Document:

Exhibit

        
Exhibit 10.13

ONE GAS, INC. 
PERFORMANCE UNIT AWARD AGREEMENT
This Performance Unit Award Agreement (this “Agreement”) is made and entered into as of February 18, 2019 (the “Grant Date”) by and between ONE Gas, Inc., an Oklahoma corporation (the “Company”) and [NAME] (the “Participant”).
WHEREAS, the Company has adopted the ONE Gas, Inc. Amended and Restated Equity Compensation Plan (2018), as amended from time to time (the “Plan”), pursuant to which Performance Unit Awards may be granted; and
WHEREAS, the Executive Compensation Committee of the Board of Directors (the “Committee”) has determined that it is in the best interests of the Company and its shareholders to grant the Performance Unit Award provided for herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:
1.Grant of Performance Units.
1.1    The Company hereby grants to the Participant an award consisting of [NUMBER] Performance Units (“Performance Units” or the “Award”) on the terms and conditions set forth in this Agreement, the Notice of Performance Unit Award and Agreement dated February 18, 2019, a copy of which is attached hereto and incorporated herein by reference, and the Plan.  The Performance Units are contingently awarded and will be earned if and only to the extent that the performance goal described on Exhibit A (the “Performance Goal”) is met and vested and distributable only if other conditions in this Agreement are met.  Each Performance Unit represents the right to receive one share of the Company’s common stock (“Share”) or, at the Company’s option, an amount of cash as set forth in Section 6.2, in either case, at the times and subject to the conditions set forth herein.  The number of Performance Units set forth above is equal to a target number of Shares that the Participant will earn for 100% achievement of the Performance Goal (the “Target Award”).  Capitalized terms that are used but not defined herein have the meanings set forth in the Plan.
1.2    The Performance Units shall be credited to a separate account maintained for the Participant on the books and records of the Company (the “Account”).  All amounts credited to the Account shall continue for all purposes to be part of the general assets of the Company.
2.    Consideration. The Award is granted in consideration of the Participant’s continued employment with the Company.  

3.    Vesting.
3.1    General.  Except as provided in this Section 3, subject to Participant’s continuous employment with the Company during the period beginning on the Grant Date and ending on February 19, 2022 (the “Performance Period”) and subject to the terms of this Agreement, the Participant shall vest at the end of the Performance Period in the number of Performance Units, if any, earned upon, and certified following, the attainment of the Performance Goal as of the end of the Performance Period.  Any Performance Units that do not vest as of the end of the Performance Period shall be forfeited.  Performance Units that vest pursuant to the terms of this Agreement, including Sections 3.2 and 3.3 below, are hereinafter referred to as “Vested Units” and the date upon which the Performance Units vest is hereinafter referred to as a “Vesting Date.”  Unless and until the Performance Units have vested, Participant will have no right to receive any Shares subject thereto.  Prior to the actual delivery of any Shares, the Award will represent an unsecured obligation of the Company, payable only from the Company’s general assets.    
3.2    Termination of Employment.  If prior to the end of the Performance Period, the Participant ceases to be employed by the Company on account of the Participant’s Retirement, Total Disability or death, the Participant will vest in a pro-rata portion of the Performance Units as of the last day of the Performance Period if the Performance Goal and requirements of this Agreement are met as of such date.  The pro-rata portion of the Performance Units that vest will be determined by multiplying (x) the maximum number of Performance Units in which the Participant could vest, based on the actual level at which the Performance Goal is attained and certified for the Performance Period, as if the Participant remained in the employ of the Company through the end of the Performance Period, by (y) a fraction, which fraction shall be equal to the number of full months which have elapsed under the Performance Period at the time of such termination of employment by the number of full months in the Performance Period.  If the Participant’s employment with the Company terminates prior to the end of the Performance Period for any other reason, Participant shall immediately forfeit any and all Performance Units that have not vested or do not vest on or prior to the Participant’s termination date and neither the Company nor any Subsidiary shall have any further obligations to the Participant under this Agreement.   For purposes of this Agreement, employment with any Subsidiary of the Company shall be treated as employment with the Company.  Likewise, a termination of employment shall not be deemed to occur by reason of a transfer of employment between the Company and any Subsidiary.  For purposes of this Agreement:
		
	(a)
	“Retirement” means a voluntary termination of employment of the Participant with the Company by the Participant if at the time of such termination of employment the Participant has both completed five (5) years of service with the Company and attained age fifty (50).

		
	(b)
	“Total Disability” means that the Participant is permanently and totally disabled and unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, and has established such disability to the extent and in the manner and form as may be required by the Committee.  

3.3    Change in Control.  If a Change in Control occurs prior to the end of the Performance Period and the Participant is employed by the Company at the time of the Change in Control, but subsequently terminates prior to the end of the Performance Period based on an involuntary termination (without cause) or a voluntary termination with “good reason” within 24 months of the Change in Control date, then the Performance Period will end on the date of the termination due to the Change in Control and the Performance Units will be deemed vested at the Target Award level as of the date of the termination due to Change in Control (the “Change in Control Date”).  Good reason includes:
		
	•
	Demotion or material reduction of authority or responsibility;

		
	•
	Material reduction in base salary;

		
	•
	Material reduction in annual incentive or LTI targets;

		
	•
	Relocation of greater than 35 miles; or

		
	•
	Failure of the successor company to assume the change-in-control plan.

Notwithstanding the foregoing, the provisions set forth in the Plan applicable to a Change in Control shall apply to the Award, and in the event of a Change in Control, the Committee, in its sole discretion and to the extent permitted by Section 409A, may take such actions as it deems appropriate pursuant to the Plan.  For purposes of this Agreement, the term “Change in Control” shall have the same meaning as provided in the Plan unless the Award is or becomes subject to Code Section 409A, in which event “Change in Control” shall have the meaning provided in Code Section 409A and the related Treasury Regulations.
3.4    Certification.  Except in the event of a Change in Control, the Committee shall, within a reasonably practicable time following the end of the Performance Period, certify to the extent, if any, to which the Performance Goal has been achieved with respect to the Performance Period and the number of Performance Units, if any, earned upon attainment of the Performance Goal.  Such certification shall be final, conclusive and binding on the Participant, and on all other persons, to the maximum extent permitted by law.  

4.    Transfer Restrictions.  
4.1    Except as provided in Section 4.2, during the Performance Period and until such time as the Shares underlying the Vested Units have been issued, the Performance Units, related Shares or the rights relating thereto may not be sold, pledged, assigned, transferred or otherwise disposed of by the Participant in any manner other than by will or by laws of descent and distribution.   Except as provided in Section 4.2, any attempt to sell, pledge, assign, transfer or otherwise dispose of the Performance Units, related Shares or the rights relating thereto shall be wholly ineffective and, if any such attempt is made, the Performance Units, related Shares or the rights relating thereto will be forfeited by the Participant and all of the Participant's rights to such units or related Shares shall immediately terminate without any payment or consideration by the Company.
4.2    Notwithstanding the foregoing, the Participant may transfer any part or all of the Participant’s rights in the Performance Units to members of the Participant’s immediate family, or to one or more trusts for the benefit of such immediate family members, or partnerships in which such immediate family members are the only partners if the Participant does not receive any consideration for the transfer.  In the event of any such transfer, Performance Units shall continue to be subject to the same terms and conditions otherwise applicable hereunder and under the Plan immediately prior to transfer, except that such rights shall not be further transferable by the transferee inter vivos, except for transfer back to the Participant.  For any such transfer to be effective, the Participant must provide prior written notice thereof to the Committee and the Participant shall furnish to the Committee such information as it may request with respect to the transferee and the terms and conditions of any such transfer.  For purposes of this Agreement, “immediate family” shall mean the Participant’s spouse, children and grandchildren.
5.    Dividend Equivalents.  During the Performance Period, the Participant's Account shall be credited with an amount equal to all ordinary cash dividends (“Dividend Equivalents”) that would have been paid to the Participant if one Share had been issued on the Grant Date for each Performance Unit granted to the Participant as set forth in this Agreement.   The Dividend Equivalents credited to the Participant’s Account will be deemed to be reinvested in additional Performance Units (or fractional units) and will be subject to the same terms and conditions as the Performance Units to which they are attributable and shall vest or be forfeited (if applicable) and settled at the same time as the Performance Units to which they are attributable. Such additional Performance Units shall also be credited with additional Dividend Equivalents as any further dividends are declared.  

6.    Time and Form of Payment with Respect to Vested Units.  
6.1    Unless an election is made pursuant to Section 7 below and subject to Section 10 and Section 23.2 and subject to certification by the Committee that the Performance Goal has been achieved and other vesting conditions have been satisfied, the Participant will receive a distribution with respect to the Vested Units within 75 days following the earlier of (i) the last day of the Performance Period (the “Distribution Date”) or (ii) the date of termination due to a Change in Control as described in 3.3.  The Vested Units will be settled and distributed in Shares (either in book-entry form or otherwise) or, at the Company’s option, paid in an amount of cash as set forth in Section 6.2.   All distributions in Shares shall be in the form of whole Shares, and any fractional Share shall be distributed in cash in an amount equal to the value of such fractional Share determined based on the Fair Market Value of a Share on the Vesting Date.  
6.2    If the Company elects to settle the Participant’s Vested Units in cash, the amount of cash payable with respect to each Vested Unit shall be equal to the Fair Market Value of a Share on the Vesting Date.   
6.3    To the extent that the Participant does not vest in any Performance Units on or before the end of the Performance Period, all interest in such Performance Units and any additional Performance Units attributable to Dividend Equivalents shall be forfeited.  The Participant has no right or interest in any Performance Units that are forfeited.
7.    Deferral Election for Officers.  
7.1    If the Participant is an officer of the Company, the Participant may irrevocably elect to defer the Distribution Date of Performance Units, Shares and cash that the Participant becomes entitled to receive under this Agreement (the “Deferred Amounts”) to a later date, by filing with the Committee, on or before the deferral election date (the “Election Deadline”) described in Section 7.2 below, a signed written irrevocable election (the “Election”) which shall be in the form substantially the same as attached hereto as Exhibit D, or as otherwise approved by the Committee. 
7.2    Any such Election shall be filed with the Committee on or before the Election Deadline, which shall be August 19, 2021, the date that is six (6) months before the end of the Performance Period, and shall become effective and irrevocable on such date provided that the Participant performs services for the Company continuously from the later of the beginning of the Performance Period or the date the Performance Goal was established through the Election Deadline.  Notwithstanding the foregoing, in no event shall the Participant’s Election become effective if any portion of the Deferred Amounts has become readily ascertainable (within the meaning of Section 409A) and is substantially certain to be paid the Participant as of the Election Deadline.  To defer the Distribution Date, the Participant must elect to defer one-hundred percent 

(100%) of the Deferred Amounts.  Subject to Section 23.2, the Deferred Amounts shall be distributed to Participant at the time and in the form set forth in the Election (the “Deferred Date”).  Notwithstanding a Participant’s Election pursuant to this Section 7, if a Change in Ownership or Control (within the meaning of Section 409A) occurs prior to the Deferred Date, the Deferred Amounts will be distributed to the Participant on the date of the Change in Ownership or Control.  
7.3    This Section 7 shall be applicable solely to the Award and shall not apply to any other compensation payable to the Participant under the Plan or otherwise.  The right to make a deferral election under this Section 7 is expressly limited to officers of the Company or any subset thereof as determined by the Committee from time to time.  This Agreement shall not permit a subsequent election to delay or modify the form of payment unless authorized and agreed upon in writing by the Company and Participant and such subsequent election complies with Section 409A.
8.    Conditions to Issuance or Transfer of Shares.  The issuance and transfer of Shares shall be subject to compliance by the Company and the Participant with all applicable laws, rules and regulations (“Applicable Laws”) and also to such approvals by governmental agencies as may be deemed appropriate to comply with relevant securities laws and regulations.  No Shares shall be issued or transferred unless and until any then applicable requirements of Applicable Laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel.   
9.    Tax Withholding.  Participant shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Participant pursuant to the Plan, the amount of any required federal, state and local taxes, domestic or foreign, including payroll taxes, in respect of the Award and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes.  The Company shall have no obligation to issue any Shares to any Participant unless and until the Participant has made arrangements, satisfactory to the Company in its sole discretion, to satisfy the Participant’s tax liability resulting from the vesting or settlement of the Vested Units.  The amount of such withholding shall be determined by the Company.  The Committee, in its sole discretion, may permit or require the Participant to satisfy any such tax withholding obligation by any of, or a combination of, the following means: 
9.1    tendering a cash payment or check payable to the Company.
9.2    authorizing the Company to withhold an amount from any cash amounts otherwise due or to become due from the Company to the Participant.

9.3    authorizing the Company to withhold Shares from the Shares otherwise issuable to the Participant as a result of the vesting of the Performance Units; provided, however, that no Shares shall be withheld with a Fair Market Value exceeding the maximum amount of tax required to be withheld by Applicable law.
9.4    delivering to the Company previously owned and unencumbered Shares having a then current Fair Market Value not exceeding the maximum amount of tax required to be withheld by Applicable Law.  
10.    Rights as Shareholder. Except as otherwise provided in the Agreement, the Participant shall not have any of the rights or privileges of a shareholder with respect to the Shares underlying the Performance Units unless and until the Performance Units vest and certificates representing such Shares (which may be in book-entry form) have been issued and recorded on the Company’s records, and delivered to the Participant or to an escrow account for the Participant’s benefit.  After such issuance, recordation and delivery, Participant will have the rights of a shareholder of the Company with respect to such Shares, including without limitation, voting rights and the right to receipt of dividends and distributions on such Shares.    
11.    No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Participant to serve as an employee or other service provider of the Company.  Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the services of the Participant at any time, with or without Cause. 
12.    Adjustments.  In the event of a change in capitalization described in Section 13 of the Plan prior to the end of the Performance Period, other than a dividend described in Section 5 above, the Performance Units shall be equitably adjusted or terminated in any manner contemplated by the Plan to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Award.  
13.    Required Participant Repayment/Reduction Provision.  Notwithstanding anything in the Plan or this Agreement to the contrary, all or a portion of the Award made to the Participant under this Agreement is subject to being called for repayment to the Company or reduced in any situation required by law or as specified by Company policy in effect at the time of the request for repayment or reduction is made.  In any event, even if not required by law or Company policy, in any situation where the Board or a committee thereof determines that fraud, negligence, or intentional misconduct by the Participant was a contributing factor to the Company having to restate all or a portion of its financial statement(s), the Committee may request repayment or reduction. The Committee may determine whether the Company shall effect any such repayment or reduction: (i) by seeking repayment from the Participant, (ii) by reducing (subject to Applicable Law and the Plan’s terms and conditions or any other applicable 

plan, program, or arrangement) the amount that would otherwise be awarded or payable to the Participant under the Award, the Plan or any other compensatory plan, program, or arrangement maintained by the Company, (iii) by withholding payment of future increases in compensation (including the payment of any discretionary bonus amount) or grants of compensatory awards that would otherwise have been made in accordance with the Company’s otherwise applicable compensation practices, or (iv) by any combination of the foregoing. The determination regarding the Participant’s conduct, and repayment or reduction under this provision shall be within the Committee’s sole discretion and shall be final and binding on the Participant and the Company. The Participant, in consideration of the grant of the Award, and by the Participant's execution of this Agreement, acknowledges the Participant's understanding and agreement to this provision, and hereby agrees to make and allow an immediate and complete repayment or reduction in accordance with this provision in the event of a call for repayment or other action by the Company or Committee to effect its terms with respect to the Participant, the Award and/or any other compensation described herein.
14.    Company Policies.  The Participant agrees that the Award will be subject to any applicable insider trading policies, retention policies and other policies that may be implemented by the Board, from time to time.
15.    Participant Undertaking.  The Participant agrees to take whatever additional actions and execute whatever additional documents the Company may in its reasonable judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on the Participant pursuant to the terms of this Agreement.  It is intended by the Company that the Plan and Shares covered by the Award are to be registered under the Securities Act of 1933, as amended, prior to the grant date; provided that in the event such registration is for any reason not effective for such Shares, the Participant agrees that all Shares acquired pursuant to the grant will be acquired for investment and will not be available for sale or tender to any third party.
16.    Beneficiary.  The Participant may designate a Beneficiary to receive any rights of the Participant which may become vested in the event of the Participant’s death under procedures and in the form established by the Committee; and in the absence of such designation of a Beneficiary, any such rights shall be deemed to be transferred to the Participant’s estate.  
17.    Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Senior Vice President-Administration and Chief Information Officer, or his successor in charge of compensation and benefits in Human Resources, of the Company at the Company's principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant's address as shown in the records of the Company. Either party may designate another 

address in writing (or by such other method approved by the Company) from time to time.  Any notice shall be delivered by hand, sent by telecopy or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage prepaid, in a post office regularly maintained by the United States Postal Service. 
18.    Incorporation of the Plan; Conflicts. The Performance Units and the Shares issued to Participant hereunder are subject to the terms and conditions set forth in this Agreement and the Plan, which is incorporated herein by reference. In the event of any inconsistency between (1) the Plan and this Agreement, the Plan will control, or (2) the resolutions and records of the Board or Committee and this Agreement, the resolutions and records of the Board or Committee will control.  
19.    Successors and Assigns. The Company may assign any of its rights under this Agreement, and this Agreement will be binding upon and inure to the benefit of the Company’s successors and assigns. Subject to the restrictions on transfer set forth herein and the Plan, this Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.  
20.    No Impact on Other Benefits. The Company does not intend for the value of the Award or any Vested Units to be included in the Participant’s normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit; provided, however, that if there is any inconsistency between this Agreement and the terms of another benefit plan, the benefit plan document will control.  
21.    Discretionary Nature of Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Board at any time, in its discretion. The grant of the Performance Units in this Agreement does not create any contractual right or other right to receive any Performance Units or other awards in the future. Future awards, if any, will be at the Committee’s sole discretion. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant's employment with the Company. 
22.    Amendment. In accordance with the Plan, the Committee may amend or otherwise modify, suspend, discontinue or terminate this Agreement at any time, prospectively or retroactively.  
23.    Section 409A. 
23.1    This Award and Agreement is intended to comply with Section 409A or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A.  Notwithstanding any other provision of the Agreement, any distributions or payments due hereunder may only be 

made upon an event and in a manner that complies with Section 409A or an applicable exemption. Any distributions or payments due hereunder upon a termination of employment shall only be made upon a "separation from service" as defined in Section 409A.  The right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments.  Except as provided in Section 7, in no event may the Participant, directly or indirectly, designate the calendar year of settlement, distribution or payment.   
23.2    If an Award is subject to Section 409A and Participant becomes entitled to settlement of the Award on account of a separation from service and is a “specified employee” within the meaning of Section 409A on the date of the separation from service, then to the extent necessary to prevent any accelerated or additional tax under Section 409A, such settlement will be delayed until the earlier of: (a) the date that is six months following the Participant's separation from service and (b) the Participant’s death (the “Delayed Payment Date”) and the accumulated amounts shall be distributed or paid in a lump sum payment on the Delayed Payment Date. 
23.3    The Company does not represent that the Award or this Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with Section 409A. 
23.4    To the extent that any provision of the Agreement would cause a conflict with the requirements of Section 409A, or would cause the administration of the Agreement to fail to satisfy Section 409A, such provision shall be deemed null and void to the extent permitted by Applicable Law.
24.    Entire Agreement.  The Plan and this Agreement (including any exhibit hereto) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof. 
25.    Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
26.    Governing Law. This Agreement will be construed and interpreted in accordance with the laws of the State of Oklahoma without regard to the conflict of laws provisions thereof.    
27.    Counterparts. This Agreement may be executed in one or more counterparts, including by way of electronic signature, subject to Applicable Law, each of which shall be deemed an original and all of which together will constitute one instrument. 

28.    Administration of Award; Acceptance. As a condition of receiving this Award, the Participant agrees that the Committee shall have full and final authority to construe and interpret the Plan and this Agreement, and to make all other decisions and determinations as may be required under the Plan or this Agreement as they may deem necessary or advisable for administration of the Plan or this Agreement, and that all such interpretations, decisions and determinations shall be final and binding on the Participant, the Company and all other interested persons.  Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review.  The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.  Day-to-day authority and responsibility has been delegated to the Company’s ONE Gas, Inc. Benefits Committee and its authorized representatives, and all actions taken thereby shall be entitled to the same deference as if taken by the Committee itself.

The Participant hereby acknowledges receipt of this Agreement, the Notice of Performance Unit Award and Agreement dated February 18, 2019, and a copy of the Plan.  Participant agrees to be bound by all of the provisions set forth in this Agreement and the Plan and acknowledges that there may be adverse tax consequences upon the vesting or settlement of the Performance Units or disposition of the underlying Shares and that Participant has been advised to consult a tax advisor prior to such vesting, settlement or disposition.  Participant accepts the Award under the terms and conditions stated in this Agreement, subject to all terms and provisions of the Plan, by electronic acceptance of the grant. 

        
Exhibit 10.13

Exhibit A 
Performance Unit Performance Goal 
2019-2022 Performance Period
Subject to the terms of the Agreement, Participant shall vest in a percentage of the Target Award (including any Dividend Equivalents) at the end of the Performance Period based on the Company’s ranking for Total Stockholder Return against the ONE Gas Peer Group listed in Exhibit C, all as determined by the Committee in its sole discretion.  Exhibit B is an illustration of Hypothetical Performance.
        

The number of PSUs awarded at the time of vesting is based on our TSR positioning as a percentage basis at the end of the three-year performance period as set forth in the following chart.  If the actual TSR percentile rank falls between the stated percentile ranks set forth in the chart, the payout percentage is interpolated between the percentile rank above and below the actual percentile rank, except that no Performance Units are earned if ONE Gas’s TSR ranking at the end of the Performance Period is below the 25th percentile.

	
		
	 
	 

	Percentile Rank
	Payout (as a % of Target)

	 
	 

	90th percentile and above
	200%

	75th percentile
	150%

	50th percentile
	100%

	25th percentile
	50%

	Below the 25th percentile
	0%

        
Exhibit 10.13

Exhibit B 
Illustration of Hypothetical 2019-2022 Performance Period 
Performance Unit Award Calculation
Illustration assumes 500 Performance Units Granted in February 2019

	
	
	Total Stockholder Return (TSR) vs. ONE Gas Peer Group

	

Hypothetical 2019-2022 ONE Gas TSR Ranking = 40th percentile

A 40th percentile TSR ranking earns 80% of Performance Units granted (i.e., 500 units) 
as interpolated between 50% and 100% from Exhibit A (see chart above)

400 Performance Units earned*

	
	
	Total Performance Units Earned

	

400 Performance Units

400* Performance Units earned out of 500 units granted = 80% “earn-out” 
[80% of 500 shares paid and distributed in the form of Shares]

        
Exhibit 10.13

*In addition, applicable Dividend Equivalents will be added with an 80% “earn-out”.

        
Exhibit 10.13

Exhibit C

2019-2022 ONE GAS TSR Peer Group
	
		
	Company Name
	Sym

	Alliant Energy Corporation
	LNT

	Atmos Energy Corporation
	ATO

	Avista Corporation
	AVA

	CenterPoint Energy
	CNP

	Chesapeake Utilities
	CPK

	CMS Energy Corporation
	CMS

	New Jersey Resources Corporation
	NJR

	NiSource
	NI

	Northwest Natural Gas Company
	NWN

	NorthWestern Corporation
	NWE

	South Jersey Industries, Inc.
	SJI

	Southwest Gas Corporation
	SWX

	Spire, Inc.
	SR

In the event that any of the Peer Group companies are not available for performance comparison either by going out of business, being sold, being merged into another company or any other reason, then that company will be dropped from the list and the performance comparison will be made with the remaining Peer Group companies.

        
Exhibit 10.13

Exhibit D
 
ONE Gas, Inc.  
Amended and Restated Equity Compensation Plan (2018)
Performance Unit Deferral Election

INSTRUCTIONS:  This Deferral Election must be completed and returned to the plan administrator at ONE Gas, Inc. no later than August 19, 2021 (the “Election Deadline”).  This election becomes irrevocable as of the Election Deadline; provided, however, this election shall only become effective to the extent permitted by Section 409A.    

This Election is made by the undersigned Participant pursuant to the terms of the ONE Gas, Inc. Amended and Restated Equity Compensation Plan (2018), as amended from time to time (the “Plan”) and that certain Performance Unit Award Agreement issued to me under the Plan on the 18th day of February, 2019 (the “Agreement”).  Capitalized terms that are used but not defined herein have the meanings set forth in the Agreement.

1.    Irrevocable Elections as to the Time and Form of Payment

I hereby irrevocably elect to defer the payment and my receipt of all Performance Units, Shares and cash that I may become entitled to receive pursuant to the Agreement (the “Deferred Amounts”) from the regularly scheduled time of payment set forth in Section 6 of the Agreement until a later date as follows:

A.     Specified Time of Payment Election (Put initials by your choice)

___    I elect to have the Deferred Amounts deferred and paid to me on the later of (i) the date of my separation from service as an employee of the Company, or (ii) [________, 20__] in the form specified below.

___    I elect to have the Deferred Amounts deferred and paid to me on the date of my separation from service as an employee of the Company in the form specified below. 

B.     Form of Payment Election (Put initials by your choice) 

___      I elect to receive the Deferred Amounts in a single lump sum payment.

____    I elect to receive the Deferred Amounts in ______ (specify 2, 3, 4 or 5) equal annual installments commencing on the Specified Time of Payment that I have elected in Part A above, until fully paid. The number of Shares or cash received in each installment will equal the number and amount, respectively, that have not been paid as of the date immediately preceding the installment payment date, divided by the number of installments remaining to be paid as of the date immediately preceding 

        
Exhibit 10.13

the installment payment date.  The resulting number shall be rounded down to the next whole number, except that the final installment shall be rounded up to the next whole number.

C.     Election in the Event of Death (Put initials by your choice)

___    In the event of my death prior to, or after, the Specified Time of Payment that I have elected above, I elect to have my named beneficiaries (or my estate, if I do not have any designated beneficiaries) receive payment and transfer of the Deferred Amounts in a single lump sum within 60 days following my death.

___    In the event of my death prior to, or after, the Specified Time of Payment that I have elected above, I elect to have my named beneficiaries (or my estate, if I do not have any designated beneficiaries) receive payment and transfer of the Deferred Amounts in ______ (specify 2, 3, 4 or 5) equal annual installments commencing within 60 days following my death, until fully paid. The number of Shares or cash received in each installment will equal the number and amount, respectively, that have not been paid as of the date immediately preceding the installment payment date, divided by the number of installments remaining to be paid as of the same date.  The resulting number shall be rounded down to the next whole number, except that the final installment shall be rounded up to the next whole number.

D.    Change in Ownership or Control (Mandatory Distribution)

Notwithstanding the above elections, if a Change in Ownership or Control (within the meaning of Section 409A) occurs prior to the full distribution of the Deferred Amounts, all Deferred Amounts that have not been paid and transferred will be paid and transferred on the date of the Change in Ownership or Control.  In the event Shares no longer exist at the time of payment and transfer, each of the deferred Performance Units shall be converted in a manner that is consistent with the manner in which Shares held by shareholders of the Company were treated with respect to the Change in Ownership or Control.

2.    Additional Terms

		
	A.
	Unforeseeable Emergency.  You may request an accelerated payment of all or a portion of the Deferred Amounts if you experience an Unforeseeable Emergency (as defined in the Plan), subject to the requirements set forth in Plan Section 11.5.   If approved, payment shall be made in a single lump sum within 90 days after the approval date.  

		
	B.
	Specified Employee.  If you become entitled to a distribution on account of a separation from service and you are “specified employee” (within the meaning of 

        
Exhibit 10.13

Section 409A) on the date of your separation from service, payment of all or a portion of your Deferred Amounts may be delayed in accordance with Plan Section 11.4.    
		
	C.
	Re-deferrals and Changing the Form of Payment. You may, at the Committee’s discretion, be permitted to make a re-deferral election with respect to the amounts deferred hereunder in accordance with Plan Section 11.3.

		
	D.
	Withholding.  You will be required to satisfy any tax withholding obligations relating to the Deferred Amounts, and delivery of the Shares or cash will be conditional upon your satisfaction of such obligations. 

 
3.    Acknowledgment

By executing this Election, I acknowledge that:

		
	A.
	I have read the terms of the Plan, the Agreement and this Election and agree to all the terms and conditions.  

		
	B.
	I understand that any amounts that I defer hereunder are unfunded and unsecured and subject to the claims of the Company’s creditors in the event of the Company’s insolvency.

		
	C.
	I understand that the Plan, the Agreement and this Election are intended to comply with Section 409A and that they will be interpreted accordingly.  However, I understand that the Company will have no liability with respect to any failure to comply with Section 409A. 

		
	D.
	I understand that this Election will become irrevocable as of the Election Deadline.  

		
	E.
	I have consulted with my own tax advisor regarding the tax consequences of participating in the Plan and making this election.

I hereby make this election as of this ___ day of ____, 20__.  

_____________________________________
Participant Signature

_____________________________________
Print Participant’s Name

_____________________________________
Employee ID Number

Copy received this ____ day of ________, 20__,

        
Exhibit 10.13

______________________________________
For the Committeeonegasinc401kplanrestate

                                                                                                   Exhibit 10.19                                                                                                                                                                     ONE GAS, INC. 401(k) PLAN   AS AMENDED AND RESTATED       Effective January 1, 2018                   

 

                               ONE GAS, INC. 401(k) PLAN                             AS AMENDED AND RESTATED                                Effective January 1, 2018                                TABLE OF CONTENTS                                                                               Page  ARTICLE                                                                  Number   ARTICLE I. DEFINITIONS ............................................................................................................... 2    1.    401(k) Contribution ............................................................................................................ 2    2.    401(k) Contribution Account .............................................................................................. 2    3.    Accrued Benefit .................................................................................................................. 2    4.    Actual Deferral Percentage ................................................................................................. 2    5.    Affirmative Election ........................................................................................................... 2    6.    After-Tax Deposits ............................................................................................................. 2    7.    Applicable Individual ......................................................................................................... 3    8.    Automatic Contribution Arrangement ................................................................................ 3    9.    Bargaining Unit Employee ................................................................................................. 3    10.   Bargaining Unit Participant ................................................................................................ 3    11.   Board or Board of Directors ............................................................................................... 3    12.   Catch-Up Contribution ....................................................................................................... 3    13.   Code .................................................................................................................................... 3    14.   Committee ........................................................................................................................... 3    15.   Company ............................................................................................................................. 3    16.   Company Matching Contributions ..................................................................................... 3    17.   Compensation ..................................................................................................................... 4    18.   Controlled Affiliate Business Organization ........................................................................ 5    19.   Designation Date................................................................................................................. 5    20.   Dividends ............................................................................................................................ 5    21.   ERISA ................................................................................................................................. 5    22.   ESOP Dividend Distribution .............................................................................................. 5    23.   ESOP Dividend/401(k) Deferrable Amount ....................................................................... 6    24.   ESOP Dividend Distribution/Additional Deferral .............................................................. 6    25.   ESOP Dividend Distribution/Additional Deferral Contribution ........................................ 6    26.   ESOP Dividends ................................................................................................................. 6    27.   Effective Date ..................................................................................................................... 6    28.   Elective Deferrals ............................................................................................................... 6                                          i     

 

                 29.   Employee ............................................................................................................................ 6  30.   Employee Contribution Account ........................................................................................ 7  31.   Employee Stock Ownership Plan ....................................................................................... 7  32.   Employer Contribution Account ......................................................................................... 7  33.   Excess Aggregate Contributions ......................................................................................... 7  34.   Excess Contributions .......................................................................................................... 7  35.   Excess Deferrals ................................................................................................................. 7  36.   Group A Bargaining Unit Participant ................................................................................. 7  37.   Group B Bargaining Unit Participant ................................................................................. 7  38.   Highly Compensated Employee ......................................................................................... 8  39.   Hours of Service ................................................................................................................. 8  40.   Independent Contractor....................................................................................................... 9  41.   KGS 401(k) Thrift Plan ...................................................................................................... 9  42.   Leased Employee ................................................................................................................ 9  43.   Matching Contribution Percentage ..................................................................................... 9  44.   Matching Contributions .................................................................................................... 10  45.   Non-Bargaining Unit Employee ....................................................................................... 10  46.   Non-Bargaining Unit Participant ...................................................................................... 10  47.   One-Year Break in Service ............................................................................................... 10  48.   ONEOK ............................................................................................................................ 10  49.   ONEOK, Inc. 401(k) Plan................................................................................................. 10  50.   Participant ......................................................................................................................... 10  51.   Participant Account........................................................................................................... 10  52.   Plan ................................................................................................................................... 10  53.   Plan Year........................................................................................................................... 10  54.   Pre-1987 Employee Contribution Account....................................................................... 11  55.   Pre-1999 KGS 401(k) Thrift Plan Account ...................................................................... 11  56.   Pre-1999 ONEOK Thrift Plan Account ............................................................................ 11  57.   Prior ONEOK, Inc. Thrift Plan ......................................................................................... 11  58.   Qualified Default Investment Alternative......................................................................... 11  59.   Qualified Matching Contributions .................................................................................... 11  60.   Qualified Nonelective Contributions ................................................................................ 11  61.   Qualified Reservist Distribution ....................................................................................... 11  62.   Qualifying Employer Stock (and/or Qualifying Employer Security(ies) ......................... 11  63.   Reduction in Compensation .............................................................................................. 12  64.   Roth 401(k) Elective Deferral........................................................................................... 12  65.   Roth 401(k) Elective Deferral Account ............................................................................ 12  66.   Salaried Employee ............................................................................................................ 12  67.   Section 16 Person.............................................................................................................. 12                                       ii                  

 

      68.   Separate Section 72(d) Employee Contribution Account ................................................. 12    69.   Severance of Employment ................................................................................................ 12    70.   Sponsor Committee........................................................................................................... 12    71.   Spouse ............................................................................................................................... 12    72.   Subsidiary (and Subsidiaries) ........................................................................................... 13    73.   Subsidiary Corporation ..................................................................................................... 13    74.   Transferred KGS 401(k) Thrift Plan Account .................................................................. 13    75.   Trust .................................................................................................................................. 13    76.   Trustee .............................................................................................................................. 13    77.   USERRA ........................................................................................................................... 13    78.   Year of Service ................................................................................................................. 13  ARTICLE II. ELIGIBILITY AND PARTICIPATION .................................................................... 14    1.    Eligibility .......................................................................................................................... 14    2.    Commencement of Participation ...................................................................................... 14    3.    Participation Voluntary ..................................................................................................... 15    4.    Confirmation of Participation ........................................................................................... 15    5.    Duration of Participation .................................................................................................. 15    6.    Reentry of Participant ....................................................................................................... 15    7.    Breaks in Service .............................................................................................................. 15    8.    Maternity and Paternity Absences .................................................................................... 15    9.    Eligibility in Case of Merger, Consolidation or Acquisition ............................................ 16    10.   Participant Military Service .............................................................................................. 16    11.   Transfer or Sponsorship of Plan ....................................................................................... 17  ARTICLE III. CONTRIBUTIONS FOR PARTICIPANT 401(K) SALARY REDUCTIONS ....... 18    1.    401(k) Contributions ......................................................................................................... 18    2.    Cash or Deferral Election ................................................................................................. 18    3.    Roth 40l(k) Elective Deferrals .......................................................................................... 22    4.    ESOP Dividend Distribution/Additional Deferral Contribution ...................................... 24    5.    Time of Contribution ........................................................................................................ 24    6.    USERRA ........................................................................................................................... 25    7.    USERRA; Treatment of Differential Wage Payments ..................................................... 25    8.    Heart Act Provisions ......................................................................................................... 25  ARTICLE IV. AFTER-TAX PARTICIPANT CONTRIBUTIONS ................................................. 28    1.    Percentage of After-Tax Deposits..................................................................................... 28    2.    Change of Percentage of After-Tax Deposits ................................................................... 29    3.    Deposit by Payroll Deduction ........................................................................................... 29    4.    Transfer to Trust ............................................................................................................... 29                                          iii     

 

      5.    USERRA ........................................................................................................................... 29  ARTICLE V. ROLLOVERS, TRANSFERRED ACCOUNTS ........................................................ 30    1.    Rollover of Distributions from Plan ................................................................................. 30    2.    Rollover from Other Plans of the Company ..................................................................... 30    3.    Trust to Trust Transfers From Other Plans of The Company ........................................... 30    4.    Direct Rollovers ................................................................................................................ 31    5.    Rollover of Nontaxable Distributions ............................................................................... 33    6.    Trust to Trust Transfers From Plans of Other Employers ................................................ 33    7.    Separately Accounted For Rollovers From Other Plans ................................................... 34    8.    Rollover to IRA for Non-Spouse Beneficiary .................................................................. 34    9.    Transfer to Foreign Trust Disallowed ............................................................................... 34    10.   Automatic Rollover by Participants or Inactive Participants............................................ 34  ARTICLE VI. SUSPENSION OF SALARY REDUCTIONS, DEPOSITS ..................................... 35    1.    Suspension  of  Reduction  in Compensation  or  After-Tax  Deposits  by  Participant  for    Deficiency in Compensation ......................................................................................................... 35    2.    Reinstatement  of  Voluntarily  Suspended  Reduction  in  Compensation  or  After-Tax    Deposits ........................................................................................................................................ 35  ARTICLE VII. COMPANY MATCHING CONTRIBUTIONS ...................................................... 36    1.    Company Matching Contributions ................................................................................... 36    2.    Participant’s Matching Contribution Account .................................................................. 37    3.    Re-entry of Participant ...................................................................................................... 37    4.    USERRA ........................................................................................................................... 38  ARTICLE VIII. LIMITATIONS ON CONTRIBUTIONS AND ANNUAL ADDITIONS ............ 39    1.    General .............................................................................................................................. 39    2.    Limitation on Elective Deferrals; Catch-Up Contributions .............................................. 39    3.    Actual Deferral Percentage Limitations ........................................................................... 39    4.    Limitations on Company Matching Contributions ........................................................... 40    5.    Separate Application of Limitations ................................................................................. 40    6.    Limitation on Allocations, Annual Additions................................................................... 41    7.    No Return or Diversion of Contributions Except for Mistake .......................................... 45    8.    Distribution of Excess Deferrals ....................................................................................... 45    9.    Excess 40l(k) Contributions.............................................................................................. 45    10.   Excess Aggregate Contributions ....................................................................................... 47    11.   Qualified Nonelective and Matching Contributions ......................................................... 48    12.   Plan Not Dependent Upon Earnings; Company Contributions Limited to Earnings ....... 49    13.   Maximum Contribution .................................................................................................... 50    14.   Application of Dollar Leveling Method. .......................................................................... 50                                         iv     

 

      15.   Income Allocable to Excess Contributions ....................................................................... 51  ARTICLE IX. INVESTMENT PROVISIONS ................................................................................. 52    1.    Participant Directed Investment........................................................................................ 52    2.    Time of Action by Trustee on Investments ...................................................................... 56    3.    Participant Rights as to Options, Rights, and Warrants .................................................... 56    4.    Redemption of Nontransferable Securities ....................................................................... 57    5.    Manner of Holding Cash and Securities ........................................................................... 57    6.    Voting of Shares ............................................................................................................... 57    7.    Tender Offers .................................................................................................................... 58    8.    Section 16 Person Limitations; Discretionary Transactions ............................................. 59    9.    Employee Stock Ownership Plan (ESOP) ........................................................................ 59    10.   Investment Diversification of Investments ....................................................................... 61    11.   No Guarantee or Indemnity. ............................................................................................. 64  ARTICLE X. CREDITS AND CHARGES TO A PARTICIPANT’S ACCOUNT ......................... 65    1.    General Charges and Credits ............................................................................................ 65    2.    ESOP Dividend Distributions ........................................................................................... 65    3.    Calculation of Charges and Credits to Participant Accounts ............................................ 66    4.    Commissions, Taxes, and Charges on Security Purchases and Sales ............................... 66    5.    Investment Management Fees .......................................................................................... 66    6.    Allocation of Plan Administrative Expenses .................................................................... 67    7.    Calculation of Credits for Redemption ............................................................................. 67    8.    Taxes ................................................................................................................................. 67  ARTICLE XI. VESTING AND LIQUIDATION OF ACCOUNTS ................................................ 68    1.    Vesting of Participant and Company Contributions ......................................................... 68    2.    Withdrawals ...................................................................................................................... 68    3.    Distribution of Participant Accounts ................................................................................ 68    4.    Time of Distribution ......................................................................................................... 69    5.    ESOP Employer Stock Distributions ................................................................................ 70    6.    Participant Election to Defer Distribution ........................................................................ 70    7.    Individual Retirement Account Distributions ................................................................... 70    8.    Sequence of Deferred Distribution of Accounts ............................................................... 71    9.    Required Deferred Distribution at Age 701⁄2 ..................................................................... 71    10.   Distribution of Deferred Accounts at Death of Participant .............................................. 71    11.   Required Distributions. ..................................................................................................... 71    12.   Form of Distributions........................................................................................................ 76    13.   Participant’s Right to Demand Employer Securities ........................................................ 76    14.   Qualified Domestic Relations Orders; Distributions ........................................................ 76                                          v     

 

    ARTICLE XII. WITHDRAWALS, DISTRIBUTIONS, PLAN LOANS......................................... 78    1.    Hardship Withdrawals from 401(k) Contribution Account .............................................. 78    2.    Participant Withdrawals of After-Tax Deposits ............................................................... 79    3.    Withdrawal Penalty........................................................................................................... 80    4.    Participant Withdrawals of Matching Contributions or Other Amounts .......................... 80    5.    Sequence of Permitted Withdrawals ................................................................................. 80    6.    Distribution Upon Severance From Employment ............................................................ 80    7.    Voluntary Withdrawal After Age Fifty-Nine and One-Half (591⁄2) .................................. 81    8.    Distributions in Certain Events ......................................................................................... 81    9.    ESOP Dividend Distributions ........................................................................................... 81    10.   No Withdrawal of Deferred Account................................................................................ 81    11.   Limited Withdrawal Rights; Pre-1999 KGS 401(k) Thrift Plan Account ........................ 82    12.   Qualified Reservist Distribution ....................................................................................... 83    13.   Suspension During Approved Leave of Absence ............................................................. 83    14.   Effect of Termination or Suspension of Participation ...................................................... 83    15.   No Forfeiture for Suspension or Termination................................................................... 84    16.   Termination of Plan .......................................................................................................... 84    17.   Valuation of Securities...................................................................................................... 84    18.   Plan Loans......................................................................................................................... 84    19.   No Withdrawal of Loan Amount ...................................................................................... 85  ARTICLE XIII. BENEFICIARIES IN THE EVENT OF DEATH .................................................. 86    1.    Surviving Spouse as Primary Beneficiary ........................................................................ 86    2.    Election and Consent to Alternate Beneficiary or Beneficiaries ...................................... 86    3.    Designation of Beneficiary or Beneficiaries ..................................................................... 86    4.    Payment and Distribution to Beneficiary or Beneficiaries ............................................... 87    5.    Rollover to IRA For Non-Spouse Beneficiary ................................................................. 87    6.    Death Benefits; Qualified Active Military Service........................................................... 87    7.    Death or Disability Resulting from Active Military Service; Treatment Allowed ........... 87  ARTICLE XIV. SUBSIDIARIES ..................................................................................................... 88   ARTICLE XV. ADMINISTRATION ............................................................................................... 89    1.    ONE Gas, Inc. Benefits Committee & ONE Gas, Inc. Benefit Plan Sponsor Committee 89    2.    Trust, Trustee and Committee .......................................................................................... 90    3.    Plan Fiduciaries................................................................................................................. 91    4.    Action by the Committee .................................................................................................. 91    5.    Costs of Plan Administration ............................................................................................ 91    6.    Uniform and Nondiscriminatory Application ................................................................... 92    7.    Summary Plan Description; Claims Procedures ............................................................... 92                                         vi     

 

      8.    Electronic Medium Notices and Elections; ERISA Disclosure and Reporting ................ 95    9.    Recognition of Agency Relationships .............................................................................. 95    10.   Valuation of Trust Assets ................................................................................................. 95    11.   Allocation and Delegation of Committee Responsibilities ............................................... 95    12.   Audit ................................................................................................................................. 96    13.   Annual Reports ................................................................................................................. 96  ARTICLE XVI. NOTICES AND OTHER COMMUNICATIONS ................................................. 97    1.    Delivery of Notices and Other Documents ....................................................................... 97    2.    Delivery of Communications by Participants ................................................................... 97  ARTICLE XVII. NON-ASSIGNABILITY ...................................................................................... 98    1.    General .............................................................................................................................. 98    2.    Loans ................................................................................................................................. 98    3.    Qualified Domestic Relations Orders ............................................................................... 98  ARTICLE XVIII. TERMS OF EMPLOYMENT UNAFFECTED .................................................. 99   ARTICLE XIX. CONSTRUCTION OF PLAN .............................................................................. 100   ARTICLE XX. TOP-HEAVY RULES ........................................................................................... 101    1.    Minimum Contribution ................................................................................................... 101    2.    Rate of Minimum Contribution ...................................................................................... 101    3.    Top-Heavy Status Determination ................................................................................... 101    4.    Vesting ............................................................................................................................ 102    5.    Definitions ...................................................................................................................... 102  ARTICLE XXI. TRANSFERRED SUBSIDIARY PLAN ACCOUNTS ....................................... 104    1.    General ............................................................................................................................ 104    2.    Separate Accounting and Accrual ................................................................................... 104    3.    Other Plan Provisions Applicable ................................................................................... 104    4.    Distributions.................................................................................................................... 104    5.    Consent of Distribution ................................................................................................... 105    6.    Time of Distribution ....................................................................................................... 105    7.    Qualified Joint and Survivor Annuity; Qualified Preretirement Survivor Annuity........ 105    8.    Notices; Waiver Election ................................................................................................ 106    9.    Definitions; and Applicable Rules .................................................................................. 108  ARTICLE  XXII.  NGC  PROFIT  SHARING/401(K)     SAVINGS  PLAN  TRANSFERRED  ACCOUNTS .................................................................................................................................... 109  PART  A.  GENERAL  PROVISIONS/ADMINISTRATION  OF  TRANSFERRED  NGC  ACCOUNTS .................................................................................................................................... 109                                          vii     

 

