Document:

ex4_02.htm

Exhibit 4.02

 

NEW CENTURY ENERGIES, INC.

EMPLOYEE INVESTMENT PLAN FOR

BARGAINING UNIT EMPLOYEES AND

FORMER NON-BARGAINING UNIT EMPLOYEES

 

(As Amended and Restated Effective January 1, 2002

But With Certain Retroactive Amendments)

 

  

  

  

 

TABLE OF CONTENTS

 

	
 

	  	
Page

	
ARTICLE I

	
PURPOSE AND ESTABLISHMENT OF THE PLAN

	
 

	
1.01

	
Establishment of the Plan

	
1

	
1.02

	
Purpose

	
2

	
1.03

	
Trust Agreement

	
2

	  	  	  
	
ARTICLE II

	
DEFINITIONS

	
 

	
2.01

	
“Account” or “Accounts”

	
2

	
2.02

	
“Affiliated Company”

	
3

	
2.03

	
“Alternate Payee”

	
3

	
2.04

	
“Beneficiary”

	
3

	
2.05

	
“Board”

	
3

	
2.06

	
“Code”

	
3

	
2.07

	
“Committee”

	
3

	
2.08

	
“Company Contribution Account”

	
3

	
2.09

	
“Company Matching Contribution Account”

	
3

	
2.10

	
“Company Stock”

	
3

	
2.11

	
“Compensation”

	
4

	
2.12

	
“Date of Employment” or “Date of Reemployment”

	
4

	
2.13

	
“Elective Contributions”

	
5

	
2.14

	
“Eligible Employee”

	
5

	
2.15

	
“Employee”

	
5

	
2.16

	
“Employee Elective Contribution Account”

	
5

	
2.17

	
“Employer”

	
6

	
2.18

	
“ERISA”

	
6

	
2.19

	
“ESOP”

	
6

	
2.20

	
“ESOP Employee Contribution Account”

	
6

	
2.21

	
“ESOP Employer Contribution Account”

	
6

	
2.22

	
“Fiscal Year”

	
6

	
2.23

	
“Hour of Service”

	
6

	
2.24

	
“Investment Manager”

	
6

	
2.25

	
“Leave of Absence”

	
6

	
2.26

	
“One-Year Period of Severance”

	
7

	
2.27

	
“Participant”

	
7

	
2.28

	
“Period of Service”

	
7

	
2.29

	
“Period of Severance”

	
8

	
2.30

	
“Plan”

	
8

	
2.31

	
“Plan Quarter”

	
8

	
2.32

	
“Plan Year”

	
8

	
2.33

	
“QDRO Account”

	
8

	
2.34

	
“Qualified Domestic Relations Order”

	
8

	
2.35

	
“Required Beginning Date”

	
8

	
2.36

	
“Retirement Date”

	
9

 

  

i

  

 

	
2.37

	
“Severance from Service Date”

	
9

	
2.38

	
“Sponsoring Company”

	
9

	
2.39

	
“Tax Benefit Plan”

	
9

	
2.40

	
“Termination of Employment”

	
9

	
2.41

	
“Total and Permanent Disability”

	
10

	
2.42

	
“Trust”

	
10

	
2.43

	
“Trust Agreement”

	
10

	
2.44

	
“Trust Fund”

	
10

	
2.45

	
“Trustee”

	
10

	
2.46

	
“Valuation Date”

	
10

	
2.47

	
“Valuation Period”

	
10

	
2.48

	
Whenever a noun, or a pronoun in lieu thereof

	
10

	
2.49

	
The words “herein,” “hereof,” and “hereunder”

	
10

	
2.50

	
The expressions listed below

	
10

	  	  	  
	
ARTICLE III

	
REQUIREMENTS FOR ELIGIBILITY AND PARTICIPATION

	
 

	
3.01

	
Service

	
13

	
3.02

	
Employment with a Predecessor Employer

	
14

	
3.03

	
Eligibility Year of Service

	
14

	
3.04

	
Reemployment of Participants

	
14

	
3.05

	
Change in Status of Eligible Employee

	
14

	
3.06

	
Participation in the Plan

	
14

	
3.07

	
Participation After March 1, 1995

	
15

	
3.08

	
Participation After July 1, 1998

	
15

	
3.09

	
Special Rule for Employees of Cabot Corporation or Texas-New

	  
	  	
Mexico Power Company

	
15

	
3.10

	
Periods of Military Service

	
15

	  	  	  
	
ARTICLE IV

	
CONTRIBUTIONS

	
 

	
4.01

	
Company Contributions

	
15

	
4.02

	
Elective Contributions

	
16

	
4.03

	
Limitations on Elective Contributions

	
16

	
4.04

	
Company Matching Contributions

	
23

	
4.05

	
Date of Payment and Allocation of Company Contributions, Company

	  
	  	
Matching Contributions and Elective Contributions

	
23

	
4.06

	
Limitation on Company Matching Contributions

	
24

	
4.07

	
Rollovers.

	
28

	
4.08

	
In-Service Withdrawals

	
29

	  	  	  
	
ARTICLE V

	
ALLOCATION TO PARTICIPANTS’ ACCOUNTS

	
 

	
5.01

	
Method of Allocating Company Matching Contributions

	
31

	
5.02

	
Allocation to a Participant Transferred to an Affiliated Company

	  
	  	
Which Has Not Adopted the Plan

	
31

	
5.03

	
Method of Allocating Company Contributions

	
31

	
5.04

	
Limitation on Annual Additions

	
32

	
5.05

	
Limitations on Annual Additions for Employers or Affiliated

	  

 

  

ii

  

 

	  	
Companies Maintaining Other Defined Contribution Plans

	
34

	
5.06

	
Limitations on Annual Additions for Employers or Affiliated

	  
	  	
Companies Maintaining Defined Benefit Plans

	
34

	
5.07

	
Definitions for Purposes of Determining the Annual Addition

	  
	  	
Limitations

	
34

	
5.08

	
Cessation of Eligible Employee Status

	
35

	  	  	  
	
ARTICLE VI

	
ACCOUNTS AND VALUATION OF TRUST FUND

	
 

	
6.01

	
Participant’s Accounts

	
35

	
6.02

	
Accounts of Participants Transferred to an Affiliated Company

	
35

	
6.03

	
Valuation of the Trust Fund and Account Statements

	
36

	
6.04

	
Periodic Determination of Participant’s Accounts

	
36

	
6.05

	
Correction of Participants’ Accounts

	
38

	
6.06

	
Transfers To Non-Bargaining Unit NCE Plan

	
38

	  	  	  
	
ARTICLE VII

	
RETIREMENT BENEFITS

	
 

	
 

	
 

	
 

	
ARTICLE VIII

	
DISABILITY BENEFITS

	
 

	
8.01

	
Disability Retirement Benefits

	
39

	
8.02

	
Determination of Disability

	
39

	  	  	  
	
ARTICLE IX

	
DEATH BENEFITS

	
 

	
9.01

	
Death Benefits

	
39

	
9.02

	
Designation of Beneficiaries

	
40

	  	  	  
	
ARTICLE X

	
EMPLOYMENT TERMINATION BENEFITS

	
 

	
 

	
 

	
 

	
ARTICLE XI

	
PAYMENT OF BENEFITS

	
 

	
11.01

	
Time and Method for Distribution of Benefits

	
41

	
11.02

	
Limitations on Timing

	
43

	
11.03

	
Payments on Personal Receipt Except in Case of Minors or Persons

	  
	  	
Under a Legal Disability

	
43

	
11.04

	
Distribution Limitations Applicable to Elective Contributions

	
44

	
11.05

	
Distribution Limitations Applicable to ESOP Accounts

	
44

	
11.06

	
Direct Rollovers to Eligible Retirement Plans

	
45

	  	  	  
	
ARTICLE XII

	
MISCELLANEOUS PROVISIONS RESPECTING

	
 

	
 

	
PARTICIPANTS

	
 

	
12.01

	
Participants to Furnish Required Information

	
46

	
12.02

	
Participants’ Rights in Trust Fund

	
46

	
12.03

	
Inalienability of Benefits

	
47

	
12.04

	
Conditions of Employment Not Affected by Plan

	
48

	
12.05

	
Address for Mailing of Benefits

	
48

	
12.06

	
Unclaimed Account Procedure

	
48

 

  

iii

  

 

	
ARTICLE XIII

	
ADMINISTRATION OF THE PLAN

	
 

	
13.01

	
Appointment of Committee

	
49

	
13.02

	
Compensated Expenses of the Committee

	
50

	
13.03

	
Secretary and Agents of the Committee

	
50

	
13.04

	
Actions of Committee

	
50

	
13.05

	
Authority of Committee

	
51

	
13.06

	
General Administrative Powers

	
51

	
13.07

	
Plan Administrator

	
51

	
13.08

	
Duties of Administrative Personnel

	
51

	
13.09

	
Designation of Named Fiduciaries and Allocation of Responsibility

	
52

	
13.10

	
Action by Fiduciaries

	
52

	
13.11

	
Appointment of Professional Assistants and the Investment Manager

	
53

	
13.12

	
Bond

	
53

	
13.13

	
Indemnity

	
53

	
13.14

	
Payment of Expenses

	
54

	  	  	  
	
ARTICLE XIV

	
INVESTMENT IN TRUST FUND

	
 

	
14.01

	
Investment in Company Stock Fund

	
54

	
14.02

	
Participant Investment Direction

	
55

	
14.03

	
Diversification of Participant’s Accounts

	
57

	
14.04

	
Funding Policy

	
57

	
14.05

	
Reservation of Cash

	
57

	
14.06

	
Voting of Company Stock; Tender Offers

	
58

	  	  	  
	
ARTICLE XV

	
PARTICIPATION BY EMPLOYERS

	
 

	
15.01

	
Adoption of Plan by Affiliated Company

	
59

	
15.02

	
Rights and Obligations of the Sponsoring Company and the Employers

	
60

	
15.03

	
Withdrawal from Plan

	
60

	  	  	  
	
ARTICLE XVI

	
AMENDMENT OF THE PLAN

	
 

	
16.01

	
Authority to Amend

	
60

	
16.02

	
Trustee’s Consent

	
61

	
16.03

	
Limitations of Vesting Changes

	
61

	
16.04

	
Limitations on Other Changes

	
61

	
16.05

	
Statutorily Required Amendments

	
61

	  	  	  
	
ARTICLE XVII

	
PERMANENCY OF THE PLAN

	
 

	
17.01

	
Right to Terminate Plan

	
62

	
17.02

	
Merger or Consolidation of Plan and Trust

	
62

	
17.03

	
Continuance by Successor Company

	
62

	  	  	  
	
ARTICLE XVIII

	
DISCONTINUANCE OF CONTRIBUTIONS AND

	
 

	
 

	
TERMINATION

	
 

	
18.01

	
Suspension of Contributions

	
62

	
18.02

	
Discontinuance of Contributions

	
62

	
18.03

	
Termination of Plan and Trust

	
63

 

  

iv

  

 

	
18.04

	

Participant’s Rights to Benefits upon Termination or Partial Termination of Plan or Complete Discontinuance of Contributions

	
63

	  	  	  
	
ARTICLE XIX

	
EXCLUSIVE BENEFIT OF THE PLAN

	
 

	
19.01

	
Limitation on Reversions

	
63

	
19.02

	
Unallocated Amounts upon Termination of Plan and Trust

	
63

	
19.03

	
Mistake of Fact or Disallowance of Deduction

	
63

	
19.04

	
Failure of Qualification of Plan and Trust

	
64

	  	  	  
	
ARTICLE XX

	
TOP HEAVY PLAN RULES

	
 

	
 

	
 

	
 

	
ARTICLE XXI

	
ESOP EXEMPT LOAN PROVISIONS

	
 

	
21.01

	
Effect of Article

	
65

	
21.02

	
Definitions

	
65

	
21.03

	
Company Contributions

	
65

	
21.04

	
Release of Shares from Suspense Accounts

	
66

	
21.05

	
Limitations on Annual Additions

	
67

	
21.06

	
Determination of Net Earnings and Adjustments in Value

	
67

	
21.07

	
Voting of Company Stock

	
67

	
21.08

	
Tender Offer on Company Stock

	
67

	
21.09

	
Forfeiture of Accounts

	
67

	
21.10

	
Distribution of Benefits

	
68

	
21.11

	
Further Conditions

	
68

	  	  	  
	
ARTICLE XXII

	
MISCELLANEOUS

	
 

	
22.01

	
Effect of Bankruptcy and Other Contingencies Affecting an Employer

	
68

	
22.02

	
Benefits Payable by Trust

	
68

	
22.03

	
Withholding

	
68

	
22.04

	
Interpretation of the Plan and Trust

	
69

	
22.05

	
Provisions Hereof for Sole Benefit of Parties Hereto and Participants

	
69

	
22.06

	
Article and Section Headings

	
69

	
22.07

	
Formal Action by Employer

	
69

	
22.08

	
Right to Require Repurchase of Shares of Company Stock

	
69

	
22.09

	
Restrictions on Transfer of Company Stock

	
71

	
22.10

	
APPLICABLE LAW

	
72

	  	  	  
	
APPENDIX RELATED TO XCEL MERGER

	
 

 

  

v

  

 

NEW CENTURY ENERGIES, INC.

EMPLOYEE INVESTMENT PLAN FOR

BARGAINING UNIT EMPLOYEES AND

FORMER NON-BARGAINING UNIT EMPLOYEES

 

(As Amended and Restated Effective January 1, 2002

But With Certain Retroactive Amendments)

 

ARTICLE I

 

PURPOSE AND ESTABLISHMENT OF THE PLAN

 

1.01  Establishment of the Plan.  Southwestern Public Service Company previously adopted and established a tax benefit, investment savings stock bonus plan (the “Tax Benefit Plan”) for the exclusive benefit of its eligible employees and their beneficiaries, effective as of March 1, 1985.  Subsequent thereto, the Tax Benefit Plan was amended from time to time and was adopted by certain Affiliated Companies.  Effective as of September 1, 1989, Southwestern Public Service Company and certain Affiliated Companies amended and restated the Tax Benefit Plan in its entirety, and effective December 1, 1994, the Tax Benefit Plan was amended to satisfy the requirements of an employee stock ownership plan and to permit the distribution of cash dividends to participants.

 

Effective as of September 1, 1974, Southwestern Public Service Company adopted and established a tax credit employee stock ownership plan and trust (the “ESOP”) for the benefit of its eligible employees.  Subsequent thereto, the ESOP was amended from time to time, and was adopted by certain Affiliated Companies.  Effective as of September 1, 1989, Southwestern Public Service Company and certain Affiliated Companies amended and restated the ESOP in its entirety.

 

Effective as of March 1, 1995 (the “Effective Date”), Southwestern Public Service Company and certain Affiliated Companies, merged the ESOP into the Tax Benefit Plan creating the Southwestern Public Service Company Employee Investment Plan, a new stock bonus/employee stock ownership plan as a continuation of the Tax Benefit Plan in accordance with the terms and conditions hereinafter set forth.

 

Except as otherwise provided herein, and subject to the following sentence, the provisions of the Plan as contained herein are applicable to Employees and Participants who die, retire, suffer Total and Permanent Disability or Termination of Employment on or after March 1, 1995, or who are reemployed by an Employer or Affiliated Company on or after March 1, 1995.  Except as otherwise provided herein, any employee or participant in either the ESOP or the Tax Benefit Plan who died, retired, became disabled or terminated employment prior to March 1, 1995 shall receive any benefits to which he or she is entitled based upon the appropriate provisions of the ESOP or Tax Benefit Plan, as the case may be, as in effect prior to March 1, 1995.

 

  

1

  

 

Effective July 1, 1998, the portion of this Plan consisting of the accounts of the Plan Participants who were eligible employees on June 30, 1998, was spun off into a separate plan, and this Plan was renamed the New Century Energies, Inc. Employee Investment Plan for Bargaining Unit Employees and Former Non-Bargaining Unit Employees.  Effective as of the date of the merger of New Century Energies, Inc. and Northern States Power Company to form Xcel Energy Inc., Xcel Energy Inc. is substituted in place of New Century Energies, Inc. as the Sponsoring Company.

 

This plan document was amended and restated generally effective January 1, 2002 but with certain retroactive amendments required by changes in the law.

 

1.02  Purpose.  The purposes of the Plan are to encourage employee thrift and savings by allowing eligible employees to enter into a cooperative savings program ( with their employer, to provide an additional opportunity for eligible employees to share in the growth and prosperity of the Sponsoring Company and to provide eligible employees with an opportunity to accumulate additional capital for their future economic security.  The primary purpose of the Plan is to enable Participants to acquire stock ownership interests in the Sponsoring Company, and therefore, the Plan is designed to invest primarily in Company Stock.  To provide all of the intended benefits described herein, a Participant must elect to defer a portion of his Compensation through salary reduction, and the Employer will contribute an amount which, in part, will be allocated on the basis of the salary reduction deferred amounts and, in part, allocated on the basis of Compensation, as well as an amount equal to the salary reduction deferred amounts.  Such contributions and any income derived therefrom shall be for the exclusive benefit of the Employers’ employees and their beneficiaries and shall not be used for, or diverted to, any other purpose except as otherwise provided in Article XIX of the Plan.

 

It is the intention of the Employers that the Plan shall continue to meet all of the requirements necessary or appropriate to qualify it as an employee stock ownership plan with a cash or deferred arrangement feature, under Code Sections 401(a), 401(k), 409 (where applicable) and 4975(e)(7) and, if and where appropriate, with respect to the tax credit employee stock ownership plan features, Section 301(d) of the Tax Reduction Act of 1975, and Sections 41, 44G and 409(A) (or 409, where applicable) of the Internal Revenue Code of 1954, as amended, and that the Trust made a part hereof shall continue to be exempt from tax under Code Section 501(a) and all provisions hereof shall be interpreted accordingly.

 

1.03  Trust Agreement.  In furtherance of this Plan, the trust agreements under the ESOP and the Tax Benefit Plan are being amended and restated to create the Trust Agreement, effective as of March 1, 1995, which is made a part hereof, for the purpose of maintaining the Trust to fund the benefits of this Plan as hereinafter set forth.

 

ARTICLE II

 

DEFINITIONS

As used in the Plan:

 

2.01  “Account” or “Accounts” shall mean all or any of the Company Contribution Account, the ESOP Employer Contribution Account, the ESOP Employee Contribution Account, the Company Matching Contribution Account, the Employee Elective Contribution Account, the Rollover Account and the QDRO Account to the extent any one or more of such accounts have been created for a Participant, Beneficiary or Alternate Payee.  Any of the Accounts may have such subaccounts as are from time to time administratively necessary, as determined by the Committee.

 

  

2

  

 

2.02  “Affiliated Company” shall mean any of the following which itself is not an Employer:  (i) a member of a controlled group of corporations of which an Employer is a member as defined in Code Section 414(b), (ii) any trade or business (whether or not incorporated) which is under common control with an Employer as determined in accordance with Code Section 414(c) and regulations issued thereunder, (iii) a member of an “affiliated service group” (whether or not incorporated) as determined in accordance with Code Section 414(m) and regulations issued thereunder, of which an Employer is a member, or (iv) any other entity which is required to be aggregated with an Employer in accordance with Code Section 414(o) and the regulations issued thereunder. “Affiliated Company” as defined in clauses (i) and (ii) shall be modified as required by Code Section 415(h) when used in Sections 5.04, 5.05 and 5.06 hereof with respect to limitations on Annual Additions.

 

2.03  “Alternate Payee” shall mean an individual or trust entitled to benefits under the Plan pursuant to a Qualified Domestic Relations Order.

 

2.04  “Beneficiary” shall mean any person or entity entitled to receive benefits which are payable upon or after a Participant’s death pursuant to Article IX hereof.

 

2.05  “Board” shall mean the Board of Directors of the Sponsoring Company, as from time to time constituted.

 

2.06  “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time. References to any section of the Internal Revenue Code shall include any successor provision thereto.

 

2.07  “Committee” shall mean the Committee provided for in Section 13.01 hereof.  “Committee” shall have the same meaning as Committee as defined in the Tax Benefit Plan.

 

2.08  “Company Contribution Account” shall mean the separate account maintained for each Participant reflecting Company Contributions and Forfeitures allocated to such Participant in accordance with Sections 4.01 and 5.03 hereof, as adjusted in accordance with the provisions of Article VI hereof.

 

2.09  “Company Matching Contribution Account” shall mean the separate account maintained for each Participant reflecting Company Matching Contributions allocated to such Participant as provided in Sections 4.04 and 5.01 hereof, as adjusted in accordance with the provisions of Article VI hereof and shall include the amounts held in the Company Contribution Account under the Tax Benefit Plan.

 

2.10  “Company Stock” shall mean (a) the common stock issued by the Sponsoring Company (or by a corporation which is a member of the same controlled group, as determined under Code Section 409(l)(4)) which is readily tradable on an established securities market, or (b) if there is no common stock which meets the requirements of clause (a) above, the common stock issued by the Sponsoring Company (or by a corporation which is a member of the same controlled group) having a combination of voting power and dividend rights equal to or in excess of (i) that class of common stock of the Sponsoring Company (or of any other such corporation) having the greatest voting power, and (ii) that class of common stock of the Sponsoring Company (or of any other such corporation) having the greatest dividend rights.

  

3

  

 

2.11  “Compensation” shall mean base compensation as reflected on the Employer’s payroll records actually paid by an Employer to an Employee during the Plan Year, including an Employee’s Elective Contributions under this Plan and an Employee’s elective salary deferrals pursuant to Code Section 125 or commencing January 1, 2001 pursuant to Code Section 132(f)(4), but excluding overtime, bonuses, commissions, moving expense allowances and other extraordinary compensation, and excluding Company Contributions or any other Employer contributions to this Plan or employer contributions under any other employee benefit plan and all other deferred compensation; provided, however, in the event that an employee is disabled and is receiving payments under any workers’ compensation laws but is simultaneously receiving compensation from the Employer, such Participant’s Compensation for the period while receiving such workers’ compensation payments shall be based upon his rate of pay from the Employer as in effect from time to time during such period determined without regard to the fact that such Participant is receiving payments under any workers’ compensation laws.

 

Compensation shall not include any Compensation in excess of One Hundred Fifty Thousand Dollars ($150,000) for Plan Years commencing on or after January 1, 1994 and before January 1, 1997; in excess of One Hundred Sixty Thousand Dollars ($160,000) for Plan Years commencing on or after January 1, 1997 and before January 1, 2000; and in excess of One Hundred Seventy Thousand Dollars ($170,000) for Plan Years commencing on or after January 1, 2000.

 

In applying the compensation limitation for Plan Years commencing prior to January 1, 1997, the family group of a Highly Compensated Employee who is subject to the family member aggregation rules of Code Section 414(q)(6) because such Employee is either a five percent owner of the Employer or one of the ten (10) Highly Compensated Employees paid the greatest Limitation Year Compensation during the year, shall be treated as a single Participant, except that for this purpose, Family Members shall include only the affected Participant’s spouse and any lineal descendants who have not attained age nineteen (19) before the close of the year.  In the event the Highly Compensated Employee’s and one or more Family Member’s Compensation for a Plan Year from an Employer are limited pursuant to the provisions of this Section, then the Compensation of each such person for such Plan Year shall be reduced proportionately based on the ratio of their respective Compensation to the aggregate Compensation of both (or all) of such persons for such Plan Year.

 

2.12  “Date of Employment” or “Date of Reemployment” shall mean the day on which an Employee first commences employment or reemployment following Termination of Employment, retirement after attaining his Retirement Date-or recovery from Total and Permanent Disability, as the case may be, with an Employer or an Affiliated Company by performing an Hour of Service.

 

  

4

  

 

2.13  “Elective Contributions” shall mean the amount each Participant has elected to have the Employer contribute on his behalf, in lieu of cash compensation, pursuant to the provisions of Section 4.02 hereof.  Such amounts are intended to qualify as elective contributions under Code Section 401(k) and the regulations thereunder.  “Elective Contributions” shall also mean Elective Contributions as defined in and made to the Tax Benefit Plan.

 

2.14  “Eligible Employee” shall mean any Employee who is employed in a bargaining unit covered by a collective bargaining agreement that provides for participation in this Plan.  However, the following Employees are not Eligible Employees: (i) a nonresident alien who receives no earned income within the meaning of Code Section 911(b), (ii) any Employee who is a “leased employee” as defined in Section 2.15 hereof and (iii) from and after the date on which occurs the “Effective Time” of the “Mergers” pursuant to Section 1.4 of the Agreement and Plan of Reorganization by and among Public Service Company of Colorado, Southwestern Public Service Company and M-P New Co., dated as of August 22, 1995 (the “Merger Effective Date”), any Employee who is not hired by an Employer to work in the geographic area comprising the service area of Southwestern Public Service Company immediately prior to the Merger Effective Date.

 

2.15  “Employee” shall mean any person who is employed by one or more Employers, is on an Employer’s payroll, and whose wages are subject to FICA withholding.  Employee also includes any person who is not employed by an Employer but is performing services for an Employer pursuant to an agreement between such Employer or an Affiliated Company and a leasing organization and who is a “leased employee” as that term is defined in Code Section 414(n).  A “leased employee” shall not be an Employee, however, if (1) such person is covered by a money purchase pension plan qualified under Code Section 401(a) providing  (i) a nonintegrated employer contribution rate of at least ten (10) percent of Limitation Year Compensation as defined in Subsection 5.07(5) hereof, but including amounts contributed pursuant to a salary reduction agreement which are excludable from such person’s gross income under Code Sections 125, 402(a)(8), 402(h) or 403(b), (ii) immediate participation, and (iii) full and immediate vesting, and (2) “leased employees” do not constitute more than twenty percent (20%) of the Employer’s or Affiliated Company’s work force who are Non-Highly Compensated Employees.  However, except to the extent otherwise provided in regulations under Code Section 414(n), in the event a “leased employee” subsequently becomes an Employee as defined herein, the period from and after January 1, 1984 during which said leased employee performed services for an Employer or an Affiliated Company as a leased employee shall be taken into account in determining such person’s Eligibility Years of Service under the Plan in accordance with and subject to the remainder of the provisions of the Plan, as if such employee were employed by an Employer or an Affiliated Company during such period.

 

2.16  “Employee Elective Contribution Account” shall mean the separate account maintained for each Participant reflecting the Elective Contributions made on behalf of such Participant pursuant to Section 4.02 hereof, if any, as adjusted in accordance with the provisions of Article VI of the Plan, and shall include amounts held in the Elective Contribution Account under the Tax Benefit Plan.

  

5

  

 

2.17  “Employer” shall mean the Sponsoring Company, Southwestern Public Service Company, Utility Engineering Corporation, Quixx Corporation, or any other Affiliated Company which adopts the Plan pursuant to Article XV hereof.

 

2.18  “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. References to any Section of ERISA shall include any successor provision thereto.

 

2.19  “ESOP” shall mean the Southwestern Public Service Company Employee Stock Ownership Plan and Trust as in effect at any time and from time to time on and prior to February 28, 1995, as the context so requires.

 

2.20 “ESOP Employee Contribution Account” shall mean the separate account maintained for each Participant who was a participant in the ESOP consisting of the contributions made by the participant as described in Section 5(a) of the ESOP as in effect on and prior to February 28, 1995, plus earnings and/or losses (including appreciation and depreciation) credited to such contributions under the ESOP and credited to such Account hereunder.  Any amounts credited to a Participant’s ESOP Employee Contribution Account shall at all times, be fully vested and nonforfeitable.

 

2.21 “ESOP Employer Contribution Account” shall mean the separate account maintained for each Participant who was a participant in the ESOP consisting of the contributions made by the Employers as described in Sections 2.02(a), 2.02(b), 2.02(c) and 5(b)(i)(A) of the ESOP as in effect on and prior to February 28, 1995, plus earnings and/or losses (including appreciation and depreciation) credited to such contributions under the ESOP and credited to such Account hereunder.  Any amounts credited to a Participant’s ESOP Employer Contribution Account shall at all times, for all purposes and in all respects be fully vested and nonforfeitable.

 

2.22  “Fiscal Year” shall mean the fiscal year of an Employer. The Fiscal Year of the Sponsoring Company ends on August 31.

 

2.23  “Hour of Service” shall mean each hour for which an Employee is paid or entitled to payment for the performance of duties for an Employer or an Affiliated Company.

 

2.24  “Investment Manager” shall mean any fiduciary other than the trustee or a Named Fiduciary that:  (i) is either (a) registered as an investment adviser under the Investment Advisers Act of 1940 and registered under the laws of Texas, or (b) a bank (as defined in the Investment Advisers Act of 1940), or (c) an insurance company qualified to manage, acquire or dispose of Plan assets under the laws of more than one state, (ii) acknowledges in writing that it is a fiduciary with respect to the Plan, and (iii) is granted the power to manage, acquire or dispose of any asset of the Plan pursuant to Section 13.11 hereof.

 

2.25  “Leave of Absence” shall mean an absence from the active employment of an Employer by reason of an approved absence granted by such Employer on the basis of a uniform policy applied by such Employer without discrimination.

  

6

  

 

2.26  “One-Year Period of Severance” shall mean a twelve (12)-consecutive month Period of Severance.

 

Notwithstanding any other provision of this Section 2.26 to the contrary, solely for purposes of determining whether an Employee has a One-Year Period of Severance, in the case of an Employee who is first absent from work for any period:  (i) by reason of  (a) the Employee’s pregnancy, (b) the birth of the Employee’s child, (c) the placement of a child with the Employee in connection with adoption of such child by the Employee, or (ii) for the purpose of caring for such child for a period beginning immediately following such birth or placement, the (12)-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a One-Year Period of Severance.  The period between the first and second anniversaries of the first date of such absence is neither a Period of Service nor a Period of Severance.  Notwithstanding the provisions of this Section, no credit shall be given pursuant to this Section unless the Employee furnishes the Committee with such information as the Committee shall require to establish:   (i) that the absence from work was for the reasons referred to herein, and (ii) the number of days for which there was such an absence.

 

2.27  “Participant” shall mean an Eligible Employee who participates in the Plan as provided in Article III hereof or a former Employee who has a vested interest in the Plan.

 

2.28  “Period of Service” shall mean the period of time commencing on an Employee’s Date of Employment or Date of Reemployment, as the case may be, and ending on such Employee’s Severance from Service Date.  For the period prior to the Effective Date, a Participant’s or Employee’s Period of Service shall equal his Period of Service under the ESOP, if greater than his Period of Service as defined herein.  A Period of Service shall also include a Period of Severance of twelve (12) consecutive months or less.  Notwithstanding the preceding sentence:

 

2.28(1)  If an Employee who is on Leave of Absence or is temporarily laid off, retires or terminates employment during the first twelve (12) months of such Leave of Absence or temporary layoff, as the case may be, such Employee’s Period of Service shall not include any Period of Severance beginning on the date such Employee retired after attaining his Retirement Date or the date he terminated employment and ending on such Employee’s Date of Reemployment, if any, so long as such Date of Reemployment does not occur within the twelve (12) month period commencing on the date such Leave of Absence or temporary layoff began.

 

2.28(2)  If an Employee works simultaneously for more than one Employer and/or Affiliated Company, the total Period of Service for such Employee shall not be increased by reason of such simultaneous employment.

 

2.28(3)  In the case of any Employee (i) who became an employee of Southwestern Public Service Company on November 1, 1982 as a result of the merger of Cochran Power & Light Company (“CP&L”) into Southwestern Public Service Company and who immediately prior to such merger was an employee of CP&L (a “Former CP&L Employee”), (ii) who became an employee of Southwestern Public Service Company on May 5, 1983 as a result of the acquisition of the business and assets of New Mexico Electric Service Company (“NME”) by Southwestern Public Service Company and who immediately prior to such acquisition was an employee of NME (a “Former NME Employee”), or (iii) who is a Former CP&L Employee and who immediately prior to commencing employment with CP&L was employed by NME, so that his employment with said two companies prior to becoming an employee of Southwestern Public Service Company was continuous and uninterrupted (a “Former CP&L/NME Employee”), “Period of Service” shall include such employee’s period of employment with NME and/or CP&L, as the case may be, beginning with such employee’s last date of hire by CP&L, in the case of a Former CP&L Employee, or by NME, in the case of a Former NME Employee or a Former CP&L/NME Employee.

  

7

  

 

2.29  “Period of Severance” shall mean the period of time commencing on an Employee’s Severance from Service Date and ending on such Employee’s Date of Reemployment, if any.

 

2.30  “Plan” shall mean the New Century Energies, Inc. Employee Investment Plan for Bargaining Unit Employees and Former Non-Bargaining Unit Employees as set forth in this document, and as hereafter amended.

 

2.31  “Plan Quarter” shall mean the quarter-annual portion beginning on each January 1, April 1, July 1 and October 1.  The month of December, 1998 was also treated as a Plan Quarter for purposes of this Plan.

 

2.32  “Plan Year” shall mean, commencing on January 1, 1999, the calendar year.  Prior to September 1, 1998, the Plan Year was the 12-consecutive month period ending on August 3l.  The period from September 1, 1998 to December 31, 1998 was a short Plan Year.

 

2.33  “QDRO Account” shall mean that part of any other Account which has been isolated from such Account for the benefit of an Alternate Payee pursuant to a Qualified Domestic Relations Order.

 

2.34  “Qualified Domestic Relations Order” shall mean a judgment, order or decree which:

 

2.34(1)  Relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of a Participant; and

 

2.34(2)  Is made pursuant to a state domestic relations law (including a community property law); and

 

2.34(3)  Creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or a portion of the benefits payable with respect to a Participant under the Plan; and

 

2.34(4)  Is determined by the Plan Administrator to meet all applicable requirements pursuant to the procedure established by the Committee for determining whether an order is a Qualified Domestic Relations Order pursuant to Code Section 414(p).

 

2.35  “Required Beginning Date” shall mean April 1 of the calendar year following the calendar year in which the Participant attains age seventy and one-half (70-1/2).

  

8

  

 

2.36  “Retirement Date” shall mean the date on which occurs the Participant’s sixty-fifth (65th) birthday.

 

2.37  “Severance from Service Date” shall mean the earlier of:

 

2.37(1)  The date on which an Employee suffers a Termination of Employment, retires after attaining his Retirement Date or after sustaining Total and Permanent Disability or dies; or

 

2.37(2)  In the case of an Employee on Leave of Absence who does not return to the active employment of the Employer or an Affiliated Company at or ( prior to the expiration of such Leave of Absence, the earlier of  (i) the expiration date of such Leave of Absence, or (ii) the date which is twelve (12) months after the date on which such Leave of Absence began, or, in the case of an Employee who becomes absent (whether the absence is with or without pay) from the active employment of an Employer or an Affiliated Company by reason of a temporary layoff, the date which is twelve (12) months after the date on which such Employee first becomes absent.

 

2.38  “Sponsoring Company” shall mean Xcel Energy Inc.

 

2.39  “Tax Benefit Plan” shall mean the Southwestern Public Service Company Tax Benefit Plan as in effect at any time and from time to time on and prior to February 28, 1995, as the context so requires.

 

2.40  “Termination of Employment” shall mean the earlier of  (i) the termination of employment with all Employers and all Affiliated Companies, whether voluntarily or involuntarily, other than by reason of a Participant’s retirement after attaining his Retirement Date or as otherwise provided in Article VII hereof, or after sustaining Total and Permanent Disability, or death, or (ii) in the case of an Employee on Leave of Absence who does not return to the active employment of the Employer or an Affiliated Company at or prior to the expiration of such Leave of Absence, the earlier of  (i) the expiration date of such Leave of Absence, or (ii) the date which is twelve (12) months after the date on which such Leave of Absence began, or, in the case of an Employee who becomes absent (whether the absence is with or without pay) from the active employment of an Employer or an Affiliated Company by reason of layoff, the date which is twelve (12) months after the date on which such Employee first becomes absent.  A Leave of Absence will not constitute a Termination of Employment provided the Employee returns to the active employment of the Employer at or prior to the expiration of his leave, or if not specified therein, within the period of time which accords with such Employer’s policy with respect to permitted absences.  Notwithstanding the foregoing provisions of this Section, absence from the active service of the Employer because of military service will be considered a Leave of Absence granted by an Employer and will not terminate the employment of an Employee if he returns to the active employment of an Employer within the period of time during which he has reemployment rights under any applicable federal law or within sixty (60) days from and after discharge or separation from such military service if no federal law is applicable.  However, no provision of this Section or of the remainder of the Plan shall require reemployment of any Employee whose active service with an Employer was terminated by reason of military service.

  

9

  

 

2.41  “Total and Permanent Disability” shall mean the determination under the Employer’s Long-Term Disability Plan that the Participant is eligible to receive a disability benefit.

 

2.42  “Trust” shall mean the legal entity resulting from the Trust Agreement between the Sponsoring Company and the Trustee who receives the contributions under the Plan, as well as the amounts held under the trusts funding the ESOP and the Tax Benefit Plan, and holds, invests, and disburses funds to or for the benefit of Participants and their Beneficiaries.

 

2.43  “Trust Agreement” shall mean the instrument establishing the Trust, as amended from time to time.

 

2.44  “Trust Fund” shall mean all assets of whatsoever kind or nature from time to time held by the Trustee pursuant to the Trust Agreement without distinction as to income and principal.

 

2.45  “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.

 

2.46  “Valuation Date” shall mean each business day.

 

2.47  “Valuation Period” shall mean the period from the close of business on the previous Valuation Date to the close of business on the current Valuation Date.

 

2.48  Whenever a noun, or a pronoun in lieu thereof, is used in this Plan in plural form and there be only one person, thing or institution within the scope of the word so used, or in singular form and there be more than one person, thing or institution within the scope of the word so used, such word, or the pronoun used in lieu thereof, shall have a plural or singular meaning, as the case may be.  Pronouns of the masculine gender may mean the feminine and vice versa.

 

2.49  The words “herein,” “hereof,” and “hereunder” shall refer to the Plan.

 

2.50  The expressions listed below shall have the meanings stated in the Sections or Subsections hereof respectively indicated:

 

	 	
“Actual Contribution Percentage” or “ACP”

	
Subsection 4.06(1);

Subsection 4.06(7)(a)

	 	
“Actual Deferral Percentage” or “ADP”

	
Subsection 4.03(1);

Subsection 4.03(8)(a)

	 	
“Aggregated Family Group”

	
Subsection 4.03(8)(f);

Subsection 4.06(7)(b)

	 	
“Annual Additions”

	
Section 5.04

  

10

  

 

	 	
“Cash Dividend Account”

	
Subsection 6.04(4)(a)

	 	
“Company Contribution”

	
Section 4.01

	 	
“Company Matching Contribution”

	
Section 4.04

	 	
“Company Stock Fund”

	
Subsection 14.01(1)

	 	
“Compensation”

	
Section 2.11

	 	
“Current Value”

	
Subsection 6.03(1)

	 	
“Defined Benefit Plan”

	
Subsection 5.07(2);

	 	
“Defined Contribution Plan”

	
Subsection 5.07(3);

	 	
“Direct Rollover”

	
Subsection 11.06(2)(iv)

	 	
“Distributee”

	
Subsection 11.06(2)(iii)

	 	
“Effective Date”

	
Section 1.01

	 	
“Eligibility Year of Service”

	
Section 3.03

	 	
“Eligible Participant”

	
Section 14.03

	 	
“Eligible Retirement Plan”

	
Subsection 11.06(2)(ii)

	 	
“Eligible Rollover Distribution”

	
Subsection 11.06(2)(i)

	 	
“Eligible Shares”

	
Section 14.03

	 	
“Employee Participant”

	
Subsection 4.03(8)(d);

Subsection 4.06(7)(b)

	 	
“Entry Date”

	
Section 3.01

	 	
“Excess Aggregate Contributions”

	
Subsection 4.06(3)

	 	
“Excess Contributions”

	
Subsection 4.03(3)

	 	
“Excess Deferrals”

	
Subsection 4.03(7)

	 	
“Family Member”

	
Subsection 4.03(8)(f);

Subsection 4.06(7)(b)

	 	
“Forfeiture”

	
Subsection 12.06(2)

	 	
“Former Employees”

	
Subsection 4.03(8)(b)

  

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“Hardship”

	
Subsection 4.08(1)

	 	
“Highly Compensated Employee”

	
Subsection 4.03(8)(b);

Subsection 4.06(7)(b)

	 	
“Investment Funds”

	
Subsection 14.02(3)

	 	
“Limitation Year”

	
Subsection 5.07(4)

	 	
“Limitation Year Compensation”

	
Subsection 4.03(8)(b);

Subsection 5.07(5);

	 	
“Named Fiduciaries”

	
Section 13.09

	 	
“Net Earnings and Adjustments in Value of the Trust Fund”

	
Subsection 6.04(2)

	 	
“Non-Highly Compensated Employee”

	
Subsection 4.03(8)(c);

Subsection 4.06(7)(b)

	 	
“Offer”

	
Subsection 14.06(3)

	 	
“Option Period”

	
Subsection 22.08(3)

	 	
“Option Price”

	
Subsection 22.08(4)

	 	
“Plan Administrator”

	
Section 13.07

	 	
“Promissory Note”

	
Subsection 21.02(1)

	 	
“Put”

	
Subsection 22.08(1)

	 	
“Qualified Consent”

	
Subsection 9.02(2)

	 	
“Retirement Plan”

	
Subsection 5.07(1)

	 	
“Rollover Account”

	
Subsection 4.07(1)

	 	
“Rollover Contribution”

	
Subsection 4.07(1);

Subsection 4.07(4)

	 	
“Salary Reduction Agreement”

	
Subsection 4.02(1)

	 	
“Suspense Account”

	
Subsection 21.02(2)

	 	
“Tender”

	
Subsection 14.06(3)

	 	
“Total Compensation”

	
Subsection 4.03(8)(e);

Subsection 4.06(7)(b)

  

12

  

 

	 	
“Valuation Date”

	
Section 2.46;

	 	
“Yearly Election Period”

	
Section 14.03

 

ARTICLE III

 

REQUIREMENTS FOR ELIGIBILITY AND PARTICIPATION

 

3.01  Service.  Each Eligible Employee shall become a Participant as of the January 1, April 1, July 1 or October 1 (the “Entry Date”) coinciding with or next following the date upon which such Eligible Employee completes an Eligibility Year of Service, provided such Eligible Employee is so employed on such Entry Date.

