan.
(A) The Company contemplates that this Plan will constitute
a profit-sharing plan for Participants and continue
indefinitely in the future, but the Company, by action
of its Board of Directors, shall have the right at any
time to terminate the Plan.
(B) If this Plan shall be at any time terminated, in whole
or in part, or contributions by the Company completely
discontinued and the Company determines that the Trust
Fund shall be terminated, in whole or in part, the
Participants' Total Accounts shall become fully vested
and nonforfeitable, the Trust Fund and all accounts
shall be revalued as if the termination date were a
Valuation Date and the Total Accounts of the
Participants shall be distributed in accordance with
Articles VIII and XVI.
(C) If this Plan shall be terminated in whole or in part or
contributions by the Company completely discontinued,
but the Company determines that the Trust Fund shall be
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continued pursuant to the terms of the Trust Agreement,
Participants', Total Accounts shall become fully
vested, but the Trust Fund shall be administered as
though the Plan were otherwise in effect. Upon the
subsequent termination of the Trust, in whole or in
part, the provisions of Section 20.02(B) shall apply.
(D) If this Plan shall be terminated, in whole or in part
or contributions by the Company completely
discontinued, the Company Shares in the Loan Suspense
Account shall be sold for fair market value and used to
reduce the Acquisition Loan. In the event the proceeds
of such sale are insufficient to completely eliminate
the Acquisition Loan, the Company shall make additional
payments to eliminate the Acquisition Loan. The
Company Shares released through such payments on the
Acquisition Loan shall be allocated to the Participants
covered in Part I of this Plan in the ratio that each
Participant's Compensation bears to the total
Compensation of such Participants.
20.03 Merger or Consolidation with Another Corporation.
Notwithstanding any other provision of this Plan, in the event of
a merger or consolidation of the Company into or with another
corporation, or the sale or other transfer of all or
substantially all of the assets of the Company to another
corporation, the surviving, resulting or transferee corporation
may continue this Plan, by resolution of its board of directors,
and by executing a proper supplemental agreement to the Trust
Agreement. If within one-hundred eighty (180) days from the
effective date of such consolidation or merger or sale or
transfer of assets, such surviving, resulting or transferee
corporation does not adopt this Plan, as provided herein, the
Plan shall automatically be terminated insofar as it is
applicable to the Company and the proportionate share of all
assets in the Trust Fund attributable to the Company shall be
distributed in conformity with Article VIII and XVI of the Plan.
20.04 Rights of Participants upon Merger. At no time shall
there occur any merger or consolidation of this Plan with, or
transfer of the assets or liabilities of this Plan to, any other
plan, unless, if such plan then terminated, each Participant and
each Beneficiary would be entitled to a benefit immediately after
the merger, consolidation or transfer which is equal to or
greater than the benefit which such Participant or Beneficiary
would have been entitled to receive immediately before the
merger, consolidation or transfer, if this Plan had then
terminated.
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ARTICLE XXI
MISCELLANEOUS PROVISIONS
21.01 Benefits Payable From Trust Fund. All persons with any
interest in the Trust Fund shall look solely to the Trust Fund
for any payments with respect to such interest.
21.02 Internal Revenue Service Approval. This Plan is
contingent upon, and subject to obtaining and maintaining, such
approvals of the Internal Revenue Service as may be necessary to
establish (i) that the Plan meets the requirements of Section
401(a) and other applicable provisions of the Code as amended,
and regulations thereunder; and (ii), that any Trust established
under the Plan is entitled to exemption from Federal Income Tax
under Section 501(a) and other applicable provisions of the Code,
as amended, and regulations thereunder; (iii) that the Plan meets
the requirements of Section 4975(e) and other applicable
provisions of the Code as amended, and regulations thereunder;
and (iv) that Basic Contributions constitute an election under
Section 401(k)(2)(A) of the Code. Any modification or amendment
to the Plan may be made retroactively, if-necessary or
appropriate to qualify or maintain the Plan and Trust as a plan
and trust or trusts meeting the requirements of Sections 401,
404, 501 and 4975(e) or other applicable provisions of the Code
and regulations thereunder, as now in effect or hereafter amended
or adopted.
21.03 Alienation and Assignment.
(A) Except as provided in (B), below, no benefits nor any
funds held under this Plan shall be subject in any
manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer,
assign, pledge, encumber or charge the same shall be
void; and no such benefits or funds shall in any manner
be liable for, or be subject to, the debts, contracts,
liabilities, engagements or torts of any Participant or
Beneficiary hereunder, nor shall they be subject to
attachment or any legal process either legal or
equitable, for, or against, such Participant or
Beneficiary, except to such extent as may be required
by law.
(B) Notwithstanding the provisions of Section 21.03(A),
payments from the Plan shall be made as required under
a qualified domestic relations order, as defined in
Section 414(p) of the Code.
21.04 No Rights-Of Employment. The employment rights of an
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employee of the Company shall not be enlarged or reduced by
reason of this Plan and no such employee shall have any right or
interest in the Trust Fund other than as herein provided.
21.05 Satisfaction of Claims. Any payment to any Participant or
Beneficiary or to the legal representative of any Participant or
Beneficiary, in accordance with the provisions of this Plan,
shall, to the extent hereof, be in full satisfaction of all
claims hereunder against the Trustees, the Committee and the
Company, any of whom may require such Participant, Beneficiary or
legal representative, as a condition precedent to such payment,
to execute a receipt and release therefor in such form as shall
be determined by the Trustee, the Committee or the Company, as
the case may be.
21.06 Headings. The headings to the articles and sections in
this Plan are inserted for convenience of reference only, and
shall not affect the meaning or construction of any of the
provisions of the Plan.
21.07 Effect of Invalidity of Provision. If any provision of
this Plan is held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof,
and this Plan shall be construed and enforced as if such
provisions had not been included.
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IN WITNESS WHEREOF, Yankee Energy System, Inc. has caused
this instrument to be executed by its duly elected officer and
its seal affixed hereto this day of July 1989.
(Corporate Seal)
YANKEE ENERGY SYSTEM, INC.
By: /s/ Michael E. Bielonko
Title: Vice President and Treasurer
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TRUST AGREEMENT
FOR
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article Title Page
<S> <C>
ARTICLE I Establishment of Trust 2
ARTICLE II Associate Companies 3
ARTICLE III Duties of the Company and the
Associate Companies 5
ARTICLE IV Investment and Administration of
the Trust Fund 7
ARTICLE V Taxes, Expenses and Compensation
of Trustee 15
ARTICLE VI Accounts - Reports 16
ARTICLE VII Resignation, Removal and Replacement
of Trustee 18
ARTICLE VIII Termination of Trust 19
ARTICLE IX Amendment 20
ARTICLE X Miscellaneous 21
ARTICLE XI Revocation of Trust 23
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TRUST AGREEMENT
FOR
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
THIS TRUST AGREEMENT, effective the day of 19
is made by and between YANKEE ENERGY SYSTEM, INC., a corporation
organized and existing under the laws of Connecticut (hereinafter
the "Company"), and UNITED BANK & TRUST COMPANY, a banking
corporation organized and existing under the laws of the State of
Connecticut (hereinafter the "Trustee").
W I T N E S S E T H
WHEREAS, the Company and the "Associate Companies" described
in Article II hereof have adopted the Yankee Energy System, Inc.
401(k) Employee Stock Ownership Plan (hereinafter the "Plan");
WHEREAS, the Plan provides for contributions to a trustee or
other funding agent, to be held for the exclusive benefit of
participants in the Plan and their beneficiaries after payment of
the reasonable expenses of administering the Plan;
WHEREAS, the Company desires to establish a Trust to serve
as a funding medium for the Plan; and
WHEREAS, the Company desires the Trustee to, and the Trustee
desires to, act as the trustee of said Trust pursuant to the
terms hereof;
NOW, THEREFORE, in consideration of the premises and mutual
and dependent promises herein, the parties hereto covenant and
agree as follows:
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ARTICLE I
Establishment of Trust
Section 1.1 The Trustee shall receive and hold, in trust
(hereinafter the "Trust"), any contributions, in cash or other
property acceptable to it, received from the Company, an
Associate Company, any participant in the Plan, or any trust
qualified under Section 401 of the Internal Revenue Code of 1986,
as amended (hereinafter the "Code"), pursuant to the terms of the
Plan, which contributions, together with the income and gains
therefrom, less any payments or other distributions therefrom,
shall constitute the Trust Fund.
Section 1.2 The Trustee shall hold, manage, invest, and
otherwise administer the Trust Fund pursuant to the terms of this
Trust Agreement. The Trustee shall be responsible only for
contributions actually received by it hereunder. The Trustee
shall have no duty or authority to ascertain whether any
contributions should be made to it pursuant to the Plan or to
bring any action or proceeding to enforce any obligation to make
any such contribution.
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ARTICLE II
Associate Companies
Section 2.1 With the consent of the Company and the Trustee,
any other employer that has adopted the Plan, pursuant to a
resolution of the Board of Directors thereof, may join in this
Trust Agreement as an "Associate Company" by delivery to the
Company and the Trustee of a certified copy of such resolution
and a written instrument duly executed and acknowledged in form
reasonably satisfactory to the Company and the Trustee. Any
contributions made by, or on behalf of, an Associate Company, or
the employees of an Associate Company, together with the income
and gains therefrom, shall be held by the Trustee as part of the
Trust Fund unless segregated in a separate trust as provided in
Section 2.3 hereof.
Section 2.2 Each Associate Company appoints the Board of
Directors of the Company as its agent to exercise on its behalf
all the powers and authority conferred upon the Company by this
Agreement, including without limitation the power to amend this
Trust Agreement or to terminate the Trust. Each Associate
Company shall be bound by the decisions, instructions, actions,
and directions of the Company under this Trust Agreement and the
Trustee shall be fully protected by the Company and such
Associate Company in relying upon such decisions, instructions,
actions, and directions of the Company. The Trustee shall not be
required to give notice to or obtain the consent of any such
Associate Company with respect to any action which is taken by
the Trustee pursuant to this Trust Agreement, and the Company
shall have the sole authority to endorse this Trust Agreement on
behalf of any such Associate Company. The authority of the Board
of Directors of the Company to act as agent for any Associate
Company shall terminate only if the part of the Trust Fund held
for the benefit of the employees of such Associate Company shall
be segregated in a separate trust as provided in Section 2.3
hereof.