      1.    General ............................................................................................................................ 109    2.    Separate Accounting and Accrual ................................................................................... 109    3.    Other Plan Provisions Applicable ................................................................................... 109  PART B. TRANSFERRED NGC ACCOUNTS; RETIREMENT BENEFITS .............................. 109   PART C. TRANSFERRED NGC ACCOUNTS; DISABILITY BENEFITS ................................. 110    1.    Disability Benefits .......................................................................................................... 110    2.    Total and Permanent Disability Determined .................................................................. 110  PART D. TRANSFERRED NGC ACCOUNTS; SEVERANCE BENEFITS ............................... 110   PART E. TRANSFERRED NGC ACCOUNTS; DEATH BENEFITS .......................................... 110  PART F. TRANSFERRED NGC ACCOUNTS; TIME AND FORM OF PAYMENT OF BENEFITS  ......................................................................................................................................................... 111    1.    Time of Payment ............................................................................................................. 111    2.    Standard and Alternative Forms of Benefit for Participants........................................... 112    3.    Standard and Alternative Forms of Death Benefit.......................................................... 114    4.    Cash-Out of Benefit ........................................................................................................ 116    5.    Direct Rollover Election ................................................................................................. 116    6.    Benefits from Account Balances .................................................................................... 116    7.    Commercial Annuities .................................................................................................... 116    8.    Present Value Determinations ........................................................................................ 117    9.    Unclaimed Benefits......................................................................................................... 117    10.   Claims Review ................................................................................................................ 117  PART G. TRANSFERRED NGC ACCOUNTS; IN-SERVICE WITHDRAWALS ..................... 117    1.    In-Service Withdrawals .................................................................................................. 117    2.    Restriction on In-Service Withdrawals ........................................................................... 118    3.    Withdrawal Exception Following Termination .............................................................. 119  PART H.  DEFINITIONS ............................................................................................................... 119    1.    Annuity Starting Date ..................................................................................................... 119    2.    Eligible Surviving Spouse .............................................................................................. 119    3.    Normal Retirement Date ................................................................................................. 119    4.    Transferred NGC After-Tax Account ............................................................................. 119    5.    Transferred NGC Before-Tax Account .......................................................................... 120    6.    Transferred NGC Rollover Contribution Account ......................................................... 120    7.    Vested Interest ................................................................................................................ 120  ARTICLE XXIII. MODIFICATION AND TERMINATION ........................................................ 121    1.    Amendment and Termination of Plan ............................................................................. 121                                        viii     

 

      2.    Limit to Effect of Modification ...................................................................................... 121    3.    Participant Rights in Case of Modification..................................................................... 121    4.    Nonforfeitability ............................................................................................................. 121    5.    Termination Distributions ............................................................................................... 121    6.    Transfer or Sponsorship of Plan ..................................................................................... 122  ARTICLE XXIV. ONEOK 401(K) PLAN TRANSFER PROVISIONS ....................................... 123    1.    Definitions ...................................................................................................................... 123    2.    Trust to Trust Transfer .................................................................................................... 124    3.    Crediting of Service ........................................................................................................ 124    4.    Recognition of Elections ................................................................................................. 124                                             ix     

 

                               ONE GAS, INC. 401(K) PLAN                             INTRODUCTORY STATEMENT         This Plan document is the ONE Gas, Inc. 401(k) Plan, established and maintained for ONE Gas  Employees and Former ONE Gas Employees (as such terms are defined in Article XXIV), effective for  periods after December 31, 2013.         On November 13, 2013, in anticipation of the separation of ONE Gas, Inc. from ONEOK, Inc.,  the Board of Directors of ONEOK, Inc. approved the (1) the establishment, effective January 1, 2014, of  a 401(k) plan that was substantially similar to the ONEOK, Inc. 401(k) Plan for the benefit of ONE Gas  Employees and Former ONE Gas Employees; (2) the exclusion of ONE Gas Employees and Former ONE  Gas Employees from participating in the ONEOK, Inc. 401(k) Plan for periods after December 31, 2013;  and (3) the transfer of liabilities for ONE Gas Employees and Former ONE Gas Employees who were  participants in the ONEOK, Inc. 401(k) Plan to this Plan, effective January 1, 2014.         By unanimous consent, the Board of Directors of ONE Gas approved the adoption of this Plan,  effective January 1, 2014, for the benefit of ONE Gas Employees and Former ONE Gas Employees.  Effective January 1, 2014, all transferred liabilities attributable to ONE Gas Employees and Former ONE  Gas Employees under the ONEOK, Inc. 401(k) Plan were accepted by this Plan. ONE Gas, Inc. (acting  directly or through its affiliates) intended to cause this Plan to recognize and maintain all then ONEOK,  Inc. 401(k) Plan elections, including, but not limited to, deferral, investment, and payment form elections,  dividend elections, beneficiary designations, and the rights of alternate payees under qualified domestic  relations orders with respect to ONE Gas Employees and Former ONE Gas Employees.         The IRS issued a favorable determination letter on October 22, 2013 with respect to the most  recent restatement of the ONEOK, Inc. 401(k) Plan. The terms and conditions of this Plan at that time  were substantially the same as the terms and conditions of the ONEOK Inc. 401(k) Plan at that time.  However, Article XXIV to the Plan sets forth additional rules applicable to ONE Gas Employees and  Former ONE Gas Employees who were participants in the ONEOK Inc. 401(k) Plan (hereinafter called  “Transferred Participants”). No individual is entitled to a benefit under both this Plan and the ONEOK,  Inc. 401(k) Plan.         The IRS issued a favorable determination letter on this Plan on November 3, 2017, with respect  to the most recent restatement of the Plan effective January 1, 2017.         This amendment and restatement is effective January 1, 2018, except as otherwise provided herein  or by applicable law.         The  purposes  of  the  Plan  and  the  Trust  established  thereunder  are  to  provide  for  deferred  compensation and benefits for eligible employees through a qualified profit-sharing plan and, in part, with  respect to the investment in securities of ONE Gas, Inc., through an employee stock ownership plan,  which constitutes a qualified stock bonus plan. The Plan is intended in all respects to be qualified under  the requirements of Section 401(a) and other applicable sections of the Internal Revenue Code of 1986,  as  amended, and  the  Plan shall  be  interpreted, wherever  possible,  to  comply  with  the  terms  of  the  aforementioned laws, and all regulations and rulings issued thereunder.                                                    1  

 

                                       ARTICLE I.                                   DEFINITIONS   As used in this Plan, unless otherwise required by the context, the following words and phrases shall have  the meanings indicated:   PARAGRAPH         401(k) Contribution   The amount contributed by the Company in accordance with paragraphs 1., 2., and 3. of Article III.         401(k) Contribution Account   The account of a Participant established and maintained for 401(k) Contributions of the Company made  for such Participant in accordance with paragraph 2. of Article III.         Accrued Benefit   The balance of all accounts established and maintained for a Participant pursuant to this Plan. The Accrued  Benefit shall include amounts transferred to the Plan in connection with the spinoff of certain assets and  liabilities from the  ONEOK, Inc.  401(k) Plan.  A Participant’s Accrued  Benefit from Company  contributions as of any applicable date is the excess, if any, of the Accrued Benefit of such Participant as  of  such  date  over  the  Accrued  Benefit  of  such  Participant  derived from contributions made by  such  Participant on such date; and the Accrued Benefit derived from contributions made by a Participant as of  any applicable date is the balance of the Participant’s Accounts consisting only of his/her contributions  and the income, expenses, gains and losses attributable thereto.         Actual Deferral Percentage   The  Actual  Deferral  Percentage for  a specified  group  of  Employees  (either  Highly  Compensated  Employees or all other Employees eligible to participate in this Plan who are not Highly Compensated  Employees) for a Plan Year is the average of the ratios, calculated separately for each employee in such  group, of the amount of the Employer’s 401(k) Contribution paid on behalf of each such Employee for  the Plan Year to such Employee’s Compensation for the Plan Year. The Employer may, from time to time  in its discretion, and to the extent permitted by Section 401(k) of the Code, calculate such ratios by adding  to the 401(k) Contribution for such Employee the Matching Contribution paid for the benefit of such  Employee and qualified nonelective contributions (within the meaning of Code Section 401(m)(4)(C)).         Affirmative Election   An election for a Reduction in Compensation submitted by a Participant to the Plan Administrator in  accordance with Article III, Paragraphs 2.A.1.a., 2.A.3., and 2.A.4; 2.B.1.a., 2.B.1.d., and 2.B.1.e.; or  2.B.2.a.i, 2.B.2.d and 2.B.2.e  that provides for a specific Reduction in Compensation, including an  affirmative election to elect no Reduction in Compensation.         After-Tax Deposits   The deposits and contributions of Participants made to this Plan pursuant to paragraph 1. of Article IV.                                          2  

 

          Applicable Individual   An Applicable Individual is (i) any Participant in the Plan, (ii) any beneficiary who has an account under  the Plan with respect to which the beneficiary is entitled to exercise the rights of a Participant.         Automatic Contribution Arrangement   The provisions described by Article III, Paragraph 2.A.1.b and 2.B.2.a.ii.         Bargaining Unit Employee   Any Employee who is represented by a collective bargaining unit which includes Group A Bargaining  Unit Employees and Group B Bargaining Unit Employees; with “Group A Bargaining Unit Employees”,  meaning  any  Employee  who  is  represented  by  Locals  12561, 13417,  and  14228,  of  the  United  Steel  Workers; and “Group B Bargaining Unit Employees”, meaning any Employee who is represented by  Local 304 of the International Brotherhood of Electrical Workers.         Bargaining Unit Participant   Any Participant who is a Bargaining Unit Employee.         Board or Board of Directors   The Board of Directors of the Company.         Catch-Up Contribution   Elective Deferrals made to the Plan that are in excess of an otherwise applicable Plan limit and that are  made by a Participant who is age fifty (50) or over by the end of the taxable year, pursuant to Code Section  414(v).         Code   The Internal Revenue Code of 1986, as amended.         Committee   The ONE Gas, Inc. Benefits Committee authorized by the Board of Directors to administer the Plan in  accordance  with  paragraph  1.  of  Article  XV  hereof.  For  clarity,  any  reference  in  the  Plan  to  the  “Committee,” refers to the ONE Gas, Inc. Benefits Committee.  The ONE Gas, Inc. Benefit Plan Sponsor  Committee will be separately referred to as the “Sponsor Committee.”         Company   ONE Gas, Inc., an Oklahoma corporation, and its Subsidiaries.         Company Matching Contributions   The matching contribution made by the Company pursuant to Article VII of the Plan with respect to the  Reductions in Compensation and After-Tax Deposits of the Participant.                                          3  

 

          Compensation   A.    Non-Bargaining Unit Participants. The total annual base salary plus any lump sum merit pay and  promotion awards, gainshare awards, cash incentive compensation, commissions, overtime pay, and shift  differentials paid to a Participant by the Company, but excluding amounts contributed by the Company  or deferred by the Participant under a plan of deferred compensation to the extent that such contributions  or deferrals are not includible in gross income of the Participant for the taxable year in which contributed  or deferred. Provided, that any reduction in salary elected and deferred by the Participant under the cash  or deferred arrangement of Article III of the Plan or under Code Sections 125, 132(f)(4), 402(e)(8) and  457  pursuant  to  the  employee  benefit  plans  of  the  Company  shall  be  included  in  determining  compensation hereunder. For purposes of this definition incentive compensation shall be treated as paid  to a Participant at the time of actual payment. Provided, further, that the annual compensation of each  Participant taken into account under this Plan for any year shall not exceed two hundred seventy-five  thousand dollars ($275,000) in the years beginning after December 31, 2017 (such two hundred seventy- five thousand  dollars  ($275,000)  amount  to  be  adjusted  to  reflect  increases  in  the  cost-of-living  in  accordance  with  Code  Sections  401(a)(17)  and  415(d)). The  cost-of-living  adjustment  in  effect  for  a  calendar year applies to any period, not exceeding 12 months, over which compensation is determined  (determination period) beginning in such calendar year.   B.    Bargaining  Unit  Participants.  For  Bargaining  Unit  Participants  the  term “Compensation” for  purposes of this Plan shall include “Adjusted Total Compensation” and “Annual Compensation,” defined  as follows:   “Adjusted Total Compensation” shall mean an active Bargaining Unit Participant’s Annual Compensation  unreduced by overtime, bonuses, and commissions.   “Annual Compensation” shall mean the base salary or wage paid to an active Bargaining Unit Participant  during a calendar year by the Company, exclusive of overtime, bonuses, commissions, the value of group  life insurance in excess of $50,000, reimbursement for moving expenses or tuition, or any other payments  made by the Company on behalf of an Employee under any other deferred compensation or welfare plan.  “Annual Compensation” for any Group B Bargaining Unit Employee who is represented by Local 304  and Local 1523 of the International Brotherhood of Electrical Workers shall include the base salary or  wage paid to such an active Group B Bargaining Unit Employee during a calendar year by the Company  plus overtime, shift differential, call out, call out 7th day, FLSA OT ADJ, meal not eaten, OT double time,  OT straight time, OT time and one-half, overtime, standby half pay, standby quarter pay and all earning  elements included in compensation for purposes of the Plan prior to such date. Annual Compensation  shall  be  such  amount  prior  to  any  payroll  reduction  for  a  Participant  Reduction  in  Compensation  or  amounts excludible from the Employee’s gross income under Code Sections 125, 132(f)(4), 402(e)(8) and  457.   The Annual Compensation and Adjusted Total Compensation of each active Bargaining Unit Participant  taken into account for determining all benefits provided under the Plan shall not exceed $275,000 as  adjusted for increases in the cost-of-living in accordance with Code Section 401(a)(17)(B). The cost-of- living adjustment in effect for a calendar year applies to any determination period beginning in such  calendar year.   Provided, further, that the annual compensation of each Participant taken into account under Plan shall  not exceed $275,000 and such $275,000 amount shall be adjusted to reflect increases in the cost-of-living  in accordance with Code Sections 401(a)(17) and 415(d).                                          4  

 

    If a determination period consists of fewer than 8 months, the Annual Compensation and Adjusted Total  Compensation limit is an amount equal to the otherwise applicable Annual Compensation and Adjusted  Total Compensation limit multiplied by a fraction, the numerator of which is the number of months in the  short determination period, and the denominator of which is 12.   C.    Increase in Compensation Limit. The annual compensation of each Participant taken into account  in determining allocations shall not exceed two hundred seventy-five thousand dollars ($275,000), as  adjusted for cost-of-living increases in accordance with Code Section 401(a)(17)(B).  Annual  Compensation means compensation during the Plan Year or such other consecutive 12-month period over  which compensation is otherwise determined under the Plan (the determination period). The cost-of-living  adjustment in effect for a calendar year applies to annual compensation for the determination period that  begins with or within such calendar year.         Controlled Affiliate Business Organization   Any business organization or entity (including, without limitation, a corporation, general partnership,  limited partnership, or limited liability company)  that is in one or more chains of such organizations  conducting trades or businesses connected through ownership of a 100 percent ownership interest in which  (i) ONE Gas, Inc., an Oklahoma corporation, is the common parent business organization and (ii) a 100  percent ownership interest in each of the organizations, except ONE Gas, Inc., is owned directly by one  or more of the other organizations, and (iii) ONE Gas, Inc. owns a 100 percent ownership interest in at  least one of the other organizations. For purposes of the foregoing provisions of this definition, “100  percent ownership interest” means, in the case of an organization which is a partnership or limited liability  company, ownership of 100 percent of the profits interest or capital interest of such partnership or limited  liability company.         Designation Date   On and after January 1, 2014, the Designation Date under the Plan with respect to any particular election  or other action required or allowed to be taken, elected or confirmed on or before the Designation Date,  shall mean and be the next regular payroll date that is established and scheduled to occur for the periodic  payment of salaries, wages and compensation to Employees by the Company.         Dividends   All cash, stock, rights or other property distributed by the Company pro rata to holders of any class of its  capital stock.         ERISA   Employee Retirement Income Security Act of 1974, as amended.         ESOP Dividend Distribution   A payment in cash of ESOP Dividends to a Participant and/or distribution in cash to a Participant of ESOP  Dividends paid to the Trust of the Plan, on Qualifying Employer Stock in the Participant Account of such  Participant (and such payments and distributions to  a  retired or  terminated  Employee)  pursuant  to  paragraph 2. of Article X.                                           5  

 

          ESOP Dividend/401(k) Deferrable Amount   The maximum amount which may be deferred by a Participant with respect to an ESOP  Dividend  Distribution paid and distributed to such Participant under the provisions of paragraph 4.A. of Article III,  and  the  applicable  limitations  of  the  Plan  and  the  Code  pertaining  to  cash  or deferral  elections  by  a  Participant.         ESOP Dividend Distribution/Additional Deferral   An  elective  deferral  of  Compensation made  by  a  Participant with  respect  to  an  ESOP  Dividend  Distribution paid and distributed to such Participant, as provided in paragraph 4. of Article III.         ESOP Dividend Distribution/Additional Deferral Contribution   The amount contributed by the Company to the Trust of the Plan with respect to the ESOP Dividend  Distribution/Additional Deferral made and elected by a Participant under paragraph 4. of Article III.         ESOP Dividends   The  dividends  paid to  Participants or  to  the  Trust  of  the  Plan  on  Qualifying Employer  Stock  in  the  Participant Account of such a Participant, or a retired or terminated Employee.         Effective Date   January 1, 2014.  The effective date for purposes of this amendment and restatement is January 1, 2018,  except as otherwise provided herein or required by applicable law.         Elective Deferrals   With respect to any taxable year, the sum of (i) any employer contribution under a qualified cash or  deferred arrangement (as defined in Code Section 401(k)) to the extent not includible in gross income for  the taxable year under Code Section 402(e)(3) (determined without regard to Code Section 402(g)), (ii)  any  Roth  Elective Deferral made  pursuant to  the  Plan  and  Code  Section 402A,  (iii)  any  employer  contribution  to  the  extent  not  includible  in  gross  income  for  the  taxable  year  under  Code  Section  402(h)(1)(B) (determined without regard to Code Section 402(g)), and (iv) any employer contribution to  purchase an annuity contract under Code Section 403(b) under a salary reduction agreement (within the  meaning of Code Section 3121(D), except as provided in Code Section 402(g)(3)).         Employee   Any person employed by the Company, including officers and others engaged in the management of the  business, provided such person is in active service of the Company; but not including members of the  Board of Directors who are not officers of the Company, and not including Independent Contractors and  Leased  Employees.  To  the  extent required  by  the  Code,  Leased  Employees  shall  be  considered  as  employees of the Company for purposes of determining if the Plan meets participation, coverage or other  applicable requirements for qualification of the Plan under Code Section 401, but such Leased Employees  are not eligible to participate in the Plan, and are excluded from the definition of Employee under this  paragraph. For purposes of determining eligibility to participate in the Plan, a person’s status as a common  law employee shall be determined at the relevant time by the Company, without regard to any subsequent  reclassification of the Employee by any court, administrative body, agency or other entity.                                          6  

 

          Employee Contribution Account   An amount to be separately accounted for and maintained for each Participant to which all Participant  After-Tax Deposits (other than those accounted for and maintained as his/her Separate Section 72(d)  Employee  Contribution  Account),  and  all  earnings,  income,  expenses,  gains,  and  losses  attributable  thereto shall be charged and credited pursuant to Article X.         Employee Stock Ownership Plan   That portion of the Plan under which Employee Stock Ownership Plan (ESOP) Participant Accounts are  invested in Qualifying Employer Stock pursuant to paragraph 1., Article IX, and held and administered in  accordance with the provisions of paragraph 9. of Article IX, and other pertinent provisions of the Plan.         Employer Contribution Account   An amount to be separately accounted for and maintained for each Participant to which all Company  contributions for such Participant and all earnings, expenses, gains, and losses attributable thereto shall  be charged and credited.         Excess Aggregate Contributions   With respect to any Plan Year, the excess of (i) 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 (ii) the maximum Contribution Percentage Amounts  permitted by the Actual Contribution Percentage test (determined by 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.         Excess Contributions   The excess with respect to any Plan Year of (i) the aggregate amount of Company contributions actually  paid over to the Trust of the Plan on behalf of Highly Compensated Employees and taken into account in  computing the Actual Deferral Percentage for such Highly Compensated Employees for such Plan Year  over (ii) the maximum amount of such contributions permitted under Code Section 401(k) discrimination  limitations under Code Section 401(k)(3)(A)(ii) (determined by reducing contributions made on behalf of  Highly Compensated Employees in order of the Actual Deferral Percentages beginning with the highest  of such percentages).         Excess Deferrals   Any amount of Elective Deferrals of any Participant which is included in such Participant’s gross income  pursuant to the limitation on the exclusion of such Elective Deferrals provided in Code Section 402(g)(1).         Group A Bargaining Unit Participant   Any Participant who is a Group A Bargaining Unit Employee.         Group B Bargaining Unit Participant   Any Participant who is a Group B Bargaining Unit Employee.                                         7  

 

          Highly Compensated Employee   The term “Highly Compensated Employee” means any Employee who: (1) was a five-percent (5%) owner  at any time during the year or the preceding year, or (2) for the preceding year had compensation from  the Company in excess of one-hundred twenty thousand dollars ($120,000) and, if the Company so elects,  was in the top-paid group for the preceding year. The hundred and twenty thousand dollar ($120,000)  amount is adjusted at the same time and in the same manner as under Code Section 415(d), except that  the base period is the calendar quarter ending September 30, 1996. For purposes of the foregoing the  “applicable year” of the Plan for which a determination is being made is called a “determination year”  and the preceding 12-month period is called a look-back year. A highly compensated former employee  shall be determined and based on the rules applicable to determining Highly Compensated Employee  status as in effect for a determination year, in accordance with Treasury Regulation § 1.414(q)-1T, A-4  and Internal Revenue Service notice 97-45. An Employee shall be treated as a five-percent (5%) owner  for any year if at any time during such year such Employee was a five-percent (5%) owner (as defined in  Code Section 416(i)(1)) of the Company. An Employee is in the top-paid group of Employees for any  year if such Employee is in the group consisting of the group consisting of the top twenty percent (20%)  of the Employees when ranked on the basis of compensation paid during such year.   For purposes of this paragraph, the term “compensation” means compensation within the meaning of Code  Section 415(c)(3).   For purposes of determining the number of Employees in the top-paid group, there shall be excluded (i)  Employees who have not completed six (6) months of service, (ii) Employees who normally work less  than 17 1⁄2 hours per week, (iii) Employees who normally work during not more than six (6) months during  any year, (iv) Employees who have not attained age 21, and (v) except to the extent provided in Treasury  regulations, Employees who are included in a unit of Employees covered by an agreement which the  Secretary of Labor finds to be a collective bargaining agreement between employee representatives and  the Company.         Hours of Service   All  hours  for  which  the  Employee  is  either  directly  or  indirectly compensated by  the  Company  for  performing duties for the Company. These hours are to be credited to the Employee in the computation  period during which the duties were performed and not when paid. The determination of the Hours of  Service  for  reasons  other  than  the  performance  of  duties  shall  be  made  in  accordance  with  Section  2530.200b-2(b) of the Department of Labor regulations. The determination of the computation to which  the Hours of Service are credited shall be made in accordance with Section 2530.200b-2(c) of Department  of Labor regulations. Credit is also to be given for each hour of back pay for which back pay has been  awarded or agreed to  by  the  Employer,  and  these  hours  are  to  be  credited  to  the  Employee  in  the  computation  period  during  which  the  duties  were  performed and  not  paid.  An  Employee  should  be  credited with Hours of Service for any customary period of work based upon a forty (40)-hour week or  pro rata portion thereof, during which the Employee is absent for any authorized reason in accordance  with established Company policy and procedure, is laid off for a temporary period, is on a Company•  approved leave of absence, or sick or disability leave, is on jury or military duty, or is not working due to  a labor-management dispute. The clause shall be construed so as to resolve any ambiguities in favor of  crediting Employees with Hours of Service.                                           8  

 

          Independent Contractor   Any person, exercising and engaging in a business or occupation separate from and independent of the  Company, who by mutual agreement with the Company is not to be otherwise treated as an Employee for  payroll, compensation, employee benefits, or similar purposes, and who is  engaged  or  contracted to  perform a certain job or services for the Company, but according to his/her own methods, and without  being subject to the control or supervision of the Company, except as to specification of the product or  result of his/her work or services for which he/she is contracted.         KGS 401(k) Thrift Plan   The ONEOK, Inc. KGS 401(k) Thrift Plan, heretofore sponsored by ONEOK, which became effective on  the effective date of the strategic alliance between ONEOK Inc., a Delaware corporation and Western  Resources, Inc. and the merger of said ONEOK, Inc. with and into WAI, Inc., an Oklahoma corporation.         Leased Employee   A person who otherwise is not an Employee, but who provides services for the Company and such services  are provided pursuant to an agreement between the Company and any other person (leasing organization),  and such person has performed such services for the Company (or for the Company and a related person  determined in accordance with Code Section 414(n)(6)) on a substantially full-time basis for at least one  (1)  year, and  such services are  performed under  primary direction and control of the Company.  Contributions or benefits provided a Leased Employee by the leasing organization which are attributable  to services performed for the Company shall be treated as provided by the Company.   A Leased Employee shall not be considered an employee of the Company if: (i) such employee is covered  by a money purchase pension plan providing: (1) a nonintegrated employer contribution rate of at least  10  percent  of  compensation,  as  defined  in  section  415(c)(3)  of  the  Code,  but  including  amounts  contributed pursuant to a salary reduction agreement which are excludable from the employee’s gross  income under  section  125,  section  402(e)(3),  section 402(h)(1)(B) or section 403(b) of the Code, (2)  immediate participation, and (3) full and immediate vesting; and (ii) leased employees do not constitute  more than 20 percent of the Company’s non-highly compensated work force.   Leased Employees shall be considered as employees of the Company for the purpose of determining if  the Plan meets participation, coverage or other applicable requirements for qualification of the Plan under  Code Section 401, but such Leased Employees are not eligible to participate in the Plan, and are excluded  from the definition of “Employee” in paragraph 24. of this Article I, above.         Matching Contribution Percentage   The average of the ratios (calculated separately for each Employee in such group) of (i) the sum of the  Company Matching Contributions and Participant After-Tax Deposits paid under the Plan on behalf of  each such Employee for the Plan Year, to (ii) the Employee’s Compensation (within the meaning of Code  Section  414(s)  for  such  Plan  Year;  with  the  Company  having  the  election  to  take  into  account  (in  computing such percentage) elective deferrals and qualified nonelective contributions (as defined in Code  Section  401(m)(4)(C)  under  this  Plan  or  any  other  plan  of  the  Company,  to the  extent  allowed  by  regulations.                                           9  

 

          Matching Contributions   The matching contribution made by the Company pursuant to Article VII of the Plan with respect to the  Reductions in Compensation and After-Tax Deposits of the Participant.         Non-Bargaining Unit Employee   Any  Employee  who  is  not  represented  by  a  collective  bargaining  unit,  and  is  not  a  Bargaining Unit  Employee.         Non-Bargaining Unit Participant   Any Participant who is a Non-Bargaining Unit Employee.         One-Year Break in Service   A twelve (12)-consecutive-month period of time commencing on any anniversary date of  original  employment and ending twelve (12) consecutive months thereafter, during which the Employee has not  completed more than five hundred (500) Hours of Service.         ONEOK   ONEOK, Inc., an Oklahoma corporation, and its Subsidiaries.         ONEOK, Inc. 401(k) Plan   The ONEOK, Inc. 401(k) Plan, which was known as the Thrift Plan for Employees of ONEOK, Inc. and  Subsidiaries prior to January 1, 2014.         Participant   An Employee who has satisfied the eligibility requirements of the Plan and has elected to participate in  the Plan or is deemed to have elected to participate in the Plan under the Automatic Contribution  Arrangement.         Participant Account   All cash and other assets held by the Trustee under the Plan in the accounts maintained under the Trust  for the particular Participant.         Plan   This ONE Gas, Inc. 401(k) Plan, as amended and restated.         Plan Year   A twelve (12) month period commencing  on January 1 of each year and ending on the  subsequent  December 31.                                           10  

 

          Pre-1987 Employee Contribution Account   Any portion of a Transferred Participant’s Account that constituted a Pre-1987 Employee Contribution  Account (as defined in the ONEOK, Inc. 401(k) Plan) as of December 31, 2013.         Pre-1999 KGS 401(k) Thrift Plan Account   Any portion of a Transferred Participant’s Account that constituted a Pre-1999 KGS 401(k) Thrift Plan  Account (as defined in the ONEOK, Inc. 401(k) Plan) as of December 31, 2013.         Pre-1999 ONEOK Thrift Plan Account   Any  portion  of  a  Transferred  Participant’s  Account that  constituted  a  Pre-1999  ONEOK  Thrift Plan  Account (as defined in the ONEOK, Inc. 401(k) Plan) as of December 31, 2013.         Prior ONEOK, Inc. Thrift Plan   The ONEOK, Inc. 401(k) Plan as in effect immediately prior to the merger thereof with the KGS 401(k)  Thrift Plan, and amendment and restatement thereof effective on and after January 1, 1999.         Qualified Default Investment Alternative   An  investment option established and  maintained under  the  Plan  that  shall  be  administered as  more  particularly described in Article IX, paragraph 1.D. of the Plan, and as so defined therein.         Qualified Matching Contributions   Matching Contributions, which are subject to the distribution and nonforfeitability requirements under  Code Section 401(k) when made.         Qualified Nonelective Contributions   Contributions  (other  than  Matching  Contributions  or  Qualified  Matching  Contributions)  made  by  the  Company and allocated to Participants’ accounts that Participants 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.         Qualified Reservist Distribution   A distribution of a Participant’s 401(k) Contribution Account if the Participant was (by reason of being a  member of a reserve component (as defined in section 101 of title 37, United States Code)) ordered or  called to active duty after September 11, 2001, for a period in excess of 179 days or for an indefinite  period, and such distribution is made after the date of such order or call to active duty period, and to the  extent allowed in accordance with Code Section 401(k)(2)(B)(i)(V) and regulations under that Section.         Qualifying Employer Stock (and/or Qualifying Employer Security(ies)   The common stock of ONE Gas, Inc. which is a security readily tradable on an established securities  market, within the meaning of Code Section 409(1). Prior to the Separation, Qualifying Employer Stock  shall consist of the common stock of ONEOK, Inc.                                         11  

 

          Reduction in Compensation   The reduction in Compensation payable to the Employee by the Company, which is elected, or deemed  elected  in  accordance  with  the  Automatic  Contribution  Arrangement, by  the  Employee under  paragraphs 1. and 2. of Article III, but not including any deemed elected additional deferral for Non- Bargaining Unit Participants made under paragraph 4. of Article III.         Roth 401(k) Elective Deferral   An elective deferral of a Participant made pursuant to the provisions and requirements set forth in Article  III, paragraph 3. of the Plan, and more specifically defined in Article III, paragraph 3.F. of the Plan.         Roth 401(k) Elective Deferral Account   A separate account maintained for each Participant who elects to make a Roth 401(k) Elective Deferral  which account shall be created, maintained and administered as provided in Article III, paragraph 3. of  the Plan.         Salaried Employee   An Employee whose basic rate of compensation or pay, as stated in the payroll records of the Company,  is a fixed monthly or annual salary and not an hourly rate of pay for services performed.         Section 16 Person   A person subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, with respect to  equity securities of the Company.         Separate Section 72(d) Employee Contribution Account   An amount to be separately accounted for and maintained for each Participant to which all Participant  After-Tax Deposits made after January 1, 1988, shall be allocated and credited, and to which all earnings,  income, expense, gains, and losses attributable thereto shall be separately charged and credited after that  date pursuant to paragraphs 1. and 3. of Article X, and Code Section 72(d).         Severance of Employment   An Employee has a “severance from employment” when the Employee ceases to be an Employee of the  Employer  maintaining  the  Plan.  An  Employee  does  not  have  a  severance  from  employment  if,  in  connection with a change of employment, the Employee’s new employer maintains the Plan with respect  to the employee.         Sponsor Committee   The ONE Gas, Inc. Benefit Plan Sponsor Committee authorized by the Board of Directors to establish,  design, price, amend, and/or terminate the Plan in accordance with paragraph 1. of Article XV hereof.         Spouse   A Spouse is a person of the same sex or opposite sex to whom the Participant is married if their marriage  was validly entered into in a state or foreign country or is otherwise valid under Federal law.                                         12  

 

          Subsidiary (and Subsidiaries)   A Subsidiary Corporation or a Controlled Affiliate Business Organization of ONE Gas, Inc., as herein  defined. From January 1, 2014 until the Separation (as defined in Article XXIV), the ONE Gas Group (as  such term is defined in Article XXIV) is a Subsidiary of ONEOK, Inc.  After Separation, the ONE Gas  Group is not a Subsidiary of ONEOK, Inc.         Subsidiary Corporation   Any  corporation  that  is  in  one  or  more  chains  of  includible  corporations  connected  through  stock  ownership in which (i) ONE Gas, Inc., an Oklahoma corporation, is the common parent corporation (ii)  ONE Gas, Inc. owns directly stock in at least one (1) of the other includible corporations possessing not  less than 100 percent of the total voting power of such corporation, or having a value equal to 100 percent  of the total value of the stock of such corporation (“applicable ownership level”), and (iii) stock at such  applicable ownership level in each of the includible corporations (except said ONE Gas, Inc.) is owned  directly by one (1) or more of the other includible corporations.         Transferred KGS 401(k) Thrift Plan Account   Any portion of a Transferred Participant’s Account that constituted a Transferred KGS 401(k) Thrift Plan  Account (as defined in the ONEOK, Inc. 401(k) Plan) as of December 31, 2013.         Trust   The Trust established for the receiving, holding, investing, and disposing of the Participant  deposits,  Company contributions, and any earnings thereon under this Plan, and any predecessor plan.         Trustee   The Trustee under the Plan hereinafter named in paragraph 2. of Article XV or any successor to said  Trustee.         USERRA   The Uniformed Service Employment and Reemployment Rights Act, 38 United States Code, §§ 4301, et  seq.         Year of Service   A twelve (12) month period, beginning on the date the Employee Commenced employment with the  Employer and ending  twelve (12)  months  thereafter,  or  any  subsequent twelve  (12)  month  period  beginning on any anniversary of the employment commencement date and ending twelve (12) months  thereafter, during which an Employee has completed at least one thousand (1,000) Hours of Service.   Provided that, upon employment by the Company, for purposes of determining an Employee’s eligibility  to participate in the Plan, and subject to the foregoing definition of a Year of Service, a Year of Service  with any member of a controlled group (as described in Section 414(b) of the Internal Revenue Code of  1986, or similar provisions in succeeding enactments) of which the Company is also a member shall be  deemed to be a Year of Service with the Company, whether or not such other member of the controlled  group shall have adopted this or any other Plan.                                          13  

 

                                      ARTICLE II.                         ELIGIBILITY AND PARTICIPATION   PARAGRAPH   1.    Eligibility   Except as hereinafter otherwise provided, participation in the Plan shall be open to any Employee upon  and after his/her commencement of employment with the Company; provided, that Company Matching  Contributions with respect to Bargaining Unit Participants shall be made only upon completion of one (1)  Year  of  Service,  and  provided,  further,  that  Company  Matching  Contributions  with respect  to  Non- Bargaining Unit Participants shall be made upon and after commencement of participation in the Plan, as  provided in Article VII of the Plan. Any Employee who prior to January 1, 1999, was eligible to participate  in, or who was a participant in the Prior ONEOK, Inc. Thrift Plan, or the KGS 401(k) Thrift Plan shall be  eligible to participate in this Plan. Any Employee eligible to participate in a qualified pension or profit•  sharing plan of the Company from which a rollover or trust to trust transfer is approved, or with which a  merger and consolidation is approved, shall be eligible to participate in this Plan. The Plan shall not have  a maximum age condition or limitation on participation, shall not exclude from participation (on the basis  of age) any Employees who have attained any specified age; and allocations to a Participant’s Account  under the Plan shall not be ceased, and the rate at which amounts are allocated to a Participant’s Account  shall not be reduced because of the attainment of any age; provided, that such requirements relating to no  maximum age for participation and accrual of benefits shall be coordinated to the extent provided in  Treasury Regulations with the requirements of Code Sections 404, 410, and 415, and the Code provisions  precluding discrimination in favor of Highly Compensated Employees.   Notwithstanding  the  foregoing,  the  term “Employee” for  purposes  of  eligibility  shall  exclude  the  following classes of individuals:   Individuals hired on a temporary basis or as interns and who do not complete a Year of Service.   2.    Commencement of Participation   Transferred  Participants  (as  such  term  is  defined  in  Article  XXIV),  who were  eligible  on  the initial  Effective Date of the Plan may commence his/her initial participation (subject to any applicable Year of  Service Requirement in Paragraph 1.) as of that date. Any other eligible Employee may commence initial  participation  on  (a) the  first  day  of  the  month coinciding  with  or immediately  following  the  date  the  Employee becomes eligible and elects to participate; (b) the date after the Employee becomes eligible, is  given a reasonable opportunity to make an Affirmative Election, and is then deemed to have elected to  participate under the Automatic Contribution Arrangement; or (c)  as soon as administratively feasible  after the Employee elects to participate if later. However, no Employee who is on authorized leave of  absence on the date he/she becomes eligible may commence to participate in the Plan until his/her return  to active service; and provided, further, that such Employee may in any event participate in the Plan not  later than the earlier of the first day of the Plan Year after such Employee has met the requirements for  eligibility under this Plan, or six (6) months after the day such requirements are met. Commencement of  participation in the Plan by an eligible Employee shall be accomplished by his/her election (or deemed  election) to make deposits or a Reduction in Compensation, as hereinafter provided.                                           14  

 

    3.    Participation Voluntary   Participation in the Plan by eligible Employees shall be voluntary. Participants may elect in writing to  decline  participation  and  this  election  shall  be  irrevocable.  A  Participant  may  become  temporarily  ineligible to participate in the event of termination or suspension of his/her participation pursuant to the  terms of the Plan.   4.    Confirmation of Participation   Each  Employee  at  the  time  of  becoming  a  Participant  in  the  Plan  shall  be  given  or  provided  direct  electronic access to a copy of the Plan and/or summary plan description of the Plan as effective at that  time.   5.    Duration of Participation   After an Employee has satisfied the eligibility requirements and has elected to participate in the Plan, or  is deemed to have elected to participate in the Plan under the Automatic Contribution Arrangement,  participation in the Plan shall continue until the employer-employee relationship is terminated between  the Company and the Participant, except as provided in the case of voluntary or involuntary Participant  suspension or voluntary or involuntary Plan termination.   6.    Reentry of Participant   If a former Participant whose employment has terminated shall be rehired as an Employee, he/she shall  be  entitled  to  reenter  the  Plan  as  a  Participant  on  the  first  day  of  the  month  next  following  such  reemployment.   7.    Breaks in Service   If an Employee who has not satisfied the eligibility requirements of the Plan and whose  employee  relationship with the Company has been terminated, is subsequently reemployed, he/she shall again be  eligible to participate in the Plan, and to commence to participate in accordance with paragraphs 1. and 2.  of this Article II. Notwithstanding the foregoing eligibility provisions, or any other provisions of this Plan,  an Employee’s prior Years of Service shall always be considered in determining the satisfaction of the  eligibility requirements if such termination period is not a period of consecutive One (1)-year Breaks in  Service which equals or exceeds the greater of five (5), or the aggregate number of Years of Service before  such termination period. If any Years of Service are not required to be taken into account by reason of a  period of Breaks in Service to which the foregoing provisions of this paragraph 7. apply, such Years of  Service shall not be taken into account in applying such provisions to a subsequent period of Breaks in  Service.   8.    Maternity and Paternity Absences   Any period of absence from work, not exceeding the hours described in subparagraphs A. and B., below,  by an Employee for any period by reason of the pregnancy of the Employee; by reason of the birth of a  child of the Employee; by reason of the placement of a child with the Employee in connection with the  adoption of such child by the Employee; or for the purpose of caring for such child for a period beginning  immediately following such birth or placement shall be treated as Hours of Service, solely for purposes  of determining whether a One (1)-year Break in Service has occurred with respect to Years of Service for                                          15  

 

    purposes of eligibility for participation in this Plan. The Hours of Service described in this paragraph 8.  are:   A.    the Hours of Service which otherwise would normally have been credited to such Employee but  for such absence, or  B.    in any case where the Committee is unable to determine the hours described in subparagraph A.,  above, eight (8) hours per normal workday of service, except that the total number of hours treated as  Hours of Service under this paragraph 8. shall not exceed five hundred one (501) hours.  Provided, that no credit will be given pursuant to this paragraph 8. unless the individual furnishes to the  Committee such timely information as it may reasonably require to establish that the absence from work  is for reasons referred to hereinabove, and the number of days for which there was such absence.   The hours described in this paragraph 8. shall be treated as Hours of Service only in the year in which the  absence from work begins, if an Employee would be prevented from incurring a One (1) year Break in  Service in such year solely because the period of absence is treated as Hours of Service as hereinabove  provided; or in any case, in the immediately following year. For purposes of application of the foregoing  rules in this paragraph 8. the term “year” means the twelve (12) month period beginning on the first day  of employment with the Company and each anniversary thereof.   9.    Eligibility in Case of Merger, Consolidation or Acquisition   The  Board  of  Directors, or  the  Committee  at  the Board  of  Directors’ direction,  shall  determine  on a  uniform and nondiscriminatory basis, in accordance with any agreement to which the Company shall be  a party, or by which it shall be bound, and in a manner not inconsistent with law, which persons, if any,  who become employees of the Company as a result of a merger or consolidation or the acquisition of a  substantial portion of the assets or stock of a corporation shall be eligible for participation in this Plan.   Where  in  connection  with  a  merger,  consolidation,  or  acquisition  of  assets,  property  or  stock  by  the  Company  from  or  of  another corporation  or  entity,  individuals  who  were  employees  of  such other  corporation or entity become Employees of the Company, the Board of Directors, or the Committee at the  Board of Directors’ direction, may determine on a uniform and nondiscriminatory basis, in accordance  with any agreement to which the Company shall be a party, or by which it shall be bound, and in a manner  not  inconsistent  with  law,  whether  employment  with  such  other corporation  or  entity  preceding  such  transaction  or  the  Company’s  acquisition  of  stock  of,  or  property  from  it,  shall  be  deemed  to  be  employment for eligibility purposes under this Plan; provided, that the determination of deemed service  for eligibility or similar determinations in any particular instance of the acquisition of stock or assets by  the Company pursuant to the foregoing provisions of this paragraph 9., shall not be effective or control  with respect to the employees of any other corporation in any prior or subsequent acquisition of stock or  assets of another corporation by the Company.   10.   Participant Military Service   Notwithstanding any provisions of the Plan to the contrary, contributions, benefits and service credit with  respect to qualified military service of an employee will be provided in accordance with the special rules  relating to veterans’ reemployment rights under USERRA in Code Section 414(u).                                           16  

 

    11.   Transfer or Sponsorship of Plan   The Plan is sponsored by the Company for the exclusive benefit of the employees of the Company and its  Subsidiaries and their subsidiaries and their beneficiaries. Any transfer of sponsorship of the Plan to a  successor employer may be permissible in connection with the acquisition of business assets or operations,  but  such  a  transfer  of  sponsorship  of  the  Plan  shall  not  be  made  if  it  is  not in  connection  with  the  acquisition of business assets or operations or if substantially all business risks and opportunities under  the transaction are those associated with the transfer of the sponsorship of the Plan.                                           17  

 

                                      ARTICLE III.           CONTRIBUTIONS FOR PARTICIPANT 401(K) SALARY REDUCTIONS   PARAGRAPH   1.    401(k) Contributions   The Company shall contribute to the Trust for each Plan Year, that portion of the net earnings of the  Company for that year equal to the amount of the Reduction in Compensation elected by each Participant,  and  ESOP  Dividend  Distribution/Additional  Deferral Contribution  elected  and  agreed  to and deemed  elected by each Participant pursuant to paragraphs 2. and 4. of this Article III, to the extent provided  therein. Such contributions shall be the 401(k) Contribution for the Participant.   2.    Cash or Deferral Election   A.    Non-Bargaining Unit Participants.        1.    (a)   Each  Employee  who  is  a  Non-Bargaining  Unit  Participant  in  this  Plan  may        affirmatively elect a Reduction in Compensation in an amount not in excess of twenty-four percent        (24%) of his/her Compensation or the limitation on exclusion of elective deferrals for his/her        taxable year, provided in Code Section 402(g), subject to applicable cost-of-living adjustment        thereunder, or as provided in any successor provision of the federal tax law.               (b)   Automatic Contribution Arrangement – Effective August 1, 2017                      (i)  In the event a Non-Bargaining Unit Participant, who is hired or rehired                    (after being terminated for at least 30 days) on or after August 1, 2017, fails to                    make  an  Affirmative  Election,  such  Non-Bargaining  Unit  Participant  shall  be                    deemed to automatically elect a pre-tax Reduction in Compensation in the amount                    of six percent (6%) of his/her Compensation.  A Non-Bargaining Unit Participant                    subject  to  this  Automatic  Contribution  Arrangement  will  have  a  reasonable                    opportunity after receipt of the Automatic Contribution Arrangement notice to                    make an Affirmative Election before automatic deferrals are made on the Non-                   Bargaining Unit Participant’s behalf.                     (ii)  Automatic  Contribution  Arrangement  Notice.   The  Plan  Administrator                    shall  provide  a  notice  of  the  rights  and  obligations  under  the  Automatic                    Contribution Arrangement to each Non-Bargaining Unit Participant covered by                    the  Automatic  Contribution  Arrangement  at  least  thirty  (30)  days  prior  to  the                    beginning  of  each  Plan Year.   If  a  Non-Bargaining  Unit  Employee  becomes                    eligible to participate in the Plan after the Plan Administrator has provided the                    annual notice, the Plan Administrator shall provide the notice on the date the Non-                   Bargaining Unit Employee becomes eligible or as soon as practicable thereafter.                    (c)   The amount of such Reduction in Compensation shall be deferred and become the        401(k)  Contribution  for  such  Participant;  provided,  that  to the  extent  an elected  Reduction  in        Compensation of a Highly Compensated Employee causes the limitations of paragraph 3. or 6. of        Article VIII to be exceeded, the election shall not become effective for the excess amount and it        shall be paid to the Highly Compensated Employee in cash. If necessary to meet the limitations        of  paragraphs  2.,  3.,  or 6.  of  Article  VIII,  a  Non-Bargaining  Unit  Participant’s Reduction  in                                         18  

 