 

In the event an Eligible Employee suffers a Termination of Employment before or after the completion of his Eligibility Year of Service but prior to the Entry Date upon which such Eligible Employee would have begun participating in the Plan, and such Eligible Employee is reemployed by an Employer prior to a twelve (12) consecutive month Period of Severance, such Eligible Employee shall, upon his reemployment, participate in the Plan as of the Entry Date that the Participant would have begun participation had the Employee not incurred a Termination of Employment, and shall be eligible to elect to have made on his behalf Elective Contributions from and after the later of his Entry Date or his Reemployment Commencement Date, provided he complies with the provisions of Section 4.02 hereof.

 

In the event an Eligible Employee suffers a Termination of Employment prior to completing an Eligibility Year of Service or after completing an Eligibility Year of Service but prior to the Entry Date upon which such Eligible Employee would have become a Participant, and such Eligible Employee is reemployed by the Employer after incurring five (5) One-Year Periods of Severance, such Employee shall be treated as a new Employee with no prior service for purposes of participation in the Plan.

 

In the event an Eligible Employee suffers a Termination of Employment prior to completing an Eligibility Year of Service or after completing an Eligibility Year of Service but prior to the Entry Date upon which such Eligible Employee would have become a Participant, and such Eligible Employee is reemployed by the Employer after incurring one (1) One-Year Period of Severance but prior to incurring five (5) One-Year Periods of Severance, such Employee’s Period of Service prior to the Periods of Severance shall be aggregated with his Period of Service subsequent to such Periods of Severance for purposes of determining his eligibility for the Plan, and such Eligible Employee shall become a Participant as of the later of (i) his Date of Reemployment, or (ii) the Entry Date coinciding with or next following the date upon which such Employee completes an Eligibility Year of Service, provided such Eligible Employee is so employed on such Entry Date.

 

In the event an Eligible Employee transfers to an Affiliated Company prior to or after completing an Eligibility Year of Service but prior to the Entry Date upon which such Eligible Employee would have become a Participant, and is employed continuously with an Affiliated Company until his transfer back to an Employer, such Eligible Employee shall become a Participant as of the later of (i) the date of his transfer back to an Employer, or (ii) the Entry Date coinciding with or next following the date upon which such Employee completes an Eligibility Year of Service, provided such Eligible Employee is so employed on such Entry Date.

  

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3.02  Employment with a Predecessor Employer.  If the Plan had previously been maintained by a predecessor of an Employer, whether a corporation, partnership, sole proprietorship or other business entity, any period of employment with such predecessor shall be treated as a period of employment with an Employer.  Effective July 1, 1998, if the Plan had not been previously maintained by a predecessor of an Employer, employment with such predecessor shall be taken into account to the extent permitted by regulations prescribed by the Secretary of the Treasury.

 

3.03  Eligibility Year of Service.  An “Eligibility Year of Service” shall mean a Period of Service of three hundred sixty-five (365) days, commencing with an Employee’s Date of Employment, or, if applicable, an Employee’s Date of Reemployment, subject to the provisions of Section 3.02 hereof.

 

3.04  Reemployment of Participants.  In the event that a Participant incurs a Period of Severance and is subsequently reemployed by an Employer, he shall resume participation in the Plan for all purposes effective as of his Date of Reemployment.

 

3.05  Change in Status of Eligible Employee.

 

3.05(1)  In the event an Employee, including an Employee who previously was not defined as an Eligible Employee under Section 2.14 hereof, becomes defined as an Eligible Employee, such individual shall become a Participant in the Plan as of the date he becomes defined as an Eligible Employee, provided he has met the other requirements for eligibility set forth in Section 3.01 hereof and previously would have begun to participate in the Plan had he been defined as an Eligible Employee, or, if he has not met the other requirements for eligibility set forth in Section 3.01 hereof, as of the Entry Date after he meets such other eligibility requirements.

 

3.05(2)  In the event a Participant who ceased to be defined as an Eligible Employee under Section 2.14 hereof but who did not incur a Termination of Employment with an Employer or an Affiliated Company subsequently becomes defined as an Eligible Employee again, such Eligible Employee shall recommence participation in the Plan for all purposes without regard to the limitations imposed by Section 5.08 hereof, as of the date he again becomes defined as an Eligible Employee.

 

3.06  Participation in the Plan.  Each Eligible Employee who was a Participant in the ESOP and/or the Tax Benefit Plan immediately prior to the Effective Date shall be eligible to make Elective Contributions on and after the Effective Date, provided he is still an Eligible Employee.  In addition, any Designation of Beneficiary on file for such Eligible Employee under the Tax Benefit Plan shall be a valid Designation under this Plan, unless and until changed in accordance with the provisions of this Plan.  Each other Eligible Employee who becomes a Participant shall be notified when he is eligible to make Elective Contributions and shall be provided with such information as is required by the Plan and by ERISA, within the time prescribed for providing such information.  Each such Participant also shall be provided with a Designation of Beneficiary Form which shall provide for a designation of one or more Beneficiaries to receive benefits in the event of the Employee’s death, and shall be provided with such forms as may be necessary to cause Elective Contributions to be made on his behalf to the Trust.

  

14

  

 

3.07  Participation After March 1, 1995.  Any Eligible Employee who met the eligibility requirements under the ESOP and/or the Tax Benefit Plan as it existed prior to the Effective Date shall continue to be a Participant in the Plan on the Effective Date.  Each person who was a Participant in the Plan on the day immediately preceding the Merger Effective Date (as defined in Section 2.14 hereof) shall remain a Participant in the Plan after said Date.

 

3.08  Participation After July 1, 1998.  Notwithstanding anything in the Plan to the contrary, on and after July 1, 1998, the Participants in this Plan shall consist solely of those Eligible Employees who have met the requirements of this Article to be a Participant and who are employed in a bargaining unit covered by a collective bargaining agreement that provides for participation in this Plan, and those other persons who were Participants on June 30, 1998, but who were not Eligible Employees on June 30, 1998.  Any person who was both a Participant and an Eligible Employee on June 30, 1998, but who is not described in the previous sentence shall not be entitled to any benefit under this Plan on or after July 1, 1998.

 

3.09  Special Rule for Employees of Cabot Corporation or Texas-New Mexico Power Company.  Notwithstanding the provisions of Section 3.01, any Eligible Employee who was a former employee of Cabot Corporation or Texas-New Mexico Power Company and who was hired as an Eligible Employee of Southwestern Public Service Company on or about August, 1995 in connection with and at the time of Southwestern Public Service’s acquisition of certain assets of Cabot Corporation and Texas-New Mexico Power Company, shall become a Participant as of the Entry Date coinciding with or next following the date upon which such Eligible Employee completes an Eligibility Year of Service computed as if such Eligible Employee’s Date of Employment was measured from the date such Eligible Employee last commenced employment with Cabot Corporation or Texas-New Mexico Power Company, as the case may be, prior to being hired by the Employer.

 

3.10  Periods of Military Service.  Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).

 

ARTICLE IV

 

CONTRIBUTIONS

 

4.01  Company Contributions.  As of the last day of each Plan Quarter, each Employer shall make a contribution (the “Company Contribution”) in cash, or if appropriate, in shares of Company Stock, to the Trust in such amount as may be determined by the Committee, to be allocated among the Company Contribution Accounts of Participants in accordance with Section 5.03 hereof.  In no event, however, shall any Company Contribution for any Plan Quarter by any Employer be required.  In addition, in no event, however, shall any Company Contribution, when added to any Elective Contributions and Company Matching Contributions, exceed the maximum deductible contribution under Code Section 404(a) including any amount which may be deductible by the Employer under the carryover provisions of the Code.

  

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For purposes of determining and allocating Company Contributions and Company Matching Contributions under this Article IV and Article V in the case of Participants whose Accounts were transferred to the New Century Energies, Inc. Employees’ Savings and Stock Ownership Plan for Non-Bargaining Unit Employees effective as of July 1, 1998, the Plan Quarter that began on June 1, 1998 was deemed to end on June 30, 1998 and contributions on behalf of such non-bargaining unit Participants for said period were made and allocated separately from contributions on behalf of other Participants based on the Elective Contributions and Compensation of such non-bargaining unit Participants during said period.

 

4.02  Elective Contributions.  In addition to any Company Contribution permitted hereunder, each Employer shall contribute to the Trust Fund an amount determined under the provisions of this Section, as an Elective Contribution, on behalf of each Participant who has in effect an agreement electing to reduce his or her Compensation (“Salary Reduction Agreement”).  The rate to be contributed as an Elective Contribution on behalf of each such Participant, for each payroll period, as such Participant shall elect, shall be equal to  (i) for Participants who are Non-Highly Compensated Employees (as defined in Subsection 4.03(8) hereof) from one to fifteen percent (1% – 15%) of such Participant’s Compensation for the payroll period, and (ii) for Participants who are Highly Compensated Employees (as defined in Subsection 4.03(8) hereof) from one to fifteen percent (1% – 15%) of such Participant’s Compensation for the payroll period, as determined from time to time and set by the Committee and communicated to such Participants, based in part on the anticipated Limitations on Elective Contributions under Section 4.03 hereof for such Participants.  The percentage rate of Elective Contributions, if any, which each Participant elects must be in whole percentage points and shall be made on a Salary Reduction Agreement provided by and filed with the Committee.

 

An election of a rate shall initially be effective as of the date as specified by the Committee, provided the Salary Reduction Agreement is filed at the time and in the manner prescribed by the Committee.  An election shall not have retroactive effect and shall remain in force until revoked or changed.  The Committee shall establish and communicate to Participants uniform and nondiscriminatory procedures for the election of salary reduction amounts, including procedures regarding the effective dates of any such elections and for changes in elections and discontinuances of such elections, and may change said procedures at such times and in such manner as the Committee may determine to be necessary or desirable.

 

Elective Contributions made on behalf of a Participant shall be credited to his Employee Elective Contribution Account under the Plan.  Any amounts credited to a Participant’s Employee Elective Contribution Account shall, for all purposes and in all respects, be fully vested and nonforfeitable.

 

4.03  Limitations on Elective Contributions.  The limitations described in this Section 4.03 shall be determined in accordance with the applicable sections of the Code and regulations thereunder.

 

4.03(1)  Notwithstanding any other provision of this Plan, in no event shall the Employer make an Elective Contribution in any Plan Year if such contribution would cause the “Actual Deferral Percentage” (or “ADP”) of Highly Compensated Employees to exceed the greater of the limitations indicated below:

  

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(a)           One hundred twenty-five percent (125%) of the ADP for all Non-Highly Compensated Employees; or

 

(b)           The lesser of (A) the sum of the ADP for all Non-Highly Compensated Employees plus two percent (2%), or (B) two hundred percent (200%) of the ADP for all Non-Highly Compensated Employees.

 

4.03(2)  The Committee may, at any time prior to or during a Plan Year, to the extent necessary to conform the Elective Contributions to the above limitations or, if applicable, the limitations of Subsection 4.06(8) hereof, reduce or eliminate prospectively the percentage rates of Elective Contributions to be made on behalf of Highly Compensated Employees.  Such prospective elimination or reduction shall be applied among the Highly Compensated Employees who have elected Elective Contributions in such manner as the Committee, in its sole discretion, shall deem appropriate, taking into consideration the ability of any Highly Compensated Employee to defer compensation under any non-qualified plan maintained by an Employer.

 

4.03(3)  In the event that following the end of a Plan Year, it is determined by the Committee that the Elective Contributions for Highly Compensated Employees exceed the limitations of Subsection 4.03(1), then the amount in excess of such limitation (“Excess Contributions”) (and the income thereon) shall be distributed to the Highly Compensated Employees, notwithstanding any Plan provision to the contrary, within two and one-half (2-1/2) months after the close of the Plan Year in which such Excess Contributions occurred.  In determining the amount of the Excess Contributions, the following rules shall apply:  First, the Elective Contributions of all those Highly Compensated Employees who have elected the highest percentage rate of Elective Contributions shall be hypothetically reduced to the percentage rate elected by all those Highly Compensated Employees (including those Employees whose percentage rate was previously reduced) whose elected percentage rate is at the next highest percentage rate of Elective Contributions and shall thereafter continue to be applied to the extent necessary in like manner in descending order on the basis of elected percentage rates until the hypothetical reductions enable the Elective Contributions to conform to the limitations of Subsection 4.03(1).  The sum of the hypothetical reductions in the previous sentence is the amount of the Excess Contributions.

 

The amount of the Excess Contributions that are distributed to each affected Highly Compensated Employee shall be determined as follows: First, the Elective Contributions of all those Highly Compensated Employees who have elected the greatest dollar amount of Elective Contributions shall have their Elective Contributions reduced to the dollar amount elected by all those Highly Compensated Employees (including those Employees whose dollar amount of Elective Contributions was previously reduced) whose elected dollar amount is at the next greatest amount of Elective Contributions and shall thereafter continue to be applied to the extent necessary in like manner in descending order on the basis of dollar amounts of Elective Contributions until the amount of reductions equal the amount of Excess Contributions.

 

The amount of Excess Contributions that may be distributed under this Subsection with respect to a Highly Compensated Employee for a Plan Year shall be reduced by any Excess Deferrals (as defined in Subsection 4.03(7)) attributable to such Plan Year previously distributed to such Employee.  In the event a distribution of Elective Contributions constitutes a distribution of Excess Contributions and a distribution of Excess Deferrals pursuant to Subsection 4.03(7), the amounts distributed shall be treated as a simultaneous distribution of both Excess Contributions and Excess Deferrals.

  

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4.03(4)  In determining the amount of income allocable to Excess Contributions which are being distributed, the following rules shall apply:

 

(a)           The income allocable to Excess Contributions for the Plan Year in which the contributions are made is the income for the Plan Year allocable to Elective Contributions and amounts treated as Elective Contributions with respect to the Highly Compensated Employee, multiplied by a fraction, the numerator of which is the amount of Excess Contributions made on behalf of the Highly Compensated Employee for the Plan Year and the denominator of which is the balance of such Employee’s Employee Elective Contribution Account as of the end of the Plan Year before adjustment of such Account as provided for in Subsection 6.04(3).

 

(b)           No income shall be allocable to the Excess Contributions for the period between the end of the Plan Year and the date of the distribution.

 

(c)           For purposes of this Subsection, the income of the Plan shall mean all earnings, gains and losses, computed in accordance with the provisions of Article VI.

 

4.03(5)  Effective for Plan Years beginning on or after January 1, 1997, this subsection (5) ceases to apply.  For Plan Years beginning before January 1, 1997, notwithstanding anything to the contrary contained herein, in the case of a Highly Compensated Employee who is, pursuant to the requirements of Code Section 414(q)(6), to be treated as part of an Aggregated Family Group, as defined in Subsection 4.03(8)(f), the following rules shall apply:

 

(a)           The ADP for the Aggregated Family Group shall be determined by aggregating the Elective Contributions and Total Compensation of all Family Members, as defined in Subsection 4.03(8)(f), who are Employee Participants.

 

(b)           If the limitations of Subsection 4.03(1) are exceeded, the ADP of the Aggregated Family Group shall be reduced as provided in Subsection 4.03(2) or (3) in order to comply with the limitations of Subsection 4.03(1), and if the provisions of Subsection 4.03(3) are applicable, Excess Contributions shall be allocated among and distributed to all of the Family Members in proportion to each such Family Member’s Elective Contributions.

 

4.03(6)  In addition to or in lieu of the above procedures to conform Elective Contributions to the limitations of Subsection 4.03(1), the Employer may, in its sole discretion, contribute on behalf of any Participant who is a Non-Highly Compensated Employee additional contributions (which shall meet the requirements of Treasury Regulation Section 1.401(k)-1(b)(5) (or any successor thereto), shall be treated as Elective Contributions and shall be allocated to such Participant’s Employee Elective Contribution Account) to the extent necessary to insure that the limitations of Subsection 4.03(1) are met.  Any such additional contributions shall be allocated in a manner proportionate to the Total Compensation of the affected Participants. Such additional contributions shall be immediately fully vested and subject to the distribution restrictions of Sections 4.08 and 11.04 hereof, applicable to Elective Contributions.  In addition, the Committee may designate that all or part of the Company Contributions or Company Matching Contributions, or both, allocated to a Participant’s Accounts shall be included in the calculations under Subsection 4.03(1) to the extent necessary to insure that the limitations of Subsection 4.03(1) are met, provided such use complies with the requirements of Treasury Regulation Section 1.401(k)-1(b)(5) (or any successor thereto).  Any Company Contributions or Company Matching Contributions, or both, so designated shall not be included in the calculations under Subsection 4.06(1), shall be treated as Elective Contributions, shall be allocated to such Participant’s Employee Elective Contribution Account, shall be immediately fully vested and, to the extent applicable, shall be subject to the distribution restrictions of Sections 4.08 and 11.04 hereof applicable to Elective Contributions.

  

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4.03(7)  Notwithstanding anything herein to the contrary, in no event shall the Employer make an Elective Contribution in any Plan Year on behalf of any Participant if such contribution would cause the Elective Contributions for such Participant for the Participant’s taxable year to exceed Eleven Thousand Dollars ($11,000), or such higher amount as provided in Code Section 402(g) or such higher amount to which such amount has been adjusted by the Secretary of the Treasury or his delegate at the same time and in the same manner as under Code Section 415(d), as of the beginning of such taxable year.  Should any Elective Contribution made to the Plan by the Employer on behalf of a Participant exceed Eleven Thousand Dollars ($11,000), as so adjusted (“Excess Deferrals”) on account of the Participant’s Elective Contributions to another plan, contract or arrangement, the Participant may, not later than March 15 following the close of his taxable year, notify the Committee in writing of the amount of the Excess Deferral and the Committee thereafter shall cause such Excess Deferral (and income allocable thereto) to be distributed to such Participant, notwithstanding any Plan provision to the contrary, no later than the April 15 next following the close of the Participant’s taxable year in which such Excess Deferral is made.  In the event the Participant’s Elective Contributions to the Plan and other plans, contracts or arrangements of an Employer or an Affiliated Company constitute Excess Deferrals, such Participant shall be deemed to have timely notified the Committee of the amount of such Excess Deferral as provided for in the preceding sentence and the appropriate Employers or Affiliated Companies shall notify the Committee on behalf of the Participant under these circumstances.  The amount of Excess Deferrals which may be distributed to the Participant shall not exceed the Participant’s Elective Contributions under the Plan during the Participant’s taxable year.

 

In determining the amount of income allocable to Excess Deferrals, the following rules shall apply:

 

(a)           The income allocable to Excess Deferrals for the taxable year in which the deferrals are made is the income for the Plan Year ending with or within said taxable year allocable to Elective Contributions for the Participant multiplied by a fraction, the numerator of which is the amount of Excess Deferrals made on behalf of the Participant for the Plan Year ending with or within said taxable year and the denominator of which is the balance of the Participant’s Employee Elective Contribution Account as of the end of the Plan Year ending with or within said taxable year before adjustment of such Account as provided for in Subsection 6.04(3).

  

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(b)           No income shall be allocable to the Excess Deferrals for the period between the end of the Plan Year and the date of the distribution.

 

(c)           For purposes of this Subsection, the income of the Plan shall mean all earnings, gains and losses computed in accordance with the provisions of Article VI.

 

The amount of Excess Deferrals that may be distributed under this Subsection with respect to a Highly Compensated Employee for any taxable year of said Employee shall be reduced by any Excess Contributions previously distributed to the Employee attributable to such taxable year.  In the event a distribution of Elective Contributions constitutes a distribution of Excess Contributions pursuant to Subsection 4.03(3) and a distribution of Excess Deferrals pursuant to this Subsection, the amounts distributed shall be treated as a simultaneous distribution of both Excess Contributions and Excess Deferrals.

 

4.03(8)  For purposes of this Section 4.03, the following terms shall have the following meanings:

 

(a)           “Actual Deferral Percentage” (or “ADP”) shall mean for the Highly Compensated Employees, as a group, and for the Non-Highly Compensated Employees, as a group, the average of the ratios (calculated separately for each such Employee Participant in such group) of the Elective Contributions, if any, made on behalf of each such Employee Participant for each Plan Year, to the Employee Participant’s Total Compensation, as defined in Subsection 4.03(8)(e), for such Plan Year.  For purposes of computing ADP, an Employee Participant who makes no Elective Contributions for a Plan Year shall be treated as making a zero percent contribution for the Plan Year.

 

In calculating ADP, an Elective Contribution shall be taken into account for a Plan Year only if such Elective Contribution:  (i) relates to Total Compensation that would have been received by the Employee Participant during such Plan Year (but for the salary reduction election) or is attributable to services performed by the Employee Participant during such Plan Year and would have been received by the Employee Participant within two and one-half (2-1/2) months after the close of such Plan Year (but for the salary reduction agreement); and (ii) is allocated to the Employee Participant during such Plan Year. An Elective Contribution is treated as allocated as of a particular date during a Plan Year if allocation of such contribution is not contingent on participation in the Plan or the performance of services after such date and such contribution is paid to the Trust not later than twelve (12) months after the close of such Plan Year.

 

In calculating the ADP of a Highly Compensated Employee who participates in more than one plan maintained by an Employer or an Affiliated Company, all elective deferrals (as defined in Code Section 401(m)(4)) of such Highly Compensated Employee shall be aggregated for purposes of determining such percentage.

  

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In calculating the ADP of a Highly Compensated Employee who has Excess Deferrals, such Excess Deferrals shall be treated as Elective Contributions for purposes of determining such percentage.

 

In calculating ADP, all elective deferrals (as defined in Code Section 401(m)(4)) to any plan required to be aggregated with the Plan for purposes of Code Section 401(a)(4) or 410(b) shall be treated as if made under the Plan.  If the Plan is permissively aggregated with another plan in order to comply with the limitations of Subsection 4.03(1), such aggregated plans must also meet the requirements of Code Sections 401(a)(4) and 410(b) as a single plan.

 

(b)           “Highly Compensated Employee” shall mean, effective for Plan Years commencing on or after January 1, 1997, any employee of an Employer or Affiliated Company who is a highly compensated employee as defined in Code Section 414(q) and the regulations thereunder.  Generally, any such employee is considered a Highly Compensated Employee if such employee:

 

(i)           was at any time during the current Plan Year or the prior Plan Year, a “five percent owner”, as defined in Code Section 416(i)(1), with respect to an Employer;

 

(ii)           received Limitation Year Compensation from the Employer in excess of Eighty Thousand Dollars ($80,000) during the prior Plan Year in the case of determinations for Plan Years commencing prior to 2001, or in excess of Eighty Five Thousand Dollars ($85,000) during the prior Plan Year in the case of determinations for Plan Years commencing in 2001 or 2002, or in excess of $90,000 for the prior Plan Year in the case of determinations for Plan Years commencing in 2003 or later.  The dollar amount in this paragraph (ii) shall be adjusted to reflect increases in the cost-of-living published by the Secretary of Treasury pursuant to Code Section 414(q)(1).  For any Plan Year, the applicable dollar amount shall be the dollar amount in effect for the calendar year in which the Plan Year commences.

 

For purposes of this Section 4.03, “Limitation Year Compensation” shall have the same meaning as set forth in Subsection 5.07(5) hereof, subject to the following:  (i) the determination of “Limitation Year Compensation” shall include amounts deferred pursuant to Code Sections 125, 401(k), 408(k)(6), 403(b) and, for Limitation Years commencing on or after January 1, 2000, Code Section 132(f)(4) and (ii) Limitation Year Compensation shall include compensation paid by any employer required to be aggregated with an Employer under Code Section 414(b), (c), (m) or (o).

 

A Former Employee who is an Employee Participant shall be treated as a Highly Compensated Employee if such Former Employee was a Highly Compensated Employee when he separated from service with the Employer or was a Highly Compensated Employee at any time after attaining age fifty-five (55).  “Former Employee” shall mean a person who has been an employee, but who ceased to be an employee for any reason and later returned to employment with an Employer.

 

For Plan Years commencing before January 1, 1997, “Highly Compensated Employee” also included any employees who were, pursuant to the requirements of Code Section 414(q)(6), to be treated as part of an Aggregated Family Group, as defined in Subsection 4.03(8)(f) hereof.

  

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(c)           “Non-Highly Compensated Employee” shall mean each Employee Participant who is not a Highly Compensated Employee.

 

(d)           “Employee Participant” shall mean each Eligible Employee who is a Participant.

 

(e)           “Total Compensation” shall mean an Employee Participant’s total compensation for services rendered to an Employer during the Plan Year, as reported in Box 10 on Form W-2 or other similar location on any successor federal wage statement as taxable for federal income tax purposes but determined without regard to any rules that limit the amount taken into account based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)).  Total Compensation shall not include amounts paid or reimbursed by an Employer or Affiliated Company for moving expenses incurred by an Employee Participant, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are deductible by the Employee Participant under Code Section 217.

 

In the event an employee begins, resumes or ceases to be an Employee Participant during a Plan Year, the amount of such Employee Participant’s Total Compensation for the entire Plan Year that shall be taken into account for purposes of Section 4.03 shall not include that portion of the Employee’s Total Compensation paid for any period prior to the Entry Date on which an Employee first becomes a Participant or the date on which a Participant resumes active participation hereunder or after the date that a Participant ceases to be an active Participant hereunder.

 

Total Compensation shall be limited to One Hundred Fifty Thousand Dollars ($150,000) for Plan Years commencing on or after January 1, 1994 and before January 1, 1997; One Hundred Sixty Thousand Dollars ($160,000) for Plan Years commencing on or after January 1, 1997 and before January 1, 2000; and One Hundred Seventy Thousand Dollars ($170,000) for Plan Years commencing on or after January 1, 2000.

 

In applying the compensation limitation for Plan Years commencing prior to January 1, 1997, the family group of a Highly Compensated Employee who is subject to the family member aggregation rules of Code Section 414(q)(6) because such Employee is either a five percent owner of the Employer or one of the ten (10) Highly Compensated Employees paid the greatest Limitation Year Compensation ( during the year, shall be treated as a single Participant.  For this purpose, “Family Members” shall include any spouse, lineal ascendant, lineal descendant, spouse of a lineal ascendant, or spouse of a lineal descendant of the Highly Compensated Employee.  In the event the Highly Compensated Participant’s and one or more Family Member’s Total Compensation for a Plan Year from an Employer are limited pursuant to the provisions of this Section, then the Total Compensation of each such person for such Plan Year shall be reduced proportionately based on the ratio of their respective Total Compensation to the aggregate Total Compensation of both (or all) of such persons for such Plan Year.

  

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Notwithstanding the foregoing, Total Compensation may be modified as follows:

 

If elected by the Committee in accordance with Treasury Regulations, Total Compensation shall include any amount that is not currently includable in the Employee Participant’s gross income by reason of an elective salary deferral pursuant to an Employer’s cafeteria plan established pursuant to Code Section 125 or any other Employer plan established pursuant to Code Section 401(k), including this Plan.

 

If elected by the Committee in accordance with Treasury Regulations, Total Compensation shall not include reimbursements or other expense allowances, fringe benefits (cash and non-cash), moving expenses, deferred compensation and welfare benefits, even if includable in gross income; provided, however, that if the Committee elects to exclude such amounts, a Self-Employed Individual’s total Earned Income for the Plan Year shall be multiplied by a fraction, the numerator of which is the Total Compensation of all Non-Highly Compensated Employees (who are not Self-Employed Individuals) excluding the foregoing exclusions, and the denominator of which is the Total Compensation of all Non-Highly Compensated Employees (who are not Self-Employed Individuals) including the foregoing exclusions.

 

(f)           “Aggregated Family Group” shall mean a family group of employees employed by an Employer required to be aggregated under Code Section 414(q)(6) and regulations thereunder and shall include any member of the family, as defined in Code Section 414(q)(6) and regulations thereunder, of either (i) a five percent (5%) owner, or (ii) one of the ten (10) Highly Compensated Employees paid the greatest Limitation Year Compensation for the current Plan Year.  Any spouse, lineal ascendant, lineal descendant, spouse of a lineal ascendant, or spouse of a lineal descendant of such a Highly Compensated Employee (a “Family Member”) shall be included in the “Aggregated Family Group.”

 

4.04  Company Matching Contributions.  As of the last day of each Plan Quarter, each Employer shall make a contribution (the “Company Matching Contribution”) in cash or, if appropriate, in shares of Company Stock, to the Trust in such amount as may be determined by the Committee, to be allocated among the Company Matching Contribution Accounts of Participants in accordance with Section 5.01 hereof.  In no event, however, shall any Company Matching Contribution for any Plan Quarter by any Employer be required.  In addition, in no event, however, shall any Company Matching Contributions, when added to any Company Contributions and Elective Contributions, exceed the maximum deductible contribution under Code Section 404(a) including any amount which may be deductible by the Employer under the carryover provisions of the Code.

 

4.05  Date of Payment and Allocation of Company Contributions, Company Matching Contributions and Elective Contributions.  An Employer shall make its Company Contributions and Company Matching Contributions to the Trust Fund for a Plan Quarter as soon as administratively possible on or after the last day of such Plan Quarter.  Company Contributions and Company Matching Contributions shall be deemed to have been made and shall be allocated to the Company Matching Contribution Accounts and Company Contribution Accounts of Eligible Participants in accordance with Sections 5.01 and 5.03 hereof as of the last day of the Plan Quarter for which they are made.  An Employer shall make all Elective Contributions as provided for in Section 4.02 hereof to the Trust Fund as soon as such amounts reasonably can be segregated from the general assets of the Employer but in all events by the fifteenth (15th) day of the calendar month following the close of the payroll period in which such amounts would otherwise have been payable to the Participant in cash.  Elective Contributions shall be deemed to have been made and shall be allocated to the Employee Elective Contribution Accounts of the Participants for whom they are made in accordance with Section 4.02 as of the last day of the Plan Quarter for which they are made.

  

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4.06  Limitation on Company Matching Contributions.  This section 4.06 shall only apply for Plan Years in which non-collectively bargained employees benefit under the Plan.  The limitations described in this Section shall be determined in accordance with the applicable Sections of the Code and regulations thereunder.

 

4.06(1)  Notwithstanding any other provision of this Plan, the “Actual Contribution Percentage” (or “ACP”) of Company Matching Contributions made to this Plan for Highly Compensated Employees during any Plan Year shall not exceed the greater of the limitations indicated below:

 

(a)           One hundred twenty-five percent (125%) of the ACP for all Non-Highly Compensated Employees; or

 

(b)           The lesser of (A) the sum of the ACP for all Non-Highly Compensated Employees plus two percent (2%), or (B) two hundred percent (200%) of the ACP for all Non-Highly Compensated Employees.

 

4.06(2)  The Committee may, at any time prior to or during a Plan Year, to the extent necessary to conform the Company Matching Contributions to the above limitations or, if applicable, the limitations of Subsection 4.06(8) hereof, reduce or eliminate prospectively the allocation of Company Matching Contributions for the benefit of Highly Compensated Employees.  Such prospective elimination or reduction shall be applied among the Highly Compensated Employees who have elected Elective Contributions in such manner as the Committee, in its sole discretion, shall deem appropriate, taking into consideration the ability of any Highly-Compensated Employee to defer compensation under any non-qualified plan maintained by an Employer.

 

4.06(3)  In the event that following the end of the Plan Year, it is determined by the Committee that the Company Matching Contributions for Highly Compensated Employees exceed the limitations of Subsection 4.06(1), then the amount in excess of such limitation (“Excess Aggregate Contributions”) (and income thereon) either shall be distributed to the Highly Compensated Employees, notwithstanding any Plan provision to the contrary, within two and one-half (2-1/2) months after the close of the Plan Year in which such Excess Aggregate Contributions occurred, or forfeited in accordance with the following rules: First, the Company Matching Contributions of all those Highly Compensated Employees who have elected the highest percentage rate of Matching Contributions shall be hypothetically reduced to the percentage rate elected by all those Highly Compensated Employees (including those Employees whose percentage rate was previously reduced) whose elected percentage rate is at the next highest percentage rate of Company Matching Contributions and shall thereafter continue to be applied to the extent necessary in like manner in descending order on the basis of elected percentage rates until the hypothetical reductions enable the Company Matching Contributions to conform to the limitations of Subsection 4.06(1).  The sum of the hypothetical reductions in the previous sentence is the amount of the Excess Aggregate Contributions.

  

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The amount of the Excess Aggregate Contributions that are either distributed to each affected Highly Compensated Employee or forfeited shall be determined as follows: First, the Company Matching Contributions of all those Highly Compensated Employees who have elected the greatest dollar amount of Company Matching Contributions shall have their Elective Contributions reduced to the dollar amount elected by all those Highly Compensated Employees (including those Employees whose dollar amount of Company Matching Contributions was previously reduced) whose elected dollar amount is at the next greatest amount of Company Matching Contributions and shall thereafter continue to be applied to the extent necessary in like manner in descending order on the basis of dollar amounts of Company Matching Contributions until the amount of reductions equal the amount of Excess Aggregate Contributions.

 

In applying the reduction, distribution and forfeiture rules of this Subsection 4.06(3), a Highly Compensated Employee’s Excess Aggregate Contributions shall be distributed, if vested, or forfeited, if nonvested, in proportion to the Participant’s vested and nonvested interests in all Company Matching Contributions.  For purposes of the foregoing sentence, the Employee’s Excess Aggregate Contributions attributable to the vested portion of the Highly Compensated Employee’s Company Matching Contributions for any Plan Year shall be the product of (i) the amount of the Employee’s Excess Aggregate Contributions (as adjusted for allocable income) multiplied by (ii) his vested percentage, determined as of the last day of said Plan Year.  The amount of Excess Aggregate Contributions to be distributed to each affected Highly Compensated Employee or forfeited, as appropriate, is equal to the Company Matching Contributions on behalf of such Employee (prior to reduction of the Excess Aggregate Contributions), less the product of such Employee’s ACP (after reduction for such Excess Aggregate Contributions) times such Participant’s Total Compensation, rounded to the nearest one cent ($.01), and likewise is equal to the amount of reduction provided for hereinabove.

 

4.06(4)  In determining the amount of income allocable to Excess Aggregate Contributions which are being distributed or forfeited, the following rules shall apply.

 

(a)           The income allocable to Excess Aggregate Contributions for the Plan Year in which the contributions are made is the income for the Plan Year allocable to Company Matching Contributions with respect to the Highly Compensated Employee multiplied by a fraction, the numerator of which is the amount of Excess Aggregate Contributions made on behalf of the Highly Compensated Employee for the Plan Year and the denominator of which is the combined balance of the Participant’s Company Matching Contributions Account as of the end of the Plan Year before adjustment of such Account as provided for in Subsection 6.04(3) hereof.

 

(b)           No income shall be allocable to the Excess Aggregate Contributions for the period between the end of the Plan Year and the date of the distribution.

 

(c)           For purposes of this Subsection, the income of the Plan shall mean all earnings, gains and losses computed in accordance with the provisions of Article VI.

  

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4.06(5) Effective for Plan Years beginning on or after January 1, 1997, this subsection (5) ceases to apply.  For Plan Years beginning before January 1, 1997, notwithstanding anything to the contrary contained herein, in the case of a Highly Compensated Employee who is, pursuant to the requirements of Code Section 414(q)(6), to be treated as part of an Aggregated Family Group, the following rules shall apply:

 

(a)           The ACP for the Aggregated Family Group shall be determined by aggregating the Company Matching Contributions and Total Compensation of all Family Members who are Employee Participants.

 

(b)           If the limitations of Subsection 4.06(1) are exceeded, the ACP of the Aggregated Family Group shall be reduced as provided in Subsection 4.06(3) in order to comply with the limitations of Subsection 4.06(1), and if the provisions of Subsection 4.06(3) are applicable, Excess Aggregate Contributions shall be allocated among and forfeited or distributed to all of the Family Members in proportion to each such Family Member’s Company Matching Contributions.

 

4.06(6)  In addition to or in lieu of the above procedures to conform Company Matching Contributions to the limitations of Subsection 4.06(1), the Employer may, in its sole discretion, contribute on behalf of any Participant who is a Non-Highly Compensated Employee additional contributions (which shall meet the ( requirements of Treasury Regulation Section 1.401(m)-1(b)(5) (or any successor thereto), shall be treated as Elective Contributions and shall be allocated to such Participant’s Employee Elective Contribution Account) to the extent necessary to insure that the limitations of Subsection 4.06(1) are met.  Any such additional contributions shall be allocated in a manner proportionate to the Total Compensation of the affected Participants.  Such additional contributions shall be immediately fully vested and subject to the distribution restrictions of Section 4.08 and 11.04 hereof, applicable to Elective Contributions.  In addition, the Committee may designate that all or part of the Elective Contributions or Company Contributions, or both, allocated to a Participant’s Accounts shall be included in the calculations under Subsection 4.06(1) to the extent necessary to insure that the limitations of Subsection 4.06(1) are met, provided such use complies with the requirements of Treasury Regulation Section 1.401(m)-1(b)(5) (or any successor thereto).  Any Elective Contributions or Company Contributions so designated shall not be included in the calculations under Subsection 4.03(1), shall be treated as Elective Contributions, shall be allocated to such Participant’s Employee Elective Contribution Account, shall be immediately fully vested and, to the extent applicable, shall be subject to the distribution restrictions of Sections 4.08 and 11.04 hereof applicable to Elective Contributions.

 

4.06(7)  For purposes of this Section 4.06, the following terms shall have the following meanings:

 

(a)           “Actual Contribution Percentage” (or “ACP”) shall mean for the Highly Compensated Employees, as a group, and for the Non-Highly Compensated Employees, as a group, the average of the ratios (calculated separately for each Employee Participant in such group) of the amount of Company Matching Contributions paid to the Trust on behalf of each such Employee Participant for each Plan Year to the Employee Participant’s Total Compensation for such Plan Year.  For purposes of computing ACP, an Employee Participant who makes no Elective Contributions for a Plan Year and who receives no Company Matching Contributions for a Plan Year shall be treated as having an ACP of zero for the Plan Year.

  

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In calculating ACP, a Company Matching Contribution shall be taken into account for a Plan Year only if such Company Matching Contribution:  (i) is made on account of the Employee Participant’s Elective Contributions for the Plan Year, (ii) is allocated to the Employee Participant during such Plan Year, and (iii) is paid to the Trust not later than the last day of the twelfth (12th) month following the close of such Plan Year.

 

In calculating ACP, all employee contributions and employer matching contributions (as defined in Code Section 401(m)(4)) of any Highly Compensated Employee who participates in more than one plan maintained by an Employer or an Affiliated Company shall be aggregated for purposes of determining such percentage.

 

In calculating ACP, all employee contributions and employer matching contributions (as defined in Code Section 401(m)(4)) to any plan required to be aggregated with the Plan for purposes of Code Section 401(a)(4) or 410(b) shall be treated as if made under the Plan.  If the Plan is permissively aggregated with another plan in order to comply with the limitations of Subsection 4.06(1), such aggregated plans must also meet the requirements of Code Sections 401(a)(4) and 410(b) as a single plan.

 

(b)           “Highly Compensated Employee,” “Employee Participant,” “Non-Highly Compensated Employee,” “Total Compensation,” “Aggregated Family Group,” and “Family Member” shall all have the meanings set forth in Subsection 4.03(8).

 

(c)           “Aggregate Limit” shall mean the greater of:

 

(a)           the sum of (i) 125% of the greater of the ADP of the Non-Highly Compensated Employees (as a group) for the Plan Year or the ACP of the Non-Highly Compensated Employees (as a group) for the Plan Year and (ii) two percentage points plus the lesser of such ADP or ACP; or

 

(b)           the sum of (i) 125% of the lesser of the ADP of the Non-Highly Compensated Employees for the Plan Year or the ACP of the Non-Highly Compensated Employees for the Plan Year and (ii) two percentage points plus the greater of such ADP or ACP.