Section 2.3 The Company may at any time direct the Trustee
in writing to segregate from the Trust Fund such part thereof as
the Company shall determine to be held for the benefit of the
employees of an Associate Company. The Company shall give a copy
of such direction to all Associate Companies. Such direction
shall specify both the amount and particular assets of the Trust
Fund to be segregated. Such direction shall conclusively
establish that the amount and particular assets specified therein
represent the part of the Trust Fund held for the benefit of the
employees of such Associate Company.
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The Trustee shall follow the Company's direction. Any part
of the Trust Fund segregated pursuant to such direction shall
thereafter be held under a separate trust identical in terms to
the Trust hereby established, except that with respect to such
separate trust this Trust Agreement shall be construed as if such
Associate Company had been named as the Company, and all powers
and authority conferred upon the Company or its Board of
Directors shall devolve upon such Associate Company and its Board
of Directors, respectively.
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ARTICLE III
Duties of the Company and the Associate Companies
Section 3.1 The Company shall provide the Trustee with a
certified copy of the Plan and all amendments thereto and of the
resolutions of the Board of Directors of the Company or an
Associate Company approving the Plan and all amendments thereto,
promptly upon their adoption. The Trustee may rely on any
certification, notice or direction of the Company or an Associate
Company that the Trustee believes to have been signed by a duly
authorized officer or agent of the Company or an Associate
Company. The Company and the Associate Companies shall be
responsible for keeping accurate books and records with respect
to their respective employees, the compensation of such
employees, and the rights and interests of such employees in the
Trust Fund.
Except as the Trustee may otherwise agree in writing, the
Trustee shall not be required to maintain any separate records or
accounts with respect to any participant of the Plan, and any
records or accounts required to be maintained pursuant to the
terms of the Plan or to comply with ERISA or the Code shall be
the responsibility of the Company.
Section 3.2 The Company and the Associate Companies shall
appropriate corporate action, and shall deliver to the Trust
other contributions received by them as soon as practicable after
the receipt thereof by the Company or an Associate Company.
Section 3.3 From time to time as any changes therein are
made, the Company shall communicate to the Trustee in writing the
current funding policy, and the method that has been established
to achieve the objectives, of the Plan. After the execution of
this Trust Agreement, the Company shall, within thirty (30) days
of the receipt of a written request from the Trustee, file with
the Trustee a certified list of the names of each person who is a
"party in interest" with respect to the Plan, as that term is
defined in Section 3(14) of the Employee Retirement Income
Security Act of 1974, as amended from time to time (hereinafter
"ERISA"). The Company shall, upon receipt of a written request
from the Trustee, promptly notify the Trustee of the addition or
deletion of any person's name to or from such list.
Section 3.4 The Company and the Associate Companies shall
indemnify and hold harmless the Trustee for any liability or
expenses, including without limitation reasonable attorneys'
fees, incurred by the Trustee with respect to holding, managing,
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investing or otherwise administering the Trust Fund, other than
by its negligence or willful misconduct. Nevertheless, neither
the Company nor any Associate Company shall be obligated to
indemnify the Trustee for any matter with respect to which the
Trustee shall not have acted in accordance with the provisions of
the Trust Agreement.
7
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ARTICLE IV
Investment and Administration of the Trust Fund
Section 4.1
(a) The investment policy of the portion of the Plan and
Trust defined in Section 2.16 in the Plan as the
Company Matching Contributions Account shall be
primarily to invest in and hold shares of common stock
of the Company which are "qualifying employer
securities" ("Shares") within the meaning of Section
409(1) and 4975(e)(8) of the Code, or any successor
sections, for the exclusive benefit of the Participants
and their Beneficiaries. The Trustee shall invest the
Company Matching Contributions Account of the Trust
Fund primarily in Shares, and shall pay any
indebtedness arising from Acquisition Loans (as defined
in Section 7.01 of the Plan) out of assets of the Trust
Fund in accordance with the documents governing such
Acquisition Loans and as instructed from time to time
in writing by the Company. In connection with the
acquisition of Shares, the Trustee may purchase newly
issued or outstanding Shares from the Company or any
other holders of Shares, including Participants and
Beneficiaries. Investments in Shares shall be made
only at the direction of the Company and the Trustee
shall not be liable for following any such direction.
Pursuant to Section 7.01 of the Plan, the Trustee, at
the direction of the Company, may incur Acquisition
Loans and the Trustee shall not be liable for following
any such direction.
(b) All purchases and sales of Shares shall be made by the
Trustee at fair market value. Such purchases may be
made with assets of the Trust Fund, with funds borrowed
for this purpose (with or without guarantees of
repayment to the lender), by installment payment
contracts, or by any combination of the foregoing.
(c) All Shares shall be voted by the Trustee, and the
Trustee shall act with respect to an opportunity to
respond to a tender or exchange offer for Shares, as
provided in Section 6.06 and 6.07 of the Plan.
Section 4.2 Except as provided in Sections 4.1 and 4.3
hereof, the Trustee shall discharge its duties hereunder with the
care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and
familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The Trustee
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shall not be liable in discharging its duties hereunder,
including without limitation its duty to invest and reinvest the
Trust Fund, if it acts in good faith and in accordance with the
terms of this Trust Agreement and any applicable Federal or state
laws, rules or regulations. Under any and all circumstances, if
the Trustee in good faith determines that an action or inaction
required by the terms of the Plan or this Trust Agreement would
be contrary to the standards set forth in ERISA or other
requirements of law, the Trustee shall not follow such terms and
shall not be required to be inactive, but shall act in a manner
which it in good faith determines to be in accordance with the
standards set forth in ERISA and other applicable provisions of
law.
Section 4.3 Except as provided in Sections 4.1 and 4.4
hereof, the Trustee shall, subject to the Terms of the Plan with
respect to the requirements of any of the specific funds or
accounts making up the Trust Fund, have the power in investing
and reinvesting the Trust Fund, and any separate funds or
accounts into which directed, in its sole discretion:
(a) To invest and reinvest in any property, real, personal
or mixed, wherever situated and whether or not
productive of income or consisting of wasting assets,
including, without limitation, common and preferred
stocks, bonds, notes, debentures (including convertible
stocks and securities but, except as directed by an
insurance company or Investment Manager not affiliated
with the Trustee, not including any stock or security
of the Trustee, or any affiliate thereof, leaseholds,
mortgages, certificates of deposit or demand or time
deposits (including any such deposits with the Trustee
or an affiliate of the Trustee which bear a reasonable
rate of interest), shares of investment companies and
mutual funds, interests in partnerships and trusts,
insurance policies and annuity contracts, and oil,
mineral or gas properties, royalties, interests or
rights, without being limited to the classes of
property in which Trustees are authorized to invest by
any law or any rule of court of any state and without
regard to the proportion any such property may bear to
the entire amount of the Trust Fund; provided, however,
that the Trust Fund, except for the funds or accounts
holding primarily shares of stock of Northeast
Utilities or Yankee Energy System, Inc., shall be
diversified so as to minimize the risk of large losses
unless under the circumstances it is clearly prudent
not to do so, in the sole discretion of the Trustee;
(b) To invest and reinvest all or any portion of the Trust
Fund collectively with the funds of other trusts
9
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qualifying under Section 401 of the Code through the
medium of any common, collective or commingled trust
fund that may be established and maintained by the
Trustee or any of its affiliates, or any state or
national bank or banking association, the instrument or
instruments establishing such trust fund or funds, as
amended, being made a part of this Trust Agreement so
long as any portion of the Trust Fund shall be invested
through the medium thereof; provided further that any
such common, collective or commingled trust fund may be
specifically designated for investment in guaranteed
investment contracts (a "GIC Fund");
(c) To retain any property at any time received by the
Trustee;
(d) To sell or exchange any property held by it at public
or private sale, for cash or on credit, to grant and
exercise options for the purchase or exchange thereof,
to exercise all conversion or subscription rights
pertaining to any such property and to enter into any
covenant or agreement to purchase any property in the
future;
(e) To participate in any plan or reorganization,
consolidation, merger, combination, liquidation or
other similar plan relating to property held by it and
to consent to or oppose any such plan or any action
thereunder or any contract, lease, mortgage, purchase,
sale or other action by any person;
(f) To deposit any property held by it with any
protective,reorganization or similar committee, to
delegate discretionary power thereto, and to pay part
of the expenses and compensation thereof and any
assessments levied with respect to any such property so
deposited;
(g) To extend the time of payment of any obligation held by
it;
(h) To hold uninvested any moneys received by it, without
liability for interest thereon, until such moneys shall
be invested, reinvested or disbursed;
(i) To exercise all voting or other rights with respect to
any property held by it and to grant proxies,
discretionary or otherwise; provided, however that
shares of stock of the Company defined as Shares in
Section 4.1 hereof shall be voted by the Trustee, and
the Trustee shall act with respect to an opportunity to
respond to a tender or exchange offer for such Shares,
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as provided therein; and shares of stock of the Company
not specifically defined as Shares in Section 4.1
hereof shall be voted by the Trustee, and the Trustee
shall act with respect to an opportunity to respond to
a tender or exchange offer with respect thereto, as
provided in the Plan;
(j) For the purposes of the Trust, to borrow money from
others, to issue its promissory note or notes therefor,
and to secure the repayment thereof by pledging any
property held by it;
(k) To manage, administer, operate, insure, repair,
improve, develop, preserve, mortgage, lease or
otherwise deal with, for any period, any real property
or any oil, mineral or gas properties, royalties,
interests or rights held by it directly or through any
corporation, either alone or by joining with others,
using other Trust assets for any such purposes, to
modify, extend, renew, waive or otherwise adjust any
provision of any such mortgage or lease and to make
provision for amortization of the investment in or
depreciation of the value of such property;
(l) To employ suitable agents and counsel, who may be
counsel to the Company, and to pay their reasonable
expenses and compensation;
(m) To cause any property held by it to be registered and
held in the name of one or more nominees, with or
without the addition of words indicating that such
securities are held in a fiduciary capacity, and to
hold securities in bearer form;
(n) To settle, compromise or submit to arbitration any
claims, debts or damages due or owing to or from the
Trust, respectively, to commence or defend suits or
legal proceedings to protect any interest of the Trust,
and to represent the Trust in all suits or legal
proceedings in any court or before any other body or
tribunal; provided, however, that the Trustee shall not
be required to take any such action unless it shall
have been indemnified by the Company and the Associate
Companies to its reasonable satisfaction against
liability or expenses it might incur therefrom;
(o) To organize under the laws of any state a corporation
or trust for the purpose of acquiring and holding title
to any property which it is authorized to acquire
hereunder and to exercise with respect thereto any or
all of the powers set forth herein; and
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(p) Generally, to do all acts, whether or not expressly
authorized, that the Trustee may deem necessary or
desirable for the protection of the Trust Fund.