               Compensation, and the 401(k) Contribution shall be reduced in the manner determined by the  Committee,  and  may  include,  without  limitation,  reducing  the  percentage  of  highest  elected  Reductions  in  Compensation  of  Non-Bargaining  Unit  Participants  then  in  effect  until  such  limitations are not exceeded. In case the amount and percentage be so reduced, such reduction  shall be to the next lower full percentile below the permissible limitation percentage, and shall  remain in effect until the next succeeding Designation Date, subject to any further adjustment  necessary to meet such limitations under paragraphs 2., 3., or 6. of Article VIII.         (d)   Notwithstanding  the  above,  a  Participant  who  was  also  a  participant  of  the  ONEOK,  Inc.  401(k)  Plan  as  of  December  31,  2013 was deemed  to  have  elected  to  make  a  Reduction in Compensation under this Plan in the same percentage as elected under the ONEOK,  Inc. 401(k) Plan at that time, unless subsequently changed by the Participant.   2.    For  purposes  of  the  foregoing  and  the  Plan, “Catch-Up Contributions” are  Elective  Deferrals made to the Plan that are in excess of an otherwise applicable Plan limit and that are  made by a Participants who is age fifty (50) or over by the end of the taxable year. An otherwise  applicable limit is a limit in the Plan that applies to Elective Deferrals without regard to Catch-Up  Contributions, such as limits on annual additions, the applicable limit on Elective Deferrals under  Code Section 402(g) (not counting Catch-Up Contributions) and the limit imposed on the actual  deferral  percentage  (ADP)  test under Code Section 401(k)(3). Catch-Up Contributions for a  Participant may be made under the Plan, and for a taxable year may not exceed (1) the limit on  Catch-Up  Contributions  under  Code  Section  414(v)(2)(B)(I)  for  the  taxable year  or  (2)  when  added to other Elective Deferrals, 75 percent of the Participant’s Compensation for the taxable  year.   3.    Each Participant in this Plan may make an Affirmative Election by signing and filing with  the  Committee  a  written  election  and  agreement  in  the  form  specified  and  furnished  to  such  Participant by the Committee and by making such election by telephone voice response system or  internet in accordance with such rules and regulations as the Committee may prescribe.   4.    Affirmative Elections by Non-Bargaining  Unit Participants shall be  stated in full  percentiles of the Participant’s Compensation.   5.    The Reduction in Compensation elected or deemed elected by a Non-Bargaining Unit  Participant (in accordance with Paragraph 2.A.1.a or 2.A.1.b of Article III, as applicable) shall  remain in effect until changed by such Participant’s delivery of a change of election in the manner  provided  herein.  A  Non•  Bargaining  Unit  Participant  may  change  his/her  Reduction  in  Compensation  only  on  a  Designation  Date.  A  Non-Bargaining  Unit  Participant’s  change  of  election may designate a different percentage of Reduction in Compensation, subject to the terms  and conditions of the Plan; or may state that such Participant elects no Reduction in Compensation  and  deferral  after  the  Designation  Date  until  he/she  makes  a  subsequent  change  of  election  hereunder. Change of election by written direction or by electronic medium, voice response or  other means determined and prescribed by the Committee may be delivered or transmitted by a  Non-Bargaining Unit Participants at any time, but shall be effective only as of the Designation  Date next following the date of the delivery of such change of election to the Committee.                                     19  

 

    B.    Bargaining Unit Participants.        1.    Group A Bargaining Unit Participants                (a)  Each Employee who is a Group A Bargaining Unit Participant in this Plan may        affirmatively elect a Reduction in Compensation in an amount not in excess of twenty-four percent        (24%)  of his/her Adjusted  Total  Compensation or the  limitation  on  exclusion  of  elective        deferrals for his/her taxable year, provided in Code Section 402(g), subject to applicable cost-       of-living adjustment thereunder, or as provided in any successor provision of the federal tax        law.               (b)   The amount of such Reduction in Compensation shall be deferred and become the        401(k) Contribution for such Participant.               (c)   For purposes of the foregoing and the Plan, “Catch-Up Contributions” are Elective        Deferrals made to the Plan that are in excess of an otherwise applicable Plan limit and that are        made by a Participant who is age fifty (50) or over by the end of the taxable year. An otherwise        applicable limit is a limit in the Plan that applies to Elective Deferrals without regard to Catch-Up        Contributions, such as limits on annual additions, the dollar limit on Elective Deferrals Under        Code Section 402(g) (not counting Catch-Up Contributions) and the limit imposed on the actual        deferral  percentage  (ADP)  test  under  Code  Section  40l(k)(3).  Catch-Up  Contributions for a        Participant for a taxable year may not exceed (1) the dollar limit on Catch-Up Contributions under        Code Section 414(v)(2)(B)(I) for the taxable year or (2) when added to other Elective Deferrals,        75 percent of the Participant’s Compensation for the taxable year.               (d)   Each Participant in this Plan may make an Affirmative Election by signing and        filing with the Committee a written election and agreement in the form specified and furnished to        such  Participant  by  the  Committee and  by  making  such election  by  telephone  voice  response        system or internet in accordance with such rules and regulations as the Committee may prescribe.               (e)   Affirmative Elections by Group A Bargaining Unit Participants shall be stated in        full percentiles of the Participant’s Adjusted Total Compensation.               (f)   Notwithstanding the foregoing, on or about the end of each calendar quarter in a        Plan Year, a Group A Bargaining Unit Participant will be allowed to contribute in a lump sum        amount the additional cash necessary to meet his/her maximum contribution percentage. Such        pre-tax catch-up contributions will be made through payroll deduction and must be greater than        $25.00. In a Plan Year a Group A Bargaining Unit Participant will be allowed to make such catch-       up contribution for previous quarters in the Plan Year. This catch-up  contribution shall be        considered in determining the Company’s Matching Contribution for such Group A Bargaining        Unit Participant to the extent provided in Article VII of the Plan.               (g)   The Reduction in Compensation elected by a Group A Bargaining Unit Participant        (in accordance with Paragraph 2.B.1.a. of Article III) shall remain in effect until changed by such        Participant’s  delivery  of  a  change  of  election  in  the  manner  provided  herein.  A Group  A        Bargaining  Unit  Participant  may  change  his/her  Reduction  in  Compensation  only  on  a        Designation Date. A Group A Bargaining Unit Participant’s change of election may designate a        different percentage of Reduction in Compensation, subject to the terms and conditions of the        Plan; or may state that such Participant elects no Reduction in Compensation and deferral after        the Designation Date until he/she makes a subsequent change of election hereunder. Change of                                          20  

 

               election by written direction or electronic medium, voice response or other means determined and  prescribed  by  the  Committee  may  be  delivered  or  transmitted  by Group  A Bargaining  Unit  Participants at any time, but shall be effective only as of the Designation Date next following the  date of the delivery of such change of election to the Committee in accordance with procedures  and rules, as prescribed by the Committee and its authorized representatives.   2.    Group B Bargaining Unit Participants         (a)   (i)   Each Employee who is a Group B Bargaining Unit Participant in this Plan  may affirmatively elect a Reduction in Compensation in an amount not in excess of twenty-four  percent (24%) of his/her Adjusted Total Compensation or the limitation on exclusion of elective  deferrals for his/her taxable year, provided in Code Section 402(g), subject to applicable cost-of- living adjustment thereunder, or as provided in any successor provision of the federal tax law.               (ii) Automatic Contribution Arrangement – Effective August 1, 2018                     (A)   In the event a Group B Bargaining Unit Participant, who is hired              or rehired (after being terminated for at least 30 days) on or after August 1, 2018,              fails to make an Affirmative Election, such Group B Bargaining Unit Participant              shall be deemed to automatically elect a pre-tax Reduction in Compensation in the              amount of six percent (6%) of his/her Adjusted Total Compensation.  A Group B              Bargaining Unit Participant subject to this Automatic Contribution Arrangement              will have a reasonable opportunity after receipt of the Automatic Contribution              Arrangement notice to make an Affirmative Election before automatic deferrals              are made on the Group B Bargaining Unit Participant’s behalf.                     (B)   Automatic  Contribution  Arrangement  Notice.   The  Plan              Administrator  shall  provide  a  notice  of  the  rights  and  obligations  under  the              Automatic  Contribution  Arrangement  to  each Group  B Bargaining  Unit              Participant  covered  by  the  Automatic  Contribution  Arrangement at least  thirty              (30) days prior to the beginning of each Plan Year.  If a Group B Bargaining Unit              Employee becomes eligible to participate in the Plan after the Plan Administrator              has provided the annual notice, the Plan Administrator shall provide the notice on              the date the Group B Bargaining Unit Employee becomes eligible or as soon as              practicable thereafter.         (b)   The amount of such Reduction in Compensation shall be deferred and become the  401(k) Contribution for such Participant.         (c)   For purposes of the foregoing and the Plan, “Catch-Up Contributions” are Elective  Deferrals made to the Plan that are in excess of an otherwise applicable Plan limit and that are  made by a Participant who is age fifty (50) or over by the end of the taxable year. An otherwise  applicable limit is a limit in the Plan that applies to Elective Deferrals without regard to Catch-Up  Contributions, such as limits on annual additions, the dollar limit on Elective Deferrals Under  Code Section 402(g) (not counting Catch-Up Contributions) and the limit imposed on the actual  deferral  percentage  (ADP)  test  under  Code  Section  40l(k)(3).  Catch-Up  Contributions  for  a  Participant for a taxable year may not exceed (1) the dollar limit on Catch-Up Contributions under                                     21  

 

          Code Section 414(v)(2)(B)(I) for the taxable year or (2) when added to other Elective Deferrals,        75 percent of the Participant’s Compensation for the taxable year.               (d)   Each Participant in this Plan may make an Affirmative Election by signing and        filing with the Committee a written election and agreement in the form specified and furnished to        such  Participant  by  the  Committee and  by  making  such election  by  telephone  voice  response        system or internet in accordance with such rules and regulations as the Committee may prescribe.               (e)   Affirmative Elections by Group B Bargaining Unit Participants shall be stated in        full percentiles of the Participant’s Adjusted Total Compensation.               (f)   Notwithstanding the foregoing, on or about the end of each calendar quarter in a        Plan Year, a Group B Bargaining Unit Participant will be allowed to contribute in a lump sum        amount the additional cash necessary to meet his/her maximum contribution percentage. Such        pre-tax catch-up contributions will be made through payroll deduction and must be greater than        $25.00. In a Plan Year a Group B Bargaining Unit Participant will be allowed to make such catch-       up  contribution  for  previous  quarters  in  the  Plan  Year.  This  catch-up  contribution  shall  be        considered in determining the Company’s Matching Contribution for such Group B Bargaining        Unit Participant to the extent provided in Article VII of the Plan.               (g)   The  Reduction  in  Compensation  elected or  deemed  elected by  a Group  B        Bargaining Unit Participant (in accordance with Paragraph 2.B.2.a.i or 2.B.2.a.ii of Article III, as        applicable)  shall  remain in  effect  until changed  by  such  Participant’s  delivery  of  a  change  of        election  in  the  manner  provided  herein.  A Group B Bargaining  Unit  Participant  may  change        his/her  Reduction  in  Compensation  only  on  a  Designation  Date.  A Group  B Bargaining  Unit        Participant’s  change  of  election  may  designate  a  different  percentage  of  Reduction  in        Compensation, subject to the terms and conditions of the Plan; or may state that such Participant        elects no Reduction in Compensation and deferral after the Designation Date until he/she makes        a subsequent change of election hereunder. Change of election by written direction or electronic        medium, voice response or other means determined and prescribed by the Committee may be        delivered  or  transmitted  by Group  B Bargaining  Unit  Participants  at  any  time,  but  shall  be        effective only as of the Designation Date next following the date of the delivery of such change        of  election  to  the  Committee in  accordance  with  procedures  and  rules,  as  prescribed  by  the        Committee and its authorized representatives.   3.    Roth 40l(k) Elective Deferrals   A.    General Application.        1.    This paragraph of the Plan will apply to contributions beginning on the initial Effective        Date.         2.    Under  paragraph  1.,  the  Plan  will  accept  Roth  Elective Deferrals  made  on  behalf  of        Participants.  A  Participant’s  Roth  Elective  Deferrals  shall  be  allocated  to  a  separate  account        maintained for such deferrals as described in paragraph 3.B. of this Article III, below.         3.    Unless specifically stated otherwise, Roth Elective Deferrals will be treated as elective        deferrals for all purposes under the Plan.         4.    A  Participant  may  make  Roth  Elective  Deferrals  with  catch-up  contributions  that  are        elective deferrals to the extent allowed by Code Section 402A.                                         22  

 

    B.    Separate Accounting.        1.    Contributions and withdrawals of Roth Elective Deferrals will be credited and debited to        the Roth Elective Deferral Account maintained for each Participant.         2.    The  Plan  will  maintain  a  record  of  the  amount  of  Roth  Elective  Deferrals  in  each        Participant’s account.         3.    Gains, losses, and other credits or charges must be separately allocated on a reasonable        and consistent basis to each Participant’s Roth Elective Deferral Account and the Participant’s        other accounts under the Plan.         4.    No contributions other than Roth Elective Deferrals and properly attributable earnings        will be credited to each Participant’s Roth Elective Deferral Account.   C.    Direct Rollovers.        1.    Notwithstanding the provisions of Article V of the Plan, a direct rollover of a distribution        from a Roth Elective Deferral Account under the Plan will only be made to another Roth Elective        Deferral Account under an applicable retirement plan described in Code Section 402A(e)(l) or to        a Roth IRA described in Code Section 408A, and only to the extent the rollover is permitted under        the rules of Code Section 402(c).         2.    The  Plan  will  not  provide  for  a  direct  rollover  (including  an  automatic  rollover)  for        distributions from a Participant’s Roth Elective Deferral Account if the amount of the distributions        that are eligible rollover distributions are reasonably expected to total less than $200 during a year.        In addition, any distribution from a Participant’s Roth Elective Deferral Account is not taken into        account in determining whether distributions from a Participant’s other accounts are reasonably        expected to total less than $200 during a year. However, eligible rollover distributions from a        Participant’s Roth Elective Deferral Account are taken into account in determining whether the        total amount of the Participant’s account balances under the Plan exceeds $1,000 for purposes of        mandatory distributions from the Plan.         3.    Any provisions of the Plan that allow a Participant to elect a direct rollover of only a        portion of an eligible rollover distribution but only if the amount rolled over is at least a specified        dollar amount are to be applied by treating any amount distributed from the Participant’s Roth        Elective Deferral Account as a separate distribution from any  amount  distributed  from  the        Participant’s other accounts in the Plan, even if the amounts are distributed at the same time.   D.    Correction of Excess Contributions.        1. In the case of a distribution of excess contributions, a Highly Compensated Employee may           designate the extent to which the excess amount is composed of pre-tax elective deferrals and           Roth Elective Deferrals but only to the extent such types of deferrals were made for the year.   E.    Distributions; Loans.        1.    Distributions from a Participant’s Roth Elective Deferral Account shall be made only to        the extent, and at a time that is in accordance with and subject to all other terms and provisions of        the Plan generally applicable to a distribution of any elective deferral made by a Participant under        the Plan.                                          23  

 

          2.    If the Highly Compensated Employee does not designate which type of elective deferrals        are to be distributed, the Plan will distribute pre-tax elective deferrals first.         3.    No Participant loan shall be allowed from a Participant Roth Elective Deferral Account.         4.    The Committee and  Plan  shall provide written information to  each Participant  who is        eligible to make a Roth Elective Deferral describing the minimum required distribution provisions        of Code Section 401(a)(9) that apply commencing at the time a Participant attains age 701⁄2, and        the related federal income tax consequences of a  distribution from  a  Roth  Elective  Deferral        Account if it is before completion of the 5- taxable year period of participation for Roth Elective        Deferrals under the Plan.   F.    Definition.        1.    Roth Elective Deferrals. For purposes of the foregoing provisions of this paragraph, and        otherwise under the Plan, “Roth Elective Deferral” is an elective deferral that is:               (a)   Designated irrevocably by the Participant at the time of the cash or  deferred                    election as a Roth Elective Deferral that is being made in lieu of all or a portion                    of the pre-tax elective deferrals the Participant is otherwise eligible to make under                    the Plan; and                (b)   Treated by the Company as includible in the Participant’s income at the time the                    Participant would have received that amount in cash if the Participant had not                    made a cash or deferred election.   4.    ESOP Dividend Distribution/Additional Deferral Contribution   A.    Each Participant in the Plan, unless such Participant elects otherwise in writing, shall be deemed  to have also made an elective deferral of his/her Compensation in an amount equal to the ESOP Dividend  Distribution paid and distributed in cash to such Participant pursuant to paragraph 2 of Article X, except  that such ESOP Dividend Distribution/Additional Deferral of a Participant shall be limited to an amount  which, when added to such Participant’s regularly elected Reduction in Compensation under paragraph  2. of this Article III, will not cause such Participant’s total elective deferrals of Compensation for the year  to exceed the maximum permissible amount which may be deferred under Code Section 402(g) for the  taxable year, and shall be subject to the reductions thereof as determined by the Committee in order to  comply with applicable limitations in Code Sections 401(k) and 415 as provided in paragraphs 2., 3., and  6.  of  Article  VIII. A  Participant’s  election  in  writing to  not  make a  deemed ESOP  Dividend  Distribution/Additional Deferral shall be made at the time and in the manner provided for in rules and  procedures prescribed by the Committee.  B.    The Company shall contribute to the Trust for each Plan Year that portion of the net earnings of  the  Company  for  the  Plan  Year  equal  to  the  amount  of  the  ESOP  Dividend  Distribution/Additional  Deferral elected by each Participant pursuant to subparagraph 4.A., above.  5.    Time of Contribution   The Company shall make payment of its contributions to the Trust under the terms of this Article III  periodically within the time permitted by the Code and the Employee Retirement Income Security Act of  1974, as amended.                                           24  

 

    6.    USERRA   The elections to defer salary or compensation and related benefits provided herein shall be provided in  accordance with the special rules relating to veterans’ rights under USERRA in Code Section 414(u).   7.    USERRA; Treatment of Differential Wage Payments   A.    Except as provided in this Paragraph, for purposes of applying the Code to the Plan:        1.    an individual receiving a differential wage payment shall be treated as an employee of the        employer making the payment,         2.    the differential wage payment shall be treated as compensation, and          3.    the Plan shall not be treated as failing to meet the requirements of any provision described        in  Code  Section  414(u)(l)(C)  by  reason  of  any  contribution  or  benefit  which  is  based  on  the        differential wage payment.   B.    Special rule for distributions.        1.    Notwithstanding Paragraph 7.A.l., above, for purposes of section 401(k)(2)(B)(i)(I), an        individual shall be treated as having been severed from  employment  during  any  period  the        individual is performing service in the uniformed services described in section 3401(h)(2)(A).         2.    If an individual elects to receive a distribution by reason of paragraph 7.B.l., above, the        Plan shall provide that the individual may not make an elective deferral or employee contribution        during the 6-month period beginning on the date of the distribution.   C.    Paragraph 7.A.3, above, shall apply only if all employees of an employer (as determined under  Code Sections 414 (b), (c), (m), and (o)) performing service in the uniformed services described in section  3401(h)(2)(A) are entitled to receive differential wage payments on reasonably equivalent terms and, if  eligible to participate in a retirement plan maintained by the employer, to make contributions based on  the payments on reasonably equivalent terms. For purposes of applying this subparagraph, the provisions  of paragraphs (3), (4), and (5) of Code Section 410(b) shall apply.  D.    For purposes of this Paragraph, the term “differential wage payment” has the meaning given such  term by section 3401(h)(2).  8.    Heart Act Provisions   The following provisions apply to the Plan with respect to benefits and distributions authorized by the  Heroes Earnings Assistance and Relief Tax Act of 2008 (“Heart Act”). These provisions shall be applied  in coordination  with  other  terms  and  provisions  of  the  Plan  with  respect  to  the  subjects  and  matters  described therein.   A.    In the case of a Participant who dies while performing qualified military service (as defined in  Code Section 414(u)), the survivors of the Participant shall be entitled to any additional benefits (other  than benefit accruals relating to the period of qualified military service) provided under the Plan had the  Participant resumed and then terminated employment with the Company on account of death.  B.    Service credit for the period of a deceased Participant’s period of qualified military service shall  be provided for vesting purposes under the Plan.                                          25  

 

    C.    If a Participant would not be entitled to reemployment rights immediately before his death under  USERRA, the provisions of Paragraph 8.A., above, shall not apply in determining the death benefits to  which the Participant’s survivors are entitled under the Plan.   D.    Under Code Section 414(u)(9) for benefit accrual purposes under the Plan, an individual who dies  or becomes disabled while performing qualified military service shall be treated as if such individual  resumed employment with the Company in accordance with the individual’s USERRA reemployment  rights on the day preceding the death or disability and then terminated employment on the actual date of  disability. All individuals shall be credited with service and benefits on reasonably equivalent terms. The  individual must be provided vesting credit for  purposes of determining his/her vested percentage in  accruals earned both during qualified military service and during other periods.  E.    The amount of employee contributions and the amount of elective deferrals of an  individual  treated as reemployed in connection with death or disability, as described above, shall be determined on  the basis of the individual’s average actual employee contributions or elective deferrals for the lesser of  (i) the 12-month period of service with the employer immediately prior to qualified military service, or  (ii) if service with the employer is less than such 12-month period, the actual length of continuous service  with the employer.  F.    Credited service for vesting shall be provided for a disabled individual’s qualified military service  to the extent permitted under other applicable rules, including Treas. Reg.§1.401(a)(4)-11(d)(3).  G.    For employer-provided contributions or benefits for an individual treated as reemployed under  Code Section 414(u)(9) which are contingent on the individual’s contributions or elective deferrals by the  individual, such contributions and benefits shall be based upon deemed employee contributions or elective  deferrals or actual employee contributions or elective deferrals for individuals who die or become disabled  as provided in Code Section 414(u), and applicable regulations and guidance and herein above.  H.    An individual performing uniformed service and receiving differential wage payments, as defined  in Code Section 3401(h), if any, paid to such individual by the Company, shall be treated and deemed as  an employee of the Company as to such payment and the differential wage payment shall be treated as  compensation, and the Company may base contributions or benefits on the differential wage payment, if  done in a reasonable nondiscriminatory basis to all individuals.  I.    An individual performing uniformed service and receiving any differential wage payments shall  for purposes of Code Section 401(k)(2)(B)(i)(I) (which allows amounts attributable to employee elective  deferrals  to  be  distributed  upon  severance  from employment)  be  treated  and  deemed  as  having  been  severed  from  employment  during  any  period  the  individual  is  performing service in  the uniformed  services, so that such individual is not prohibited from receiving distributions even though the individual  has not actually severed employment with the Company; provided, an individual being so treated and  deemed to have severed employment for purposes of Code Section 401(k)(2)(B)(i)(I) shall not cause the  individual to be treated as severed from employment for other purposes or Code sections.  J.    If an individual performing uniformed services elects to receive a distribution under Code Section  414(u)(12)(B)(ii) by reason of being treated and deemed as having severed from employment for purposes  of Code Section 401(k)(2)(B)(i)(I) during any period the individual is performing uniformed services, the  individual  may  not  make  an  elective  deferral  or  employee  contribution  during  the  6-month  period  beginning on the date of the distribution.  K.    If  differential wage  payments  are  made  to  any  individual  such  payments  shall  be  treated  as  compensation for purposes of determining benefits and contributions under the Plan, and as compensation  under Code Section 415.                                           26  

 

    L.    The Plan shall provide for and allow distributions under Code Section 401(k) to an individual who  is so treated and deemed as severed from employment for purposes of Code Section 401(k)(2)(B)(i)(I)  while performing service in the uniformed services pursuant to Code Section 414(u)(12)(B).  M.    An individual may receive a distribution otherwise subject to distribution restrictions of Code  Section 401(k) if  otherwise treated as  severed from  employment to  the  extent provided  therein.  An  individual treated as a severed from employment under Code Section 414(u)(12) is not to be treated as  severed under other Code sections not referred to therein. Code Section 414 (u)(12) does not apply to  individuals  who  have  an  actual  severance  from  employment  or  who  otherwise are eligible to take a  distribution of Plan benefits. The Committee and Plan administrator shall apply Section 414(u)(12) and  Heart Act to such circumstances in accordance with applicable published regulations and guidelines in a  uniform and nondiscriminatory manner.  N.    A distribution made under Code Section 414(u)(12)(B) to an individual who is treated and deemed  as severed from employment for purposes of Code Section 401(k)(2)(B)(i)(I) while performing service in  the uniformed services shall be treated as an eligible rollover distribution within the meaning of Code  Section 402(c)(4) (but not as a hardship distribution ineligible for rollover).                                           27  

 

                                      ARTICLE IV.                     AFTER-TAX PARTICIPANT CONTRIBUTIONS   PARAGRAPH   1.    Percentage of After-Tax Deposits   A.    Non-Bargaining Unit Participants.        1.    A  Non-Bargaining  Unit  Participant  may  make  After-Tax  Deposits  of zero  (0)  to  six        percent  (6%),  as  he/she  may  designate,  of  his/her  Compensation.  A  Participant  who  has        commenced making deposits of his/her Compensation hereunder may thereafter change his/her        deposit percentage from zero (0) to six percent (6%), as he/she may designate, in accordance with        paragraph 2. of this Article IV.               A Non-Bargaining Unit Participant may not designate an After-Tax Participant Deposit        Percentage which exceeds six percent (6%) of his/her Compensation.               Notwithstanding the above, a Non-Bargaining Unit Participant who was also a participant        of the ONEOK, Inc. 401(k) Plan as of December 31, 2013 will be deemed to have elected to make        an After-Tax Deposit under this Plan in the same percentage as elected under the ONEOK, Inc.        401(k) Plan.               If necessary to meet the limitations of paragraphs 2., 3., 4., or 6. of Article VIII, a Non-       Bargaining Unit Participant’s After-Tax Deposits, or the combination of a Non• Bargaining Unit        Participant’s elected Reduction in Compensation and After-Tax Deposits shall be reduced in the        manner determined by the Committee. In case the amount and percentage of a Non-Bargaining        Unit Participant’s elected After-Tax Participant Deposit must be so reduced, such reduction shall        be to the next lower full percentile below the permissible limitation percentage, and shall remain        in effect until the next succeeding Designation Date, subject to any further adjustment necessary        to meet such limitations under paragraphs 2., 3., 4., or 6. of Article VIII.   B.    Bargaining Unit Participants. A Bargaining Unit Participant may make an After-Tax Deposits of  from zero (0) to six percent (6%) as he/she may designate, of his/her Compensation. Notwithstanding the  foregoing, on or about the end of each calendar quarter within a Plan Year, a Bargaining Unit Participant  may contribute in a lump sum amount the additional cash necessary to meet his/her maximum contribution  percentage. Such after tax catch-up contributions may be made through payroll deduction, certified check,  cashier’s check or money order and must be greater than $25.00. A Bargaining Unit Participant will be  allowed to make such catch-up contribution for previous calendar quarters during a Plan Year. This catch- up  contribution  shall  be  considered  in  determining  the  Company  Matching  Contributions  for  such  Bargaining Unit Participant to the extent provided in Article VII of the Plan.              Notwithstanding the above, a Bargaining Unit Participant who was also a participant of        the ONEOK, Inc. 401(k) Plan as of December 31, 2013 will be deemed to have elected to make        an After-Tax Deposit under this Plan in the same percentage as elected under the ONEOK, Inc.        401(k) Plan.                                           28  

 

    2.    Change of Percentage of After-Tax Deposits   The deposit percentage designated by a Participant for his/her After-Tax Deposit (in accordance with  Paragraph 1.A. and 1.B. of Article IV) shall continue in effect, notwithstanding any change in his/her  Compensation, until he/she shall change such percentage. A Participant may change such percentage as  of a Designation Date, but not retroactively. A Participant shall designate and change the percentage of  his/her  After-Tax  Participant  Deposit  by  written  direction,  or  by  electronic  medium,  voice  response  system, or other means determined and prescribed by the Committee, to the Committee in the form and  manner prescribed by the Committee in  accordance  with  procedures  and  rules,  as  prescribed  by  the  Committee and its authorized representatives.   3.    Deposit by Payroll Deduction   After-Tax  Deposits  under  this  Article  IV  shall  be affected only  by  payroll  deductions  in  the  amount  designated  by  the  Participant  and  in  accordance  with  any  regulations  prescribed  by  the  Committee;  provided, that deposits may also be made in connection with the exercise of options, rights or warrants as  provided  in  paragraph 3.  of  Article  IX,  and  deposits  may  be  made  in  connection  with  rollover  contributions or transfers of accounts, if authorized or directed as provided in Article V.   4.    Transfer to Trust   The amount of the payroll deductions of After-Tax Deposits so made shall be transferred by the Company  to the Trustee under the terms of this Article IV periodically within the time permitted by the Code and  the Employee Retirement Income Security Act of 1974, as amended. The Trustee shall hold the same in  the respective Participants’ separate After-Tax Deposit Accounts, subject to the provisions of the Plan;  and any such amount shall not be subject to diversion or return to the Company, except return thereof to  the Company in the case and to the extent its transfer having been by reason of a mistake of fact, in which  case the return to the Company of the amount involved shall be made within one (1) year of the mistaken  payment.   5.    USERRA   The right of a Participant to make After-Tax Deposits provided herein shall be provided in accordance  with the special rules relating to veterans rights under USERRA in Code Section 414(u).                                           29  

 

                                      ARTICLE V.                       ROLLOVERS, TRANSFERRED ACCOUNTS   PARAGRAPH   1.    Rollover of Distributions from Plan   A.    General. If any portion of the balance to the credit of a Participant is paid or distributed from the  Plan to the Participant in an Eligible Rollover Distribution, as defined herein, the amount may be rolled  over by the Participant as directed by the Participant, subject to and in accordance with the terms and  provisions of the Plan and the Code.  B.    Written Explanation. The Committee shall cause within a reasonable period of time before making  an Eligible Rollover Distribution the issuance of a written explanation to the Participant of the provisions  under which the Participant may have the distribution directly transferred to an Eligible Retirement Plan,  as defined herein, of the provisions of the Code under which the distribution will not be subject to tax if  transferred to an Eligible Retirement Plan, and of the provisions of the Code under which the distribution  will not be subject to tax if transferred to an Eligible Retirement Plan within sixty (60) days after the date  on which the Participant received the distribution, the provisions of the Code regarding foreign trusts and  tax treatment of distributions from the Plan, and of the provisions of the Code under which distributions  from  the  Eligible  Retirement  Plan  receiving  a  distribution  may  be  subject  to  restrictions  and  tax  consequences which are different from those applicable to distributions from this Plan. The explanation  shall describe a Participant’s right to defer distributions from the Plan to the extent provided in the Plan,  and a description of investment options available under the Plan (including fees) that will be available if  distributions are deferred, in accordance with and to the extent provided for in applicable regulations.  2.    Rollover from Other Plans of the Company   With  the  prior  written  approval  of  the  Committee,  a  Participant  in  this  Plan  may  make  a  rollover  contribution of all or part of a qualifying rollover distribution to such Participant from a trust which is a  part  of  a  separate  qualified  pension  or  profit-sharing  plan  of  the  Company  or  any  subsidiary  of  the  Company. The allowance of any rollover contribution shall be at the discretion of the Committee, and  only in accordance with such terms and conditions as the Committee may prescribe. The Participant’s  rollover contribution shall constitute an additional deposit in, and become a part of the accounts of the  Participant for all purposes of the Plan, and become subject to all the terms and provisions of this Plan,  except that the Company shall have no obligation to contribute any amount, out of its net earnings and  earned  surplus,  or  otherwise,  to  or  for  the  benefit  of  a Participant  on  account  of  any  such  rollover  contribution by the Participant. Any Participant’s rollover contribution shall be received, deposited, held,  and invested consistent with the investment and accounting provisions of this Plan.   For purposes of this paragraph 2., a “qualified pension or profit-sharing plan” shall mean a plan qualified  under  Section  401(a)  of  the  Code  and  ERISA;  and  a “qualifying  rollover  distribution” shall  mean  a  distribution to a Participant from a trust which forms a part of the Company or a subsidiary qualified  pension or profit-sharing Plan which distribution constitutes a distribution qualifying for rollover to this  Plan pursuant to Code Section 402(c) (or corresponding provision of any future federal tax code).   3.    Trust to Trust Transfers From Other Plans of The Company   The Company may, from time to time, direct the Trustee to receive, accept transfers of, and hold as a part  of the Trust, deposits or transfers of the funds, deposits, property, assets, and/or accounts of Participants,                                         30  

 

    or employees of any subsidiary of the Company, from a trust which is part of any other qualified defined  benefit plan or qualified defined contribution plan of the Company or any subsidiary of the Company.  Any  such  deposit  or transfer  shall  be  subject to  prior  written approval  of  the  Company,  and  may  be  pursuant to a modification, continuation, termination, partial termination, consolidation or merger with,  or replacement of any such other Company plan or subsidiary plan which may be adopted by the Company  or the subsidiary employer, or pursuant to any other arrangement mutually determined and agreed upon  by the Company and a subsidiary and/or the subsidiary employee (or Participant). If an employee of the  Company or of a subsidiary of the Company whose account is so transferred is otherwise eligible and not  already participating in the Plan, he/she shall become a Participant at the time of such transfer and deposit.  Any funds or property from the account of a Participant under another Company plan or a subsidiary plan  which are so transferred and accepted by the Trustee shall be received and deposited in full to an account  or accounts of that Participant under this Plan, and shall thereupon become a part of the Trust held for the  account of that Participant in accordance with all the terms and provisions of the Plan. The Committee  shall determine and  prescribe  reasonable  and  appropriate  procedures,  certifications,  and  other  requirements to be accomplished and performed by the Company, the Trustee, the Participant, any such  subsidiary and the plan administrator and trustee of such other Company plan or subsidiary plan, in order  to assure an effective and satisfactory transfer of trust funds, and any such transfer shall be conditioned  upon compliance with all such requirements. Notwithstanding any of the foregoing, the Company shall  have no obligation to make any matching or other additional contributions to the Plan to or for the benefit  of any Participant by reason of any such transfer or deposit to the Trust under this paragraph 3.   4.    Direct Rollovers   A.    Application. Notwithstanding any provision of the Plan to the contrary that might otherwise limit  a Distributee’s election under the Plan, a Distributee may elect, at the time and in the manner prescribed  by the Committee, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible  Retirement Plan specified by the Distributee in a Direct Rollover.  B.    Definitions. For purposes of this paragraph the following definitions shall apply:        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 specified period of ten (10) years or more; any distribution to the        extent such distribution is required under Code Section 401(a)(9); any hardship distribution; the        portion of any other distribution(s) that is not includible in gross income (determined without        regard to the exclusion for net unrealized appreciation with respect to employer securities).               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 Sections 401(a) or 403(a) that agrees to separately account for 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.         2.    Eligible Retirement Plan.  An  Eligible Retirement Plan  is  an  eligible  plan  under  Code        Section 457(b) which is maintained by a state, political subdivision of a state, or any agency or        instrumentality of a state or political subdivision of a state and which agrees to separately account                                         31  

 

          for amounts transferred into such plan from the Plan, an individual retirement account described        in Code Section 408(a), an individual retirement annuity described in Code Section 408(b), an        annuity  described  in  Code  Section  403(a), an annuity described in Code Section 403(b), or a        qualified plan described in Code Section 401(a), that accepts the Distributee’s eligible rollover        distribution.  The  definition  of  Eligible Retirement Plan  shall  also  apply  in  the  cases  of a        distribution to a surviving spouse, or to a spouse or former spouse who is the alternate payee under        a qualified domestic relations order, as defined in Code Section 414(p).               If  any  portion  of  an  Eligible  Rollover  Distribution  is  attributable  to  payments or        distributions from a Designated Roth Account, an Eligible Retirement Plan with respect to such        portion shall include only another Designated Roth Account of the individual from whose Account        the payments and distributions were made, or a Roth IRA of such individual.         3.    Distributee. A  Distributee  includes  a  Participant, Employee  or  former  Employee.  In        addition,  the  Participant’s,  Employee’s  or  former  Employee’s  surviving  spouse  and  the        Participant’s, 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.   C.    Automatic Rollovers. In the event of a mandatory distribution from the Plan greater than One  Thousand Dollars ($1,000) in accordance with the provisions of the Plan, if the Participant does not elect  to have such distribution paid directly to an Eligible Retirement Plan specified by the Participant in a  Direct Rollover or to receive the distribution directly in accordance with the Plan, then the Committee  will pay the distribution in a Direct Rollover to an individual  retirement  account  designated  by  the  Committee. For purposes of determining whether a mandatory distribution is greater than One Thousand  Dollars ($1,000), the portion of the Participant’s distribution attributable to any rollover contribution is  included.  D.    Rollovers From Other Plans. The Plan will accept rollovers from other plans as follows:        1.    Direct  Rollovers.  The  Plan  will  accept  a  direct  rollover  of  an  Eligible  Rollover        Distribution from:               (a)   Qualified  plan  described in  Code  Section 401(a)  or  403(a), including  after•tax                    employee contributions.               (b)   An  annuity  contract  described  in  Code  Section  403(b),  excluding  after-tax                    employee contributions.               (c)   An  eligible  plan  under  Code  Section  457(b)  which  is  maintained  by  a  state,                    political  subdivision  of  a  state,  or  any  agency  or  instrumentality  of  a  state  or                    political subdivision of a state.         2.    Participant Rollover Contributions from Other Plans. The Plan will accept a Participant        contribution of an Eligible Rollover Distribution from:               (a)   A qualified plan described in Code Section 401(a) or 403(a).                                           32  

 

                (b)   An annuity contract described in Code Section 403(b).               (c)   An  eligible  plan  under  Code  Section  457(b)  which  is  maintained  by  a  state,                    political  subdivision  of  a  state,  or  any  agency  or  instrumentality  of  a  state  or                    political subdivision of a state.         3.    Participant Rollover Contributions from IRAs. The Plan will accept a Participant rollover        contribution of the portion of a distribution from a traditional individual retirement account or        annuity described in Code Section 408(a) or 408(b) that is eligible to be rolled over and would        otherwise be includible in gross income.         4.    Rollover of Roth Elective Deferrals or Contributions. The Plan will accept any rollover        contributions to a Roth Elective Deferral Account under the Plan or other permissible rollover        transfers,  contributions  or  payments  of  Roth  401(k)  deferrals  or  contributions  from  any  other        qualified  plan,  annuity  contract,  or  other  plan,  account,  or  arrangement,  subject  to  rules  and        applicable regulations as determined by the Committee and consistent with the Code and the Plan.   5.    Rollover of Nontaxable Distributions   The portion of a distribution of a Participant’s Account that is not includible in gross income for federal  income tax purposes may be transferred in a direct trustee-to-trustee transfer to a qualified trust or to an  annuity contract described in Code Section 403(b) that provides for separate accounting for amounts so  transferred (and earnings thereon), 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, or to  an eligible retirement plan, as provided in Code Section 402(c)(2)(A).   6.    Trust to Trust Transfers From Plans of Other Employers   The Company may, from time to time, direct the Trustee to receive, accept transfers of, and hold as a part  of the Trust, deposits or transfers of the funds, deposits, property, assets, and/or accounts of Participants  from a trust which is part of any qualified defined contribution plan of another employer. Any such deposit  or  transfer  shall  be  subject  to  prior  written  approval  of  the  Company,  and  may  be  pursuant  to  a  modification, continuation, termination, partial termination, consolidation or merger with, or replacement  of any such other plan which may be adopted by the Company, or pursuant to any other arrangement  mutually determined and agreed upon by the Company and such other employer. If an employee of the  Company whose account is so transferred is otherwise eligible and not already participating in the Plan,  he/she shall become a Participant at the time of such transfer and deposit. Any funds or property from the  account of a Participant under the plan of another employer which are so transferred and accepted by the  Trustee shall be received and deposited in full to an account or accounts of that Participant under this  Plan, and shall thereupon become a part of the Trust held for the account of that Participant in accordance  with all the terms and provisions of the Plan. The Committee shall determine and prescribe reasonable  and appropriate procedures, certifications, and other requirements to be accomplished and performed by  the Company, the Trustee, the Participant, the plan administrator and trustee of such other employer plan,  in  order  to  assure an effective and  satisfactory  transfer  of  trust  funds,  and  any  such  transfer  shall be  conditioned upon compliance with all such requirements.   Notwithstanding any of the foregoing, the Company shall have no obligation to make any matching or  other additional contributions to the Plan to or for the benefit of any Participant by reason of any such  transfer or deposit to the Trust under this Paragraph 5.                                          33  

 

    7.    Separately Accounted For Rollovers From Other Plans   Notwithstanding the foregoing or any other provision of the Plan, the Plan may separately account for  amounts attributable to rollover contributions by Participants to the Plan. If such separate accounting is  prescribed and made pursuant to direction of the Committee, the amounts attributable to such rollover  contributions shall be subject to the general rules otherwise applicable to distributions under the Plan,  unless  and  until  there  is  an  amendment  of  the  Plan  to  expressly  provide  that  such  amounts  may  be  distributed at any time pursuant to the Participant’s request. Provided, that any distributions of amounts  attributable to a rollover contribution from another plan is subject to the survivor annuity requirements of  Code Sections 401(a)(11) and 417, and the minimum distribution requirements of Code Section 401(a)(9)  and additional  income  tax  under  Section  72(t)  to  the  extent  otherwise  applicable  to  the  Plan  and  Participants.   8.    Rollover to IRA for Non-Spouse Beneficiary   A direct trustee-to-trustee transfer may be made of any portion of a distribution of the Plan Account of a  deceased  Participant  or  Employee  to  an  individual  retirement  account  established  for  the  purpose  of  receiving the distribution on behalf of an individual who is a designated beneficiary of the Participant or  Employee and who is not the surviving spouse of the Participant or Employee pursuant to Code Section  402(c)(11) and Article XIII, paragraph 5. of the Plan.   9.    Transfer to Foreign Trust Disallowed   Notwithstanding anything to the contrary expressed or implied in the Plan, transfers of amounts from the  Plan to a foreign trust that is not a qualified plan or that would be considered a distribution of the amount  transferred for federal income tax purposes under applicable regulations and guidance of the Internal  Revenue Service, shall not be made.   10.   Automatic Rollover by Participants or Inactive Participants   In furtherance of the foregoing and as otherwise allowed by the Plan and directed and authorized by the  Committee, the Plan may include and be administered to provide one or more automatic rollover features  and  procedures,  to  include  such  a  feature  or  procedure  under  which  inactive  Participants or former  Employees may rollover cash or investment options in kind to an individual retirement account by means  of an electronic medium or similar program maintained and administered by the Trustee of the Plan, or  an affiliate thereof.                                           34  

 

                                      ARTICLE VI.                  SUSPENSION OF SALARY REDUCTIONS, DEPOSITS   PARAGRAPH   1.    Suspension  of  Reduction  in  Compensation  or  After-Tax Deposits  by  Participant  for  Deficiency in Compensation   A Participant may, at any time elect in writing, in the manner prescribed by the Committee, to suspend  his/her elected Reduction in Compensation or After-Tax Deposits in any regular pay period in which  either  would  normally  be  deducted  pursuant  to  his/her  prior  election.  In  any  pay  period  in  which  a  Reduction in Compensation or After-Tax Participant Deposit would normally be deducted from such a  Participant’s pay, such Reduction in Compensation or After-Tax Participant Deposit will be automatically  suspended without notice if his/her net pay for such pay period is insufficient to permit the deduction to  be made in full.   2.    Reinstatement of Voluntarily Suspended Reduction in Compensation or After-Tax Deposits   A Participant may at any time elect in writing to reinstate his/her Reduction in Compensation or After- Tax  Participant  Deposit  to  the  Plan  which  he/she  previously  voluntarily  suspended.  Such  election  to  reinstate a previously suspended Reduction in Compensation or After-Tax Participant Deposit shall be  made in the manner prescribed by the Committee and shall be effective on the first day of the calendar  quarter next following the end of the calendar month in which the Participant’s written election for such  reinstatement is received by the Company.                                           35  

 

                                      ARTICLE VII.                       COMPANY MATCHING CONTRIBUTIONS   PARAGRAPH   1.    Company Matching Contributions   The Company shall make Matching Contributions for Participants in the Plan as provided for in this  Article VII, below.   Upon and after a Non-Bargaining Unit Participant’s commencement of participation in the Plan, subject  to the limitations specified herein and in Article VIII, the Company shall regularly contribute, out of its  net earnings and earned surplus as reflected by its books of account, and shall pay to the Trustee at least  monthly, amounts of Matching Contributions equal to the 401(k) Contributions for that Non-Bargaining  Unit  Participant,  or  that  Non•  Bargaining  Unit  Participant’s  After-Tax  Deposits  for  that  month,  as  provided for herein below.   After  a  Bargaining  Unit  Participant  has  completed  one  (1)  Year  of  Service  as  an  Employee  of  the  Company, subject to the limitations specified herein and in Article VIII, the Company shall regularly  contribute, out of its net earnings and earned surplus as reflected by its books of account, and shall pay to  the Trustee at least monthly, amounts of Matching Contributions equal to the 401(k) Contributions for  that Bargaining Unit Participant, or that Bargaining Unit Participant’s After-Tax Deposits for that month,  as the case may be, as provided for herein below.   A.    Non-Bargaining Unit Participants        1.    The  Company  shall  make  a  Matching  Contribution  for  each  Non-Bargaining  Unit        Participant which shall be equal to the 401(k) Contribution for such Participant based upon such        Participant’s elected Reduction in Compensation and deferral for that payroll period, subject to        the limitation stated in clause 3. of this subparagraph 1.A., below; provided, that the Company        shall  not  make  any  Matching  Contribution  for  such  a  Non-Bargaining  Unit  Participant  with        respect  to  that  part of  the 401(k)  Contribution  that  is  either  an  ESOP  Dividend        Distribution/Additional  Deferral  Contribution  or  a  Catch-Up  Contribution  made  for  such        Participant.         2.    After making the Matching Contribution provided for in clause 1. of this subparagraph        1.A. above, the Company shall make a Matching Contribution for each Non• Bargaining Unit        Participant which shall be equal to such Participant’s After-Tax Deposits for that payroll period,        subject to the limitation stated in clause 3. of this subparagraph l.A., below.         3.    The aggregate Matching Contributions of the Company per payroll period under clauses        1. and 2. of this subparagraph 1.A. for a Non-Bargaining Unit Participant hereunder shall not        exceed six percent (6%) of the Non-Bargaining Unit Participant’s Compensation for the payroll        period.         4.    A full Matching Contribution shall be made for a Participant whose 401(k) Contributions        equal  the  deferral  limitation  under  Code  Section  402(g)  prior  to  the  Plan  limit  on  Matching        Contributions  being  reached  for  the  Plan  Year.  If  the  401(k) Contributions  based  upon a        Participant’s elected Reduction in Compensation equal the Code Section 402(g) limitation at any        time during a Plan Year, and when such limitation is reached no further 401(k) Contributions or                                         36  

 

