PHILADELPHIA SUBURBAN CORPORATION
INDEX TO EXHIBITS
Exhibit Number Document
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5.1 Opinion of Morgan, Lewis & Bockius LLP.
5.2 Conformed copy of determination letter from Internal
Revenue Service as to qualification of the Consumers
Water Company 401(k) Plan and Trust, dated May 3, 1995,
incorporated by reference to Exhibit 5.2 to Consumers
Water Company Registration Statement on Form S-8 filed
with the Securities and Exchange Commission on January
15, 1997.
23.1 Consent of KPMG LLP.
23.2 Consent of Arthur Andersen LLP.
99.1 Employees 401(k) Savings Plan and Trust.
EXHIBIT 5.1
June 18, 1999
Philadelphia Suburban Corporation
762 W. Lancaster Avenue
Bryn Mawr, Pennsylvania 19010
Ladies and Gentlemen:
We have acted as counsel to Philadelphia Suburban Corporation., a Pennsylvania
corporation (the "Company"), in connection with the registration of 1,026,000
shares (the "Shares") of its Common Stock, $.50 par value per share (the "Common
Stock"), on a registration statement on Form S-8 (the "Registration Statement")
filed pursuant to the Securities Act of 1933, as amended (the "Act"). The Shares
will be issued pursuant to Consumer Water Company's Employees 401(k) Savings
Plan and Trust, as amended (the "Plan").
We have examined the Registration Statement and such corporate records,
documents, statutes and decisions as we have deemed relevant in rendering this
opinion.
Based on the foregoing, it is our opinion that the Shares will be, when issued
in accordance with the terms of the Plan, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not thereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
Morgan, Lewis & Bockius LLP
EXHIBIT 23.1
Consent of Independent Auditors
The Board of Directors
Philadelphia Suburban Corporation
We consent to incorporation by reference in this Registration Statement on Form
S-8 of Philadelphia Suburban Corporation of our report dated February 1, 1999,
relating to the consolidated balance sheets and statements of capitalization of
Philadelphia Suburban Corporation and subsidiaries as of December 31, 1998 and
1997 and the related consolidated statements of income and cash flow for each of
the years in the three-year period ended December 31, 1998 which report is
incorporated by reference in the December 31, 1998 Annual Report on Form 10-K
and also our report dated May 21, 1999, relating to the supplemental
consolidated balance sheets and statements of capitalization of Philadelphia
Suburban Corporation and subsidiaries as of December 31, 1998 and 1997 and the
related supplemental consolidated statements of income and cash flow for each of
the years in the three-year period ended December 31, 1998 which report is
included on Form 8-K filed by Philadelphia Suburban Corporation on May 24, 1999.
/s/ KPMG LLP
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Philadelphia, Pennsylvania
June 17, 1999
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANT
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated, February 18, 1999
(except with respect to the matter discussed in Note 12, as to which the date is
March 10, 1999) on Consumers Water Company and to all references to our Firm
included in this registration statement. Our report dated February 18, 1999
(except with respect to the matter discussed in Note 12, as to which the date is
March 10, 1999) on Consumers Water Company previously included in the
Philadelphia Suburban Corporation's Form 8-K/A filed on May 5, 1999 is no longer
appropriate since restated financial statements have been presented giving
effect to a business combination accounted for as a pooling-of-interest.
Arthur Andersen LLP
Boston, Massachusetts
June 17, 1999
Exhibit 99.1
CONSUMERS WATER COMPANY
EMPLOYEES 401(K) SAVINGS PLAN AND TRUST
(Amended and Restated as of January 1, 1998 with
amendments through January 1, 1999)
This Trust Agreement was originally dated as of January 1, 1987 between
CONSUMERS WATER COMPANY, a Maine corporation with its principal place of
business in Portland, Maine, as sponsoring Employer, and BRIAN R. MULLANY, JOHN
VAN C. PARKER and ROBERT W. PHELPS, as Trustees. Effective as of March 10, 1999,
CONSUMERS WATER COMPANY, the Maine corporation, was merged with and into
CONSUMERS WATER COMPANY, the Pennsylvania corporation with its principal place
of business located in Bryn Mawr Pennsylvania, which has assumed all rights and
obligations of CONSUMERS WATER COMPANY, the Maine corporation, hereunder.
Effective as of May 20, 1999, ROY H. STAHL, ROBERT G. LIPTAK, and DAVID P.
SMELTZER replaced BRIAN R. MULLANY, JOHN VAN C. PARKER and ROBERT W. PHELPS as
Trustees hereunder.