 

4.06(8) If one or more Highly Compensated Employees participates in this Plan and the sum of the ADP and ACP of those Highly Compensated Employees exceeds the Aggregate limit, then the ACP of those Highly Compensated Employees will be reduced in accordance with Subsection 4.06(3) so that the Aggregate Limit is not exceeded.  The amount by which each Highly Compensated Employee’s Company Matching Contributions are reduced shall be treated as an Excess Aggregate Contribution.  The ADP and ACP of the Highly Compensated Employees are determined after any corrections required to meet the ADP and ACP tests or to correct Excess Deferrals under Subsection 4.03(7) hereof.  No reduction will be required under this Subsection if both the ADP and ACP of the Highly Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP of the Non-Highly Compensated Employees.  Effective for Plan Years commencing on or after January 1, 2002, this subsection (8) ceases to apply.

 

  

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4.07  Rollovers.

 

4.07(1)  With the consent of the Committee, “Rollover Contributions” in cash or such other form as may be permitted by the Committee may be received by the Trustee on behalf of any Eligible Employee or Participant.  Such amounts shall be allocated and credited to a separate Account herein referred to as a “Rollover Account” as of the date on which such amounts were received by the Trustee.  However, the transfer of such an amount to the Trustee will not cause such Eligible Employee to be eligible to participate in the Plan prior to the time specified in Section 3.01.  Prior to the time such Eligible Employee becomes eligible to participate in the Plan, the Eligible Employee shall be treated as a Participant solely with respect to the amount in his Rollover Account.

 

4.07(2)  An amount credited to a Rollover Account (iii) shall be held by the Trustee pursuant to the provisions of this Plan, (ii) shall be fully vested at all times and shall not be subject to forfeiture for any reason, and (iii) shall be distributed to the Eligible Employee, Participant or Beneficiary at such time and in the same manner as provided in this Article IV or Article XI hereof for the distribution of a Participant’s Accounts under the Plan.

 

4.07(3)  During the Plan Quarter in which the Rollover Contribution is initially received by the Plan, all of the balance of the Eligible Employee’s or Participant’s Rollover Account shall be segregated for investment purposes and any earnings thereon shall inure to the benefit of the Eligible Employee or Participant.  Such segregated amounts may be temporarily held in cash, and as soon as practical, shall be invested as directed by the Participant or Eligible Employee in accordance with the provisions of Section 14.02 hereof.

 

4.07(4)  For purposes of this Section, the term “Rollover Contributions” shall include:

 

(a)           Amounts which are properly characterized as a qualifying rollover distribution (including a lump sum distribution) received by a person who is now an Eligible Employee or a Participant from another qualified plan, which amounts are eligible for tax free rollover treatment and which are transferred by the Eligible Employee or Participant to the Trustee of this Plan within sixty (60) days following receipt thereof;

 

(b)           Amounts transferred to this Plan from an individual retirement account as defined in Code Section 7701(a)(37), provided that the individual retirement account contains no assets other than (1) assets which were previously distributed to the person who is now an Eligible Employee or a Participant by another qualified corporate (and, after December 31, 1983, qualified non-corporate) employer’s plan as a qualifying rollover distribution (including a lump sum distribution) with respect to such person’s service for such employer, which amounts were eligible for tax-free rollover treatment, and which amounts were deposited in such individual retirement account within sixty (60) days of receipt thereof, and (2) earnings on said assets; and

 

(c)           Amounts distributed to a person who is now an Eligible Employee or a Participant from an individual retirement account meeting the requirements of Subsection 4.07(4)(b) above, and transferred by the Eligible Employee or Participant to this Plan within sixty (60) days of receipt thereof from such individual retirement account.

  

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Prior to accepting any transfers to which this Section 4.07 applies, the Committee may require the Eligible Employee or Participant to establish that the amounts to be transferred to this Plan meet the requirements of this Section and may also require that the Eligible Employee or Participant provide an opinion of counsel satisfactory to the Committee that the amounts to be transferred meet the requirements of this Section and will not jeopardize the tax exempt status of this Plan or the Trust Fund for any reason (including, but not limited to, the failure of the amount to be excluded from the definition of annual addition in Code Section 415(c)(2), thereby causing the annual addition to the Account to exceed the permissible limits of Code Section 415, or to create adverse tax consequences to an Employer).

 

4.08  In-Service Withdrawals.

 

4.08(1)  Hardship Withdrawals of Elective and Company Matching Contributions.  Subject to the provisions of Subsection 4.08(2), upon application by a Participant, the Committee may, in accordance with the provisions of this Subsection, permit such Participant to withdraw all or a portion of such Participant’s Elective Contributions, but no earnings on such Contributions, or Company Matching Contributions (including Company Contributions made under the Tax Benefit Plan), including earnings on such Contributions, or both, if the Committee determines that the Participant suffered a Hardship.  For purposes hereof, “Hardship” shall mean an immediate and heavy financial need of the Participant on account of (i) medical expenses described in Code Section 213(d) previously incurred by the Participant, the Participant’s spouse or dependents (as defined in Code Section 152) or necessary for these persons to obtain medical care as described in Code Section 213(d), (ii) purchase (excluding mortgage payments) of a principal residence of the Participant, (iii) payment of tuition, related educational fees and room and board expenses for the next twelve (12) months of post-secondary education for the Participant or such Participant’s spouse, children or dependents (as defined in Code Section 152), or (iv) the need to prevent eviction of the Participant from his principal residence or foreclosure on the mortgage of the Participant’s principal residence.  Notwithstanding the foregoing, in no event shall a Hardship withdrawal of any amount allocated to a Participant’s Account pursuant to Subsection 4.03(6) or 4.06(6) be permitted.

 

The following provisions shall apply with respect to Hardship withdrawals:

 

(a)           Application for withdrawal must be made in writing on a form approved by the Committee, and must set out in detail the circumstances establishing that the proposed withdrawal is for a Hardship.

 

(b)           The Committee’s determination of whether the application meets the requirements of this Section shall be final and conclusive, and in making such determination, the Committee shall follow uniform and nondiscriminatory rules.

 

(c)           If the Committee is satisfied that the application meets the requirements of this section and the Code and regulations thereunder, the application shall be granted.

 

(d)           A withdrawal shall not be permitted unless the Committee determines the Participant has obtained all distributions (other than hardship distributions) and all nontaxable loans (determined at the time of the loan) currently available under all plans maintained by the Employer or any Affiliated Company, and in no event will such payment exceed the amount required to meet such financial need plus an amounts necessary to pay any federal, state or local taxes or penalties reasonably anticipated to result from such payment.

  

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(e)           Any withdrawal taken on or after January 1, 2002 shall terminate the Participant’s right to make Elective Contributions and employee contributions to this Plan or “Any Other Plans Maintained by the Employer” until the first day of the first payroll period of the Plan Quarter which commences at least six (6) months following such withdrawal.  For purposes hereof, “Any Other Plans Maintained by the Employer” shall mean all qualified and nonqualified plans of deferred compensation maintained by the Employer, including a stock option, stock purchase, or similar plan, or a cash or deferred arrangement that is part of a cafeteria plan within the meaning of Code Section 125.  However, it does not include the mandatory employee contribution portion of a defined benefit plan.  It also does not include a health or welfare benefit plan, including one that is part of a cafeteria plan within the meaning of Code Section 125.

 

4.08(2)  Procedure for Withdrawals.  All withdrawals under Subsection 4.08(1) shall be subject to Committee approval.  All withdrawals under this Section 4.08 shall require a written request for withdrawal on such forms as the Committee shall prescribe.  If any withdrawal under this Section 4.08 is less than the entire amount which is available for withdrawal at such time from the Employee Elective Contribution and Company Matching Contribution Accounts, then such Participant must withdraw a minimum amount equal to Five Hundred Dollars ($500.00).  Any withdrawal shall be made from a Participant’s Accounts in the following order of priority, provided at the time of such withdrawal such Participant either (i) has an amount credited to such Account, or (ii) is entitled to withdraw from such Account:  Such Participant’s Company Matching Contribution Account and such Participant’s Employee Elective Contribution Account.  When an application for withdrawal is granted under the provisions of this Subsection, the Committee shall give such directions to the Trustee as shall be appropriate to effectuate the distribution in accordance with the terms hereof of the amount withdrawn.  The date of withdrawal payment shall be specified by the Committee.  Withdrawals shall be paid in the form of a single lump sum.  A Participant’s Account shall, for purposes of determining its current value at the time of withdrawal, be based on the value as of the Valuation Date preceding the effective date of the withdrawal.  For purposes of allocating appreciation or depreciation of the Trust Fund and income of the Trust Fund, where appropriate, any withdrawal pursuant to this Article IV shall be subtracted from the Participant’s Account balance at the beginning of the Valuation Period in which the withdrawal occurs.

 

4.08(3)  Spousal Consent to Withdrawals.  Notwithstanding anything to the contrary contained in this Section 4.08, if, at the time a withdrawal is to be paid to a married Participant, the value of his or her Accounts (including amounts in his Accounts that are not being withdrawn) is equal to or exceeds $3,500 for withdrawals prior to January 1, 1998 or $5,000 for withdrawals on or after January 1, 1998, the Participant’s spouse must, within the 90-day period before withdrawal amounts are to be paid, consent to the payment of the withdrawal amount.  The spouse’s consent to any such withdrawal (i) must be in writing, (ii) must consent to the lump sum form of payment, (iii) must acknowledge the effect of the consent and be witnessed by a Plan representative or notary public, and (iv) shall be irrevocable.

  

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ARTICLE V

 

ALLOCATION TO PARTICIPANTS’ ACCOUNTS

 

5.01  Method of Allocating Company Matching Contributions.

 

5.01(1)  Subject to Sections 4.06, 5.04, 5.05 and 5.06 hereof, the Company Matching Contribution made for each Plan Quarter shall be allocated as of the last day of such Plan Quarter among the Company Matching Contribution Accounts of all Participants who were Eligible Employees for all or any part of such Plan Quarter and who elected to have made on their behalf Elective Contributions during such Plan Quarter.  Each Participant’s allocable share of Company Matching Contributions shall be in the proportion that the Elective Contributions made on his behalf for such Plan Quarter that were not otherwise distributed or withdrawn pursuant to the provisions of Section 4.03 or 4.08 hereof bears to the total Elective Contributions made on behalf of all Participants for such Plan Quarter that were not otherwise distributed or withdrawn pursuant to the provisions of Section 4.03 or 4.08 hereof.  Notwithstanding the foregoing, if Company Matching Contributions have been allocated to a Participant’s Company Matching Contribution Account and it is later determined that such Company Matching Contributions are attributable to Excess Contributions or Excess Deferrals, such Company Matching Contributions shall be forfeited and such Forfeitures shall be allocated as provided in Section 5.03 hereof.

 

5.01(2)  Any amounts of Company Matching Contributions credited to a Participant’s Company Matching Contribution Account shall, for all purposes and in all respects, be fully vested and nonforfeitable.

 

5.01(3)  If, during a Plan Quarter, a Participant is transferred from one Employer to another Employer, such Participant’s share of each Employer’s Company Matching Contributions shall be determined on the basis of the Elective Contributions made on behalf of such Participant for the portion of the Plan Quarter that such Participant was employed by such Employer.

 

5.02  Allocation to a Participant Transferred to an Affiliated Company Which Has Not Adopted the Plan.  Notwithstanding any other provisions of the Plan to the contrary, if a Participant who is an Eligible Employee ceases to be an Eligible Employee or is transferred from an Employer to an Affiliated Company, he or she shall continue to participate in the Plan as provided in Section 5.08 hereof as a Participant who has elected a voluntary suspension of Elective Contributions.  If such Participant is subsequently reemployed by an Employer or returns to Eligible Employee status, he or she shall be eligible to elect to have made on his or her behalf Elective Contributions from and after the day on which occurs such transfer back to an Employer or return to Eligible Employee status, provided he or she complies with the provisions of Section 4.02 of the Plan.

 

5.03  Method of Allocating Company Contributions.

 

5.03(1)  Subject to Sections 5.04, 5.05 and 5.06, the total Company Contribution made for each Plan Quarter and any Forfeitures pursuant to Subsection 5.01(1) or Section 12.06 hereof shall be allocated as of the last day of such Plan Quarter among the Company Contribution Accounts of all Participants who were Eligible Employees for all or any part of such Plan Quarter.  Each such Participant’s allocable share of Company Contributions and any Forfeitures shall be in the proportion that his or her Compensation while an Eligible Employee for such Plan Quarter bears to the total Compensation of all such Participants while Eligible Employees for such Plan Quarter.

 

  

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5.03(2)  Any amounts credited to a Participant’s Company Contribution Account shall, for all purposes and in all respects, be fully vested and nonforfeitable.

 

5.03(3)  If, during a Plan Quarter, a Participant is transferred from one Employer to another Employer, such Participant’s share of each Employer’s Company Contributions shall be determined on the basis of the Compensation received by such Participant from each such Employer.

 

5.04  Limitation on Annual Additions.

 

5.04(1)  Notwithstanding any other provision of the Plan, the sum of the Annual Additions to a Participant’s Account for any Limitation Year shall not exceed the lesser of:

 

(i) Thirty Thousand Dollars ($30,000) for Plan Years ending prior to 2001; Thirty Five Thousand Dollars ($35,000) for Plan Years ending in 2001 or commencing in 2001 and ending in 2002, and Forty Thousand Dollars ($40,000) for Plan Years commencing on or after January 1, 2002 adjusted for each subsequent Plan Year to reflect cost of living increases for the Plan Year provided under Code Section 415(d) or published by the Secretary of the Treasury, or

 

 (ii) twenty-five percent (25%) of such Participant’s Limitation Year Compensation for the entire Limitation Year (even though such Participant may not have been a Participant for the entire Limitation Year) for Limitation Years commencing prior to 2002, and 100% of such Participant’s Limitation Year Compensation for the entire Limitation Year (even though such Participant may not have been a Participant for the entire Limitation Year) for Limitation Years commencing in 2002 or later.  This paragraph (ii) shall not apply to any contribution for medical benefits after separation from service within the meaning of Code Section 401(h) or 419.

 

If a Limitation Year is less than a 12-consecutive month period, the above dollar limitations for the short Limitation Year shall not exceed the amount determined in the preceding sentence multiplied by a fraction, the numerator of which is the number of whole months in the short Limitation Year and the denominator of which is twelve (12). The term “Annual Additions” to a Participant’s Account for any Limitation Year shall mean the sum of:

 

(a)           such Participant’s allocable share of the Company Contributions and Company Matching Contributions credited to such Participant within such Limitation Year; and

 

(b)           the amount of such Participant’s Elective Contributions (including any amounts characterized as Excess Contributions and amounts characterized as Excess Deferrals, if such Excess Deferrals are not distributed as provided for in Subsection 4.03(7) hereof), and Excess Aggregate Contributions under the Plan, if any, for such Limitation Year; and

  

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(c)           such Participant’s allocable share of Forfeitures, if any, credited to such Participant within such Limitation Year; and

 

(d)           any amount allocated to an “individual medical account,” as defined in Code Section 415(1)(2), which is part of a Defined Benefit Plan maintained by an Employer; and

 

(e)           any amounts derived from contributions paid or accrued after December 31, 1985, in taxable years ending after such date, which are attributable to post-retirement medical benefits allocated to the separate account of a key employee (as defined in Code Section 419A(d)(3)) under a welfare benefit fund (as defined in Code Section 419(e)) maintained by an Employer.

 

Solely for purposes of this Section 5.04, the determination of a Participant’s Elective Contributions and after-tax employee contributions, if any, for a Limitation Year shall exclude the items set forth in Sections 1.415-6(b)(3)(i)-(iv) of the Income Tax Regulations, and the determination of a Participant’s allocable share of Company Matching Contributions, Company Contributions and Forfeitures, if any, for a Limitation Year shall exclude any Company Matching Contributions, Company Contributions, Elective Contributions, if any, and Forfeitures, if any, allocated to such Participant for any of the reasons set forth in Sections 1.415-6(b)(2)(ii)-(vi) of the Income Tax Regulations (except as otherwise provided in such Sections).

 

5.04(2)  In the event that as a result of:  (i) a reasonable error in estimating Participant’s Limitation Year Compensation, or (ii) other facts and circumstances which the Internal Revenue Service finds justify the availability of the provisions of this Subsection 5.04(2) and Subsections 5.04(3) and 5.04(4), it is determined that, but for the limitations contained in Subsection 5.04(1), the Annual Additions to a Participant’s Account for any Limitation Year would be in excess of the limitations contained herein, such Annual Additions shall be reduced to the extent necessary to bring such Annual Additions within the limitations contained in Subsection 5.04(1) by reducing such Participant’s allocable share of Forfeitures, if any, and Company Contributions for the Plan Year ending within such Limitation Year, then by reducing such Participant’s allocable share of Company Matching Contributions for the Plan Year ending within such Limitation Year, and then by reducing Elective Contributions made on such Participant’s behalf for the Plan Year ending within such Limitation Year and distributing such Elective Contributions (and income attributable to such Contributions) to the Participant.

 

5.04(3)  If, and to the extent that the amount of any Participant’s allocable share of Forfeitures, if any, or Company Contributions or Company Matching Contributions, if any, pursuant to Sections 4.01 and 4.04 hereof are reduced in accordance with the provisions of Subsection 5.04(2) above, the amount of such reduction shall be used to reduce the applicable contributions made for such Participant for the next Limitation Year (and succeeding Limitation Years, as necessary), if that Participant is covered by the Plan as of the end of the Limitation Year.  However, if that Participant is not covered by the Plan as of the end of the Limitation Year, then such amounts shall be maintained in a separate suspense account under the Trust for the Limitation Year and allocated and reallocated in the next Limitation Year among all of the remaining Participants in the Plan in the manner prescribed in Section 5.03 for the allocation of any Company Contributions.  If in said next Limitation Year, after the allocations as provided for herein, there are any amounts remaining which cannot be allocated to any Participant as a result of the limitations contained herein, such amount shall be maintained in a separate suspense account under the Trust to be used to reduce Company Contributions in the next Limitation Year (and succeeding Limitation Years, as necessary) for all of the remaining Participants in the Plan.

  

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5.04(4)  Any suspense account established pursuant to this Section 5.04 shall not be adjusted to reflect net income, loss, appreciation or depreciation in the value of the Trust Fund as provided for an Employee’s regular Accounts pursuant to Section 6.04 of the Plan.  Notwithstanding any other provision of the Plan to the contrary, in the event amounts are credited to a suspense account, no Company Contributions, Company Matching Contributions or Elective Contributions shall be made to the Plan for a Plan Year while there are any amounts in such separate suspense accounts attributable to prior Plan Years which cannot be allocated to Participants in accordance with the terms of this Subsection.

 

5.05  Limitations on Annual Additions for Employers or Affiliated Companies Maintaining Other Defined Contribution Plans.  In the event that any Participant in this Plan is also a participant under any other Defined Contribution Plan maintained by an Employer or an Affiliated Company (whether or not terminated), the total amount of Annual Additions to such Participant’s accounts under all such Defined Contribution Plans shall not exceed the limitations set forth in Subsection 5.04(1) hereof.  If such total amount of Annual Additions to a Participant’s accounts under all such Defined Contribution Plans does exceed the limitations set forth in Subsection 5.04(1) hereof, then the Annual Additions to such Participant’s Accounts in this Plan shall be reduced, and such reduction shall be accomplished in accordance with the provisions of Section 5.04 hereof.

 

5.06  Limitations on Annual Additions for Employers or Affiliated Companies Maintaining Defined Benefit Plans.  Code Section 415(e) ceased to apply to this Plan effective January 1, 2000.

 

5.07  Definitions for Purposes of Determining the Annual Addition Limitations.  For purposes of Sections 5.04, 5.05 and 5.06 hereof and this Section 5.07, the following definitions shall apply:

 

5.07(1)  “Retirement Plan” shall mean (a) any profit-sharing, pension or stock bonus plan described in Code Sections 401(a) and 501(a), (b) any annuity plan or annuity contract described in Code Section 403(a) or 403(b), and (c) any simplified employee pension plan described in Code Section 408(k).

 

5.07(2)  “Defined Benefit Plan” shall mean any Retirement Plan which does not meet the definition of a Defined Contribution Plan.

 

5.07(3)  “Defined Contribution Plan” shall mean a Retirement Plan which provides for an individual account for each participant and for benefits based solely on the amount contributed to the participant’s account, and any income, expenses, gains or losses, and any forfeitures of accounts of other participants which may be allocated to such participant’s account.  For purposes of Sections 5.04, 5.05 and 5.06, a Participant’s voluntary nondeductible contributions to a Defined Benefit Plan shall be treated as being part of a separate Defined Contribution Plan.

 

5.07(4)  “Limitation Year” shall mean the Plan Year.

  

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5.07(5)  “Limitation Year Compensation” shall mean an Employee Participant’s total compensation for services rendered to an Employer during a Limitation Year, as reported in Box 10 on Form W-2 or other similar location on any successor federal wage statement as taxable for federal income tax purposes but determined without regard to any rules that limit the amount taken into account based on the nature or location of the employment or the services performed (such as the exception for agricultural labor in Code Section 3401(a)(2)).  Compensation shall not include amounts paid or reimbursed by the Employer or Affiliated Company for moving expenses incurred by an Employee Participant, but only to the extent that at the time of the payment it is reasonable to believe that these amounts are deductible by the Employee Participant under Code Section 217.

 

5.08  Cessation of Eligible Employee Status.  Subject to the exception at Section 5.02, if any Participant does not incur a Termination of Employment but ceases to be an Eligible Employee as defined in Section 2.14 hereof, then, during the period that such Participant is not an Eligible Employee as defined in such Section 2.14 hereof:  (i) such Participant shall not have any Elective Contributions made on his behalf, (ii) except for any Company Contributions pursuant to Section 4.01 or Company Matching Contributions pursuant to Section 4.04 hereof owing for the Plan Quarter in which such Participant ceases to be an Eligible Employee, such Participant shall not receive any further allocation of any Company Contributions and Forfeitures, if any, or Company Matching Contributions, if any, under the Plan pursuant to Sections 5.01 and 5.03, and (iii) such Participant’s Accounts shall continue to share in the earnings or losses of the Trust Fund

 

ARTICLE VI

 

ACCOUNTS AND VALUATION OF TRUST FUND

 

6.01  Participant’s Accounts.  The assets of the Trust Fund shall constitute a single fund in which each Participant, Beneficiary or Alternate Payee shall have his proportionate interest as provided in this Plan.  The Committee shall maintain, or cause to be maintained, with respect to each Employer, individual Accounts for each Participant, Beneficiary or Alternate Payee.  A Participant shall have a Company Contribution Account, a Company Matching Contribution Account, and an Employee Elective Contribution Account, and, if applicable, an ESOP Employer Contribution Account and/or an ESOP Employee Contribution Account and/or a Rollover Account, and, where appropriate, an Alternate Payee shall have a QDRO Account.  Each Account shall reflect the credits and charges allocable thereto in accordance with the Plan.  The Committee shall maintain, or cause to be maintained, records which will adequately disclose at all times the state of the Trust Fund and of each separate interest therein.  The books, forms and methods of accounting shall be entirely in the hands of and subject to the supervision of the Committee.

 

6.02  Accounts of Participants Transferred to an Affiliated Company.  If a Participant is transferred to an Affiliated Company and his or her Accounts are not transferred pursuant to Section 6.06, the amount in the Trust which is credited to his Accounts shall continue to share in the earnings or losses of the Trust Fund, and such Participant’s rights and obligations with respect to such Accounts shall be governed by the provisions of the Plan and Trust.

  

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6.03  Valuation of the Trust Fund and Account Statements.

 

6.03(1)  Within a reasonable time after each Valuation Date, the Committee shall have the Trustee prepare a statement of the condition of the Trust Fund as of the close of business of such Valuation Date setting forth:  (i) the assets of the Trust Fund as of such Valuation Date, and the cost and current value thereof as defined in ERISA Section 3(26) (the “Current Value”), and (ii) all investments, receipts, disbursements and other transactions effected by it during the Valuation Period.  The Current Value of any shares of Company Stock that are not readily tradeable on an established securities market shall be determined by an independent appraiser meeting requirements similar to the requirements of the Treasury Regulations under Section 170(a)(1) of the Code.  This statement shall be delivered to the Committee.  As soon as practicable after each Valuation Date, the Committee shall cause to be prepared, and shall deliver to each Participant, Beneficiary or Alternate Payee, a report disclosing the status of each such individual’s Accounts in the Trust Fund.

 

6.03(2)  The Trustee’s determination of the Current Value of the assets in the Trust Fund and the Committee’s charges or credits to the individual Accounts with respect to Participants, Beneficiaries or Alternate Payees, as provided in Section 6.04, shall be final and conclusive on all persons ever interested hereunder.

 

6.04  Periodic Determination of Participant’s Accounts.

 

6.04(1)  Allocations in General.  For the purpose of making allocations as of any Valuation Date, except as otherwise provided herein, the Net Earnings and Adjustments in Value of the Trust Fund shall be allocated pursuant to Subsection 6.04(3) below, the Net Earnings and Adjustments in Value of the Cash Dividend Account shall be allocated pursuant to Subsection 6.04(4) hereof, Rollover Contributions received during such Valuation Period shall be allocated pursuant to Subsection 4.07(1) hereof, and Elective Contributions, Company Contributions and Company Matching Contributions made for such Valuation Period shall be allocated pursuant to Section 4.05 hereof.  Whenever an allocation or credit is required to be made hereunder, it shall be made by the Committee, or at the Committee’s direction and subject to its supervision.

 

6.04(2)  Determination of Net Earnings and Adjustments In Value.

 

(a)           “Net Earnings and Adjustments in Value of the Trust Fund” for a particular Valuation Period means the Current Value of the Trust Fund as of the Valuation Date (determined pursuant to Section 6.03 hereof) less the sum of:

 

(i)           The total of all Account balances respectively as of the first (1st) day of such Valuation Period of all Participants, Beneficiaries and Alternate Payees as of such time whose Accounts had not been segregated under Subsection 4.07(3) hereof; and

 

(ii)           Company Contributions, Company Matching Contributions, Elective Contributions and Rollover Contributions for the Valuation Period under consideration, to the extent that such Company Contributions, Company Matching Contributions, Elective Contributions and Rollover Contributions were actually paid over to the Trustee and not otherwise distributed to Participants, Beneficiaries or Alternate Payees prior to the close of such Valuation Period; and

  

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(iii)           The amount credited to the Cash Dividend Account as of such Valuation Date.

 

(b)           “Net Earnings and Adjustments in Value of the Cash Dividend Account” means the Current Value of the Cash Dividend Account as of the Valuation Date (determined pursuant to Section 6.03 hereof) less the sum of:

 

(i)           The Cash Dividend Account balance as of the first (1st) day of such Valuation Period; and

 

(ii)           All cash dividends credited to such Cash Dividend Account which were actually paid over to the Trustee during such Valuation Period and not otherwise distributed prior to the dose of such Valuation Period.

 

6.04(3)  Allocation of Net Earnings and Adjustments in Value of the Trust Fund.  Subject to the provisions of Subsections 6.04(2) and 6.04(4) hereof, the Net Earnings and Adjustments in Value of the Trust Fund for a particular Valuation Period shall be allocated as of the Valuation Date to those Accounts that had not, for such Valuation Period been segregated under Subsection 4.07(3) hereof, and the total value of which had not been distributed prior to the Valuation Date, as follows:  Such Net Earnings and Adjustments in Value of the Trust Fund shall be credited to or charged against such Accounts in proportion to the average funds credited to each such Account during such Valuation Period.

 

6.04(4)  Payment of Cash Dividends.

 

(a)           Notwithstanding the foregoing provisions of this Article VI, any cash dividends received by the Trustee with respect to shares of Company Stock held under the Plan on the record date for such dividends and allocated under the Plan to one or more of the Accounts of the Participants (whether or not so allocated on such record date), will be paid in accordance with one of the following methods, as determined by the Sponsoring Company in its sole discretion:

 

(i)           To such Participant (or the Participant’s Beneficiary following the Participant’s death), or

 

(ii)           To the Trust Fund and distributed to such Participant (or the Participant’s Beneficiary following the Participant’s death), or

 

(iii)           To the Trust Fund and invested in additional Company Stock on or as soon as administratively feasible after the dividend payment date.

 

(b)           In lieu of direct payment in cash under subsection (a)(i), the Sponsoring Company may permit a Participant (or Beneficiary following the Participant’s death) to direct that such payment instead be invested in Company Stock in the name of the Participant (or Beneficiary), and not owned by or subject to the provisions of this Plan.

 

6.04(5)  Computations.  All of the computations required to be made under the provisions of this Article VI, when made, shall be conclusive with respect thereto and shall be binding upon all the Participants, Beneficiaries, Alternate Payees, and all other persons ever having an interest in the Trust Fund.

  

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6.05  Correction of Participants’ Accounts.  If an error or omission is discovered in the Accounts of a Participant, or in the amount distributed to a Participant, the Committee, as authorized by Section 13.05 hereof, shall make such equitable adjustments in the records of the Plan as may be necessary or appropriate to correct such error or omission as of the Plan Year in which such error or omission is discovered.  Further, an Employer may, in its discretion, make a special contribution to the Plan which shall be allocated by the Committee only to the Accounts of a Participant as is necessary to correct such error or omission.

 

6.06  Transfers To Non-Bargaining Unit NCE Plan.  The Sponsoring Company shall cause a direct transfer of a Participant’s Accounts between defined contribution plans sponsored by the Sponsoring Company as follows:

 

(a)           Transfers From This Plan.  If a Member ceases to be an active Member in the Plan and thereafter is an active participant in another defined contribution plan maintained by the Sponsoring Company that benefits non-collectively bargained employees, the Member’s Accounts shall be transferred to the other plan.  Following such a transfer, the Member shall have no right to benefits from this Plan.

 

(b)           No Transfers To This Plan.  No transfers shall be made to this Plan under this section.

 

(c)           Time or Form of Transfer.  The Company shall determine the date as of which any transfer between plans shall occur.  The Company shall also determine whether the transfer shall be in cash or in kind or partly in each.  Transfers in kind may include the promissory note with respect to any outstanding loan from a plan to the Participant.

 

(d)           No Reduction of Benefits.  No such transfer shall occur unless the Company determines that the requirements of Sec. 17.02 have been satisfied.

 

ARTICLE VII

 

RETIREMENT BENEFITS

 

A Participant who continues in the Employer’s employment after his Retirement Date shall continue to be a Participant in the Plan until his actual retirement.  In addition, any Participant who has retired under a defined benefit pension plan maintained by the Sponsoring Company and has immediately commenced the receipt of monthly retirement income from said Retirement Plan shall be deemed to have retired under this Article VII.  Upon actual retirement on or after his Retirement Date or as otherwise provided herein, a Participant shall be entitled to the benefits provided for in this Article VII.  Subject to the provisions of Subsections 11.01(2), 11.02(1) and 12.03(2) hereof, any Participant who becomes entitled to benefits under this Article VII shall receive benefits equal to the total amounts in his Accounts valued as of the Valuation Date coinciding with or immediately following the date on which such Participant becomes entitled to such benefits. Payment upon retirement shall be made by the Trustee at the direction of the Committee at the time and manner provided in Article XI hereof.

  

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ARTICLE VIII

 

DISABILITY BENEFITS

 

8.01  Disability Retirement Benefits.  If a Participant retires by reason of Total and Permanent Disability while in the employ of an Employer or an Affiliated Company or on Leave of Absence, subject to the provisions of Subsections 11.01(2), 11.02(1) and 12.03(2) hereof, he shall be entitled to receive benefits equal to the total amounts in his Accounts valued as of the Valuation Date coinciding with or immediately following the date on which such Participant retires on account of Total and Permanent Disability.  However, if distribution is delayed because the Participant’s Account balances exceed $3,500 (for distributions prior to January 1, 1998) or $5,000 (for distributions on or after January 1, 1998), such distribution shall be based upon the balance in such Participant’s Accounts as of the Valuation Date coinciding with or immediately preceding the earlier of (iv) the date of the Participant’s election to receive such distribution, or (v) the date on which such Participant attains age sixty-five (65) or dies.  Payments resulting from a Participant’s retirement on account of Total and Permanent Disability shall be made by the Trustee at the direction of the Committee at the time and in the manner provided in Article XI hereof.

 

8.02  Determination of Disability.  The Committee shall determine whether a Participant has suffered Total and Permanent Disability, and its determination in that respect is binding upon the Participant, provided that the Committee may rely upon professional medical advice in making such determination.  In making its determination, the Committee may require the Participant to submit to medical examinations by doctors selected by the Committee.  The provisions of this Article VIII shall be uniformly and consistently applied to all Participants.

 

ARTICLE IX

 

DEATH BENEFITS

 

9.01  Death Benefits.  Upon the death of a Participant while in the employ of an Employer or an Affiliated Company or on Leave of Absence, subject to the provisions of Subsections 11.01(2), 11.02(1) and 12.03(2) hereof, his Beneficiary, determined in accordance with Section 9.02 hereof, shall receive, provided proper proof of death has been filed with the Committee, the full amount of his Accounts as of the Valuation Date coinciding with or immediately following the date on which the Participant dies.

 

Upon the death of a Participant who is no longer employed by an Employer or an Affiliated Company, his Beneficiary, determined in accordance with Section 9.02, shall receive the balance of such Participant’s Accounts as of the Valuation Date coinciding with or immediately following the date on which the Participant died.

 

Payments resulting from the death of a Participant shall be made by the Trustee at the direction of the Committee at the time and in the manner provided in Article XI hereof.

 

  

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9.02  Designation of Beneficiaries.

 

9.02(1)  Subject to the provisions of Section 3.06 and Subsections 9.02(2) and 12.03(2) hereof, each Participant may designate a Beneficiary or Beneficiaries, and contingent Beneficiary or Beneficiaries, if desired, including the executor or administrator of his estate, to receive his interest in the Trust Fund in the event of his death, but the designation of a Beneficiary shall not be effective for any purpose unless and until it has been filed with the Committee on the form provided therefor.  If the Participant has a surviving spouse and the surviving spouse consented to the naming of another Beneficiary in accordance with Subsection 9.02(2) hereof, but the deceased Participant failed to name a Beneficiary in the manner herein prescribed, or the Beneficiary or Beneficiaries so named predecease the Participant, the amount, if any, which is payable hereunder in respect of such deceased Participant shall be paid to the surviving spouse.  If the Participant does not have a surviving spouse and the deceased Participant failed to name a Beneficiary in the manner herein prescribed, or the Beneficiary or Beneficiaries so named predecease the Participant, the amount, if any, which is payable hereunder in respect of such deceased Participant shall be paid to either (i) the spouse of the deceased Participant, (ii) the surviving children of the deceased Participant or on their behalf as provided in Section 11.03 below, (iii) any one or more or all of the next-of-kin of the deceased Participant in such proportions as the Committee may determine, or (iv) the legal representative or representatives of the estate of the deceased Participant.  Notwithstanding the foregoing, the Committee may elect to have a court of applicable jurisdiction determine to whom a payment or payments should be made.  Any payment made to any person pursuant to the power and discretion conferred upon the Committee by the preceding sentence shall operate as a complete discharge of all obligations under the Plan in respect of such deceased Participant and shall not be subject to review by anyone, but shall be final, binding and conclusive on all persons ever interested hereunder.

 

Subject to the provisions of Subsection 9.02(2) below, a Participant may from time to time change any Beneficiary designated by him without notice to such Beneficiary, under such rules and regulations as the Committee may from time to time promulgate, but the last Beneficiary designation filed with the Committee shall control.

 

9.02(2)  With respect to a Participant who has been credited with an Hour of Service on or after August 23, 1984, notwithstanding any other provision herein to the contrary, but subject to the provisions of Subsection 12.03(2) hereof, if, as of such Participant’s death, such Participant is married, such Participant’s Accounts shall, on his death, be paid to the surviving spouse to whom he was married at the date of his death unless the surviving spouse has made a Qualified Consent to the payment of any or all of said Accounts to a designated Beneficiary other than the surviving spouse.  “Qualified Consent” means an irrevocable written consent executed by the Participant’s spouse which acknowledges the effect of the consent and is witnessed by a Plan representative or a notary public.  A Participant may, after obtaining a Qualified Consent, change his Beneficiary designation as permitted by Subsection 9.02(1) above, but any such change is subject to the requirements of this Subsection 9.02(2) and will require another Qualified Consent should the spouse, if surviving, not be the sole Beneficiary of all amounts in the Account.  A Qualified Consent is effective only with respect to the spouse who executes it.  If the Plan Administrator is satisfied that there is no spouse, or that the spouse cannot reasonably be located, or in such other circumstances as permitted by governmental regulations, no Qualified Consent shall be required as a condition to payment, under Section 9.01 hereof, to a Beneficiary who is not the surviving spouse.

  

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9.02(3)  Where a Participant’s spouse fails to survive the Participant and has a community interest in a portion of the Participant’s vested interest at the spouse’s death, and where the Participant may not lawfully retain and dispose of the whole interest including the community interest of the non-participating spouse, the non-participating spouse shall be deemed a Participant entitled to make a Beneficiary designation of his or her community share; however, the funds shall not be available out of the Trust until the Participant becomes entitled and the method of payment shall not be controlled by the method of payment provided for in the Plan.  In the absence of a designation of Beneficiary by the non-participating spouse or if no designee survives, the Participant’s spouse shall be deemed to have named the Participant as his or her Beneficiary, if he or she survives, and if not, then the Beneficiaries (other than the Participant’s spouse) named by the Participant who survives the Participant.  Otherwise, the Committee shall have the power described in Subsection 9.02(1) hereof to determine the recipients as in the case of the Participant’s death.

 

ARTICLE X

 

EMPLOYMENT TERMINATION BENEFITS

 

Subject to the provisions of Subsections 11.01(2), 11.02(1) and 12.03(2) hereof, in the event of the Termination of Employment of a Participant, such Participant shall be entitled to receive the entire balance in his Accounts, all valued as of the Valuation Date coinciding with or immediately following the date on which such Participant suffered a Termination of Employment.  If distribution is delayed because the Participant’s Account balances exceed $3,500 (for distributions prior to January 1, 1998) or $5,000 (for distributions on or after January 1, 1998), such distribution shall be based upon the entire balance in such Participant’s Accounts as of the Valuation Date coinciding with or immediately preceding the earlier of (i) the date of the Participant’s election to receive such distribution, or (ii) the date on which such Participant attains age sixty-five (65) or dies.

 

Payment pursuant to this Article X shall be made by the Trustee, at the direction of the Committee, at the time and manner provided in Article XI hereof.

 

ARTICLE XI

 

PAYMENT OF BENEFITS

 

11.01  Time and Method for Distribution of Benefits.

 

11.01(1)  Upon a Participant’s:   (i) retirement on or after his Retirement Date or as otherwise provided in Article VII hereof, (ii) retirement due to Total and Permanent Disability, (iii) death, or (iv) Termination of Employment, subject to the provisions of this Section 11.01 and Section 11.02, the Participant or his Beneficiary shall be entitled to a distribution pursuant to and in an amount computed in accordance with Article VII, VIII, IX or X, as the case may be.  Except as otherwise provided in this Article XI, and except to the extent a Participant elects to diversify his Account pursuant to Section 14.03 hereof, the entire amount payable to a Participant or Beneficiary shall be distributed in a single lump sum in whole shares of Company Stock, or cash in the case of any fractional shares of Company Stock, as soon as administratively practicable after the Valuation Date on which such amounts were valued as provided in Article VII, Section 8.01, Section 9.01 or Article X as applicable.  If a Participant has elected to diversify his Account pursuant to Section 14.03 hereof, any amounts so diversified will be distributed in a single lump sum cash payment, at the time provided herein.  In no event, however, will any such distribution be paid later than one year after the close of the Plan Year:

  

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(i)           in which the Participant dies or retires after attaining his Retirement Date under the plan, or retires after sustaining Total and Permanent Disability; or

 

(ii)           which is the fifth Plan year following the Plan Year in which the Participant has a Termination of Employment for any other reason, provided that the Participant has not been reemployed before such distribution.

 

In no event will such amounts be paid later than the sixtieth (60th) day after the close of the Plan Year in which occurs the latest of:

 

(a)           The date on which the Participant attains or would have attained sixty-five (65) years of age or if earlier, his Retirement Date;

 

(b)           The tenth (10th) anniversary of the year in which the Participant commenced participation in the Plan; or

 

(c)           The date the Participant terminates his employment with the Employer for any reason.

 

Shares of Company Stock and the certificates representing such shares which are distributed by the Trustee may contain such restrictions on transferability and legends regarding restrictions on transfer as the Sponsoring Company may reasonably require to ensure compliance with applicable federal or state securities laws.

 

11.01(2)  Notwithstanding any other provision of this Plan to the contrary, if actual distribution pursuant to Subsection 11.01(1) above is delayed for any reason beyond the Valuation Date upon which the amount of such distribution was to be based, the distribution shall be based on the value of the Participant’s Accounts as of the Valuation Date coinciding with or immediately preceding the date on which such distribution is actually made.

 

11.01(3)  Notwithstanding the provisions of Subsection 11.01(1), and subject to Section 11.02 below, if a Participant has a Termination of Employment or retires due to Total and Permanent Disability and the vested portion of the Participant’s Accounts at such time exceed Three Thousand Five Hundred Dollars ($3,500) for determinations prior to January 1, 1998 or Five Thousand Dollars ($5,000) for determinations on or after January 1, 1998, the amounts owing to such Participant shall be distributed in a single lump sum as soon as administratively practicable after such Participant attains age sixty-five (65) or dies, unless such Participant delivers to the Committee his written consent to an earlier distribution.