          After-Tax Deposits are made for or by such Participant for that Plan Year, and the amount of        Matching  Contributions  made  for  the  Plan  Year  is  then  less  than  the  Maximum  Matching        Contribution Amount, the Company shall thereafter make one or more payroll period Matching        Contributions for the Participant in that Plan Year until the total Matching Contributions made for        the  Participant  for  that  Plan  Year  equal  such  Maximum  Matching  Contribution  Amount.  For        purposes of this subparagraph 1.A.4., the term “Maximum Matching Contribution Amount” shall        mean the lesser of (i) the total amount of the 401(k) Contributions for the Participant and the        Participant’s After-Tax Contributions for that Plan Year, or (ii) six percent (6%) of the total of the        Participant’s payroll period compensation for all payroll periods in that Plan Year.   B.    Bargaining Unit Participants.        1.    For  each  payroll  period  the  Company  shall  make  a  Matching  Contribution  for  each        Bargaining Unit Participant equal to one hundred percent (100%) of the percentage of any 401(k)        Contribution and of any After-Tax Deposit for the Payroll Period times such Bargaining Unit        Participant’s Annual Compensation; provided, that the Company’s Matching Contribution for a        Payroll Period shall apply only to the first six percent (6%) of the amount of any Bargaining Unit        Participant’s Annual Compensation paid for the Payroll Period, and any Matching Contribution        shall only be made with respect to any Bargaining Unit Participant’s Annual Compensation for        Payroll  Periods  beginning  after  the  first  day  of  the  calendar  month  coincident  with  or  next        following  completion  of  one  (1)  year  of  service  by such  Bargaining  Unit  Participant.        Notwithstanding  any  other  provision  of  the  Plan,  the  Company  shall  not  make  any  Matching        Contribution  for  such  a  Bargaining  Unit  Participant  with  respect  to  that  part  of  the 401(k)        Contribution that is a Catch-Up Contribution made for such Participant.         2.    The  Company’s  maximum  Matching  Contribution  shall  in  all  cases  be  allocated  and        contributed first to match the 401(k) Contribution for the Participant’s Reduction in Compensation        for that month, and shall then be allocated and contributed to match a Participant’s After-Tax        Deposit only to the extent such Participant’s Reduction in Compensation for that month is less        than the Company’s maximum Matching Contribution for that month.   C.    Application of Limitations         If necessary to meet the limitations of paragraphs 2., 3., 4., or 6. of Article VIII, the Company’s        Matching  Contributions  for  a  Participant  shall  be  reduced  in  the  manner  determined by the        Committee. Such reductions shall be made in a uniform and nondiscriminatory manner,        determined  by  the  Committee  in  its  sole  discretion,  which  are  needed  to  comply  with  such        limitations.   2.    Participant’s Matching Contribution Account   The Company’s Matching Contribution shall be credited to each participating Participant’s Employer  Contribution Account.   3.    Re-entry of Participant   If a former Participant whose employment has terminated shall be rehired as an Employee, he/she shall  be entitled to have all his/her prior service counted for purposes of the one (1)-year service requirement  for entitlement to Company Matching Contributions.                                          37  

 

    4.    USERRA   The Company matching contributions provided for under the Plan shall be provided in accordance with  the special rules relating to veterans rights under USERRA in Code Section 414(u).                                           38  

 

                                     ARTICLE VIII.             LIMITATIONS ON CONTRIBUTIONS AND ANNUAL ADDITIONS   PARAGRAPH   1.    General   Company contributions, After-Tax Deposits, and other contributions under the Plan shall be limited as  provided in this Article VIII.   2.    Limitation on Elective Deferrals; Catch-Up Contributions   No Participant shall be permitted to have Elective Deferrals made under this Plan, or any other plan,  contract or arrangement maintained by the Company, during any calendar year, in excess of the dollar  limitation contained in Code Section 402(g) in effect for the Participant’s taxable year beginning in such  calendar year. In the case of a Participant age fifty (50) or over by the end of the taxable year, the dollar  limitation described in the preceding sentence includes the amount of Elective Deferrals that can be Catch- Up Contributions. The dollar limitation contained in Code Section 402(g) is $18,500 for taxable years  beginning in 2018. Such limit will be adjusted by the Secretary of the Treasury for the cost-of-living  increases under Code Section 402(g)(4).    For purposes of the foregoing and the Plan “Catch-Up Contributions” are Elective Deferrals made to the  Plan that are in excess of an otherwise applicable Plan limit and that are made by a Participant who is age  fifty (50) or over by the end of the taxable year. An otherwise applicable limit is a limit in the Plan that  applies  to  Elective  Deferrals  without  regard  to  Catch•  Up  Contributions,  such  as  limits  on  annual  additions,  the  dollar  limit  on  Elective  Deferrals  under  Code  Section  402(g)  (not  counting  Catch-Up  Contributions) and the limit imposed on the actual deferral percentage (ADP) test under Code Section  401(k)(3). Catch-Up Contributions for a Participant for a taxable year may not exceed (1) the dollar limit  on Catch-Up Contributions under Code Section 414(v)(2)(B)(i) for the taxable year or (2) when added to  other Elective Deferrals, 75 percent of the Participant’s Compensation for the taxable year. The dollar  limit on Catch-Up Contributions under Code Section 414(v)(2)(B)(i) is $6,000 for taxable years beginning  in 2018, which will be adjusted by the Secretary of the Treasury for cost-of-living increases under Code  Section 414(v)(2)(C). Catch-Up Contributions are not subject to the limits on annual additions, are not  counted in the ADP test and are not counted in determining the minimum allocation under Code Section  416 (but Catch-Up Contributions made in prior years are counted in determining whether the Plan is top- heavy).   3.    Actual Deferral Percentage Limitations   The Actual Deferral Percentage for the Highly Compensated Employees for the Plan Year shall not exceed  the greater of A. or B. as follows:   A.    The Actual Deferral Percentage for the preceding Plan Year for all those Employees eligible to be  Participants in this Plan who are not Highly Compensated Employees, multiplied by 1.25, or  B.    The Actual Deferral Percentage for the preceding Plan Year for those Employees eligible to be  Participants in this Plan who are not Highly Compensated Employees multiplied by two (2); provided,  however, that under this subparagraph 3.B. limitation the Actual Deferral  Percentage for the Highly  Compensated Employees may not exceed the Actual Deferral Percentage for the preceding Plan Year for                                          39  

 

    the Employees eligible to be Participants in this Plan who are not Highly Compensated Employees by  more than two (2) percentage points.  This limitation shall be applied and used in testing under the prior or preceding year method under Code  Section 401(k)(3). Provided, the  Company may amend  the  Plan to  provide  that it  elects  to  apply  the  limitations  of  subparagraphs A.  and  B.  of  this  paragraph  by  using  the  Actual  Deferral  Percentage  of  eligible Participants who are not Highly Compensated Employees for the current Plan Year rather than  the preceding Plan Year in accordance with applicable Regulations, except that if such election is made,  it may not be changed except as provided by the Internal Revenue Service under Code Section 401(k)(3).   If any Highly Compensated Employee is a participant in two (2) or more cash or deferred arrangements  of  the  Company,  for  purposes  of  determining the  Actual  Deferral  Percentage  with  respect  to  such  Participant,  all  such  cash  or  deferred  arrangements  shall  be  treated  as  one  (1)  cash  or  deferred  arrangement, for purposes of this paragraph and the Plan, in accordance with Code Section 401(k)(3) and  Treasury Regulations §1.401(k)-1(g).   If two (2) or more plans which include cash or deferred arrangements are considered as one (1) plan for  purposes of Code Section 401(a)(4) or 410(b), the cash or deferred arrangements included in such plans  shall be treated as one (1) arrangement for purposes of this paragraph and the Plan, in accordance with  Code Section 401(k)(3) and Treasury Regulations §§1.401(k)-1(b)(3) and 1.401(k)-1(g).   4.    Limitations on Company Matching Contributions   The Matching Contribution Percentage for eligible Highly Compensated Employees for any Plan Year  shall not exceed the greater of (i) one hundred twenty-five percent (125%) of such percentage for all other  eligible Employees, for the preceding Plan Year, or (ii) the lesser of two hundred percent (200%) of such  Matching Contribution Percentage for all other eligible Employees for the preceding Plan Year, or such  Matching Contribution Percentage for all other eligible Employees for the preceding Plan Year, plus two  (2) percentage points.   This limitation shall be applied and used in testing under the prior or preceding year method under Code  Section 401(m)(2). Provided, the  Company may amend the  Plan to  provide that  elects  to  apply  the  limitations  of  this  paragraph  by  using  the  current  Plan  Year  rather  than  the  preceding  Plan  Year,  in  accordance with applicable Regulations, except that if such election is made, it may not be changed except  as provided by the Internal Revenue Service under Code Section 401(m)(2).   If two (2) or more plans of the Company to which matching contributions, employee contributions, or  elective deferrals are made are treated as one (1) plan for purposes of Code Section 410(b), such plans  shall be treated as one (1) plan for purposes of this paragraph and the Plan, for purposes of this paragraph  and the Plan, in accordance with Code Section 401(m)(2)(B) and Treasury Regulations §1.401(m)-1(f).   If  a  Highly Compensated Employee participates in  two  (2)  or  more  plans of  the  Company to  which  contributions to which Code Section 401(m) applies are made, all such contributions shall be aggregated  for purposes of this paragraph and the Plan, in accordance with Code Section 401(m)(2)(B) and Treasury  Regulations §§1.401(m)-1(b)(3) and 1.401(m)-1(f).   5.    Separate Application of Limitations   If  this  Plan  is  maintained  by  separate  employers  as  a  multiple  employer  plan,  the  Actual  Deferral  Percentage limitations in paragraph 3. above, and the Matching Contribution Percentage limitations in                                          40  

 

    paragraph 4. above, shall be applied as if each separate employer maintaining this Plan as a multiple  employer plan maintained a separate plan   6.    Limitation on Allocations, Annual Additions   Pursuant to this paragraph 6., contributions and other additions to the Plan with respect to any Participant  for any taxable year shall not exceed the limitation provided in Code Section 415(c)(3), expressed as an  Annual Addition to the Participant’s account, which limitation is the greater of (i) $55,000 (adjusted for  increases in the cost-of-living pursuant to Code Section 415(d)),  or  (ii)  100%  of  the  Participant’s  Compensation, as described and provided herein below.    A.    Limitation for Participant that Participates in No Other Plan.        1.    (a)   If the Participant does not participate in, and has never participated in another              qualified plan maintained by the Company or a welfare benefit fund, as defined in §419(e)              of the Code maintained by the Company, or an individual medical account, as defined in              §415(1)(2) of the Code, maintained by the Company, or a simplified employee pension,              as defined in §408(k) of the Code, maintained by the Company, which provides an Annual              Addition as defined in paragraph 6.C.l., below, the amount of Annual Additions which              may be credited to the Participant’s account for any Limitation Year will not exceed the              lesser of the Maximum Permissible Amount or any other limitation contained in the Plan.               (b)   If the Company contribution that would otherwise be contributed or allocated to              the Participant’s Account would cause the Annual Additions for the Limitation Year to              exceed the Maximum Permissible Amount, the amount contributed or allocated will be              reduced so that the Annual Additions for the Limitation Year will equal the Maximum              Permissible Amount.         2.    Prior to determining the Participant’s actual Compensation for the Limitation Year, the        Company may determine the Maximum Permissible Amount for a Participant on the basis of a        reasonable estimation of the Participant’s Compensation for the Limitation  Year,  uniformly        determined for all Participants similarly situated.         3.    As soon as is administratively feasible after the end of the Limitation Year, the Maximum        Permissible Amount for the Limitation Year will be determined on the basis of the Participant’s        actual Compensation for the Limitation Year.         4.    If there is an Excess Amount of a Participant’s Annual Additions for a Limitation Year it        shall be corrected and adjusted in the manner allowed and authorized under Code Section 401(a)        and applicable regulations and guidance published by the Internal Revenue Service, including the        Employee Plans Compliance Resolution System (EPCRS).   B.    Limitation for Participant that Participates in Other Plan.        1.          (a)   This paragraph 6.B. applies if, in addition to this Plan, the Participant is                    covered  under  another  qualified  defined  contribution  plan  maintained  by  the                    Company,  a  welfare  benefit  fund  maintained  by  the  Company,  an  individual                    medical account maintained by the Company, or a simplified employee pension                    maintained  by  the  Company,  that  provides  an  Annual  Addition  as  defined  in                    paragraph 6.C.l., during any Limitation Year.                                          41  

 

                     (b)   The Annual Additions which may be credited to a Participant’s Account under              this Plan for any such Limitation Year will not exceed the Maximum Permissible              Amount reduced by the Annual Additions credited to a Participant’s account under              the other qualified defined contribution plans, welfare benefit funds, individual              medical  accounts,  and  simplified  employee  pensions  for  the  same  Limitation              Year.         (c)   If  the  Annual  Additions  with  respect  to  the  Participant  under  other  qualified              defined  contribution  plans,  welfare  benefit  funds, individual  medical  accounts,              and simplified employee pensions maintained by the Company are less than the              Maximum  Permissible  Amount  and  the  Company  contribution  that  would              otherwise be contributed or allocated to the Participant’s Account under this Plan              would  cause  the  Annual  Additions  for  the  Limitation  Year  to  exceed  this              limitation, the amount contributed or allocated will be reduced so that the Annual              Additions under all such plans and funds for the Limitation Year will equal the              Maximum Permissible Amount.         (d)   If the Annual Additions with respect to the Participant under such other qualified              defined  contribution  plans,  welfare  benefit  funds, individual  medical  accounts,              and simplified employee pensions in the aggregate are equal to or greater than the              Maximum Permissible Amount, no amount will be contributed or allocated to the              Participant’s Account under the Plan for the Limitation Year.   2.    Prior to determining the Participant’s actual Compensation for the Limitation Year, the  Company  may  determine  the  Maximum Permissible Amount  for  a  Participant  in  the  manner  described in paragraph 6.A.2., above.   3.    As soon as is administratively feasible after the end of the Limitation Year, the Maximum  Permissible Amount for the Limitation Year will be determined on the basis of the Participant’s  actual Compensation for the Limitation Year.   4.    If, pursuant to paragraph 6.B.3., above, or as a result of the allocation of forfeitures, a  Participant’s Annual Additions under the Plan and such other plans would result in an Excess  Amount  for  a  Limitation  Year,  the  Excess  Amount  will  be  deemed  to  consist  of  the  Annual  Additions  last  allocated,  except  that  Annual  Additions  attributable  to  a  simplified  employee  pension will be deemed to have been allocated first, followed by Annual Additions to a welfare  benefit fund or individual medical account, regardless of the actual allocation date.   5.    If an Excess Amount was allocated to a Participant on an allocation date of the Plan which  coincides with an allocation date of another plan, the Excess Amount attributed to the Plan will  be the product of,         (a)   the total Excess Amount allocated as of such date, times         (b)   the ratio of (i) the Annual Additions allocated to the Participant for the Limitation              Year as of such date under the Plan to (ii) the total Annual Additions allocated to              the Participant for the Limitation Year as of such date under this Plan and all the              other qualified defined contribution plans.                                     42  

 

          6.    Any Excess Amount attributed to this Plan will be disposed in the manner described in        paragraph 6.A.4.   C.    Definitions.  The  following  definitions  shall  apply  for  purposes  of  this  paragraph 6.,  and  is  applicable under the Plan.        1.    Annual Additions: The sum of the following amounts credited to a Participant’s Account        for the limitation year:               (a)   Company contributions;               (b)   Employee contributions;               (c)   Forfeitures;               (d)   Amounts allocated to an individual medical account, as defined in Code Section                    415(1)(2), which is part of a pension or annuity plan maintained by the Company                    are  treated as  Annual Additions to  a  defined contribution  plan.  Also  amounts                    derived  from  contributions paid  or  accrued  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  the  Company  are  treated  as  Annual                    Additions to a defined contribution plan; and               (e)   Allocations under a simplified employee pension.               For this purpose, any Excess Amount applied under paragraphs 6.A.4. and 6.B. in the        Limitation Year to reduce Company contributions will be considered Annual Additions for such        Limitation Year.         2.    Compensation: Compensation is defined as wages, salaries, and fees for  professional        services and other amounts received (without regard to whether or not an amount is paid in cash)        for personal services actually rendered in the course of  employment  with  the  Company  or        employer  maintaining  the  Plan  to  the  extent  that  the  amounts  are  includable  in  gross  income        (including, but not limited to, commissions paid salesmen, compensation for services on the basis        of a percentage of profits, commissions on insurance premiums, tips, bonuses, fringe benefits, and        reimbursements  or other  expense  allowances  under  a  nonaccountable  Plan  (as  described  in        Treasury Regulations §1.62-2(c)), and excluding the following:               (a)   Employer  contributions  to  a  plan  of  deferred  compensation  which  are  not                    includible  in  the  Employee’s  gross  income  for  the  taxable  year  in  which                    contributed, or Employer contributions under a simplified employee pension plan,                    or any distributions from a plan of deferred compensation;               (b)   Amounts  realized  from  the  exercise  of  a  non-qualified  stock  option,  or  when                    restricted  stock  (or  property)  held  by  the  Employee  either  becomes  freely                    transferable or is no longer subject to a substantial risk of forfeiture;               (c)   Amounts realized from the sale, exchange or other disposition of stock acquired                    under a qualified stock option; and                                          43  

 

                     (d)   Other amounts which received special tax benefits, or contributions made by the              Employer  (whether  or  not  under  a  salary  reduction  agreement)  towards  the              purchase of an annuity contract described in Code Section 403(b) (whether or not              the contributions are actually excludable from the gross income of the Employee).         In general, for purposes of applying the limitations of this paragraph 6., Compensation for  a Limitation Year is the Compensation actually paid or made available in gross income during  such Limitation Year.         Notwithstanding  the  preceding  sentence,  Compensation  for  a  Participant  in  a  defined  contribution plan who is permanently and totally disabled (as defined in Code Section 22(e)(3))  is  the  Compensation  such  Participant  would  have  received  for  the  Limitation  Year  if  the  Participant  had  been  paid  at  the  rate  of  Compensation  paid  immediately  before  becoming  permanently and totally disabled.         Any compensation shall be considered for purposes of this paragraph for a Limitation  Year notwithstanding that is paid after the Participant’s severance from employment with the  Company, provided the compensation is paid by the later of 2 1⁄2 months after severance from  employment  with  the  Company  or  the  end  of  the  Limitation  Year  that  includes  the  date  of  severance from employment with the Company.   3.    Defined Contribution Dollar Limitation: $55,000, as adjusted under Code Section 415(d).   4.    Company:  For  purposes  of  this  paragraph,  Company  shall  mean  the  Company  and  subsidiaries that adopt the Plan, and all members of a controlled group of corporations (as defined  in Code Section 414(b), as modified by Code Section 415(h)), all commonly controlled trades or  businesses (as defined in Code Section 414(c), as modified by Code Section 415(h)) or affiliated  service groups (as defined in Code Section 414(m)) of which the adopting entity is a part, and any  other  entity  required  to  be  aggregated  with  the  Company  pursuant  to  regulations  under  Code  Section 414(o).   5.    Excess Amount: The excess of the Participant’s Annual Additions for the Limitation Year  over the Maximum Permissible Amount.   6.    Limitation Year: A calendar year. All qualified plans maintained by the Company must  use the same Limitation Year. If the Limitation Year is amended to a different 12- consecutive  month period, the new Limitation Year must begin on a date within the Limitation Year in which  the amendment is made.   7.    Maximum Permissible Amount.         For  limitation  years  beginning  on  or  after  January  1,  2014,  except  for  catch  up  contributions described in Code Section 414(v), the Annual Addition that may be contributed or  allocated to a Participant’s Account under the Plan for any Limitation Year shall not exceed the  lesser of:         (a)   The Defined Contribution Dollar Limitation.         (b)   100 percent of the Participant’s Compensation for the Limitation Year.                                    44  

 

                The compensation limit referred to in (b) shall not apply to any contribution for medical        benefits after separation from service (within the meaning of Code Section 401(h) or Code Section        419A(f)(2)), which is otherwise treated as an Annual Addition.               If a short limitation year is created because of an amendment changing the Limitation        Year  to  a  different  12-consecutive  month  period,  the  Maximum  Permissible  amount  will  not        exceed the defined contribution dollar limitation multiplied by the following fraction:                         Number of months in the short limitation year                                         12   7.    No Return or Diversion of Contributions Except for Mistake   Except  as  provided  in  paragraphs  9.  and  10.  of  this  Article  VIII  below,  the  Trustee  shall  hold  the  Company’s contributions in the respective Participants’ Accounts, subject to the provisions of the Plan;  and no part of those contributions shall be recoverable by the Company, nor shall they be used for, or  diverted to any other purpose, except for return thereof to the Company in the case and to the extent of its  contributions having been made by reason of a mistake of fact, in which case the return to the Company  of  the  amount  involved  shall  be  made  within  one  (1)  year  of  the  mistaken  contribution;  and  if  a  contribution to the Plan conditioned upon the deductibility of the contribution under Code Section 404,  as provided in paragraph 14. of this Article VIII, then such contribution may be returned to the Company  (to the extent disallowed) within one (1) year after the disallowance of the deduction; provided, that any  contribution for a Participant which exceeds the limitations provided in paragraphs 2. and 3. of this Article  VIII shall be distributed to the Participant as directed by the Committee within a reasonable period of time  consistent with requirements for distributing excess deferrals under the Code and regulations thereunder.   8.    Distribution of Excess Deferrals   If any Excess Deferrals are included in the gross income of a Participant for any taxable year under Code  Section 402(g)(1), (or corresponding section of any future federal tax code), then not later than March 1  following the close of the taxable year, such Participant may allocate the amount of such Excess Deferrals  among the plans under which the Excess Deferrals were made and may notify the Committee of the  portion allocated to the Plan; and not later than April 1 following the close of the taxable year, the Plan  may distribute to such Participant the amount allocated to the Plan (and any income allocable to such  amount). Such distribution of the Excess Deferrals of a Participant may be made notwithstanding any  other provision of the Plan, the Code, or ERISA; provided, that except to the extent provided in applicable  Treasury Regulations, notwithstanding the distribution of such portion of Excess Deferrals from the Plan,  such portion shall be treated as a contribution of the Company for purposes of applying the limitations in  paragraphs 3. and 4. of this Article VIII and Code Section 401(k). If the Plan distributes only a portion of  any Excess Deferrals allocated to the Plan and income allocable thereto, such portion shall be treated as  having been distributed ratably from the Excess Deferral allocable to the Plan and the income.   9.    Excess 40l(k) Contributions   In the event there are Excess Contributions under the limitations of Code Section 401(k) for any Plan  Year actually paid over to the Trust on behalf of Highly Compensated Employees, then the Committee  may, in its sole discretion, direct the Trustee to distribute the amount of such Excess Contributions for  such  Plan  Year  (and any  income allocable  to  such  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 Participants to whose accounts such Excess                                         45  

 

    Contributions were allocated for the preceding Plan Year; provided, that such distribution shall be made  as promptly as practicable, so as to avoid the effect of Code provisions stating that if such excess amounts  are distributed more than 21⁄2 months after the last day of the Plan Year in which such excess amounts  arose, a ten percent (10%) excise tax will be imposed on the employer maintaining the Plan with respect  to such amounts. Excess Contributions shall be allocated to the Highly Compensated Employees with the  largest  amounts  of Company  contributions  taken  into account  in calculating  the  Actual Deferral  Percentage test for the Plan Year in which the excess arose, beginning with the Highly Compensated  Employee with the largest amount of such Company contributions and continuing in descending order  until all the Excess Contributions have been allocated. For purposes of the preceding sentence the “largest  amount” is determined after distribution of Excess Contributions. If such excess amounts are distributed  more than two and one-half (21⁄2) months after the last day of the Plan Year in which such excess amounts  arose, a 10-percent excise tax will be imposed on the Company with respect to such amounts.   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 end of the Plan Year. Unless  otherwise  determined  by  the  Committee,  the  income  or  loss  allocable  to  Excess  Contributions  is  the  income or loss allocable to the Participant’s Elective Deferral account (and, if applicable, the Qualified  Nonelective Contribution account or the Qualified Matching Contributions account or both) for the Plan  Year multiplied by a fraction, the numerator of which is such Participant’s Excess Contributions for the  year  and  the  denominator  is  the  Participant’s  account  balance  attributable  to  Elective  Deferrals  (and  Qualified  NonElective  Contributions  or  Qualified  Matching  Contributions,  or both,  if  any  of  such  contributions are included in the Actual Deferral Percentage test) without regard to any income or loss  occurring during such Plan Year.   Excess Contributions shall be distributed from the Participant’s Elective Deferral account and Qualified  Matching Contribution account (if applicable) in proportion to the Participant’s Elective Deferrals and  Qualified Matching Contributions (to the extent used in the Actual Deferral Percentage test) for the Plan  Year. Excess Contributions shall be distributed from the Participant’s Qualified Nonelective Contribution  account only to the extent that such Excess Contributions exceed the balance in the Participant’s Elective  Deferral account and Qualified Matching Contribution account.   The Committee may, in its sole discretion, permit a Participant to treat his or her Excess Contributions as  an  amount  distributed  to the  Participant  and  then  contributed  by  the  Participant  to  the  Plan.  Such  recharacterized amounts will remain nonforfeitable and subject to the same distribution requirements as  Elective Deferrals under the Plan. Amounts may not be  recharacterized by a Highly Compensated  Employee to the extent that such amount in combination with other Participant contributions made by the  Participant  would  exceed  any  stated  limit  under  the  Plan  on  Participant  contributions.  Any  such  recharacterization must occur no later than two and one-half (21⁄2) 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 Participant for the Participant’s tax  year in which the Participant would have received them in cash.   If and to the extent Excess Contributions (and income allocable thereto) are distributed, such Excess  Contributions  and  allocable  income  shall  be  designated  by  the  Company  as  a  distribution  of  Excess  Contributions (and income) and shall be distributed to the appropriate Highly Compensated Employees  after the close of the Plan Year in which the Excess Contributions arose and within twelve (12) months  after the close of that Plan Year. In all cases, for purposes of the foregoing, the income allocable to Excess                                         46  

 

    Contributions  shall  equal  the  sum  of the  allocable  gain  or  loss  for  the  Plan  Year.  In  addition  to  the  provisions stated above, the Committee may determine and use any reasonable method for computing the  income allocable to Excess Contributions, which method shall be nondiscriminatory, be used consistently  for all Participants and for all corrective distributions under the Plan for the Plan Year, and be used by the  Plan for allocating income to Participants’ accounts.   The amount  of Excess Contributions  to be distributed or to be recharacterized under the  foregoing  provisions of this Article VIII with respect to a Participant shall be reduced by any Excess Contributions  previously distributed to the Participant for the Participant’s taxable year ending with or within the Plan  Year in accordance with Code Section 402(g)(2), (or corresponding section of any future federal tax code),  and the amount of Excess Contributions that may be distributed with respect to a Participant for a taxable  year shall be reduced by any Excess Contributions previously distributed or recharacterized with respect  to the Participant for the Plan Year beginning with or within the taxable year, in the manner necessary to  satisfy the applicable provisions of the Treasury Regulations under Code Section 401(k).   10.   Excess Aggregate Contributions   In  the  event  the  aggregate  amount  of  Matching  Contributions  and  employee  contributions  (and  any  qualified  nonelective  contribution  or  elective  contribution  taken  into  account  in  computing  the  contribution percentage) actually made on behalf of Highly Compensated Employees for any Plan Year  is an amount in excess of the maximum amount of such contributions permitted under the limitations on  matching contributions stated in paragraph 4. of this Article VIII (determined by reducing contributions  made on behalf of Highly Compensated Employees in order of their contribution percentages beginning  with the highest of such percentages), then the Committee may, in its sole discretion, direct the Trustee to  distribute the amount of such excess of such contributions for such Plan Year (and any income allocable  to such contributions), but the distribution of such excess contributions (and income) shall be made within  two  and  one-half  (21⁄2)  months  after  the  close  of  such Plan  Year.  Any  distribution  of  such  Excess  Aggregate Contributions for any Plan Year shall be made to Highly Compensated Employees on the basis  of the amount of contributions on behalf of, or by, each such Highly Compensated Employee.   The determination of the amount of such excess aggregate contributions with respect to the Plan shall be  made  after  (i)  first  determining  the  excess  deferrals  (within  the  meaning  of  Code  Section 402(g)  (or  corresponding  section  of  any  future  federal  tax  code)),  and  (ii)  then determining  the  excess  401(k)  Contributions under paragraph 3. of this Article VIII.   Notwithstanding any other provision of this Plan, Excess Aggregate Contributions, plus any income and  minus  any  loss  allocable thereto,  shall  be  distributed no  later  than the  last  day  of  each  Plan  Year to  Participants to whose accounts such Excess Aggregate Contributions were allocated for the preceding  Plan Year; provided, that such distribution shall be made as promptly as practicable, so as to avoid the  effect of Code provisions stating that if such Excess Aggregate Contributions are distributed more than  21⁄2 months after the last day of the Plan Year in which such excess amounts arose, a ten percent (10%)  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.   Excess Aggregate Contributions shall be adjusted for any income or loss up to the end of the Plan Year.  Unless  otherwise  determined  by  the  Committee,  the  income  or  loss  allocable  to  Excess  Aggregate  Contributions  is  the  income  or  loss  allocable  to  the  Participant’s  Employee  Contribution  account,  Matching  Contribution  account,  Qualified  Matching  Contribution  account  (if  any,  and  if  all  amounts  therein  are  not  used  in  the  Actual  Deferral  Percentage  test)  and,  if  applicable,  Qualified  Nonelective                                         47  

 

    Contribution  account  and  Elective  Deferral  account  for  the  Plan Year multiplied by a fraction, the  numerator of which is such Participant’s Excess Aggregate Contributions for the year and the denominator  is the Participant’s account balance(s) attributable to Contribution Percentage Amounts without regard to  any income or loss occurring during such Plan Year.   Excess Aggregate Contributions shall be distributed on a pro-rata basis from the Participant’s Employee  Contribution  account,  Matching  Contribution  account,  and  Qualified  Matching  Contribution  account  (and,  if  applicable,  the  Participant’s Qualified  Nonelective  Contribution  account  or  Elective  Deferral  account, or both).   The method of distributing Excess Aggregate Contributions shall in all cases satisfy the requirements of  Code Section 401(a)(4), and after any correction by means of such distributions, each level of matching  contributions must be currently and effectively available to a group of Employees that satisfies Code  Section 410(b), and in correcting Excess Aggregate Contributions by means of distributions, Participant  contributions may not be distributed to Highly Compensated Employees to the extent needed to meet the  requirements of Code Section 401(m)(2) while Matching Contributions attributable to Participant  Contributions remain allocated to Highly Compensated Employees’ accounts; provided, that a method of  distributing  Excess  Aggregate  Contributions  may  include  the  distribution  of  unmatched  Participant  contributions that exceed the highest rate at which Participant contributions are matched before matched  Participant contributions, or the distribution of Matching Contributions prior to Participant contributions.   The  distribution  of  Excess  Aggregate  Contributions  under  this  paragraph  shall  include  all  income  applicable thereto. The income allocable to Excess Aggregate Contributions is equal to the sum of the  allocable gain or loss for the Plan Year. In addition, to the provisions stated above, the Committee may  determine  and  use  any  reasonable  method  for  computing  the  income  allocable  to  Excess  Aggregate  Contributions, which method shall be nondiscriminatory, be used consistently for all Participants and for  all corrective distributions under the Plan for the Plan Year, and be used by the Plan for allocating income  to Participants’ accounts.   11.   Qualified Nonelective and Matching Contributions   The Company may, in its sole discretion, elect to make Qualified Nonelective Contributions and Qualified  Matching  Contributions  that  are  to  be  treated  as  401(k)  Contributions  in  order  to  satisfy  the  Actual  Deferral Percentage tests prescribed in paragraph 3. of this Article VIII, and treated as Company Matching  Contributions,  to  satisfy  the  nondiscrimination  tests  prescribed  in  paragraph  4.  of  this  Article  VIII  provided that such Qualified Nonelective Contributions or Qualified Matching Contributions shall be  treated as 401(k) Contributions or Company Matching Contributions if they satisfy the requirements for  such  treatment  prescribed  by  the  applicable  Treasury Regulations. The term “Qualified Nonelective  Contributions” means Company contributions to the Plan other than 401(k) Contributions and Company  Matching Contributions that satisfy the requirements of the nondiscrimination requirements of the Plan  provided  in  paragraph 3. of this Article VIII, and the distribution limitations applicable to 401(k)  Contributions under the Plan, Code Section 401(k)(2)(B), and Treasury Regulations Section 1.401(k)- l(d).   The  amount  of  any  nonelective  contributions  to  the  Plan,  including  those  Qualified  Nonelective  Contributions treated as elective contributions for purposes of the Actual Deferral Percentage test, must  satisfy the requirements of Code Section 401(a)(4) and Treasury Regulations thereunder; the amount of  nonelective  contributions,  excluding  those  Qualified  Nonelective  Contributions  treated  as  elective  contributions for purposes of the Actual Deferral Percentage Test and those nonelective contributions  treated as matching contributions for purposes of the Actual Deferral Percentage Test must satisfy the                                         48  

 

    requirements  of  Code  Section  401(a)(4)  and  applicable  Treasury  Regulations  thereunder;  and  the  Qualified Nonelective Contributions and Qualified Matching Contributions must satisfy the requirements  of Treasury Regulation §  1.401(k)-2(a)(6)  for  the  Plan  Year  as  if  such  contributions  were  elective  contributions.   The aggregation requirements specified in Treasury Regulations § 1.401(k)-2(a)(6)(iii) shall be satisfied  with respect to any taking into account of Qualified Nonelective Contributions and Qualified Matching  Contributions for purposes of the Actual Deferral Percentage test.   The Plan shall be administered by the Committee to assure that the amount of nonelective contributions,  including those Qualified Nonelective Contributions treated as Matching Contributions for purposes of  the Actual Contribution Percentage test, shall satisfy the requirements of Code Section 401(a)(4) and the  Treasury Regulations thereunder. The amount of nonelective contributions, excluding those Qualified  Nonelective Contributions treated as Matching Contributions for purposes of the Actual Contribution  Percentage  test and  those  Qualified  Nonelective  Contributions  treated  as  elective  contributions  under  Code  Section  401(k)  for  purposes  of  the  Actual  Deferral  Percentage  Test,  shall  satisfy  Code  Section  401(a)(4) and the Treasury Regulations thereunder; the elective contributions, including those treated as  Matching  Contributions  for  purposes  of  the  Actual  Contribution  Percentage  Test  must  satisfy  the  requirements of Code Section 401(k)(3); the Qualified Nonelective Contributions shall be allocated to the  Participant under the Plan as of a date within the Plan Year, and the elective contributions shall satisfy  Code Section 401(k) and the Treasury Regulations thereunder for the Plan Year; and the aggregation of  plans requirements of Treasury Regulations § 1.401(m)• l(b)(4) shall be satisfied.   In administering the Plan with respect to Qualified Nonelective Contributions certain contributions are  not taken into account. Qualified Nonelective Contributions cannot be taken into account for a Plan Year  for  a  non-highly  compensated  employee  (hereinafter  referred  to  as “NHCE”) to  the  extent  such  contributions exceed the product of that NHCE’s compensation and the greater of five percent (5%) or  two (2) times the Plan’s Representative Contribution Rate. Any Qualified Nonelective Contribution taken  into account under an actual contribution percentage test under Treas. Reg. §1.401(m)-2(a)(6) (including  the  determination  of  the  Representative  Contribution  Rate  for  purposes  of  Treas.  Reg.  §1.401(m)- 2(a)(6)(v)(B)),  is  not  permitted  to  be  taken  into  account. For  purposes  of  this  paragraph,  the  Plan’s  “Representative Contribution Rate” means and is the lowest Applicable Contribution Rate of any eligible  NHCE among a group of eligible NHCEs that consists of half of all eligible NHCEs for the Plan Year (or,  if greater, the lowest Applicable Contribution Rate of any eligible NHCE in the group of all eligible  NHCEs for the Plan Year and who is employed by the Company on the last day of the Plan Year); and  the “Applicable Contribution Rate” for an eligible NHCE means and is the sum of the qualified matching  contributions taken into account for the eligible NHCE for the Plan Year and the Qualified Nonelective  Contributions  made  for  the  eligible  NHCE  for  the  Plan  Year,  divided  by  the  eligible  NHCE’s  compensation for the same period.   12.   Plan Not Dependent Upon Earnings; Company Contributions Limited to Earnings   This Plan is intended to be a profit-sharing plan within the meaning of Code Sections 401(a)(l) and 401(a)  (27) without regard to current or accumulated earnings and profits of the Company; provided, that if at  any  time  the  Company’s  net  earnings  and  earned  surplus  as  reflected  by  its  books  of  account  are  insufficient to permit the making in full therefrom of any contribution otherwise required to be made by  the Company hereunder, such contributions shall be required to be made only to the extent, if any, that  such net earnings, earned surplus, and accumulated earnings and profits are sufficient, and the deficiency  shall not thereafter be made up even though such earnings and profits again become sufficient therefor;  provided further, however, that the portion of this Plan which constitutes an employee stock ownership                                         49  

 

    plan is intended to be a stock bonus plan within the meaning of Code Sections 401(a) and 4975(e)(7), and  the  Treasury  regulations  thereunder  which  is  established  and maintained  by  the  Company  to  provide  benefits similar to those of a profit-sharing plan except that the contributions by the Company are not  necessarily dependent upon profits and the benefits are distributable in stock of the Company.   13.   Maximum Contribution   In no event, however, shall Company contributions be made in excess of the amount deductible under  Code Section 404, or other applicable federal law now or hereafter in effect.   14.   Application of Dollar Leveling Method.   The distribution of Excess Contributions for any Plan Year shall be made to Highly  Compensated  Employees on the basis of the amount of contributions by, or on behalf of each Highly Compensated  Employee in accordance  with Code Section 401(k)(8)(C). A parallel  method shall also be used for  recharacterizing Excess Contributions under Code Section 401(k)(8)(A)(ii), and for distributing Excess  Aggregate Contributions under Code Section 401(m)(6)(C).   In order to distribute  Excess Contributions  (and to apply a parallel method to recharacterize  Excess  Contributions, or distribute Excess Aggregate Contributions, as applicable) the following procedure and  method shall be used:         (1)   Calculate  the  dollar  amount  of  Excess Contributions  for  each  affected Highly              Compensated  Employee in  a  manner described  in  Code  Section 401(k)(8)(B)  and              Treasury Regulations § 1.401(k)-2(b)(2). However, in applying these rules, rather than              distributing  the  amount necessary  to  reduce the  Actual Deferral Percentage  of  each              affected Highly Compensated Employee in order of such Highly Compensated Employees              Actual Deferral Percentages, beginning with the highest Actual Deferral Percentage, the              Plan shall use these amounts in step (2.)         (2)   Determine the total of the dollar amounts calculated in step (1).   This total amount in step (2) (total excess contributions) should be distributed in accordance with steps  (3) and (4), below:         (3)   The elective contributions of the Highly Compensated Employee with the highest dollar              amount of elective contributions are reduced by the amount required to cause that Highly              Compensated Employee’s elective contributions to equal the dollar amount of the elective              contributions of the Highly Compensated Employee with the next highest dollar amount              of  elective contributions.  This  amount is  then  distributed  to  the  Highly Compensated              Employee with the highest dollar amount. However, if a lesser reduction, when added to              the total dollar amount already distributed under this step, would equal the total excess              contributions, the lesser reduction amount is distributed.         (4)   If  the  total  amount distributed  is  less  than  the  total  excess contributions,  step  (3)  is              repeated.                                           50  

 

    15.   Income Allocable to Excess Contributions   The income allocable to Excess Contributions is equal to the allocable gain or loss through the end of the  Plan Year.                                           51  

 

                                      ARTICLE IX.                             INVESTMENT PROVISIONS   PARAGRAPH   1.    Participant Directed Investment   A.    General. The amounts allocated to Participant Accounts and Plan assets shall be invested by the  Trustee in accordance with this Article IX. The Plan investment options made available to Participants  from time to time shall be established, maintained, modified and changed by action of the Committee,  unless otherwise determined or directed by the Company.  B.    Plan Investment Policy. The Committee shall be authorized and is directed to adopt, maintain,  monitor, and update from time to time a written investment policy statement for the Plan. The investment  policy statement for the Plan shall provide a written policy to govern the providing of a program under  the Plan that includes investment options for directed investment of Participant Accounts by Participants.  The  investment  policy  statement  for  the  Plan  shall be  periodically  reviewed  by  the  Committee  and  modified as the Committee determines to be in accordance with the purposes and provisions of the Plan  and other circumstances the Committee considers relevant.  C.    Direction of Investment; Investment Options. A Participant shall have the right and opportunity,  by delivery of his/her direction to the Committee in the manner and form it prescribes, and in turn direct  the  Trustee,  that  any  or  all  cash  in  his/her  account,  including  his/her  deposits,  the  Company’s  contributions,  and  any  other  cash,  shall  be  invested  under  any  one  or  more  of  certain  designated  investment  options  made  available  under  the  Plan.  The  Committee  shall  in turn furnish  or  cause  the  Participant’s investment direction to be delivered to and acted upon by the Trustee within such period of  time as the Committee determines to be reasonable and practicable in the circumstances. A Participant’s  initial direction of investment shall be in written form or by electronic medium, telephone voice response  system or other means determined and prescribed by the Committee. A Participant shall be authorized  and have the right and opportunity, after initial direction of investment, to give  further directions for  changes in the investment of his/her account by written direction, electronic medium, use of a telephone  voice response system established by the Committee and Trustee for the Plan or other means determined  and  prescribed  by  the  Committee.  Investment  in  certain  options  may  be  limited  to  retention  and  maintenance of prior contributions invested in such options, with no further investment of contributions  therein being permitted, as more particularly provided below. The Committee may establish, modify and  change the investment options made available to Participants from time to time. A Participant may also  change his investment direction and direct sales from time to time to the extent permitted and authorized  in subparagraphs l.D. and F., and paragraph G., below.  The Plan Administrator intended that the investment options under this Plan would be identical to those  under the ONEOK, Inc. 401(k) Plan as of January 1, 2014, and that all Participant investment directions  under the ONEOK, Inc. 401(k) Plan as of December 31, 2013 would transfer to this Plan. Accordingly,  in the absence of any other affirmative investment direction, each Transferred Participant (as defined in  Article XXIV) who was a participant in the ONEOK, Inc. 401(k) Plan as of December 31, 2013 was then  deemed to have elected to allocate his or her Plan Account among investment options under this Plan in  the same manner as under the ONEOK, Inc. 40l(k) Plan and thereby continue to exercise control, over the  investment  of  such  Participant’s  Plan  Account. The  Plan  Administrator  intended that  such  deemed  election would constitute a  qualified  change  in  investment  options  within  the  meaning  of  Section  404(c)(4) of ERISA.                                          52  

 

    Moreover, in the absence of any other affirmative investment direction, Participants who have directed  the investment of their Plan Accounts, in whole or in part, in ONEOK, Inc. common stock as of the  Separation (as defined in Article XXIV) shall ‘be deemed to have elected to direct the same investment  in ONE Gas, Inc. common stock after the Separation, and the Plan Administrator intends that such deemed  election shall constitute a qualified change in investment options within the meaning of Section 404(c)(4)  of ERISA.   D.    Qualified Default Investment of Participant Account        1.    Notwithstanding the foregoing, if a Participant fails or refuses to direct the investment of        all or any part of his/her Participant Account the amount of the Account that is not directed to be        invested by the Participant shall be invested in a Qualified Default Investment Alternative that is        determined by the Company and the Committee in accordance with paragraph E. of this Article        IX, below, and otherwise in accordance with the Plan.         2.    With  respect  to  the  investment  of  assets  in  a  Participant Account  pursuant  to  this        paragraph, the following requirements and conditions shall apply:               (a)   The assets shall be invested in the Qualified Default Investment Alternative as                    defined herein.               (b)   The Participant or beneficiary on whose behalf the investment is made shall have                    had an opportunity to direct investment of assets of his/her Participant Account                    but did not direct the investment of the assets.               (c)   The Participant or beneficiary on whose behalf an investment is made in such a                    Qualified  Default  Investment  Alternative  shall  be  furnished  with  a  notice  that                    satisfies the requirements set forth below.               (d)   Any material provided to the Plan relating to a Participant’s or  beneficiary’s                    investment in a Qualified Default Investment Alternative shall be provided to the                    Participant or beneficiary.               (e)   Any Participant or beneficiary on whose behalf assets are invested in a Qualified                    Default Investment Alternative may, consistent with the terms of the Plan (but not                    less frequently than once within any three (3) month period) transfer, in whole or                    in part, such assets to any other investment option or alternative available under                    the Plan without financial penalty.               (f)   The Plan shall otherwise offer a broad range of investment alternatives within the                    meaning of 29 CFR 2550.404c-l(b)(3).         3.  For investment of a Participant Account pursuant to this paragraph the Participant shall be        provided written notice of the Qualified Default Investment Alternative  investment of  his/her        Participant Account in a manner determined to be understood by the average Plan Participant and        that contains a description of the circumstances under which assets of the individual account of a        Participant and  beneficiary may  be  invested  on  behalf  of  the  Participant  or  beneficiary  in  a        Qualified  Default  Investment  Alternative;  a  description  of  the  Qualified  Default Investment        Alternative under the Plan, including a description of the investment objectives, risk and return        characteristics, and fees and expenses attendant to the investment alternative; a description of the        right of Participants and beneficiaries on whose behalf assets are invested in a Qualified Default                                         53  

 

          Investment Alternative to direct the investment of those assets to any other investment option        under  the  Plan,  without  financial  penalty;  and  an  explanation  of  where  the  Participants  and        beneficiaries can obtain investment information concerning the other investment options under        the Plan.         4.    For purposes of the foregoing and the Plan, the term “Qualified Default  Investment        Alternative” shall mean an investment option established and maintained under the Plan that meets        the requirements and conditions for· treatment as a qualified default investment alternative under        29 CFR §2550.404c-5.   E.    Investment Options. The investment options existing and recognized under the Plan and Trust,  shall be established as hereinabove provided, and listed and described to  Participants  by  written  information and memoranda, and by electronic media, furnished by and at the direction of the Committee  from time to time. The investment options shall include Qualifying Employer Stock and other investments  determined  by  the  Committee  or  required  hereunder. It  is intended that the investment options shall  provide Participants investment  alternatives which  will  provide  a  Participant with  a  reasonable  opportunity to materially affect the potential return on amounts in his/her Plan account and the degree of  risk to which such amounts are subject, and to choose from at least three (3) investment options, each of  which is diversified, has materially different risk and return characteristics, and which in the aggregate  enable the Participant to achieve investment direction of risk and return characteristics within the range  normally appropriate for such Participant, and when combined with investments in other alternatives will  tend  to  allow  reasonable  diversification so  as  to  minimize  risk  of  losses,  taking  into  account  all  circumstances.  A Participant may, by written, telephone voice response or internet direction to the Committee, and in  turn to the Trustee, as provided above, direct that his/her deposits and account, the  Company’s  contributions and any other cash be deposited in such investment options.   A Participant who was a Participant in the Prior ONEOK, Inc. Thrift Plan or the KGS 401(k) Thrift Plan  may retain in his/her account stock or securities which were his/her prior directed investments in such  Plans to the extent, and as the Committee may prescribe by written memoranda and instructions pertaining  to the Plan. The Committee may prescribe the manner in which dividends or other amounts received from  such  retained  investments  may  be  invested,  and  may  limit  or  prescribe  additional  investment  or  reinvestment in such stock or securities.   A Participant shall be permitted to retain shares of ONEOK, Inc. common stock held under the Plan (to  the extent not distributed as a dividend in the form of ONE Gas, Inc. common stock) in connection with  the Separation (as described in Article XXIV). Any such investment in ONEOK, Inc. common stock after  the Separation shall be subject to the provisions of this Plan applicable to other Plan investment options  except that (1) the investment in ONEOK, Inc. common stock is authorized by the Company solely to  enable Participants who own ONEOK, Inc. common stock under the Plan to participate in the Separation  under the same terms as other shareholders of ONEOK, Inc. common stock; (2) the Committee shall not  have  the  discretion  to  eliminate ONEOK, Inc. common stock as an investment option unless the  Committee determines, in its sole discretion, that ONEOK, Inc. is insolvent or otherwise in danger of  imminent collapse; (3) after the Separation, no additional shares of ONEOK, Inc. common stock may be  purchased in any manner whether by deposit, exchange, transfer, reinvestment of dividends or otherwise;  (4) ONEOK, Inc. common stock shall not be subject to the diversification requirement applicable to other  Plan  investment  options  under  the  meaning  of 404(a)(1)(C)  of  ERISA;  and  (5)  Participants  shall  be  notified of the importance of diversifying their overall investment portfolio.                                          54  