Section 4.4 If (i) a registered investment adviser under the
Investment Advisers Act of 1940, (ii) a bank, as defined in that
Act, or (iii) an insurance company qualified to perform
investment management services under the laws of more than one
state is duly appointed by the Company an "Investment Manager" as
the term is defined in Section 3(38) of ERISA, with respect to
the Plan with the power to direct the investment and reinvestment
of all or part of the Trust Fund, the Investment Manager shall,
unless its appointment provides otherwise, have the power to
direct the_ Trustee in the exercise of the powers described in
Paragraphs (a) through (k) inclusive of Section 4.3 hereof with
respect to all or part of the Trust Fund, as the case may be, and
the Trustee shall, upon receipt of a copy of the Investment
Manager's appointment and written acknowledgement of such
appointment, satisfactory in form to the Trustee, exercise such
powers as directed in writing by the Investment Manager, unless
it knows that such direction is a breach of the Investment
Manager's duty to act with care, skill, prudence, and diligence
under the circumstances then prevailing that a prudent man acting
in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like
aims. If more than one Investment Manager is appointed, each
shall have the right to direct the Trustee, in accordance with
the provisions of the preceding sentence, as to such part of the
Trust Fund as the Company shall specify. The Trustee shall not
be liable for any diminution in the value of the Trust Fund as a
result of following any such direction of an Investment Manager
or as a result of not exercising any such powers in the absence
of any such direction.
The Trustee shall have full authority to invest and reinvest
any part of the Trust Fund with respect to which no such bank,
insurance company, or registered investment adviser has been
appointed, and shall not be required to follow the directions of
any other person, including without limitation the Company, as to
such part of the Trust Fund notwithstanding any provision in the
Plans to the contrary. Nevertheless, the Trustee shall invest
the funds covered by Section 4.1 hereof as provided therein.
For efficiency or convenience of investment or
administration, the Trust Fund may be divided into such one or
more sub-funds as may be provided in the Plan or as the Company
or the Trustee may deem advisable. In the event that the Trust
Fund is so divided, and while the Plan grants to Participants the
opportunity to direct that all or a portion of their accounts
shall be invested in one or more of such sub-funds, the Trustee
shall accept the direction so to invest among the sub-funds
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(however such direction is communicated to the Trustee by the
Company) and the Trustee shall be fully protected in following
any such direction.
A portion of the Trust Fund may be invested in shares of
stock of Northeast Utilities, as provided in Sections 6.02 and
15.02 of the Plan or elsewhere in the Plan. The Trustee shall
not be liable for any diminution in the value of the Trust Fund
as a result of any such investment.
Section 4.5 No person dealing with the Trustee shall be
under any obligation to see to the proper application of any
money paid or property delivered to the Trustee or to inquire
into the Trustee's authority as to any transaction.
Section 4.6 The Trustee shall distribute cash or property
(and shall stop such distributions) from the Trust Fund at such
time or times, to such person or persons, including a paying
agent or agents designated by the Company, and for such purposes
as the Company shall direct in writing. Any cash or property so
distributed to any paying agent shall be held in trust by such
payee until disbursed in accordance with the Plan. Upon written
direction by the Company, the Trustee shall distribute that part
of the Trust Fund specified in such direction to any other trust
established for the purpose of funding benefits under the Plan.
In the event that any portion of the Trust Fund is invested in a
fund of guaranteed investment contracts ("GIC Fund"), and the
total withdrawals requested or required from the GIC Fund
(including withdrawals due to disqualification of participating
trusts) ever exceed the uncommitted cash and the liquid
investments of the GIC Fund on a valuation date, withdrawals due
to disqualification of a participating trust will be given first
priority to the extent of the assets of the GIC Fund available
for such withdrawals. Requests to pay benefits from the GIC Fund
from participating trusts, or to accommodate requests by plan
participants under a participating trust to transfer all or a
portion of their account balances from such GIC Fund in
accordance with the terms of the participating trust, will be
given second priority to the extent of the assets of the GIC Fund
available for such withdrawals. The remaining requests for
withdrawals from the GIC Fund will be fulfilled on a pro-rata
basis on each succeeding valuation date until all such requests
for withdrawals are satisfied but will be completed on or before
the last day of the twelfth month following the date of the
withdrawal request.
The Trustee shall charge any distribution pursuant to this
Section 4.6 against such portion of the Trust Fund as the Company
may direct.
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In directing the Trustee to make any such distribution (or
to stop any such distribution), the Company shall follow the
provisions of the Plan and, except as provided in Section 11.1
hereof, shall not direct that any payment be made, either during
the existence or upon the discontinuance of the Plan, that would
cause any part of the equitable share of such Plan in the Trust
Fund to be used for or diverted to purposes other than the
exclusive benefit of the participants in the Plan and their
beneficiaries after defraying reasonable expenses of
administering the Plan, pursuant to the provisions of the Plan.
The preceding sentence shall not prohibit the return to the
Company or an Associate Company of (1) a contribution to the Plan
that is made by the Company or Associate Company under a mistake
of fact, within one year after the payment of the contribution,
or (2) a contribution to the Plan by the Company or an Associate
Company which is conditioned upon the deductibility of the
contribution under Section 404 of the Code, to the extent that
such deduction if disallowed, within one year after the
disallowance of the deduction. Any written direction of the
Company shall constitute a certification that the distribution so
directed is one that the Company is authorized to direct, and the
Trustee need not make any further investigation.
The Trustee may make any distribution required hereunder by
mailing its check for the specified amount, or delivering the
specified property, to the person to whom such distribution or
payment is to be made, at such address as may have been last
furnished to the Trustee, or if no such address shall have been
so furnished, to such person in care of the Company, or (if so
directed by the Company) by crediting the account of such person
or by transferring funds to such person's account by bank or wire
transfer.
Section 4.7 Anything in this Trust Agreement to the contrary
notwithstanding, the Trustee may condition its delivery, transfer
or distribution of any cash or other property from the Trust Fund
upon the Trustee's receiving assurances satisfactory to it that
the approval of appropriate governmental or other authorities has
been secured and that all notice and other procedures required by
applicable law have been complied with.
Section 4.8 Anything in this Trust Agreement to the contrary
notwithstanding, upon the direction of the Company, the Trustee
shall transfer the specified portion of the Trust Fund, or, as
the case may be, the specified portion of any commingled fund
described in Section 4.3, to such insurance company as the
Company shall designate for the purchase of one or more group
annuity insurance contracts; provided further, that upon the
direction of the Company, the Trustee is authorized to enter into
such insurance policies or contracts with such insurance company
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as the Company may from time to time designate. Any such
contract may be purchased for the purpose of providing the Plan
and the Trust Fund with an additional funding medium or
investment vehicle or for providing for the payment of benefits
under the Plan. The Trustee shall not be responsible for the
form, terms or choice of issuer of any such contract.
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The Trustee as contract holder shall perform such functions
as the contract may specify and as are acceptable to the Trustee,
provided that should any function specified to be performed by
the Trustee as contract holder be unacceptable in whole or in
part to it, the Company shall be responsible for performing such
functions and the Trustee shall be relieved of all responsibility
with respect to the performance of the same. The Trustee shall
include in its accounts under Article VI hereof a statement of
the value of any such contract as certified by the issuer.
Section 4.9 The Trustee may consult with any legal counsel,
who may be counsel to the Company, with respect to the meaning or
construction of this Trust Agreement, its obligations or duties
hereunder, or any act which it should take or omit hereunder, or
any action or proceeding or any question of law, and shall be
fully protected with respect to any action taken or omitted by it
in good faith pursuant to such advice.
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ARTICLE V
Taxes, Expenses and Compensation of Trustee
Section 5.1 The Trustee shall pay out of the Trust Fund any
Federal, state or local taxes on the Trust Fund, or any part
thereof, or the income therefrom, or which the Trustee is
required to pay with respect to the interest of any person
therein.
Section 5.2 The Trustee shall be paid its reasonable
expenses for the management and administration of the Trust Fund,
including without limitation reasonable expenses of counsel and
other agents employed by the Trustee hereunder, and reasonable
compensation for its services as Trustee hereunder, the amount of
which shall be agreed upon by the Company and the Trustee in
writing; provided, however, that if the Trustee forwards an
amended fee schedule to the Company requesting its agreement
thereto and the Company fails to object thereto within thirty
(30) days of its receipt, the amended fee schedule shall be
deemed to be agreed upon by the Company and the Trustee. Such
expenses and compensation shall be paid by the Company and the
Associate Companies, but if they are not so paid, they shall be
paid by the Trustee from the Trust Fund.
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ARTICLE VI
Accounts - Reports
Section 6.1 The Trustee shall keep books of account that
show all its receipts and disbursements hereunder. The books of
account of the Trustee with respect to the Trust Fund shall be
open to inspection by the Company, or its representatives, at all
reasonable times during normal business hours of the Trustee and
may be audited not more frequently than once each fiscal year by
an independent certified public accountant engaged by the
Company.