W I T N E S S E T H
WHEREAS, Consumers Water Company desires to maintain a 401(k) savings plan
for its employees and the employees of those of its affiliates who have elected
to be included in the Plan;
WHEREAS, Roy H. Stahl, Robert G. Liptak, and David P. Smeltzer have agreed
to act as Trustees of the Trust created hereunder pursuant to the terms and
conditions hereof; and
WHEREAS, the Plan, as amended and restated herein for the purposes of (i)
reflecting the substitution of the common stock of Philadelphia Suburban
Corporation for the Consumers Water Company common stock as an investment option
as well as a medium for making matching contributions under the Plan, and (ii)
complying with the requirements of the Uniformed Services Employment and
Reemployment Rights Act of 1994, the Small Business Job Protection Act of 1996
and the Taxpayer Relief Act of 1997, is generally effective January 1, 1999
except as otherwise required by law or provided herein,
NOW THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
1. DEFINITIONS
The following terms shall have the meanings set forth below unless the
context clearly indicates that a different meaning is required.
1. "Accounts" shall include the Elective Account, the Matching Account,
the Voluntary Account and the Transfer Account.
2. "Affiliate" shall mean any corporation which is a member of a
controlled group of corporations which includes the Company (within
the meaning of section 1563(a) of the Code, determined without regard
to section 1563(a)(4) and (e)(3)(C) of the Code).
3. "Anniversary Date" shall mean January 1.
4. "Code" shall mean the Internal Revenue Code of 1986, as amended.
Reference to a section of the Code shall include that section and any
comparable section or sections of any future legislation that amends,
supplements or supersedes such section.
5. "Committee" shall mean the Committee appointed by the Company as
provided in Article VIII. The Committee shall be the "administrator"
(as defined in Section 3(16)(A) of ERISA) of the Plan and shall be
responsible for all reporting and disclosure obligations under ERISA,
and all other obligations required or permitted to be performed by the
Plan administrator under ERISA. The Committee, as Plan administrator,
shall be the designated agent for service of legal process. The
Committee shall be the "named fiduciary" referred to in Section 402(a)
of ERISA.
6. "Common Stock" shall mean shares of voting common stock of the
Philadelphia Suburban Corporation.
7. "Company" shall mean Consumers Water Company, and its successors and
assigns.
8. "Compensation" shall mean all amounts to be paid to an Employee during
the Plan Year for Service with the employer which are reportable on
such Employee's Form W-2, or which would have been reportable if such
amounts had not been contributed to his Elective Account by the
Employer.
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan years
beginning on or after January 1, 1994, the annual compensation of each employee
taken into account under the plan shall not exceed the OBRA `93 annual
compensation limit. The OBRA `93 annual compensation limit is $150,000, as
adjusted by the Commission for increases in the cost of living in accordance
with section 401(a)(17)(B) of the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to any period, not exceeding 12
months, over which compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer than 12
months, the OBRA `93 annual compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the determination period, and
the denominator of which is 12.
For plan years beginning on or after January 1, 1994, any reference in this
plan to the limitation under section 401(a)(17) of the Code shall mean the OBRA
`93 annual compensation limit set forth in this provision.
If compensation for any prior determination period is taken into account in
determining an employee's benefits accruing in the current plan year, the
compensation for that prior determination period is subject to the OBRA `93
annual compensation limit in effect for that prior determination period. For
this purpose, for determination periods beginning before the first day of the
first plan year beginning on or after January 1, 1994, the OBRA `94 annual
compensation limit if $150,000.
For purposes of Section 3.02(d), Compensation shall mean the Compensation,
as defined above, that the Member would have received during a period of
Qualified Military Service (or, if the amount of such Compensation is not
reasonably certain, the Member's average earnings from the Employer or an
Affiliate for the twelve-month period immediately preceding the Member's period
of Qualified Military Service); provided, however, that the Member returns to
work within the period during which his right to reemployment is protected by
law.
9. "Compensation Deferral Agreement" shall mean an arrangement pursuant
to which a Member agrees to reduce, or to forego an increase in, his
Compensation and the Employer agrees to contribute to the Plan the
amount so reduced or foregone as an Elective Contribution.
10. "Effective Date" shall mean January 1, 1987.
11. "Elective Account" shall mean the Elective Contributions made on
behalf of a Member, and the income, losses, appreciation and
depreciation attributable to such contributions.
12. "Elective Contribution" shall mean an amount contributed to the Plan
on behalf of a Member by the Employer pursuant to a Compensation
Deferral Agreement, as provided in Section 3.01(a) hereof.
13. "Employee" shall mean a person employed by the Employer.
14. "Employer" shall mean Consumers Water Company and any Affiliate which
elects by proper corporate action to be included in this Plan) and any
successor by merger, and any business organization that acquires the
Employer's business and adopts the Plan.
15. "Employer Matching Contribution" shall mean the amount contributed to
the Plan on behalf of a Member by the Employer pursuant to Section
3.02(a) hereof.
16. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended. Reference to a section of ERISA shall include that
section and any comparable section or sections of any future
legislation that amends, supplements or supersedes such section.