 

    Notwithstanding  any  other  provisions  herein,  the  right  of  Participants  to  direct  the  purchase,  sale  or  transfer of Qualifying Employer Stock for their Plan Accounts may be limited, suspended and restricted  from time to time, and for such periods of time as the Committee, in its discretion, determines to be  necessary and appropriate for administration of the Plan and Trust, including, without limitation, for the  purpose  of  determining  the  amount  and  timing  of  ESOP  Dividend  Distributions  and  ESOP  Dividend  Distribution/Additional  Deferral  Contributions  under  the  Plan.  The  Committee  may  direct  such  limitations, suspensions and restrictions to be made, and cause Participants and the Trustee to be given  notice thereof, in the manner it determines reasonable and practical in the circumstances. Notwithstanding  the foregoing, the Committee shall not have the discretion to eliminate ONE Gas, Inc. common stock as  an investment option under the Plan, and the continued availability of ONE Gas, Inc. common stock as  an investment option under the Plan shall be presumed prudent, unless the Committee determines, in its  sole discretion, that the Company is insolvent or otherwise in danger of imminent collapse.   The investments selected and directed by Participants may increase or decrease in value due to changes  and fluctuations in market conditions and other circumstances, and the Company, Committee and Trustee  do  not  warrant  or  guarantee,  by  or  under  the  Plan  or  otherwise,  the  value  of  any  security  or  other  investment directed by a Participant hereunder.   Notwithstanding the foregoing, the investment by a Participant who is a Section 16 Person shall be subject  to the limitations and restrictions and other provisions of paragraph 8. of this Article IX, below, with  respect to any Discretionary Transactions involving the investment of his/her deposits, the Company’s  contributions and any other cash attributable to his/her account.    F.    Change in Participant’s Investment Direction. Any direction by a Participant that available funds  in his/her account shall be invested under a particular investment option shall be deemed a continuing  direction until changed by the Participant. A Participant may, by written direction, electronic medium,  telephone  voice  response  system  or  other  means  determined  and  prescribed  by  the  Committee  give  direction  to  the  Committee  and/or  the  Trustee  to  change  investment  options  for  investment  of  the  Participant Account of the Participant, and the Committee shall if necessary in turn direct the Trustee by  means it determines and the form it prescribes to change the Participant’s investment direction; provided,  that a Participant who is a Section 16 Person shall be subject to the limitations, restrictions and other  provisions of  paragraph  8.  of  this  Article IX,  below,  with  respect  to  such  Participant’s  direction  of  investments  that  are  Discretionary  Transactions;  provided,  further,  that  the  amount  which  may  be  transferred, sold or exchanged pursuant to any directed cancellation or change in any investment direction  shall be at least Two Hundred Fifty Dollars ($250.00) or the full value of the investment being cancelled  or changed, whichever is less.  G.    Sale of Investments at Participant Direction. A Participant may (i) by written direction in form  prescribed by the Committee, or (ii) by electronic medium, telephone voice response system or other  means determined and prescribed by the Committee give direction to the Committee and/or the Trustee  to  sell  or turn in for redemption, as  may be appropriate,  any  security purchased at  the  Participant’s  direction; the Participant may similarly direct the exchange of any security or securities of an investment  option under the Plan as allowed and practicable in administration of the Plan; and the Participant may  similarly direct the investment of the proceeds of any such sale or redemption, with or without the addition  of other available cash then in the Participant’s account, under any one or more of the investments options  currently in effect under the Plan for which additional investment of contributions and cash may be so  directed;  provided,  that  a  Participant  who  is  a  Section  16  Person  shall  be  subject  to  the  limitations,  restrictions and other provisions of paragraph 8. of this Article IX, below, with respect to the direction of  the sale or redemption transactions involving any security issued by the Company that are Discretionary  Transactions, as defined by paragraph 8. of this Article IX below; provided, further, that the amount as to                                         55  

 

    any investment or security which may be so directed to be sold or redeemed and directed to be invested  under other investment options shall be at least Two Hundred Fifty Dollars ($250.00) or the full value of  the investment being sold or redeemed, whichever is less.  H.    Minimum  Transaction  Direction. The  Committee  may  prescribe  that  a  minimum  amount  and  value must be directed to be changed, sold or exchanged in any change, sale, exchange or other transaction  directed to be made by a Participant pursuant to the provisions of this Article IX, and the Plan, which  amount  shall  be  provided  and  disclosed  by  the  Committee  and  Trustee  to  Participants;  and  unless  otherwise expressly determined and prescribed by the Committee, such minimum amount and value shall  be Two Hundred Fifty Dollars ($250.00).  2.    Time of Action by Trustee on Investments   The  Trustee  will  comply  with  the  directions  of  a  Participant  with  respect  to  investment,  sale  and  reinvestment  as  soon  as  practicable  after  receipt  of  such  direction  if  they  are  given  and  received  in  accordance  with  one of  the  foregoing  authorized means  of  communicating  such  directions;  provided,  however, that in the case of directions to purchase securities, the Trustee will not comply therewith until  a means to make such purchase has been adequately provided in respect to the Participant’s account. With  respect to purchases of Qualifying Employer Stock, the Trustee shall purchase such securities on the day  or  days  of  each  month  on  which  the  Trustee  receives  the  contributions  or  receives  dividends  on  the  Qualifying Employer Stock held by the Trustee. The Committee may establish such rules, regulations and  procedures as it determines, in its discretion, to be necessary and appropriate for administering Participant  directions of investment under the Plan. The Trustee, in its discretion, may limit the daily volume of its  purchases or sales of a security to the extent that such action is deemed by it to be in the best interest of  the Participants directing such purchases or sales.   3.    Participant Rights as to Options, Rights, and Warrants   In the event that any options, rights, or warrants shall be granted or issued with respect to a security held  by the Trustee under the Plan, the Trustee, to the extent possible, shall give to the Participant in whose  account such security is held a reasonable opportunity (which in any event shall not extend beyond five  days prior to the date of expiration of the options, rights, or warrants) to direct the Trustee to exercise such  options,  rights,  or  warrants,  and  if  any  cash  shall be  required in connection  with  such exercise,  such  Participant shall, simultaneously with his/her direction to the Trustee, make available to the Trustee the  necessary funds. Such funds may be made available to the Trustee by payment thereof in cash or by  written direction to the Trustee in form prescribed by the Committee to use cash held by the Trustee in  the Participant’s Account or obtained from the sale of any security in such account; provided, however,  that the total of any such cash Payment and the amount of current monthly contributions shall not exceed  the  contribution  and  deposit  limitations  set  forth  in  Articles  III  and  IV.  Cash  payments  made  by  a  Participant to the Trustee in connection with the exercise of any such options, rights, or warrants shall  constitute  an  additional  deposit  in  the  Participant’s  Account  for  all  purposes  of  the  Plan  except  the  Company’s contributions under paragraph 1. of Article VII and except that, for a period of twelve (12)  months after making any such payment, the Participant shall have the right, by written request to the  Trustee in a form prescribed by the Committee, to receive payment from the Trustee out of any cash  available in the Participant’s Account an amount equal to the cash so paid, and such payment to the  Participant shall not constitute a withdrawal within the meaning of Article XII or any other Article of the  Plan. Any securities acquired as the result of the exercise of any such options, rights, or warrants shall be  added to the Participant’s Account.   Provided, that a Participant who is a Section 16 Person shall be subject to the limitations, restrictions and  other provisions of paragraph 8. of this Article IX, below, with respect to any options, rights or warrants                                         56  

 

    granted or issued with respect to any security held by the Trustee of the Plan that is a security issued by  the Company,  if the exercise  or  other action  by the  Participant  pursuant  to  this  paragraph  3.  is  a  Discretionary Transaction, as defined in such paragraph 8.   4.    Redemption of Nontransferable Securities   In the case of the redemption of any nontransferable security or on the maturity thereof, the Participant in  whose account such security is held shall take such steps as the Trustee may prescribe in order to affect  the redemption or collection thereof by the Trustee.   5.    Manner of Holding Cash and Securities   All cash and securities in Participants’ Accounts shall, until disposed of pursuant to the provisions of the  Plan, be held in the possession of the Trustee. Transferable securities may be registered in the name of  the Trustee or in the name of its nominee. Nontransferable securities shall be issued in such name or  names as the Trustee may elect, subject to any applicable laws or regulations at the time in effect with  respect thereto. In the sole discretion of the Trustee, investments in a particular security to be held in the  accounts of more than one (1) Participant may be represented by a single stock certificate or a single bond,  as the case may be.   6.    Voting of Shares   A.    Company Stock. Shares of the voting stock of the Company held by the Trustee in the account of  a Participant under the Plan will be voted or consents for action with respect thereto will be granted by  the Trustee or other registered owner thereof only in accordance with written instructions given to the  Trustee by the Participant, except that the Trustee, in its discretion, may vote or direct the registered owner  to vote or may consent or direct the registered owner to consent to action being taken with respect to any  such stock if the Trustee has not received written instructions from the Participant in whose account such  shares are held at least five (5) days prior to the date of the meeting at which such vote is to be taken or  the last date that a consent of action may be given. Notice of any such meeting or consent request shall be  given by the Committee to the Participant and a request for written instructions shall be made by the  Committee to be directed to the Trustee at such time and in such form as may be provided by rules and  regulations adopted by the Committee.  This paragraph and all pertinent provisions of the Plan and Trust shall be applied and interpreted in all  respects so as to meet the requirements of Code Section 409(e) (or corresponding section of any future  federal tax code) so that each Participant or beneficiary in the Plan is entitled to direct the Plan and Trustee  as to the manner in which stock and securities of the Company which are entitled to vote and are allocated  to the Participant Account of such Participant or beneficiary are to be voted.   B.    Other Investments. Unless otherwise expressly directed in writing by the Committee, the Trustee  shall administer the investments of the Plan assets directed by a Participant under the Plan in a manner  such that shares of the voting stock of the corporations held by the Trustee in the account of a Participant  under the Plan will be voted or consents for action with respect thereto will be granted by the Trustee or  other registered owner thereof in accordance with  written instructions given to the Trustee by the  Participant, except that the Trustee, in its discretion, may vote or direct the registered owner to vote or  may consent or direct the registered owner to consent to action being taken with respect to any such stock  if the Trustee has not received written instructions from the Participant in whose account such shares are  held at such time as the Committee, or the Trustee acting pursuant to authorization by the Committee,  specifies prior to the date of the meeting at which such vote is to be taken or the last date that a consent  of action may be given. Notice of any such meeting or consent request shall be given by the Trustee to                                         57  

 

    the Participant and a request for written instructions shall be made by the Trustee to be directed to the  Trustee  at  such  time  and  in  such  form  as  may  be  provided  by  rules  and  regulations  adopted  by  the  Committee.  The  foregoing  provisions  of  this  paragraph  6.B.,  when  Participant  voting  is  applicable  under  such  provisions, shall be applied and administered so that a Participant shall be entitled to direct the Trustee as  to the manner in which voting rights representing the interest of such Participant in the Trust are to be  exercised. The Committee shall provide, and cause the Trustee to provide to each Participant materials  pertaining to  the exercise of  such rights, containing all  the information  which  would  otherwise  be  distributed to shareholders or ownership interests of a corporation or entity involved. Votes representing  fractional shares of stock shall be voted in the same ratio, and for and against each issue, as the applicable  vote directed by Participants with respect to whole shares of stock.   7.    Tender Offers   Notwithstanding any other provisions of this Plan, the provisions of this paragraph 7. shall govern the  tendering of shares of Common Stock of the Company held in this Plan.   A.    Upon commencement of a tender offer for any securities that are Common Stock of the Company,  the  Company shall  notify  each  Participant of  such tender offer and  utilize its best efforts  to  timely  distribute or cause to be distributed to the Participant such information as is distributed to shareholders of  the Company in connection with such tender offer, and shall provide a means by which the Participant  can instruct the Trustee whether or not to tender the shares of Common Stock of the Company allocated  to  such  Participant’s  account.  The  Company  shall  provide  the  Trustee  with  a  copy  of  any  materials  provided to Participants.  B.    Each Participant shall have the right to instruct the Trustee as to the manner in which the Trustee  is to respond to the tender offer for any and all of the shares of Common Stock of the Company allocated  to  such  Participant’s account.  The Trustee shall  respond  to the  tender  offer  with  respect  to  shares  of  Common Stock of the Company as instructed by the Participant. The Trustee shall not tender any stock  allocated to a Participant’s account for which the Trustee has received no instructions from the Participant.  C.    The Trustee shall tender that number of unallocated shares of Common Stock of the Company  which is determined by multiplying the total number of unallocated shares by a fraction of which the  numerator is the number of shares of Common Stock of the Company allocated to Participants’ accounts  for which the Trustee has received instructions from Participants to tender (and such instructions have not  been withdrawn as of the date of determination) and the denominator is the total number of shares of  Common Stock of the Company allocated to Participants’ accounts.  D.    A Participant who has directed the Trustee to tender shares of Common Stock of the Company  allocated to such Participant’s account may, at any time prior to the tender offer withdrawal date, instruct  the Trustee to withdraw, and the Trustee shall withdraw such shares of Common Stock from the tender  offer prior to the withdrawal deadline.  Prior to such withdrawal deadline, if unallocated shares of Common Stock of the Company have already  been tendered, the Trustee shall redetermine the number of shares of Common Stock of the Company  which would be tendered under paragraph 7.C. hereunder as if the date of such withdrawal were the date  of  determination,  and  withdraw  the number  of  unallocated  shares  necessary  to  reduce the  number  of  unallocated shares tendered to the amount so redetermined. A Participant shall not be limited as to the  number of instructions to tender or withdraw which he/she may give to the Trustee.                                           58  

 

    E.    The Trustee shall credit the proceeds received in exchange for tendered shares of Common Stock  of the Company to the account from which the tendered stock originated.  F.    Notwithstanding the foregoing, a Participant who is a Section 16 Person shall be subject to the  limitations, restrictions and other provisions of paragraph 8. of this Article IX, below, with respect to any  tender  of  shares  of  Common  Stock  allocated  to  such  Participant’s  account  that  is  a  Discretionary  Transaction, as defined in such paragraph 8.  8.    Section 16 Person Limitations; Discretionary Transactions   A Section 16 Person shall be allowed to direct or have a Discretionary Transaction as defined below,  effected under the Plan only if such Discretionary Transaction is effected pursuant to an election made at  least six (6) months following the date of the most recent election, with respect to any employee benefit  plan of the Company, that effected a Discretionary Transaction that was:         (1)   an acquisition, if the current proposed Discretionary Transaction would be a disposition;              or         (2)   a disposition, if the current proposed Discretionary Transaction would be an acquisition.   For purposes of this Article IX, the term “Discretionary Transaction” shall mean a transaction involving  a Qualifying Employer Security pursuant to an employee benefit plan of the Company that:         (i)   is at the volition of the Participant;         (ii)  is not made in connection with the Participant’s death, disability, retirement or termination              of employment;         (iii) is  not  required  to  be  made  available  to  the  Participant  pursuant  to  a  provision  of  the              Internal Revenue Code; and         (iv)  results in either an intra-plan transfer involving a Qualifying Employer Security under the              Plan, or a cash distribution funded by a volitional disposition of a Qualifying Employer              Security.   Except to the extent otherwise expressly stated herein, all terms and provisions contained in this paragraph  8. are intended to have the same meaning and effect as when used in Rule 16b-3 of the Securities and  Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended (“SEC Rule  16b-3”). Transactions under the Plan by or with respect to Section 16 Persons are intended to qualify for  exemptions allowable under SEC Rule 16b-3, unless the Committee specifically determines otherwise;  and the provisions of the Plan shall be administered, interpreted and construed to carry out such intention,  and any provision that cannot be so administered, interpreted and construed shall, to the extent permissible  under the Code and the Employee Retirement Income Security Act of 1974, as amended, be disregarded.   9.    Employee Stock Ownership Plan (ESOP)   The portion of this Plan and the Trust under which investment in Qualifying Employer Stock is directed  by Participants pursuant to paragraph 1. of this Article IX, above, is intended to be an Employee Stock  Ownership Plan designed to invest primarily in Qualifying Employer Securities, including all shares of  ONEOK, Inc. Common Stock held by the Plan at the time such portion of the Plan and Trust is first made  an Employee Stock Ownership Plan until the date of the Separation (as defined in Article XXIV) and all                                          59  

 

    shares  of  ONE  Gas,  Inc.  Common  Stock  distributed  as  a  dividend  to  shareholders  of  ONEOK,  Inc.  Common Stock upon Separation. The shares of ONEOK, Inc. Common Stock held under the Plan until  the date of the Separation, and the shares of ONE Gas, Inc. Common Stock distributed as a dividend to  shareholders  of  ONEOK,  Inc.  Common  Stock  upon  Separation,  are  Qualifying  Employer  Securities  within the meaning of Code Section 409(l), and are the only employer securities of the Company in which  the Plan shall invest; provided, however, that ONEOK, Inc. Common Stock shall cease to be a Qualifying  Employer Security immediately after the Separation. The investment in such stock shall be made and  administered in accordance with the provisions of Code Section 4975(e)(7), or succeeding provisions of  the federal tax law, the Treasury regulations thereunder, and the provisions of the Plan more specifically  providing for such Employee Stock Ownership Plan, including without limitation, the provisions of this  paragraph 9., stated below; paragraph 4. of Article III, providing for deemed deferrals equal to ESOP  Dividends  paid  and  distributed;  paragraph  10.  of  this  Article  IX  providing  for  diversification  of  investments;  paragraph  6.  of  this  Article  IX  providing  for  the  voting  of  Qualifying  Employer  Stock;  paragraph  2.  of  Article  X  providing  for  payment  and  distribution  of  ESOP  Dividends  on  Qualifying  Employer Stock; paragraph 5. of Article XI providing for the time of distribution of Qualifying Employer  Stock from the Plan; and paragraph 13. of Article XI providing for Participant rights to distribution of  Qualifying Employer Stock.   It is intended that the Employee Stock Ownership Plan provided for herein shall not acquire any Plan  assets or Company securities by use of an exempt loan under Code Section 4975(d)(3), or otherwise, but  notwithstanding the foregoing, if and to the extent any such exempt loan is ever made to or received by  the Plan, then any such loan shall conform in all respects to the requirements of Code Section 4975(e) and  the  Treasury  regulations  thereunder,  and  must  be  primarily  for  the  benefit  of  Participants  and  their  beneficiaries, and shall comply with the following terms and conditions: (1) The interest rate respecting  such loan shall not exceed a reasonable rate of interest; and the Trustee shall consider all relevant factors  in determining a reasonable rate of interest, including the amount and duration of the loan, the security  and guarantee (if any) involved, the credit standing of the ESOP and the Company (if and to the extent  that the Company acts as guarantor), and the interest rate prevailing for comparable loans; and upon due  consideration of the foregoing factors, a variable interest rate may be reasonable; (2) At the time that such  loan is made or entered into, the interest rate and the price of securities to be acquired should not be such  that Plan assets might be dissipated; (3) The terms of such loan, whether or not between independent  parties, must be at such time at least as favorable to the Trust as the terms of a comparable loan resulting  from arm’s-length negotiations between independent parties; (4) The proceeds of such loan must be used  within a reasonable time after their receipt by the Trust only to acquire Qualifying Employer Stock, to  repay such loan, or to repay a prior loan to the Trust; (5) Such loan must be without recourse against the  Trust; the only assets of the Trust that may be given as collateral on such loan are shares of Qualifying  Employer Stock acquired therewith; no person entitled to payment under such loan shall have any right  to assets of the Trust other than collateral given for such loan, cash contributions of the Company made  to meet the obligations of the Trust under such loan, and earnings attributable to such collateral and the  investment of such contributions; the payments made with respect to such loan by the Trust during a Plan  Year must not exceed an amount equal to the sum of such contributions and earnings received during or  prior to the year less such payments in prior years; such contributions and earnings must be accounted for  separately on the books of account of the Trust, until the loan is repaid; (6) In the event of default on such  loan, the value of Plan assets transferred in satisfaction of the loan must not exceed the amount of default;  (7)  Shares  of  Qualifying  Employer  Stock  used  as  collateral  for  such  loan  shall  be  released  from  the  encumbrance thereof, in accordance with the provisions stated in this paragraph 9., below; and (8) Except  as otherwise provided herein below under the terms of this Plan and Trust, or as otherwise required by  applicable law, no Qualifying Employer Stock or other Company security acquired with the proceeds of  such loan shall be subject to a put, call or other option, or buy-sell or similar arrangement while held by                                          60  

 

    and when distributed from the Trust, whether or not the Trust is then an employee stock ownership plan  as described in Code Section 4975(e)(7).   All shares of Qualifying Employer Stock acquired by the Trust and pledged as collateral on any such loan  shall  be  added  to  and  maintained  in  a  suspense  account.  Said  shares  shall  be  released  from  such  encumbrance as follows: (1) For each Plan Year during the duration of the loan, the number of shares of  Qualifying  Employer  Stock  released  shall  equal  the  number  of  encumbered  shares  held  immediately  before release by a fraction. The numerator of the fraction is the amount of principal and interest paid to  the lender by the Trust for the year, and the denominator of the fraction is the sum of the numerator plus  the principal and interest to be paid for all future years; (2) For purposes of the foregoing determination,  the number of future years under the loan must be definitely ascertainable, and shall be determined without  taking  into  account  any  possible  extensions  or  renewal  periods.  If  the  interest  rate  under  the  loan  is  variable, the interest to be paid in future years shall be computed by using the interest rate applicable as  of the end of the Plan Year; and (3) To the extent of the foregoing release from encumbrance, shares shall  be withdrawn from the suspense account, and nonmonetary units representing the Participants’ interest  therein shall be allocated, for each Plan Year. The shares of Qualifying Employer Stock held in the above- described  suspense  account  shall  be  voted  by  the  Trustee.  With  respect  to  shares  released  from  encumbrance, said shares shall be voted as provided in paragraph 6. of this Article IX of the Plan.   To the extent any Company security is acquired by the Plan with the proceeds of an exempt loan, which  security is not publicly traded when distributed or is subject to a trading limitation when distributed, then  such security shall be subject to a put option exercisable only by Participant (“Participant” meaning for  purposes  of  these  provisions,  the  Participant  and  beneficiaries  of  the  Participant),  such  Participant’s  donees, or by a person (including an estate or its distributee) to whom such security passes by reason of  such Participant’s death. Such put option must permit the Participant to put such security to the Company,  and under no circumstances may the put option bind the Plan, except that such put option may grant the  Plan an option to assume the rights and obligations of the Company at the time that the put option is  exercised; the put option must be exercisable for at least 60 days following the date of distribution of stock  of the Company and, if the put option is not exercised within such 60-day period, for an additional period  of at least 60 days in the following Plan Year.  The put option paid in installments shall include adequate  security and will provide for interest on any unpaid amounts as required under IRC § 409(h)(5)(B).  A  Company notification shall inform the individual distributes of the term of the put options that they are to  hold.  Any such put option is to be exercised by the holder notifying the Company in writing that the put  option is being exercised. The period during which such a put option is exercisable shall not include any  time when the distributee is unable to exercise it because the party bound by the put option is prohibited  from honoring it by applicable federal and state law. All put options are subject to the protections and  rights regarding any put option and buy-sell arrangement as provided for in Reg. 54.4975-ll(a)(3)(ii) and  are non-terminable. The price at which any such put option must be exercisable is the value of the security,  determined  under  Section  54.4975-ll(d)(5)  of  the  Treasury  regulations.  The  terms  and  provisions  for  payment under any such put option must be reasonable terms within the meaning of Section 54.4975- 7(b)(12)(iv) of the Treasury regulations and shall not exceed five (5) years in accordance with IRC §  409(h)(5)(A). The payment under any such put option shall not be restricted by the provisions of a loan  or any other arrangement, including the Company’s certificate of incorporation, unless so required by  applicable state law.   10.   Investment Diversification of Investments   A.    Employee contributions and elective deferrals invested in employer securities. In the case of the  portion of an account of an Applicable Individual attributable to employee contributions and elective  deferrals which is invested in Employer Securities, the Applicable Individual shall be allowed to elect to                                         61  

 

    direct the Plan to divest any such securities and to reinvest an equivalent amount in other investment  options meeting the requirements of paragraph 10.C., below.  B.    Company contributions invested in Employer Securities. In the case of the portion of the account  attributable  to  employer  contributions  other  than  elective  deferrals  which  is  invested  in  Employer  Securities, each Applicable Individual who-        1.    is a Participant who has completed at least 3 years of service, or         2.    is a beneficiary of a Participant described in clause (i) or of a deceased Participant,          may elect to direct the Plan to divest any such Employer Securities and to reinvest an equivalent        amount in other investment options meeting the requirements of paragraph 10.C., below.   C.    Investment options. The requirements of this paragraph 10.C. are met if the Plan offers not less  than three (3) investment options, other than Employer Securities, to which an Applicable Individual may  direct the proceeds from the divestment of Employer Securities pursuant to this paragraph 10.C., each of  which is diversified and has materially different risk and return characteristics. The Plan shall not be  treated as failing to meet the requirements of this paragraph 10.C. merely because the Plan limits the time  for divestment and reinvestment to periodic, reasonable opportunities occurring no less frequently than  quarterly. Except as provided in Treasury regulations, the Plan shall not meet the requirements of this  paragraph 10.C. if the Plan imposes restrictions or conditions with respect to the investment of Employer  Securities which are not imposed on the investment of other assets of the Plan, except such limitation  shall not apply to any restrictions or conditions imposed by reason of the application of securities laws.  D.    The foregoing provisions shall not apply if the Plan is not an “applicable defined contribution  plan” meaning a defined contribution plan which holds any publicly traded employer securities.  For this purpose the terms “applicable defined contribution plans” does not include an employee stock  ownership plan if (i) there are no contributions to such plan (or earnings thereunder) which are held within  such plan and are subject to Code Section 401 (k) or (m) , and (ii) such plan is a separate plan for purposes  of  Code  Section  414(1) with  respect  to  any  other  defined  benefit  plan  or  defined  contribution  plan  maintained by the same employer or employers.   E.    For purposes of this paragraph the following definitions of terms shall apply:        1.    The terms “Applicable Individual” means –               (a)   any Participant in the plan, and               (b)   any  beneficiary  who  has  an  account  under  the  plan  with  respect  to  which  the                    beneficiary is entitled to exercise the rights of a Participant.         2.    The term “elective deferral” means an employer contribution described in Code Section        402(g)(3)(A) .         3.    The term “Employer Security” has the meaning given such term by section 407(d)(l) of        ERISA.         4.    The term “employee stock ownership plan” has the meaning given such term by Code        Section 4975(e)(7) .                                           62  

 

          5.    The  term “publicly  traded  employer  securities” means  employer  securities  which  are        readily tradable on an established securities market.         6.    The term “year of service” has the meaning given such term by Code Section 411(a)(5).   F.    Diversification  of Investment. The following  additional provisions apply  to  diversification  of  investment.        1.    The  investment  options  offered  to  Participants  under  the  Plan  shall  be  established,        maintained and administered in accordance with the provisions of Code Section 40l(a)(35) that        are applicable to the Plan.         2.    The provisions of this paragraph apply if the Plan holds any publicly traded Employer        Security; provided, if the Company, or any member of a controlled group of corporations (as        described  in  Treasury  regulations  section  1.40l(a)(35)•l(f)(2)(iv)(A))  which  includes  the        Company, has issued a class of stock which is a publicly traded Employer Security, and the Plan        holds Employer Securities which are not publicly traded Employer Securities, then the Plan shall        be treated as holding publicly traded Employer Securities.         3.    With respect to a Participant (including for purposes of this paragraph an alternate payee        who has an account under the Plan or a deceased Participant’s beneficiary), if any portion of the        Participant’s account under the Plan attributable to elective deferrals (as described in Code Section        402(g)(3)(A)), employee contributions, or rollover contributions is invested in publicly traded        employer securities, then the Participant must be offered the opportunity to elect to divest those        employer securities and reinvest an equivalent amount in other investment options as described in        subparagraph F.5., below.         4.    With respect to a Participant who has completed at least three (3) years of vesting service        (including for purposes of this paragraph an alternate payee who has an account under the Plan        with  respect  to  such  Participant  or  a  deceased  Participant’s  beneficiary),  if  a  portion  of  the        Participant’s account attributable to employer nonelective contributions is invested in publicly        traded employer securities, then the Participant must be offered the opportunity to elect to divest        those  employer  securities and reinvest an equivalent amount in other investment options as        described subparagraph F.5., below.         5.    At least three (3) investment options (other than employer securities) must be offered to        Participants described above. Each investment option must be diversified and have materially        different  risk  and  return  characteristics.  Periodic  reasonable  divestment  and  reinvestment        opportunities must be provided at least quarterly. Except as provided in sections 1.40l(a)(35)-       l(e)(2) and (3) of the Treasury Regulations, restrictions (either direct or indirect) or conditions will        not be imposed on the investment of publicly traded employer securities if such restrictions or        conditions are not imposed on the investment of other plan assets.         6.    For purposes of this paragraph and the Plan, a “publicly traded security” is a security        which is traded on a national securities exchange that is registered under section 6 of the Securities        Exchange Act of 1934 or which is traded on a foreign national securities exchange that is officially        recognized, sanctioned, or supervised by a governmental authority and the security is deemed by        the Securities and Exchange Commission as having a “ready market” under SEC Rule 15c3-1 (17        CFR 240.15c3).                                          63  

 

    11.   No Guarantee or Indemnity.   Nothing contained in this Plan shall be construed as a guarantee by the Company or by the Trustee of the  value of any security in which funds held by the Trustee under the Plan are invested or as an indemnity  against any loss resulting from such investments.                                                                      64  

 

                                      ARTICLE X.               CREDITS AND CHARGES TO A PARTICIPANT’S ACCOUNT   PARAGRAPH   1.    General Charges and Credits   All  interest,  dividends,  and  other income  received  by  the  Trustee  in  respect  to  assets  included  in  a  Participant’s Account, and all gains or losses upon the sale of securities in the Participant’s Account, as  determined by the Trustee, shall be credited or charged, as the case may be, to the Participant’s Account.   2.    ESOP Dividend Distributions   A.    Participant ESOP Reinvestment Election. Any ESOP Dividend on Qualifying Employer Stock  which in accordance with the Plan provisions (1) is payable in cash to the Participants in the Plan or their  beneficiaries, or (2) is payable to the Plan and is to be distributed in cash to Participants in the Plan or  their beneficiaries not later than ninety (90) days after the close of the Plan Year in which paid, may at  the election of such Participants or their beneficiaries, be (A) paid as provided in clause (1) or (2) of this  subparagraph A., above, or (B) paid to the Plan and reinvested in Qualifying Employer Stock. In this  regard, a Participant may elect in writing to either (i) receive and take payment in cash of one hundred  percent (100%) of the ESOP Dividends for such Participant’s Account, (ii) receive and take payment in  cash of fifty percent (50%) of the ESOP Dividends for his/her Participant Account, and have the other  fifty percent (50%) of such ESOP Dividends paid to the Plan and reinvested in Qualifying Employer  Stock, or (iii) elect to receive and take no payment in cash of the ESOP Dividends for his/her Participant  Account and have one hundred percent (100%) of such ESOP Dividends paid to the Plan and reinvested  in Qualifying Employer Stock. A Participant who for any reason fails to make an election with respect to  the payment or reinvestment of ESOP Dividends hereunder shall have all of the ESOP Dividends for  his/her Participant Account paid to the Plan reinvested in Qualifying Employer Stock. Reinvestment of  ESOP Dividends paid to the Plan shall be made in accordance with all applicable provisions of the Plan  providing for the investment of Plan assets in Participant Accounts and for Qualifying Employer Stock to  be a permissible investment thereof under the Plan.  The Committee shall provide for each Participant to make an election in writing to have dividends on  Qualifying Employer Stock payable to the Participant or to the Plan to be reinvested in such Qualifying  Employer Stock, at the time and in the manner provided in rules, forms and procedures prescribed by the  Committee,  which  may  include  a  required  minimum  amount  of  dividends  to  make  an  election,  as  determined to be administratively reasonable and practicable by the Committee, in its discretion.   B.    Dividend Reinvestment.        1.    Each individual who is a retired Employee, or a former Employee who has separated from        service with the Company, may elect in writing to receive and take a payment and distribution in        cash of either (i) one hundred percent (100%) of his/her ESOP Dividends, or (ii) fifty percent        (50%) of his/her ESOP Dividends, notwithstanding that such individual shall have no right to elect        any deferral of Compensation with respect to the dividend distribution to be received.         2.    The  elections  provided  to  a  Participant  who  is  an  Employee  under  the  foregoing        provisions, are intended to allow such Participant to elect to receive payment and distribution of        ESOP Dividends from the Company and/or the Trust so as to increase the dollar amount of cash        he/she  receives  in  the  form  of  ESOP  Dividends  by  the  percentage  elected,  without  any                                         65  

 

          corresponding  offset  of  such  amount  by  any  ESOP  Dividend  Distribution/401(k)  Deferral        Contribution or Reduction in Compensation under the Plan.         3.    It  is  also  intended  that  unless  a  Participant  elects  otherwise,  a  corresponding  ESOP        Dividend  Distribution/Additional  Deferral  Contribution  will  be  made  with  respect  to  ESOP        Dividends paid and distributed in cash to a Participant under paragraph 2.A. above, to the extent        provided therein and in paragraph 4. of Article III.         4.    Notwithstanding the foregoing, the payment and distribution in cash of ESOP Dividends        with respect to Qualifying Employer Stock in a Participant Account may be limited in a uniform        and consistent manner, as determined by the Committee, so as to maximize the application of the        limitations on elective deferrals and contributions contained in Code Sections 402(g) and 415 to        a Participant’s regularly designated elective deferrals of Compensation, and Company Matching        Contributions thereon during a Plan Year, before application of such limitations with respect to        any ESOP Dividend Distribution/Additional Deferral Contributions made by and for Participant        arising during the Plan Year.         5.    The payment and distribution of ESOP Dividends in cash pursuant to this paragraph 2.B.        and  the  making  of  ESOP  Dividend  Distribution/Additional  Deferral  Contributions  shall  be        administered by the Company and the Trustee, as determined, prescribed and found mutually        acceptable by the Committee and the Trustee. Any amount of ESOP Dividends not so paid and        distributed in cash to a Participant, retired Employee or former Employee under the foregoing        provisions shall be credited to and remain in the Participant Account and shall not thereafter be        distributable under the provisions of this paragraph, unless otherwise directed and approved by        the Committee.         6.    The elections made by Participants, retired Employees and former Employees to receive        distributions of ESOP Dividends hereunder shall be made in writing at the time and in the form        prescribed by the Committee.   3.    Calculation of Charges and Credits to Participant Accounts   Except  as  otherwise  directed  by  the  Committee,  within  its  discretion,  the  cost  to  be  charged  to  a  Participant’s Account of any security purchased by the Trustee according to the Participant’s direction  shall be the cost of such security at the closing market price on the date such purchase is directed; and the  proceeds credited to a Participant’s Account upon the sale or redemption of any securities shall be the  actual proceeds thereof.   4.    Commissions, Taxes, and Charges on Security Purchases and Sales   Brokerage commissions, transfer taxes, and other charges and expenses in connection with the purchase  or sale of securities shall be added to the cost of such securities or deducted from the proceeds thereof, as  the case may be.   5.    Investment Management Fees   Investment management fees charged or incurred by any person, firm, or entity for the management of  investments made in or by any fund in connection with a Participant’s investment in particular investment  options shall be charged against the Participant’s Account and may include amounts allocated toward the  payment of Plan administrative expenses, as the Committee may prescribe and direct from time to time.                                          66  

 

    6.    Allocation of Plan Administrative Expenses   The Committee may direct and cause all or part of reasonable Plan administrative expenses to be allocated  and charged to the Plan accounts of current and former employees and their beneficiaries on a pro rata or  other reasonable basis; and such allocation may from time to time be made by allocating all or part of  certain reasonable Plan expenses to the Plan accounts of former employees on pro rata or other reasonable  basis without similarly allocating and charging such expenses to the Plan accounts of current employees.   7.    Calculation of Credits for Redemption   Upon the redemption or maturity or any nontransferable Government bonds included in a Participant’s  Account,  the  difference  between  the  cost  thereof  and  the  amount  received  upon  such  redemption  or  maturity shall be credited to the Participant’s Account as income.   8.    Taxes   Taxes, if any, on any assets held by the Trustee or income therefrom which are payable by the Trustee  shall be charged against the Participants’ Accounts as the Trustee shall determine.                                           67  

 

                                      ARTICLE XI.                      VESTING AND LIQUIDATION OF ACCOUNTS   PARAGRAPH   1.    Vesting of Participant and Company Contributions   A Participant’s contributions under Article IV and his/her rights in the accrued benefit derived therefrom  are nonforfeitable. The Company’s 40l(k) Contributions and Matching Contributions for the account of a  Participant, and any income and earnings therefrom and accretions thereon, shall become vested in such  Participant immediately upon payment of such contributions to the Trustee and receipt by the Trustee of  such  income,  earnings  and  accretions,  and  (subject  to  subsequent  loss  through  decline  in  value  of  investments) the Participant may not thereafter be deprived of such funds under any provision of the Plan.  All accounts of a Participant under the Plan shall be nonforfeitable. The vesting of benefits under the Plan  for a Participant shall be provided in accordance with the provisions of USERRA contained in Code  Section 414(u), or corresponding provision of any future tax code.   Notwithstanding anything to the contrary expressed or implied in the Plan as presently stated or hereafter  amended, upon the termination or partial termination of the Plan, the rights of all affected Employees and  Participants to benefits accrued to the date of such termination or partial termination, to the extent funded  as of such date, or the amounts credited to the Employees or Participant Accounts shall be nonforfeitable  in  accordance  with  the  provisions  of  the  Code,  including  Section  411(d)(3), and  applicable  Treasury  regulations.   2.    Withdrawals   The Company’s contributions and Participant After-Tax Deposits credited to the account of a Participant,  and  the  income  and  earnings  on  and  accretions  to  a  Participant’s account  whether  derived  from  the  Participant’s deposits or the Company’s contributions or from any other funds at any time in said account,  may be withdrawn by or paid to the Participant upon request by the Participant as provided for in Article  XII or upon complete liquidation of the Participant’s account as provided for in paragraphs 3., 7., and 8.  of this Article XI, or upon termination of the Plan as provided in paragraph 14. of Article XII or upon  adverse modification of the Plan as provided in paragraph 3. of Article XXIII or upon termination of the  Trust as provided in paragraph 5. of Article XXIII.   3.    Distribution of Participant Accounts   A.    Distributions for Reasons Other than Death   Except  as otherwise provided  in the  Plan,  when  a  Participant’s employment  with  the  Company  is  terminated by retirement or for any reason other than death (except transfer of employment to a subsidiary  of  the  Company  participating  in  the  Plan),  the  account  of  such  Participant  under  the  Plan  will  be  distributed in the form of a single payment to the Participant if the benefit is $5,000 or less on the date of  his/her retirement or separation from service (subject to paragraph 7. of this Article XI below).   If, however, the Participant account is greater than $5,000 on the date of his/her retirement or separation  from service, the account of such Participant under the Plan will be distributed, pursuant to the election  of the Participant, in one of the following methods:                                          68  

 

          1.    one lump sum payment in cash (which shall be the normal form, except as otherwise              provided); or         2.    partial withdrawals.   Any distribution to a Participant whose account exceeds $5,000 on the date of his/her retirement or  separation  from service shall  not  be  immediately  distributed without  the  written  consent  of  the  Participant.  Such requirement of consent shall not give a Participant a right to any form or method  of payment of his/her account, and his/her account shall be maintained and distributed thereafter only  in accordance with paragraphs 8. and 9. of this Article XI, below. Any such undistributed balance of  the Participant’s account shall be distributed upon his/her attaining age sixty-five (65); provided that  a Participant, who has separated from employment with the Company by retirement or for any reason  other than death, may make the affirmative election to defer distribution of his/her account beyond  age sixty-five (65) pursuant to paragraph 6. of this Article XI below (but subject to paragraphs 9. and  11. of this Article XI below).   B.    Distributions Upon Death   The death benefit payable pursuant to the Plan (see Article XIII) shall be paid to the beneficiary(ies)  within a reasonable time after the Participant’s death.  Such benefit shall, if $5,000 or less on the date of  death, be paid in the form of a lump sum distribution, or if greater than $5,000 on the date of death shall  be paid in any of the following methods at the election of the beneficiary (subject, however, to the rules  in paragraphs 9. and 11. of this Article XI below):         1.    one lump sum payment in cash; or         2.    partial withdrawals.   The determination of the distributee or distributees in the event of a Participant’s death shall be made in  accordance with Article XIII of the Plan. A Participant’s beneficiary may make an election to defer the  distribution of the Participant’s account, if the account exceeds $5,000 on the date of the Participant’s  death. Such an election may be made in the manner determined and prescribed by the Committee. If  the Participant’s beneficiary makes an election to defer the distribution of the Participant’s account,  the account will not be distributed unless and until the beneficiary consents to the distribution (subject  to paragraphs 9. and 11. of this Article XI).  The failure of a beneficiary to request a distribution  following the Participant’s death will be deemed to be an election to defer the commencement of  payment of any benefit until the time otherwise permitted under the Plan.   For all purposes under this paragraph 3., amounts in the Participant’s rollover account will be considered  as  part  of  a  Participant’s  benefit  in  determining  whether  the  $1,000  or  $5,000  thresholds  have  been  exceeded.   4.    Time of Distribution   Unless the Participant elects otherwise pursuant to paragraph 6. of this Article XI, or as otherwise provided  for under the Plan, notwithstanding any other provisions of the Plan, pursuant to the requirements of Code  Section 401(a)(14) the payment of benefits under the Plan to the Participant will begin not later than the  sixtieth (60th) day after the latest of the close of the Plan Year in which:         1.    the Participant attains the age sixty-five (65),                                         69  

 

          2.    occurs the tenth (10th) anniversary of the year in which the Participant  commenced        participation in the Plan, or         3.    the Participant terminates employment with the Company.   5.    ESOP Employer Stock Distributions   Notwithstanding any other provisions of the Plan, the Qualifying Employer Stock in a  Participant’s  Account to which the Employee Stock Ownership Plan provisions of the Plan are applicable (hereinafter  referred to as “ESOP Account Balance”), shall be distributed on the earlier of (i) time when distribution  would otherwise be made under the Plan, or (ii) if the Participant so elects, will be distributed commencing  not later than one (1) year after the close of the Plan Year (I) in which the Participant separates from  service by reason of attainment of normal retirement age under the Plan, disability or death, or (II) which  is the fifth (5th) Plan Year in which the Participant otherwise separates from service, except that this  clause (II) shall not apply if the Participant is reemployed by the Company before distribution is required  to begin under this clause (II). If distribution of a Participant’s ESOP Account Balance is ever required to  be  made  under  clause  (ii)  in  the  preceding  sentence,  then  in  such  case,  unless  the  Participant  elects  otherwise,  the  distribution  of  the  Participant’s  ESOP  Account  Balance  will  be  in  substantially  equal  periodic payments (not less frequently than annually) over a period not longer than the greater of five (5)  years, or in the case of a Participant with an Account balance in excess of One Million and One Hundred  Five thousand Dollars ($1,105,000), five (5) years plus one (1) additional year (but not more than five (5)  additional years)  for each Two Hundred Twenty Thousand  Dollars  ($220,000)  or  fraction  thereof by  which such balance exceeds One Million and One Hundred Five thousand Dollars ($1,105,000), as such  dollar amounts are adjusted for cost-of-living increases pursuant to Code Sections 409(o)(2) and 415(d).  The foregoing provisions of this paragraph 5. are intended to provide for distribution of a Participant’s  ESOP Account Balance at least as soon as provided in Code Section 409(o) only if such form and timing  of distribution would be earlier than otherwise generally provided by the Plan.   6.    Participant Election to Defer Distribution   A Participant, whose employment with the Company is terminated by retirement or for any reason other  than death, may make an affirmative election to defer the distribution of his/her account if it exceeds five  thousand dollars ($5,000) on the date of his/her retirement or separation from service. Such affirmative  election of deferral of distribution is separate and distinct from the requirement of consent to immediate  distribution stated in paragraph 3. of this Article XI, and shall apply independently thereof. It shall be  made by written statement describing the Participant’s account in a form prescribed by the Committee, or  by an election of the Participant made by electronic medium, telephone voice response system or other  means and in the manner determined and prescribed by the Committee.   A Participant shall be deemed to have made such an election to defer the distribution of his/her account  in the absence of any such affirmative election, upon termination of his/her employment by retirement or  for any other reason.   7.    Individual Retirement Account Distributions   In the event of mandatory distribution greater than $1,000 in accordance with the provisions of Paragraph  3. of this Article XI or otherwise, if the Participant does not elect to have such distribution paid directly  to an Eligible Retirement Plan specified by the Participant in a direct rollover or to receive the distribution  directly in accordance with Article V of the Plan, then the Committee shall cause the distribution to be  paid in a direct rollover to an individual retirement account designated by the Committee.                                         70  

 