Section 6.2 Within a reasonable time after the close of each
fiscal year of the Company or of any termination of the duties of
the Trustee hereunder, the Trustee shall prepare and deliver to
the Company an account of its acts and transactions as Trustee
during such fiscal year or during such period from the close of
the last fiscal year to the termination of the Trustee's duties,
respectively, including a statement of the then current value of
the Trust Fund. Any such account shall be deemed accepted and
approved by the Company, and the Trustee shall be relieved and
discharged, as if such account had been settled and allowed by a
judgment or decree of a court of competent jurisdiction, unless
protested by written notice to the Trustee within sixty (60) days
of receipt thereof by the Company.
The Trustee or the Company shall have the right to apply at
any time to a court of competent jurisdiction for judicial
settlement of any account of the Trustee not previously settled
as herein provided or for the determination of any question of
construction or for instructions. In any such action or
proceeding it shall be necessary to join as parties only the
Trustee and the Company (although the Trustee may also join such
other parties as it may deem appropriate), and any judgment or
decree entered therein shall, to the extent permitted by law, be
conclusive.
Section 6.3 Anything in this Trust Agreement to the contrary
notwithstanding, with respect to any assets of the Trust Fund as
to which, an Investment Manager has been appointed pursuant to
Section 4.4 hereof, and as to any other assets which are under
the control of any person or entity other than the Trustee, the
Trustee may rely for all purposes of this Trust Agreement,
including for the purpose of determining the value of such assets
as of any valuation date, on any certified appraisal or other
form of valuation submitted to it by the Investment Manager or by
the person or entity controlling such assets.
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In addition, for the convenience of the Company and without
imposing any obligation on the Trustee, the Company may request
the Trustee to include in its annual account under Section 6.2,
assets which do not constitute part of the Trust Fund. With
respect to assets included at the request of the Company as
hereinabove provided, the Trustee may rely for all purposes of
this Agreement on the latest valuation and transaction
information submitted to it by the person responsible for the
investment of such assets even if such information predates any
valuation date used by the Trustee. The Company will cause such
person to provide the Trustee with all information needed by the
Trustee to discharge its obligations to value such assets and to
account under this Agreement.
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ARTICLE VII
Resignation, Removal and Replacement of Trustee
Section 7.1 The Trustee may resign at any time by delivering
written notice thereof to the Company; provided, however, that no
such resignation shall take effect until the earlier of (i) sixty
(60) days from the date of delivery of such notice to the Company
or (ii) the appointment of a successor trustee.
Section 7.2 The Trustee may be removed at any time by the
Company, pursuant to a resolution of the Board of Directors of
the Company, or by action of any officer or committee of the
Company to whom plan administration duties have been allocated
pursuant to the Plan and sixty (60) days written notice, unless
such notice period is waived in whole or in part by the Trustee,
of (i) such removal and (ii) the appointment of a successor
trustee.
Section 7.3 Upon the resignation or removal of the Trustee,
a successor trustee shall be appointed by the Company. Such
appointment shall take effect upon the delivery to the Trustee of
(a) a written appointment of such successor trustee duly executed
by the Company, and (b) a written acceptance by such successor
trustee, duly executed thereby. Any successor trustee shall have
all the rights, powers, and duties granted the Trustee hereunder.
Section 7.4 If, within sixty (60) days of the delivery of a
Trustee's written notice of resignation, a successor trustee
shall not have been appointed, the Trustee may apply to any court
of competent jurisdiction for the appointment of a successor
trustee.
Section 7.5 Upon the resignation or removal of the Trustee
and the appointment of a successor trustee, and after the
acceptance and approval of its account, the Trustee shall
transfer and deliver the Trust Fund to such successor.
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ARTICLE VIII
Termination of Trust
Section 8.1 The Trust may be terminated at any time by the
Company, pursuant to a resolution of the Board of Directors
thereof, upon delivery to the Trustee of a certified copy of such
resolution and a written instrument of termination duly executed
and acknowledged in the same form as this Trust Agreement.
Section 8.2 Upon the termination of the Trust, the Trustee
shall, after the acceptance and approval of its account by the
Company, distribute the Trust Fund as directed by the Company
pursuant to Section 4.6 hereof, or in the absence of such
direction as directed by any court of competent jurisdiction.
Upon completing such distribution, the Trustee shall be relieved
and discharged. The powers of the Trustee shall continue as long
as any part of the Trust Fund remains in its possession.
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ARTICLE IX
Amendment
Section 9.1 This Trust Agreement may be amended, in whole or
in part, at any time and from time to time, by the Company,
pursuant to a resolution of the Board of Directors thereof or by
action of any officer or committee of the Company to whom plan
administration duties have been allocated pursuant to the Plan,
by delivery to the Trustee of a certified copy of such
resolution, if appropriate, and a written instrument duly
executed and acknowledged in the same form as this Trust
Agreement, except that the duties and responsibilities of the
Trustee shall not be increased without the Trustee's written
consent; provided, however, that no such amendment shall divert
any part of the Trust Fund to purposes other than the exclusive
benefit of the participants in the respective Plans and their
beneficiaries and defraying reasonable expenses of administering
the Plan.
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ARTICLE X
Miscellaneous
Section 10.1 This Trust Agreement shall be construed and
interpreted under, and the Trust hereby created shall be governed
by, the laws of Connecticut insofar as such laws do not
contravene any applicable Federal laws, rules or regulations.
Section 10.2 The Titles to the Articles in this Trust
Agreement are included for convenience of reference only and are
not to be used in interpreting this Trust Agreement.
Section 10.3 Neither the gender nor the number (singular or
plural) of any word shall be construed to exclude another gender
or number when a different gender or number would be appropriate.
Section 10.4 No right or interest of any participant in a
Plan or his beneficiaries in the Trust Fund shall be transferable
or assignable or shall be subject to alienation, anticipation or
encumbrance, and no right or interest of any participant in a
Plan or his beneficiaries in the Trust Fund shall be subject to
any garnishment, attachment or execution. Notwithstanding the
foregoing, payments from the Trust Fund shall be made as required
under a qualified domestic relations order, as defined in Section
414(p) of the Code.
Section 10.5 All persons at any time interested in the Plan
shall be bound by the provisions in this Trust Agreement and, in
the event of any conflict between this Trust Agreement and the
provisions of the Plan or any other instrument or agreement
forming part of the Plan, the provisions of this Trust Agreement
shall control.
Section 10.6 This Trust Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which shall together constitute only one
Trust Agreement.
Section 10.7 Communications to the Trustee shall be sent to
the Trustee's principal offices or to such other address as the
Trustee may specify in writing. No communication shall be
binding upon the Trustee until it is received by the Trustee.
Communications to the Company shall be sent to the Company's
principal offices or to such other address as the Company may
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specify in writing.
Section 10.8 In the event that the Company or the Trustee is
a party to any merger, consolidation or reorganization, the
surviving corporation shall be the Company or Trustee, as
applicable, hereunder.
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ARTICLE XI
Revocation of Trust
Section 11.1 If the Trustee shall receive written notice
from the Company that the Internal Revenue Service has issued a
final ruling in writing to the effect that the initial
determination by the Internal Revenue Service was that the Plan
did not qualify under Section 401 of the Code, the Trust and Plan
shall without further action be revoked, and the Trustee shall
distribute the remainder of the Trust Fund allocable, after
payment of the Trustee's proper expenses and compensation, as
provided in the Plan.
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IN WITNESS WHEREOF, the parties hereto have caused
this Trust Agreement to be duly executed and their
respective corporate seals to be hereto affixed this 7th day of
July, 1989.
YANKEE ENERGY SYSTEM, INC.
By: /s/ Michael E. Bielonko
Its: Vice President and Treasurer
UNITED BANK & TRUST COMPANY
By:_____________________________
Its: Vice President
STATE OF CONNECTICUT )
) ss: Hartford, July 7, 1989
COUNTY OF HARTFORD )
Personally appeared Michael E. Bielonko, Vice President and
Treasurer of YANKEE ENERGY SYSTEM, INC., signer and sealer of the
foregoing instrument, and acknowledged the same to be his
free act and deed as such Vice President and Treasurer and the
free act and deed of said Corporation, before me.
/s/Charles B. Milliken
Notary Public
CHARLES B. MILLIKEN
Notary Public
My Commission Expires March 31, 1992
STATE OF CONNECTICUT )
) ss: Hartford, July 7, 1989
COUNTY OF HARTFORD )
Personally appeared Edward J. Tedesco, Vice President of
UNITED BANK & TRUST COMPANY, signer and sealer of the foregoing
instrument, and acknowledged the same to be his free act and deed
as such Vice President and the free act and deed of said
Corporation, before me.
/s/Charles B. Milliken
Notary Public
CHARLES B. MILLIKEN
Notary Public
My Commission Expires March 31, 1992
26
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FIRST AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") has
established the Yankee Energy System, Inc. 401(k) Employee Stock
Ownership Plan (the "Plan") for its eligible employees, effective
July 1, 1989; and
WHEREAS, Section 20.01 of the Plan reserves to the Company the
right to amend the Plan:
NOW THEREFORE, the Plan is amended by this First Amendment,
effective July 1, 1989.
1. Article III, Participation, is hereby amended by changing
Section 3.02(B) in its entirety to read as follows:
3.02(B) Other Participants. Each Covered Employee shall
become eligible for participation on any
Enrollment Date coincident with or following the
completion of six (6) months of Service.
2. Article III, Participation, is hereby amended by deleting
Section 3.02(C)in its entirety and substituting the
following Sections 3.02(C) and 3.02(D):
3.02(C) Former Northeast Utilities Employees. Each former
Covered Employee of the Company or Participating
Company shall receive credit for service for
eligibility to participate in the Plan for
previous service with Northeast Utilities from
June 1, 1989 to July 1, 1990. If such deemed
Service is equal to or more than 6 months of
Service, such Covered Employee shall be eligible
to participate in the Plan on the Enrollment Date
coincident with or following the date he becomes a
Covered Employee. If such deemed Service is not
sufficient to meet the participation requirement
of 3.02(B), such Covered Employee shall be
eligible to participate in the Plan on the
Enrollment Date coincident with or following the
date his deemed Service and Service after becoming
a Covered Employee equals six months.