 

  

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11.01(4)  Notwithstanding the provisions of Subsection 11.01(1), if a Participant has elected to direct the investment of a portion of certain Account balances into investments other than Company Stock pursuant to Article XIV hereof or if a Participant has cash amounts credited to any of his Accounts which are earmarked for the purchase of Company Stock but have not been used to purchase Company Stock on or prior to the Valuation Date upon which the amount of such Participant’s distribution is to be based, or if the Participant has a Rollover Account which is invested in whole or in part in investments other than Company Stock, distribution of such portion or portions of such Account balances (or such portion or all of his Rollover Account) under Subsection 11.01(1) shall be in cash rather in shares of Company Stock, unless such Participant elects in writing, within the time prescribed and on a form provided by the Committee to receive his entire distribution (less the value of his Rollover Account, if he so elects) in shares of Company Stock pursuant to Subsection 11.01(1).

 

11.01(5)  If, upon termination of service for any reason, or, when distributions are required to commence to a Participant pursuant to Subsection 11.02(1), the value of the vested portion of a Participant’s Accounts is Three Thousand Five Hundred Dollars ($3,500) or less, then his total Account shall be paid to or for the benefit of the Participant, or in the case of his death, to or for the benefit of his Beneficiary or Beneficiaries, only as a non-deferred lump sum payment as provided in Subsection 11.01(1).  Effective January 1, 1998, notwithstanding the foregoing, if the total vested value of the Accounts of a Participant (or a Beneficiary following the Participant’s death) is $5,000 or less at any time following the date the Participant’s Termination of Employment or death occurs, a single-sum distribution of the entire vested benefit shall be made to the Participant (or Beneficiary) as soon as administratively feasible following the Termination of Employment or death (or following the date the value is determined to be $5,000 or less, if later) equal to the value determined as of a Valuation Date selected by the Trustee which is on or a reasonable time prior to the date the distribution occurs.

 

11.02  Limitations on Timing.  Notwithstanding any other provision of the Plan to the contrary, distributions must occur at least as rapidly as required under this Section 11.02.

 

11.02(1)  A Participant’s entire interest in the Plan shall be distributed to him no later than the Required Beginning Date based on the balance in his Accounts as of the Valuation Date coinciding with or immediately preceding the Required Beginning Date.

 

11.02(2)  In the event of the death of a Participant prior to distribution of his benefits under the Plan, distribution of such deceased Participant’s entire interest under the Plan shall be made within five (5) years after the death of such Participant.

 

11.03  Payments on Personal Receipt Except in Case of Minors or Persons Under a Legal Disability.  All payments to any Participant, Beneficiary or Alternate Payee from the Trust Fund shall be made to the recipient entitled thereto in person or upon his personal receipt, in a form satisfactory to the Committee, except when the recipient entitled thereto shall be a minor or under a legal disability, or, in the sole judgment of the Committee, shall otherwise be unable to apply such payments in furtherance of his own interests and advantage.  The Committee may, in such event, in its sole discretion, direct all or any portion of such payments to be made in any one or more of the following ways:  (i) directly to such person, (ii) to the guardian of his person or of his estate, even if appointed by a court other than a Texas state court, (iii) to a custodian under any applicable Uniform Gifts to Minors Act or Uniform Transfers to Minors Act, or (iv) to a person appointed as his personal representative through a Power of Attorney.  Notwithstanding the foregoing, the Committee may elect to have a court of applicable jurisdiction determine to whom a payment or payments should be made.  The decision of the Committee, in each case, will be final, binding and conclusive upon all persons ever interested hereunder, and the Committee shall not be obliged to see to the proper application or expenditure of any payments so made.  Any payment made pursuant to the power herein conferred upon the Committee shall operate as a complete discharge of all obligations of the Trustee and the Committee, to the extent of the amounts so paid.

  

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11.04  Distribution Limitations Applicable to Elective Contributions.

 

Notwithstanding any provisions to the contrary herein, except as otherwise provided in Sections 4.03 and 4.08 and Subsection 6.04(4) hereof, no distribution shall be made of any Elective Contributions or the earnings thereon prior to the earliest of:

 

(a)           Termination of Employment, retirement, death, or Total and Permanent Disability.

 

(b)           Termination of the Plan without establishment of or maintenance of another successor defined contribution plan as defined in Code Section 414(i) (other than an employee stock ownership plan as defined in Code Section 4975(e)(7) or Code Section 409 or a simplified employee pension as defined in Code Section 408(k)) by an Employer or an Affiliated Company at the time of termination of the Plan or within the period ending twelve months after distribution of all assets from the Plan; provided, however, that if fewer than two percent (2%) of the Participants in this Plan at the time of the Plan’s termination are or were eligible under another defined contribution plan (as defined in this Subsection) at any time during the twenty-four (24) month period beginning twelve (12) months before the time of this Plan’s termination, such other plan is not a successor defined contribution plan.

 

(c)           The attainment of age fifty-nine and one-half (59-1/2).

 

11.05  Distribution Limitations Applicable to ESOP Accounts.  Notwithstanding any other provisions to the contrary in this Plan, except as otherwise provided in Sections 11.01, 11.02 and 14.03 hereof, and except as otherwise provided in Code Section 409(d)(2) and (3), no distribution of any Company Stock attributable to contributions made by the Employers under the provisions of the ESOP and allocated to the ESOP Employer Contribution Accounts and contributions made by participants in the ESOP and allocated to the ESOP Employee Contribution Accounts shall be made before the end of the eighty-four (84)-month period which begins the month immediately following the month in which such Company Stock was allocated to the appropriate account under the ESOP.

 

11.06  Direct Rollovers to Eligible Retirement Plans.

 

11.06(1)  This Section applies to distributions made on or after January 1, 1993.  Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee’s election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.

  

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11.06(2)  For purposes of this Section 11.06, the following terms shall have the following meanings:

 

(i)           “Eligible Rollover Distribution” means any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee’s designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

 

(a)           Any hardship withdrawal from a Participant’s Employee Elective Contribution Account prior to age 591⁄2 pursuant to Sec. 6.02 which is described in Code section 401(k)(2)(B)(i)(IV) and which occurs after December 31, 1998 and prior to January 1, 2002, and any withdrawal from any of the Participant’s Accounts due to financial hardship prior to age 591⁄2 pursuant to Sec. 6.02 which occurs on or after January 1, 2002, is not an eligible rollover distribution.

 

(b)           Commencing January 1, 2002, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income.  However, such portion may be transferred only to an individual retirement account or annuity described in Code Section 408(a) or (b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for the amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

 

(ii)           “Eligible Retirement Plan” means an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee’s eligible rollover distribution.  Commencing January 1, 2002, an eligible retirement plan also means an annuity contract described in Code Section 403(b), or an eligible plan under Code Section 457(b) which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to account separately for amounts transferred into such plan from this Plan.  Prior to January 1, 2002, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan was limited to an individual retirement account or individual retirement annuity.

 

(iii)           “Distributee” means an Employee or former Employee.  In addition, the Employee’s or former Employee’s surviving spouse and the Employee’s or former Employee’s spouse or former spouse who is the Alternate Payee under a Qualified Domestic Relations Order are Distributees with regard to the interest of the spouse or former spouse.

 

(iv)           “Direct Rollover” means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee.

  

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ARTICLE XII

 

MISCELLANEOUS PROVISIONS RESPECTING PARTICIPANTS

 

12.01  Participants to Furnish Required Information.

 

12.01(1)  Each Participant shall furnish to the Committee such information as the Committee considers necessary or desirable for purposes of administering the Plan, and the provisions of the Plan respecting any payments hereunder are conditional upon the Participant’s furnishing promptly such true, full and complete information as the Committee may reasonably request.

 

12.01(2)  Each Participant shall submit proof of such Participant’s age to the Committee.  The Committee shall, if such proof of age is not submitted as required, use as conclusive evidence thereof, such information as is deemed by it to be reliable, regardless of the source of such information.  Any adjustment required by reason of lack of proof or the misstatement of the age of persons entitled to benefits hereunder, by the Participant or otherwise, shall be in such manner as the Committee deems equitable.

 

12.01(3)  Any notice or information which according to the terms of the Plan or the rules of the Committee must be filed with the Committee, shall be deemed so filed if addressed and either delivered in person or mailed, postage fully prepaid, to the Committee.  Whenever a provision herein requires that a Participant (or the Participant’s Beneficiary) give notice to the Committee within a specified number of days or by a certain date, and the last day of such period, or such date, falls on a Saturday, Sunday, or Employer holiday, the Participant (or the Participant’s Beneficiary) will be deemed in compliance with such provision if notice is delivered in person to the Committee or is mailed, properly addressed, postage prepaid, and postmarked on or before the business day next following such Saturday, Sunday or Employer holiday.  The Committee may, in its sole discretion, modify or waive any specified notice requirement; provided, however, that such modification or waiver must be administratively feasible, must be in the best interest of the Participant, and must be made on the basis of rules of the Committee which are applied uniformly to all Participants.

 

12.02  Participants’ Rights in Trust Fund.  No Participant or other person shall have any right, title or interest in, to or under the Trust Fund, or any part of the assets thereof, except and to the extent expressly provided in the Plan.

 

12.03  Inalienability of Benefits.

 

12.03(1)  Restrictions on Assignment.  The benefits provided hereunder are intended for the personal security of persons entitled to payment under the Plan, and are not subject in any manner to the debts or other obligations of the persons to whom they are payable.  The interest of a Participant or such Participant’s Beneficiary or Beneficiaries may not be sold, transferred, assigned or encumbered in any manner, either voluntarily or involuntarily, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be null and void; neither shall the Trust Fund nor any benefits thereunder or hereunder be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person to whom such benefits or funds are payable, nor shall they be subject to garnishment, attachment, or other legal or equitable process nor shall they be an asset in bankruptcy.  All of the provisions of this Section 12.03, however, are subject to Section 11.03, to withholding of any applicable taxes and to assignments permitted by Code Section 401(a)(13).

  

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12.03(2)  Exception for Benefit Payable Pursuant to a Qualified Domestic Relations Order.

 

(a)           The prohibitions contained in Subsection 12.03(1) hereof shall not apply to the creation, assignment or recognition of a right to any benefit payable with respect to a Participant pursuant to a Qualified Domestic Relations Order.

 

(b)           The Plan Administrator shall establish written procedures for the determination of the qualified status of a domestic relations order.

 

(c)           Upon receiving a domestic relations order, the Plan Administrator shall notify the Participant and Alternate Payee named in the order, in writing, of the receipt of the order and the Plan’s procedures for determining the qualified status of the order.  Within a reasonable period of time after receiving the domestic relations order, the Plan Administrator shall determine the qualified status of the order and shall notify the Participant and the Alternate Payee, in writing, of its determination.  The Plan Administrator shall provide notice under this paragraph by mailing such notice to the individual’s address specified in the domestic relations order, or in a manner consistent with Department of Labor regulations.

 

(d)           During any period in which the issue of whether a domestic relations order is a Qualified Domestic Relations Order is being determined, notwithstanding any other provision of the Plan to the contrary, the Committee shall separately account for the amounts which would have been payable during such period to an Alternate Payee pursuant to a Qualified Domestic Relations Order, if such order had been determined to be a Qualified Domestic Relations Order.  During the period such amounts are separately accounted for under the Plan, such amounts shall remain subject to the general investment provisions of the Plan.  If within the eighteen (18) month period beginning with the date on which the first payment would be required to be made under such domestic relations order, the domestic relations order is determined to be a Qualified Domestic Relations Order, the Committee shall direct the Trustee to distribute to the Alternate Payee the separately accounted for amounts including any earnings (or losses) thereon in accordance with Section 11.05 and the order.  However, if within such eighteen (18) month period, it is determined that such order is not qualified, or if by the end of such eighteen (18) month period the issue of qualification is not resolved, then the Committee shall pay the separately accounted for amounts including any earnings (or losses) thereon to the person or persons who would have been entitled to such amounts if there had been no such order.

 

(e)           Notwithstanding any other provision of the Plan to the contrary, all rights and benefits, including rights to make elections or to give directions, provided to a Participant under this Plan shall be subject to the rights, benefits and elections or directions afforded to an Alternate Payee, pursuant to a Qualified Domestic Relations Order, and this Plan shall be interpreted and administered by the Committee in such manner as to effectuate the provisions of any such Qualified Domestic Relations Order as they relate to the rights, benefits and elections or directions afforded to such Alternate Payee under such Qualified Domestic Relations Order.  Furthermore, to the extent provided in any such Qualified Domestic Relations Order, a former spouse of a Participant shall be treated as a spouse or surviving spouse for all applicable purposes under the Plan.

  

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(f)           The Trustee shall make any payments or distributions required under this Subsection 12.03(2) by separate benefit checks or other separate distribution to the Alternate Payee(s).

 

12.04  Conditions of Employment Not Affected by Plan.  Neither the Plan nor the Trust nor the Trust Agreement shall confer on any employee, including any Participant, any right to be retained in the service of any Employer or any Affiliated Company, and nothing contained herein or in the Trust Agreement shall be construed in any way to limit or restrict the right of any Employer or any Affiliated Company to discharge any employee, regardless of whether such employee is a Participant, or to change such employee’s position or the basis or amount of such employee’s compensation.

 

12.05  Address for Mailing of Benefits.

 

12.05(1)  Each Participant and each other person entitled to benefits hereunder shall file with the Committee from time to time in writing such Participant’s post office address and each change of address.  Any payment hereunder and any communication addressed to a Participant, an Employee or Beneficiary, at such person’s last address filed with the Committee, or if no such address has been filed, then at such person’s last address as indicated on the records of an Employer, shall be deemed to have been delivered to such person on the date on which such payment or communication is deposited, postage prepaid, in the United States mail.

 

12.05(2)  If the Committee is in doubt as to whether payments are being received by the person entitled thereto, it shall, by registered mail addressed to the person concerned, at his address last known to the Committee, notify such person that all unmailed and future payments shall be withheld until he provides the Committee with a sworn statement, properly notarized, evidencing his continued life and his proper mailing address.

 

12.06  Unclaimed Account Procedure.

 

12.06(1)  Neither the Trustee nor the Committee shall be obliged to search for, or ascertain the whereabouts of any Participant, Beneficiary or Alternate Payee.  The Committee, by certified or registered mail addressed to such Participant’s, Beneficiary’s or Alternate Payee’s last known address, shall notify the Participant, Beneficiary or Alternate Payee that such Participant, Beneficiary or Alternate Payee is entitled to a distribution under this Plan, and the notice shall quote the provisions of Subsections 12.06(1) and (2).  The Committee shall utilize the services of the Internal Revenue Service (pursuant to its Policy Statement P-1-187 or any successor thereto) in attempting to ascertain the current mailing address of a Participant, Beneficiary or Alternate Payee.

 

12.06(2)  If any distribution or payment is not claimed by the person entitled thereto within one (1) year from the date of the mailing of the notice referred to in subsection (1) above, the Participant’s, Beneficiary’s or Alternate Payee’s Accounts, valued as of the Valuation Date coinciding with or immediately preceding the date such one (1) year period ends, shall be forfeited (“Forfeitures”) and if not used to restore previous Forfeitures as provided herein, reallocated pursuant to Section 5.03 hereof.  If a Participant, Beneficiary or Alternate Payee makes a claim, at any time, such Forfeitures shall be restored and the Committee shall direct the Trustee to distribute such amount to the individual entitled to the distribution.  Such restorations shall be made from Forfeitures which occurred during the Plan Year pursuant to this Subsection.  Should such Forfeitures, if any, be insufficient to restore the claimed amount owing to any Participant or Beneficiary, the additional amount necessary for restoration shall be contributed by the Employer as a special contribution to be specially allocated to the Account of such Participant or Beneficiary.

 

  

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12.06(3)  Notwithstanding Subsection 12.06(1) or 12.06(2) above, if upon termination of the Plan and the liquidation of the Trust, all or any distribution payable to a Participant or his Beneficiary has not been claimed after sending the notice described in Subsection 12.06(1) above, the Committee shall establish an Individual Retirement Account or an interest-bearing, federally insured account in a bank or savings and loan association in the name of the Participant or Beneficiary, shall purchase a deferred annuity providing the form(s) of benefit prescribed in Article XI or, if the Committee is unable to accomplish any of the foregoing, shall dispose of the Participant’s Account in any other method permitted by the Code and ERISA.  If a Participant’s Account has been forfeited pursuant to Subsection 12.06(2) above, it shall be restored upon Plan termination and distributed as provided in the preceding sentence.  The Committee shall direct the Trustee to distribute the Participant’s Account valued as of the last Valuation Date, or special valuation date as provided in Section 18.03 hereof, preceding distribution.

 

ARTICLE XIII

 

ADMINISTRATION OF THE PLAN

 

13.01  Appointment of Committee.  The administration of the Plan will be the responsibility of the Committee which shall be appointed by the Board and shall consist of at least one (1) but no more than eight (8) members.  The President or Vice President of the Sponsoring Company shall certify to the Trustee the names of the members of the Committee.  The Board shall be authorized to remove any member of the Committee with or without cause by notifying such member and the Chairman, in writing, and may fill vacancies in the Committee, however caused.  A member of the Committee may resign upon ten (10) days’ prior notice by delivery of his written resignation to the President of the Sponsoring Company.  The Committee shall have the sole power, duty and responsibility for directing the administration of the Plan in accordance with its provisions.  Until such time as the Board so determines otherwise, the Committee of this Plan shall be the Retirement Committee under the Retirement Plan for Employees of Southwestern Public Service Company.

 

13.02  Compensated Expenses of the Committee.  The members of the Committee shall serve without compensation for their services as such, but the reasonable and necessary expenses of the Committee shall be paid as provided in Section 13.14.  When, in its discretion, the Committee, or any Employer, deems it advisable, the Committee shall be authorized to have the records of the Committee and the Trustee audited by an independent auditor, and reasonable and necessary ( expenses thereby incurred shall be paid as provided in Section 13.14 hereof.

 

  

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13.03  Secretary and Agents of the Committee.  The Committee or the Trustee may employ such agents and such clerical and other administrative personnel as reasonably may be required for the purpose of administering the Plan.  Such administrative personnel shall carry out the duties and responsibilities assigned to them by the Committee or Trustee, as applicable.  Expenses necessarily incurred for such purpose shall be paid by the Trust Fund unless paid by the Employers, as provided in Section 13.14.

 

13.04  Actions of Committee.

 

13.04(1)  A majority of the members of the Committee shall constitute a quorum for the transaction of business, and shall have full power to act hereunder.  Action by the Committee shall be official if approved by a vote of a majority of the members present at any official meeting.  The Committee may, without a meeting, authorize or approve any action by written instrument signed by a majority of all of the members.  Any written memorandum signed by the Chairman, or any other member of the Committee, or by any other person duly authorized by the Committee to act, in respect of the subject matter of the memorandum, shall have the same force and effect as a formal resolution adopted in open meeting.  The Committee shall give to the Trustee any order, direction, consent, certificate or advice required or permitted under the terms of the Trust Agreement, and the Trustee shall be entitled to rely on, as evidencing the action of the Committee, any instrument delivered to the Trustee when:  (i) if a resolution, it is certified by the Chairman and Secretary, or (ii) if a memorandum, it is signed by a majority of all of the members of the Committee, or by a person who shall have been authorized to act for the Committee in respect of the subject matter thereof.

 

13.04(2)  A member of the Committee may not vote or decide upon any matter relating solely to him or vote in any case in which his individual right or claim to any benefit under the Plan is specifically involved.  If, in any case in which a Committee member is so disqualified to act, the remaining members then present cannot, by majority vote, act or decide, the Board will appoint a temporary substitute member to exercise all of the powers of the disqualified member concerning the matter in which he is disqualified.

 

13.04(3)  The Committee shall maintain minutes of its meetings and written records of its actions, and as long as such minutes and written records are maintained, members may participate and hold a meeting of the Committee by means of conference telephone or similar communications equipment which permits all persons participating in the meeting to hear each other. Participation in such a meeting constitutes presence in person at such meeting.

 

13.05  Authority of Committee.  The Committee is authorized to take such actions as may be necessary to carry out the provisions and purposes of the Plan and shall have the authority to control and manage the operation and administration of the Plan, including complying with all reporting and disclosure requirements under applicable laws and regulations.  In order to effectuate the purposes of the Plan, the Committee shall have the fiduciary power and discretion to construe and interpret the Plan, to supply any omissions therein, to reconcile and correct any errors or inconsistencies, to decide any questions in the administration and application of the Plan, and to make equitable adjustments for any mistakes or errors made in the administration of the Plan.  The Committee shall also have the power to direct the purchase by the Trustee of or the investment by the Trustee in any insurance company investment or annuity contracts acquired for the purpose of funding benefits under the Plan.  All such actions or determinations made by the Committee, and the application of rules and regulations to a particular case or issue by the Committee, in good faith, shall not be subject to review by anyone, but shall be final, binding and conclusive on all persons ever interested hereunder.  In construing the Plan and in exercising its fiduciary power under provisions requiring Committee approval, the Committee shall attempt to ascertain the purpose of the provisions in question and when such purpose is known or reasonably ascertainable, such purpose shall be given effect to the extent feasible.  Likewise, the Committee is, in the exercise of its fiduciary powers, authorized to determine all questions with respect to the individual rights of all Participants and their Beneficiaries and Alternate Payees under this Plan, including, but not limited to, all issues with respect to eligibility, Compensation, service, valuation of Accounts, allocation of consolidated contributions and Trust Fund earnings, and retirement or Termination of Employment, and shall direct the Trustee concerning the allocation, payment and distribution of all funds held in trust for purposes of the Plan.  The Committee, in the exercise of any discretionary powers hereunder, shall not exercise that discretion so as to discriminate in favor of Employees who are officers, shareholders, or highly compensated Employees.  The Committee shall establish investment objectives and monitor, or cause to be monitored, the investment performance of the Trustee or any Investment Manager which may be appointed with respect to any assets of the Plan, and shall make such reports and give such recommendations to the Board as determined to be appropriate with respect thereto.

  

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13.06  General Administrative Powers.  The Committee shall have authority to make, and from time to time, revise, rules and regulations for the administration of the Plan.

 

13.07  Plan Administrator.  “Plan Administrator” (as defined in Section 3(16)(A) of ERISA) shall mean the Sponsoring Company. Except as otherwise delegated herein, the Plan Administrator shall exercise such authority and responsibility as it deems appropriate to comply with the provisions of federal law and governmental regulations issued thereunder and to carry out any duties imposed hereby, including, but not limited to, records of Participants’ service, accrued benefits and the percentage of such benefits which are nonforfeitable under the Plan, notification to Participants, annual registration with the Internal Revenue Service, annual reports to the Department of Labor, and furnishing the Trustee with any directions or information regarding income tax withholding required by law.  The Plan Administrator is hereby designated as the agent for service of process unless the Committee designates another person or entity.

 

13.08  Duties of Administrative Personnel.  Administrative personnel appointed pursuant to Section 13.03 hereof, shall be responsible for such matters as the Committee shall delegate to them by written instrument, including, but not limited to communications to Employees at the direction of the Committee, reports to the Committee involving questions of eligibility and the amount of Compensation of Participants, assisting Participants, Beneficiaries and Alternate Payees in the completion of forms prescribed by the Committee, maintenance of records concerning terminated vested Participants, Participants who have retired and Beneficiaries.  Administrative personnel may not make any decision as to Plan policy, interpretations, practices or procedures unless the authority to make such decisions has been delegated to them in writing by the Committee and they accept fiduciary responsibilities in accordance with the provisions of Section 13.09 hereof.  All administrative personnel shall perform their allocated function within the policies, interpretations, rules, practices and procedures established by the Committee, except that administrative personnel shall coordinate matters related to the Plan with the appropriate departments of each Employer as the Committee directs.

  

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13.09  Designation of Named Fiduciaries and Allocation of Responsibility.  ERISA requires that certain persons, who are deemed to be “fiduciaries,” as defined in ERISA Section 3(21)(A), be designated as “Named Fiduciaries” in the Plan.  The Board, the Committee and the Plan Administrator are hereby designated Named Fiduciaries.  Each Named Fiduciary shall have only the powers, duties and responsibilities specifically allocated to such fiduciary pursuant to the terms of this Plan.  The Board shall not have power or fiduciary responsibility hereunder other than the power to name and to remove the persons who shall comprise the Committee and to continue to those persons such allocation of fiduciary responsibilities.  In addition to all of the other rights, powers and responsibilities delegated to it hereunder, the Committee shall have the fiduciary responsibility and the power to appoint (and remove) one or more Investment Managers, and the Committee shall have the power to appoint (and remove) the Trustee.  Each Named Fiduciary may, by written instrument, allocate some or all of its responsibilities to another fiduciary or designate another person to carry out some or all of its fiduciary responsibilities.  The Committee, Plan Administrator and each other fiduciary under the Plan (including fiduciaries to whom responsibilities are allocated by a Named Fiduciary) will be furnished a copy of the Plan, and their acceptance of such responsibility will be made by agreeing in writing to act in the capacity designated.  No Named Fiduciary shall be liable for an act or omission of any person who is allocated a fiduciary responsibility or who is designated to carry out such responsibility by a Named Fiduciary, except to the extent that the Named Fiduciary did not act in accordance with the standards contained in Subsection 13.10(2) hereof with respect to the allocation or designation of a fiduciary duty.  Any person or group of persons may serve in more than one (1) fiduciary capacity with respect to the Plan.

 

13.10  Action by Fiduciaries.

 

13.10(1)  Any action herein permitted or required to be taken by an Employer shall, subject to the provisions of Section 21.07 hereof, be by resolution of its board of directors or by written instrument signed by a person or group of persons who has been authorized by resolution of such board of directors as having authority to take such action.  Any action herein permitted or required to be taken by the Committee shall be in the manner specified in Section 13.04 hereof.

 

13.10(2)  Each fiduciary with respect to the Plan shall perform all of his duties and responsibilities and exercise his powers hereunder with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent man acting in like capacity and familiar with such matters would use in the conduct of an enterprise of like character and with like aims, and no fiduciary shall be liable for any act or failure to act on his part (including reliance on the advice of counsel) which conforms to that standard, unless:  (i) he knowingly participates in or knowingly undertakes to conceal an act or omission of another fiduciary of the Plan, with the knowledge that such act or omission is a breach of fiduciary responsibility, or (ii) knowing of a breach of fiduciary responsibility, he fails to make reasonable efforts under the circumstances to remedy the breach, or (iii) by failing to carry out his specific responsibilities, in accordance with such standard, he has enabled another fiduciary of the Plan to commit a breach.

 

13.10(3)  Each fiduciary shall furnish or cause to be furnished to each other fiduciary all information needed for the proper performance of its duties.  Each fiduciary warrants that any directions given, information furnished or action taken by it shall be in accordance with the provisions of the Plan or the Trust Agreement, as the case may be, authorizing or providing for such direction, information or action.

  

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13.11  Appointment of Professional Assistants and the Investment Manager.  The Committee may appoint such accountants, counsel, and actuaries and other advisers as it deems necessary or desirable in connection with the administration of the Plan.  The Committee, in its sole discretion, may appoint one or more Investment Managers to manage (including the power to acquire or dispose of) all or any of the assets of the Trust Fund.  The Committee shall be entitled to rely upon and shall not be liable for any act or failure to act in reliance, on any opinion or reports, which shall be furnished to the Committee by any such accountant with respect to accounting matters, counsel in respect to legal matters, or actuary in respect of actuarial matters as long as the Committee’s reliance is in accordance with the standard set forth in Subsection 13.10(2) hereof.  The fees and costs of such services are an administrative expense to the Plan to be paid out of the Trust Fund except to the extent that such fees and costs are paid by any of the Employers.

 

13.12  Bond.  The Committee shall see that the appropriate fiduciaries are bonded as required by federal law or regulation.  Except as required by state or federal statute, irrespective of this provision, no bond or other security shall be required of any fiduciary.

 

13.13  Indemnity.  In the event and to the extent not insured against under any contract of insurance with an insurance company, the Employers shall indemnify and hold harmless each “Indemnified Person”, as defined below, against any and all claims, demands, suits, proceedings, losses, damages, interest, penalties, expenses (specifically including, but not limited to counsel fees to the extent approved by the Sponsoring Company or otherwise provided by law, court costs and other reasonable expenses of litigation), and liability of every kind, including amounts paid in settlement, with the approval of the Sponsoring Company, arising from any action or cause of action related to the Indemnified Person’s act or acts or failure to act.  Such indemnity shall apply regardless of whether such claims, demands, suits, proceedings, losses, damages, interest, penalties, expenses, and liability arise in whole or in part from (i) the negligence or other fault of the Indemnified Person, except when the same is judicially determined to be due to gross negligence, fraud, recklessness, willful or intentional misconduct of such Indemnified Person or (ii) from the imposition on such Indemnified Person of any penalties imposed by the Secretary of Labor, pursuant to Section 502(1) of ERISA, relating to any breaches of fiduciary responsibility under Part 4 of Title I of ERISA.  “Indemnified Person” shall mean each member of the Board of Directors of the Company, the Committee, the Trustee (other than a corporate Trustee), each other individual (but not any independent business entity) who is allocated fiduciary responsibility hereunder, and each individual (but not any independent business entity) otherwise acting in an administrative capacity with respect to the Plan.

 

13.14  Payment of Expenses.

 

13.14(1)  The expenses of agents or advisers, the expenses of the Trustee and any other reasonable expenses of the Committee approved by the Sponsoring Company or as otherwise provided for in Section 13.02, shall, subject to Subsection 13.14(2) hereof, be paid by the Plan out of the Trust Fund unless paid by the Employers.  If such expenses are to be paid by the Employers, the portion thereof payable by each may be determined by the ratio that the number of Participants who are Employees of each Employer bears to the total of all such Participants; provided, that if any expense is incurred solely on account of a single Employer or group of Employers, such expense shall be paid by such Employer or Employers to the extent and in such proportion as the Sponsoring Company may determine.

  

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13.14(2)  Notwithstanding any provisions of Subsection 13.14(1) to the contrary, as reimbursement for the expenses of administering the Plan, the Plan may pay so much of the amounts paid or incurred during the taxable year as expenses of administering the Plan as does not exceed the lesser of:

 

(a)           The sum of ten percent (10%) of the first One Hundred Thousand Dollars ($100,000.00), and five percent (5%) of any amount in excess of One Hundred Thousand Dollars ($100,000.00) of the dividends paid to the Plan during the Plan Year ending with or within the Employer’s taxable year, with respect to the aggregate Company Stock held in the ESOP Employer Contribution Accounts and ESOP Employee Contribution Accounts, or

 

(b)           One Hundred Thousand Dollars ($100,000.00).

 

ARTICLE XIV

 

INVESTMENT IN TRUST FUND

 

14.01  Investment in Company Stock Fund.

 

14.01(1)  Except as otherwise provided in Sections 14.02 or 14.03 hereof, the Trustee shall invest all Accounts solely in shares of Company Stock which shall be held by the Trustee in a separate investment fund under the Trust (the “Company Stock Fund”).  The Trustee may acquire those shares in the open market or may acquire those shares from the Sponsoring Company, either from treasury stock or from previously authorized but unissued stock, at a price equal to the average of the high and low, as reported on the composite tape for the New York Stock Exchange, on the last day on which Company Stock is traded preceding the date of purchase by the Trustee of the Company Stock.  Monies in amounts estimated by the Trustee to be needed for cash withdrawals or in amounts too small to be reasonably invested may be retained by the Trustee in cash in a separate subaccount under the Company Stock Fund.  Likewise, monies may be retained in cash or invested temporarily in short-term (less than one year) U. S. Treasury obligations, high grade commercial paper, certificates of deposit and other money market investments as selected by the Trustee (or in interest-bearing securities similar to such investments) until such time as stock is normally purchased by the Trustee in accordance with its administrative procedures, or during periods when Company Stock is not reasonably available for purchase, or if, in the opinion of the Trustee, the purchase of Company Stock might involve a possible violation of any Federal or state law, including any Federal or state securities law or any regulation or rule thereunder, or as the Trustee deems to be in the best interest of the Participants.  To the extent not otherwise provided in the Plan, dividends and other distributions received and gains realized on Company Stock shall, to the extent permissible, be invested in Company Stock and held in the Company Stock Fund.  Rights to purchase Company Stock issued to the Trustee as stockholder shall be exercised to the fullest extent practicable through the application of cash, and if that be insufficient to exercise the rights in full, then through the application of cash derived from the sale of a part of the rights under a procedure that will permit the purchase of the maximum number of shares from the cash thus made available.

  

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14.01(2)  The Committee shall establish and maintain, or cause the Trustee to establish and maintain procedures and records which will adequately reflect (i) the number of shares (including fractional shares) of Company Stock in the Company Stock Fund and/or the cash available for the purchase of Company Stock attributable to each Account of a Participant, (ii) the dividends accrued in the form of Company Stock, stock splits and similar changes with respect to shares of Company Stock attributable to a Participant’s Accounts, (iii) the net unrealized gain or loss attributable to such shares of Company Stock, and (iv) the cost basis of all shares of Company Stock attributable to a Participant’s Accounts.

 

14.02  Participant Investment Direction.

 

14.02(1)  Notwithstanding the provisions of Subsection 14.01(1) hereof, each Participant may elect to have twenty-five percent (25%) of such Participant’s Elective Contributions made on and after the Effective Date and the Company Matching Contributions which are allocated for the benefit of the Participant on the basis of such twenty-five percent (25%) of the Participant’s Elective Contributions, and may elect to have any amount credited to a Rollover Account, to the extent provided for in Section 4.07 hereof, invested in any Investment Fund established hereunder, including the Company Stock Fund, in accordance with the rules and procedures established from time to time by the Committee and communicated in writing to the Participants.  To the extent a Participant fails to direct the investment of all or a portion of such amounts (other than amounts credited to a Rollover Account), they shall be invested in the Company Stock Fund.  If a Participant fails to direct the investment of all or any portion of a Rollover Account, the Trustee shall direct and redirect such investment among the Investment Funds other than the Company Stock Fund as the Trustee, in its sole discretion, may determine.  Any amounts invested in the Company Stock Fund under this Section 14.02 shall thereafter no longer be eligible for investment direction pursuant to this Section 14.02.  Upon a Participant’s Termination of Employment or cessation of participation for any reason, including death, Total and Permanent Disability or retirement, if payment of such Participant’s Accounts is to be deferred pursuant to Section 11.01 hereof, such Participant (or Beneficiary) shall continue to have the right to direct the investment of the portion of his Accounts as provided herein.

 

14.02(2)  On the last day of each Plan Quarter, a Participant may change such Participant’s designation of the manner for investment of the amounts the Participant previously directed into Investment Funds other than the Company Stock Fund and future contributions described in Subsection 14.02(1) made on behalf of or by the Participant to any other manner of investment permitted under Subsection 14.02(1) hereof, provided that (1) application for the change is made in the form and in accordance with the rules prescribed by the Committee, (ii) any such change shall not become effective unless made within the time the Committee designates, and (iii) the change shall be applicable to contributions made after the application for change shall have become effective, or to the interest of the Participant in each Investment Fund as of the date the application for change shall have become effective, as the case may be.  In order to comply with applicable federal or state securities laws, the Committee may establish such rules with respect to the change of investment designation by Participants as it shall deem necessary or advisable to prevent possible violations of such laws.

 

14.02(3)  The Trustee shall maintain such investment funds (including the Company Stock Fund) as the Committee may direct from time to time, ( for the investment of the Trust Fund (“Investment Funds”).  Such Investment Funds shall be communicated to Participants in writing.  Except as provided hereinafter in this Section, the assets of each such Investment Fund other than the Company Stock Fund shall be invested exclusively in shares of the registered investment company or mutual fund designated by the Committee, provided that such shares constitute securities described in ERISA Section 401(b)(1).  Assets in any such Investment Fund in amounts estimated by the Trustee to be needed for cash withdrawals, or in amounts too small to be reasonably invested, or in amounts designated for the purchase of Company Stock but which have not yet been so used due to the Trustee’s normal procedures regarding the purchase of Company Stock, or in amounts which the Trustee deems to be in the best interest of the Participants, may be retained by the Trustee in cash or invested temporarily.

  

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14.02(4)  Any part or all of an Investment Fund other than the Company Stock Fund may be invested and reinvested by the Trustee in one or more collective investment funds or commingled trust funds maintained by the Trustee, as the same may have heretofore been or may hereafter be established or amended, so long as the Trustee is a bank or other applicable financial institution or another fiduciary with respect to the Plan.  Any such fund must be invested principally in assets of the kind specified for the respective Investment Fund and must be authorized to accept investments by retirement plans qualified under the provisions of Section 401(a) and exempt under the provisions of Code Section 501(a).  During such period of time as an investment in or through any such fund shall exist, the declaration of trust of such collective investment fund or commingled trust fund shall be incorporated by reference in, and shall constitute a part of, the Trust instrument.

 

14.02(5)  The Trustee may, in Trustee’s sole discretion, invest cash balances held by the Trustee, as permitted in Subsection 14.02(3) hereof, from time to time, in short-term cash equivalents having ready marketability, including, but not limited to, U.S. Treasury bills, commercial paper (including such forms thereof, other than Trustee’s own paper, as may be available through Trustee’s own trust department), certificates of deposit, and similar type securities.

 

14.03  Diversification of Participant’s Accounts.  This Section 14.03 shall apply to (1) the shares of Company Stock, if any, credited to a Participant’s ESOP Employer Contribution Account and/or his ESOP Employee Contribution Account, to the extent such shares were acquired by the Plan after December 31, 1986, and (ii) all of the shares of Company Stock credited to a Participant’s other Accounts in the Plan, regardless of when such shares were acquired (hereinafter individually or collectively referred to as “Eligible Shares”).  A Participant who has attained age fifty-five (55) and who has completed ten (10) or more years of participation in the Plan (including participation in the ESOP and/or the Tax Benefit Plan) shall be, for purposes of this Section, an “Eligible Participant.”  An Eligible Participant may elect either to direct the investment of, or to receive a single lump sum distribution of twenty-five percent (25%) of the Eligible Shares in his Accounts, after taking into account all shares as to which a prior election under this Section (or the comparable section under the ESOP and/or Tax Benefit Plan) has been made.  The total number of Eligible Shares subject to election at any time shall be determined by rounding such Shares to the nearest whole share.  During each year of the period of six (6) consecutive Plan Years beginning with the Plan Year in which the Participant first becomes an Eligible Participant, an election hereunder shall be permitted.  Each such yearly election shall be permitted during the period of ninety (90) days after the close of the applicable Plan Year (the “Yearly Election Period”).  During the last such Yearly Election Period, an Eligible Participant may either elect to direct the investment of, or to receive a single lump sum distribution of fifty percent (50%) of the Eligible Shares in his Accounts, taking into account all Shares as to which he has previously made an election.  To the extent an Eligible Participant makes an election under this Section 14.03, the Eligible Shares in the Eligible Participant’s Accounts that are subject to the election shall, no later than ninety (90) days after the end of the Yearly Election Period, be liquidated, if necessary, and either be invested among the investment options available for participant direction in accordance with the instructions of the Eligible Participant pursuant to the provisions of Section 14.02 of the Plan, or be distributed to said Participant in a single lump sum.  Any amounts diversified as provided for in this Section 14.03 through investment among the investment options shall thereafter be subject to the rules and other provisions of Sections 14.01 and 14.02 regarding the reinvestment or change in investment of those amounts.

 

  

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14.04  Funding Policy.  The Committee shall establish a funding policy and method consistent with the objectives of the Plan, the investments authorized under the Trust Agreement and the requirements of Title I of ERISA.  The Committee shall periodically review such funding policy and method.  In establishing and reviewing such funding policy and method, the Committee shall endeavor to determine the Plan’s short-term and long-term objectives and financial needs, taking into account the need for liquidity to pay benefits and the need for investment growth.  All actions of the Committee taken pursuant to this Section 14.04 shall be communicated to the Trustee.

 

14.05  Reservation of Cash.  In the implementation of its duties under Section 14.04, the Committee may communicate to the Trustee the need to reserve from permanent investment from time to time such amounts of cash as it deems necessary or advisable in the administration of the Plan.

 

14.06  Voting of Company Stock; Tender Offers.

 

14.06(1)  Voting of Stock – Registered Stock.  All Shares of Company  Stock, including fractional shares, held in the Company Stock Fund for a Participant’s various Accounts shall be voted by the Trustee in accordance with the directions of the Participant acting in his right as a shareholder.  The Trustee shall combine fractional shares to the extent possible to reflect the direction of the Participants holding fractional shares.  The Trustee shall establish such uniform and nondiscriminatory procedures as it deems necessary or appropriate in order to effectuate the voting rights granted to Participants hereunder.  The Trustee shall be bound to follow the instructions of Participants, acting as named fiduciaries under Section 403(a)(1) of ERISA, with respect to voting of shares of Company Stock which have been allocated to Accounts; provided, however, that if a Participant does not respond in a timely fashion to the solicitation of voting instructions, the shares of Company Stock allocated (or treated as having been allocated) to such Participant’s Accounts shall, to the extent consistent with ERISA, be voted by the Trustee in its sole discretion.