    8.    Sequence of Deferred Distribution of Accounts   A.    Subject to subparagraph 8.B., below, if a Participant refuses consent to immediate distribution of  his/her account under paragraph 3. of this Article XI, above, or a Participant makes the affirmative election  of deferral of distribution provided in paragraph 6. of this Article XI, his/her account shall continue to be  maintained in the Trust in the manner provided by the Plan. The Participant may at any time thereafter  request  in  writing  that  distribution  of  his/her  account  be  made. The Participant’s  account shall be  distributed to the Participant within a reasonable time following receipt of that request.  B.    Notwithstanding the  foregoing,  a  Participant  (or  former  Employee)  shall  have  the  right  to  withdrawal of all or a portion of that part of his/her Pre-1999 KGS 401(k) Thrift Plan Account of which  distribution was deferred pursuant to the provisions of the KGS 401(k) Thrift Plan in accordance with  those provisions, which are incorporated herein by reference.  9.    Required Deferred Distribution at Age 701⁄2   A Participant or beneficiary who makes the election to defer the distribution of his/her Participant Account  under  Paragraph 3. or  Paragraph 6. of  this Article IX shall in all events commence payment and  distribution of any undistributed  balance  of  his/her  account  not  later  than  the date provided  for  in  paragraph 11. of  this  Article  XI,  below.  No  deferral  of  distribution permitted  or  provided  for  under  paragraph  3. or  paragraph  6. of  this  Article  XI  shall  take  precedence  over  or  prevent  such  required  distributions under paragraph 11.   10.   Distribution of Deferred Accounts at Death of Participant   If a Participant who has refused to consent to immediate distribution under paragraph 3. of this Article  XI, above, or who has made the affirmative election to defer receipt of his/her account under paragraph  6. of this Article XI, dies before a complete distribution of the account has been made, then upon his/her  death, his/her entire account balance shall be distributed to his/her surviving spouse, beneficiaries, or  legatees in the same manner following such death as are provided for under paragraph 3. of this Article  XI in the case of a Participant’s death prior to other termination of his/her employment with the Company.   11.   Required Distributions.   A.    General Rules.        1.    Precedence. The requirements of this paragraph 11. of Article XI of the Plan will take        precedence over any inconsistent provisions of the Plan.         2.    Requirements of Treasury Regulations Incorporated. All distributions required under this        article will be determined and made in accordance with the Treasury  regulations  under  Code        Section 401(a)(9).   B.    Time and Manner of Distribution.        1. Required Beginning Date. The Participant’s entire interest in the Plan will be distributed, or           begin to be distributed, to the Participant no later than the Participant’s Required Beginning           Date, as provided for in this paragraph 11. and in accordance with Code Section 401(a)(9).            The entire interest of an alternate payee under a qualified domestic relations order, as defined           within Code Section 414(p), will be distributed, or begin to be distributed to the alternate           payee  no  later  than  the  Participant’s  Required  Beginning  Date as  provided  for  in  this           paragraph 11. and in accordance with Code Section 401(a)(9) and the regulations thereunder.                                          71  

 

          2. Death  of  Participant  before  distributions  begin.  If  the  Participant  dies  before  distributions           begin, the Participant's entire death benefit will be distributed, or begin to be distributed, as           follows:                     (i)  If the Participant or beneficiary elects, distributions to the designated beneficiary will               begin by December 31 of the calendar year immediately following the calendar year in               which the Participant died, or, if the Participant's surviving Spouse is the Participant's               designated beneficiary, by December 31 of the calendar year in which the Participant               would have attained age 70 1/2, if later. Alternatively, the Participant or beneficiary may               elect  to  have  distribution  of  the  Participant's  death  benefit  be  completed  by  the               December 31 of the calendar year containing the fifth anniversary of the Participant's               death.  In  the  absence  of  any  election  (including  the  failure  to  commence  required               minimum distributions described by this Section by the December 31 of the calendar               year immediately following the calendar year in which the Participant died), distribution               of the Participant's death benefit shall be completed by December 31 of the calendar               year containing the fifth anniversary of the Participant's death.            (ii) If  there  is  no  beneficiary  as  of  September  30  of  the  year  following  the  year  of  the               Participant's death, the distribution of the Participant's death benefit will be completed               by December 31 of the calendar year containing the fifth anniversary of the Participant's               death.           (iii) If the Participant's surviving Spouse is the Participant's sole designated beneficiary and               the surviving Spouse dies after the Participant but before distributions to the surviving               Spouse  begin,  this paragraph  11.B.,  other  than  this  paragraph,  will apply  as  if  the               surviving  Spouse  were  the  Participant.  Thus,  in  all  such  cases,  the  time  at  which               distributions  must  commence (or  be  completed  by)  shall  be  determined  solely  by               reference to the year that the Participant died, and not the year in which the Participant               would have attained age 70 1/2.                For purposes of this paragraph 11.B., unless a surviving Spouse is electing to commence benefits        based  upon  the  date  that  the Participant  would  have  attained  age  70  1/2, distributions  are        considered to begin on the Participant's required beginning date. If the surviving Spouse election        applies, distributions are considered to begin on the date distributions are required to begin to the        surviving Spouse under paragraph 11.B. in this Article XI.          3. Forms of distribution. Unless the Participant's interest is distributed in a single sum on or           before the required beginning date, as of the first distribution calendar year distributions will           be made in accordance with paragraph 11.C. and paragraph 11.D. of this Article XI.  All           distributions under this paragraph shall be made in a manner which is consistent with and           satisfies the provisions of paragraph 3. of this Article XI.    C.    Required minimum distributions during Participant's lifetime          1. Amount  of  required  minimum  distribution  for  each  distribution  calendar  year.  During  the           Participant's  lifetime,  the minimum  amount  that  will  be  distributed  for  each  distribution           calendar year is the lesser of:                                            72  

 

             (i) the quotient obtained by dividing the Participant's Account balance by the distribution               period in the Uniform Lifetime Table set forth in Regulation §1.401(a)(9)-9, using the               Participant's age as of the Participant's birthday in the distribution calendar year; or                      (ii) if the Participant's sole designated beneficiary for the distribution calendar year is the               Participant's Spouse and the Spouse is more than 10 years younger than the Participant,               the quotient obtained by dividing the Participant's Account balance by the number in the               Joint  and  Last  Survivor  Table  set  forth  in  Regulation  §1.401(a)(9)-9,  using  the               Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in               the distribution calendar year.          2. Lifetime  required  minimum  distributions  continue  through  year  of Participant's  death.           Required minimum distributions will be determined under this paragraph 11.C. beginning           with the first distribution calendar year and up to and including the distribution calendar year           that includes the Participant's date of death.    D.    Required minimum distributions after Participant's death          1. Death on or after date distributions begin.             (i) Participant  survived  by  designated  beneficiary.  Except  as  provided  in paragraphs               11.B.2. and  11.B.3. of  this  Article  XI,  if  the Participant  dies  on  or  after  the  date               distributions begin and there is a designated beneficiary, the minimum amount that will               be distributed for each distribution calendar year after the year of the Participant's death               is the quotient obtained by dividing the Participant's Account balance by the longer of               the remaining life expectancy of the Participant or the remaining life expectancy of the               Participant's designated beneficiary, determined as follows:                 (A)  The  Participant's  remaining  life  expectancy  is  calculated  using  the age  of  the                    Participant in the year of death, reduced by one for each subsequent year.                              (B)  If  the  Participant's  surviving  Spouse  is  the  Participant's  sole  designated                    beneficiary, the remaining life expectancy of the surviving Spouse is calculated                    for each distribution calendar year after the year of the Participant's death using                    the surviving Spouse's age as of the Spouse's birthday in that year. For distribution                    calendar years after the year of the surviving Spouse's death, the remaining life                    expectancy of the surviving Spouse is calculated using the age of the surviving                    Spouse as of the Spouse's birthday in the calendar  year of the Spouse's death,                    reduced by one for each subsequent calendar year.                              (C)  If  the  Participant's  surviving  Spouse  is  not  the  Participant's  sole  designated                    beneficiary, the designated beneficiary's remaining life expectancy is calculated                    using the age of the beneficiary in the year following the year of the Participant's                    death, reduced by one for each subsequent year.             (ii) No designated beneficiary. If the Participant dies on or after the date distributions begin               and there is no designated beneficiary as of September 30 of the year after the year of               the Participant's death, the minimum amount that will be distributed for each distribution               calendar year after the year of the Participant's death is the quotient obtained by dividing                                          73  

 

                 the Participant's  Account  balance  by  the  Participant's  remaining  life  expectancy               calculated using the age of the Participant in the year of death, reduced by one for each               subsequent year.          2  Death before date distributions begin.                           (i) Participant survived by designated beneficiary. Except as provided in paragraph 11.B.3.               of this Article XI, if the Participant dies before the date distributions begin and there is               a  designated  beneficiary,  the  minimum  amount  that  will  be  distributed  for  each               distribution calendar year after the year of the Participant's death is the quotient obtained               by dividing the Participant's Account balance by the remaining life expectancy of the               Participant's designated beneficiary, determined as provided in paragraph 11.D.1. of this               Article XI.            (ii) No designated beneficiary. If the Participant dies before the date distributions begin and               there is no designated beneficiary as of September 30 of the year following the year of               the Participant's death, distribution of the Participant's entire interest will be completed               by December 31 of the calendar year containing the fifth anniversary of the Participant's               death.            (iii) Death  of  surviving  Spouse  before  distributions  to  surviving  Spouse  are  required  to               begin.  If  the  Participant  dies before  the  date  distributions  begin,  the  Participant's               surviving  Spouse  is  the  Participant's  sole  designated  beneficiary,  and  the surviving               Spouse dies before distributions are required to begin to the surviving Spouse under               paragraph 11.B.2. of this Article XI, this paragraph 11.D.2. will apply as if the surviving               Spouse were the Participant.             E.    Required Distributions; Transferred Account.         1.    Application. This paragraph 11.E. shall be applicable instead of the general rule stated        above,  but  only  with  respect  to  accounts  of  Participants  that  constitute  transferred accounts        described and provided for in Articles XXI and XXII of the Plan (“Transferred Account”).         2.    Required Distribution.               (i)   General. The entire interest of each Participant in a Transferred Account:                     (A)   shall be distributed to  such Participant not later than the Participant’s                          Required Beginning Date, or                     (B)   shall be distributed, beginning not later that the Participant’s  Required                          Beginning Date, in accordance with the Treasury regulations under Code                          Section 401(a)(9) over the life of such Participant or over the lives of such                          Participant and a Designated Beneficiary (or over a period not extending                          beyond the Life Expectancy of such Participant or the Life Expectancy of                          such Participant and a Designated Beneficiary).                                          74  

 

                (ii)  Distribution Where Participant Dies Before Entire Interest is Distributed.  In the                    event of the death of a Participant before the entire interest of the Participant has                    been distributed, the interest of the Participant shall be distributed in accordance                    with the following requirements:                     (A)   If  the  distribution  of  a  Participant’s  interest  has  begun  over  the                          Participant’s life, or over the life or Life Expectancy of such Participant                          and  a  Designated Beneficiary, and  the  Participant dies  before  the                          Participant’s entire interest is distributed, the remaining portion of such                          interest shall  be  distributed at  least  as  rapidly as  under  the method  of                          distribution provided for under the Plan being used as of the date of the                          Participant’s death.                     (B)   If the Participant dies before the distribution of the Participant’s interest                          has begun in accordance with Paragraph 11.E.2.ii.,  above,  the  entire                          interest of  the  Participant shall  be  distributed in  the  manner  and  form                          provided for under the Plan in such event, but no case later than:                           (1)   within 5 years after the death of such Participant, or                           (2)   If any portion of the Participant’s interest is payable to (or for the                                benefit of) a Designated Beneficiary pursuant to the provisions of                                the  Plan,  such  portion  shall  be  distributed (in  accordance with                                Treasury regulations under Code Section 401(a)(9)) over the life                                of such Designated Beneficiary (or over a period not extending                                beyond the Life Expectancy of such Designated Beneficiary), and                                such distributions shall begin not later than one (1) year after the                                Participant’s  death  or  such  later  date  as  is  prescribed  in  the                                Treasury regulations under Code Section 401(a)(9).                     (C)   If the Designated Beneficiary referred to in the foregoing provisions of                          this paragraph 11.E. is the surviving spouse of the Participant, then the                          date that distributions are required to begin shall not be earlier than the                          date the Participant would have attained age 701⁄2, and if the surviving                          spouse  dies  before  the  distributions  to  such  spouse  begin,  this                          subparagraph shall  be  applied as  if  the  surviving spouse  were  the                          Participant.   F.    Definitions.  The  following terms  and  definitions  are applicable  to  this  paragraph  11. and        distributions provided for therein.        1.    Designated Beneficiary. The individual who is designated as the beneficiary under Article        XIII of the Plan and is the Designated Beneficiary under Code Section 401(a)(9) and Treasury        regulations under Code Section 401(a)(9).         2.    Life Expectancy. Life expectancy as determined under Code Section 401(a)(9) and the        Treasury  regulations  to  include  life  expectancy  computed  by  use  of  the  Single  Life  Table  in        Section 1.401(a)(9)-9 of the Treasury regulations.         3.    Required  Beginning  Date.  April  1  of  the  calendar  year  following  the  later  of  (i)  the        calendar year in which the Participant attains age 701⁄2, or (ii) the calendar year in which the                                         75  

 

          Participant retires. Provided, that clause (ii) of the preceding sentence shall not apply except as        provided in Code Section 409(d), in the case of a Participant who is a 5- percent owner (as defined        in Code Section 416) with respect to the Plan Year ending in the calendar year in  which the        Participant attains age 701⁄2.   G.    Transition;  TEFRA  Section  242(b)(2)  Elections.  Notwithstanding  the  other  provisions  of  this        paragraph 11., distributions may be made under a designation made before January 1, 1984, in        accordance with section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act (TEFRA) and        the provisions of the Plan that relate to section 242(b)(2) of TEFRA.  12.   Form of Distributions   In so far as practicable, upon any complete liquidation of a Participant’s account, upon distributions under  paragraphs 7. or 8. of this Article XI, and upon withdrawals provided for in Article XII, any securities  held in the account of the Participant will be distributed in kind if the Participant so requests, but where  this form of distribution is impracticable, cash will be paid in an amount equal to the value at the time of  distribution, as determined by the Trustee, of any investment that it is impracticable to distribute in kind.  No other form of distribution (neither annuity contract nor other item) shall be made from the Trust;  provided, that accrued benefits of accounts transferred to the Trust from the trust of a subsidiary plan  pursuant to paragraphs 1. Or 2. of Article V, which are subject to the provisions of Articles XXII and  XXIII hereof shall be distributed as provided therein.   13.   Participant’s Right to Demand Employer Securities   Notwithstanding  any other provisions  herein, each Participant who has his/her Participant  Account  invested in Qualifying Employer Stock, and each Participant who is participating in the Employee Stock  Ownership Plan part of the Plan and is entitled to a distribution from the Plan shall have a right to demand  that  his/her  Participant  Account  and  benefits  under  the  Plan  be  distributed in  the  form  of  Qualifying  Employer Stock. Prior to commencement of a distribution from a Participant’s Account to the Participant,  the Committee and the Trustee shall notify the Participant in writing that the Participant has the right to  demand that his/her Participant Account and benefits be distributed in the form of Qualifying Employer  Stock. Such right shall expire at the time specified in such notice, which shall be not less than thirty (30)  days after the delivery of such notice to the Participant. A Participant who has the stock of a former  employer in his/her Plan account by reason of a merger, spin-off or transfer of plan accounts from a former  employer plan shall have a similar right to demand distribution of such stock in accordance with the  provisions of this paragraph 13.   To the extent required by Code Section 411(d)(6), such rights shall also apply to ONEOK, Inc. common  stock.   14.   Qualified Domestic Relations Orders; Distributions   Notwithstanding any other provisions of the Plan, if a Participant’s account is ordered paid, transferred,  or assigned, in whole or in part, to an alternate payee pursuant to an order  determined  by  the  Plan  Administrator to be a Qualified Domestic Relations Order within the meaning of Code Section 414(p),  the payment and distribution to such alternate payee of amounts attributable to the Participant’s account  shall be made by the Plan and Trustee, at the election of the alternate payee (subject to the requirements  of Paragraph 11. of this Article XI), in the form and at the time allowed in paragraph 3. of this Article XI.    A distribution to an alternate payee shall be permitted if such distribution is authorized by a Qualified  Domestic Relations Order and is otherwise permissible under Code Section 414(p), even if the affected  Participant has not separated from service and has not reached the “earliest retirement age.”  For purposes                                         76  

 

    of this paragraph 14., the term “earliest retirement age” shall mean the earlier of (i) the date on which the  Participant is entitled to a distribution under the Plan, or (ii) the later of (a) the date the Participant attains  age fifty (50), or (b) the earliest date on which the Participant could begin receiving benefits under the  Plan  if  the  Participant  separated  from  service.  Periodic  distributions  authorized  from plan  accounts  assigned to alternate payees under the KGS 401(k) Thrift Plan pursuant to a Qualified Domestic Relations  Order shall be made in accordance with such Order, notwithstanding the foregoing provisions generally  providing for immediate distribution.                                           77  

 

                                      ARTICLE XII.                   WITHDRAWALS, DISTRIBUTIONS, PLAN LOANS   PARAGRAPH   1.    Hardship Withdrawals from 401(k) Contribution Account   Subject to paragraph 10., and the limitations of paragraph 5. of this Article XII, below, a Participant may  withdraw amounts from his/her 401(k) Contribution Account by submitting his/her written request to the  Committee at such time and in such manner as shall be prescribed by the Committee under the following  conditions:   A.    The withdrawal request must be on account of an immediate and heavy financial need (sometimes  hereinafter referred to as “hardship”) of the Participant and the withdrawal must be necessary to satisfy  such hardship, all as determined by the Committee in accordance with the nondiscriminatory and objective  standards set forth herein.  B.    No hardship withdrawal shall be made in an amount in excess of the amount of the immediate and  heavy financial need of the Participant. 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  to result from the distribution.  C.    No hardship withdrawal shall be permitted unless the Participant has obtained all distributions  other than hardship distributions from the 401(k) Contributions in the Participant’s Account, and has  obtained all nontaxable loans currently available under all plans maintained by the Company.  D.    A withdrawal will be deemed to be made on account of an immediate and heavy financial need if  it is on account of:        1.    Expenses for (or necessary to obtain) medical care that would be deductible under Code        Section 213(d)(determined without regard to whether the expenses exceed 7.5% of adjusted gross        income described in Code Section 213(d) previously incurred by the Participant, the Participant’s        spouse, or any dependents;         2.    Costs directly related to the purchase of a principal residence for the Participant (excluding        mortgage payments);         3.    Payment of tuition, related educational fees and room and board expenses, for up to the        next  twelve (12)  months  of  post-secondary  education  for  the  Participant,  or  the  Participant’s        spouse, children, or dependents, as defined in Code Section 152, without regard to Code Section        152(b)(1),(b)(2) and (d)(1)(B);         4.    Payments necessary to prevent the eviction of the Participant from his/her  principal        residence or foreclosure on the mortgage on that residence;         5.    Payments for burial or funeral expenses for the Participant’s  deceased parent,  spouse,        children  or  dependents  (as  defined  in  Code  Section  152,  without regard  to  Code  Section        152(d)(l)(B);                                           78  

 

          6.    Expenses for the  repair or  damage to  the  Participant’s  principal residence that  would        qualify for the casualty deduction under Code Section 165 (determined without regard to whether        the loss exceeds ten percent (10%) of adjusted gross income; and         7.    Such  other  facts  and  circumstances  as  the  Commissioner of  Internal  Revenue  lists  as        deemed immediate and heavy financial needs through publication of regulations, revenue rulings,        notices, and other documents of general applicability.   E.    Notwithstanding anything otherwise expressed or  implied in  the  Plan,  or  under Code  Section  401(k), or the regulations under that section, a hardship distribution shall not be determined or allowed  under the Plan on account of an event or condition of immediate and heavy financial need of a person  who  is  a  beneficiary  of  a  Participant  under  the  Plan,  unless  such  person,  in  addition  to  being  such  a  beneficiary, also has a relationship of being the spouse or a dependent of the Participant and an immediate  and heavy financial need of such person for which a hardship distribution is expressly allowable to a  spouse, child  or  dependent under  the  terms  and  provisions  of  paragraph  1.D.,  above;  and  a  hardship  distribution  shall  not  otherwise  be  allowed under  the  Plan  for  or  with  respect  to  circumstances of  immediate and heavy financial need of a beneficiary of a Participant if such beneficiary is not either the  spouse, child or a dependent of the Participant.  F.    A  Participant’s  Elective  Deferrals  under  the Plan  (and  Participant  Contributions) shall  be  suspended for six (6) months after receipt of the hardship distribution.  G.    The hardship withdrawal, if approved by the Committee, shall be paid to the Participant as soon  as  practicable  following  the  date  the  Participant’s  written  request  is  submitted  to  the  Committee.  A  hardship withdrawal for payment of tuition under subparagraph D.3., above, may be made in two (2) parts  over the twelve (12) month period to conform the withdrawal to the amount of tuition determined to be  needed by the student.  H.    A hardship withdrawal and distribution is not an eligible rollover distribution under Code Section  402(c) and the Plan shall be administered consistent with such classification and treatment.  I.    A Participant who has received a hardship withdrawal pursuant to the foregoing provisions of the  Plan, and who has thereby been suspended from making Participant deposits and contributions for six (6)  months, shall be reinstated to the amount of his/her elected  Reduction in Compensation and other  contributions in effect at the time of the hardship withdrawal unless the Participant changes such amount  after notice from the Committee which shall be provided not less than thirty (30) days prior to the end of  the suspension. A Participant may be required to provide such other written application or election to the  Committee,  as  it  may  determine  under  rules  prescribed  by  it,  in  order  to  resume  making  Participant  contributions under the Plan.  J.    Notwithstanding the foregoing, a hardship distribution may be made on account of a hardship  resulting from Hurricane Harvey on or after August 23, 2017 and continuing through January 31, 2018,  in  the  manner  allowed  and  authorized  under  guidance  published  by  the  Internal  Revenue  Service,  including Internal Revenue Service Announcement 2017-11.  A Participant’s Elective Deferrals under the  Plan (and Participant Contributions) shall not be suspended pursuant to subparagraph 1.F. above after  receipt of a hardship distribution made pursuant to this subparagraph.  2.    Participant Withdrawals of After-Tax Deposits   A Participant may request to withdraw in a lump sum of all or any part of the value of his/her After• Tax  Deposits in his/her Account, provided that the withdrawal is for a least $500 or the full value of the  Account,  if  less.  A  Participant  may  request  a  withdrawal  in  writing  on  a  form  prescribed  by  the                                          79  

 

    Committee, or by electronic medium, telephone voice response system or other means determined and  prescribed by the Committee.   The amount of the withdrawal shall be withdrawn from the Participant’s After-Tax Deposits in proportion  to the value of the Participant’s total Plan Account balance.   A withdrawal pursuant to this paragraph may be made upon request of the Participant subject to such  limitations  on  frequency  of  withdrawals  as  the  Committee, in  its  discretion,  may  determine.  Such  withdrawal shall be paid as soon as practicable after the appropriate request is received by the Trustee. A  withdrawal shall be paid in cash, except that if a Participant’s After-Tax Deposits are invested in the  Qualifying Employer Stock, the Participant may request that the value withdrawn be distributed in whole  shares of Qualifying Employer Stock. Any fractional shares shall be paid in cash, the amount of such  payment to be based upon the closing price of  Qualifying  Employer Stock  on  the  New  York  Stock  Exchange Consolidated Tape, on a trading date which does not precede the date of the distribution by  more than 10 days. A Participant who has After-Tax Deposits in his/her Plan Account invested in stock  of a prior employer which has been transferred to the Trust pursuant to any merger, acquisition or similar  transaction may also request distribution of such stock in a manner comparable to that provided in the  foregoing provisions with respect to Qualifying Employer Stock.   3.    Withdrawal Penalty   In the event a Participant makes a withdrawal of After-Tax Deposits in his/her Plan Account pursuant to  paragraph 2., above, such Participant shall not be entitled to Company Matching Contributions otherwise  required to be made under the Plan until the first of the next month following the expiration of six (6)  months  from  the  date  of  such  withdrawal  by  such  Participant.  This suspension and abatement of the  Participant’s right to receive Company Matching Contributions shall not affect the Participant’ s right to  elect a Reduction in Compensation or make After-Tax Deposits to the extent otherwise permissible under  the Plan.   4.    Participant Withdrawals of Matching Contributions or Other Amounts   Except  as  otherwise  provided  in  paragraph  10.,  below,  or  as  expressly  provided  differently  herein,  a  Participant shall not be permitted or allowed to withdraw any Company Matching Contributions or other  amounts  in  excess  of  the  amount  of  401(k)  Contributions  or  After-Tax  Deposits  coming  into  his/her  account.   5.    Sequence of Permitted Withdrawals   In the event a Participant desires to withdraw funds credited to his/her accounts from After-Tax Deposits,  the withdrawal sequence shall be: first, the Participant’s contributions which are in the Participant’s Prior  ONEOK Thrift Plan Pre-1987 Employee Contribution Account Balance; second, the Participant’s KGS  401(k) Thrift Plan Account Balances (to the extent they are subject to withdrawal pursuant to paragraph  10. of this Article XII, below); third, the Participant’s Separate Section 72(d) Employee Contribution  Account, if any; and fourth, the balance of the Participant’s Account, if any, which may be withdrawn  under this Article XII.   6.    Distribution Upon Severance From Employment   Amounts attributable to elective contributions to the Plan by Participants may be distributed upon the  Participant’s severance from employment with an employer maintaining the Plan, even if the Participant                                          80  

 

    continues on the same job for a different employer following a liquidation, merger, consolidation, or other  corporate or business entity transaction.   7.    Voluntary Withdrawal After Age Fifty-Nine and One-Half (591⁄2)   Except as otherwise provided in paragraph 11., below, a Participant who has completed five (5) years of  participation in this Plan may be allowed to withdraw from the Plan at any time and from time to time an  amount not exceeding the entire balance in his/her Accounts, less any Roth Elective Deferral and earnings  and losses thereon, at any time after his/her attainment of age fifty-nine and one-half (591⁄2); provided, the  amount of any Participant withdrawal shall be at least Five Hundred Dollars ($500.00) or the full value  of the Participant’s Account, if less. This right to withdrawal shall be exercised by application or request  to the Committee or its authorized representative in writing or by electronic medium, telephone voice  response system or other means determined and prescribed by the Committee.   8.    Distributions in Certain Events   Notwithstanding any other provisions hereof limiting the distribution or withdrawal of a Participant’s  401(k) Contribution Account or other amounts of a Participant’s Account, a Participant’s Account may  be distributed in the event of (i) the termination of the Plan without establishment or maintenance of  another  defined  contribution  plan  by  the  Company  (other  than  an employee  stock  ownership  plan  as  defined in Code Section 4975(e)(7)), (ii) the disposition by the Company of substantially all of the assets  (within  the  meaning  of  Code  Section  409(d)(2))  used  by  the  Company in a  trade  or  business  of the  Company,  but only  with  respect  to a  Participant  who  continues  employment  with  the  corporation  acquiring such assets, or (iii) the disposition by the Company of the Company’s interest in a subsidiary  (within the meaning of Code Section 409(d)(3)), but only with respect to a Participant who continues  employment with such subsidiary. No such distribution shall be permitted to a Participant unless it is made  in the form of a lump sum distribution as defined in Code Section 401(k)(10)(B)(ii); and a distribution by  reason of an event described in clause (ii) or (iii) of the preceding sentence of this paragraph shall not be  permitted unless the transferor corporation continues to maintain the Plan after the disposition. Payment  and distribution of ESOP Dividends to Participants and retired or terminated Employees may be made to  the extent otherwise provided for in the Plan, and as allowed and authorized by Code Sections 4975(e)  and 404(k) and Treasury regulations pertaining to such payments and distributions.   9.    ESOP Dividend Distributions   The Committee and Trustee may have ESOP dividends paid and distributed to a Participant, and to a  retired or terminated Employee in accordance with and to the extent provided in paragraph 2. of Article  X, above.   10.   No Withdrawal of Deferred Account   Subject to paragraph 11., below, when a Participant’s employment with the Company is terminated by  retirement or for any other reason other than death, and he/she either does not consent to immediate  distribution of his/her account under paragraph 3. of Article XI, or he/she elects to defer the distribution  of his/her account under paragraph 6. of Article XI, he/she shall thereafter receive distribution of his/her  account only in accordance with the provisions of paragraphs 7., 8., 9., and 11. of Article XI, and he/she  shall not be  permitted thereafter to  make  withdrawal  of  the  funds  in  his/her  account  pursuant  to  the  withdrawal provisions of this Article XII.                                           81  

 

    11.   Limited Withdrawal Rights; Pre-1999 KGS 401(k) Thrift Plan Account   Notwithstanding anything to the contrary expressed herein a Participant shall have the right to make a  withdrawal from his/her Pre-1999 KGS 401(k) Thrift Plan Account balance at January 11, 1999, pursuant  to the following provisions:   A.    Withdrawal from Matching Contribution Account. In the event that a Participant withdraws the  full value of the After Tax Deposits under the provisions of paragraph 2., above, a Participant who has  been a Participant in the Plan for a period of five (5) years or more may additionally withdraw in a lump  sum any or all of the Company Matching Contributions  (Company  Matching  Account)  in  such  Participant’s  Pre-1999  KGS  401(k)  Thrift  Plan  Account,  provided  that  the  aggregate  amount  of  the  withdrawal from the Participant’s After Tax Deposits and Company Matching Contributions is for at least  $500 or the full value of the Account, if less. A Participant may request a withdrawal in writing or by  electronic medium, telephone voice response system or other means determined and prescribed by the  Committee.  The amount of  the  withdrawal shall be  withdrawn from the  Participant’s  Company Matching  Contributions in proportion to the value of the Participant’s total Account balance.   A withdrawal may be made at any time and from time to time, subject to the minimum amount stated  above, and shall be paid as soon as practicable after the appropriate request is received by the Trustee. A  withdrawal  shall  be  paid in  cash, except that  if  a Participant’s  Company  Matching  Contributions  are  invested in Qualifying Employer Stock a Participant may request that the value withdrawn be distributed  in whole shares of Qualifying Employer Stock. Any fractional shares shall be paid in cash, the amount of  such payment to be based upon the closing price of Qualifying Employer Stock on the New York Stock  Exchange Consolidated Tape, on a trading date which does not precede the date of the distribution by  more than 10 days.   B.    Withdrawal From Rollover Account. In the event that a Participant withdraws the full value of the  After-Tax Deposits and the Company Matching Contributions under the provisions of paragraphs 2. and  11.A., above, the Participant may additionally withdraw in a lump sum any or all of the Participant’s  Rollover  Account  in  his/her  Pre-1999  KGS  401(k)  Thrift  Plan  Account;  provided,  that  the  aggregate  amount  of  the  withdrawal  from  the  Participant’s  After  Tax  Deposits  Account,  Company  Matching  Contributions, and rollover balance in the Participant’s account is at least $500 or the full value of the  Account, if less. A Participant may request a withdrawal in writing or by electronic medium, telephone  voice response system or other means determined and prescribed by the Committee. The amount of the  withdrawal  shall  be  withdrawn  from  the  Participant’s After Tax Deposits, Company Matching  Contributions, and Rollover balance in his/her account.  A withdrawal may be made at any time and from time to time, subject to the minimum required amount  stated above and shall be paid as soon as practicable after the appropriate withdrawal request is received  by the Trustee. A withdrawal shall be paid in cash, except that if a Participant’s Rollover balance in his/her  Account is invested in Qualifying Employer Stock, a Participant may request that the value withdrawn be  distributed in whole shares of Qualifying Employer Stock. Any fractional shares shall be paid in cash, the  amount of such payment to be based upon the closing price of Qualifying Employer Stock on the New  York  Stock  Exchange  Consolidated  Tape,  on  a  trading  date  which  does  not  precede  the date  of  the  distribution by more than 10 trading days.   C.    Prior Employer Stock. A Participant who has After-Tax Deposits in his/her Plan account invested  in stock of a prior employer which has been transferred to the Trust pursuant to any merger, acquisition                                          82  

 

    or similar transaction may request distribution of such stock in a manner comparable to that provided in  subparagraphs 11.A. and 11.B., above, with respect to Qualifying Employer Stock.  D.    Withdrawals  After  Age  591⁄2.  A  Participant who  has  attained  age  591⁄2 may  withdraw all  or a  portion of his/her 401(k) Account contributions in his/her Pre-1999 KGS 401(k) Thrift Plan Account as  of the end of the month next following such Participant’s delivery of request for withdrawal to the Trustee  in writing or by electronic medium, telephone voice response system or other means determined and  prescribed by the Committee. A withdrawal may be made at any time and from time to time during the  Plan Year and shall be paid as soon as practicable after the appropriate request is received by the Trustee.  E.    Hardship Withdrawals. A Participant may request an in-service distribution from his/her 401(k)  Contribution Account in his/her Pre-1999 KGS 401(k) Thrift Plan Account on the basis of a hardship  based upon immediate and heavy financial need to the extent and only as described and authorized under  paragraph 1., of this Article XII.   F.    Withdrawal Penalty. In the event a Participant withdraws sums pursuant to subparagraphs 11.A.  or 11.B., above, such Participant shall not be entitled to Company Matching Contributions until the first  of the next month following the expiration of six (6) months from the date of such withdrawal by such  Participant. This abatement of the Participant’s right to receive Company Matching Contributions shall  not affect the Participant’ s right to elect a Reduction in Compensation or make After-Tax Deposits to the  extent otherwise permissible under the Plan.  In the event a Participant withdraws sums pursuant to the hardship distribution provisions of paragraph 1.  of this Article XII, Participant shall not be entitled to Company Matching Contributions until the first of  the month next following the expiration of twelve (12) months from the date of such withdrawal by the  Participant.   12.   Qualified Reservist Distribution   Notwithstanding anything to the contrary provided in the Plan, a Participant may receive a distribution of  his/her Plan Account attributable to Company contributions made pursuant to elective deferrals if such  distribution  constitutes  a  qualified  reservist distribution  within  the  meaning  of  Code  Sections  401(k)(2)(B)(i)(V) and 72(t).   13.   Suspension During Approved Leave of Absence   A  Participant’s  deposits  and  the  corresponding  Company  Matching  Contributions  will  be  suspended  automatically for the period of any Company-approved leave of absence without pay, including military  and other governmental service. The Participant’s employment with the Company shall not be treated as  terminated thereby for the purposes of paragraph 3. of Article XI.   14.   Effect of Termination or Suspension of Participation   Any termination or suspension under any provision of this Plan, except suspension of deposits under  paragraph 11. of this Article XII, shall have the effect of ending the period of the Participant’s current  Plan participation. Upon or at any time after expiration of the required period following any termination,  the Participant may again commence participation in the manner provided in paragraph 2. of Article II  hereof as of the first day of the calendar month following the month in which he/she elects to recommence  participation and a new period of such Participant’s current Plan participation shall thereupon commence.                                           83  

 

    15.   No Forfeiture for Suspension or Termination   No termination or suspension of participation in the Plan or failure to resume participation at any time  shall affect the Participant’s right to receive distribution of his/her account upon complete liquidation  upon the terms and at the time provided in paragraph 3. of Article XI, or upon termination of the Plan as  provided in this paragraph 16. of this Article XII or upon adverse modification of the Plan as provided in  paragraph 3. of Article XXIII, or upon termination of the Trust as provided in paragraph 5. of Article  XXIII. Furthermore, and notwithstanding any other terms or provisions of this Plan, no suspension or  termination  of  participation  under  the  Plan  shall  operate  to  alter  a  Participant’s  rights,  privileges,  or  obligations thereunder with respect to the management or disposition of his/her account with the Trustee.   16.   Termination of Plan   Upon a partial termination of the Plan, or upon a termination of the Plan as an entirety or as to any  subsidiary of the Company, each Participant of the Company or of such subsidiary then participating, as  the case may be, will receive distribution of the entire balance of his/her account, subject to the successor  plan rule in 401(k)(10)(A).   17.   Valuation of Securities   For the purpose of valuing a Participant’s Account in connection with any withdrawal under the provisions  of this Article XII and for the purpose of any distribution in kind, any nontransferable Government bonds  shall be valued at the then current redemption price thereof, and other securities shall be valued at prices  determined by the Trustee, as near as practicable to those then obtainable upon a sale in the open market.   18.   Plan Loans   A.    Loan Policy  The Plan Administrator, at any time and in its sole discretion, may establish, amend or terminate a policy  which the Trustee must observe in making Plan loans, if any, to Participants and to Beneficiaries. If the  Plan Administrator adopts a loan policy, the loan policy must be nondiscriminatory and must be in writing.   B.    Requirements for Plan Loans  The  Trustee,  as  directed  by  the  Plan  Administrator  will  make  a  Plan  loan  to  a  Participant  or  to  a  Beneficiary in accordance with the Plan’s loan policy, provided:           1. Loans  shall be  made available  to all  Participants and beneficiaries  on a reasonably              equivalent basis.           2. Loans  shall  not  be  made  available  to  Highly  Compensated  Employees  in  an  amount              greater that the amount made available to other employees.            3. Loans shall be adequately secured and bear a reasonable rate of interest.           4. No Participant loan may be made from a Participant Roth Elective Deferral Account.           5. If a Participant Account is subject to Qualified Joint and Survivor Annuity requirements,              a Participant must obtain the consent of his or her spouse, if any, to use of the Participant’s              Account Balance as security for the loan. Spousal consent shall be obtained no earlier than              the beginning of the 90-day period that ends on the date on which the loan is to be so              secured. The consent must be in writing, must acknowledge the effect of the loan, and              must be witnessed by a Plan representative or notary public. Such consent shall thereafter                                          84  

 

                be binding with respect to the consenting spouse or any subsequent spouse with respect to              that loan.           6. In the event of default, foreclosure on the note and attachment of security will not occur              until a distributable event occurs in the Plan.           7. The Loan provides for repayment within a specified time, except that repayments may be              suspended as permitted under Code Section 414(u)(4).           8. If a valid spousal consent has been obtained in accordance with paragraph 18.B.5., above,              then  notwithstanding  any  other  provision  of  the  Plan,  the  portion  of  the  Participant’s              vested account balance used as a security interest held by the Plan by reason of a loan              outstanding to the Participant shall be taken into account for purposes of determining the              amount of the Participant’s Account Balance payable at the time of death or distribution,              but only if the reduction is used as repayment of the loan. If less than one hundred percent              (100%) of the Participant’s vested Account Balance (determined without regard to the              preceding sentence) is payable to the surviving spouse, then the Participant’s Account              Balance shall be adjusted by first reducing the vested Account Balance by the amount of              the security used as repayment of the loan, and then determining the benefit payable to the              surviving spouse.           9. The amount of the loan does not exceed the lesser of:                  a. Fifty Thousand Dollars ($50,000) reduced by the excess (if any) of (i) the highest                    outstanding balance of loans during the one year period ending on the day before                    the loan is made, over (ii) the outstanding balance of loans from the Plan on the                    date the loan is made, or                   b. one-half of the present value of nonforfeitable Accrued Benefit of the Participant               For purposes of the above limitation, all loans from all plans of the Company and other              members of a group of employers described in Code Sections 414(b), 414(c) and 414(m)              are aggregated.            10. The loan otherwise conforms to the exemption provided Section 408(b)(1) of ERISA and              Code Section 4975(d)(1).         19.   No Withdrawal of Loan Amount   A Participant to whom a loan has been made pursuant to the provisions of paragraph 18. of this Article  XII, shall not be allowed at any time to withdraw any amount from his/her Account in excess of the  amount which is equal to the current value of his/her Account minus the outstanding unpaid balance of  such loan together with any accrued interest thereon.                                           85  

 

                                     ARTICLE XIII.                      BENEFICIARIES IN THE EVENT OF DEATH   PARAGRAPH   1.    Surviving Spouse as Primary Beneficiary   A  Participant’s  nonforfeitable  Accrued  Benefit  (reduced  by  any  security  interest  held  by  the  Plan  by  reason of a loan outstanding to such Participant) shall be payable in full, on the death of the Participant,  to the Participant’s surviving spouse, or if there is no surviving spouse or the surviving spouse consents,  in the manner provided in paragraph 2. of this Article XIII, below, then to a designated beneficiary of the  Participant under paragraph 3. of this Article XIII.   2.    Election and Consent to Alternate Beneficiary or Beneficiaries   A Participant may elect at any time to waive the required distribution and payment of his/her Account to  his/her surviving spouse in the event of his/her death. Any such election must be made in writing or by  electronic means or other means by the Participant in the form and manner prescribed by the Committee.  Any election by a Participant to waive the surviving spouse benefit may be revoked at any time by the  Participant by a declaration of revocation delivered to the Committee in writing or by electronic medium  or other means in such form and manner as it may prescribe. Any election to waive the surviving spouse  benefit provided under paragraph 1. of this Article XIII above shall not take effect unless the spouse of  the Participant consents to such election in writing or by electronic medium or other means prescribed by  the Committee, such election designates a beneficiary which may not be changed without spousal consent  (or the consent of the spouse expressly permits designations by the Participant without requirement of  further consent by the spouse), and the spouse’s consent acknowledges the effect of such election and is  witnessed by a Plan representative or notary public; or it is established to the satisfaction of the Plan  representative that the consent required of the spouse, as hereinabove provided, may not be obtained  because the spouse cannot be located, or because of such other circumstances as may be prescribed by  Treasury Regulations; provided, that any such consent by a spouse shall be effective only with respect to  such spouse.   3.    Designation of Beneficiary or Beneficiaries   A Participant who has no spouse, or who with his/her spouse’s consent has elected to waive the surviving  spouse benefit as hereinabove provided, may file with the Committee, a written designation or provide  and state a designation by electronic medium or other means, in the form and/or manner determined and  prescribed by the Committee, of the beneficiary or the beneficiaries to receive all or part of his/her account  upon his/her death, and the Participant shall also file with or provide by electronic or other means to the  Committee such information as to the identity of the beneficiary or beneficiaries and the relationship of  the beneficiary or beneficiaries to the Participant as the Committee may from time to time require. The  last designation received by the Committee shall be controlling over any testamentary or other disposition;  provided, however, that no designation, or change or cancellation thereof, under this Plan shall be effective  unless received by the Committee prior to the Participant’s death, and in no event shall it be effective as  of a date prior to such receipt.                                           86  

 

    4.    Payment and Distribution to Beneficiary or Beneficiaries   Upon the death of a Participant, his/her account shall be paid or distributed to the Participant’s spouse, or  beneficiary or beneficiaries designated by him/her as provided in the preceding paragraphs 1. through 3.  of  this  Article  XIII,  or,  in  the  absence  of such  designation,  to  the  estate  of  the  Participant  or  to  the  beneficiary or beneficiaries entitled thereto under the intestacy laws governing the disposition of his/her  estate, and thereupon the Trustee, the Company, and the Committee shall not be under any further liability  to anyone. Provided, that the provisions for payment of a distribution to a surviving spouse of a deceased  Participant in the KGS 401(k) Thrift Plan for a designated period of time shall remain in effect and be  applicable until such distribution is completed pursuant to such provisions.   5.    Rollover to IRA For Non-Spouse Beneficiary   Notwithstanding  the  foregoing,  a  direct  trustee-to-trustee  transfer  may  be  made  of  any  portion  of  a  distribution of the Plan Account of a deceased Participant or Employee to an individual retirement account  established for the purpose of receiving the distribution on behalf of an individual who is a designated  beneficiary  of  the  Participant  or Employee  and  who  is  not the  surviving  spouse  of  the  Participant or  Employee pursuant to Code Section 402(c)(ll).   6.    Death Benefits; Qualified Active Military Service   In the case of a Participant who dies while performing qualified military service (as defined in Code  Section 414(u)), the survivors of the Participant shall be entitled to any additional benefits (other than  benefit  accruals  relating  to  the  period  of  qualified  military  service)  provided  under  the  Plan  had  the  Participant resumed and then terminated employment on account of death.   7.    Death or Disability Resulting from Active Military Service; Treatment Allowed   The Company may treat an individual who dies or becomes disabled (as defined under the terms of the  Plan) while performing qualified military service with respect to the Company as if the individual has  resumed employment in accordance with the individual’s reemployment rights under chapter 43 of title  38, United States Code, on the day preceding death or disability (as the case may be) and terminated  employment on the actual date of death or disability. In the case of any such treatment, and subject to the  provisions of this paragraph, any full or partial compliance by the Plan with respect to the benefit accrual  USERRA requirements of Code Section 414(u)(8) with respect to such individual shall be treated for  purposes of Code Section 414(u)(l) as if such compliance were required under such chapter 43. This  paragraph shall apply only if all individuals performing qualified military  service with respect to the  Company (as determined under Code Section 414(b), (c), (m), and (o)) who die or became disabled as a  result of performing qualified military service prior to reemployment by the Company are credited with  service  and  benefits  on  reasonably  equivalent  terms.  The  amount  of  employee  contributions  and  the  amount of elective deferrals of an individual treated as reemployed under this paragraph for purposes of  applying Code Section 414(u)(9)(C) shall be determined on the basis of the individual’s average actual  employee contributions or elective deferrals for the lesser of (i) the 12-month period of service with the  employer immediately prior to qualified military service, or (ii) if service with the employer is less than  such 12-month period, the actual length of continuous service with the employer .                                           87  

 

                                     ARTICLE XIV.                                   SUBSIDIARIES   PARAGRAPH   The Plan may be modified and amended from time to time pursuant to the provisions of Article XXIII  hereof for purposes of extending its benefits to one (1) or more Subsidiaries of the Company.                                           88  

 

                                      ARTICLE XV.                                 ADMINISTRATION   Notwithstanding  the January  1,  2018 general effective  date,  the  effective  date  of  the  creation  of  the  committees described herein is the date previously determined by the Board of Directors, which was an  amendment to the Plan as of that date.   PARAGRAPH   1.    ONE Gas, Inc. Benefits Committee & ONE Gas, Inc. Benefit Plan Sponsor Committee   The  Plan  shall  be  administered  by  the  ONE  Gas,  Inc.  Benefits  Committee. (the  “Committee”)  The  Committee shall serve as the plan administrator within the meaning of Section 3(16)(A) of ERISA and as  the term “Plan Administrator” is used in the Plan.   In acting with respect to and administering each Plan, the Committee shall have the authority and power,  in its exclusive discretion, (i) to make and enforce rules and regulations, and to prescribe forms with  respect to the administration of the Plan,  (ii) to establish rules and procedures required by the applicable  laws  and  regulations  or the  terms  of  the Plan,  (iii)  to  interpret  and  apply  the  terms  of  all  documents  governing  the  establishment,  administration  or  operation  of  the Plan,  (iv)   to  decide  all  matters  and  questions  concerning  the Plan  and  its administration,  including,  without  limitation,  those  concerning  eligibility of any person to participate in or benefit under the Plan, (v) to establish and administer an  investment policy or funding policy of the Plan, (vi) to appoint agents, counsel, accountants, actuaries,  consultants, investment managers, including investment managers qualified to be appointed and act under  ERISA, to manage any assets of the Plan under the terms of the Plan, and other persons to assist in  administration of the Plan, (vii), to make, sign, furnish, deliver or file reports, returns, forms or other  instruments with respect to or for the Plans and Plan administrator, (viii) to allocate and delegate its  authority, responsibilities, duties and powers under these resolutions  or the terms and provisions of the  Plan to other persons, as it determines, in its exclusive discretion, and (ix) to take such other actions and  do all other things that it determines, in its discretion, with respect to the administration and operation of  the Plan.   The Committee shall have such other powers and duties as are specified in this instrument, any Charter  for the Committee, or any Board directive, as the same may from time to time be constituted, and not in  limitation  but  in  amplification  of  the  foregoing,  the  Committee  shall  have  power,  to  direct  the  administration of the Plan, Trust, and that part of the funds held by the insurance company pursuant to  contracts entered into from time to time by the Employer and an insurance company, with the Trustee and  the insurance company to the extent described in such contracts being subject to the direction of the  Committee. The Committee may supply any omission or reconcile any inconsistency in this instrument  in such manner and to such extent as it shall deem expedient to carry the same into effect and it shall be  the sole and final judge of such expediency. The Committee may adopt such regulations with respect to  the signature by an Employee, Participant, and/or Spouse of an Employee or Participant, to any documents  to be signed by Employees or Participants as the Committee shall determine in view of federal and state  laws.   The Company, separate from the Plan, shall to the fullest extent permissible by law, defend, indemnify,  and hold harmless any officer or employee of the Company serving as a member of the Committee against  all  liabilities,  losses,  damages,  costs,  and  expenses,  including  attorneys’  fees  and  amounts  paid  in  settlement of any claims or liabilities in connection with the Plan by reason of any action taken or failure                                         89  