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3.02(D) Other Former Northeast Utilities Employees. Each
former employee of Northeast Utilities who becomes
a Covered Employee of the Company or Participating
Company during July, 1989 and who had at least ten
(10) years of Service with Northeast Utilities
prior to becoming a Covered Employee shall be
immediately eligible to elect to participate in
the plan on the Enrollment Date coincident with or
next following his date of becoming a Covered
Employee of the Company or Participating Company.
IN WITNESS WHEREOF, the Company, by its duly authorized officer
causes this First Amendment to be executed this Twenty-third day
of April 1990.
YANKEE ENERGY SYSTEM, INC.
By: /s/ Leonard A. O'Connor
Its: Vice President and Chief
Financial Officer
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SECOND AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(K) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") has
established the Yankee Energy System, Inc. 401(k) Employee Stock
Ownership Plan (the "Plan") for its eligible employees, effective
July 1, 1989; and
WHEREAS, Section 20.01 of the Plan reserves to the Company by
action of its Board of Directors the right to amend the Plan;
NOW THEREFORE, the Plan is amended by this Second Amendment,
effective August 1, 1991.
1. Article IV, Contributions, is hereby amended by changing
Section 4.04(A) to read as follows, and by adding a new
sentence before Section 4.06(A):
4.04(A) Effective as of any January 1, April 1, July 1 or
October 1 (or other such dates as permitted by the
Committee in its sole discretion) , a Participant
may elect to increase, decrease or suspend Basic
Contributions, Supplemental Contributions and/or
After-Tax Contributions, provided that he notify
the committee in writing at least thirty (30) days
prior to the effective date of such election. In
the event of an increase, decrease or suspension
of Basic Contributions, the Participant's Company
Matching Contribution for the months affected by
the change will be adjusted accordingly.
4.06 Company Matching Contributions. The Company
Matching Contributions will be accrued on a
monthly basis and allocated to each Participant's
Matching Contributions Account at year end.
2. Article VI, Accounts and Funds, is hereby amended by
changing Section 6.03(C) to read as follows:
6.03(C) Elections by Participants to transfer amounts from
one Investment Fund to another in increments of
ten percent (10%) effective as of January 1, April
1, July 1 or October 1, following thirty (30) days
written notice to the Committee (or such other
dates as permitted by the Committee in its sole
discretion) , provided that the Company Matching
Contribution Account may not be transferred except
as provided in Section 6.05.
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3. Article IX, Withdrawals, is hereby amended by deleting
section 9.05(b), relettering Sections 9.05(c), (d) and (e)
to be 9.05(b), (c) and (d), and by adding Sections 9.05(e)
and (f) as follows:
9.05(e) The Participant's Basic Contributions,
Supplemental Contributions and Company Matching
Contributions will be suspended for a period of
twelve (12) months after the date of the hardship
withdrawal when the participant will automatically
re-enter the plan and recommence Basic
Contributions, Supplemental Contributions and
Company Matching Contributions at the rate in
effect prior to the suspension, subject to
paragraph (f) below; and
(f) in the Plan Year next following the date of the
hardship withdrawal, the Participant may
contribute Basic Contributions and Supplemental
Contributions no greater than an amount equal to
the maximum amount specified in Section 4.01 minus
the amount of Basic Contributions and Supplemental
Contributions made on behalf of the Participant
during the Plan Year in which the hardship
withdrawal occurred.
4. Article XII, Contributions, is hereby amended by changing
Section 12.04(A) to read as follows:
12.04(A) Rules for Contributions. Effective as of any
January 1, April 1, July 1, or October 1 (or other
such dates as permitted by the Committee in its
sole discretion) , a Participant may elect to
increase, decrease or suspend Basic Contributions,
Supplemental Contributions and/or After-Tax
Contributions; provided that he must notify the
Committee in writing at least thirty (30) days
prior to the effective date of such election. In
the event of an increase, decrease or suspension
of Basic Contributions, the Participant's Company
Matching Contribution for the months affected by
the change will be adjusted accordingly.
5. Article XV, Accounts and Funds, is hereby amended by
changing Section 15.03(E) to read as follows:
15.03(E) Elections by Participants to transfer amounts from
one Investment Fund to another in increments of
ten percent (10%) may be made once in each Plan
year following thirty (30) days written notice to
the Committee (or other such number of days as
permitted by the Committee in its sole
discretion).
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6. Article XVII, Withdrawals, is hereby amended by changing
Section 17.01(D) to read as follows; by deleting Section
17.04(b), relettering Sections 17.04(c), (d) and (e) to be
17.04(b), (c) and (d), and by adding Sections 17.04(e) and
(f) as follows:
17.01(D) From that part of his Basic and Supplemental
Contribution Account equal to the aggregate amount
of his Basic and Supplemental Contributions,
excluding earnings after January 1, 1989 thereon;
provided, however, that no withdrawal of such
amount shall be permitted unless the Participant
has suffered a total Disability or is able to
demonstrate hardship pursuant to Section 17.03.
17.04 (e) The Participant's Basic Contributions,
Supplemental Contributions and Company Matching
Contributions will be suspended for a period of
twelve (12) months after the date of the hardship
withdrawal when the participant will automatically
re-enter the plan and recommence Basic
Contributions, Supplemental Contributions and
Company Matching Contributions at the rate in
effect prior to the suspension, subject to
paragraph (f) below; and
(f) in the Plan Year next following the date of the
hardship withdrawal, the Participant may
contribute Basic Contributions and Supplemental
Contributions no greater than an amount equal to
the maximum amount specified in section 12.01
minus the amount of Basic Contributions and
Supplemental Contributions made on behalf of the
Participant during the Plan Year in which the
hardship withdrawal occurred.
IN WITNESS WHEREOF, the Company, by its duly authorized officer
causes this Second Amendment to be executed this 1st day of
August, 1991.
YANKEE ENERGY SYSTEM, INC.
By:/s/ Michael E. Bielonko
Vice President and
Chief Financial Officer
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THIRD AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
The Yankee Energy System, Inc. (the "Company") established the
Yankee Energy System, Inc. 401(k) Employee Stock Ownership Plan
(the "Plan") effective as of July 1, 1989; and
Section 20.01, Plan Amendment, reserves to the Company the right
to amend the Plan;
The Company hereby amends the Plan as indicated, in accordance
with the following provisions:
1. Part I, Article VIII, Benefit Distributions. is hereby
amended by renumbering of Section 8.04 as &05, 8.05 as 8.06
and the addition of Section 8.04 as follows:
"8.04 Direct Rollovers. Effective on and after January 1,
1993, a Participant or Participant's spouse who is entitled
to receive a distribution of benefits under Article VIII
(XVI) or to make a withdrawal under Article IX (XVII) may
elect to have the portion of such benefit distribution or
withdrawal that qualifies as an eligible rollover
distribution under Code Section 402(c)(4) paid directly to
an 'eligible retirement plan" specified by such Participant
or Participant's spouse. For a Participant's spouse who so
elects, an "eligible retirement plan" means an individual
retirement account described in Code Section 408(a) or an
individual retirement annuity described in Code Section
408(b) (other than an endowment contract). For a
Participant who so elects an "eligible retirement plan" so
means an individual retirement account described in Code
Section 408(a) or an individual retirement annuity described
in Code Section 408(b) (other than an endowment contract),
or a defined contribution plan that is qualified under Code
Section 401(a) the terms of which permit acceptance of
direct rollover distributions. The Committee shall
establish reasonable procedures in connection with such
elections in accordance with any applicable Treasury
Regulations promulgated."
2. Part 1, Article IX Withdrawals, is hereby amended by
revision of Section 9.04 in its entirety to read as follows:
"9.04 An immediate and heavy financial need will be deemed
to exist without further inquiry only if the withdrawal is
on account of:
(a) unreimbursed medical expenses previously incurred by
the Participant, a spouse or any dependent of the
Participant, or unreimbursed expenses necessary for
such persons to obtain medical care;
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(b) the purchase (excluding mortgage payments) of the
Participant's principal residence;
(c) the payment of tuition and reasonable educational fees
for the next twelve (12) months of post-secondary
education for the Participant, a spouse, a child or
other dependent;
(d) payments necessary to prevent a mortgage foreclosure or
eviction from the Participant's principal place of
residence; or
(e) such other specific events which the Internal Revenue
Service constitutes to be an immediate and heavy
financial need.
A financial need shall not fail to qualify merely because
such need was reasonably foreseeable or voluntarily incurred
by the Participant."
3. Part I, Article IX, Withdrawals, is hereby amended by the
addition of the following sentence at the end of Section
9.06:
"Any withdrawal which qualifies as an eligible
rollover distribution under Code Section 402(c)(4) shall be
eligible for a direct rollover in accordance with Section
8.03"
4. Part 11, Article XII, Contributions, is hereby amended by
revision of Section 12.01 in its entirety to read as
follows:
"Basic Contributions. Subject to the provisions of Article
XIV, each Participant may elect, pursuant to Section 11.03,
to have the Company contribute a percentage of his
Compensation to the Trust Fund on behalf of such
Participant, in an amount equal to any whole percentage
not less than one percent (1%) nor more than five
percent (5%) of his Compensation; provided that such
contribution, along with the contribution provided for in
Section 12.02, shall not in any calendar year exceed the
limitation in Section 402(g) of the Code--$8,728 for
1992--as adjusted by the Secretary of Treasury or his
delegate."
5. Part II, Article XII, Contributions, is hereby amended by
revision of Section 12.02, in its entirety to read as
follows:
"Supplemental Contributions. Subject to the provisions of
Article XIV, and after first electing to have the Company
contribute the maximum Basic Contribution amount, each
Participant may elect, pursuant to Section 11.03, to have
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the Company contribute a percentage of his Compensation to
the Trust Fund on behalf of such Participant, in an
additional amount equal to any whole percentage not less
than one percent (1%) nor more than five percent (5%)
of his Compensation; provided that such contribution, along
with the contribution provided for in Section 12.01, shall
not in any calendar year exceed the limitation in Section
402(g) of the Code -- $8,728 for 1992 -- as adjusted by the
Secretary of Treasury or his delegate."