 

14.06(2)  Voting of Company Stock – Non-Registered Stock.

 

(a)           Notwithstanding the provisions of Subsection 14.06(1), if any Company Stock allocated to a Participant’s Accounts is not a “registration type class of securities,” the Participant shall be entitled to instruct the Trustee with respect to voting such Company Stock (in accordance with the provisions of Subsection 14.06(1)) only with respect to any corporate matter which involves the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction as the Secretary of the Treasury may prescribe ( in regulations pursuant to the provisions of Section 409(e) of the Code.

  

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(b)           If a matter is to be submitted to the holders of Company Stock which is not a “registration type class of securities” and it is not necessary that the Participant be entitled to instruct the Trustee with respect to voting in accordance with this Section, the Trustee, in its discretion, shall vote all shares of such Company Stock held by it (or exercise dissenter’s rights, if applicable), after consultation with the Committee.  “Registration type class of securities” shall mean any class of securities required to be registered under Section 12 of the Securities Exchange Act of 1934, or exempt from such registration solely by reason of Section 12(g)(2)(h) (concerning interests in pooled investment vehicles issued to annuity plans or qualified pension, profit sharing, or stock bonus plans).

 

14.06(3)  Tender or Exchange Offers.

 

(a)           In the event of a tender offer, exchange offer, or other offer for 10% or more of the shares of Company Stock held in the Company Stock Fund in the Trust (such offer hereinafter referred to as an “Offer”), the Trustee shall cause each Participant to whose Account any shares are credited to be advised in writing of the terms of the Offer as soon as practicable after the commencement of the Offer and shall furnish each Participant with a form by which the Participant may instruct the Trustee confidentially whether or not to tender shares Credited to his Account.  For purposes of this Section, “Tender” shall mean tender, exchange, sale or any other form of disposition in connection with an Offer.  The Trustee shall immediately notify the Committee of any Offer made to the Trustee including all terms and conditions of any such Offer.  The Trustee shall tender those shares which a Participant, acting as a named fiduciary under Section 403(a)(1) of ERISA, has so instructed it to tender, and the Trustee shall not tender shares which it is instructed not to tender.  If a Participant does not respond in a timely fashion to the solicitation for instructions regarding a Tender, the decision on whether or not to tender the shares allocated to such Participant’s Accounts shall, to the extent consistent with ERISA, be made by the Trustee in its sole discretion.  The provisions of this Section 14.06(3) are intended to establish each Participant as a named fiduciary as defined in Section 403(a)(1) of ERISA in connection with any such Tender; however, to the extent the Trustee retains any fiduciary responsibility with respect to any such Tender, the Trustee shall not be required to take any action, or omit to take any action, which would cause the Trustee to commit a breach of fiduciary duty under ERISA.

 

(b)           In advising Participants of the terms of the Offer, the Trustee shall advise the Participant that if the Trustee receives no instructions, the decision on whether or not to Tender the shares allocated to the Participant’s Accounts will be made by the Trustee in its sole discretion, and shall provide Participants with such documents relating to the Offer as are prepared by any person and provided to shareholders.  In addition, the Trustee may provide Participants with such other material concerning the Offer as the Trustee in its sole discretion determines to be appropriate. Reasonable means shall be employed by the Trustee to provide confidentiality with respect to the tendering directions by each Participant, and the Trustee shall hold such directions in confidence and shall not divulge or release such directions to any person, including all Employers or any director, officer, employee or agent of an Employer, it being the intent of this provision to ensure that the Employers (and their directors, officers, employees and agents) cannot determine the tendering directions given by any Participant.  A Participant’s instructions to the Trustee to tender shares shall not be deemed a withdrawal or suspension from the Plan or a forfeiture of any portion of the Participant’s interest in the Plan.  The Committee shall advise the Trustee of the commencement date of any Offer and, until receipt of such advice, the Trustee shall not be obligated to take any action under this Section.

  

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(c)           Funds or property received in exchange for tendered stock shall be credited to the Accounts of the Participants whose stock was tendered.  If Company Stock is available on a national securities exchange, such funds or property may be used by the Trustee to purchase Company Stock.  Pending investment in Company Stock pursuant to the preceding sentence, the Trustee shall invest such funds in Authorized Investments permitted under the Trust Agreement.

 

ARTICLE XV

 

PARTICIPATION BY EMPLOYERS

 

15.01  Adoption of Plan by Affiliated Company.  Any Affiliated Company, whether or not presently existing, may adopt this Plan, effective as of the date indicated in the instrument of adoption, if (i) its application is made in writing to the Board, (ii) such application is accepted in writing by the Board, and (iii) such Affiliated Company executes an instrument in writing duly authorized by it adopting this Plan and the Trust forming a part hereof and delivers a copy thereof to the Committee, the Trustee and to the Board.  The provisions of this Plan shall apply only to each Employer severally, except as otherwise specifically provided herein or in such Employer’s instrument of adoption.

 

15.02  Rights and Obligations of the Sponsoring Company and the Employers.  Throughout this instrument, a distinction is purposely drawn between rights and obligations of the Sponsoring Company and rights and obligations of each other Employer.  The rights and obligations specified as belonging to the Sponsoring Company shall belong only to the Sponsoring Company.  Each Employer shall have the obligation, as hereinafter provided, to make Company Contributions, Company Matching Contributions and Elective Contributions for its own Participants, and no Employer shall have the obligation to make Company Contributions, Company Matching Contributions or Elective Contributions for the Participants of any other Employer.  Any failure by an Employer to fulfill its own obligations under this Plan shall have no effect upon any other Employer. An Employer may withdraw from this Plan without affecting any other Employer.

 

15.03  Withdrawal from Plan.

 

15.03(1)  Notice of Withdrawal.  Any Employer may, with the approval of the Board, as of any Valuation Date withdraw from the Plan upon giving the Committee and the Trustee at least thirty (30) days’ notice in writing of its intention to withdraw.

  

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15.03(2)  Trustee Segregation of Trust Assets upon Withdrawal.  Upon the withdrawal by an Employer pursuant to this Article, the Trustee shall segregate the share of the assets in the Trust Fund, the value of which shall equal the total credited to the Accounts of Participants of the withdrawing Employer.  The determination as to which assets are to be so segregated shall be made by the Trustee in its sole discretion.

 

15.03(3)  Exclusive Benefit of Participants.  Neither the segregation and transfer of any Trust assets upon the withdrawal of an Employer nor the execution of a new agreement and declaration of trust by such withdrawing Employer shall operate to permit any part of the Trust Fund to be used for or diverted to purposes other than for the exclusive benefit of the Participants.

 

15.03(4)  Applicability of Withdrawal Provisions.  The withdrawal provisions contained in this Article XV shall be applicable only if the withdrawing Employer continues to cover its Participants and eligible Employees in another stock bonus/employee stock ownership plan and trust qualified under Code Sections 401, 409, 4975(e)(7) and 501.  Otherwise, the termination provisions of the Plan and Trust shall apply.

 

ARTICLE XVI

 

AMENDMENT OF THE PLAN

 

16.01  Authority to Amend.  The Sponsoring Company reserves the right to amend the Plan with respect to all Employers at any time and from time to time provided that a copy of any such amendment is delivered to all other Employers within thirty (30) days of the adoption of the amendment.  Each Employer may amend the Plan with respect to such Employer at any time, and from time to time, provided the Sponsoring Company approves such amendment.  No amendment shall permit any part of the Trust Fund to revert to or be recoverable by an Employer or be used for or diverted to purposes other than the exclusive benefit of the Participants or their Beneficiaries, or deprive any Participant of any interest he might have in the Trust Fund at the time of the amendment to the extent that such interest would be available to the Participant under Article X hereof were he to voluntarily resign as of the effective date of the amendment.

 

16.02  Trustee’s Consent.  Under no condition, shall such amendment, amendments, or restatements increase the duties or responsibilities, or decrease the compensation, privileges, and immunities of the Trustee without the Trustee’s written consent.

 

16.03  Limitations of Vesting Changes.  Under no condition, shall such amendment change the vesting schedule to one which would result in the nonforfeitable percentage of the accrued benefit derived from Company Contributions and Company Matching Contributions (determined as of the later of the date of the adoption of the amendment or of the effective date of the amendment) of any Participant being less than such nonforfeitable percentage computed under the Plan without regard to such amendment; no amendment shall change the vesting schedule unless each Participant with three (3) or more Eligibility Years of Service as of the expiration date of the election period described below, is permitted to elect, within the election period described below, to have his nonforfeitable percentage computed under the Plan without regard to the amendment.  The election period described herein shall begin no later than the date upon which the amendment is adopted and shall end no later than the latest of the following dates:  (i) the date which is sixty (60) days after the day the amendment is adopted, (ii) the date which is sixty (60) days after the day the amendment becomes effective, or (iii) the date which is sixty (60) days after the day the Participant is issued a written notice of the amendment by the Sponsoring Company.

  

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16.04  Limitations on Other Changes.  Subject to the above stated limitations and the requirement that no amendment shall eliminate, except with respect to any future contributions or future accrual of benefits, any nondiscretionary optional form of payment (as provided in Treasury Regulation Section 1.411(d)-4, and Treasury Regulation Section 1.401(a)(4)-4(d) and Code Section 411(d)(6)) with respect to any Participant who is a Participant immediately prior to the amendment, the Sponsoring Company shall have the power to amend the Plan and Trust Agreement, retroactively or otherwise, in any manner in which it deems desirable, including, but not by way of limitation, the power to change any provisions relating to the administration of the Plan and Trust Fund, and to change any provisions relating to the benefits or payment of any of the assets of the Trust Fund.  Each such amendment shall become effective when executed by the Sponsoring Company unless a different effective date is specified in the amendment.

 

16.05  Statutorily Required Amendments.  Notwithstanding anything herein to the contrary, this Plan may be amended at any time by the Sponsoring Company if necessary or desirable in order to have it conform to the provisions and requirements of the Code or any federal statute with respect to qualified employees’ plans and trusts, and no such amendment shall be considered prejudicial to the rights of any Participant hereunder or of any Beneficiary, Alternate Payee or Employee.  Further, it is understood that any provisions of this Plan as herein contained which are contrary to the requirements of the Code for a qualified tax exempt employees’ plan and trust shall be deemed void and of no effect, without affecting the validity of other provisions hereof.

 

ARTICLE XVII

 

PERMANENCY OF THE PLAN

 

17.01  Right to Terminate Plan.  Each Employer contemplates that the Plan shall be permanent and that it shall be able to make contributions to the Plan.  Nevertheless, in recognition of the fact that future conditions and circumstances cannot now be entirely foreseen, the Sponsoring Company reserves the right to terminate the Plan and each Employer reserves the right to terminate the Plan as to such Employer.

 

17.02  Merger or Consolidation of Plan and Trust.  Neither the Plan nor the Trust may be merged or consolidated with, nor may its assets or liabilities be transferred to, any other plan or trust, unless each Participant would (if the Plan then terminated) receive a benefit immediately after the merger, consolidation, or transfer which is equal to or greater than the benefit he would have been entitled to receive immediately before the merger, consolidation, or transfer (if the Plan had then terminated).

 

17.03  Continuance by Successor Company.  In the event of the liquidation, dissolution, merger, consolidation or reorganization of an Employer, the successor company may adopt the Plan and Trust for the benefit of the Employees of such Employer.  If such successor company does adopt the Plan and Trust, it shall, in all respects, be substituted for such Employer under the Plan and Trust.  Any such substitution of such successor company shall constitute an assumption of Plan liabilities by such successor company, and such successor company shall have all of the powers, duties and responsibilities of such Employer under the Plan and Trust.  If such successor company does not adopt the Plan and Trust, the Plan and Trust shall be terminated with respect to such Employer in accordance with the provisions of the Plan and Trust Agreement.

  

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ARTICLE XVIII

 

DISCONTINUANCE OF CONTRIBUTIONS AND TERMINATION

 

18.01  Suspension of Contributions.  Should an Employer fail for any reason to make Company Contributions and/or Company Matching Contributions in any one (1) or more years, such failure shall not, of itself, terminate or discontinue this Plan and Trust as to the Employer and its Participants, nor shall the Employer incur any obligation to make up such Company Contributions and/or Company Matching Contributions in whole or in part.

 

18.02  Discontinuance of Contributions.  Whenever an Employer determines that it is impossible or inadvisable for it to make further Company Contributions and/or Company Matching Contributions, such Employer may, without terminating the Trust, permanently discontinue all further Company Contributions and/or Company Matching Contributions by such Employer.  A certified copy of such Employer’s resolution or other formal written instrument pursuant to Section 21.07 hereof, shall be delivered to the Committee and the Trustee.  Thereafter, the Committee and the Trustee shall continue to administer all the provisions of the Plan which are necessary and remain in force, other than the provisions relating to Company Contributions and/or Company Matching Contributions by such Employer.  Unless otherwise provided by such resolutions, the Trust shall remain in existence ( with respect to such Employer and all of the provisions of the Trust Agreement shall remain in force.

 

18.03  Termination of Plan and Trust.  If an Employer determines to terminate (as to such Employer) the Plan and Trust completely, they shall be terminated insofar as they are applicable to such Employer as of the date specified in certified copies of resolutions or other formal written instrument pursuant to Section 21.07 hereof, delivered to the Committee and the Trustee.  Upon such termination of the Plan and Trust and before liquidation of the Trust, the Committee shall require a special valuation of the Trust, if the liquidation is not to occur as of a Valuation Date.  After payment of all expenses and proportional adjustment of Accounts of Participants with respect to such Employer to reflect such expenses, Trust Fund profits or losses, and subject to the limitations contained in Section 5.04 hereof, allocations of any previously unallocated funds to the date of termination, such Employer’s Participants shall be entitled to receive the amount then credited to their respective Accounts in the Trust Fund in a lump-sum payment.  If, in the opinion of the Committee, assets in the Trust Fund or certain of them may possibly not be readily salable (i) because of federal or state securities laws, or the rules and regulations thereunder, or (ii) at their fair market value, the Committee may direct and the Trustee shall effect, a distribution of such assets in kind.  If the entire Plan is terminating, upon completion of liquidation and distribution of the assets of the Trust to the Participants as provided for herein, the Trustee shall thereby complete the Trustee’s duties, and the Trust shall terminate.

 

18.04  Participant’s Rights to Benefits upon Termination or Partial Termination of Plan or Complete Discontinuance of Contributions.  Upon the termination or partial termination (as determined by the Internal Revenue Service) of the Plan or the complete discontinuance of Company Contributions and Company Matching Contributions by an Employer, the rights of each such Employer’s Employees who are then Participants (or, in the case of a partial termination, who are then Participants affected by the partial termination) and the rights of each other person to the amounts credited to his Accounts at such time shall be nonforfeitable without reference to any formal action on the part of such Employer, the Committee or the Trustee.

  

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ARTICLE XIX

 

EXCLUSIVE BENEFIT OF THE PLAN

 

19.01  Limitation on Reversions.  Except as otherwise provided in this Article XIX, it shall be impossible, at any time, for any part of the Trust Fund, other than such part as is required to pay taxes and administration expenses or such part as may otherwise be permitted by law to be returned to the Employer, to be recoverable by an Employer, or to be used for, or diverted to, purposes other than for the exclusive benefit of the Participants, Beneficiaries and Alternate Payees.

 

19.02  Unallocated Amounts upon Termination of Plan and Trust.  In the event the Plan and Trust are terminated, any previously unallocated amounts maintained in the suspense account in accordance with the provisions of Section 5.04 hereof which cannot be allocated to Participants upon the termination of the Plan and Trust pursuant to Section 18.03 hereof because of the limitations contained in Sections 5.04 through 5.07 hereof, shall revert to the Employer or Employers employing the Participant at the time of such termination.

 

19.03  Mistake of Fact or Disallowance of Deduction.  If the Committee in good faith determines that (a) a Company Contribution or Company Matching Contribution or Elective Contribution, or all of them was made by reason of a mistake of fact, or (b) a Company Contribution or Company Matching Contribution or Elective Contribution, or all of them is conditioned on its being deductible under Code Section 404, but the Internal Revenue Service disallows such deduction, the Trustee shall, upon direction of the Committee, return the amount of the excess Company Contribution or Company Matching Contribution or Elective Contribution, or all of them to the contributing Employer.  All payments of returned Company Contributions or Company Matching Contributions or Elective Contribution, or all of them under this Section shall be made within one (1) year from the date of the payment of such mistaken Company Contribution or Company Matching Contribution or Elective Contribution, or all of them or the disallowance by the Internal Revenue Service of the deduction, whichever is applicable.  The amount of the excess Company Contribution or Company Matching Contribution or Elective Contribution, or all of them shall be the excess of (1) the amount contributed over (2) the amount that would have been contributed had there not occurred a mistake of fact or had the deduction not been disallowed.  Earnings attributable to the excess Company Contribution or Company Matching Contribution or Elective Contribution, or all of them shall not be returned to the contributing Employer, but losses attributable thereto shall reduce the amount of such Company Contribution or Company Matching Contribution or Elective Contribution, or all of them to be so returned. Furthermore, if the withdrawal of the amount attributable to the mistaken Company Contribution or Company Matching Contribution or Elective Contribution, or all of them would cause the balance of a Participant’s Account to be reduced to an amount which is less than the balance which would have been in said Account had the mistaken amount not been contributed, then the amount to be returned to the Employer under this Section will be reduced so as to avoid any such reduction.

  

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19.04  Failure of Qualification of Plan and Trust.  The initial establishment of the Plan and Trust by any Employer is contingent upon obtaining the approval of the Internal Revenue Service.  In the event that the Internal Revenue Service fails initially to approve the Plan and Trust as to any Employer and the application for determination of the initial qualification of the Plan was made within the time prescribed by law for filing the Employer’s Federal income tax return for the taxable year in which the Plan was adopted, or such later date as the Secretary of the Treasury may prescribe, the Trustee shall, after paying any expenses attributable to such initial establishment, return to such Employer any remaining Company Contribution or Company Matching Contribution made by such Employer.  Such remaining Company Contribution or Company Matching Contribution shall be returned as promptly as practicable, but in no event later than one (1) year after the date of the final denial of qualification of the Plan as to such Employer, including the final resolution of any appeals before the Internal Revenue Service or the courts.

 

  

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ARTICLE XX

 

TOP HEAVY PLAN RULES

 

The Top Heavy rules under Code Section 416 ceased to apply to this Plan effective September 1, 1998, the first day of the first Plan Year in which the Plan no longer benefited any non-collectively bargained employees.

 

ARTICLE XXI

 

ESOP EXEMPT LOAN PROVISIONS

 

21.01  Effect of Article.  The following provisions of this Article XXI and the appropriate provisions of the Trust Agreement shall apply notwithstanding any other provisions of the Plan or the Trust Agreement to the contrary, in the event the Trustee executes a Promissory Note for an exempt loan to the Trust as defined in the regulations under Section 4975(e)(7) of the Code.

 

21.02  Definitions.  For purposes of this Article XXI, the following terms shall have the following meanings:

 

21.02(1)  “Promissory Note” shall mean each purchase money obligation executed by the Trustee for the purpose of acquiring shares of Company Stock (i) from a “disqualified person” within the meaning of Code Section 4975 or a “party in interest” within the meaning of Section 3(14) of ERISA or (ii) from any other person if the purchase money obligation payable to such other person is guaranteed by a “disqualified person” or a “party in interest.”  Shares of Company Stock acquired with each Promissory Note shall be held in separate Suspense Accounts.  The terms of each Promissory Note and any security agreements executed by the Trustee in connection therewith shall be subject to the provisions set forth in the Trust Agreement.

 

21.02(2)  “Suspense Account” shall mean the record maintained by the Committee pursuant to Section 21.04 of shares of Company Stock which have been acquired by the Trustee with a Promissory Note and which have not been allocated to the Accounts of Participants.

 

21.03  Company Contributions.  Notwithstanding the provisions of Section 4.01 hereof, subject to the limitations contained in Section 404(a) of the Code including the carryover provisions thereof, each Employer shall make a Company Contribution for each Plan Year in which a Promissory Note is outstanding in an amount which shall not be less than the amount required to be paid under each Promissory Note for such Plan Year.  In no event will Elective Contributions be used to repay any exempt loan.

  

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21.04  Release of Shares from Suspense Accounts.

 

21.04(1)  General.

 

(a)           The Committee shall establish a separate Suspense Account for shares of Company Stock acquired with each Promissory Note.  The earnings, including cash dividends paid on the allocated and unallocated shares of Company Stock acquired with indebtedness represented by a Promissory Note shall be accounted for separately from other assets of the Trust Fund and shall be used to pay interest and/or principal on the Promissory Note until the Promissory Note has been retired.  For purposes of allocating to Participants’ Company Contribution Accounts shares released from a Suspense Account by reason of the payment of principal and/or interest with earnings on such Company Stock, such earnings shall be deemed to have been allocated first to Participants’ Company Contribution Accounts pursuant to Section 6.04 and then charged to such Accounts in the manner provided in Section 21.04(2).

 

(b)           As of each Valuation Date there shall be released from the applicable Suspense Account for allocation to Participants’ Company Contribution Accounts in the manner specified in Section 21.04(2) below a number of shares of Company Stock equal to the number of shares of Company Stock in such Suspense Account on such Valuation Date multiplied by a fraction, the numerator of which shall be the amount of principal and interest payments under the terms of the applicable Promissory Note made since the previous Valuation Date, and the denominator of which shall be the sum of (1) the numerator and (2) the remaining principal and interest to be paid under such Promissory Note for the current Plan Year and all future Plan Years, without regard to any possible extension or renewal periods of such Promissory Note.  If the interest rate under a Promissory Note is variable, the calculation of the remaining interest to be paid in future Plan Years for the denominator of the fraction described above shall be based on the interest rate in effect under such Promissory Note on the Valuation Date with respect to which the fraction is applied.  The interest of each Participant in Company Stock released from a Suspense Account shall be allocated to his Company Contribution Account in shares of such Company Stock.

 

21.04(2)  Charges and Credits to Company Contribution Accounts.  Each Participant’s Company Contribution Account shall be charged with the Participant’s share of any cash or property allocated to his Company Contribution Account which is used by the Trustee to release shares of Company Stock from the Suspense Account in the manner described in Section 21.04(1) above, and the shares of Company Stock so purchased or released shall be allocated to the Participant’s Company Contribution Account to the extent that such Account has been so charged.

 

21.04(3)  Prohibited Allocations.  No portion of the assets of the Plan attributable to Company Stock acquired by the Plan in a sale to which Code Section 1042 applies may accrue to or be allocated, directly or indirectly, under any plan of the Sponsoring Company (or any Affiliated Company) meeting the requirements of Code Section 401(a), during the “non-allocation period,” for the benefit of:  (i) any Participant who makes an election under Code Section 1042(a) with respect to Company Stock; or (ii) any individual who is related to such a Participant within the meaning of Code Section 267(b); or (iii) for the benefit of any other person who owns (after application of Code Section 318(a)) more than (x) 25% of any class of outstanding stock of the corporation which issued the Company Stock or of any corporation which is a member of the same controlled group of corporations (within the meaning of Code Section 409(l)(4)) as such corporation, or (y) 25% of the total value of outstanding stock of any such corporation.  The “non-allocation period” shall be the period beginning on the date of the sale of the Company Stock and ending on the later of (i) the date which is 10 (ten) years after the sale of Company Stock; or (ii) the date of allocation attributable to the final payment under the Promissory Note incurred in connection with such sale.  The Trustee may establish subaccounts that it deems necessary in order to comply with the provisions of this Section 21.04(3).

 

  

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21.05  Limitations on Annual Additions.  Notwithstanding the provisions of Section 5.04, if no more than one-third (1/3) of the Company Contributions to the Plan for a Plan Year are allocated to accounts of Highly Compensated Employees, the following amounts shall be excluded in determining the Annual Addition of each Participant for such Plan Year: (i) Forfeitures of Company Stock acquired with the proceeds of a Promissory Note, (ii) Company Contributions to the Plan which are used to pay the interest on a Promissory Note and which are deductible under Code Section 404(a)(9)(B) and which are charged against the Participant’s Company Contribution Account.

 

21.06  Determination of Net Earnings and Adjustments in Value.  For purposes of Section 6.04, the share of net income or net loss of the Trust Fund allocable to the Company Contribution Accounts of Participants shall not include any unrealized increase or decrease in the fair market value of Company Stock held in a Suspense Account.

 

21.07  Voting of Company Stock.  For all purposes of Section 14.06, the shares of Company Stock allocated to an active Participant’s Company Contribution Account (not including inactive Participants) shall be treated as including a portion of the unallocated shares of Company Stock held in a Suspense Account; for this purpose the unallocated shares shall be considered allocated to active Participants’ Company Contribution Accounts by assuming that all such unallocated shares of Company Stock had been allocated to active Participants in the Plan as of a date selected by the Committee, based upon such active Participants’ comparative Company Stock account balances (i.e., Company Stock in an active Participant’s Company Contribution Account as a percentage of all Company Stock in the Company Contribution Accounts of all active Participants).

 

21.08  Tender Offer on Company Stock.  With respect to unallocated shares of Company Stock, for purposes of Section 14.06, rights to tender in connection with an Offer shall be exercised at the discretion of the Participants by assuming that all such shares of Company Stock had been allocated to active Participants (not including former Participants) in the Plan as of a date selected by the Committee, based upon such Participants’ comparative Company Stock account balances (i.e., Company Stock in an active Participant’s Company Contribution Account as a percentage of all Company Stock in the Company Contribution Accounts of all active Participants), and by permitting the respective Participants to exercise tender rights as if such shares had been finally and completely allocated to such Participants’ Accounts.  Funds or property received in exchange for tendered stock constituting unallocated shares of Company Stock shall be credited to the Suspense Account.

 

21.09  Forfeiture of Accounts.  If a portion of a Participant’s Company Contribution Account is forfeited, Company Stock allocated to such Account shall be forfeited only after all other assets in such Account.  If interests in more than one class of Company Stock have been allocated to the Participant’s Company Contribution Account, the Participant shall be treated as forfeiting the same proportion of each such class.

  

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21.10  Distribution of Benefits.

 

21.10(1)  Notwithstanding the provisions of the fourth sentence of Subsection 11.01(1) hereof to the contrary, a distribution of a Participant’s Accounts under said fourth sentence shall not include Company Stock allocated to an Account which was acquired with the proceeds of a Promissory Note until the end of the Plan Year in which any acquisition indebtedness related to such Company Stock is repaid in full, including any refinancings which are permitted to be treated as acquisition indebtedness in accordance with rules prescribed by the Secretary of the Treasury.

 

21.10(2)  If interests in more than one class of Company Stock have been allocated to the Participant’s Company Contribution Account, each distribution to the Participant shall be made in substantially the same proportion of each such class.

 

21.11  Further Conditions.  Except as otherwise provided in Section 12.03 and Section 22.08, shares of Company Stock acquired with a Promissory Note shall not be subject to any other put, call, or other option, or buy-sell or similar arrangement while held under the Plan or when distributed from the Plan to a Participant or Beneficiary, whether or not the Plan then constitutes an “employee stock ownership plan” within the meaning of Section 4975(e)(7) of the Code.  In addition, the provisions of the preceding sentence and of Section 22.08 shall continue to apply to shares of Company Stock acquired with a Promissory Note after the Promissory Note has been satisfied and after the Plan ceases to constitute an “employee stock ownership plan” as described above.

 

ARTICLE XXII

 

MISCELLANEOUS

 

22.01  Effect of Bankruptcy and Other Contingencies Affecting an Employer.  Neither the bankruptcy, receivership, insolvency, liquidation, dissolution, merger, consolidation or reorganization of an Employer, or any other eventuality affecting the Employer, shall terminate the Trust or render ineffectual this Plan or discharge any Employer from any liabilities to the Trust for which it shall already have become obligated, but the same shall continue in full force and effect as though such eventuality had not occurred; however, the Committee shall in such event be authorized hereby to make any and all rules and regulations not inconsistent with the purposes of the Plan as shall be necessary to deal with such change in the situation of the Plan and Trust.

 

22.02  Benefits Payable by Trust.  All benefits payable under the Plan shall be paid or provided for solely from the Trust Fund.  No Employer assumes any liability or responsibility therefor.

 

22.03  Withholding.  The Committee shall determine whether or not federal income tax withholding is required with respect to any distribution or withdrawal hereunder, shall direct the Trustee to withhold any amounts required by law to be withheld, and shall furnish the Trustee with any information required by Treasury regulations regarding withholding.  Notwithstanding any other provision of this Plan to the contrary, all rights and benefits of a Participant, Beneficiary or Alternate Payee are subject to withholding of any tax required by law to be withheld.

  

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22.04  Interpretation of the Plan and Trust.  It is the intention of the Employers that the Plan, and the Trust established by the Employers to implement the Plan, shall be an employee stock ownership plan and trust, with a cash or deferred arrangement feature and shall comply with the provisions of Code Sections 401, 409, 4975(e)(7) and 501 and the requirements of ERISA, and the corresponding provisions of any subsequent laws, and the provisions of the Plan and Trust Agreement shall be construed to effectuate such intention.

 

22.05  Provisions Hereof for Sole Benefit of Parties Hereto and Participants.  All of the covenants, stipulations and agreements contained in this Plan are and shall be for the sole and exclusive benefit of and binding upon the parties hereto, their successors and assigns, and the Participants and their Beneficiaries.

 

22.06  Article and Section Headings.  The titles or headings of the respective Articles and Sections in this Plan are inserted merely for convenience and shall be given no legal effect.

 

22.07  Formal Action by Employer.  Any formal action herein permitted or required to be taken by an Employer shall be:

 

(a)           if and when a partnership, by written instrument executed by one or more of its general partners or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by one or more general partners as having authority to take such action;

 

(b)           if and when a proprietorship, by written instrument executed by the proprietor or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by the proprietor as having authority to take such action;

 

(c)           if and when a corporation, by resolution of its board of directors or other governing board, or by written instrument executed by a person or group of persons who has been authorized by resolution of its board of directors or other governing board as having authority to take such action; or

 

(d)           if and when a joint venture, by written instrument executed by one of the joint venturers or by written instrument executed by a person or group of persons who has been authorized by written instrument executed by one of the joint venturers as having authority to take such action.

 

22.08  Right to Require Repurchase of Shares of Company Stock.

 

22.08(1)  Subject to the following provisions of this Section 22.08, if at the time of distribution hereunder the shares of Company Stock distributed from the Trust Fund to a Participant or his Beneficiary with respect to a Plan Year are not publicly traded or are subject to a trading limitation (as hereafter defined), the former Participant or Beneficiary shall have an option (the “Put”) to require the Sponsoring Company to purchase all shares of Company Stock distributed from the Trust Fund to the former Participant or Beneficiary for such Plan Year.  For purposes of the preceding sentence, a “trading limitation” is a restriction under any federal or state securities law, or any regulation thereunder, or an agreement, which would make the shares of Company Stock not as freely tradable as shares of Company Stock not subject to such restriction.

  

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22.08(2)  The Put may be exercised at any time during the Option Period (as hereinafter defined) by giving the Sponsoring Company written notice of the election to exercise the Put.  The Option Price (as hereinafter defined) shall be payable in cash and/or in installments (as provided below) beginning not later than 30 days after the Sponsoring Company receives written notice of the election by the former Participant or Beneficiary to exercise the Put.  The Put may be exercised by a former Participant or the Beneficiary only during the Option Period relating to a distribution of shares of Company Stock under Section 11.01 to the former Participant or Beneficiary.

 

22.08(3)  The “Option Period” shall be the sixty (60) day period following the day on which a Participant or his Beneficiary receives a distribution of shares of Common Stock under Section 11.01; if the Put is not exercised within this first sixty (60) day period, it may be exercised during a second “Option Period” which shall be a sixty (60) day period beginning on the first day of the third month of the Plan Year which follows the Plan Year of distribution of such shares of Common Stock.  Notwithstanding the foregoing, the Option Period shall be extended by the amount of time during which the Sponsoring Company is unable to honor the Put by reason of applicable federal or state law.

 

22.08(4)  The “Option Price” shall be the fair market value as determined pursuant to Treasury Regulations Section 54.4975-11(d)(5) (or, in the case of any shares of Company Stock that are not readily tradable on an established securities market, as determined by an independent appraiser meeting requirements similar to the requirements of the Treasury Regulations under Section 170(a)(1) of the Code) of each share of Company Stock as determined by the Sponsoring Company as of the Valuation Date immediately preceding the date the Put is exercised, multiplied by the number of shares to be sold under the Put.  Notwithstanding the provisions of this paragraph, the Option Price shall be determined on the date the Put is exercised if the transaction involves a “disqualified person” within the meaning of Code Section 4975.

 

22.08(5)  Payment of the Option Price for shares of Company Stock subject to the Put shall be made either in a lump sum or in installments as determined by the Sponsoring Company.  In the event payments are made in installments, the installment obligation shall (1) be adequately secured as determined by the Sponsoring Company, (2) bear a reasonable rate of interest as determined by the Sponsoring Company on a uniform and nondiscriminatory basis, but in no event shall such rate of interest be greater than the maximum non-usurious rate of interest permitted to be charged on such indebtedness under Texas law, (3) require that the payments be made in annual installments, (4) have a payment period of five (5) years from the date the Put is exercised, (5) require that any payments pursuant to the installment obligation must begin to be made no later than thirty (30) days after the date the Put is exercised, and (6) permit the Sponsoring Company to prepay the amount of any remaining installments without penalty.

  

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22.08(6)  The Put granted to a former Participant or Beneficiary hereunder shall not be assignable, except that the former Participant’s donees or, in the event of a Participant’s death, his personal representative shall be entitled to exercise the Put during the Option Period for which it is applicable.

 

22.08(7)  The Committee shall notify each former Participant or Beneficiary who is eligible to exercise the Put of the fair market value of each share of Company Stock for the Valuation Date next following the date the Participant receives a distribution as soon as practicable following such determination.

 

22.08(8)  The Committee and the Sponsoring Company shall send all notices required under this Section to the last known address of a former Participant or Beneficiary, and it shall be the duty of such persons to inform the Committee of any changes in address.

 

22.08(9)  The Trustee in its discretion may, with the Sponsoring Company’s consent, assume the Sponsoring Company’s obligation under this Section at the time a former Participant or Beneficiary exercises the Put.  If the Trustee does assume the Sponsoring Company’s obligations, the foregoing provisions of this Section that apply to the Sponsoring Company shall also apply to the Trustee.

 

22.08(10)  The Put provided for in this Section shall also apply to shares of Company Stock that are publicly traded without restriction when distributed but which cease to be publicly traded or which become subject to a trading limitation during the Option Period.  In such event, the Committee shall notify in writing each former Participant or Beneficiary to whom the Put becomes applicable that the shares of Company Stock held by the former Participant or Beneficiary are subject to the Put for the remainder of such Option Period and shall inform the Participant or Beneficiary of the terms of the Put.  If written notice is given pursuant to this Section later than ten days after the shares of Company Stock cease to be publicly traded or become subject to a trading limitation, the period during which the Put may be exercised shall be extended by the number of days between such tenth day and the date such notice is actually given.

 

22.09  Restrictions on Transfer of Company Stock.

 

22.09(1)  Federal Securities Laws.  If the Sponsoring Company does not register under the Securities Act of 1933 (the “1933 Act”) any shares of Company Stock to be distributed to Participants or their Beneficiaries, such shares of Company Stock distributed under the Plan may be “restricted securities.”  Restricted securities may not be sold unless they are registered under the 1933 Act by the Sponsoring Company, or unless an exemption from registration is available.  If the Sponsoring Company does not register shares of Company Stock for resale by Participants or their Beneficiaries, and if such persons desire to sell the shares of Company Stock distributed to them, they will be required to sell the shares of Company Stock in transactions exempt from registration under the 1933 Act.  The Sponsoring Company will not permit shares of Company Stock to be transferred unless it is satisfied that any proposed transfer of Company Stock is exempt from the registration requirements of the 1933 Act.

  

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22.09(2)  Other Restrictions.  All transactions involving shares of Company Stock, including distributions, purchases and sales, shall be made only in compliance with applicable federal and state laws, regulations and rules.  All such transactions shall also be subject to all restrictions and limitations imposed on all shares of Company Stock provided for in the Sponsoring Company’s Articles of Incorporation and Bylaws as amended from time to time.

 

22.09(3)  Legends.  The Sponsoring Company reserves the right to cause appropriate legends to be imprinted on the certificates representing shares of Company Stock distributed under this Plan to reflect all restrictions and limitations referred to in this Section 22.09.

 

22.09(4)  Notices.  The Committee and the Sponsoring Company shall send all notices required with respect to shares of Company Stock to the last known address of each Participant or Beneficiary who is required to receive notices regarding such stock, and it shall be the duty of the Participant and Beneficiary to inform the Committee of any changes in address.

 

22.10  APPLICABLE LAW.  THIS PLAN SHALL BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS TO THE EXTENT NOT PREEMPTED BY APPLICABLE FEDERAL LAW.

 

  

72

  

 

  APPENDIX RELATED TO XCEL MERGER

 

Notwithstanding anything in this Plan to the contrary,

 

	
  

	
A.

	
Commencing on the effective date (hereinafter, the “Merger Date”), of the merger of New Century Energies, Inc. (hereinafter “NCE”) and Northern States Power Company (hereinafter “NSP”) to form Xcel Energy Inc. (hereinafter “Xcel”), the individuals who will be eligible to accrue benefits under this Plan with respect to service and compensation on or after the Merger Date are limited to the following:

 

	
  

	
(1)

	
Those persons who were accruing benefits under this Plan (or who would have been eligible to accrue benefits under this Plan if they had satisfied any applicable age and/or service requirements) immediately prior to the Merger Date.

 

	
  

	
(2)

	
Persons who are hired by Xcel or a subsidiary of Xcel after the Merger Date in a position or job category that was covered by this Plan immediately prior to the Merger Date and whose principal place of employment is at a facility or location that was owned and/or operated by NCE or an NCE subsidiary and was covered by this Plan immediately prior to the Merger Date.

 

	
  

	
(3)

	
Any person who was a participant in this Plan at some time prior to the Merger Date, who had ceased to accrue benefits under this Plan due to a termination of employment prior to the Merger Date, who had not become a participant in any qualified retirement plan sponsored by NSP or an NSP subsidiary at any time after such termination of employment and prior to the Merger Date, who was not employed by NCE, NSP or any of their subsidiaries immediately prior to the Merger Date, and who is rehired by Xcel or a subsidiary of Xcel after the Merger Date.

 

	
  

	
B.

	
For purposes of applying paragraph A. of this Appendix,

 

	
  

	
(1)

	
Any individual (i) who was actively participating in and accruing benefits under any qualified retirement plan sponsored by NSP or an NSP subsidiary immediately prior to the Merger Date (or who would have been participating in such an NSP plan if he or she had satisfied any applicable age and/or service requirements), or (ii) who became a participant in such an NSP retirement plan after the Merger Date, shall not be eligible to participate in or accrue benefits under this Plan after the Merger Date, even if the individual subsequently satisfies the requirements of paragraph A.  The previous sentence also applies to any individual who was a participant in such an NSP retirement plan at some time prior to the Merger Date, who had ceased to accrue benefits under such NSP retirement plan due to a termination of employment prior to the Merger date, who had not become a participant in this Plan at any time after such termination of employment and prior to the Merger Date, who was not employed by NCE, NSP or any of their subsidiaries immediately prior to the Merger Date, and who is rehired by Xcel or a subsidiary of Xcel after the Merger Date.

 

  

73

  

 

	
  

	
(2)

	
Any individual (other than an individual described in paragraph B(1), above) who (i) has satisfied the requirements of paragraph A(1), A(2) or A(3), and (ii) is subsequently transferred to the employ of an Xcel subsidiary that is not a participating employer in this Plan, or to an Xcel facility or location that was not owned and/or operated by NCE or an NCE subsidiary immediately prior to the Merger Date, will nevertheless continue to participate in this Plan following the transfer.  An Xcel subsidiary that is not otherwise a participating employer in this Plan, but that employs one or more transferred participants described in this paragraph B(2) following the transfer, shall be deemed to be a participating employer in this Plan solely with respect to such transferred participants.

 

	
  

	
(3)

	
Notwithstanding paragraph B(2), if an individual described in that paragraph is employed following the transfer in a collective bargaining unit that is not covered by this Plan, paragraph B(2) shall not apply, the individual shall cease to actively participate in and accrue benefits under this Plan following the transfer, and the individual shall become eligible to participate following the transfer in any qualified retirement plan that covers that collective bargaining unit pursuant to the terms of such plan.  The previous sentence shall also apply to any individual who is rehired by Xcel or a subsidiary of Xcel after the Merger Date in a collective bargaining unit that is not covered by this Plan, notwithstanding anything in this Appendix to the contrary.