 

    to act by such person as a member of the Committee or by the Committee with respect to the Plan if the  person, or Committee, acted in good faith and in a manner that was reasonably believed to be in or not  opposed to the best interest of the Plan and, with respect to any criminal action or proceeding, had no  reasonable cause to believe his, her, or its conduct was unlawful.   The  settlor  function  of  the  Plan  shall  be  administered  by  the  ONE  Gas,  Inc.  Benefit  Plan  Sponsor  Committee (“Sponsor Committee”). The Sponsor Committee shall have all settlor functions regarding  Plan establishment, design, pricing, amendment, and termination, but shall have no fiduciary functions.   The Sponsor Committee shall have such other powers and duties as are specified in this instrument, any  Charter for the Sponsor Committee, or any Board directive.   The Company, separate from the Plan, shall to the fullest extent permissible by law, defend, indemnify,  and  hold  harmless  any  officer  or  employee  of  the  Company  serving  as  a  member  of  the  Sponsor  Committee  against  all  liabilities,  losses,  damages,  costs,  and  expenses,  including  attorneys’  fees  and  amounts paid in settlement of any claims or liabilities in connection with the Plan by reason of any action  taken or failure to act by such person as a member of the Sponsor Committee or by the Sponsor Committee  with respect to the Plan if the person, or Sponsor Committee, acted in good faith and in a manner that was  reasonably believed to be in or not opposed to the best interest of the Plan and, with respect to any criminal  action or proceeding, had no reasonable cause to believe his, her, or its conduct was unlawful    2.    Trust, Trustee and Committee   The Company and Fidelity Management Trust Company have entered into a Trust Agreement pursuant  to which the Fidelity Management Trust Company is to act as Trustee under the Plan. The Company may,  without further reference to or action by any Employee, Participant, or any subsidiary of the Company  participating in the Plan, (a) from time to time enter into such further agreements with the Trustee or other  parties, and make such amendments to said Trust Agreement or such further agreements, as the Company  may deem necessary or desirable to carry out the Plan; (b) from time to time designate successor Trustees  which in each case shall be a bank or trust company having capital and surplus of not less than five  hundred million dollars ($500,000,000); and (c) from time to time take such other steps and execute such  other instruments as the Company may deem necessary or desirable to put the Plan into effect or to carry  it out. The Board shall determine the manner in which the Company shall take any such action. Moreover,  the Committee may execute such further agreements with the Trustee or other parties as it reasonably  deems necessary to fulfill its own obligations with respect to administration of the Plan. The Committee  shall advise the Trustee in writing with respect to all benefits which become payable under the terms of  the Plan and shall direct the Trustee to pay such benefits from the respective Participants’ Accounts. The  Committee shall have such other powers and duties as are specified in this instrument as the same may  from time to time be constituted, and not in limitation but in amplification of the foregoing, the Committee  shall have power, to the exclusion of all other persons, in its sole discretion, to make all determinations  and interpretations with respect to administration of the Plan, to interpret or construe the provisions of  this instrument and to determine all questions that may arise hereunder as to the status and rights of  Participants and others hereunder, to decide any disputes which may arise hereunder; to construe and  determine the effect of beneficiary designations; to determine all questions that shall arise under the Plan,  including questions as to the rights of Employees to become Participants, as to the rights of Participants,  and including questions submitted by the Trustee on all matters necessary for it properly to discharge its  duties, powers, and obligations; to employ legal counsel, accountants, actuaries, consultants and agents;  to  establish  and  modify  such  rules  and  regulations  for  carrying  out  the  provisions  of  the  Plan  not  inconsistent with the terms and provisions hereof, as the Committee may consider proper and desirable;  and in all things and respects whatsoever, without limitation, to direct the administration of the Plan and  Trust with the Trustee being subject to the direction of the Committee. The Committee shall establish and                                         90  

 

    maintain  reasonable  procedures  governing  the  filing  of  benefit  claims,  notification  of  benefit  determinations  and  appeal  of  adverse  benefit  determinations,  as  described  in  and  consistent  with  paragraph 7. of this Article, below, and which shall also be described in the summary plan description for  the Plan. The Committee may supply any omission or reconcile any inconsistency in this instrument in  such manner and to such extent as it shall deem expedient to carry the same into effect and it shall be the  sole and final judge of such expediency. The Committee may adopt such regulations with respect to the  signature by an Employee, Participant and/or the spouse of an Employee or Participant to any directions  or other papers to be signed by Employees or Participants and similar matters as the Committee shall  determine in view of the laws of any state or states.   3.    Plan Fiduciaries   The  named  fiduciary  of  the  Plan  (within  the  meaning  of  Section  402(a)  of  ERISA),  who  shall  have  authority to control and manage the operation and administration of the Plan, is the Committee (which,  again, is the Benefits Committee). The Fiduciary may serve in more than one (1) fiduciary capacity under  the Plan. The Committee may appoint or employ such assistants or representatives as they deem necessary  for the effective exercise of its duties in the administration of the Plan including without limitation the  appointment of an investment manager or managers. The Committee may delegate to such assistants and  representatives any powers and duties, both ministerial and discretionary, as it may deem expedient or  appropriate. The Trustee and the Company may by agreement in writing arrange for the delegation by the  Trustee to the Committee of any of the Trustee’s functions except the custody of the assets, the voting  with respect to shares held by the Trustee, and the purchase and sale or redemption of securities. Any  appointment of an additional or replacement named fiduciary in accordance with this paragraph will be  subject to advance approval of the Board of Directors of the Company.   4.    Action by the Committee   Any act which this instrument authorizes or requires the Committee to do may be done by a majority of  the then members of the Committee. The action of such majority of the members expressed either by a  vote at a meeting or in writing without a meeting, shall constitute the action of the Committee and shall  have the same effect for all purposes as if assented to by all of the members of the Committee at the time  in  office,  provided,  however,  that  the  Committee  may,  in  specific  instances,  authorize  one  (1)  of  its  members to act for the Committee when and if it is found desirable and convenient to do so.   5.    Costs of Plan Administration   Except as provided in Paragraphs 4., 5., 6. and 8. of Article X hereof, or otherwise determined and directed  by  the  Committee,  the  Company  shall  pay  all  costs and  expenses  incurred  in  administering  the  Plan  including without limitation the expenses of the Committee, the fees and expenses of the Trustee, the fees  of its counsel, and other administrative expenses.  Notwithstanding the foregoing, the Company may apply  forfeitures toward the satisfaction of the costs and expenses incurred in administering the Plan and/or  towards the satisfaction of any Company Matching Contributions to the Plan.  Forfeitures must be used  no later than the last day of the Plan Year following the Plan Year in which the forfeiture occurs.                                              91  

 

    6.    Uniform and Nondiscriminatory Application   All rules and decisions of the Committee shall be uniformly and consistently applied to all Employees  and  Participants  in  similar  circumstances.  The  Committee  shall  be  entitled  to  rely  upon  information  furnished by the Company pertinent to any calculation or determination made pursuant to this Plan.   7.    Summary Plan Description; Claims Procedures   The Committee shall cause to be furnished to each Participant, in a manner calculated to ensure actual  receipt, a written summary plan description of the Plan and shall periodically update such summary plan  description or furnish a written summary of material modifications describing any amendments to the  Plan. Such summary plan description shall include the designation of the plan administrator, name of the  Trustee, and shall set forth the Participant’s rights and duties with respect to the benefits available to  him/her under the Plan; provided, however, that in the event of any conflict between the terms of this Plan  and such written summary plan description or summary of material modifications, the terms of this Plan  shall control.   The  summary  plan  description  shall  include a  description  of  claims  procedures,  which  shall  contain  provisions  that  are  consistent  with  the  following  terms  of  this  paragraph. Any  decisions  of  the Plan  respecting  an  Employee’s  right  to  become  a  Participant  in  the  Plan  or  the  right  of  a  Participant  or  beneficiary to benefits shall be delivered to the Employee, Participant or beneficiary in writing.    If a claim for benefits under the Plan is wholly or partially denied, the Plan shall notify the claimant within  a reasonable period of time, but not later than ninety (90) days after the claim is received by the Plan,  unless the Plan determines that special circumstances require an extension of time for processing the  claim. If the Plan determines an extension of time for processing the claim is required, a written notice of  the extension will be furnished to the claimant prior to the end of the initial 90-day period. An extension  for processing because of special circumstances will not exceed a period of ninety (90) days from the end  of the initial 90-day period. The written notice of an extension of time for processing a claim will indicate  the  special circumstances  requiring  the  extension, and  the  date  by  which  the  Plan  expects  to make a  decision on the claim.     If the claim concerns disability benefits under the Plan, the Plan must notify the claimant in writing within  45 days after the claim is received by the Plan  This period may be extended by the Plan for up to 30 days,  if the Plan Administrator determines that such an extension is necessary due to matters beyond the control  of the Plan, and the Plan notifies the claimant, prior to the expiration of the initial 45-day period, of the  circumstances requiring the extension of time and the date by which the Plan expects to render a decision.   An additional 30-day extension may be required if, prior to the end of the first 30-day extension period,  the Plan Administrator determines that such an extension is necessary due to matters beyond the control  of the Plan, and the Plan notifies the claimant, prior to the expiration of the first 30-day extension period,  of the circumstances requiring the extension of time and the date by which the Plan expects to render a  decision.  Any notice of extension will specifically explain: (i) the standards on which entitlement to  benefits  is  based; (ii)  the  unresolved  issues  that  prevent  a  decision  on  the  claim; (iii)  the  additional  information needed to resolve those issues; and (iv) that the claimant will have 45 days to provide any  specified additional information. If a period of time is extended because the claimant failed to provide  necessary information, the period for making the benefit determination is tolled from the date the Plan  sends notice of the extension to the claimant until the date on which the claimant responds to the request  for additional information.                                             92  

 

    If an Employee, Participant or beneficiary is denied benefits under the Plan, the Plan shall notify the  Employee, Participant or beneficiary of its decision with a written or electronic notification of the denial.  This notification will be provided in a culturally and linguistically appropriate manner and shall set forth  (i) the specific reason or reasons for the denial  of the claim, (ii) the specific Plan provisions on which the  determination to deny the claim is based, (iii) a description of any additional material or information  necessary for the Employee, Participant or beneficiary (hereinafter also referred to as a “claimant”) to  perfect  the  claim  and  an  explanation  of  why  such  material  or  information  is  necessary,  and  (iv)  a  description of the Plan’s review procedures and time limits applicable to such procedures, including a  statement of the right of a claimant to bring a civil action under ERISA following an adverse benefit  determination on review.   If a claim concerns disability benefits under the Plan, the written or electronic notification shall also  include the following: (i) a discussion of the decision including an explanation of the basis for disagreeing  with or not following (a) the views presented by the claimant to the Plan of health care professional  treating the claimant and vocational professional who evaluated the claimant, (b) the views of medical or  vocational  experts  whose  advice  was  obtained  on behalf  of  the  Plan  in  connection  with a  claimant’s  adverse benefit determination, without regard to whether the advice was relied upon in making the benefit  determination; and (c) a disability determination regarding the claimant presented by the claimant to the  Plan by the Social Security Administration; (ii) if the adverse determination is based on medical necessity  or experimental treatment or similar exclusion or limit, either (a) an explanation of the scientific or clinical  judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances,  or (b) a statement that such explanation will be provided free of charge upon request; (iii) either (a) the  specific internal rules, guidelines, protocols, standards or other similar criterion of the Plan relied upon in  making the adverse determination, or (b) a statement that such rules, guidelines, protocols, standards or  other similar criterion of the Plan do not exist; and (iv) a statement that the claimant is entitled to receive,  upon request and free of charge, reasonable access to and copies of all documents, records, and other  information relevant to the claimant’s claim for benefits.   A claimant shall have a right to a full and fair review of a claim and adverse benefit determination, and in  all cases of such review (i) a claimant shall have sixty (60) days following receipt of notification of an  adverse benefit determination within which to appeal such determination, (ii) a claimant shall have the  opportunity to submit written comments, documents, records and other information relating to the claim  for benefits (iii) a claimant shall be provided, upon request and free of charge, reasonable access to and  copies of all documents, records and other information relevant to the claimant’s claim for benefits, and  (iv) a review that takes into account all comments, documents, records and other information submitted  by  the  claimant  relating  to  the  claim,  without  regard  to  whether  such  information  was  submitted  or  considered in the initial benefit determination. A claimant shall be notified of the determination of the  Plan on review within a reasonable time, but not later than sixty (60) days after the receipt of the claimant’s  request for review, unless the Plan determines that special circumstances require an extension of time for  processing of the claim and review, in which event written notice of such extension shall be furnished to  the claimant  prior  to the  termination of  the  initial  sixty  (60)  day  period,  and  in  no  event  shall  such  extension  exceed  a  period  of  sixty  (60)  days  from  the  end  of  such  initial  period;  and  such  notice  of  extension shall indicate the special circumstances requiring an extension of time and the date by which  the  Plan expects to render the determination on review.    If the initial claim was for disability benefits under the Plan and is denied, a claimant shall have one  hundred eighty (180) days following receipt of notification of an adverse benefit determination within  which to appeal such determination.  The appeal will be handled completely independently of the findings  and decision made regarding the initial claim and will be processed by an individual or committee who is  not a subordinate of the individual or committee who denied the initial claim.  If the claim requires medical                                         93  

 

    judgment, the individual or committee handling the appeal will consult with a medical professional who  was not consulted regarding the initial claim and who is not a subordinate of anyone consulted regarding  the initial claim and identify that medical professional to the claimant. If the Plan considers, relies upon,  or creates any new or additional evidence during the review of the appeal, the Plan will provide such new  or additional evidence to the claimant.  This new or additional evidence will be provided free of charge,  as soon as possible and sufficiently in advance of the time within which a final determination on appeal  is  required  to  allow the  claimant time  to  respond.  Additionally,  before  the  Plan  issues  a  notice  of  determination on appeal that is based on new or additional rationale, the claimant must be provided a copy  of the rationale at no cost. The rationale must be provided as soon as possible and sufficiently in advance  of the time within which a final determination on appeal is required to allow the claimant time to respond.  A claimant shall be notified of the determination of the Committee and Plan on review within a reasonable  time, but not later than forty-five (45) days after the receipt of the claimant’s request for review, unless  the Committee and Plan determine that special circumstances require an extension of time for processing  of the claim and review, in which event written notice of such extension shall be furnished to the claimant  prior to the termination of the initial forty-five (45) day period and in no event shall such extension exceed  a period of forty-five (45) days from the end of such initial period. The notice of extension shall indicate  the special circumstances requiring an extension of time and the date by which the Plan expects to render  a determination on review.  If a period of time is extended because the claimant failed to provide necessary  information, the period for making the benefit determination is tolled from the date the Plan sends notice  of the extension to the claimant until the date on which the claimant responds to the request for additional  information.   A claimant shall be provided by the Plan a written or electronic notification of a benefit determination on  review. This notification will be provided in a culturally and linguistically appropriate manner and  shall  set forth (i) the specific reason or reasons for the adverse determination, (ii) reference to the specific Plan  provisions on which the benefit determination is based, (iii) a statement that the claimant is entitled to  receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, or  other information relevant  to  the  claimant’s  claim  for  benefits,  and  (iv)  a  statement  describing  any  voluntary appeal procedures offered by the Plan and the claimant’s right to obtain information about such  procedures, and a statement of the claimant’s right to bring an action under Section 502(a) of ERISA.   If a claim concerns disability benefits under the Plan, the written or electronic notification shall also  include the following: (i) a discussion of the decision including an explanation of the basis for disagreeing  with or not following (a) the views presented by the claimant to the Plan of health care professional  treating the claimant and vocational professional who evaluated the claimant, (b) the views of medical or  vocational  experts  whose  advice  was  obtained  on behalf  of  the  Plan  in  connection  with a  claimant’s  adverse benefit determination, without regard to whether the advice was relied upon in making the benefit  determination; and (c) a disability determination regarding the claimant presented by the claimant to the  Plan by the Social Security Administration; (ii) if the adverse determination is based on medical necessity  or experimental treatment or similar exclusion or limit, either (a) an explanation of the scientific or clinical  judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances,  or (b) a statement that such explanation will be provided free of charge upon request; and (iii) either (a)  the specific rules, guidelines, protocols, standards or other similar criterion of the Plan relied upon in  making the adverse determination, or (b) a statement that such rules, guidelines, protocols, standards or  other similar criterion of the Plan do not exist.   The Company, the Committee and other Plan fiduciaries shall be fully protected in relying on the accuracy  and completeness of all personal data, consents, elections and designations provided by any Participant,  and each Participant shall be solely responsible for the accuracy and completeness of such information. If  the Committee or any other Plan fiduciary acts or fails to act with respect to a Participant or a Participant’s                                         94  

 

    Account under the Plan, and the Participant knows or reasonably should have known of such act or failure  to act (such as by timely reviewing periodic Account statements and timely reviewing payroll statements),  then the Participant’s failure to notify the Committee or other applicable Plan fiduciary within a reasonable  period of time (not to exceed one year) shall be deemed an acceptance and ratification of such act or  failure to act, and the Company, the Plan, the Committee and applicable Plan fiduciary shall be forever  discharged from liability with respect to such act or failure to act to the same extent as if the absence of  such liability had been finally adjudicated in federal court.   8.    Electronic Medium Notices and Elections; ERISA Disclosure and Reporting   A.    The  Plan  may  use  an  electronic  medium  to  provide  applicable  notices and for  the  making  of  Participant elections to the maximum extent permitted by law. Any electronic system used by the Plan  shall be reasonably designed to provide the information in any notice to an Employee, Participant or other  recipient in  a  manner  that  is  no  less  understandable to  the  recipient  than  a written  document.  Such  electronic system used by the Plan shall be reasonably designed to alert the recipient at the time a notice  is provided, to the significance of the information in the notice, any instructions needed to access the  notice and the availability of a paper copy at no cost to the recipient.  B.    Notwithstanding any  other  provision  stated,  expressed or  implied  to  the  contrary  in  this  Plan  document, the Plan may be administered with respect to any election, consent, direction or other right,  act, or feature provided for under or in connection with the Plan, by the Committee authorizing, directing  or allowing that such things be done, delivered, provided or communicated by written instrument or by  electronic medium, telephone voice response system or any other means authorized and permitted under  applicable laws and regulations, and determined and prescribed from time to time by the Committee.  9.    Recognition of Agency Relationships   The Trustee need not recognize the agency of any party for an Employee or Participant unless it shall  receive documentary evidence thereof satisfactory to it and thereafter from time to time, as the Trustee  may determine, additional documentary evidence showing the continuance of such agency; provided that  the Trustee shall not be required to recognize any agency which the Trustee deems to be a device for  violating  the  provisions  of  Article  XVII.  Until  such  time  as  the  Trustee  shall  receive  documentary  evidence satisfactory to it of the cessation or modification of any agency, the Trustee shall be entitled to  rely upon the continuance of such agency and to deal with the agent as if he/she or it were the Employee  or Participant.   10.   Valuation of Trust Assets   The Trustee shall value the assets of the Plan Trust as of the close of the last day of the Plan Year, and  more frequently, if directed by the Committee. The assets of the Trust shall be valued at their fair market  value and the Committee shall, in accordance with a method consistently followed and uniformly applied,  allocate the sums contributed by the Company and Participants, plus the net income or minus the net loss  of the Trust, and plus the net appreciation or minus the net depreciation in the Trust assets, to the separate  Participants’ Accounts of the respective Participants under the Plan in accordance with the foregoing and  the provisions of Article X of the Plan.   11.   Allocation and Delegation of Committee Responsibilities   The Committee may (i) allocate among any of the members of the Committee any of the responsibilities  of the Committee under the Plan or (ii) designate any person, firm, or corporation that is not a member of  the  Committee  to  carry  out  any  of  the  responsibilities  of  the  Committee  under  the  Plan.  Any  such                                         95  

 

    allocation  or  designation  shall  be  made  pursuant  to  a  written  instrument  signed  by  a  majority  of  the  members  of  the  Committee  or  its  duly  authorized  representative  and  fiduciary.  If  such  allocation  or  designation occurs, then the person, firm, or corporation designated, or to whom such allocation and  delegation of authority, responsibilities, or duties is made, shall, upon acceptance thereof by them, be  solely responsible for performing the delegated, allocated, or designated duties and functions until such  delegation may terminate from time to time.   12.   Audit   The independent accountants who audit the books and accounts of the Company shall annually examine  the  records  of  the  Company  and  the  Committee  in  respect  of  the  Plan  and,  on  the  basis  of  such  examination, make such report to the Trustee as it may request. The records of the Trustee and (subject to  such report by said independent accountants) the records of the Company and the Committee shall be  conclusive in respect of all matters involved in the administration of the Plan.   13.   Annual Reports   The Committee shall annually furnish to each Participant a statement as of the end of the previous Plan  Year, at such time and in such form as the Committee shall determine, setting forth the account of such  Participant. Such statement shall be deemed to have been accepted as correct unless written notice to the  contrary  is  received  by  the  Trustee  within  thirty  (30)  days  after  the  mailing  of  such  statement to  the  Participant.                                           96  

 

                                     ARTICLE XVI.                      NOTICES AND OTHER COMMUNICATIONS   PARAGRAPH   1.    Delivery of Notices and Other Documents   All notices, reports, and statements given, made, delivered, or transmitted to a Participant shall be deemed  duly given, made, delivered, or transmitted when mailed, by such class of mail as the Trustee may deem  appropriate, with postage prepaid and addressed to the Participant at the address last appearing on the  books of the Company. A Participant may change his/her address from time to time by written notice in  form prescribed by the Committee.   2.    Delivery of Communications by Participants   Written directions, notices, and other communications from Participants to the Company, the Trustee, or  the Committee shall be mailed by first-class mail or delivered to such location as shall be specified in  regulations or upon the forms prescribed by the Committee, and shall be deemed to have been given when  received at such location.                                           97  

 

                                     ARTICLE XVII.                                NON-ASSIGNABILITY   PARAGRAPH   1.    General   To the extent permitted by law, it is a condition of the Plan, and all rights of each Participant shall be  subject  thereto,  that  no  right  or  interest  of  any  Participant  in  the  Plan  or  in  his/her  account  shall  be  assignable or transferable in whole or in part, either directly or by operation of law or otherwise, including  (but without limitation) execution, levy, garnishment, attachment, pledge, bankruptcy, or in any other  manner,  but  excluding  devolution  by  death  or  mental  incompetency;  and  no  right  or  interest  of  any  Participant in the Plan or in his/her account shall be liable for or subject to any obligation or liability of  such Participant.   2.    Loans   The foregoing limitation in paragraph 1. shall not apply to a loan made to a Participant if such loan is  secured by the Participant’s accrued nonforfeitable benefit and such loan is made in accordance with the  nondiscriminatory loan policy prescribed in paragraph 18. of Article XII.   3.    Qualified Domestic Relations Orders   The foregoing limitation shall not apply to a Qualified Domestic Relations Order, and payments shall be  made hereunder in accordance with the applicable requirements of any such Qualified Domestic Relations  Order in accordance with written procedures to be established by the Committee to determine the qualified  status of domestic relations orders and to administer distributions under such orders in accordance with  Section 206(d)(3) of ERISA, and regulations thereunder. For purposes of this Plan a “Qualified Domestic  Relations Order” means any judgment, decree, or order (including approval of a property settlement)  which creates or recognizes the existence of an alternate payee’s right to, or assigns to an alternate payee  the right to receive all or a portion of the benefits payable with respect to a Participant under this Plan,  and 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, is made pursuant to a state domestic relations  law (including a community property law), and which meets the requirements of Section 206(d)(3)(C)  and (D) of ERISA. For purposes of the foregoing, an “alternate payee” means any spouse, former spouse,  child, or other dependent of a Participant who is recognized by a Qualified Domestic Relations Order as  having a right to receive all or a portion of, the benefits payable under the Plan with respect to such  Participant.                                           98  

 

                                    ARTICLE XVIII.                       TERMS OF EMPLOYMENT UNAFFECTED   PARAGRAPH   1.    Participation in the Plan by a Participant shall in no way affect any of the Company’s rights to  assign such Participant to a different job or position; to change his/her title, authority, duties, or rate of  compensation; or to terminate his/her employment.                                           99  

 

                                     ARTICLE XIX.                              CONSTRUCTION OF PLAN   PARAGRAPH   1.    To the extent federal law does not apply, Plan shall be governed by and construed in accordance  with  the  laws  of  the  State  of  Oklahoma.  Any  interpretation  of  the  Plan  by  the  Committee  shall  be  conclusive and may be relied upon by the Trustee and all parties in interest.                                           100  

 

                                      ARTICLE XX.                                 TOP-HEAVY RULES   PARAGRAPH   1.    Minimum Contribution   If this Plan is top-heavy in any Plan Year, the Plan guarantees a minimum contribution of three percent  (3%) of Compensation for each Non-key Employee who is a Participant employed by the Company on  the last day of the Plan Year. If the contribution rate for the Key Employee with the highest contribution  rate is less than three percent (3%), the guaranteed minimum contribution for Non-key Employees under  this paragraph 1. shall equal the highest contribution rate received by a Key Employee. The contribution  rate is the sum of Company contributions (not including Company contributions to Social Security) and  any forfeitures allocated to the Participant’s Account for the Plan Year divided by his/her Compensation  for  the  Plan  Year  taking  into  consideration amounts  contributed as  a result  of  a  salary  reduction  arrangement in determining the contributions made on behalf of Key Employees. All qualified defined  contribution  plans  maintained  by  the  Company  shall  be  considered  as  a  single  plan  for  purposes  of  determining the contribution rate. For any year in which the Plan is top-heavy, each Non-key Employee  shall receive a minimum contribution if not separated from service at the end of the Plan Year regardless  of whether such Non-key Employee has declined to make any mandatory contribution otherwise required  by the Plan.   If this Plan is top-heavy and any Participant in the Plan is a Participant in any other top-heavy defined  contribution plan(s) maintained by the Company, then this Plan shall provide the defined contribution  plan minimum contribution for all such top-heavy defined contribution plans.   If any Participant in the Plan is also covered by a top-heavy defined benefit plan of the Company, the  aggregate top-heavy minimum benefit requirement for such Participant for all plans affected shall be  satisfied by such Participant receiving a safe harbor minimum defined contribution under this Plan equal  to at least five percent (5%) of his/her Compensation for each Plan Year such plans are top-heavy, all in  accordance with and  pursuant to  the  provisions of  Treasury  Regulations,  §1.416-1,  M-12,  and  any  amendment thereto.   2.    Rate of Minimum Contribution   To the extent the contribution rate with respect to a Non-key Employee for a Plan Year as described in  paragraph 1. above, is less than the minimum contribution, the Company will increase its contribution for  such  Employee  to  the  extent  necessary so  his/her  contribution  rate  for  the  Plan  Year  shall  equal  the  guaranteed minimum contribution. The required additional contribution shall be made from net profits of  the Company to the extent available, but if for a particular Plan Year there are no profits out of which to  make contributions to  the  Plan,  the  Company shall nevertheless make the minimum guaranteed  contribution for each Non-key Employee. The Committee shall allocate the additional contribution to the  account of the Non• key Employee for whom the Company makes the contribution.   3.    Top-Heavy Status Determination   The Plan is top-heavy for a Plan Year if the top-heavy ratio as of the Determination Date exceeds sixty  percent (60%). The top-heavy  ratio is a  fraction, the numerator  of which is the present  value of the  Accrued Benefit of all Key Employees as of the Determination Date, the contributions due as of the                                         101  

 

    Determination  Date, and distributions  made within the one-year  period  immediately  preceding  the  Determination Date, and the denominator of which is a similar sum determined for all Participants under  this Plan; provided, that if any individual has not performed services for the Company at any time during  the one (1)-year period ending on the Determination Date, any accrued benefit for such individual (and  on  account of  such  individual)  shall  not  be  taken  into  account. The  foregoing  determination  of  top- heaviness, and the top-heavy ratio shall also apply to distributions under a terminated plan which if it had  not been terminated would have been required to be included in an aggregation group including the Plan.  The Committee shall calculate the top-heavy ratio without regard to any Non-key Employee who was  formerly a Key Employee. The Committee shall calculate the top-heavy ratio, including the extent to  which it must take into account any distributions, rollovers, and other transfers, in accordance with Code  Section 416 and the regulations thereunder.   If the Company maintains any other qualified plans, this Plan is a top-heavy plan only if it is part of the  Top-Heavy Aggregation Group, and the top-heavy ratio for both the Top-Heavy Aggregation Group and  the Additional Aggregation Group exceeds sixty percent (60%). The Committee shall calculate the top- heavy  ratio  and  determine  top-heavy  status  for  the  aggregation  of  plans  for  a  particular  year  by  the  following procedures:   A.    The present value of accrued benefits (including distribution to Key Employees) is determined  separately for each plan as of each plan’s Determination Date;   B.    The plans are then aggregated by adding together the results for each plan as of the Determination  Dates for such plans that fall within the same calendar year, and   C.    The combined results shall indicate whether or not the plans so aggregated are top heavy. The  Plan shall not be considered to be a top-heavy plan if it at any time consists solely of a cash or deferred  arrangement which meets the requirements of Code Section 401(k)(12)  or 401(k)(13),  and  matching  contributions with respect to which the requirements of Code Section 401(m)(11) and 401(m)(12) are  met. If, but for the preceding sentence, the Plan would be treated as a top-heavy plan because it is a  member of an aggregation group which is a top-heavy group, contributions under the Plan may be taken  into account in determining whether any other plan in the group meets the requirements of requirements  of providing minimum contributions and benefits under Code Section 416(c).  4.    Vesting   The vesting in Plan benefits for Participants provided in paragraph 1. of Article XI, shall be applicable to  this Plan as a top-heavy plan.   5.    Definitions   For purposes of applying the provisions of this Article XX, the following definitions shall be applicable:   A.    “Key Employee” means as of any Determination Date, any Participant or former  Employee  (including any deceased Employee) who at any time during the Plan Year that includes the Determination  Date was an officer of the Company having an annual compensation greater than One Hundred Seventy- Five Thousand Dollars ($175,000) (as adjusted under Code Section 416(i)(l)), a five-percent (5%) owner  of the Company, or a one-percent (1%) owner of the Company who has total annual compensation from  the Company of more than One Hundred Fifty Thousand Dollars ($150,000). For this purpose, annual  compensation means compensation within the meaning of Code Section 415(c)(3). The determination of  who  is  a  key  employee  shall  be  made in  accordance with Code  Section 416(i)(l)  and the  applicable  regulations and other guidance of general applicability thereunder.                                         102  

 

    B.    “Non-key Employee” means a Participant who does not meet the definition of Key Employee,  and such Participant’s beneficiary or beneficiaries.  C.    “Five percent (5%) owner” means any person who owns (or is considered as owning within the  meaning of Code Section 318) more than five percent (5%) of the outstanding stock of the Company or  stock possessing more than five percent (5%) of the total combined voting power of all stock of the  Company.  D.    “One percent (1%) owner” means any person who would be described in subparagraph C., above,  if “one percent (1%)” were substituted for “five percent (5%)” each place it appears in subparagraph C.,  above.  For purposes of the foregoing, subparagraph (C) of Code Section 318(a)(2) shall be applied by substituting  “five percent (5%)” for “fifty percent (50%);” the rules of Subsection (b), (c), and (m) of Code Section  414 shall not apply for purposes of determining ownership of the Company; and the term “compensation”  shall have the meaning given such term by Code Section 414(q)(7).   E.    “Accrued Benefit” shall mean the amount of the Participant’s account under this Plan as of any  particular date derived within the limitation year for this Plan.  F.    “Top-Heavy Aggregation Group” means each qualified plan of the Company in which at least one  (1) Key Employee participates (in the Plan Year containing the Determination Date or any of the four (4)  preceding Plan Years) and any other qualified plan of the Company which, when considered with such  qualified  plans  with  Key  Employee  participants, enables  such  plans  (those with  at  least  one  (1)  Key  Employee) to meet the coverage and nondiscrimination rules of Code Sections 401(a)(4) or 410.  G.    “Additional Aggregation Group” means the Top-Heavy Aggregation Group plus any  other  qualified plans maintained by the Company, but only if such group would satisfy in the aggregate the  requirements of Code Sections 401(a)(4) and 410. The Committee shall determine which plan or plans to  consider in determining the Additional Aggregation Group.  H.    “Determination Date” for any Plan Year is the last day of the preceding Plan Year. For the first  Plan Year, this date shall be the last day of such Plan Year.  I.    “Valuation Date” means the annual date on which Plan assets are to be valued hereunder for the  purpose of determining the value of account balances, which occurred most recently within a twelve (12)- month period ending on the determination date.                                           103  

 

                                     ARTICLE XXI.                    TRANSFERRED SUBSIDIARY PLAN ACCOUNTS   PARAGRAPH   1.    General   If a Participant was a participant in a defined contribution plan of a subsidiary of ONEOK that is subject  to Code Sections 401(a)(11) and 417 with respect to that Participant, from which assets in which the  Participant  had  a vested  account  and  benefits  have  been  transferred  directly  or  indirectly  on  or  after  January 1, 1985, to the Trust of this Plan pursuant to paragraphs 1. and 2. of Article V, that vested account  and benefits (hereinafter referred to as “Transferred Participant Account”) of the Participant shall be held,  invested, maintained and distributed in accordance with this Article XXI.   2.    Separate Accounting and Accrual   A Participant’s Transferred Participant Account shall be accounted for separately from all other of his/her  contributions  hereunder and  the  Company’s  contributions  to  his/her  regular  Participant  Account.  The  Participant’s rights in his/her accrued benefit derived from his/her Transferred Participant Account shall  be nonforfeitable, and any income and earnings therefrom and accretions thereon, shall be separately  accounted for and become vested in such Participant immediately upon receipt thereof by the Trustee of  such  income,  earnings  and  accretions,  and  (subject  to  subsequent  loss  through  decline  in  value  of  investments) and the Participant may not thereafter be deprived of such funds under any provision of the  Plan.   3.    Other Plan Provisions Applicable   Except as otherwise provided in this Article XXI, the Transferred Participant Account of any Participant  shall be separately held, accounted for, and distributed, but in the same manner and subject to the same  rules, requirements, and limitations as generally apply to a Participant’s account under all provisions of  this Plan.   4.    Distributions   Subject to paragraphs 7. and 8., below, the Transferred Participant Account of a Participant shall not be  distributed under a method of payment which, as of the Required Beginning Date, does not satisfy the  minimum distribution requirements established by this Article XXI or paragraph 11. of Article XI, or  which is not consistent with Treasury regulations. The minimum distribution for a calendar year equals  the Participant’s nonforfeitable accrued benefit in his/her Transferred Participant Account at the beginning  of  the year divided  by  the  Participant’s  life  expectancy  or,  if  applicable,  the  life  expectancy  of  such  Participant  and  his/her  designated  beneficiary.  For  the  purposes  of  this  Article  XXI,  the “Required  Beginning Date” shall mean the latest date for distribution to a Participant stated in paragraph 11. of  Article  XI.  In  computing  a  minimum  distribution,  the  life  expectancy  multiples  under  Treasury  Regulations,  Section  1.72-9  shall  be used.  For  purposes  of  such  computation,  a  Participant’s  life  expectancy may be recalculated no more frequently than annually, but the life expectancy of a nonspouse  beneficiary may not be recalculated. If the Participant’s spouse is not the designated beneficiary, the  method of distribution selected must provide that the present value of the payments to be made to the  Participant is more than fifty percent (50%) of the present value of the total payments to the Participant  and his/her beneficiaries.                                         104  

 

    5.    Consent of Distribution   A Participant and the spouse of the Participant (or where the Participant has died, the surviving spouse)  must consent to the form of the distribution of the Transferred Participant Account the Committee directs  the Trustee to make if: (i) the present value of the Participant’s nonforfeitable accrued benefit exceeds  five thousand dollars ($5,000); (ii) the Qualified Joint and Survivor Annuity provisions stated below in  this Article XXI apply to the distribution; and (iii) a distribution in a form other than a Qualified Joint and  Survivor Annuity is to be made.   6.    Time of Distribution   If distribution of a Participant’s Transferred Participant Account in other than lump-sum is authorized by  this Article XXI, then upon the death of the Participant, the Participant’s Transferred Participant Account  shall be paid in accordance with this paragraph. If the Participant’s death occurs after payment of the  Participant’s  Transferred  Participant  Account  has  begun,  payment  thereof  shall  be  completed  over  a  period which does not exceed the payment period which had commenced. If the Participant’s death occurs  prior to the time payment of the Participant’s benefit from the Transferred Participant Account has begun,  the payment thereof shall be made over a period not exceeding (i) five (5) years after the date of the  Participant’s death, or (ii) if the beneficiary is a designated beneficiary, over the designated beneficiary’s  life expectancy; but payment of the Participant’s Transferred Participant Account over a period described  in (ii) shall not be made unless such payment to the designated beneficiary begins no later than one (1)  year after the date of the Participant’s death or, if later, and the designated beneficiary is the Participant’s  surviving spouse, the date the Participant would have attained age seventy and one-half(701⁄2).   7.    Qualified Joint and Survivor Annuity; Qualified Preretirement Survivor Annuity   The Committee shall direct the Trustee to distribute a married or unmarried Participant’s Transferred  Participant Account, otherwise payable in annuity form, in the form of a Qualified Joint and Survivor  Annuity or a Qualified Preretirement Survivor Annuity, unless the Participant makes a valid election to  waive  the  Qualified  Joint  and  Survivor  Annuity  or  Qualified  Preretirement  Survivor  Annuity  under  paragraph 8. Of this Article XXI, below.   If a Participant elects at any time during the Applicable Election Period to waive the Qualified Joint and  Survivor Annuity form of benefit or the Qualified Preretirement Survivor Annuity form of benefit (or  both), the Participant shall be allowed to elect the Qualified Optional Survivor Annuity form of benefit at  any time during the Applicable Election Period.   A “Qualified Joint and Survivor Annuity” is an annuity which is purchasable with the Participant’s  Transferred Participant Account and which is payable for the life of the Participant with, if the Participant  is  married  on  the  Annuity  Starting  Date,  a  survivor  annuity  payable  for  the  life  of  the  Participant’s  surviving spouse equal to fifty percent (50%) of the amount of the annuity payable during the joint lives  of the Participant and his/her spouse, and which is the actuarial equivalent of a single annuity for the life  of the Participant. On or before the Annuity Starting Date, the Committee, in its sole discretion without  Participant or spousal consent, may direct the Trustee to pay the Participant’s Transferred Participant  Account in a lump sum, in lieu of a Qualified Joint and Survivor Annuity, if the present value of the  Participant’s  Transferred  Participant  Account  (excluding  accumulated  deductible  employee  contributions) does not exceed five thousand dollars ($5,000).   “Qualified Optional Survivor Annuity” means (ii) an annuity for the life of the Participant with a survivor  annuity for the life of the spouse which is equal to the applicable percentage of the amount of the annuity                                         105  

 

    which is payable during the joint lives of the Participant and the spouse, and (ii) which is the actuarial  equivalent of a single annuity for the life of the Participant. Such term also includes any annuity in a form  having the effect of an annuity described in the preceding sentence. For purposes of this paragraph and  definition if the survivor annuity percentage is less than 75 percent (75%), the applicable percentage is 75  percent (75%), and if the survivor annuity percentage is greater than or equal to 75 percent (75%), the  applicable  percentage  is  50  percent (50%).  For  purposes  of  this  paragraph  and  definition,  the  term  “survivor annuity percentage” means the percentage which the survivor annuity under the Plan’s qualified  joint and survivor annuity bears to the annuity payable during the joint lives of the Participant and the  spouse.   If a married Participant dies before the Annuity Starting Date and such Participant has a surviving spouse,  the Committee shall direct the Trustee to distribute the Participant’s Transferred Participant Account to  the Participant’s surviving spouse in the form of a Qualified Preretirement Survivor Annuity, unless the  Participant  has a  valid  waiver  election in  effect. A “Qualified  Preretirement  Survivor  Annuity” is  an  annuity which is actuarially equivalent to fifty percent (50%) of the Participant’s Transferred Participant  Account (determined as of the date of the Participant’s death) and which is payable for the life of the  Participant’s surviving spouse. Any security interest held by reason of a loan outstanding to the Participant  shall be taken into account in determining the amount of the Qualified Preretirement Survivor Annuity.  The Participant’s surviving spouse may elect to have the Trustee commence payment of the Qualified  Preretirement Survivor Annuity within a reasonable period of time following the date of the Participant’s  death. Furthermore, if the present value of the Participant’s Transferred Participant Account exceeds five  thousand  dollars  ($5,000),  the  Committee  shall  not  direct  the  Trustee  to  distribute  the  Qualified  Preretirement  Survivor  Annuity  to  the  Participant’s surviving  spouse  prior  to  the  date the  Participant  would  have  attained  age  sixty-five  (65)  without  the  written  consent  of  the  surviving  spouse.  The  Committee,  in  its  sole  discretion,  may  direct  the  Trustee  to  make  a  lump-sum  distribution  to  the  Participant’s surviving spouse in lieu of a Qualified Preretirement Survivor Annuity, if the present value  of the Participant’s Transferred Participant Account is not greater than five thousand dollars ($5,000).   If the Participant has in effect a valid waiver election regarding the Qualified Joint and Survivor Annuity  or the Qualified Preretirement Survivor Annuity, the Committee shall direct the Trustee to distribute the  Participant’s  Transferred  Participant  Account  in  accordance  with  paragraphs  3.  and  4.,  above.  For  purposes of applying this Article XXI, the Committee shall treat a former spouse as the Participant’s  spouse or surviving spouse to the extent provided under a Qualified Domestic Relations Order (as defined  in Code Section 414(p)).   8.    Notices; Waiver Election   Within the Applicable Notice Period with respect to such Participant, the Company shall provide the  Participant a written explanation of the terms and conditions of the Qualified Joint and Survivor Annuity  and a Qualified Optional Survivor Annuity, the Participant’s right to make and the effect of an election to  waive the Qualified Joint and Survivor Annuity form of benefit, the effect of an election of a Qualified  Optional Survivor Annuity, the rights of the Participant’s spouse to consent to such a waiver election, and  the right to make and the effect of a revocation of the Participant’s waiver election. A Participant may  elect at any time during the Applicable Election Period to waive the Qualified Joint and Survivor Annuity  form of benefit. The Participant may revoke a waiver of the Qualified Joint and Survivor Annuity, or an  elected Qualified Optional Survivor Annuity or make a new waiver at any time during the Applicable  Election Period.   The Annuity Starting Date for a distribution in a form other than a Qualified Joint and Survivor Annuity  may  be  less  than  thirty  (30)  days  after  receipt  of  the  written  explanation  described  in  the  preceding                                         106  

 

    paragraph provided: (1) the Participant has been provided with information that clearly indicates that the  Participant has at least thirty (30) days to consider whether to waive the Qualified Joint and Survivor  Annuity and elect (with spousal consent) to a form of distribution other than a Qualified Joint and Survivor  Annuity, including a Qualified Optional Survivor Annuity; (2) the Participant is permitted to revoke any  affirmative distribution election at least until the Annuity Starting Date or, if later, at any time prior to the  expiration of the 7-day period that begins the day after the explanation of the Qualified Joint and Survivor  Annuity is provided to the Participant; and (3) the Annuity Starting Date is a date after the date that the  written explanation was provided to the Participant.   A married Participant’s waiver election is not valid after December 31, 1984, unless (i) the Participant’s  spouse (to whom the survivor annuity is payable under the Qualified Joint and Survivor Annuity) has  consented in writing to the waiver election, (ii) such election designates a beneficiary (or form of benefit)  which  may  not  be  changed  without  spousal  consent  (or  the  consent  of  the  spouse  expressly  permits  designations by the Participant without any requirement of further consent by the spouse), and (iii) the  spouse’s consent acknowledges the effect of the election, and a notary public or the Company (or its Plan  representative) witnesses the spouse’s consent. The spouse’s consent to a waiver of the Qualified Joint  and Survivor Annuity shall be irrevocable unless the Participant revokes the waiver election.   The  Company  may  accept  as  valid  a  waiver  election  which  does  not  satisfy  the  spousal  consent  requirements, if the Company establishes the Participant does not have a spouse, the Company is not able  to locate the Participant’s spouse, or other circumstances exist under which the Treasury Regulations  excuse the consent requirement.   Notwithstanding  the  foregoing,  a  Qualified  Joint  and  Survivor  Annuity,  Qualified  Optional  Survivor  Annuity and Qualified Preretirement Survivor Annuity will not be provided unless the Participant and  spouse had been married throughout the one-year period ending on the earlier of (i) the Participant’s  Annuity Starting Date or (ii) the date of the Participant’s death; except that if a Participant marries within  one (1) year before the Annuity Starting Date, and the Participant and the Participant’s spouse in such  marriage have been married for at least a one-year period ending on or before the date of the Participant’s  death, such Participant and such spouse shall be treated as having been married throughout the one-year  period ending on the Participant’s Annuity Starting Date.   With respect to any Participant’s Transferred Participant Account subject to paragraph 7., the Company  shall provide to each Participant, within the Applicable Notice Period with respect to such Participant in  a manner consistent with Treasury Regulations, a written explanation of the terms and conditions of the  Qualified Optional Survivor Annuity comparable to the explanation of the Qualified Joint and Survivor  Annuity required hereunder.   With respect to any Participant’s Transferred Participant Account subject to paragraph 7., the Company  shall provide to each Participant, within the Applicable Notice Period with respect to such Participant in  a manner consistent with Treasury Regulations, a written explanation of the terms and conditions of the  Qualified Preretirement Survivor Annuity comparable to the  explanation of  the  Qualified Joint  and  Survivor Annuity required hereunder. If the Participant’s Transferred Participant Account is not subject  to paragraph 7. above prior to the time the Company must provide the written explanation of the Qualified  Preretirement Survivor Annuity, the Company shall provide the written explanation within a reasonable  period consistent with Treasury Regulations following the time the Participant’s Transferred Participant  Account first is subject to this Article XXI, but not later than the close of the second Plan Year following  the Plan Year in which the Participant enters the Plan or first becomes subject to paragraph 7. A Participant  may elect at any time during the Applicable Election Period to waive the Qualified Preretirement Survivor                                          107  