6. Part II, Article XV, Accounts and Funds, is hereby amended
by revision of Section 15.03(C) given the Second
Amendment to the Plan, in its entirety to read as follows:
"(C) Participants may elect to change the investment
direction in Section 15.03(A) effective as of the first
January 1, April 1, July 1 or October 1, following
thirty days written notice to the Committee (or such
other dates as permitted by the Committee in its sole
discretion); and"
7. Part II, Article XV, Accounts and Funds (as amended by the
Second Amendment to the Plan), is hereby amended by revision
of Section 15.03(E) in its entirety to read as follows:
"(E) Participants may elect to transfer amounts from one
Investment Fund to another, effective as of the first
January 1, April 1, July 1 or October 1, following
thirty days written notice to the Committee (or such
other dates as permitted by the Committee in its sole
discretion)."
8. Part 11, Article XVI, Benefit Distributions, is hereby
amended by renumbering of Section 16.08 as 16.09 and the
addition of Section 16.08 as follows:
"16.08 Direct Rollovers. Effective on and after January 1,
1993, a Participant or Participant's spouse who is entitled
to receive a distribution of benefits under Article VIII
(XVI) or to make a withdrawal under Article IX (XVII) may
elect to have the portion of such benefit distribution or
withdrawal that qualifies as an eligible rollover
distribution under Code Section 402(c)(4) paid directly to
an "eligible retirement plan" specified by such Participant
or Participant's spouse. For a Participant's spouse who so
elects, an "eligible retirement plan' means an individual
retirement account described in Code Section 408(a) or an
individual retirement annuity described in Code Section
408(b) (other than an endowment contract). For a
Participant who so elects an "eligible retirement plan" so
means an individual retirement account described in Code
Section 408(a) or an individual retirement annuity described
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in Code Section 408(b) (other than an endowment contract),
or a defined contribution plan that is qualified under Code
Section 401(a) the terms of which permit acceptance of
direct rollover distributions. The Committee shall establish
reasonable procedures in connection with such elections in
accordance with any applicable Treasury Regulations
promulgated."
9. Part II, Article XVII, Withdrawals, is hereby amended by
revision of Section 17.03 in its entirety to read as
follows:
"17.03 An immediate and heavy financial need will be deemed
to exist without further inquiry only if the withdrawal is
on account of:
(a) unreimbursed medical expenses previously incurred by
the Participant, a spouse or any dependent of the
Participant, or unreimbursed expenses necessary for
such persons to obtain medical care;
(b) the purchase (excluding mortgage payments) of the
Participant's principal residence;
(c) the payment of tuition and reasonable educational fees
for the next twelve (12) months of post-secondary
education for the Participant, a spouse, a child or
other dependent;
(d) payments necessary to prevent a mortgage foreclosure or
eviction from the Participant's principal place of
residence; or
(e) such other specific events which the Internal Revenue
Service constitutes to be an immediate and heavy
financial need.
A financial need shall not fail to qualify merely because
such need was reasonably foreseeable or voluntarily incurred
by the Participant."
10. Part II, Article XVII, Withdrawals, is hereby amended by the
addition of the following sentence at the end of Section
17.05:
"Any withdrawal which qualifies as an eligible
rollover distribution under Code Section 402(c)(4) shall
be eligible for a direct rollover in accordance with Section
16.08."
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IN WITNESS WHEREOF, the Company, its duly authorized officer,
causes this Third Amendment to be executed this. 29th day of
January, 1993.
YANKEE ENERGY SYSTEM, INC.
By:/s/ Michael E. Bielonko
Vice President, Treasurer
and Chief Financial Officer
135
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FOURTH AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") established
the Yankee Energy System, Inc. 401(k) Employee Stock Ownership
Plan (the "Plan") effective as of July 1, 1989; and
WHEREAS, Section 20.01 of the Plan reserves to the Company the
right to the amend the Plan;
NOW, THEREFORE, the Company hereby amends the Plan as follows:
1. Part I, Article IX, Withdrawals, is amended by restating
section 9.04 in its entirety to read as follows:
"9.04 The existence of an immediate and heavy financial need
shall be determined by Committee based on all relevant facts
and circumstances presented by the Participant. For this
purpose, an immediate and heavy financial need may include,
but is not limited to, the need to make the following types
of payments:
(a) unreimbursed medical expenses previously incurred by
the Participant, a spouse, or any dependent of the
Participant, or unreimbursed expenses necessary for
such persons to obtain medical care;
(b) the purchase (excluding mortgage payments) of the
Participant's principal residence;
(c) the payment of tuition and related educational fees for
the next twelve (12) months of post secondary education
for the Participant, a spouse, a child or other
dependent;
(d) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence
or foreclosure on the mortgage on that residence; or
(e) payments on account of such other specific events which
the Internal Revenue Service constitutes an immediate
and heavy financial need.
2. Part II, Article XVII, Withdrawals, is amended by restating
Section 17.03 in its entirety to read as follows:
"17.03 The existence of an immediate and heavy financial
need shall be determined by Committee based on all relevant
facts and circumstances presented by the Participant. For
this purpose, an immediate and heavy financial need may
include,, but is not limited to, the need to make the
following types of payments:
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(a) unreimbursed medical expenses previously incurred by
the Participant, a spouse, or any dependent of the
Participant, or unreimbursed expenses necessary for
such persons to obtain medical care;
(b) the purchase (excluding mortgage payments) of the
Participant's principal residence;
(c) the payment of tuition and related educational fees for
the next twelve (12) months of postsecondary education
for the Participant, a spouse, a child or other
dependent;
(d) payments necessary to prevent the eviction of the
Participant from the Participant's principal residence
or foreclosure on the mortgage on that residence; or
(e) payments on account of such other specific events which
the Internal Revenue Service constitutes an immediate
and heavy financial need.
IN WITNESS WHEREOF, the Company, its duly authorized officer,
causes this Fourth Amendment to be executed this 16th day of
July, 1993.
YANKEE ENERGY SYSTEM, INC.
By:/s/ Michael E. Bielonko
Vice President and
Chief Financial Officer
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FIFTH AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") established
the Yankee Energy System, 401(k) Employee Stock Ownership Plan
(the "Plan") effective as of July 1, 1989; and
WHEREAS, Section 20. 01 of the Plan reserves to the Company the
right to the amend the Plan;
NOW, THEREFORE, BE IT
RESOLVED, that the Company hereby amends the Plan by adding the
following new Section 8.08 to the end of Article VIII thereof:
"8.08 Distributions to Alternate Payees. In the event that
a "qualified domestic relations order," within the meaning
of Code Section 414(p)(1)(A), provides that all or a portion
of a Participant's vested Total Account is payable to a
"alternate payee," within the meaning of Code Section
414(p)(8), such alternate payee shall receive a distribution
of the applicable portion of the Participant's vested Total
Account in one lump sum payment as soon as practicable after
the Plan Administrator determines that such order meets the
requirements for a qualified domestic relations order under
Code Section 414(p)(1)(A)."
Notwithstanding the foregoing, if the order specifies an
alternative time or form of distribution, such
specifications will be complied with to the extent they are
consistent with the requirements for a qualified domestic
relations order under Code Section 414(p)(1)(A)."
IN WITNESS WHEREOF, the Company, its duly authorized officer,
causes this Fifth Amendment to be executed this 26th day of
August, 1993.
YANKEE ENERGY SYSTEM, INC.
By: /s/ Michael E. Bielonko
Vice President, Treasurer, and
Chief Financial Officer
138
<PAGE>
SIXTH AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") established
the Yankee Energy System, 401(k) Employee Stock ownership Plan
(the "Plan") effective as of July 1, 1989; and
WHEREAS, Section 20. 01 of the Plan reserves to the Company the
right to the amend the Plan;
NOW, THEREFORE, the Company hereby amends the Plan effective as
of August 26, 1993, by amending and restating paragraph (A) of
Section 20.01 in its entirety to read as follows (the remaining
paragraphs of such section will remain unchanged):
"(A) The Board or its designee may amend or modify the Plan
from time to time in any respect; provided, however that no
such action shall retroactively decrease the accrued benefit
of a Participant under the Plan, eliminate an optional form
of benefit with respect to benefits attributable to service
prior to the amendment, or otherwise violate Code Section
411(d)(6)."
IN WITNESS WHEREOF, the Company, its duly authorized officer,
causes this Fifth Amendment to be executed this 26th day of
August, 1993.
YANKEE ENERGY SYSTEM, INC.
By:/s/ Michael E. Bielonko
Vice President, Treasurer, and
Chief Financial Officer
139
<PAGE>
SEVENTH AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") has
established the Yankee Energy System, Inc. 401(k) Employee Stock
Ownership Plan (the "Plan") for its eligible employees, effective
July 1, 1989; and
WHEREAS, Section 20.01 of the Plan reserves to the Company the
right to amend the Plan:
NOW THEREFORE, the Plan is amended by this Seventh Amendment,
effective as of January 3, 1994:
1.Section 8.03 of the Plan is hereby amended by restating
paragraphs (B) and (C) thereof in their entirety to read as
follows:
"(B) A Participant who is entitled to receive a distribution
in excess of $3,500 in accordance with this Article
VIII must consent to any distribution prior to
attainment of age 70-1/2. If a Participant does not
consent to such distribution, he shall remain a
Participant in the Plan until he actually receives a
distribution, except no further contributions shall be
made by him or on his behalf unless reemployed by the
Company.
(C) A Participant who is entitled to receive a distribution
may elect to receive the portion of his Total Account
which is invested in the Yankee Energy Share (Company
Matching) Fund or the Yankee Energy Share (Voluntary)
Fund in the form of Company Stock or the Northeast
Utilities Stock Fund in the form of common shares of
Northeast Utilities."
2. Article XVI of the Plan is hereby restated in its entirety
to read as follows:
"ARTICLE XVI
BENEFIT DISTRIBUTIONS
16.01 Termination of Employment. Upon the Termination of
Employment of a Participant, the Participant's vested Total
Account shall be distributed as provided in Section 16.03.