 

	
  

	
(4)

	
If an individual (other than an individual described in paragraph B(1)) who meets the requirements of paragraph A(1), A(2) or A(3) is subsequently transferred from a position or job category that was covered by this Plan prior to the Merger Date to a position or job category that was covered prior to the Merger Date by another qualified retirement plan of the same type (i.e. defined benefit or defined contribution) that was sponsored by NCE prior to the Merger Date, or if an individual covered by such other NCE plan at any time following the Merger Date is subsequently transferred to a position or job category covered by this Plan, the individual’s participation in this Plan or the other NCE Plan following the transfer shall be determined pursuant to the provisions of the applicable NCE plans in effect immediately prior to the Merger Date.

 

	
  

	
C.

	
If an individual who does not satisfy the requirements of paragraph A(1), A(2) or A(3) remains entitled to a benefit under this Plan that accrued prior to the Merger Date, such benefit shall continue to be held under the provisions of this Plan in effect at the applicable times prior to the Merger Date for distribution pursuant to such provisions following the termination of the individual’s employment with Xcel and the subsidiaries of Xcel (or the occurrence of any other event that permits distribution of such benefit).

 

 

74ex4_03.htm

Exhibit 4.03

 

NEW CENTURY ENERGIES, INC.

EMPLOYEES’

SAVINGS AND STOCK OWNERSHIP PLAN

FOR

BARGAINING UNIT EMPLOYEES AND

FORMER NON-BARGAINING UNIT EMPLOYEES

(Amended and Restated Effective January 1, 2002 But With

Certain Retroactive Amendments)

 

 

  

  

  

TABLE OF CONTENTS

 

	 	 	 	
Page

	
ARTICLE I

	 	
DEFINITIONS

	
 

	
1.01

	 	
“Accounts”

	
1

	
1.02

	 	
“Acquisition Loan”

	
2

	
1.03

	 	
“Adjustment Factor”

	
2

	
1.04

	 	
“After-Tax Account”

	
2

	
1.05

	 	
“After-Tax Contributions”

	
2

	
1.06

	 	
“Alternate Payee”

	
2

	
1.07

	 	
“Beneficiary”

	
2

	
1.08

	 	
“Board” or “Board of Directors”

	
2

	
1.09

	 	
“Break in Service”

	
2

	
1.10

	 	
“Code”

	
3

	
1.11

	 	
“Common Stock”

	
3

	
1.12

	 	
“Company”

	
3

	
1.13

	 	
“Company Common Stock Account”

	
3

	
1.14

	 	
“Compensation”

	
3

	
1.15

	 	
“Deferral Account”

	
4

	
1.16

	 	
“Deferral Contributions”

	
4

	
1.17

	 	
“Disability”

	
4

	
1.18

	 	
“Domestic Relations Order”

	
4

	
1.19

	 	
“Effective Date”

	
5

	
1.20

	 	
“Employee”

	
5

	
1.21

	 	
“Employer”

	
5

	
1.22

	 	
“Enrollment Date”

	
5

	
1.23

	 	
“ERISA”

	
5

	
1.24

	 	
“ESOP Accounts”

	
5

	
1.25

	 	
“Financed Shares”

	
5

	
1.26

	 	
“Fund” or “Investment Fund”

	
5

	
1.27

	 	
“Highly-Compensated Employee”

	
5

	
1.28

	 	
“Hour of Service”

	
6

	
1.29

	 	
“Investment Fund” or “Fund”

	
8

	
1.30

	 	
“Leased Employee”

	
8

	
1.31

	 	
“Matched Deferral Contributions”

	
8

	
1.32

	 	
“Member”

	
8

	
1.33

	 	
“Normal Retirement Age”

	
8

	
1.34

	 	
“Plan”

	
8

	
1.35

	 	
“Plan Administrator”

	
8

	
1.36

	 	
“Plan Year”

	
8

	
1.37

	 	
“Prior Deferred Account”

	
8

	
1.38

	 	
“Prior ESOP”

	
9

	
1.39

	 	
“Prior ESOP Company Account”

	
9

	
1.40

	 	
“Prior ESOP Employee Matching Account”

	
9

	
1.41

	 	
“Prior ESP”

	
9

	
1.42

	 	
“Qualified Domestic Relations Order”

	
9

	
1.43

	 	
“Required Beginning Date”

	
9

	
1.44

	 	
“Rollover Account”

	
9

	
1.45

	 	
“Trustee”

	
9

	
1.46

	 	
“Trust Fund”

	
9

	
1.47

	 	
“Unmatched Deferral Contributions”

	
9

	
1.48

	 	
“Valuation Date”

	
10

	
1.49

	 	
“Year of Service”

	
10

  

i

  

	
ARTICLE II

	 	
ELIGIBILITY AND MEMBERSHIP

	
 

	
2.01

	 	
Eligibility

	
10

	
2.02

	 	
Termination of Membership

	
11

	
2.03

	 	
Reemployment of Former Employees and Former Members

	
11

	
2.04

	 	
Employment After Normal Retirement Age

	
11

	
2.05

	 	
Periods of Military Service

	
12

 

	
ARTICLE III

	 	
CONTRIBUTIONS

	  
	
3.01

	 	
Deferral Contributions

	
12

	
3.02

	 	
After-Tax Contributions

	
13

	
3.03

	 	
Change in Contributions

	
13

	
3.04

	 	
Suspension or Resumption of Member Contributions

	
13

	
3.05

	 	
Company Contributions

	
13

	
3.06

	 	
Limitations on Member Deferral Contributions, Company Contributions, and After-Tax Contributions

	
16

	
3.07

	 	
Limitation on Annual Additions

	
26

	
3.08

	 	
Limitation on Reversion of Contributions

	
27

	
3.09

	 	
Transfers from Other Plans

	
27

	
3.10

	 	
Transfers To Non-Bargaining Unit NCE Plan

	
28

	
ARTICLE IV

	 	
INVESTMENT AND VALUATION OF DEFERRAL AFTER-TAX AND ROLLOVER ACCOUNTS

	
 

	
4.01

	 	
Investment Funds

	
29

	
4.02

	 	
Investment of Deferral, After-Tax and Rollover Accounts

	
29

	
4.03

	 	
Responsibility for Investments

	
29

	
4.04

	 	
Change of Election

	
30

	
4.05

	 	
Transfers Between Funds

	
30

	
4.06

	 	
Allocation of Investment Income on a Valuation Date

	
30

	
4.07

	 	
Member Statements

	
30

	
ARTICLE V

	 	
INVESTMENT OF MEMBERS’ ESOP ACCOUNTS

	
 

	
5.01

	 	
Investment of Members’ ESOP Accounts

	
30

	
5.02

	 	
Valuation of common Stock

	
31

	
5.03

	 	
Dividend Payments

	
31

	
5.04

	 	
Voting of Stock

	
31

	
5.05

	 	
Diversification Requirements

	
32

	
5.06

	 	
Member Statements

	
32

	
5.07

	 	
Nonterminable Protections and Rights

	
32

	
5.08

	 	
Certain Corporate Transactions

	
33

  

ii

  

	
ARTICLE VI

	 	
WITHDRAWALS WHILE EMPLOYED

	
 

	
6.01

	 	
Withdrawal from After-Tax Accounts

	
33

	
6.02

	 	
Financial Hardship Withdrawals

	
33

	
6.03

	 	
Loans to Members

	
35

	
6.04

	 	
Other Withdrawals

	
36

	
ARTICLE VII

	 	
DISTRIBUTION OF BENEFITS

	
 

	
7.01

	 	
Amount

	
36

	
7.02

	 	
Time and Manner of Distribution

	
36

	
7.03

	 	
Put Option for Common Stock

	
37

	
7.04

	 	
Direct Rollover to Eligible Retirement Plan

	
38

	
ARTICLE VIII

	 	
ADMINISTRATION OF PLAN

	
 

	
8.01

	 	
Powers and Duties

	
39

	
8.02

	 	
Actions by the Company

	
40

	
8.03

	 	
Interested Persons

	
40

	
8.04

	 	
Indemnification

	
40

	
8.05

	 	
Conclusiveness of Action

	
40

	
8.06

	 	
Payment of Expenses

	
41

	
8.07

	 	
Claims Procedure

	
41

	
ARTICLE IX

	 	
MANAGEMENT OF FUNDS

	
 

	
9.01

	 	
Trust Agreement

	
41

	
9.02

	 	
Exclusive Benefit Rule

	
42

	
ARTICLE X

	 	
AMENDMENTS TO THE PLAN

	
 

	
10.01

	 	
Amendments

	
42

	
10.02

	 	
Amendment — Merger or Consolidation of Plan

	
43

	
ARTICLE XI

	 	
TERMINATION OF THE PLAN

	
 

	
11.01

	 	
Right to Terminate

	
43

	
ARTICLE XII

	 	
TOP-HEAVY PLAN REQUIREMENTS

	
 

	
ARTICLE XIII

	 	
MISCELLANEOUS

	
 

	
13.01

	 	
Voluntary Plan/Right to Dismiss Members

	
44

	
13.02

	 	
Nonalienation of Benefits/QDRO’s

	
44

	
13.03

	 	
Payments Due to Minors or Incapacitated Persons

	
45

	
13.04

	 	
Disposition of Unclaimed Payments

	
46

	
13.05

	 	
Limitation of Rights

	
46

	
13.06

	 	
Invalid Provisions

	
46

	
13.07

	 	
Headings and Underlines

	
46

	
13.08

	 	
Written Instructions

	
46

	
13.09

	 	
Governing Law

	
46

 

APPENDIX RELATED TO XCEL MERGER

 

  

iii

  

NEW CENTURY ENERGIES, INC.

EMPLOYEES’ SAVINGS AND STOCK OWNERSHIP PLAN

FOR BARGAINING UNIT EMPLOYEES AND

FORMER NON-BARGAINING UNIT EMPLOYEES

INTRODUCTION

 

The Plan was originally adopted as of January 1, 1989 and was amended and restated December 19, 1995.  The Plan was amended and restated generally effective as of January 15, 1996, with the amendments to Section 3.05 to be effective with respect to Company Matching contributions made on or after January 15, 1996.  The Plan is hereby amended and restated generally effective January 1, 2002 but with certain retroactive amendments necessary to bring the Plan into compliance with the law.  The Plan provides for Employees’ pre-tax and after-tax contributions and to supplement Employee pre-tax contributions by Company Matching contributions.  Employee pre-tax, Employee after-tax and Company contributions will be made without regard to current or accumulated earnings or profits of the Company.  However, the Plan will continue to qualify as a Profit Sharing Plan for purposes of Code Section 401(a).

The Company contributions will be invested in Common Stock and it is intended that the Plan will constitute a cash or deferred arrangement under Code Section 401(k) with the feature, as to certain Company contributions and as to the ESOP Accounts, of an employee stock ownership plan under Code Section 4975(e)(7).

This Plan is also designed to incur loans (or other extensions of credit) to finance the acquisition of Common Stock, with such loans to be repaid by Company contributions to the Trust.

Effective July 1, 1998, the portion of the Plan consisting of the accounts of the Members who were Employees on June 30, 1998, and who were not covered by a collective bargaining agreement, and the assets attributable to those accounts, were spun off into a separate plan, and this Plan was then renamed the New Century Energies, Inc. Employees’ Savings and Stock Ownership Plan for Bargaining Unit Employees and Former Non-Bargaining Unit Employees.  Effective as of the date of the merger of New Century Energies, Inc. and Northern States Power Company to form Xcel Energy Inc., Xcel Energy Inc. was substituted in place of New Century Energies, Inc. as the sponsor of this Plan.

ARTICLE I

DEFINITIONS

When used in this document, the following words and phrases have the meaning specified below.  Where appearing in the Plan, pronouns of either gender shall include the other gender and the singular shall include the plural and vice versa.

1.01  “Accounts” means the Member’s Deferral Account, After-Tax Account, Rollover Account, Prior Deferred Account and ESOP Accounts.

  

1

  

1.02  “Acquisition Loan” means a loan used to finance the acquisition of Common Stock and which is made to the Plan by a disqualified person (within the meaning of Code Section 4975(e)(2)), or a loan to the Plan which is guaranteed by a disqualified person, provided the loan or guarantee satisfies the requirements of Treasury Regulation Section 54.4975-7(b).

1.03  “Adjustment Factor” means the cost of living adjustment factor prescribed by the Secretary of the Treasury under Code Section 415(d), applied to such items and in such manner as the Secretary shall prescribe.

1.04  “After-Tax Account” means the account into which shall be credited the After-Tax Contributions made by the Employee and any earnings, gain or loss on those contributions, less any withdrawals.

1.05  “After-Tax Contributions” means the Member’s after-tax contributions under Section 3.02.

1.06  “Alternate Payee” means any spouse, former spouse, child, or other dependent of a Member who is recognized by a Domestic Relations Order as having a right to receive all, or a portion of, the benefits payable under this Plan with respect to such Member.

1.07  “Beneficiary” means any person, persons, or entity named by a Member by written designation filed with the Company to receive benefits payable in the event of the Member’s death.  If the Beneficiary of a married Member is other than the Member’s spouse, the designation must be signed by both the Member and the Member’s spouse, the spouse’s consent must either approve the specific Beneficiary or authorize the designation of beneficiaries without further consent and must acknowledge the effect of the designation, and the spouse’s consent thereto shall be witnessed by a Plan representative or notary public, unless those requirements are waived by the Company in accordance with Code Section 417(a)(2)(B).  If no such designation is in effect at the time of the Member’s death, or if no person, persons, or entity so designated shall survive the Member, the Beneficiary shall be the person or persons surviving the Participant in the first of the following classes in which there is a survivor, share and share alike:

(a)           The Member’s spouse.

(b)           The Member’s children, except that if any of the Member’s children predecease the Member but leave issue surviving the Member, such issue shall take by right of representation the share their parent would have taken if living.

(c)           The Member’s parents.

(d)            The Member’s brothers and sisters.

(e)           The Member’s estate.

1.08  “Board” or “Board of Directors” means the Board of Directors of the Company.

 

1.09  “Break in Service” means any Plan Year during which an Employee is credited with 500 or fewer Hours of Service.

  

2

  

 

1.10  “Code” means the Internal Revenue Code of 1986, as amended from time to time.

1.11  “Common Stock” means the common stock of the Company which is readily tradeable on an established securities market (or which otherwise meets the requirements of Code Section 409(l)(2)), and which constitutes “employer securities” within the meaning of Code Section 409(1) and “qualifying employer securities” within the meaning of Code Section 4975(e)(8).

1.12  “Company” means Xcel Energy Inc. and its successors.

1.13  “Company Common Stock Account” means the account into which shall be credited the contributions made by the Company in accordance with Section 3.05, and any dividend reinvestments, as adjusted for valuations of the stock on subsequent Valuation Dates.

1.14  “Compensation” means:

(a)           Computing Benefits.  For purposes of determining an Employee’s benefits under the Plan, the total cash remuneration paid to an Employee from the Company during the applicable period of participation.  Compensation will include amounts deferred pursuant to Code Sections 125, 401(k), 402(h), and 403(b) and commencing January 1, 2001, amounts deferred under Code Section 132(f)(4).

(b)           Annual Additions and Top-Heavy Provisions.  For purposes of Section 3.07 and Article XII only, an Employee’s compensation as defined in Code Section 415(c)(3) and the regulations thereunder.  For Plan Years beginning before January 1, 1998, amounts deferred pursuant to Code Sections 125, 401(k), 402(h), and 403(b) shall not be included as Compensation under this subsection (b).  For Plan Years commencing on or after January 1, 1998, amounts deferred pursuant to Code Sections 125, 401(k), 402(h), 403(b) or 457 (or under Code Section 132(f)(4) for Plan Years commencing on or after January 1, 2001) shall be included as Compensation under this subsection (b).

(c)           Additional Company Matching Contributions.  For purposes of subsection 3.06(b), an Employee’s compensation as defined in Code Section 414(s).

(d)           Allocation of Company Contributions.  For purposes of subsection 3.06(d), an Employee’s compensation as defined in subsection (a) above.

(e)           Limit on Compensation.  For all purposes of the Plan other than calculating Code Section 415 limits, the Compensation taken into account for the appropriate time period shall not exceed the compensation limit in effect for the calendar year in which the time period begins.  For Plan Years beginning before January 1, 1994, the compensation limit was $200,000 (as adjusted by the Secretary of Treasury).

  

3

  

In addition to other applicable limitations set forth in the Plan, and notwithstanding any other provision of the Plan to the contrary, for Plan Years beginning on or after January 1, 1994, the annual compensation of each Employee taken into account under the Plan shall not exceed the OBRA ‘93 annual compensation limit.  The OBRA ‘93 annual compensation limit was $150,000 for Plan Years commencing on or after January 1, 1994 and before January 1, 1997.  The OBRA ’93 annual compensation limit was $160,000 for Plan Years commencing on or after January 1, 1997 and before January 1, 2000.  The OBRA ’93 annual compensation limit was $170,000 for Plan Years commencing on or after January 1, 2000 and before January 1, 2002.  The OBRA ’93 annual compensation limit shall remain at $170,000 for Plan Years commencing on or after January 1, 2002.

If a determination period consists of fewer than 12 months, the annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

For Plan Years beginning on or after January 1, 1994 any reference in this Plan to the limitation under Code Section 401(a)(17) shall mean the OBRA ‘93 annual compensation limit set forth in this provision.

If Compensation for any prior determination period is taken into account in determining an Employee’s benefits accruing in the current Plan Year, the Compensation for that prior determination period is subject to the annual compensation limit in effect for that prior determination period.  For this purpose, for determination periods beginning before the first day of the first Plan Year beginning on or after January 1, 1994, the annual compensation limit is $150,000.

For Plan Years beginning prior to January 1, 1997, in determining the Compensation of a Member for purposes of this limitation, the rules of Code Section 414(q) shall apply, except in applying such rules, the term “family” shall include only the spouse of the Member and any lineal descendants of Members who have not attained age 19 before the close of the Plan Year.  If, as a result of the application of such rules, the adjusted $150,000 limitation is exceeded, then the limitation shall be pro-rated among the affected individuals in proportion to each such individual’s compensation as determined under this Section prior to the application of this limitation.  For Plan Years beginning on or after January 1, 1997, this paragraph ceases to apply.

1.15  “Deferral Account” means the account into which shall be credited the Prior Deferred Account and Deferral Contributions, earnings, gain or losses, on those contributions, less any withdrawals, or as otherwise adjusted in accordance with Section 4.06 on a Valuation Date.

1.16  “Deferral Contributions” means the Member’s pre-tax contributions under Section 3.01.

1.17  “Disability” means any disability for which the Member is receiving benefits under the Company’s Long Term Disability Income Plan or any successor plan thereto.

1.18  “Domestic Relations Order” means any judgment, decree or order (including approval of a property settlement agreement) that relates to the provision of child support, alimony payments, or marital property rights to a spouse, former spouse, child, or other dependent of the Member and is made pursuant to a state domestic relations law (including a community property law).

  

4

  

1.19  “Effective Date” means January 1, 1989, the original effective date of this Plan.

1.20  “Employee” means a person regularly employed by the Employer as a common-law employee who receives stated compensation from other than a pension, severance pay, retainer, fee under contract, or the Company’s Long Term Disability Income Plan, and, except as provided in Section 1.30, a Leased Employee.  However, Section 2.01(c)(iii) provides that a Leased Employee shall not be eligible to become a Member.

1.21  “Employer” means Xcel Energy Inc., and each of the following subsidiaries thereof:

Natural Fuels Corporation

Cheyenne Light, Fuel and Power Company

Bannock Center Corporation

Public Service Company of Colorado

or any successor thereto, and any other subsidiary or affiliated entity which shall adopt the Plan with the approval of the Board of Directors.

1.22  “Enrollment Date” means the first day of each month.

1.23  “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.

1.24  “ESOP Accounts” means the Member’s Company Common Stock Account, Prior ESOP Company Account, and Prior ESOP Employee Matching Account.

1.25  “Financed Shares” means shares of Common Stock acquired with the proceeds of an Acquisition Loan.

1.26  “Fund” or “Investment Fund” means the separate finds in which Deferral, Rollover, or After-Tax Contributions to the Plan are invested in accordance with Article IV.

1.27  “Highly-Compensated Employee” means, effective January 1, 1997, an individual described as such in Code Section 414(q).

(a)           Unless other provided in Code Section 414(q), each Employee who meets one of the following requirements is a “Highly-Compensated Employee”:

(1)           The Employee at any time during the current or prior Plan Year was a more than 5-percent owner as defined in Code Section 414(q)(2), or was the spouse, child, parent or grandparent of such an owner to whom the owner’s stock is attributed pursuant to Code Section 318 (regardless of the Compensation of the owner or family member).

(2)           The Employee received Compensation from the Employer in excess of $80,000 for the prior Plan Year in the case of determinations for Plan Years commencing prior to 2001, or in excess of $85,000 for the prior Plan Year in the case of determinations for Plan Years commencing in 2001 or later.

  

5

  

 (3)           The individual is a former Employee who had a separation year prior to the current Plan Year and such individual performed services for the Employer and was a Highly-Compensated Employee for either (i) such separation year, or (ii) any Plan Year ending on or after the individual’s 55th birthday.  A “separation year” is the Plan Year in which the individual separates from service with the Employer.  With respect to an individual who separated from service before January 1, 1987, the individual will be included as a Highly-Compensated Employee only if the individual was a more than 5-percent owner or received Compensation in excess of $50,000 during (i) the Employee’s separation year (or the year preceding such separation year), or (ii) any year ending on or after such individual’s 55th birthday (or the last year ending before such individual’s 55th birthday).

(b)           The dollar amount specified in paragraph (2) of subsection (a) shall be indexed for cost of living increases for each calendar year after 2001 as provided in the applicable Treasury regulations.  For any Plan Year, the applicable dollar amount shall be the dollar amount in effect for the calendar year in which the Plan Year commences.

(c)           For purposes of this Section, “Employer” includes the Employer and all affiliates under common control, and “Employee” includes Leased Employees.

(d)           For purposes of this Section, “Compensation” means the amount defined as such under Sec. 1.14(b).

1.28  “Hour of Service” means:

(a)           Performance of Duties.  Each hour for which an Employee is paid or entitled to payment by the Employer for performance of duties for the Employer during the applicable computation period.  Hours of service under this subsection (a) shall be credited to the Employee for the computation period or periods, in which the duties are performed, regardless of when the Employee is paid for such duties.

(b)           Vacations Etc.  Each hour for which an Employee is paid or entitled to payment by the Employer on account of a period of time during which no duties are performed (irrespective of whether the employment relationship has terminated) due to vacation, holiday, illness, incapacity (including disability), layoff, jury duty, military duty or leave of absence.  Hours of service under this subsection (b) shall be credited to the Employee for the computation period or periods in which the period during which no duties are performed occurs, beginning with the first unit of time to which the payment relates.  Notwithstanding the preceding sentence:

(1)           No more than 501 hours of service shall be credited under this subsection to an Employee on account of any single continuous period during which the employee performs no duties (whether or not such period occurs in a single computation period);

(2)           An hour for which an Employee is directly or indirectly paid, or entitled to payment, on account of a period during which no duties are performed shall not be credited to the Employee if such payment is made or due under a plan maintained solely for the purpose of complying with applicable worker’s compensation, unemployment compensation or disability insurance laws; and

  

6

  

(3)           Hours of service shall not be credited for a payment that solely reimburses an Employee for medical or medically related expenses incurred by the Employee.  For purposes of this subsection a payment shall be deemed to be made by or due from the Employer regardless of whether such payment is made by or due from the Employer directly, or indirectly through, among others, a trust fund, or insurer, to which the Employer contributes or pays premiums and regardless of whether contributions made or due to the trust fund, insurer or other entity are for the benefit of particular Employees or are on behalf of a group of Employees in the aggregate.

(c)           Back Pay Awards.  Each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the Employer.  Hours of service under this subsection (c) shall be credited to the Employee for the computation period or periods to which the award or agreement pertains rather than the computation period in which the award, agreement or payment is made.  The same hours of service shall not be credited both under subsection (a) or subsection (b) of this Section, as the case may be, and under this subsection (c).

(d)           Parental Leave.  In the case of each Employee who is absent from work for any period (i) by reason of the pregnancy of the Employee, (ii) by reason of the birth of a child of the Employee, (iii) by reason of the placement of a child with the Employee in connection with the adoption of such child by such Employee, or (iv) for purposes of caring for such child for a period beginning immediately following such birth or placement, the Plan shall treat as hours of service, solely for purposes of determining whether a one-year Break in Service has occurred for purposes of participation, the following hours:  (i) the hours of service which otherwise would normally have been credited to such Employee but for such absence, or (ii) in any case in which the Plan is unable to determine the hours described in clause (i), eight hours of service per day of such absence; provided, however, that the total number of hours treated as hours of service under this subsection by reason of any such pregnancy or placement shall not exceed 501 hours of service.  The hours described in this subsection (d) shall be treated as hours of service only in the year in which the absence from work begins, if a Member would be prevented from incurring a one-year Break in Service in such Plan Year solely because the period of absence is treated as hours of service as provided in this subsection, or in any other case, in the immediately following year.  Notwithstanding the foregoing, the Company may determine that no credit will be given pursuant to this subsection unless the Employee furnishes to the Company such timely information as the Company may reasonably require to establish that the absence from work is for reasons referred to in the first sentence of this subsection (d) and the number of days for which there was such an absence.

(e)           DOL Rules.  For purposes of calculating the hours of service to be credited to periods during which no duties are performed and determining the computation periods to which hours shall be credited, the rules set forth in paragraphs (b) and (c) of Department of Labor Regulation Section 2530.200b-2 are hereby incorporated by reference as though such provisions were fully set herein.

 

  

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1.29  “Investment Fund” or “Fund” means the separate funds in which Deferral. Rollover, or After-Tax contributions to the Plan are invested in accordance with Article IV.

 

1.30  “Leased Employee” means an individual (who otherwise is not an Employee of the Employer) who, pursuant to a leasing agreement between the Employer and any other person, has performed services for the Employer (or for the Employer and any persons related to the Employer within the meaning of Code Section 144(a)(3)) on a substantially full time basis for at least one year and who performs services under the primary direction or control of the recipient.  If a Leased Employee is treated as an Employee by reason of this Section, “Compensation” for such person includes Compensation from the leasing organization which is attributable to services performed for the Employer.

(a)           Safe Harbor Plan Exception.  The Plan does not treat a Leased Employee as an Employee if the leasing organization covers the employee in a safe harbor plan and, prior to application of this safe harbor exception, 20% or less of the Employer’s Employees (other than Highly Compensated Employees) are Leased Employees.  A safe harbor plan is a money purchase pension plan providing immediate participation, full and immediate vesting, and a nonintegrated contribution formula equal to at least 10% of the employee’s compensation without regard to employment by the leasing organization on a specified date.  The safe harbor plan must determine the 10% contribution on the basis of compensation as defined in Code Section 415(c)(3) plus amounts deferred pursuant to Code Sections 125, 401(k), 402(h) and 403(b).

(b)           Other Requirements.  The Company shall apply this Section in a manner consistent with Code Sections 414(n) and 414(o).

1.31  “Matched Deferral Contributions” means the Member’s Deferral Contributions up to 7% of Compensation for the Plan Year, except as may be limited by the provisions of Section 3.06.

1.32  “Member” means any person included in the membership of the Plan as provided in Article II.

1.33  “Normal Retirement Age” means age 65.

1.34  “Plan” means the New Century Energies, Inc. Savings and Stock Ownership Plan for Bargaining Unit Employees and Former Non-Bargaining Unit Employees as set forth in this document, as amended from time to time.

1.35  “Plan Administrator” means the plan administrator within the meaning of Code Section 414(g) and ERISA Section 3(16)(A).  The Plan Administrator shall be the Company.

1.36  “Plan Year” means the calendar year.

1.37  “Prior Deferred Account” means the account that was credited with the deferred cash contributions in the Prior ESP.

  

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1.38  “Prior ESOP” means the Employee Stock Ownership Plan of the Public Service Company of Colorado and Subsidiaries as in effect prior to January 1, 1989.

 

1.39  “Prior ESOP Company Account” means the account which was credited with Company contributions to the Prior ESOP until January 1, 1989.

1.40  “Prior ESOP Employee Matching Account” means the account which was credited with Employee Matching Contributions under the Prior ESOP until January 1, 1989.

1.41  “Prior ESP” means the Employee Savings Plan of the Public Service Company of Colorado and Participating Subsidiary Companies as in effect prior to January 1, 1989.

1.42  “Qualified Domestic Relations Order” means a Domestic Relations Order that creates or recognizes the existence of an Alternate Payee’s right to, or assigns to an Alternate Payee the right to, receive all or a portion of the balance of the Accounts with respect to a Member under the Plan and with respect to which the requirements of subsections 13.02(c) and (d) are met.

1.43  “Required Beginning Date” means:

(a)           70-1/2 After 1987.  For a Member who attains age 70-1/2 after December 31, 1987, April 1 of the calendar year following the calendar year in which the Member attains age 70-1/2 except as provided in subsection 1.43(c) below;

(b)           70-1/2 Before 1988.  For a Member who attains age 70-1/2 before January 1, 1988, and is not a “five-percent owner” (as defined in Proposed Treasury Regulation Section 1.40l(a)(9)(l), B-2 or successor regulations), April 1 of the calendar year following the later of (i) the calendar year in which the Member attains age 70-1/2 or (ii) the calendar year in which the Member retires; and

(c)           70-1/2 In 1988.  For a Member who attains age 70-1/2 during calendar year 1988 and is not a “five-percent owner,” April 1, 1990.

1.44  “Rollover Account” means the account into which shall be credited the amount of any transfer from other plans made in accordance with Section 3.09, plus earnings, gain or loss on such transfer, less any withdrawals.

1.45  “Trustee” means the trustee by whom the Funds of the Plan are held as provided in Article IX.

1.46  “Trust Fund” means the total amount of contributions made by the Members and the Company that are paid to the Trustee and including the Prior ESOP Employee Matching Accounts and the Prior ESOP Company Accounts of Prior ESOP participants who are Members, together with the net earnings on such contributions and Accounts.

1.47  “Unmatched Deferral Contributions” means the Member’s Deferred Contributions over 7% of Compensation for the Plan Year (or such lesser percentage as may result from the application of Section 3.06).

 

  

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1.48  “Valuation Date” means any day on which the New York Stock Exchange is open for trading and any other day that may be specified by the Company.

1.49  “Year of Service” means the 12-month period beginning on the date an Employee first completes an Hour of Service, provided the Employee completes 1,000 Hours of Service during such 12-month period.  If the Employee fails to complete 1,000 Hours of Service during such 12-month period, Year of Service means the Plan Year beginning with the Plan Year, immediately following the date the Employee first completes an Hour of Service, during which the Employee completes 1,000 Hours of Service.

ARTICLE II

ELIGIBILITY AND MEMBERSHIP

2.01  Eligibility.

(a)           Prior Members.  Each Employee who was a Member or a participant in the Plan on January 15, 1996 shall be a Member on January 16, 1996.

(b)           After January 15, 1996.  Each other Employee shall be eligible to become a Member on the first Enrollment Date on or after the date the Employee first performs an Hour of Service for the Company, if the Employee is designated by the Company as a full-time employee, and on the first Enrollment Date on or after the Employee completes one Year of Service, if the Employee is designated by the Company as a part-time Employee, and in either such case files with the Company a form or forms as prescribed by the Company, on which the eligible Employee:

(1)           makes the elections described in Sections 3.01 and 3.02;

(2)           authorizes the Company to reduce the Employee’s Compensation;

(3)           makes the investment election described in Section 4.02; and

(4)           names a Beneficiary.

(c)           Notwithstanding the foregoing provisions of this Section 2.01:

(1)           An Employee who is included in a unit of Employees covered by a collective bargaining agreement where retirement benefits were the subject of good faith bargaining will not be eligible to become or continue as a Member unless the bargaining agreement provides for participation in this Plan;

(2)           An Employee who was a participant in the Prior ESOP and who does not elect to become a Member in the manner described in (1)-(4) of subsection (b), above, shall be a Member only to the extent that the Employee’s Accounts under the Prior ESOP are maintained under the Plan.

(3)           A Leased Employee shall not be eligible to become a Member.

 

  

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(d)           Notwithstanding anything in the Plan to the contrary, on and after July 1, 1998, the Members of this Plan shall consist solely of those Employees who have met the requirements of this section to be a Member and who are employed in a bargaining unit covered by a collective bargaining agreement that provides for membership in this Plan, and those other persons who were Members on June 30, 1998, but who were not Employees on June 30, 1998.  Any person who was both a Member and an active Employee on June 30, 1998 but who is not described in the previous sentence shall not be entitled to any benefit under this Plan on or after July 1, 1998.

2.02  Termination of Membership.

(a)           In General.  Active membership in the Plan shall cease upon termination of employment with the Employer including such termination resulting from retirement, death, disability, resignation, transfer to a nonparticipating subsidiary company, or ceasing to be covered in a bargaining unit covered by a collective bargaining agreement that provides for membership in the Plan.  Until such former Employee’s Accounts are distributed, the Employee will continue to receive the Employee’s share of investment earnings, gain, loss, expenses and dividend distributions.

(b)           Permitted Investments After Termination.  A former Employee whose membership ceases will have the option to elect in accordance with Article IV the investment funds in which the former Employee’s Deferral Account, After-Tax Account and Rollover Account will be invested.

(c)           Restriction on Loans and Withdrawals.  A former Employee will not be entitled to receive a loan in accordance with Section 6.04 or make withdrawals in accordance with Sections 6.01 and 6.02 unless the withdrawal is requested for the full value of the former Employee’s Account.  A former Employee may repay a loan by making monthly installment payments in accordance with the procedures established by the Plan Administrator.

2.03  Reemployment of Former Employees and Former Members.  Any person reemployed by the Employer as an Employee covered in a bargaining unit covered by a collective bargaining agreement that provides for membership in the Plan, who was previously a Member of this Plan or a participant in another qualified plan maintained by the employer, or who was previously eligible to become a Member of this Plan or another plan maintained by the employer, shall be immediately eligible to become a Member of the Plan upon filing a form in accordance with Section 2.01.  A reemployed person who had not met the eligibility requirements of Section 2.01 or the eligibility requirements of any other applicable qualified plan maintained by the Employer before the employment of such person terminated will be eligible to enter the Plan on any Enrollment Date after that person satisfies the requirements of Section 2.01.

2.04  Employment After Normal Retirement Age.  A Member who continues in the employ of the Company after the Member’s Normal Retirement Age shall continue to be a Member in the Plan.

  

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2.05  Periods of Military Service.  Notwithstanding any provision of this Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).

ARTICLE III

CONTRIBUTIONS

3.01  Deferral Contributions.

(a)           Deferral Percentage.  Before an eligible Employee becomes a Member, subject to the limitations of Sections 3.06 and 3.07, the Employee may, through such election and notification procedures as may be established from time to time by the Company, elect to have the Employee’s subsequent Compensation reduced by any amount from 1% to not more than 15% in multiples of 1% as elected by the Member.  However, in no event may the sum of the Member’s deferral percentage and after-tax percentage (Section 3.02) exceed 15%.

(b)           Method of Deferral.  A Member’s Deferral Contributions will be made by payroll deductions and constitute Employer contributions under the Plan qualifying as elective contributions under Code Section 401(k).  Member Deferral Contributions will be paid promptly by the Company to the Trustee, but no later than 30 days after the pay period to which they apply.

(c)           Vesting.  A Member will always be 100% vested in such Member’s Deferral Account.

(d)           Limitation on Deferral Contributions.  A Member’s Deferral Contributions during any calendar year may not exceed $11,000.  This dollar limitation may be adjusted each Plan Year for the Adjustment Factor or based on statutory adjustments to Code Section 402(g).  If a Member’s Deferral Contributions (plus deferral contributions under any other plans maintained by the Employer) exceed the dollar limitation in any taxable year, the amount of such excess, and earnings thereon for the taxable year of the contribution, shall be designated as excess contributions by the Employer and distributed on or before April 15 of the year following the taxable year in which such deferral contributions were made.  If, during a calendar year, (i) a Member participates in this Plan and one or more other plans with qualified cash or deferred arrangements described in Code Sections 401(i), 408(k)(6) or 403(b) maintained by an unrelated employer, (ii) the Member’s deferral contributions under all such plans (including this Plan) exceed $11,000 (as adjusted for statutory increases under Code Section 402(g) or multiplied by the Adjustment Factor), and (iii) all or any portion of such Member’s Deferral Contributions constitute excess deferrals by virtue of an allocation and notification by the Member pursuant to Code Section 402(g)(2)(A)(i), such excess deferrals shall not be distributed to such Member as permitted by Code Section 402(g)(2)(A)(ii), notwithstanding that the Member may request such distribution, but rather shall be held in the Trust Fund in the same manner as such Member’s Deferral Contributions which do not constitute excess deferrals.

  

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3.02  After-Tax Contributions.

(a)           Amount.  Subject to the limitations of Sections 3.06 and 3.07, a Member may, through such notification and election procedures as may be established from time to time by the Company, elect to make After-Tax Contributions from 1% to not more than 8% in multiples of 1% as elected by the Member.  However, in no event may the sum of the Member’s deferral percentage (Section 3.01) and after-tax-percentage exceed 15%.  Member After-Tax Contributions will be paid promptly by the Company to the Trustee, but not later than 30 days after the pay period to which they apply.

(b)           Vesting.  A Member will always be 100% vested in such Member’s After-Tax -Account.

3.03  Change in Contributions.  The percentage of Compensation designated by a Member under Sections 3.01 or 3.02 shall automatically apply to increases and decreases in the Member’s Compensation.  Subject to the provisions of Sections 3.01 and 3.02, a Member may change the percentage of such Member’s authorized Compensation reduction following notice to the Company in accordance with such notification and election procedures as may be established from time to time by the Company.  The changed percentage shall become effective for the first day of the payroll period next following receipt of the notice.

3.04  Suspension or Resumption of Member Contributions.

(a)           Revocation of Election.  A Member may revoke such Member’s election under Sections 3.01 or 3.02 by giving notice to the Company in accordance with such notification procedures as may be established from time to time by the Company.  The revocation shall become effective as soon as administratively feasible, but no later than the first day of the payroll period next following receipt of the notice.

(b)           Resumption of Election.  A Member who has revoked such Member’s election under Section 3.01 or 3.02 may apply to the Company to have such Member’s Compensation reduction resumed in accordance with Section 3.01 or 3.02 as of the first day of the first payroll period next following receipt of the notice of that intent in accordance with such notification and election procedures as may be established from time to time by the Company.

  

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3.05  Company Contributions.

(a)           Company Matching Contributions.  The Company shall contribute for each Plan Year an amount that equals the sum of the amounts to be allocated during such Plan Year to the Company Common Stock Account of each Member.  Such amount to be allocated to the Company Common Stock Account of each Member shall be determined by first calculating an amount equal to 100% of the Member’s Matched Deferral Contributions for the Plan Year, up to 3% of the Member’s Compensation for the Plan Year, plus 50% of the Member’s Matched Deferral Contributions for the Plan Year for such Member contributions in excess of 3% and up to 7% of the Member’s Compensation for the Plan Year.  The Company shall next calculate the “Average Price” for the Common Stock for the Plan Year by determining the average of the high and low sales prices of the Common Stock on the first day of each month that the Common Stock is traded on the open market following the 15th day of each month for the Plan Year, adding the price for each month together and dividing the sum of the monthly prices by 12.  The amount determined pursuant to the second sentence of this Subsection 3.05(a) for each Member shall then be divided by the Average Price to determine the number of shares of Common Stock to be contributed as a Company Matching Contribution for each Member.  If the Company Matching Contribution is made in cash, the amount of cash to be contributed on behalf of each Member shall be determined by multiplying the number of shares of Common Stock to which such a Member is entitled as a Company Matching Contribution for such Plan Year, as determined above, by the average of the high and low sales prices of the Common Stock as reported in the consolidated tape on the day preceding the day of contribution to the Plan.  Due to an extreme financial hardship, the Board may, at its discretion, decide not to make the contribution under this subsection (a) for any Plan Year.

(b)           Additional Company Matching Contributions.  The Company may contribute for each Plan Year an additional amount which will be determined for each Plan Year by the Board in its complete discretion.  Such Additional Company Matching Contributions, if any, will be allocated to the Company Common Stock Account of each Member in the same ratio as the Member’s Matched Deferral Contributions for such Plan Year bears to the Matched Deferral Contributions for all Members in such Plan Year.

(c)           Special Company Contributions.  Notwithstanding subsections (a) and (b) above, the Company shall contribute for a Plan Year such additional amount necessary to meet any currently maturing obligations under an Acquisition Loan incurred by the Plan pursuant to subsection 3.05(g).  Subject to subsection 3.06(d)(3), such Special Company Contributions, if any, will be allocated to the Company Common Stock Account of each Member in the same ratio as the Member’s Matched Deferral Contributions for such Plan Year bears to the Matched Deferral Contributions for all Members for such Plan Year.

(d)           Allocation of Company Contributions.  Company contributions under subsections (a), (b) and (c) will be allocated to the Company Common Stock Accounts of all Members who made Matched Deferral Contributions during the Plan Year whether or not they have terminated employment for any reason during the Plan Year.