 

    Annuity form of benefit. A Participant may revoke a waiver of the  Qualified Preretirement Survivor  Annuity or make a new waiver at any time during the Applicable Election Period.   A Participant’s waiver election of the Qualified Preretirement Survivor Annuity is not valid unless (i) the  Participant makes the waiver election no earlier than the first day of the Plan Year in which he/she attains  age thirty-five (35), and (ii) after December 31, 1984, the Participant’s spouse (to whom the Qualified  Preretirement Survivor  Annuity  is  payable)  satisfies  the  consent  requirements  described  above.  The  spouse’s consent to a waiver of the Qualified Preretirement Survivor Annuity is irrevocable unless the  Participant revokes the waiver election. Irrespective of the time of election requirement described in (i),  if the Participant separates from service prior to the first day of the Plan Year in which he/she attains age  thirty-five (35), the Company may accept a waiver election with respect to the Transferred Participant  Account attributable to his/her service prior to his/her separation from service.   9.    Definitions; and Applicable Rules   For purposes of paragraphs 7. and 8. of this Article XXI, the term “Annuity Starting Date” means with  respect to the Participant’s Transferred Participant Account (i) the first day of the first period for which  an amount is payable as an annuity, or (ii) in the case of a benefit not payable in the form of an annuity,  the first day on which all events have occurred which entitle the Participant to such benefit.   The term “Earliest Retirement Age” means the earliest date on which, under the Plan, the Participant could  elect  to receive  retirement  benefits  with  respect  to  his/her Transferred  Participant  Account. The  term  “Applicable  Notice  Period” means,  with  respect  to  a  Qualified  Joint  and  Survivor  Annuity  for  a  Participant, a reasonable period of time of not less than thirty (30) days and not more than one hundred  eighty (180) days before the Annuity Starting Date (as consistent with applicable Treasury Regulations).   With  respect  to  a  Qualified  Preretirement  Survivor  Annuity  for  a  Participant,  the “Applicable  Notice  Period” means whichever of the following periods ends last: (i) the period beginning with the first day of  the Plan Year in which the Participant attains age thirty-two (32) and ending with the close of the Plan  Year preceding the Plan Year in which the Participant attains age thirty-five (35); (ii) a reasonable period  after the individual becomes a Participant; (iii) a reasonable period ending after the Plan ceases to fully  subsidize  costs  of  the  benefit,  if applicable;  or  (iv)  a  reasonable  period  ending  after  Code  Section  401(a)(11) applies to the Participant provided that in the case of a Participant who separates from service  before  attaining  age  thirty-five  (35),  the  Applicable  Notice  Period  shall  be  a  reasonable  period  after  separation.   The term “Applicable Election Period” means (i) with respect to a Qualified Joint and Survivor Annuity,  the one hundred eighty (180) day period ending on the Annuity Starting Date and (ii) with respect to a  Qualified Preretirement Survivor Annuity, the period which begins on the first day of the Plan Year in  which the Participant attains age thirty-five (35) and ends on the Participant’s death.   The present value of a qualified joint and survivor annuity benefit or a qualified preretirement survivor  annuity benefit shall be calculated by using the Applicable Mortality Table and the Applicable Interest  Rate. For purposes of the preceding sentence the terms “Applicable Mortality Table” and “Applicable  Interest  Rate” shall  have  the  meaning  for  such  terms  stated  in  Code  Section  417(e)(3),  Treasury  regulations  promulgated  under  that  section,  and  in  applicable  rulings  and  guidance  published  by  the  Internal Revenue Service with respect to such terms and the Code, including without limitation, changes  enacted by the Pension Protection Act of 2006 (P. L. 109-280). Provided, that the Plan and amendment  thereof to add the preceding sentence shall be applied and interpreted consistent with the Code in such  manner as does not decrease the accrued benefit of a Participant.                                         108  

 

                                     ARTICLE XXII.        NGC PROFIT SHARING/401(K) SAVINGS PLAN TRANSFERRED ACCOUNTS                                       PART A.               General Provisions/Administration Of Transferred NGC Accounts   PARAGRAPH   1.    General   If a Participant was a participant in the NGC Profit Sharing/401(k) Savings Plan (“NGC Plan”) from  which assets in which the Participant had a vested account and benefits have been transferred directly to  the Trust of this Plan pursuant to Paragraph 3. of Article V, that vested account and benefits (hereinafter  referred  to  as “Transferred  NGC  Account”)  of  the  Participant  shall  be  held,  invested,  maintained,  administered and distributed in accordance with this Article XXII.   2.    Separate Accounting and Accrual   A Participant’s Transferred NGC Account shall be accounted for separately  from all other of his/her  contributions  hereunder and  the  Company’s contributions  to  his/her  regular  Participant  Account.  The  Participant’s rights in his/her accrued benefit derived from his/her Transferred NGC Account shall be  fully vested and nonforfeitable, and any income and earnings therefrom and accretions thereon, shall be  separately accounted for and become vested in such Participant immediately upon receipt thereof by the  Trustee of such income, earnings and accretions, and (subject to subsequent loss through decline in value  of investments) and the Participant may not thereafter be deprived of such funds under any provision of  the Plan. The Transferred NGC Account of a Participant shall be paid and distributed in the forms of  benefit provided under the NGC Plan prior to the transfer thereof to this Plan in such manner as is required  to satisfy the applicable provisions of Section 411(d)(6) of the Code, and Treasury Regulations thereunder.   3.    Other Plan Provisions Applicable   Except as otherwise provided in this Article XXII, the Transferred NGC Account of any Participant shall  be separately held, accounted for, and distributed, but in the same manner and subject to the same rules,  requirements, and limitations as generally apply to a Participant’s Account or parts thereof pertinent under  all provisions of this Plan.                                       PART B.                      Transferred NGC Accounts; Retirement Benefits   A Participant who terminates his/her employment on or after his/her Normal Retirement Date shall be  entitled to a retirement benefit, payable at the time and in the form provided in Part F of this Article XXII,  equal in value to the aggregate amount in his/her Transferred NGC Account on his/her Annuity Starting  Date. Any contribution or addition allocable to a Participant’s Transferred NGC Account after his/her  Annuity Starting Date shall be distributed, if his/her benefit was paid in a lump sum, or used to increase  his/her payments, if his/her benefit is being paid on a periodic basis, as soon as administratively feasible  after the date that such contribution or addition is paid to the Trust of the Plan.                                          109  

 

                                           PART C.                      Transferred NGC Accounts; Disability Benefits   1.    Disability Benefits   In the event a Participant’s employment is terminated, and such Participant is totally and permanently  disabled, as determined pursuant to Paragraph 2. of this Part C, below, such Participant shall be entitled  to a disability benefit, payable at the time and in the form provided in Part F of this Article XXII equal in  value to the aggregate amount in his/her Transferred NGC Account on his/her Annuity Starting Date. Any  contribution or addition allocable to a  Participant’s Transferred  NGC  Account  after  his/her  Annuity  Starting Date shall be distributed, if his/her benefit was paid in a lump sum, or used to increase his/her  payments, if his/her benefit is being paid on a periodic basis, as soon as administratively feasible after the  date that such contribution or addition is paid to the Trust of the Plan.   2.    Total and Permanent Disability Determined   A Participant shall be considered totally and permanently disabled if the Committee determines, based on  a  written medical  opinion  (unless  waived  by  the  Committee as  unnecessary),  that  such  Participant  is  permanently incapable of performing his/her job for physical or mental reasons.                                          PART D.                      Transferred NGC Accounts; Severance Benefits   Each Participant whose employment is terminated prior to his/her Normal Retirement Date for any reason  other than total and permanent disability (as defined in Paragraph 2. of Part C of this Article XXII) or  death shall be entitled to a benefit that is payable at the time and in the form provided in Part F of this  Article XXII, equal in value to his/her Vested Interest in the aggregate amount in his/her Transferred NGC  Account on his/her Annuity Starting Date. A Participant’s Vested Interest in any contribution allocable to  such Participant’s Transferred NGC Account after his/her Annuity Starting Date shall be distributed, if  his/her benefit was paid in a lump sum, or used to increase his/her payments, if his/her benefit is being  paid on a periodic basis, as soon as administratively feasible after the date that such contribution is paid  to the Trust of the Plan.                                       PART E.                        Transferred NGC Accounts; Death Benefits   Upon  the  death  of  a  Participant while  an  Employee,  the  Participant’s  Eligible  Surviving  Spouse  or  designated beneficiary shall be entitled to a death benefit, payable at the time and in the form provided in  Part F of this Article XXII, equal in value to the aggregate amount in his/her Transferred NGC Account  on his/her Annuity Starting Date. Any contribution allocable to a Participant’s Transferred NGC Account  after his/her Annuity Starting Date shall be distributed, if his/her benefit was paid in a lump sum, or used  to increase payments, if  his/her benefit is being paid on a periodic basis, as soon as administratively  feasible after the date that such contribution is paid to the Trust of the Plan.                                          110  

 

                                        PART F.             Transferred NGC Accounts; Time And Form Of Payment Of Benefits   1.    Time of Payment   A.    Subject to the provisions of the remaining Paragraphs of this Part, a Participant’s Annuity Starting  Date shall be the date that is as soon as administratively feasible after the date the Participant or his/her  beneficiary becomes entitled to a benefit pursuant to Parts B, C, D and E, of this Article XXII, but no  earlier than the expiration of the seven-day period that begins the day after the information required to be  furnished pursuant to Paragraph 2.C. of this Part F, has been furnished to the Participant.  B.    Unless a Participant (1) has attained age sixty-five, (2) has died (A) without leaving an Eligible  Surviving Spouse or (B) with an election in effect, pursuant to Paragraph 3.B. of this Part F, not to receive  the standard death benefit set forth in Paragraph 3.A of this Part F, or (3) consents to a distribution pursuant  to Paragraph 1.A. of this Part F, and, if such Participant has an Eligible Surviving Spouse, unless such  Eligible  Surviving Spouse consents (with  such  consent  being  irrevocable)  in  accordance  with  the  requirements of section 417 of the Code and applicable Treasury regulations thereunder) within the one  hundred eighty (180) day period ending on the date payment of his/her benefit hereunder is to commence  pursuant to Paragraph 1.A. of this Part F, his/her Annuity Starting Date shall be deferred to the date which  is as soon as administratively feasible after the date the Participant attains (or would have attained) age  sixty-five, or such earlier date as the Participant (with the consent of his/her Eligible Surviving Spouse, if  applicable) may elect by written notice to the Committee prior to such date. Consent of the Participant’s  Eligible Surviving Spouse under this Paragraph shall not be required if the Participant’s benefit is to be  paid in the form of the standard benefit described in this part. The Committee shall furnish information  pertinent to his/her consent to each Participant no less than thirty days (unless such thirty-day period is  waived by an affirmative election in accordance with applicable Treasury regulations) and no more than  one hundred eighty (180) days before his/her Annuity Starting Date, and the furnished information shall  include a general description of the material features of, and an explanation of the relative values of, the  alternative forms of benefit available under the Plan and must inform the Participant of his/her right to  defer his/her Annuity Starting Date and of his/her Direct Rollover right pursuant to Paragraph 5. of this  Part F, below, if applicable. In the case of a married Participant who dies before his/her Annuity Starting  Date without electing not to receive the standard death benefit set forth in Paragraph 3.A. of this Part F,  the consent and election set forth in this Paragraph may be made by his/her Eligible Surviving Spouse.  C.    A Participant’s Annuity Starting Date shall in no event be later than the sixtieth day following the  close of the Plan Year during which such Participant attains, or would have attained, his/her Normal  Retirement Date or, if later, terminates his/her employment with the Company.  D.    A  Participant’s Annuity  Starting  Date  shall  be  in  compliance with  the  provisions  of  Section  401(a)(9) of the Code and applicable Treasury regulations and shall in no event be later than:        1.    April 1 of the calendar year following the later of (A) the calendar year in which such              Participant attains the age of seventy and one-half (701⁄2) or (B) the calendar year in which              such Participant terminates his/her employment with the Employer (provided, however,              that clause (B) of this sentence shall not apply in the case of a Participant who is a “five-             percent owner” (as defined in section 416 of the Code) with respect to the Plan Year              ending in the calendar year in which such Participant attains the age of seventy and one-             half (701⁄2); and         2.    In the case of a benefit payable pursuant to Part E of this Article XXII, (A) if payable to              other than the Participant’s spouse, the last day of the one-year period following the death                                         111  

 

                of such Participant or (B) if payable to the Participant’s spouse, after the date upon which              such Participant would have attained the age of seventy and one-half (701⁄2), unless such              surviving spouse dies before payments commence, in which case the Annuity Starting              Date may not be deferred beyond the last day of the one-year period following the death              of such surviving spouse.   The preceding provisions of this Part F, notwithstanding, a Participant may not elect to defer the receipt  of  his/her  benefit  hereunder  to  the  extent  that  such  deferral  creates  a  death  benefit  that  is  more  than  incidental within the meaning of section 401(a)(9)(G) of the Code and applicable Treasury regulations  thereunder. Further, in determining compliance with the provisions of section 401(a)(9) of the Code, the  life expectancies of a Participant and the Participant’s spouse shall not be recalculated after the Annuity  Starting Date. Finally, a Participant (other than a Participant who is a “five-percent owner” (as defined in  section  416 of  the Code)  with  respect  to  the  Plan  Year  ending  in  the  calendar  year  in  which  such  Participant attains the age of seventy and one-half (701⁄2) who attains age seventy and one-half (701⁄2) in  calendar years 1996, 1997, or 1998 may elect to defer his/her Annuity Starting Date until no later than  April 1 of the calendar year following the later of (A) the calendar year in which such Participant attains  the age of seventy and one-half (701⁄2) or (B) the calendar year in which such Participant terminates his/her  employment with the Employer, provided, that such election is made by the later of the end of the calendar  year in which such Participant attains age seventy and one-half (701⁄2) or December 31, 1997.   E.    Subject to the provisions of Subparagraph D., a Participant’s Annuity Starting Date shall not occur  unless the events under Parts B, C, D and E of this Article XXII entitling the Participant (or his/her  beneficiary) to a benefit constitutes a distributable event described in Section 401(k)(2)(B) of the Code  and shall not occur while the Participant is employed by the Company or any Subsidiary (irrespective of  whether the Participant has become entitled to a distribution of his/her benefit pursuant to Part B, C, D,  or E of this Article XXII).  F.    Subparagraphs  A.,  B. and  C.,  above,  notwithstanding,  a  Participant  whose  vested  interest  in  his/her Transferred NGC Account is $5,000 or more may elect to defer his/her Annuity Starting Date  beyond the date specified in such subparagraphs, subject to the provisions of Subparagraph D., above, by  submitting to the Committee a written statement, signed by the Participant, which describes the benefit  and designates the date on which the payment of such benefit shall commence.  2.    Standard and Alternative Forms of Benefit for Participants   A.    For purposes of Parts B, C or E of this Article XXII, the standard benefit for any Participant who  is married on his/her Annuity Starting Date shall be a joint and survivor annuity. Such joint and survivor  annuity shall be a commercial annuity which is payable for the life of the Participant with a survivor  annuity for the life of the Participant’s Eligible Surviving Spouse which shall be one-half of the amount  of the annuity payable during the joint lives of the Participant and the Participant’s Eligible Surviving  Spouse. The standard benefit for any Participant who is not married on his/her Annuity Starting Date shall  be a commercial annuity which is payable for the life of the Participant.  B.    Any Participant who would otherwise receive the standard benefit may elect not to take his/her  benefit in such form by executing the form prescribed by the Committee for such election during the  election  period  described  in  Subparagraph  C.,  below.  Any  election  may  be  revoked  and  subsequent  elections may be made or revoked at any time during such election period. Notwithstanding the foregoing,  an election by a married Participant not to receive the standard benefit as provided in Subparagraph A.,  above, shall not be effective unless (1) the Eligible Surviving Spouse has consented thereto in writing  (including consent to the specific designated beneficiary to receive payments following the Participant’s  death or  to the  specific  benefit  form  elected,  which  designation  or election may  not  subsequently  be                                          112  

 

    changed by the Participant without spousal consent) and such consent acknowledges the effect of such  election and is witnessed by a Plan representative (other than the Participant) or a notary public, or (2) the  consent of such spouse cannot be obtained because the Eligible Surviving Spouse cannot be located or  because of other circumstances described by applicable Treasury regulations. Any such consent by such  Eligible Surviving Spouse shall be irrevocable.  C.    The Committee shall furnish certain information, pertinent to the Subparagraph B. election, to  each Participant no less than thirty (30) days (unless such thirty-day period is waived by an affirmative  election in accordance with applicable Treasury regulations) and no more than one hundred eighty (180)  days before his/her Annuity Starting Date. The furnished information shall include an explanation of (1)  the terms and conditions of the standard benefit, (2) the Participant’s right to elect to waive the standard  benefit and the effect of such election, (3) the rights of the Participant’s Eligible Surviving Spouse, if any,  (4) the right to revoke such election and the effect of such revocation, (5) a general description of the  eligibility conditions and other material features of the alternative forms of benefit available pursuant to  Subparagraph D., below, and (6) sufficient additional information to explain the relative values of such  alternative forms of benefit. The period of time during which a Participant may make or revoke such  election shall be the one hundred eighty (180) day period ending on such Participant’s Annuity Starting  Date provided that such election may also be revoked at any time prior to the expiration of the seven-day  period that begins the day after the information required to be furnished pursuant to this Paragraph has  been furnished to the Participant.  D.    If a Participant elects at any time during the Applicable Election Period to waive the standard form  of benefit or the qualified preretirement survivor annuity form of benefit (or both), the Participant shall  be  allowed  to  elect  the  Qualified  Optional  Survivor  Annuity  form  of benefit  at  any  time  during  the  Applicable Election Period.  “Qualified Optional Survivor Annuity” means (ii) an annuity for the life of the Participant with a survivor  annuity for the life of the spouse which is equal to the applicable percentage of the amount of the annuity  which is payable during the joint lives of the Participant and the spouse, and (ii) which is the actuarial  equivalent of a single annuity for the life of the Participant. Such term also includes any annuity in a form  having the effect of an annuity described in the preceding sentence. For purposes of this paragraph and  definition if the survivor annuity  percentage  is  less  than  75  percent,  the  applicable  percentage is  75  percent, and is greater than or equal to 75 percent, the applicable percentage is 50 percent. For purposes  of this paragraph and definition, the term “survivor annuity percentage” means the percentage which the  survivor annuity under the Plan’s qualified joint and survivor annuity bears to the annuity payable during  the joint lives of the Participant and the spouse.   E.    For purposes of Parts B, C or D of this Article XXII, the benefit for any Participant who has  elected not to receive the standard benefit shall be paid in one of the following alternative forms to be  selected by the Participant or, in the absence of such election, by the Committee; provided, however, that  the period and method of payment of any such form shall be in compliance with the provisions of Section  401(a)(9) of the Code and applicable Treasury regulations thereunder:        1.    A commercial annuity in the form of a single life annuity for the life of such Participant.         2.    A commercial annuity (a) for the joint lives of the Participant and any person designated              by the Participant, (b) for a term certain (of 5, 10, or 15 years) and continuous for the life              of the Participant if he/she survives such term certain, or (c) for a term certain to the              Participant and any designated beneficiary of the Participant if the Participant does not              survive such term certain.         3.    A lump sum.                                         113  

 

          4.    Periodic installment payments to such Participant for a term certain or, in the event of such              Participant’s death before the end of such term certain, to his/her designated beneficiary;              provided, however, that such term certain shall not exceed the lesser of (i) ten years or (ii)              the  life  expectancy  of  the  Participant  or  the  joint  and  last  survivor  expectancy  of  the              Participant and his/her designated beneficiary. Upon the death of a beneficiary who is              receiving  installment  payments  under  this  Paragraph,  the  remaining  balance  in  the              Participant’s Transferred NGC Account shall be paid as soon as administratively feasible,              in one lump sum cash payment, to the beneficiary’s executor or administrator or to his/her              heirs at law if there is no administration of such beneficiary’s estate.   The Annuity Starting Date for a distribution in a form other than a survivor annuity may be less than thirty  (30) days after receipt of the written explanation described in the preceding paragraph provided: (1) the  Participant has been provided with information that clearly indicates that the Participant has at least thirty  (30) days to consider whether to waive the survivor annuity and elect (with spousal consent) to a form of  distribution  other  than  a  survivor  annuity;  (2)  the  Participant  is  permitted  to  revoke  any  affirmative  distribution election at least until the Annuity Starting Date, or, if later, at any time prior to the expiration  of the 7-day period that begins the day after the explanation of the survivor annuity is provided to the  Participant; and (3) the Annuity Starting Date is a date after the date that the written explanation was  provided to the Participant.   F.    If a Participant, who terminated his/her employment under circumstances such that he/she was  entitled to a benefit pursuant to Parts B, C, or D, dies prior to his/her Annuity Starting Date, the amount  of the benefit to which he/she was entitled shall be paid pursuant to Paragraph 3. of this Part F, just as if  such Participant had died while employed by the Employer except that his/her vested interest shall be  determined pursuant to Parts B, C, or D, whichever is applicable.  3.    Standard and Alternative Forms of Death Benefit   A.    For purposes of Part E, the standard death benefit for a deceased Participant who leaves an Eligible  Surviving Spouse shall be a survivor annuity. Such survivor annuity shall be a commercial annuity which  is payable for the life of such Eligible Surviving Spouse.  B.    Any Participant who would otherwise have his/her death benefit paid in the standard survivor  annuity  form  may  elect  not  to  have  his/her  benefit  paid  in  such  form  by  executing  the  beneficiary  designation form prescribed by the Committee and filing same with the Committee, designating a primary  beneficiary other than his/her Eligible Surviving Spouse or electing some form of payment other than a  survivor annuity. Any election may be revoked and subsequent elections may be made or revoked at any  time prior to a Participant’s date of death.  C.    Subparagraph B., above, to the contrary notwithstanding:        1.    An election not to have the death benefit paid in the standard survivor annuity form as              provided  in  Subparagraph  A.,  above,  shall  not  be  effective  unless  (a)  the  Eligible              Surviving Spouse has consented thereto in writing and such consent (i) acknowledges the              effect of such election, (ii) either consents to the specific designated beneficiary (which              designation may not subsequently be changed by the Participant without spousal consent)              or expressly permits such designation by the Participant without the requirement of further              consent  by  the  spouse,  and  (iii) is  witnessed  by  a  Plan  representative  (other  than the              Participant)  or  a  notary  public  or  (b)  the  consent  of  such  spouse  cannot  be  obtained              because  the  Eligible Surviving  Spouse  cannot  be  located  or  because  of  other              circumstances described by applicable Treasury regulations. Any such consent by such              Eligible Surviving Spouse shall be irrevocable.                                         114  

 

          2.    An election not to have the death benefit paid in the standard survivor annuity form may              be made before the first day of the Plan Year in which a Participant attains the age of              thirty-five (35) only (a) after the Participant separates from service and only with respect              to benefits accrued under the Plan before the date of such separation and (b) in the case of              a Participant who has not separated from service, if the Participant has been furnished the              information described in Subparagraph D., with such election to become invalid upon the              first  day  of  the  Plan  Year  in  which  the  Participant  attains  the  age  of  thirty-five  (35),              whereupon a new election may be made by such Participant.   D.    The Committee shall furnish certain information pertinent to the Subparagraph B. election to each  Participant within the period beginning with the first day of the Plan Year in which he/she attains the age  of thirty-two (32) (but no earlier than the date such Participant begins participation in the Plan) and ending  with the later of (1) the last day of the Plan Year preceding the Plan Year in which the Participant attains  the  age  of  thirty-five  (35),  or  (2)  a  reasonable  time  after  the  Employee  becomes  a  Participant.  If  a  Participant separates from service before attaining age thirty-five (35), such information shall be furnished  to such Participant within the period beginning one year before the Participant separates from service and  ending one year after such separation. Such information shall also be furnished to a Participant who has  not attained the age of thirty-five (35) or terminated employment, within a reasonable time after written  request by such Participant. The furnished information shall include an explanation of (1) the terms and  conditions of the survivor annuity, (2) the Participant’s right to elect to waive the survivor annuity and  the effect of such election, (3) the rights of the Participant’s Eligible Surviving Spouse, (4) the right to  revoke such election and the effect of such revocation, (5) a general description of the eligibility conditions  and other material features of the alternative forms of benefit available pursuant to Subparagraph F.,  below, and (6) sufficient additional information to explain the relative value of such alternative forms of  benefit.  E.    In the event a survivor annuity is to be paid to a Participant’s Eligible Surviving Spouse, such  Eligible Surviving Spouse may elect to receive the benefit in one of the alternative forms set forth in  Subparagraph 3.F. Within a reasonable time after written request by such Eligible Surviving Spouse, the  Committee shall provide to such Eligible Surviving Spouse a written explanation of such survivor annuity  form and the alternative forms of payment which may be selected along with the financial effect of each  such form.  F.    For purposes of Part E, the death benefit of a deceased Participant who is not survived by an  Eligible  Surviving  Spouse  or  who  has  elected  not  to  have  his/her  death  benefit  paid  in  the  standard  survivor annuity form set forth in Subparagraph 3.A. shall be paid to his/her designated beneficiary in one  of the following alternative forms to be selected by such beneficiary or, in the absence of such selection,  by the Committee; provided, however, that the period and method of payment of any such form shall be  in compliance with the provisions of Section 401(a)(9) of the Code and applicable Treasury regulations  thereunder:        1.    A commercial annuity in the form of a single life annuity for the life of the designated              beneficiary.         2.    A lump sum.   G.    If a deceased Participant who either is not survived by an Eligible Surviving Spouse or has elected  (with spousal consent) not to have his/her standard death benefit paid in the standard survivor annuity  form set forth in Subparagraph 3.(A.) does not have a valid beneficiary  designation  on  file  with  the  Committee  at  the  time  of his/her  death,  the  designated  beneficiary  or  beneficiaries  to  receive  such  Participant’s death benefit shall be as follows:                                          115  

 

          1.    If a Participant leaves an Eligible Surviving Spouse, his/her designated beneficiary shall              be such Eligible Surviving Spouse;         2.    If a Participant leaves no Eligible Surviving Spouse, his/her designated beneficiary shall              be (a) such Participant’s executor or administrator or (b) his/her heirs at law if there is no              administration of such Participant’s estate.   4.    Cash-Out of Benefit   If a Participant terminates his/her employment and his/her vested interest in his/her Transferred NGC  Account is not in excess of $5,000, such Participant’s benefit shall be paid in one lump sum payment in  lieu of any other form of benefit herein provided. Any such payment shall be made at the time specified  in Subparagraph l.A. of this Part F, without regard to the consent restrictions of Subparagraph l.B. of this  Part F, and the election and spousal consent requirements of Paragraphs 2. and 3 .of this Part F, except  that a married Participant’s death benefit shall be paid to his/her Eligible Surviving Spouse unless another  beneficiary has been designated pursuant to the provisions of Subparagraph 3.B. The provisions of this  Paragraph shall not be applicable to a Participant following his/her Annuity Starting Date.   5.    Direct Rollover Election   Notwithstanding  any  provision  of  the  Plan  to  the  contrary  that  would  otherwise  limit  a  Distributee’s  election  under  this  Part  F,  a  Distributee  may  elect,  at  the  time  and  in  the manner  prescribed  by  the  Committee,  to  have  all  or  any  portion  of  an  Eligible  Rollover  Distribution  (other than any portion  attributable to the offset of an outstanding loan balance of such Participant pursuant to the Plan’s loan  procedure) paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover.  The  preceding  sentence  notwithstanding,  a  Distributee  may  elect  a  Direct  Rollover  pursuant  to  this  Paragraph only if such Distributee’s Eligible Rollover Distributions during the Plan Year are reasonably  expected to total $200 or more. Furthermore, if less than 100% of the Participant’s Eligible Rollover  Distribution is to be a Direct Rollover, the amount of the Direct Rollover must be $500 or more. Prior to  any Direct Rollover pursuant to this Paragraph, the Committee may require the Distributee to furnish the  Committee with a statement from the plan, account, or annuity to which the benefit is to be transferred  verifying that such plan, account, or annuity is, or is intended to be, an Eligible Retirement Plan.   6.    Benefits from Account Balances   With respect to any benefit payable in any form pursuant to the Plan, such benefit shall be provided from  the Transferred NGC Account balance(s) to which the particular Participant or beneficiary is entitled.   7.    Commercial Annuities   At the direction of the Committee, the Trustee may pay any form of benefit provided hereunder other than  a lump sum payment or a Direct Rollover pursuant to Paragraph 5. of this Part F by the purchase of a  commercial  annuity  contract  and  the  distribution  of  such  contract  to  the  Participant  or  beneficiary.  Thereupon, the Plan shall have no further liability with respect to the amount used to purchase the annuity  contract and such Participant or beneficiary shall look solely to the company issuing such contract for  such annuity payments. All certificates for commercial annuity benefits shall be nontransferable, except  for surrender to the issuing company, and no benefit thereunder may be sold, assigned, discounted, or  pledged  (other  than  as  collateral  for  a  loan  from  the  company  issuing  same).  Notwithstanding  the  foregoing, the terms of any such commercial annuity contract shall conform with the time of payment,  form of payment, and consent provisions of Paragraphs 1., 2., and 3. of this Part F.                                         116  

 

    8.    Present Value Determinations   The present value of a qualified joint and survivor annuity benefit or a qualified preretirement survivor  annuity benefit shall be calculated by using the Applicable Mortality Table and the Applicable Interest  Rate. For purposes of the preceding sentence, the terms “Applicable Mortality Rate” and “Applicable  Interest  Rate” shall  have  the  meaning  for  such  terms  stated  in  Code  Section  417(e)(3),  Treasury  regulations  promulgated  under  that  section,  and  in applicable  rulings  and  guidance  published  by  the  Internal Revenue Service with respect to such terms and the Code, including without limitation, changes  enacted by the Pension Protection Act of 2006 (P. L. 109-280). Provided, that the Plan and amendment  thereof to add the preceding sentence shall be applied and interpreted consistent with the Code in such  manner as does not decrease the accrued benefit of a Participant.   9.    Unclaimed Benefits   In  the  case  of  a  benefit  payable  on  behalf  of  a  Participant,  if  the Committee  is  unable  to  locate  the  Participant or beneficiary to whom such benefit is payable, upon the Committee’s determination thereof,  such benefit shall be forfeited. Notwithstanding the foregoing, if subsequent to any such forfeiture the  Participant or beneficiary to whom such benefit is payable makes a valid claim for such benefit, such  forfeited benefit shall be restored to the Plan.   10.   Claims Review   A claim for Plan benefits by a Participant or beneficiary shall be administered in accordance with  paragraph 7 of Article XV.                                       PART G.                    Transferred NGC Accounts; In-Service Withdrawals   1.    In-Service Withdrawals   A.    A  Participant  may  withdraw  any  or  all  amounts  held  in  his/her  Transferred  NGC  After- Tax  Account.  B.    A Participant who has a financial hardship, as determined by the Committee, and who has made  all available withdrawals pursuant to Subparagraph 1.A., above, and Paragraphs 3. and 4. of this Part G,  below, as applicable, and pursuant to the provisions of any other plans of the Company of which he is a  Participant and who has obtained all loans available pursuant to Article XII of the Plan and pursuant to  the provisions of any other plans of the Company of which he is a Participant, may withdraw from his/her  Transferred  NGC  Rollover  Contribution  Account and  his/her  Transferred  NGC  Before-Tax  Account  amounts  not  to  exceed  the  amount  determined  by  the  Committee  as  being  available  for  withdrawal  pursuant to this Paragraph. Such withdrawal shall come, first, from the Participant’s Transferred NGC  Rollover Contribution Account and, second, from his/her Transferred NGC Before-Tax Account. For  purposes of this Paragraph, financial hardship shall mean the immediate and heavy financial needs of the  Participant. A withdrawal based upon financial hardship pursuant to this Paragraph shall not exceed the  amount required to meet the immediate financial need created by the hardship and not reasonably available  from other resources of the Participant. The amount required to meet the immediate financial need may  include any amounts necessary to pay any federal, state, or local income taxes or penalties reasonably  anticipated to result from the distribution. The determination of the existence of a Participant’s financial  hardship and the amount required to be distributed to meet the need created by the hardship shall be made  by the Committee. The decision of the Committee shall be final and binding, provided that all Participants                                         117  

 

    similarly situated shall be treated in a uniform and nondiscriminatory manner. A withdrawal shall be  deemed to be made on account of an immediate and heavy financial need of a Participant if the withdrawal  is for:        1.    Expenses for medical care described in Section 213(d) of the Code previously incurred by              the Participant, the Participant’s spouse, or any dependents of the Participant (as defined              in Section 152 of the Code) or necessary for those persons to obtain medical care described              in Section 213(d) of the Code and not reimbursed or reimbursable by insurance;         2.    Costs directly related to the purchase of a principal residence of the Participant (excluding              mortgage payments);         3.    Payment of tuition and related educational fees, and room and board expenses, for the next              twelve months of post-secondary education for the Participant or the Participant’s spouse,              children, or dependents (as defined in Section 152 of the Code);         4.    Payments necessary to prevent the eviction of the Participant from his/her  principal              residence or foreclosure on the mortgage of the Participant’s principal residence; or          5.    Payments for burial or funeral expenses for the  Participant’s  deceased parent,  spouse,              children or dependents (as defined in Code Section 152, without regard to Code Section              152(d)(1)(B);         6.    Expenses for the  repair or  damage to  the Participant’s principal residence that  would              qualify for the casualty deduction under Code Section 165 (determined without regard to              whether the loss exceeds ten percent (10%) of adjusted gross income; and         7.    Such other financial needs that the Commissioner of Internal Revenue may deem to be              immediate and heavy financial needs through the publication of revenue rulings, notices,              and other documents of general applicability.   The above notwithstanding, (1) withdrawals under this Paragraph from a Participant’s Transferred NGC  Before-Tax Account shall be limited to the sum of the Participant’s  Transferred NGC Before-Tax  Contributions to the Plan, plus income allocable thereto and credited to the Participant’s Transferred NGC  Before-Tax Account as of December 31, 1988, less any previous withdrawals of such amounts, and (2)  amounts allocated to a Participant’s Transferred NGC Before-Tax Account pursuant to the provisions of  Subparagraph 2.E, below, of this Part G shall not be subject to withdrawal. A Participant who makes a  withdrawal from  his/her  Transferred  NGC  Before-Tax  Account  under  this  Paragraph  may  not  make  elective contributions or employee contributions to the Plan or any other qualified or nonqualified plan of  the Company for a period of twelve (12) months following the date of such withdrawal.   A  Participant shall  be  allowed a  Qualified Reservist Distribution with  respect  to  a  Transferred  NGC  Before-Tax Account in the same manner and to the same extent as is applicable under Article XII of the  Plan.   2.    Restriction on In-Service Withdrawals   A.    All withdrawals pursuant to this Part G shall be made in accordance with the provisions and within  the time period prescribed by the Committee prior to the proposed date of withdrawal.                                           118  

 

    B.    Notwithstanding the  provisions  of  this  Part  G,  not  more  than  one  withdrawal  pursuant  to  Subparagraph 1.A shall be made in any one calendar quarter, and (ii) no withdrawal shall be made from  a Transferred NGC Account to the extent such Account has been pledged to secure a loan from the Plan.  C.    If a Participant’s Transferred NGC Account from which a withdrawal is made is invested in more  than one investment option under the Plan, the withdrawal shall be made pro rata from each investment  option under the Plan in which such Transferred NGC Account is invested.  D.    All withdrawals under this paragraph shall be paid in cash.  E.    Any withdrawal hereunder shall be subject to the Direct Rollover election described in Paragraph  5. of Part F of this Article XXII.  F.    Except as provided in Paragraph 3. of this Part G, below, this Part G shall not be applicable to a  Participant following termination of employment and the amounts in such Participant’s Transferred NGC  Account shall be distributable only in accordance with the provisions of Part F.  3.    Withdrawal Exception Following Termination   Withdrawal following a termination of employment may be allowed to the extent such withdrawal would  be permissible under the provisions of Appendices A and B and related provisions of the NGC Plan with  respect to withdrawals from a Trident Account or Destec Account, if applicable, which provisions are  incorporated herein and made a part of this paragraph and the Plan by reference for all purposes.                                       PART H.                                      Definitions   Where  the  following  words  and  phrases  appear  in  this  Article  XXII  of  the  Plan,  they shall  have the  respective meanings set forth below, unless their use in a particular context indicates to the contrary.   1.    Annuity Starting Date   With respect to each Participant or beneficiary, the first day of the first period for which an amount is  payable to the Participant or beneficiary from the Trust of the Plan as an annuity or in any other form.   2.    Eligible Surviving Spouse         (a)   In the case of a Participant who is living on his/her Annuity Starting Date, the spouse to              whom a deceased Participant was married on his/her Annuity Starting Date and         (b)   in the case of a Participant who dies before his/her Annuity Starting Date, the spouse to              whom a deceased Participant was married on the date of his/her death.   3.    Normal Retirement Date   The date the Participant attains age sixty-five (65).   4.    Transferred NGC After-Tax Account   An individual account for each Participant which is credited with the balance, if any, of such Participant’s  Prior Employee (Post-Tax) Contribution Account under the NGC Plan as of December 31, 1997, and                                          119  

 

    which is credited with (or debited for) such account’s allocation of net income (or net loss) and changes  in value of the trust fund of said Plan and this Plan.   5.    Transferred NGC Before-Tax Account   An individual account for each Participant, which         (a)   is credited with               (1)   the balance in such Participant’s Elective Deferral Contributions Account (also                    known as the Pre-tax Contributions Account) under the NGC Plan as of December                    31, 1997, and               (2)   the Before-Tax Contributions made by the Employer on such Participant’s behalf                    and the Employer Safe Harbor Contributions, if any, made on such Participant’s                    behalf pursuant to Section 3.5 of said Plan to satisfy the restrictions set forth in                    Section 3.1(e) thereof, and               (3)   is credited with (or debited for) such account’s allocation of net income (or net                    loss) and changes in value of the Trust of said plan and this Plan.   6.    Transferred NGC Rollover Contribution Account   An individual account for a Participant, which is credited with the sum of         (a)   the amount, if any, credited to such Participant’s Rollover Contributions Account under              the NGC Plan as of December 31, 1997, and         (b)   the Rollover Contributions of such Participant and which is credited with (or debited for)              such account’s allocation of net income (or net loss) and changes in value of the Trust              Fund.   7.    Vested Interest   The portion of the Participant’s Transferred NGC Account which, pursuant to the Plan, is nonforfeitable.                                           120  

 

                                    ARTICLE XXIII.                         MODIFICATION AND TERMINATION   PARAGRAPH   1.    Amendment and Termination of Plan   The Company hopes and expects to continue the Plan indefinitely. However, the right to amend, modify  or terminate the Plan is necessarily reserved by the Company. The amendment or modification of the Plan  may be made by the Sponsor Committee, executing a written instrument signed by its designee containing  such amendment or modification as the Sponsor Committee deems necessary or advisable (pursuant to  authority which has been duly delegated to the designee by the Board or Sponsor Committee and is hereby  acknowledged and recognized).   2.    Limit to Effect of Modification   A  modification  may  affect  Participants  at  the  time  thereof  as  well  as  future  Participants,  but  no  modification, termination or partial termination or discontinuance of the Plan for any reason may diminish  the  account  of  any  Participant  as  of  the  effective  date  of  such  modification  or  discontinuance.  No  modification may alter the allocation of the benefits as between Officers and Directors on the one hand  and other Employees on the other hand. A modification which affects the rights or duties of the Trustee  may be made only with the consent of the Trustee.   3.    Participant Rights in Case of Modification   In the event that any modification of the Plan shall adversely affect the rights of any Participant as to the  use of or withdrawal from his/her account, such Participant, for a period of ninety (90) days after the  effective date of such modification, shall have the option, to be exercised by written notice to the Trustee  in form prescribed by the Committee (a copy of which form of notice shall accompany the notice of  modification), to have liquidated and distributed to him/her his/her entire account as of the effective date  of  such  modification;  provided,  that  such  right  of  distribution  shall  be  subject  to  any  applicable  qualification requirements of the Code and regulations thereunder, and shall not be permitted to the extent  the Committee determines that such distribution will adversely affect the qualified status of the Plan, or  is otherwise not permissible or authorized under the Code and regulations.   4.    Nonforfeitability   Notwithstanding any other provisions of the Plan, in the case of any merger or consolidation with, or  transfer of assets or liabilities to, any other plan after the date of the enactment of the Employee Retirement  Income Security Act of 1974, each Participant in the Plan shall (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/she would have been entitled to receive immediately before the merger, consolidation, or transfer (if  the Plan had then terminated).   5.    Termination Distributions   The  Company  reserves  the  right  to  terminate  the  trust  under  the  Trust  Agreement,  but  upon  any  termination  or  partial  termination  of  the  trust,  each  Participant  will  receive  distribution  of  the  entire  balance of his/her account held under the Trust (subject to the successor plan rule in Treas. Reg. 1.40l(k)-                                         121  

 

    l(d)(4)), provided that if the Participant’s Account exceeds $5,000, it shall not be immediately distributed  prior to his/her attaining age sixty-five (65) without the written consent of the Participant; but no consent  to immediate distribution shall be required in the event of death of the Participant, and such requirement  of consent shall not give a Participant a right to any form or method of payment of his/her account other  than immediate distribution of his/her entire account balance.   6.    Transfer or Sponsorship of Plan   The Plan is sponsored by the Company for the exclusive benefit of the employees of the Company and its  Subsidiaries and their subsidiaries and their beneficiaries. Any transfer of sponsorship of the Plan to a  successor employer may be permissible in connection with the acquisition of business assets or operations,  but  such  a  transfer  of  sponsorship  of  the  Plan  shall  not  be  made  if  it  is  not  in  connection  with  the  acquisition of a business assets or operations or if substantially all business risks and opportunities under  the transaction are those associated with the transfer of the sponsorship of the Plan.                                           122  

 

                                     ARTICLE XXIV.                     ONEOK 401(K) PLAN TRANSFER PROVISIONS   PARAGRAPH   1.    Definitions   A.    Former ONE Gas Employee  “Former ONE Gas Employee” means any individual (or any beneficiary, dependent, or alternate payee of  such individual, as the context requires) whose employment with any member of the ONEOK Group was  terminated prior to January 1, 2014, if such individual was allocated in connection with the Separation to  any member of the ONE Gas Group as of January 1, 2014 by ONEOK, Inc. in its sole discretion.   B.    ONE Gas Employee  “ONE Gas Employee” means an active employee or an employee on vacation or on approved leave of  absence (including sick leave, qualified military service under the Uniformed Services Employment and  Reemployment  Rights  Act  of  1994,  as  amended,  and  leave  under  the  Family  Medical  Leave  Act,  as  amended), in either case, of any member of the ONE Gas Group on or after January 1, 2014, and shall  include any beneficiary, dependent, or alternate payee of such employee, as the context requires.   C.    ONE Gas Group  “ONE Gas Group” means ONE Gas, Inc. and each subsidiary of ONE Gas, Inc. as of January 1, 2014 and  any ONE Gas subsidiary that is established or acquired after January 1, 2014.    D.    ONEOK Group  “ONEOK  Group” means (i) prior  to January 1,  2014,  ONEOK, Inc.  and  any  of  its  direct or indirect  Subsidiaries, and (ii) on and after January 1, 2014, ONEOK, Inc. and its Subsidiaries as of January 1,  2014 (other than any member of the ONE Gas Group) and any ONEOK, Inc. Subsidiary (other than any  member of the ONE Gas Group) that is established or acquired after January 1, 2014.   E.    ONE Gas Participant  “ONE Gas Participant” for purposes of this Article XXIV is each person who satisfies both (a) and (b) as  follows, where: (a) requires the person to be a Former ONE Gas Employee or ONE Gas Employee who  was a Participant in the ONEOK, Inc. 401(k) Plan prior to January 1, 2014; and where (b) requires the  person’s ONEOK, Inc. 401(k) Plan Account to be transferred to the ONE Gas, Inc. 401(k) Plan on or after  January 1, 2014 in connection with the Separation.   F.    Separation  “Separation” means the distribution of all of the outstanding shares of ONE Gas, Inc. common stock to  the holders of shares of ONEOK, Inc. common stock.   G.    Transferred Participants.  “Transferred  Participants” means  ONE  Gas  Employees  and  Former  ONE  Gas  Employees  who  were  participants in the ONEOK, Inc. Profit Sharing Plan.                                           123  

 

    2.    Trust to Trust Transfer   The Company shall direct the Trustee to receive, accept transfer of, and hold as a part of the Trust, the  funds, deposits, property, assets, and/or accounts from the ONEOK, Inc. 401(k) Plan on behalf of ONE  Gas Participants (“Transfer”). If a ONE Gas Participant whose account is so Transferred is otherwise  eligible and not already participating in the Plan, he/she shall become a Participant at the time of such  Transfer. Any funds or property from the account of a Participant under the ONEOK, Inc. 401(k) Plan  which are so Transferred and accepted by the Trustee shall be received and deposited in full to an account  or accounts of that Participant under this Plan, and shall thereupon become a part of the Trust held for the  account  of  that  Participant  in  accordance  with  all  the  terms  and  provisions,  rules,  requirements  and  limitations  of  this  Plan,  except  as  otherwise  provided  in  this Article XXIV. The  Committee  shall  determine and prescribe reasonable and appropriate procedures, certifications, and other requirements to  be  accomplished and  performed  by  the  Company,  the Trustee, the  Participant,  ONEOK  and  the  plan  administrator and trustee of the ONEOK, Inc. 401(k) Plan, in order to assure an effective and satisfactory  Transfer,  and  any  such  Transfer  shall  be  conditioned  upon  compliance  with  all  such requirements.  Notwithstanding any of the foregoing, the Company shall have no obligation to make any contributions  to the Plan to or for the benefit of any ONE Gas Participant by reason of any such transfer or deposit to  the Trust under this Paragraph 2.   3.    Crediting of Service   Notwithstanding any other provision of the Plan, this Plan shall recognize all Days of Service, Hours of  Service and Years of Service credited for a ONE Gas Participant in the ONEOK, Inc. 401(k) Plan prior  to January 1, 2014 for purposes of eligibility, benefit accrual and vesting in this Plan. For the period  beginning after December 31, 2013 through the Separation, Severance from Employment shall not include  a transfer from the ONE Gas Group to the ONEOK Group or from the ONEOK Group to the ONE Gas  Group. Following the Separation, a Severance from Employment shall include a transfer from the ONE  Gas Group to the ONEOK Group.   4.    Recognition of Elections   Notwithstanding any other provision of the Plan, this Plan shall recognize all elections made by ONE Gas  Participants in the ONEOK, Inc. 401(k) Plan, including, but not limited to, investment and payment form  elections, dividend elections, beneficiary designations and the rights of alternate payees under qualified  domestic relations orders.                                              124

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