16.02 Death.
(A) In the event of the death of a Participant prior to
distribution of benefits described in Section 16.01,
his Beneficiary shall be paid an amount equal to the
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Total Account of the Participant, distributed in the
manner provided in Section 16.03.
(B) On the application form referred to in Section 11.03, a
Participant may designate a Beneficiary or
Beneficiaries for purposes of the Plan and may change
such designation from time to time by filing a written
designation with the Committee on a form prescribed by
the Committee; provided that the Committee may in its
discretion limit the number of Beneficiaries who may be
designated by a Participant.
(C) Notwithstanding any other provisions of this Section
16.02, the Beneficiary of a married Participant shall
be such Participant's spouse, unless the designation of
a Beneficiary other than the Participant's spouse has
been made in writing and consented to by such spouse.
Further, the consent of such spouse must be witnessed
by a Plan representative or notary public.
Notwithstanding this consent requirement, a
Participant's Beneficiary designation shall be deemed
valid if the Participant establishes to the
satisfaction of the Committee that such written consent
cannot be obtained because there is no spouse or the
spouse cannot be located.
(D) If no Beneficiary has been designated or no Beneficiary
survives the Participant, then the benefit payable in
accordance with Section 16.02(A) shall be distributed
to his surviving spouse or, if none, to his surviving
issue per stirpes or, if none, to the estate of such
deceased Participant.
16.03 Payment of Benefits.
(A) Except as otherwise provided below, all amounts
distributed to a Participant or his Beneficiary
pursuant to this Article XVI shall be made in a single
lump sum payment as soon as administratively possible.
(B) A Participant who is entitled to receive a distribution
in excess of $3,500 in accordance with this Article XVI
must consent to any distribution prior to attainment of
age 70-1/2. If a Participant does not consent to such
distribution, he shall remain a Participant in the Plan
until he actually receives a distribution, except no
further contributions shall be made by him or on his
behalf unless reemployed by the Company.
(C) A Participant who is entitled to receive a distribution
may elect to receive the portion of his Total Account
which is invested in the Yankee Energy Share
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(Voluntary) Fund in the form of Company Stock or the
Northeast Utilities Stock Fund in the form of common
shares of Northeast Utilities.
(D) If any Participant or his Beneficiary is, in the
judgment of the Committee, legally, physically or
mentally incapable or incompetent, payment may be made
to the guardian or other legal representative of such
Participant or Beneficiary or, if there is none, to
such other person or institution who, or which in the
opinion of the Committee, is then maintaining or has
custody of such Participant or Beneficiary. Such
payments shall constitute a full discharge with respect
thereto.
16.04 Offer to Purchase. The Trustee may, but shall not be
required to, offer to purchase any shares of Company Stock from
Participants who have received a distribution under Section 16.03
at the then fair market value. The terms of payment for any such
purchase of Company Stock may be either in a lump sum or in
installments over a period not exceeding five (5) years, with
interest payable at a reasonable rate on any unpaid installment
balance (as determined by the Trustee).
16.05 Date of Distribution. Notwithstanding the foregoing:
(A) Unless a Participant elects otherwise, the payment of
the Total Account shall begin not later than the 60th
day after the close of the Plan Year in which occurs
the latest of:
(i) the date on which the Participant attains age 65;
(ii) the 10th anniversary of the date on which the
Participant commenced participation in the Plan;
or
(iii) the Participant's Termination of Employment.
(B) Notwithstanding Section 16.05(A), the payment of
benefits to a Participant shall begin not later than
the April 1 of the calendar year immediately following
the calendar year in which the Participant attains age
70-1/2. If the Participant attained age 70-1/2 before
January 1, 1988, the Participant's required beginning
date shall be April 1 of the calendar year immediately
following the calendar year in which the later of
retirement or attainment of age 70-1/2 occurs.
16.06 Valuation Date for Distributions. If a Participant or
Beneficiary becomes entitled to a benefit pursuant to this
Article XVI, the value of the account balances to be distributed
shall be determined as of the Valuation Date that immediately
follows the event giving rise to the distribution, unless the
valuation of the account balances as of the date of distribution
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is available.
16.07 Distributions to Alternate Payees. In the event that a
"qualified domestic relations order," within the meaning of Code
Section 414(p)(1)(A), provides that all or a portion of a
Participant's vested Total Account is payable to an "alternate
payee," within the meaning of Code Section 414(p)(8), such
alternate payee shall receive a distribution of the applicable
portion of the Participant's vested Total Account in one lump sum
payment as soon as practicable after the Plan Administrator
determines that such order meets the requirements for qualified
domestic relations order under Code Section 414(p)(1)(A).
Notwithstanding the foregoing, if the order specifies an
alternative time or form of distribution, such specifications
will be complied with to the extent they are consistent with the
requirements for a qualified domestic relations order under Code
Section 414(p)(1)(A).
16.08 Direct Rollovers. Effective on and after January 1, 1993,
a Participant or a Participant's spouse who is entitled to
receive a distribution of benefits under Article XVI or to make a
withdrawal under Article XVII may elect to have the portion of
such benefit distribution or withdrawal that qualifies as an
eligible rollover distribution under Code Section 402(c)(4) paid
directly to an "eligible retirement plan" specified by such
Participant's spouse or Participant. For a Participant's spouse
who so elects, an "eligible retirement plan" means an individual
retirement account described in Code Section 408(a) or an
individual retirement annuity described in Code Section 408(b)
(other than an endowment contract). For a Participant who so
elects, an "eligible retirement plan" means an individual
retirement account described in Code Section 408(a) or an
individual retirement annuity described in Code Section 408(b)
(other than an endowment contract), or a defined contribution
plan that is qualified under Code Section 401(a), the terms of
which permit acceptance of direct rollover distributions. The
Committee shall establish reasonable procedures in connection
with such elections in accordance with any applicable Treasury
Regulations promulgated."
IN WITNESS WHEREOF, the Company, by its duly authorized officer,
causes this Seventh Amendment to be executed as of the 3rd day of
January, 1994.
YANKEE ENERGY SYSTEM, INC.
By: /s/ Michael E. Bielonko
Vice President, Treasurer and
Chief Financial Officer
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EIGHTH AMENDMENT TO THE
YANKEE ENERGY SYSTEM, INC.
401(k) EMPLOYEE STOCK OWNERSHIP PLAN
WHEREAS, Yankee Energy System, Inc. (the "Company") has
established the Yankee Energy System, Inc. 401(k) Employee Stock
Ownership Plan (the "Plan") for its eligible employees, effective
July 1, 1989; and
WHEREAS, Section 20.01 of the Plan reserves to the Company the
right to amend the Plan:
NOW THEREFORE, the Plan is amended by this Eighth Amendment,
effective as of January 3, 1994:
1. Article VI of the Plan is hereby amended by restating
Sections 6.02 through 6.06 in their entirety as follows:
"6.02 Investment Funds. The Trust Fund shall consist of
such Investment Funds as shall be selected from time to time
by the Committee for the investment of assets held in the
Trust Fund, including the three Investment Funds described
below in this Section 6.02. In addition, the Trustee shall
have the right to invest in a short-term cash fund on an
interim short-term basis.
Yankee Energy Share (Company Matching) Fund-- the
subfund of the Trust Fund consisting of allocated
shares of Company Stock attributable to Company
Matching Contributions.
Yankee Energy Share (Voluntary) Fund-- the subfund of
the Trust Fund consisting of allocated shares of
Company Stock attributable to Participant investment
elections with respect to Basic Contributions,
Supplemental Contributions, After-Tax Contributions,
Rollover Contributions and Transfer Contributions.
Northeast Utilities Stock Fund-- the subfund of the
Trust Fund consisting of common shares of Northeast
Utilities transferred from the Northeast Utilities
TRAESOP/PAYSOP or the Northeast Utilities Savings Plan.
No Basic Contributions, Supplemental Contributions,
After-Tax Contributions, Rollover Contributions or
Transfer Contributions (except as provided above) may
be invested in this Fund.
Dividends issued on the shares in this Fund shall be
used to purchase additional shares of Northeast
Utilities.
6.03 Investment Direction. The Committee may adopt rules
under which Participants may elect to have their accounts
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invested in the Investment Funds. Any rules adopted by the
Committee shall be established and operated in a
nondiscriminatory manner and shall provide that:
(A) Participants may direct the investment of Basic
Contributions, Supplemental Contributions, After-
Tax Contributions, Rollover Contributions and
Transfer Contributions made by the Participants or
on their behalf in increments of ten percent (10%)
among any of the Investment Funds in effect at the
time such contributions are made except the Yankee
Energy Share (Company Matching) Fund and the
Northeast Utilities Stock Fund.
(B) Participants may elect to change the investment
direction in Section 6.03(A) for future
contributions effective as of the first day of the
month following fifteen days written notice to the
Committee (or such shorter notice period as may be
permitted by the Committee in its sole
discretion), provided that no more than one such
change shall be permitted for any one calendar
quarter.
(C) Elections by Participants to transfer amounts from
one Investment Fund to another shall be effective
as of the first day of the month following fifteen
days written notice to the Committee (or such
shorter notice period as may be permitted by the
Committee in its sole discretion), provided that
no more than one such change shall be permitted
for any one calendar quarter, and provided further
that amounts may not be transferred from the
Yankee Energy Share (Company Matching) Fund except
as provided in Section 6.05.
(D) Participants may direct the investment of proceeds
from the sale of any common shares of Northeast
Utilities held in the Northeast Utilities Transfer
Contribution Account in increments of ten percent
(10%) among any of the Investment Funds. If a
Participant does not so direct, said Account shall
be invested in the Northeast Utilities Stock Fund.
(E) If a Participant fails to elect an investment
option, contributions that otherwise would be made
on his behalf shall not be processed until such
time as he elects an investment option.
(F) If a Participant separates from the employment of
the Company and does not receive a distribution of
his Total Account, such terminated Participant may
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continue to make elections with respect to changes
in the investment of past accumulations and
earnings thereon.
6.04 Dividends on Company Stock.
(A) Any cash dividends on shares of Company Stock
allocated to Company Matching Accounts will be
used to repay the Acquisition Loan in accordance
with Section 7.01, provided that additional shares
of Company Stock, which have a fair market value
equal to the cash dividends, are allocated from
the Loan Suspense Account to such Company Matching
Account.