(e)           Vesting.  A Member will always be 100% vested in such Member’s Company Common Stock Account.

(f)           Time for Company Contributions.  The payment of Company contributions for a Plan Year will be made at any time during the Plan Year or after its close, but not later than 60 days after the close of the Plan Year.

 

(g)           Form of Company Contribution.  Company contributions may be paid in (i) cash in the amount needed for the immediate purchase or prior purchase by the Trustee of Common Stock in the open market, or (ii) shares of Common Stock, as determined by the Company, provided that Special Company Contributions shall be paid in cash only.

  

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(h)           Acquisition Loans.  The Company may direct the Trustee to incur an Acquisition Loan from time to time to finance the acquisition of Common Stock or to repay a prior Acquisition Loan.  An installment obligation incurred in connection with the purchase of Common 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 person entitled to payment under the Acquisition Loan shall have any right to assets of the Plan other than

(1)           Collateral given for the loan;

(2)           Contributions (other than contributions of Common Stock) that are made under the Plan to meet its obligations under the Acquisition Loan; and

(3)           Earnings attributable to such collateral and the investment of such contributions.

If the lender is a party in interest (under ERISA), the Acquisition Loan must provide for a transfer of Plan assets on default only upon and to the extent of the failure of the Plan 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 Members’ Accounts pursuant to subsection (i), below.  Payments of principal or interest or both on any Acquisition Loan shall be made by the Trustee (as directed by the Company) only from Company Matching Contributions, Additional Company Matching Contributions or Special Company Contributions paid in cash to enable the Plan to repay such Acquisition Loan, from earnings attributable to such Company contributions and from any cash dividends received by the Plan on such Financed Shares.

(i)           Allocation of Financed Shares.  All Financed Shares shall initially be credited to a loan suspense account and shall be released and credited to the Members’ Company Common Stock Accounts as of the date payments on the Acquisition Loan are made by the Trustee in the same manner as for Special Company Contributions under Section 3.05(c).  The number of Financed Shares to be released from the loan suspense account and credited to Members’ Company Common Stock Accounts will be determined by the Company as follows:

(1)           General Rule — The number of Financed Shares held in the loan suspense account immediately before the release for the current Plan Year shall be multiplied by a fraction.  The numerator of the fraction shall be the total amount of principal and interest paid on the Acquisition Loan for that Plan Year.  The denominator of the fraction shall be the sum of the numerator plus the total payments of principal and interest on the Acquisition Loan projected to be paid for all future Plan Years.  For this purpose, the interest to be paid in future years is to be computed by using the interest rate on the Acquisition Loan in effect as of the last day of the Plan Year.

(2)           Special Rule — The Company may elect (at the time an Acquisition Loan is incurred) or the Acquisition Loan documents may provide for the release of Financed Shares from the loan suspense account based solely upon the ratio that the payments of principal of each Plan year bear to the total principal amount of the Acquisition Loan.  This special method may be used to the extent that:

  

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(A)           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 10 years.

(B)           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

(C)           The entire duration of the Acquisition Loan repayment period does not exceed 10 years, including any term of a renewal, extension or refinancing of the Acquisition Loan.

(j)           Adjustment of Company Common Stock Accounts.  In the event of any change in the outstanding Common Stock by reason of any share dividend or split, recapitalization, merger, consolidation, spin-off, reorganization, combination or exchange of Common Stock or other similar corporate change, the Company shall make such adjustment, if any, in the number of shares of Common Stock then held in the Company Common Stock Accounts.

3.06  Limitations on Member Deferral Contributions, Company Contributions, and After-Tax Contributions.

(a)           Pre-Year End Estimate.  The Company will estimate, as soon as practical before the close of the Plan Year, the extent, if any, to which deferral treatment under Code Section 401(k), the receipt of Company contributions, and the contribution of After-Tax  Contributions may not be available to any active Member or class of active Members.

(b)           Actual Percentages.  An actual Deferral Percentage and, for Plan Years in which non-collectively bargained employees participate in the Plan, a Contribution Percentage will be determined for each Employee eligible to participate in the Plan.  For this purpose, an Employee eligible to participate in the Plan is any Employee who, for all or a portion of a Plan Year, is directly or indirectly eligible to make a Deferral Contribution, receive a Company Matching Contribution or make an After-Tax Contribution under the Plan, and includes (i) an Employee who would be a Member but for the failure to make required contributions; (ii) an Employee whose eligibility to make Deferral Contributions or After-Tax Contributions or right to receive Company Matching Contributions has been suspended because of an election not to participate (other than a one-time election under Treasury regulation section 1.401(k)-1(g)(4)(ii)), a distribution or a loan; and (iii) an Employee who cannot make a Deferral Contribution or After-Tax Contribution or receive a Company Matching Contribution because of the Code Section 415 limits on annual additions.  With respect to eligible Employees who made no Deferral Contributions, made no After-Tax Contributions, or received no Company Matching Contributions, such actual Deferral and Contribution Percentages shall be zero.

(1)           Member Deferral Percentage — A Member’s Deferral Percentage will be equal to the ratio of the total amount of the Member’s deferrals under subsection 3.01(a) for the Plan Year divided by the Member’s Compensation in the Plan Year.  With respect to eligible Employees who made no contributions under this Plan, such percentage will be zero.

  

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(2)           Contribution Percentages — Contribution Percentages shall be calculated as follows

(A)           ESOP Percentage — A Member’s ESOP Contribution Percentage will be equal to the ratio of the total amount of Company matching Contributions, Additional Company Matching Contributions and Special Company Contributions under Section 3.05 for the Plan Year divided by the Member’s Compensation in the Plan Year.  With respect to eligible Employees who were not allocated Company contributions, such percentage will be zero.

(B)           Non-ESOP Percentage — A Member’s non-ESOP Contribution Percentage will be equal to the ratio of the total amount of Member After-Tax Contributions under Section 3.02 for the Plan Year divided by the Member’s Compensation for the Plan Year.  With respect to eligible Employees who made no After-Tax Contributions, such percentage will be zero.  The Company may, at its discretion, elect to include Member Deferral Contributions in calculating the Contribution Percentage.

The percentage tests shall be applied as follows, effective for Plan Years beginning on and after January 1, 1992:

(1)           The percentage test for Members’ Deferral Percentages under subsection 3.06(b)(1) shall be applied separately to each group of Members included in a unit of Employees covered by a particular collective bargaining agreement and to Members who are not included in a unit of Employees covered by a collective bargaining agreement.

(2)           The percentage test for Members’ ESOP Contribution Percentages under subsection 3.06(b)(2)(A) shall be applied by taking into account only Company Matching Contributions, Additional Matching Contributions and Special Matching Contributions relating to Members who are not included in a unit of Employees covered by a collective bargaining agreement.

(3)           The percentage test for Members’ non-ESOP Contribution Percentages under subsection 3.06(b)(2)(B) shall be applied by taking into account only After-Tax Contributions (and, if elected by the Company pursuant to subsection 3.06(b)(2)(B), Member Deferral Contributions) relating to Members who are not included in a unit of employees covered by a collective bargaining agreement.

(c)           ADP Test.  The Actual Deferral Percentage (hereinafter “ADP”) for Members who are Highly Compensated Employees for each Plan Year and the ADP for Members who are Non-highly Compensated Employees for the same Plan Year must satisfy one of the following tests:

(1)           1.25 Test.  The ADP for Members who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Members who are Non-highly Compensated Employees for the same Plan Year multiplied by 1.25; or

  

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(2)           2.0/2% Test.  The ADP for Members who are Highly Compensated Employees for the Plan Year shall not exceed the ADP for Members who are Non-highly Compensated Employees for the same Plan Year multiplied by 2.0, provided that the ADP for Members who are Highly Compensated Employees does not exceed the ADP for Members who are Non-highly Compensated Employees by more than two (2) percentage points.

The following special rules shall apply:

(1)           2 or More CODA’s.  The ADP for any Member who is a Highly Compensated Employee for the Plan Year and who is eligible to have Elective Deferrals (and Qualified Nonelective Contributions or Qualified Matching Contributions, or both, if treated as Elective Deferrals for purposes of the ADP test) allocated to his or her accounts under two or more arrangements described in section 401(k) of the Code, that are maintained by the Employer, shall be determined as if such Elective Deferrals (and, if applicable, such Qualified Non-elective Contributions or Qualified Matching Contributions, or both) were made under a single arrangement.  If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different Plan Years, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement.  Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Code Section 401(k).

(2)           Aggregation of Plans.  In the event that this Plan satisfies the requirements of Code Sections 401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the ADP of Employees as if all such plans were a single plan.  Plans may be aggregated in order to satisfy Code Section 401(k) only if they have the same Plan Year.

(3)           Certain Family Members.  For purposes of determining the ADP of a Member who is a 5-percent owner or one of the ten most highly-paid Highly Compensated Employees, the Elective Deferrals (and Qualified Non-elective Contributions or Qualified Matching Contributions or both, if treated as Elective Deferrals for purposes of the ADP test) and Compensation of such Member shall include the Elective Deferrals (and, if applicable, Qualified Non-elective Contributions and Qualified Matching Contributions, or both) and Compensation for the Plan Year of family members (as defined in Code Section 414(q)(6)).  Family members, with respect to such Highly Compensated Employees, shall be disregarded as separate employees in determining the ADP both for Members who are Non-highly Compensated Employees and for Members who are Highly Compensated Employees.  Effective for Plan Years beginning on or after January 1, 1997, this paragraph (3) ceases to apply.

(4)           Time for Contributions.  For purposes of determining the ADP test, Elective Deferrals, Qualified Nonelective Contributions and Qualified Matching Contributions must be made before the last day of the twelve-month period immediately following the Plan Year to which contributions relate.

  

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(5)           Records.  The Employer shall maintain records sufficient to demonstrate satisfaction of the ADP test and the amount of Qualified Non-elective Contributions or Qualified Matching Contributions, or both, used in such test.

(6)           Regulations.  The determination and treatment of the ADP amounts of any Member shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

(d)           ACP Test.  This subsection (d) shall only apply for Plan Years in which non-collectively bargained employees benefit under the Plan.  The Actual Contribution Percentage (hereinafter “ACP”) for Members who are Highly Compensated Employees for each Plan Year and the ACP for Members who are Non-highly Compensated Employees for the same Plan Year must satisfy one of the following tests:

(1)           1.25 Test.  The ACP for Members who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Members who are Non-highly Compensated Employees for the same Plan Year multiplied by 1.25; or

(2)           2.0/2% Test.  The ACP for Members who are Highly Compensated Employees for the Plan Year shall not exceed the ACP for Members who are Non-highly Compensated Employees for the same Plan Year multiplied by two (2), provided that the ACP for Members who are Highly Compensated Employees does not exceed the ACP for Members who are Nonhighly Compensated Employees by more than two (2) percentage points.

The following special rules shall apply:

(1)           Multiple Use.  If one or more Highly Compensated Employees participate in both a CODA and a plan subject the ACP test maintained by the Employer and the sum of the ADP and ACP of those Highly Compensated Employees subject to either or both tests exceeds the Aggregate Limit, then the ACP of those Highly Compensated Employees who also participate in a CODA will be reduced (beginning with such Highly Compensated Employee whose ACP is the highest) so that the limit is not exceeded.  The amount by which each Highly Compensated Employee’s Contribution Percentage Amounts is reduced shall be treated as an Excess Aggregate Contribution.  The ADP and ACP of the Highly Compensated Employees are determined after any corrections required to meet the ADP and ACP tests.  Multiple use does not occur if either the ADP or ACP of the Highly Compensated Employees does not exceed 1.25 multiplied by the ADP and ACP of the Non-highly Compensated Employees.  Effective for Plan Years beginning on or after January 1, 2002, this paragraph (1) ceases to apply.

(2)           Aggregation of HCE Contributions.  For purposes of this section, the Contribution Percentage for any Member who is a Highly Compensated Employee and who is eligible to have Contribution Percentage Amounts allocated to his or her account under two or more plans described in Code Section 401(a), or arrangements described in Code Section 401(k) that are maintained by the Employer, shall be determined as if the total of such Contribution Percentage Amounts was made under each plan.  If a Highly Compensated Employee participates in two or more cash or deferred arrangements that have different plan year, all cash or deferred arrangements ending with or within the same calendar year shall be treated as a single arrangement.  Notwithstanding the foregoing, certain plans shall be treated as separate if mandatorily disaggregated under regulations under Code Section 401(m).

  

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(3)           Aggregation of Plans.  In the event that this Plan satisfies the requirements of Code Sections 401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or if one or more other plans satisfy the requirements of such sections of the Code only if aggregated with this Plan, then this section shall be applied by determining the Contribution Percentage of Employees as if all such plans were a single plan. Plans may be aggregated in order to satisfy Code Section 401(m) only if they have the same Plan Year.

(4)           Certain Family Members.  For purposes of determining the Contribution Percentage of a Member who is a five-percent owner or one of the ten most highly-paid Highly Compensated Employees, the Contribution Percentage Amounts and Compensation of such Member shall include the Contribution Percentage Amounts and Compensation for the Plan Year of family members (as defined in Code Section 414(q)(6)).  Family members, with respect to Highly Compensated Employees, shall be disregarded as separate employees in determining the Contribution Percentage both for Members who are Non-highly Compensated Employees and for Members who are Highly Compensated Employees.  Effective for Plan Years beginning on or after January 1, 1997, this paragraph (3) ceases to apply.

(5)           Time for Contributions.  For purposes of determining the Contribution Percentage test, Employee Contributions are considered to have been made in the Plan Year in which contributed to the trust.  Matching Contributions and Qualified Non-elective Contributions will be considered made for a Plan Year if made no later than the end of the twelve-month period beginning on the day after the close of the Plan Year.

(6)           Records.  The Employer shall maintain records sufficient to demonstrate satisfaction of the ACP test and the amount of Qualified Non-elective Contributions or Qualified Matching Contributions, or both, used in such test.

(7)           Regulations.  The determination and treatment of the Contribution Percentage of any Member shall satisfy such other requirements as may be prescribed by the Secretary of the Treasury.

(e)           Distribution of Excess Aggregate Contributions.  Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and minus any loss allocable thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed no later than the last day of each Plan Year to Members to whose accounts such Excess Aggregate Contributions were allocated for the preceding Plan Year. If such Excess Aggregate Contributions are distributed more than 2-1/2 months after the last day of the Plan Year in which such excess amounts arose, a ten (10) percent excise tax will be imposed on the Employer maintaining the Plan with respect to those amounts.  Excess Aggregate Contributions shall be treated as annual additions under the Plan.  For Plan Years commencing before January 1, 1997, Excess Aggregate Contributions of Members who are subject to the family member aggregation rules shall be allocated among the family members in proportion to the Employee and Matching Contributions (or amounts treated as Matching Contributions) of each family member that is combined to determine the combined ACP.

  

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For Plan Years commencing before January 1, 1997, such distributions shall be made to Highly Compensated Employees on the basis of the respective portions of the Excess Aggregate Contributions attributable to each of such employees.  For Plan Years commencing on or after January 1, 1997, distributions of Excess Aggregate Contributions of Members shall be made to Highly Compensated Employees based on the dollar amount of their Contribution Percentage Amounts, beginning with the Member with the greatest dollar amount of Contribution Percentage Amounts having his or her Contribution Percentage Amount reduced to the level of the Member with the next highest dollar amount of Contribution Percentage Amounts and continuing until the Excess Aggregate Contributions have been distributed.  Such distributions shall be made in accordance with the methodology prescribed at the time of the distribution by the Internal Revenue Service under Notice 97-2 or other applicable Notices or Treasury Regulations.

Excess Aggregate Contributions shall be adjusted for any income or loss up to the date of distribution. The income or loss allocable to Excess Aggregate Contributions is the sum of:  (1) income or loss allocable to the Member’s Employee Contribution account, Matching Contribution account, Qualified Matching Contribution Account (if any, and if all amounts therein are not used in the ADP test) and, if applicable, Qualified Non-elective Contribution account and Elective Deferral account for the Plan Year multiplied by a fraction, the numerator of which is such Member’s Excess Aggregate Contributions for the Plan Year and the denominator is the Member’s account balance(s) attributable to Contribution Percentage Amounts without regard to any income or loss occurring during such Plan Year; and (2) ten percent of the amount determined under (1) multiplied by the number of whole calendar months between the end of the Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the 15th of such month.

Forfeitures of Excess Aggregate Contributions shall be applied to reduce Employer contributions.

Excess Aggregate Contributions shall be forfeited, if forfeitable, or distributed on a pro-rata basis from the Member’s Employee Contribution account, Matching Contribution account, and Qualified Matching Contribution account (and, if applicable, the Member’s Qualified Non-elective Contribution account or Elective Deferral account, or both).

(f)           Distribution of Excess Elective Deferrals.  A Member may assign to this Plan any Excess Elective Deferrals made during a taxable year of the Member by notifying the Plan Administrator on or before March 30 of the following year of the amount of the Excess Elective Deferrals to be assigned to the Plan.  A Member is deemed to notify the Plan Administrator of any Excess Elective Deferrals that arise by taking into account only those Elective Deferrals made to this Plan and any other plans of this Employer.

  

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Notwithstanding any other provision of the Plan, Excess Elective Deferrals, plus any income and minus any loss allocable thereto, shall be distributed no later than April 15 to any Member to whose account Excess Elective Deferrals were assigned for the preceding year and who claims Excess Elective Deferrals for such taxable year.

(g)           Distribution of Excess Contributions.  Notwithstanding any other provision of this Plan, Excess Contributions, plus any income and minus any loss allocable thereto, shall be distributed no later than the last day of each Plan Year to Members to whose accounts such Excess Contributions were allocated for the preceding Plan Year.  If such excess amounts are distributed more than 2-1/2 months after the last day of the Plan Year in which such excess amounts arose, a ten (10) percent excise tax will be imposed on the employer maintaining the Plan with respect to such amounts. For Plan Years commencing before January 1, 1997, Excess Contributions of Members who are subject to the family member aggregation rules shall be allocated among the family members in proportion to the Elective Deferrals (and amounts treated as Elective Deferrals) of each family member that is combined to determine the combined ADP.

For Plan Years commencing before January 1, 1997, such distributions shall be made to Highly Compensated Employees on the basis of the respective portions of the Excess Contributions attributable to each of such employees.  For Plan Years commencing on or after January 1, 1997, distributions of Excess Contributions of Members shall be made to Highly Compensated Employees based on the dollar amount of their Elective Deferrals, beginning with the Member with the greatest dollar amount of Elective Deferrals having his or her Elective Deferrals reduced to the level of the Member with the next highest dollar amount of Elective Deferrals and continuing until the Excess Contributions have been distributed.  Such distributions shall be made in accordance with the methodology prescribed at the time of the distribution by the Internal Revenue Service under Notice 97-2 or other applicable Notices or Treasury Regulations.

Excess Contributions (including the amounts recharacterized) shall be treated as annual additions under the Plan.

Excess Contributions shall be adjusted for any income or loss up to the date of distribution.  The income or loss allocable to Excess Contributions is the sum of:  (1) income or loss allocable to the Member’s Elective Deferral account (and, if applicable, the Qualified Non-elective Contribution account or the Qualified Matching Contributions account or both) for the Plan Year multiplied by a fraction, the numerator of which is such Member’s Excess Contributions for the year and the denominator is the Member’s account balance attributable to Elective Deferrals (and Qualified Non-Elective Contributions or Qualified Matching Contributions, or both, if any of such contributions are included in the ADP test), without regard to any income or loss occurring during such Plan Year; and (2) ten percent of the amount determined under (1) multiplied by the number of whole calendar months between the end of the Plan Year and the date of distribution, counting the month of distribution if distribution occurs after the 15th of such month.

  

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Excess Contributions shall be distributed from the Member’s Elective Deferral account and Qualified Matching Contribution account (if applicable) in proportion of the Member’s Elective Deferrals and Qualified Matching Contributions (to the extent used in the ADP test) for the Plan Year.  Excess Contributions shall be distributed from the Member’s Qualified Non-elective Contribution account only to the extent that such Excess Contributions exceed the balance in the Member’s Elective Deferral account and Qualified Matching Contribution account.

(h)           Recharacterization.  A Member may treat his or her Excess Contributions as an amount distributed to the Member and then contributed by the Member to the Plan.  Recharacterized amounts will remain nonforfeitable and subject to the same distribution requirements as Elective Deferrals.  Amounts may not be recharacterized by a Highly Compensated Employee to the extent that such amount in combination with other Employee Contributions made by that Employee would exceed any stated limit under the Plan on Employee Contributions.

Recharacterization must occur no later than two and one-half months after the last day of the Plan Year in which such Excess Contributions arose and is deemed to occur no earlier than the date the last Highly Compensated employee is informed in writing of the amount recharacterized and the consequences thereof.  Recharacterized amounts will be taxable to the Member for the Member’s tax year in which the Member would have received them in cash.

(i)           Qualified Non-elective Contributions.  The Employer may elect to make Qualified Non-elective Contributions under the Plan on behalf of Employees.

In addition, in lieu of distributing Excess Contributions or Excess Aggregate Contributions as provided herein, the Employer may make Qualified Non-elective Contributions on behalf of Non-highly Compensated Employees that are sufficient to satisfy either the Actual Deferral Percentage test or the Average Contribution Percentage test, or both, pursuant to regulations under the Code.

(j)           Definitions and Rules.  The following definitions and rules shall apply:

(1)           “Actual Deferral Percentage” shall mean, for a specified group of Members for a Plan Year, the average of the ratios (calculated separately for each Member in such group) of (1) the amount of Employer contributions actually paid over to the trust on behalf of such Member for the Plan Year to (2) the Member’s Compensation for such Plan Year.  Employer contributions on behalf of any Member shall include:  (1) any Elective Deferrals made pursuant to the Member’s deferral election (including Excess Elective Deferrals of Highly Compensated Employees), but excluding (a) Excess Elective Deferrals of Non-highly Compensated Employees that arise solely from Elective Deferrals made under the plans of this Employer and (b) Elective Deferrals that are taken into account in the Contribution Percentage test (provided the ADP test is satisfied both with and without exclusion of these Elective Deferrals); and (2) at the election of the Employer, Qualified Non-elective Contributions and Qualified Matching Contributions.  For purposes of computing Actual Deferral Percentages, an Employee who would be a Member but for the failure to make Elective Deferrals shall be treated as a Member on whose behalf no Elective Deferrals are made.

  

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(2)           “Aggregate Limit” shall mean the sum of (i) 125 percent of the greater of the ADP of the Non-highly Compensated Employees for the Plan Year or the ACP of Nonhighly Compensated Employees under the Plan subject to Code section 401(m) for the Plan Year beginning with or within the Plan Year of the CODA and (ii) the lesser of 200 percent or two plus the lesser of such ADP or ACP.  “Lesser” is substituted for “greater” in “(i)”, above, and “greater” is substituted for “lesser” after “two plus the” in “(ii)” if it would result in a larger Aggregate Limit.

(3)           “Average Contribution Percentage” shall mean the average of the Contribution Percentages of the Eligible Members in a group.

(4)           “CODA” shall mean a cash or deferred arrangement within the meaning of Code Section 40 1(k).

(5)           “Contribution Percentage” shall mean the ratio (expressed as a percentage) of the Member’s Contribution Percentage Amounts to the Member’s Compensation for the Plan Year.

(6)           “Contribution Percentage Amounts” shall mean the sum of the Employee Contributions, Matching Contributions, and Qualified Matching Contributions (to the extent not taken into account for purposes of the ADP test) made under the Plan on behalf of the Member for the Plan Year.  Such Contribution Percentage Amounts shall not include Matching Contributions that are forfeited either to correct Excess Aggregate Contributions or because the contributions to which they relate are Excess Deferrals, Excess Contributions, or Excess Aggregate Contributions.  The Employer may include Qualified Non-elective Contributions in the Contribution Percentage Amounts.  The Employer also may use Elective Deferrals in the Contribution Percentage Amounts so long as the ADP test is met before the Elective Deferrals are used in the ACP test and continues to be met following the exclusion of those Elective Deferrals that are used to meet the ACP test.

(7)           “Eligible Member” shall mean any Employee who is eligible to make an Employee Contribution, or an Elective Deferral (if the Employer takes such contributions into account in the calculation of the Contribution Percentage), or to receive a Matching Contribution (including forfeitures) or a Qualified Matching Contribution.  If an Employee Contribution is required as a condition of participation in the Plan, any Employee who would he a Member in the Plan if such Employee made such a contribution shall be treated as an eligible Member on behalf of whom no Employee Contributions are made.

(8)           “Elective Deferrals” shall mean any Employer contributions made to the Plan at the election of the Member, in lieu of cash compensation, and shall include contributions made pursuant to a salary reduction agreement or other deferral mechanism.  With respect to any taxable year, a Member’s Elective Deferral is the sum of all Employer contributions made on behalf of such Member pursuant to an election to defer under any qualified CODA as described in Code Section 401(k), any simplified employee pension cash or deferred arrangement as described in Code Section 402(h)(1)(B), any eligible deferred compensation plan under Code Section 457, any plan as described under Code Section 501(c)(18), and any Employer contributions made on the behalf of a Member for the purchase of an annuity contract under Code Section 403(b) pursuant to a salary reduction agreement.  Elective Deferrals shall not include any deferrals properly distributed as excess annual additions.

  

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(9)           “Employee Contribution” shall mean any contribution made to the Plan by or on behalf of a Member that is included in the Member’s gross income in the year in which made and that is maintained under a separate account to which earnings and losses are allocated.

(10)           “Excess Aggregate Contributions” shall mean, with respect to any Plan Year, the excess of:

 (A)           The aggregate Contribution Percentage Amounts taken into account in computing the numerator of the Contribution Percentage actually made on behalf of Highly Compensated Employees for such Plan Year, over

(B)           The maximum Contribution Percentage Amounts permitted by the ACP test (determined by hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of their Contribution Percentages beginning with the highest of such percentages).

Such determination shall be made after first determining Excess Elective Deferrals and then determining Excess Contributions.

(11)           “Excess Contributions” shall mean, with respect to any Plan Year, the excess of:

(A)           The aggregate amount of Employer contributions actually taken into account in computing the ADP of Highly Compensated employees for such Plan Year, over

(B)           The maximum amount of such contributions permitted by the ADP test (determined by hypothetically reducing contributions made on behalf of Highly Compensated Employees in order of the ADPs, beginning with the highest of such percentages).

(12)           “Excess Elective Deferrals” shall mean those Elective Deferrals that are includable in a Member’s gross income under Code Section 402(g) to the extent such Member’s Elective Deferrals for a taxable year exceed the dollar limitation under such Code section.  Excess Elective Deferrals shall be treated as annual additions under the Plan, unless such amounts are distributed no later than the first April 15 following the close of the Member’s taxable year.

  

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Excess Elective Deferrals shall be adjusted for any income or loss up to the date of distribution.  The income or loss allocable to Excess Elective Deferrals is the sum of:  (1) income or loss allocable to the Member’s Elective Deferral account for the taxable year multiplied by a fraction, the numerator of which is such Member’s Excess Elective Deferrals for the year and the denominator is the Member’s account balance attributable to Elective Deferrals without regard to any income or loss occurring during such taxable year; and (2) the percent of the amount determined under (1) multiplied by the number of whole calendar months between the end of the Member’s taxable year and the date of distribution, counting the month of distribution if distribution occurs after the 15th of such month.

Members who claim Excess Elective Deferrals for the preceding taxable year must submit their claims in writing to the Plan Administrator by March 31.

(13)           “Matching Contribution” shall mean an Employer contribution made to this or any other defined contribution plan on behalf of a Member on account of an Employee Contribution made by such Member, or on account of a Member’s Elective Deferral, under a plan maintained by the Employer.

(14)           “Qualified Matching Contribution” shall have the same meaning as Company Matching Contribution under Section 3.05(a), which is subject to the distribution and nonforfeitability to requirements under Code Section 401(k) when made.

(15)           “Qualified Non-elective Contributions” shall mean contributions (other than Matching Contributions or Qualified Matching Contributions) made by the Employer and allocated to Members’ accounts that the Members may not elect to receive in cash until distributed from the Plan; that are nonforfeitable when made; and that are distributable only in accordance with the distribution provisions that are applicable to Elective Deferrals and Qualified Matching Contributions.

3.07  Limitation on Annual Additions.

(a)           Basic Limitation.  Notwithstanding any other provision of this Plan and subject to the provisions of subsections 3.07(b) and (c) below, the amount of Company Common Stock Account contributions, Member Deferral Contributions, and Member After-Tax Contributions allocated to the Member’s Accounts during any Plan Year shall not exceed the lesser of:

(1)           $30,000 for Plan Years ending prior to 2001, $35,000 for Plan Years ending in 2001 or commencing in 2001 and ending in 2002, and $40,000 for Plan Years commencing in 2002 or later, adjusted for each subsequent Plan Year to reflect cost of living increases for the Plan Year provided under Code Section 415(d) or published by the Secretary of the Treasury, or

(2)           25% of the Compensation of such Member for Plan Years commencing prior to 2002, and 100% of the Compensation of such Member for Plan Years commencing in 2002 or later.  This paragraph (2) shall not apply to any contribution for medical benefits after separation from service within the meaning of Code Section 401(h) or 419.

  

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If no more than one-third of Company contributions is allocated to Highly Compensated Employees, then the amount in subsection (a)(1) above may be adjusted as provided in Code Section 415(c)(6) and Company contributions that are used to pay interest on an Acquisition Loan shall not be included when calculating the basic limitation.

(b)           Participation in Other Defined Contribution Plan.  The limitation of this Section 3.07 with respect to any Member who has at any time participated in any other qualified defined contribution plan (as defined in Section 3(34) of ERISA and Code Section 414(i)) maintained by the Company shall apply as if the total contributions allocated under all such defined Contribution plans in which the Member has participated were allocated under one plan.

(c)           Participation in the Plan and Defined Benefit Plan.  Code Section 415(e) ceased to apply to this Plan effective January 1, 2000.

3.08  Limitation on Reversion of Contributions.  Except as provided in subsections (a) through (c) below, Company contributions made under the Plan will be held for the exclusive benefit of Members and their Beneficiaries and may not revert to the Company.

(a)           In the case of a contribution made by the Company due to a mistake of fact, such contribution will be returned to the Company within one year after it is contributed to the Plan.

(b)           In the case of a contribution conditioned on the Plan’s initial qualification under Code Section 401(a), if the Plan does not qualify, the Company may demand that such contribution be returned within one year after the date the Plan’s qualification is denied.

(c)           In the case of a contribution conditioned upon its deductibility under Code Section 404, to the extent the deduction is disallowed, the amount disallowed will be returned within one year after the disallowance.  Except as otherwise expressly indicated on the Company’s federal income tax return for the year of the contributions, all contributions to the Plan shall be considered conditioned on their deductibility.

3.09  Transfers from Other Plans.

(a)           Transfers From Other Qualified Plans.  The Plan Administrator may authorize the Trustee to accept “direct rollovers” from Employees.  A “direct rollover” is a voluntary, direct transfer of assets to this Plan from any other qualified retirement plan that is nontaxable under Code Sections 402(c) and 401(a)(31).  Direct rollovers may be made by any Employee, regardless of whether the Employee has satisfied the service requirements of Section 2.01 of the Plan.

An Employee to whom the entire interest in a plan meeting the requirements of Code Section 401(a) (the “Other Plan”) has been distributed may, in accordance with procedures approved by the Company, transfer the distribution received from the Other Plan to the Trustee, provided the transfer occurs on or before the 60th day after the Employee receives the distribution from the Other Plan.

  

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There may be transferred directly from the trustee of the Other Plan to the Trustee, subject to the approval of the Company and Trustee that such transfer will not adversely affect the qualified status of the Plan, all or any of the assets, including voluntary contributions, if any, held (whether by trustee, custodian or otherwise) on behalf of any Other Plan which is maintained for the benefit of any Employees who are or may become Members of this Plan.  However, no transfer may be accepted of any amounts which would be subject to the annuity distribution requirements of Code Sections 401(a)(11) and 417.  If the distribution is transferred from the trustee of the Other Plan, or from the Employee, to the Employer, the Employer shall pay the transferred distribution to the Trustee on the earliest date on which such transferred distribution can reasonably be segregated from the Employer’s general assets, but in any event, within 30 days of receipt of the distribution by the Employer.  Transfers pursuant to this subparagraph may be made regardless of whether the Employee has satisfied the service requirements of Section 2.01 of the Plan.

(b)           Transfers from Individual Retirement Accounts.  An Employee who receives a distribution from an individual retirement account described in Code Section 408(a) or an individual retirement annuity described in Code Section 408(b) which constitutes the entire amount of such account or annuity (including earnings thereon), and no portion of which is attributable to any source other than a lump sum distribution from a qualified employees’ trust described in Section 3.09(a) of the Plan, may, in accordance with procedures approved by the Company, transfer the entire amount of such distribution to the Trustee, within 60 days after receiving the distribution.  If the Employee transfers the distribution to the Employer, rather than to the Trustee, the Employer shall pay the transferred distribution to the Trustee on the earliest date on which such transferred distribution can reasonably be segregated from the Employer’s general assets, but in any event, within 30 days of receipt of the distribution by the Employer.  Transfers pursuant to this subparagraph may be made regardless of whether the Employee has satisfied the, service requirements of Section 2.01 of the Plan.

(c)           Administration.  The Company shall develop such procedures, including. procedures for obtaining information from an Employee desiring to make such a transfer, as it deems necessary or desirable to enable it to determine that the proposed transfer will meet the requirements of this Section.  Upon approval by the Company, the amount transferred shall be deposited in the Trust Fund and shall be credited to a Rollover Account.  The Rollover Account shall be 100% vested in the Employee.  Upon termination of employment, the total amount of the Employee’s Rollover Account shall be distributed in accordance with Article VI.  In the case of an Employee who has not completed the service requirements of Section 2.01 of the Plan at the date of the transfer, the Rollover Account shall represent the Employee’s sole interest in the Plan until the Employee becomes a Member.

3.10  Transfers To Non-Bargaining Unit NCE Plan.  The Company shall cause a direct transfer of a Member’s Accounts between defined contribution plans sponsored by the Company as follows:

  

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(a)           Transfers From This Plan.  If a Member ceases to be an active Member in the Plan and thereafter is an active participant in another defined contribution plan maintained by the Company that benefits non-collectively bargained employees, the Member’s Accounts shall be transferred to the other plan.  Following such a transfer, the Member shall have no right to benefits from this Plan.

(b)           No Transfers To This Plan.  No transfers shall be made to this Plan under this section.

(c)           Time and Form of Transfer.  The Company shall determine the date as of which any transfer between plans shall occur.  The Company shall also determine whether the transfer shall be in cash or in kind or partly in each.  Transfers in kind may include the promissory note with respect to any outstanding loan from a plan to the Participant.

(d)           No Reduction of Benefits.  No such transfer shall occur unless the Company determines that the requirements of Sec. 10.02(b) have been satisfied.

ARTICLE IV

INVESTMENT AND VALUATION OF DEFERRAL

AFTER-TAX AND ROLLOVER ACCOUNTS

4.01  Investment Funds.

(a)           Contributions.  Contributions to the Deferral, After-Tax and Rollover Accounts shall be invested in one or more of the separate Investment Funds, except the Company Common Stock Account, authorized by the Company and maintained by the Trustees.  No portion of the Deferral, After-Tax and Rollover Accounts shall be invested in the Common Stock Account.  However, the Investment Funds may include a Company Stock Fund, which shall be invested primarily in Common Stock, but which shall be held separately from the Common Stock Account.

(b)           Reinvestments.  Dividends, interest, and other distributions received on the assets held by the Trustees with respect to each of the available Funds other than the Company Common Stock Account, which shall be governed by the provisions of Article V, shall be reinvested in the respective Fund.

4.02  Investment of Deferral, After-Tax and Rollover Accounts.  A Member or Employee shall make an investment election covering the total balance of such Member’s or Employee’s Deferral Account, After-Tax Account and Rollover Account by directing investment of the total balance in any one or more of the Investment Funds, in any whole percentage per Investment Fund.

4.03  Responsibility for Investments.  Each Member or Employee is solely responsible for selecting such Member’s or Employee’s investment options.  The Trustees, the Company, and the officers, supervisors, and other employees of the Company are not empowered to advise a Member or Employee as to the manner in which such Member’s or Employee’s Deferral, After-Tax and Rollover Accounts shall be invested.  The fact that an Investment Fund is available to Members or Employees for investment under the Plan shall not be construed as a recommendation for investment in that Investment Fund.

  

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It is the intent of this Plan in structuring its investment options to rely, to the maximum extent permitted by law, on the provisions of Section 404(c) of ERISA, to the effect that the Member or Beneficiary shall not be deemed to be a fiduciary by reason of exercise of control over assets in the Member’s or Beneficiary’s Account and no person who is otherwise a fiduciary shall be liable for any loss, or by reason of any breach, which results from such Member’s or Beneficiary’s exercise of control.

4.04  Change of Election.  A Member or Employee may change such Member’s or Employee’s investment election under Section 4.02 by notice to the Company at such time or times, and through such notification procedures, as may be established from time to time by the Company.  The changed investment election shall become effective as soon as administratively feasible after the notice is received, and shall be effective only with respect to subsequent contributions.

4.05  Transfers Between Funds.  A Member or Employee may elect to transfer all or any whole percentage of each find in such Member’s or Employee’s Deferral Account, After-Tax Account or Rollover Account between the Investment Funds by notice to the Company at such time or times, and pursuant to such notification procedures, as may be established from time to time by the Company.  The transfer or transfers shall become effective as soon as administratively feasible after the notice is received.  The Company may, in its sole discretion, from time to time suspend or delay transfers between the Investment Funds for such periods of time as the Company may consider necessary for administrative reasons, such as a change to new or additional Investment Funds.

4.06  Allocation of Investment Income on a Valuation Date.  As of each Valuation Date, the Trustee will determine the net investment earnings, gain or loss (whether realized or unrealized), after adjustment for applicable expenses or other items, if any, of each Investment Fund since the preceding Valuation Date.  The net investment earnings, gain or loss of each such Fund will be allocated to each Member’s Deferral and After-Tax Account balance and each Employee’s Rollover Account balance in an amount bearing the same ratio to the net investment gain or loss of that Fund as the portion of such Member’s or Employee’s Account balance invested in such Fund bears to the total of all Members’ or Employees’ Account balances invested in such Fund.  If the Plan Administrator determines that an event has occurred which requires a different valuation method in order to be equitable, the Plan Administrator may implement appropriate adjustments.

4.07  Member Statements.  At least once a year, each Member and each Employee having a Rollover Account shall be furnished with a statement setting forth the value of the Deferral, After-Tax and Rollover Accounts.

ARTICLE V

INVESTMENT OF MEMBERS’ ESOP ACCOUNTS

5.01  Investment of Members’ ESOP Accounts.  A Member’s ESOP Accounts shall be invested primarily in Common Stock.  A Member’s ESOP Accounts may be accounted for either on a share basis or on a unit basis, as determined by the Plan Administrator from time to time.  If a Member’s ESOP Accounts are accounted for on a unit basis, the Trustee is authorized to maintain a portion of the fund holding shares of Common Stock invested in cash or cash equivalents, as determined by the Trustee in its sole discretion.  All purchases of Common Stock will be made by the Trustee at the direction of the Company.

  

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5.02  Valuation of common Stock.

(a)           In General.  All Common Stock shall be valued on each Valuation Date using the closing price on that day.  If the shares of Common Stock are not readily tradable on an established market, valuation shall be made by an independent appraiser who meets requirements similar to those prescribed by Treasury regulations under Code Section 170(a)(1).

(b)           Transactions.  For purposes of a transaction between the Plan and a “disqualified person,” as such term is defined in Code Section 4975(e)(2), or any other person, the valuation of Common Stock shall be determined as of the date of the transaction.

5.03  Dividend Payments.

(a)           Allocated Shares.  Dividends on Common Stock allocated to a Member’s ESOP Accounts will be paid in accordance with one of the following methods, as determined by the Company in its sole discretion:

(1)           to such Member or the Member’s Beneficiary, or

(2)           to the Trust Fund and distributed to such Member or the Member’s Beneficiary, or

(3)           to the Trust Fund and invested in additional Common Stock on or as soon as administratively feasible after the dividend payment date.

In lieu of direct payment in cash under alternative (1), the Company may permit a Member (or Beneficiary) to direct that such payment instead be invested in Common Stock in the name of the Member (or Beneficiary), and not owned by or subject to the provisions of this Plan.

(b)           Unallocated Shares.  Dividends on Common Stock not allocated to any Member’s ESOP Account, but held in a loan suspense account under subsection 3.05(i), shall be used to pay principal or interest on any Acquisition Loan under subsection 3.05(h) used to acquire Financed Shares.