(B) Any cash dividends received on unallocated shares
of Company Stock (including Company Stock in the
Loan Suspense Account) shall be used toward the
repayment of the Acquisition Loan in accordance
with Section 7.01.
(C) Any cash dividends on shares of Company Stock
allocated to Basic Contribution Accounts,
Supplemental Contribution Accounts, After-Tax
Contribution Accounts, Rollover Contribution
Accounts, Transfer Contribution Accounts and,
after the date the Acquisition Loan is repaid in
full, Company Matching Contribution Accounts shall
be reinvested in additional shares of Company
Stock.
6.05 Diversification. A Participant who has attained age
fifty-five (55) and has completed ten (10) years of
participation in the Plan may elect within ninety (90) days
after the close of each Plan Year in the six (6) Plan Year
period beginning with the Plan Year he attains age fifty-
five (55) (or he completes ten (10) years of participation
in the Plan, if later) to either
(A) Receive a distribution of twenty-five percent
(25%) of his Company Matching Account in the Plan,
or
(B) Transfer twenty-five percent (25%) of his Company
Matching Account in the Plan from the Yankee
Energy Share (Company Matching) Fund to any of the
other Investment Funds established pursuant to
Section 6.02, other than the Yankee Energy Share
(Voluntary) Fund and the Northeast Utilities Stock
Fund,
provided that such distribution or transfer election shall
be available only to the extent such portion of the
Participant's Company Matching Account exceeds the amount of
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any prior distribution or transfer under this Section. For
the last Plan Year such election is available to the
Participant, the percentage specified in clauses (A) and (B)
above shall be increased to fifty percent (50%). Any
distribution or transfer elected by a Participant under this
Section shall be made within ninety (90) days after the
period during which such election may be made.
6.06 Voting of Company Stock (Other than Shares in Loan
Suspense Account). Each Participant (or in the event of his
death, his Beneficiary) shall have the right and shall be
afforded the opportunity to instruct the Trustee how to vote
at any meeting of the Company shareholders those shares of
Company Stock allocated to such Participant's Company
Matching Contribution Account, Basic Contribution Account,
Supplemental Contribution Account, After-Tax Contribution
Account, Rollover Contribution Account and Transfer
Contribution Account. Unless otherwise required by any
provision of ERISA, the Trustee shall vote said shares in
accordance with each Participant's (or Beneficiary's)
instructions.
Instructions by a Participant (or Beneficiary) to the
Trustee shall be in such form and pursuant to such
regulations as the Committee may prescribe and any such
instructions shall remain in the strict confidence of the
Trustee. If the Trustee does not receive instructions from
a Participant (or Beneficiary) regarding his shares, the
Trustee shall have the authority to vote such shares in the
same proportion as the shares voted by instruction of the
other Participants (or Beneficiaries). The Company shall
utilize its best efforts to timely distribute or cause to be
distributed to each Participant (or Beneficiary) all proxy
materials pertaining to any vote that the Participant (or
Beneficiary) is eligible to make.
Each Participant (or in the event of his death, his
Beneficiary) shall have the right to instruct the Trustee in
writing as to the manner in which to respond to a tender or
exchange offer for any or all shares of Company Stock
credited to such Participant's Company Matching Contribution
Account, Basic Contribution Account, Supplemental
Contribution Account, After-Tax Contribution Account,
Rollover Contribution Account and Transfer Contribution
Account. The Company shall notify each Participant (or
Beneficiary) and utilize its best efforts to timely
distribute or cause to be distributed to him such
information as will be distributed to shareholders of the
Company in connection with any such tender or exchange
offer. Upon its receipt of such instructions, the Trustee
shall tender such shares of Company Stock as and to the
extent so instructed.
If the Trustee does not receive instructions from a
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Participant (or Beneficiary) regarding any such tender or
exchange offer for Company Stock, the Trustee shall treat
such non-action as a decision by the Participant not to
tender or exchange such shares credited to such
Participant's Company Matching Contribution Account, Basic
Contribution Account, Supplemental Contribution Account,
After-Tax Contribution Account, Rollover Contribution
Account and Transfer Contribution Account."
2. Article XV of the Plan is hereby amended by restating
Sections 15.02 and 15.03 in their entirety as follows:
"15.02 Investment Funds. The Trust Fund shall consist of
such Investment Funds as shall be selected from time to time
by the Committee for the investment of assets held in the
Trust Fund, including the two Investment Funds described
below in this Section 15.02. In addition, the Trustee shall
have the right to invest in a short-term cash fund on an
interim short-term basis.
Yankee Energy Share (Voluntary) Fund-- the subfund of
the Trust Fund consisting of allocated shares of
Company Stock attributable to Participant investment
elections with respect to Company Matching
Contributions, Basic Contributions, Supplemental
Contributions, After-Tax Contributions, Rollover
Contributions and Transfer Contributions.
Dividends issued on shares in this Fund shall be used
to purchase additional shares of Company Stock.
Northeast Utilities Stock Fund-- the subfund of the
Trust Fund consisting of common shares of Northeast
Utilities transferred from the Northeast Utilities
TRAESOP/PAYSOP or the Northeast Utilities Savings Plan.
No Company Matching Contributions, Basic Contributions,
Supplemental Contributions, After-Tax Contributions,
Rollover Contributions or Transfer Contributions
(except as provided above) may be invested in this
Fund.
Dividends issued on the shares in this Fund shall be
used to purchase additional shares of Northeast
Utilities.
15.03 Investment Direction. The Committee may adopt rules
under which Participants may elect to have their accounts
invested in the Investment Funds. Any rules adopted by the
Committee shall be established and operated in a
nondiscriminatory manner and shall provide that:
(A) Participants may direct the investment of Company
Matching Contributions, Basic Contributions,
Supplemental Contributions, After-Tax
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Contributions, Rollover Contributions and Transfer
Contributions made by the Participants or on their
behalf in increments of ten percent (10%) among
any of the Investment Funds in effect at the time
such contributions are made except the Northeast
Utilities Stock Fund
(B) Participants may elect to change the investment
direction in Section 15.03(A) for future
contributions effective as of the first day of the
month following fifteen days written notice to the
Committee (or such shorter notice period as may be
permitted by the Committee in its sole
discretion), provided that no more than one such
change shall be permitted for any one calendar
quarter.
(C) Elections by Participants to transfer amounts from
one Investment Fund to another shall be effective
as of the first day of the month following fifteen
days written notice to the Committee (or such
shorter notice period as may be permitted by the
Committee in its sole discretion), provided that
no more than one such change shall be permitted
for any one calendar quarter.
(D) Participants may direct the investment of proceeds
from the sale of any common shares of Northeast
Utilities held in the Northeast Utilities Transfer
Contribution Account in increments of ten percent
(10%) among any of the Investment Funds. If a
Participant does not so direct, said Account shall
be invested in the Northeast Utilities Stock Fund.
(E) If a Participant fails to elect an investment
option, contributions that otherwise would be made
on his behalf shall not be processed until such
time as he elects an investment option.
(F) If a Participant separates from the employment of
the Company and does not receive a distribution of
his Total Account, such terminated Participant may
continue to make elections with respect to changes
in the investment of past accumulations and
earnings thereon."
3. Article XV of the Plan is further amended by renumbering
Sections 15.04 through 15.07 as Sections 15.05 through 15.08,
respectively (and changing all corresponding cross-references to
such sections accordingly), and by adding the following new
Section 15.04:
"15.04 Voting of Company Stock. Each Participant (or in
the event of his death, his Beneficiary) shall have the
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right and shall be afforded the opportunity to instruct the
Trustee how to vote at any meeting of the Company
shareholders those shares of Company Stock allocated to his
Company Matching Contribution Account, Basic Contribution
Account, Supplemental Contribution Account, After-Tax
Contribution Account, Rollover Contribution Account and
Transfer Contribution Account. Unless otherwise required by
any provision of ERISA, the Trustee shall vote said shares
in accordance with each Participant's (or Beneficiary's)
instructions.
Instructions by a Participant (or Beneficiary) to the
Trustee shall be in such form and pursuant to such
regulations as the Committee may prescribe and any such
instructions shall remain in the strict confidence of the
Trustee. If the Trustee does not receive instructions from
a Participant (or Beneficiary) regarding his shares, the
Trustee shall have the authority to vote such shares in the
same proportion as the shares voted by instruction of the
other Participants (or Beneficiaries). The Company shall
utilize its best efforts to timely distribute or cause to be
distributed to each Participant (or Beneficiary) all proxy
materials pertaining to any vote that the Participant (or
Beneficiary) is eligible to make.
Each Participant (or in the event of his death, his
Beneficiary) shall have the right to instruct the Trustee in
writing as to the manner in which to respond to a tender or
exchange offer for any or all shares of Company Stock
credited to such Participant's Company Matching Contribution
Account, Basic Contribution Account, Supplemental
Contribution Account, After-Tax Contribution Account,
Rollover Contribution Account and Transfer Contribution
Account. The Company shall notify each Participant (or
Beneficiary) a nd utilize its best efforts to timely
distribute or cause to be distributed to him such
information as will be distributed to shareholders of the
Company in connection with any such tender or exchange
offer. Upon its receipt of such instructions, the Trustee
shall tender such shares of Company Stock as and to the
extent so instructed.
If the Trustee does not receive instructions from a
Participant (or Beneficiary) regarding any such tender or
exchange offer for Company Stock, the Trustee shall treat
such non-action as a decision by the Participant not to
tender or exchange such shares credited to such
Participant's Company Matching Contribution Account, Basic
Contribution Account, Supplemental Contribution Account,
After-Tax Contribution Account, Rollover Contribution
Account and Transfer Contribution Account."
IN WITNESS WHEREOF, the Company, by its duly authorized officer,
causes this Eighth Amendment to be executed as of the 3rd day of
January, 1994.
YANKEE ENERGY SYSTEM, INC.
By: /s/ Michael E. Bielonko
Vice President, Treasurer and
Chief Financial Officer
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