5.04  Voting of Stock.  A Member, in accordance with procedures adopted by the Company, and as to the shares of Common Stock credited to the Member’s ESOP Accounts as of the record date for any shareholders’ meeting, may instruct the Trustee as to the voting of the shares of Common Stock after receipt by the Member of the proxy solicitation materials of the Company (“Allocated Instructed” shares).  Fractional shares shall be combined and voted by the Trustee to the extent possible to reflect the instructions of Members credited with such shares.  If a Member does not provide the Trustee with timely voting instructions, such Member’s shares shall be “Allocated-Uninstructed” shares.  The Trustee shall vote Allocated-Uninstructed shares (excluding Allocated-Uninstructed shares of the Prior ESOP Account which qualified the Company for a tax credit under applicable Code provisions, which shall not be voted by the Trustee) and unallocated shares under Section 3.05(i) in the same percentages as the voting instructions received for Allocated-Instructed shares, except in the case where the Trustee determines that to do so would be inconsistent with the provisions of Title I of ERISA.

  

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At the time of mailing the notice of such shareholders’ meeting, the Company shall furnish a copy of such notice and all proxy solicitation material to each Member, together with a voting instruction form.

With respect to the voting of Common Stock which is not part of a registration-type class of securities (as defined in Code Section 409(e)(4)), a Member has the right to direct the Trustee regarding the voting of such Common Stock credited to the Member’s ESOP Accounts only with respect to any corporate matter which involves the approval or disapproval of any corporate merger or consolidation, recapitalization, reclassification, liquidation, dissolution, sale of substantially all assets of a trade or business, or such similar transaction as the Treasury may prescribe in regulations.

5.05  Diversification Requirements.

(a)           Requirements.  If a Member has attained age 55 and has completed 10 years of participation under the Plan or the Prior ESOP (a “Qualified Member”), then for Common Stock acquired after December 31, 1986, the Qualified Member may elect to make a diversification election as defined in subsection (b) below in the Qualified Election Period as defined in subsection (c) below.

(b)           “Diversification Election” means an election made within 90 days after the close of each Plan Year in the Qualified Election Period to have up to 25% (on a cumulative basis) of the Qualified Member’s ESOP Account balances acquired after December 31, 1986 transferred and invested in the Investment Funds offered under Section 4.01 of the Plan.  In addition, in the last year of the Qualified Election Period, the Qualified Member may direct that up to 50% (on a cumulative basis) of the Qualified Member’s ESOP Accounts acquired after December 31, 1986, be transferred and invested as provided above.

(c)           “Qualified Election Period” means the 6-Plan Year period beginning with the later of the first Plan Year in which the Member first became a Qualified Member and the first Plan Year beginning after December 31, 1986.

5.06  Member Statements.  At least once a year, each Member shall be furnished with a statement setting forth the value of the Member’s ESOP Accounts.

5.07  Nonterminable Protections and Rights.  The following protections and rights applicable to Common Stock purchased with the proceeds of any Acquisition Loan shall be nonterminable:  Except as otherwise required by law, no securities acquired with the proceeds of an Acquisition Loan may be subject to a put, call, or other option, or buy-sell or similar arrangement while held by and when distributed by the Plan whether or not the Plan is then an employee stock ownership plan under Code Section 4975(e)(7).

  

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5.08  Certain Corporate Transactions.  Each Member (or in the event of the Member’s death, the Member’s 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, or as to the exercise of any other shareholder rights created by other corporate transactions such as the exercise of dissenters’ rights in mergers, for any or all shares of Common Stock credited to such Member’s Account under the Plan.  The Company shall notify each Member (or Beneficiary) and utilize its best efforts to distribute or cause to be distributed to the Member (or Beneficiary) in a timely fashion such information as will be distributed to shareholders of the Company in connection with any such tender, exchange offer or merger, together with a form requesting confidential instruction to the Trustee as to the manner in which to respond to the tender, exchange offer or merger for any or all shares of Common Stock credited to such Member’s Account.  Upon its receipt of such instructions, the Trustee shall tender such shares of Common Stock, or otherwise exercise any such rights associated with the Common Stock with respect to such corporate transaction, as and to the extent so instructed.  If the Trustee shall not receive timely written instructions from a Member (or Beneficiary) regarding any such tender or exchange offer for Common Stock, the Trustee shall not tender any shares (or fractional shares) of Company Stock in the Company Stock Fund, or otherwise exercise any rights associated with such Common Stock, for which it does not receive timely directions, except in the case where the Trustee determines that to do so would be inconsistent with the provisions of Title I of ERISA.  The Trustee shall tender or exchange unallocated shares under subsection 3.05(i), but shall not otherwise exercise any shareholder rights with respect to unallocated shares, in the percentage of allocated shares instructing to tender or exchange to the total number of allocated shares, except in the case where the Trustee determines that to do so would be inconsistent with the provisions of title I of ERISA.  Any cash received by the Trustee as a result of the tender of shares of Common Stock, the exercise of dissenters’ rights with respect to a merger or otherwise shall be allocated to the Member’s Account from which such shares of Common Stock were sold, tendered, or otherwise disposed of and the Member shall be permitted to invest such cash proceeds in any of the Investment Funds then available under the Trust for the investment of the Member’s Accounts.

ARTICLE VI

WITHDRAWALS WHILE EMPLOYED

6.01  Withdrawal from After-Tax Accounts.  A Member may withdraw up to 100% of the value of the Member’s After-Tax Account in accordance with such procedures as may be established from time to time by the Company.

6.02  Financial Hardship Withdrawals.  A Member may request a withdrawal in the event of financial hardship of the lesser of (1) the sum of the amounts in such Member’s Deferral Account and Rollover Account, or (2) the sum of the Member’s actual Deferral Contributions plus the net earnings thereon prior to January 1, 1989 plus the amount in the Member’s Rollover Account (any hardship withdrawal to come first from the Deferral Account and then from the Rollover Account).  In no event may a Member withdraw the earnings or increases in fair market value of such Member’s Deferral Account arising after December 31, 1988.  A member desiring such a withdrawal shall file a written request with the Company which states the amount to be withdrawn, and certifies to such information as is required by the Company to determine that such withdrawal meets the requirements of this Section.  The Company shall then determine whether the hardship of the Member meets the standards of this Section.  If the withdrawal is approved, the Company shall then direct the Trustee to distribute the amount to the Member.  The right to withdraw such contributions shall be made available to all Members in a non-discriminatory manner.

  

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A withdrawal shall be deemed to be on account of financial hardship only if it is made for:

(a)           expenses for medical care described in Code Section 213(d) previously incurred by the Member, the Member’s spouse or the Member’s dependents (as defined in Code Section 152) or necessary for these persons to obtain medical care described in Code Section 2 13(d), other than such expenses that are subject to reimbursement through insurance or otherwise;

(b)           costs directly related to the purchase of a principal residence for the Member (excluding mortgage payments);

(c)           payment of tuition and related educational fees including room and board expenses for the next 12 months of post-secondary education for the Member, the Member’s spouse, children, or dependents (as defined in Code Section 152);

(d)           payments necessary to prevent the eviction of the Member from the Member’s principal residence or foreclosure on the mortgage on that residence; or

(e)           on account of any financial need deemed immediate and heavy by the Commissioner of the Internal Revenue Service through the publication of revenue rulings, notices or other documents of general applicability.

In addition, the withdrawal must not be in excess of the amount of the immediate and heavy financial need of the Member.  The amount of an immediate and heavy financial need may include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably anticipated from the distribution.  The Member must have obtained (prior to the hardship withdrawal) all distributions and withdrawals, other than hardship withdrawals, and all nontaxable loans currently available under all qualified retirement plans maintained by the Employer.  Effective for hardship distributions made on or after January 1, 2002, the Member shall not be permitted to make Deferral Contributions to this Plan or any other contributions to this or any other qualified retirement plan maintained by the Employer for 6 months after receipt of the hardship distribution.  For hardship distributions made prior to January 1, 2002, the Member was not permitted to make Deferral Contribution to this Plan or any other contributions to this or any other qualified retirement plan maintained by the Employer for 12 months after the receipt of the hardship distribution; furthermore, the Member was not allowed to make Deferral Contributions for the Member’s taxable year immediately following the taxable year of the hardship distribution in excess of the applicable limit under Code Section 402(g) for such next taxable year less the amount of such Member’s Deferral Contributions for the taxable year of the hardship distribution.

If a financial hardship withdrawal is approved, payment will be made as soon as administratively feasible.

  

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If the defined financial hardship exceeds the withdrawal available from the Member’s Deferral Account and Rollover Account, as previously specified, the Company may authorize withdrawal of shares from the Prior ESOP Matching Account provided such withdrawn shares were allocated to that account at least 84 months prior to the withdrawal date.  Should such amounts still be insufficient to meet the defined financial hardship, the Company may then authorize withdrawal of shares from the Company Common Stock Account.  Lastly, should it be necessary, the Company may authorize withdrawal of shares from the Prior ESOP Company Account provided such. withdrawn shares were allocated to that account at least 84 months prior to the withdrawal date.

6.03  Loans to Members.

(a)           Application and Amount.  Upon written notice and the filing of an application to the Company, and according to a uniform non-discriminatory policy for the approval of loan applications, the Company may approve and direct the Trustee to make a loan in cash to a Member from the Member’s Deferral Account and Rollover Account.  The amount of any loan to a Member shall not exceed the lesser of (1) reduced by the Member’s highest outstanding balance during the 12 preceding months, or (2) with a minimum of (3):

(1)           $50,000;

(2)           half the value of the sum of the Member’s Deferral Account and Rollover Account, as of the most recently completed Valuation Date prior to the date the processing of the loan begins;

(3)           the minimum loan shall be $1,000 (if the value of the sum of the Deferral Account and Rollover Account under (2) is less than $2,000 then no loan shall be available).

(b)           Terms.  The loan shall be evidenced by a promissory note and secured by 50% of such Member’s Deferral Account and Rollover Account All loans will be repaid in substantially level amortized payments by regular payroll deductions when possible provided that in all events, except as provided in subparagraphs (c) and (d) below, the loans must be repaid in not more than 5 years.  Additional lump sum payments may be accepted based upon administrative rules adopted by the Company.  Interest shall be charged for the life of the loan at a rate determined by the Company to be commensurate with the interest rates charged by persons in the business of lending money for loans which would be made under similar circumstances.

(c)           Home Loan.  If any loan is used to acquire any dwelling unit which, within a reasonable time, is to be used as the Member’s principal residence, the loan must be repaid in no more than 15 years.

(d)           Repayment From Distribution.  If any loan to a member is unpaid on the date that a distribution is to be made to the Member or the Member’s Beneficiary from the Trust Fund, such loan shall on such date become due and payable, and the amount thereof, together with any interest thereon, shall be deducted from the distribution to be made.

(e)           One Loan Rule.  A Member shall have only one outstanding loan at a time.

  

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(f)           Treatment as Directed Investment.  Payment of a Member’s loan shall be made from and shall be considered an investment of first, up to 50% of the Member’s Deferral Account and second, to the extent necessary, the Member’s Rollover Account.  Interest payments made by the Member shall be credited to such Accounts in proportion to the loan amounts made from each account and shall be reinvested at the direction of the Member according to the Member’s current investment election.  Loan repayments will not be eligible from Company Matching Contributions, or Special Company Contributions.

(g)           Administration.  The loan program shall be administered in accordance with regulations promulgated by the Department of Labor, and the Company may impose additional limitations, restrictions and requirements not described herein which the Company may determine are necessary or appropriate to satisfy the requirements of such regulations, provided such loans remain available on a reasonably equivalent and non-discriminatory basis to all Members.

6.04  Other Withdrawals.  Amounts attributable to an Employee’s Deferral Contributions may not be distributed earlier than:  (i) upon the Employee’s separation from service, death or disability; (ii) termination of the Plan without the establishment of another defined contribution plan, other than an employee stock ownership plan (as defined in Code Section 4975(e) or 409) or a simplified employee pension plan as defined in Code Section 408(k); or (iii) the hardship of the Member as described in Section 6.03.

ARTICLE VII

DISTRIBUTION OF BENEFITS

7.01  Amount.  The amount payable under the Plan in the case of a Member whose employment with the Employer is terminated for any reason shall be equal to 100% of the value of the Member’s Accounts on the Valuation Date that occurs as close as administratively feasible to the date of distribution, which shall be paid as soon as administratively feasible following such Valuation Date, plus Company contributions allocated to the Member’s Company Common Stock Account at the end of the Plan Year of termination of employment (if not already so allocated), less any applicable administrative expenses or deferred sales commissions specified for the Funds selected by the Member.

7.02  Time and Manner of Distribution.  Amounts distributable pursuant to Section 7.01 from a Member’s ESOP Accounts will be distributed in full shares of Common Stock and in cash in lieu of fractional shares and all other amounts shall be distributed in a single sum cash payment.  The election of the Member may specify that instead of distributing shares of Common Stock, cash shall be distributed.  In that event, the Member’s shares of Common Stock shall be sold immediately prior to the time they would otherwise have been distributed and the proceeds of such sate, net of any related commissions or other expenses of sale, shall be distributed to the Member.  Payment shall be made as elected by the Member as soon as practicable, but in no case later than 60 days following the end of the Plan Year in which the Member attains age 65 or terminates employment, if later.  In addition, if a Member so elects, the distribution of the Member’s ESOP Accounts attributable to stock acquired after December 31, 1986, will be distributed no later than one year after the close of the Plan Year:

  

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(a)           In which the Member terminates employment after the Member’s Normal Retirement Age or due to Disability or death, or

(b)           Which is the fifth Plan Year following the Plan Year in which the Employee otherwise terminates employment providing the Employee is not reemployed during that period, whichever is later.

For distributions made prior to January 1, 1998, if the value of the Member’s Accounts exceeded $3,500 (determined as of the Valuation Date coincident with or immediately following the date of the Member’s termination), the Member’s consent was required for a distribution beginning before the required date in the first paragraph of this Section.  For distributions made on or after January 1, 1998 (whether the Member’s termination of employment occurred before or after that date), if the value of the Member’s Accounts exceeds $5,000, the Member’s consent is required for a distribution beginning before the required date in the first paragraph of this Section.

Notwithstanding the foregoing, the Accounts of a Member must be distributed no later than the Required Beginning Date, even if the Member is still employed on that date, based on the most recently available previous Valuation Date valuation. If a Member remains employed after the Required Beginning Date, the Member’s Accounts will be distributed no later than April 1 of each year thereafter based on the most recently available Valuation Date valuation.

Distribution shall be made or commence not later than one year after the Member’s death.  In addition, the following special rules apply:

(a)           If a Member dies before the dates described in the paragraphs above distributions must be made in their entirety within 5 years after the Member’s death; and

(b)           If a Member dies after the dates described in the paragraphs above, but before such distribution has been completed, the benefits shall be distributed at least as rapidly as the Member would have received them.

If a Member terminates employment, the Member may defer the distribution in accordance with this Section and the Member’s Accounts will continue to be adjusted in accordance with Section 4.06 and the Member will continue to receive dividends on common stock under Section 5.02 until the Valuation Date preceding the distribution date.  The rights of former Employees under the Plan are further described in Section 2.02.

Notwithstanding the foregoing, the Company may require any distributions necessary to meet the requirements of Code Section 401(a)(9) and the Treasury regulations thereunder (including the minimum distribution incidental benefit requirements thereof).

7.03  Put Option for Common Stock.  If shares of Common Stock cease to be readily tradable on an established market or become subject to a “trading limitation” (as defined in Treasury Regulation § 54.4975-7(b)(10)) when shares are distributed to a Member, the Company shall provide a put option to any Member (or Member’s Beneficiary) who receives a distribution of Common Stock.  The put option shall permit the Member (or Beneficiary) to sell such Common Stock to the Company at any time during two option periods, at the then fair market value.  The first put option period shall be for at least sixty (60) days beginning on the date of distribution.  The second put option period shall be for at least sixty (60) days beginning after the new determination of the fair market value (and notice to the Member thereof) in the following Plan Year.  The Company may allow the Trustee to purchase shares of Common Stock tendered to the Company under a put option.  The payment for any Common Stock shall commence within thirty (30) days and may be made in a lump sum or in substantially equal annual installments over a period not exceeding five (5) years, with adequate security provided and interest payable at a reasonable rate on any unpaid installment balance as determined by the Company.

  

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7.04  Direct Rollover to Eligible Retirement Plan.

(a)           Election of Direct Rollover.  Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee’s election under this Section, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

(b)           Definitions.

(1)           Eligible rollover distribution:  An eligible rollover distribution is any distribution of all or any portion of the balance to the credit of the distributee, except that an eligible rollover distribution does not include:  any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for the life (or life expectancy) of the distributee or the joint lives (or joint life expectancies) of the distributee and the distributee’s designated beneficiary, or for a specific period of ten years or more; any distribution to the extent such distribution is required under Code Section 401(a)(9); and the portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities).

(A)           Any hardship withdrawal from a Participant’s Deferral Account prior to age 591⁄2 pursuant to Sec. 6.02 which is described in Code section 401(k)(2)(B)(i)(IV) and which occurs after December 31, 1998 and prior to January 1, 2002, and any withdrawal from any of the Participant’s Accounts due to financial hardship prior to age 591⁄2 pursuant to Sec. 6.02 which occurs on or after January 1, 2002, is not an eligible rollover distribution.

(B)           Commencing January 1, 2002, a portion of a distribution shall not fail to be an eligible rollover distribution merely because the portion consists of after-tax employee contributions which are not includible in gross income.  However, such portion may be transferred only to an individual retirement account or annuity described in Code Section 408(a) or (b), or to a qualified defined contribution plan described in Code Section 401(a) or 403(a) that agrees to separately account for the amounts so transferred, including separately accounting for the portion of such distribution which is includible in gross income and the portion of such distribution which is not so includible.

  

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(2)           Eligible retirement plan:  An eligible retirement plan is an individual retirement account described in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an annuity plan described in Code Section 403(a), or a qualified trust described in Code Section 401(a), that accepts the distributee’s eligible rollover distribution.  Commencing January 1, 2002, an eligible retirement plan also means an annuity contract described in Code Section 403(b), or an eligible plan under Code Section 457(b) which is maintained by a state, a political subdivision of a state, or any agency or instrumentality of a state or political subdivision of a state and which agrees to account separately for amounts transferred into such plan from this Plan.  Prior to January 1, 2002, in the case of an eligible rollover distribution to the surviving spouse, an eligible retirement plan was limited to an individual retirement account or individual retirement annuity.

(3)           Distributee:  A distributee includes an employee or former employee.  In addition, the employee’s or former employee’s surviving spouse and the employee’s or former employee’s spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Code Section 414(p), are distributees with regard to the interest of the spouse or former spouse.

(4)           Direct rollover:  A direct rollover is a payment by the Plan to the eligible retirement plan specified by the distributee.

ARTICLE VIII

ADMINISTRATION OF PLAN

8.01  Powers and Duties.  The Company shall have full power to administer the Plan and to interpret and apply all of its provisions.  All decisions of the Company shall be conclusive, final and binding on the parties.  It is the intent of this provision to give the Company the broadest possible discretion in administering the Plan and carrying out its duties hereunder.  Unless properly delegated by it, the Company’s powers and duties shall include, but shall not be limited to:

(a)           Plan Administration.  Deciding questions relating to eligibility, continuity of service, and amounts of benefits and administering the Plan as the Plan Administrator.

(b)           Plan Assets.  Selecting investment alternatives, an insurance company, and trustee to hold Plan assets.

(c)           Plan Amendments.  Amending the Plan to the extent permitted in Article X.

(d)           Disputes.  Deciding disputes that may arise with regard to the rights of Employees, Members, or Beneficiaries under the terms of the Plan. Such decisions by the Company shall be deemed final in each case.

(e)           Employee Information.  Obtaining such information with respect to its Employees as shall be necessary to determine the rights and benefits of such Employees under the Plan.  The Company may rely conclusively on such information furnished by the Employees.

  

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(f)           Records.  Compiling and maintaining all records necessary for the Plan.

(g)           Benefit Payments.  Authorizing the Trustee to make all payments of all benefits as they become payable under the Plan.

(h)           Professional Services.  Engaging such legal, administrative, consulting, actuarial, investment, accounting, and other professional services as the Company deems proper.

(i)           Rules and Regulations.  Adopting rules and regulations for the administration of the Plan, where there may be inconsistencies.

(j)           Other Actions.  Performing such other actions as may be provided for in other parts of this Plan or as it deems appropriate.

(k)           Allocation or Delegation.  The Company may from time to time allocate to one or more persons, and may delegate to any person or organization, any of its powers, duties, and responsibilities with respect to the operation and administration of the Plan and may employ, and authorize any person to whom any of its fiduciary responsibilities have been delegated to employ, persons to render advice with regard to any fiduciary responsibility held hereunder.  All allocations and delegations of responsibility shall be terminable upon such notice as the Company, at its sole discretion, deems reasonable and prudent under the circumstances.

8.02  Actions by the Company.  The Company may act through the proper actions of its Board of Directors, and its duly appointed officers and employees.  The Company, acting through its duly appointed officers, may designate in writing one or more persons to execute papers and perform other administrative duties on behalf of the Company with respect to the Plan.

8.03  Interested Persons.  No person shall participate in an action of the Company on a matter in which the person has an individual vested interest.

8.04  Indemnification.  The Company shall indemnify and hold employees or directors of the Company acting on its behalf, and each of them, harmless from the effects, and consequences of their acts, omissions, and conduct in their official capacities, except to the extent that the effects and consequences thereof shall result from their own willful misconduct, breach of good faith, or gross negligence in the performance of their duties.  The foregoing right of indemnification shall not be exclusive of other rights to which each such person may be entitled as a matter of law.

8.05  Conclusiveness of Action.  Any action on matters within the Company’s discretion shall be conclusive, final, and binding upon all Members in the Plan and upon all persons claiming any rights hereunder, including Beneficiaries and Alternate Payees.

8.06  Payment of Expenses.  The persons acting on behalf of the Company shall serve without compensation for services as such if they are Employees.  The compensation or fees of accountants, counsel, and other specialists and any other costs of administering the Plan or Trust Fund shall be charged to the Trust Fund at the discretion of the Company.

  

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8.07  Claims Procedure.  The following claims procedure shall apply:

(a)           Filing.  All claims for benefits shall be filed in writing by the Member, the Beneficiary, or the authorized representative of the claimant, by completing such procedures as the Company shall require.  Such procedures shall be reasonable and may include the completion of forms and the submission of documents and additional information.

(b)           Time for Notice of Claim Denial.  If a claim is denied, notice of denial shall be furnished by the Company to the claimant within 90 days after the receipt of the claim by the Company (or receipt of the requested additional information, if later), unless special circumstances require an extension of time for processing the claim, in which event notification of the extension shall be provided to the claimant and the extension shall not exceed 90 days from the end of the initial period.

(c)           Content of Notice of Claim Denial.  The Company shall provide adequate notice, in writing, to any claimant whose claim has been denied, setting forth the specific reasons for such denial, specific reference to pertinent Plan provisions, a description of any additional material or information necessary for the claimant to substantiate the claim and an explanation of why such material or information is necessary, all written in a manner calculated to be understood by the claimant.  Such notice shall include appropriate information as to the steps to be taken if the claimant wishes to submit the claim for review.

(d)           Review Procedure.  The claimant or the claimant’s authorized representative may request such a review by the Company upon written application.  The claimant may review pertinent documents and may submit issues or comments in writing.  The claimant or the claimant’s duly authorized representative must request such review within 60 days of receipt of notification of the claim denial unless the Company extends this period of time for good cause.  A decision on review shall be rendered within 60 days after the receipt of the request for review by the Company.  If special circumstances require a further extension of time for review, a decision shall be rendered as soon as possible, but not later than 120 days following the Company’s receipt of the request for review.  If such an extension of time of review is required, written notice of the extension shall be furnished to the claimant before the extension period commences.  The decision of the Company shall be furnished to the claimant in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Plan provisions on which the decision is based.

ARTICLE IX

MANAGEMENT OF FUNDS

9.01  Trust Agreement.  All the Funds of the Plan shall be held by a Trustee or Trustees appointed from time to time by the Company under a trust agreement as adopted, or as amended; by the Company or its delegate for use in providing the benefits of the Plan and paying its expenses not paid directly by the Company.  The Company or its delegate may appoint an investment manager or managers as defined under Section 3(38) of ERISA to manage the investment of part or all of the Investment Funds as provided for in Section 4.01.  If the Company appoints an investment manager or managers, the Trustee shall be notified by the Company of such appointment and of that portion of the Investment Funds as provided for in Section 4.01, for which the investment manager or managers shall be responsible.

  

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9.02  Exclusive Benefit Rule.  Except as otherwise provided in the Plan, no part of the corpus or income of the Funds of the Plan shall be used for, or diverted to, purposes other than for the exclusive benefit of Members or their Beneficiaries and other persons entitled to benefits under the Plan or for paying Plan expenses not paid directly by the Company.  No person shall have any interest in or right to any part of the earnings of the Funds of the Plan, or any right in, or to, any part of the assets held under the Plan, except as and to the extent expressly provided in the Plan.

ARTICLE X

AMENDMENTS TO THE PLAN

10.01  Amendments.  By adopting this Plan, the Board authorizes the proper officers of the Company, on its behalf, to make any amendment the Company determines to be necessary or desirable, with or without retroactive effect, to comply with the Code or ERISA, and any regulations thereunder, or to ensure the successful administration and operation of the Plan.  If the officers of the Company exercise the right to make any amendment to this Plan as provided in the preceding sentence, the Board shall be notified about the terms and conditions of such amendment and such amendment shall be binding upon the Company, as of the effective date specified therein.  The foregoing notwithstanding, no amendment which changes:  (i) the conditions for determining eligibility to participate in the Plan, (ii) the method of calculating Years of Service, (iii) the Plan’s vesting schedule, (iv) the Plan’s benefit and allocation formula, or (v) this Section 10.01 shall become effective without the prior approval of or subsequent ratification by the Board of Directors, unless such change is required by law.  The Board shall have the right to adopt any amendment to this Plan which has not been approved by the Company.  No amendment to this Plan shall reduce any Member’s Accrued Benefit as defined in Code Section 411(d)(6) or divert any Plan assets held hereunder to any purpose other than the provision of benefits to Members and their Beneficiaries, except as may be otherwise permitted or required by the terms of this Plan or by law.

If the Plan’s vesting schedule is amended, or the Plan is amended in any way that directly or indirectly affects the computation of the Member’s non-forfeitable percentage, or the Plan is deemed amended by an automatic change to or from a top-heavy vesting schedule, each Member with at least three Years of Service with the Employer may elect, within a reasonable period after the adoption of the amendment or change, to have the non-forfeitable percentage computed under the Plan without regard to such amendment or change.

The period during which the election may be made shall commence with the date the amendment is adopted or deemed to be made and shall end on the latest of:

(1)           60 days after the amendment is adopted;

(2)           60 days after the amendment becomes effective; or

(3)           60 days after the Member is issued written notice of the amendment by the Employer or Plan Administrator.

  

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No amendment to the Plan shall be effective to the extent that it has the effect of decreasing a Member’s accrued benefit.  Notwithstanding the preceding sentence, a Member’s account balance may be reduced to the extent permitted under Code Section 412(c)(8).  For purposes of this paragraph, a Plan amendment which has the effect of decreasing a Member’s account balance or eliminating an optional form of benefit, with respect to benefits attributable to service before the amendment shall be treated as reducing an accrued benefit.  Furthermore, if the vesting schedule of the Plan is amended, in the case of an Employee who is a Member as of the later of the date such amendment is adopted or the date it becomes effective, the nonforfeitable percentage (determined as of such date) of such Employee’s Employer derived accrued benefit will not be less than the percentage computed under the Plan without regard to such amendment.

10.02  Amendment — Merger or Consolidation of Plan.

(a)           Permission.  This Plan may be amended with the consent of the Board to provide for the merger or consolidation of the Plan with another defined contribution plan or for the transfer of assets and liabilities hereunder to another defined contribution plan.

(b)           No Reduction of Benefits.  Any amendment described in this Section 10.02 shall not be effective unless each Member affected by the amendment would receive a benefit under such other defined contribution plan after the merger, consolidation, or transfer (assuming that plan had then terminated) which is at least as great as the benefit the Member would have received under this Plan immediately before the merger, consolidation, or transfer (assuming this Plan had then terminated).

ARTICLE XI

TERMINATION OF THE PLAN

11.01  Right to Terminate.

(a)           Reservation of Right to Terminate.  The Board intends to continue the Plan indefinitely but reserves the right to terminate the Plan at any time for any reason in the sole and absolute discretion of the Company or its Board of Directors and the Company and each participating subsidiary similarly reserve the right to withdraw from the Plan as hereinafter provided.  The date when the Plan is terminated shall be referred to as the Plan Termination Date.

(b)           Nonforfeitability of Benefits.  To the extent required under the Code, upon the Plan Termination Date or upon a partial Plan termination or complete discontinuance of contributions, affected Members’ Accounts shall be nonforfeitable provided that no Member, or any person claiming benefits through a Member, shall have recourse for the satisfaction of any benefit allocated under the Plan other than against the Fund.

  

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ARTICLE XII

TOP-HEAVY PLAN REQUIREMENTS

The Top Heavy rules under Code Section 416 ceased to apply to this Plan effective January 1, 1999, the first Plan Year in which the Plan no longer benefited any non-collectively bargained employees.

ARTICLE XIII

MISCELLANEOUS

13.01  Voluntary Plan/Right to Dismiss Members.  The Plan is purely voluntary on the part of the Company and neither the establishment of the Plan nor any Plan amendment, nor the creation of any fund or account, nor the payment of any benefits shall be construed as giving any Employee or any person any legal or equitable right against the Company or Trustee unless the right is specifically provided for in this Plan or conferred by affirmative action of the Company in accordance with the terms and provisions of this Plan, nor shall such actions be construed as giving any Employee or Member the right to be retained in the service of the Company.  All Employees and/or Members remain subject to discharge to the same extent as though this Plan had not been established.

13.02  Nonalienation of Benefits/QDRO’s.

(a)           General.  Except as provided in subsection (b) below, no Member or Beneficiary shall have any right to assign, transfer, hypothecate, encumber or anticipate any interest in any benefits under this Plan (except to provide security for Plan loans under subsection 6.04(b)), nor shall such benefits be subject to any legal process to levy upon or attach the same for payment of any claim against any such Member or Beneficiary.

(b)           QDRO Exception.  Subsection (a) shall apply to the creation, assignment, or recognition of a right to any benefit payable with respect to a Member pursuant to a Domestic Relations Order unless such domestic relations order satisfies subsections (c) and (d) below.

(c)           QDRO Terms.  A Domestic Relations Order meets the requirements of this subsection only if such order clearly specifies (i) the name and last known mailing address (if any) of the Member and the name and mailing address of each Alternate Payee covered by the order, (ii) the amount or percentage of the Member’s benefits to be paid by the Plan to each such Alternate Payee, or the manner in which such amount or percentage is to be determined, (iii) the number of payments or period to which such order applies, and (iv) each plan to which such order applies.  Moreover, a Domestic Relations Order meets the requirements of this subsection only if such order (i) does not require the Plan to provide any type or form of benefit, or any option, not otherwise provided under the Plan, (ii) does not require the Plan to provide increased benefits, and (iii) does not require the payment of benefits to an Alternate Payee that are required to be paid to another Alternate Payee under another order previously determined to be a Qualified Domestic Relations Order.

  

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(d)           Payments Before Separation from Service.  In the case of any payment before a Member has separated from service, a Domestic Relations Order shall not be treated as failing to meet the requirements of subsection (c) solely because such order requires that payment of benefits be made to an Alternate Payee (i) on or after the date on which the Member attains (or would have attained) the earliest retirement age and (ii) as if the Member had retired on the date on which such payment is to begin under such order.  Notwithstanding any other provision of this Section 13.02, the only form of distribution available to an Alternate Payee shall be a lump-sum distribution, which distribution shall be made as soon as reasonably practicable following receipt by the Company of the final Qualified Domestic Relations Order.

(e)           Company Action on Receipt of Order.  In the case of any Domestic Relations Order received by the Plan, the Company shall promptly notify the Member and any Alternate Payee of the receipt of such order and the Plan’s procedures for determining the qualified status of Domestic Relations Orders and, within a reasonable period after receipt of such order, the Company shall determine whether such order is a Qualified Domestic Relations Order and notify the Member and each Alternate Payee of such determination.  The Company shall establish reasonable procedures to determine the qualified status of Domestic Relations Orders and to administer distributions under Qualified Domestic Relations Orders.  Such procedures shall be in writing, shall provide for the notification of each person specified in the Domestic Relations Order as entitled to payment of benefits under the Plan (at the address included in the Domestic Relations Order) of such procedures promptly upon receipt by the Plan of the Domestic Relations Order and shall permit an Alternate Payee to designate a representative for receipt of copies of notices that are sent to the Alternate Payee with respect to a Domestic Relations Order.  During any period in which the issue of whether a Domestic Relations Order is a Qualified Domestic Relations Order is being determined (by the Company, by a court of competent jurisdiction, or otherwise), the Company shall separately account for the amounts which would have been payable to the Alternate Payee during such period if the order had been determined to be a Qualified Domestic Relations Order.  If within 18 months the order (or modification thereof) is determined to be a Qualified Domestic Relations Order, the Company shall pay the amounts that were separately accounted for (plus any interest thereon) to the person or persons entitled thereto.  However, if within 18 months from the date on which the first payment would be required to be made pursuant to the Domestic Relations Order it is determined that the order is not a Qualified Domestic Relations Order or the issue as to whether such order is a Qualified Domestic Relations Order is not resolved, then the Company shall pay the amounts that were separately accounted for (plus any interest thereon) to the person or persons who would have been entitled to such amounts if there had been no order.  Any determination that an order is a Qualified Domestic Relations Order that is made after the close of the 18-month period shall be applied prospectively only.  If the Plan’s fiduciaries act in accordance with the fiduciary provisions of ERISA in treating a Domestic Relations Order as being (or not being) a Qualified Domestic Relations Order or in taking action in accordance with this subsection, then the Plan’s obligation to the Member and each Alternate Payee shall be discharged to the extent of any payment made pursuant to the acts of such fiduciaries.

13.03  Payments Due to Minors or Incapacitated Persons.  If any person entitled to a payment under the Plan is a minor, or if the Company determines that any such person is incapacitated by reason of physical or mental disability, whether or not legally adjudicated an incompetent, the Company shall have the power to cause the payments becoming due to such person to be made to another for such person’s benefit, without responsibility of the Company or the Trustee to see to the application of such payments.  Payments made pursuant to such power shall operate as a complete discharge of the Trustee and the Company.

  

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13.04  Disposition of Unclaimed Payments.  Any communication, statement or notice addressed to a Member, Beneficiary or Alternate Payee at such person’s last post office address filed with the Company, or if no address is filed with the Company then at such person’s last post office address as shown on the Company’s records, will be binding on the Member, Beneficiaries or Alternate Payees for all purposes of the Plan.  Neither the Company nor the Trustee shall be required to search for or locate a Member, Beneficiary or Alternate Payee.  If the Company notifies a Member, Beneficiary or Alternate Payee that such person is entitled to a distribution and also notifies such person of the provisions of this Section, and the Member, Beneficiary or Alternate Payee fails to claim benefits under the Plan or make an address known to the Company within three calendar years after the Member’s Required Beginning Date, the benefit will be treated as having been forfeited. If a Member, Beneficiary or Alternate Payee subsequently submits a valid claim for benefits and otherwise complies with the requirements of this Plan to obtain a benefit, then the Plan shall reinstate the forfeited benefits, provided the Plan has not been previously terminated.

13.05  Limitation of Rights.  Nothing in the Plan expressed or implied is intended or shall be construed to confer upon or give to any person, firm, or association other than the Company, the Members, and their successors in interest any right, remedy, or claim under or by reason of this Plan.

13.06  Invalid Provisions.  In case any provision of this Plan is held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of this Plan; this Plan shall be construed and enforced as if said illegal and invalid provisions had never been inserted.

13.07  Headings and Underlines.  Headings on Articles and Sections and underlines are inserted solely for convenience and reference, and constitute no part of the Plan.

13.08  Written Instructions.  Whenever the Plan requires written notice or instructions to the Company from a Member, such notice or instructions may be given by such means, including the use of any interactive telephonic message system as may be approved by the Company from time to time for such use.

13.09  Governing Law.  The Plan shall be governed by and construed in accordance with ERISA and other federal laws governing employee benefit plans qualified under the Code and in accordance with the laws of the State of Colorado where such laws do not conflict with the aforementioned federal laws.

  

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APPENDIX RELATED TO XCEL MERGER

Notwithstanding anything in this Plan to the contrary,

	
  

	
A.

	
Commencing on the effective date (hereinafter, the “Merger Date”), of the merger of New Century Energies, Inc. (hereinafter “NCE”) and Northern States Power Company (hereinafter “NSP”) to form Xcel Energy Inc. (hereinafter “Xcel”), the individuals who will be eligible to accrue benefits under this Plan with respect to service and compensation on or after the Merger Date are limited to the following:

	
  

	
(1)

	
Those persons who were accruing benefits under this Plan (or who would have been eligible to accrue benefits under this Plan if they had satisfied any applicable age and/or service requirements) immediately prior to the Merger Date.

	
  

	
(2)

	
Persons who are hired by Xcel or a subsidiary of Xcel after the Merger Date in a position or job category that was covered by this Plan immediately prior to the Merger Date and whose principal place of employment is at a facility or location that was owned and/or operated by NCE or an NCE subsidiary and was covered by this Plan immediately prior to the Merger Date.

	
  

	
(3)

	
Any person who was a Member in this Plan at some time prior to the Merger Date, who had ceased to accrue benefits under this Plan due to a termination of employment prior to the Merger Date, who had not become a participant in any qualified retirement plan sponsored by NSP or an NSP subsidiary at any time after such termination of employment and prior to the Merger Date, who was not employed by NCE, NSP or any of their subsidiaries immediately prior to the Merger Date, and who is rehired by Xcel or a subsidiary of Xcel after the Merger Date.

	
  

	
B.

	
For purposes of applying paragraph A. of this Appendix,

	
  

	
(1)

	
Any individual (i) who was actively participating in and accruing benefits under any qualified retirement plan sponsored by NSP or an NSP subsidiary immediately prior to the Merger Date (or who would have been participating in such an NSP plan if he or she had satisfied any applicable age and/or service requirements), or (ii) who became a participant in such an NSP retirement plan after the Merger Date, shall not be eligible to participate in or accrue benefits under this Plan after the Merger Date, even if the individual subsequently satisfies the requirements of paragraph A.  The previous sentence also applies to any individual who was a participant in such an NSP retirement plan at some time prior to the Merger Date, who had ceased to accrue benefits under such NSP retirement plan due to a termination of employment prior to the Merger date, who had not become a participant in this Plan at any time after such termination of employment and prior to the Merger Date, who was not employed by NCE, NSP or any of their subsidiaries immediately prior to the Merger Date, and who is rehired by Xcel or a subsidiary of Xcel after the Merger Date.

  

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(2)

	
Any individual (other than an individual described in paragraph B(1), above) who (i) has satisfied the requirements of paragraph A(1), A(2) or A(3), and (ii) is subsequently transferred to the employ of an Xcel subsidiary that is not a participating employer in this Plan, or to an Xcel facility or location that was not owned and/or operated by NCE or an NCE subsidiary immediately prior to the Merger Date, will nevertheless continue to participate in this Plan following the transfer.  An Xcel subsidiary that is not otherwise a participating employer in this Plan, but that employs one or more transferred participants described in this paragraph B(2) following the transfer, shall be deemed to be a participating employer in this Plan solely with respect to such transferred participants.

	
  

	
(3)

	
Notwithstanding paragraph B(2), if an individual described in that paragraph is employed following the transfer in a collective bargaining unit that is not covered by this Plan, paragraph B(2) shall not apply, the individual shall cease to actively participate in and accrue benefits under this Plan following the transfer, and the individual shall become eligible to participate following the transfer in any qualified retirement plan that covers that collective bargaining unit pursuant to the terms of such plan.  The previous sentence shall also apply to any individual who is rehired by Xcel or a subsidiary of Xcel after the Merger Date in a collective bargaining unit that is not covered by this Plan, notwithstanding anything in this Appendix to the contrary.

	
  

	
(4)

	
If an individual (other than an individual described in paragraph B(1)) who meets the requirements of paragraph A(1), A(2) or A(3) is subsequently transferred from a position or job category that was covered by this Plan prior to the Merger Date to a position or job category that was covered prior to the Merger Date by another qualified retirement plan of the same type (i.e. defined benefit or defined contribution) that was sponsored by NCE prior to the Merger Date, or if an individual covered by such other NCE plan at any time following the Merger Date is subsequently transferred to a position or job category covered by this Plan, the individual’s participation in this Plan or the other NCE Plan following the transfer shall be determined pursuant to the provisions of the applicable NCE plans in effect immediately prior to the Merger Date.

	
  

	
C.

	
If an individual who does not satisfy the requirements of paragraph A(1), A(2) or A(3) remains entitled to a benefit under this Plan that accrued prior to the Merger Date, such benefit shall continue to be held under the provisions of this Plan in effect at the applicable times prior to the Merger Date for distribution pursuant to such provisions following the termination of the individual’s employment with Xcel and the subsidiaries of Xcel (or the occurrence of any other event that permits distribution of such benefit).

 

 

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