17. "Fund" shall mean all property received by the Trustees for purposes
of the Plan, investments thereof and earnings and any increase or
decrease in the market value thereon, less payments made by the
Trustees to carry out the Plan.
18. "Hour of Service" shall be determined on the basis of actual hours for
which the Employee is paid or entitled to payment and shall mean:
a. Each hour for which an Employee is paid, or entitled to payment,
for the performance of duties for the Employer. These hours shall
be credited to the Employee for the computation period in which
the duties are performed; and
b. Each hour for which an Employee is paid, or entitled to payment,
by the Employer on account of a period of time during which no
duties are performed (irrespective of whether the employment
relationship has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service shall
be credited under this paragraph for any single continuous period
(whether or not such period occurs in a single computation
period). Hours under this paragraph shall be calculated and
credited pursuant to sections 2530.200b-2(b) and (c) of the
Department of Labor Regulations which are incorporated herein by
reference; and
c. Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The same
hours of service shall not be credited both under paragraph (a)
or paragraph (b) as the case may be, and under this paragraph
(c). These hours shall be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the award,
agreement or payment is made.
Hours of Service will be credited for employment with other members of an
affiliated service group (under section 414(m) of the Code), a controlled group
of corporations (under section 414(b) of the Code), or a group of trades or
businesses under common control (under section 414(c) of the Code), of which the
adopting Employer is a member. Hours of Service will also be credited for any
individual considered an Employee for purposes of this Plan under section 414(n)
of the Code.
Solely for purposes of determining whether a Break in Service, as defined
in Section 16.01, for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service which would
otherwise have been credited to such individual but for such absence, or in any
case in which such hours cannot be determined, 8 Hours of Service per day of
such absence. For
purposes of this paragraph, an absence from work for maternity or paternity
reasons means an absence (1) by reason of the pregnancy of the individual, (2)
by reason of a birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with the adoption of such
child by such individual, or (4) for purposes of caring for such child for a
period beginning immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in the computation
period in which the absence begins if the crediting is necessary to prevent a
Break in Service in that period, or (2) in all other cases, in the following
computation period.
Members who are on a leave of absence to perform Qualified Military Service
shall be credited with Hours of Service as required by the Uniformed Services
Employment and Reemployment Rights Act of 1994.
19. Masculine pronouns shall include the feminine.
20. "Matching Account" shall mean the Employer Matching Contributions, if
any, made on behalf of a Member, and the income, losses, appreciation
and depreciation attributable to such contributions.
21. "Member" shall mean any Employee who meets the requirements for
membership fixed by Article II hereof.
22. "Plan", shall mean the profit-sharing plan of the Company as set forth
in this 401(k) Savings Plan and Trust.
23. "Plan Year" shall mean the twelve consecutive month period beginning
on January 1.
24. "Qualified Military Service" shall mean any service in the uniformed
services (as defined in chapter 43 of title 38, United States Code)
where the Member's right to reemployment is protected by law.
25. "Rollover Contribution" shall mean any rollover amount or rollover
contribution defined in section 402(a)(5) or section 403(a)(4) of the
Code (relating to certain lump sum distributions for an employee's
trust or employee annuity described in section 402(a) or section
403(a) of the Code), or section 408(d)(3) of the Code (relating to
certain distributions from an individual retirement account or an
individual retirement annuity) or section
409(b)(3)(C) of the Code (relating to certain distributions from a
retirement bond). Any Rollover Contributions from an individual
retirement account shall be limited to amounts rolled over into such
individual retirement account from another qualified plan plus the
income and gains thereon.
26. "Service" shall mean the period of an Employee's current or prior
employment by the Employer.
27. "Total and Permanent Disability" shall mean a disability which
prevents the Employee from engaging in any substantial gainful
activity by reason of any 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 months. The permanence and degree of such impairment shall
be supported by medical evidence.
28. "Transfer Account" shall mean any amount transferred on behalf of a
Member from another qualified plan pursuant to Article XIV hereof, and
the income, losses, appreciation and depreciation attributable to such
transferred amounts.
29. "Trustee" or "trustees" shall mean Chase Manhattan Bank, or any
successor or successors thereto.
30. "Voluntary Account" shall mean the Member's voluntary contributions,
if any, pursuant to Section 3.05 hereof, and the income, losses,
appreciation and depreciation attributable to such contributions.
2. ELIGIBILITY
1. Each Employee who is employed on the Effective Date shall immediately
participate in the Plan. Each Employee first employed after the
effective Date shall become a Member on the Anniversary Date next
following his initial employment date.
An Employee shall not become a Member in the Plan if he is a member of a
union with which the Employer has a collective bargaining agreement directly or
through an employers' association, unless the collective bargaining agreement
between the Employer and the union involved specifically makes the Plan
applicable to Employees covered under such collective bargaining agreement,
provided that retirement benefits have been a subject of good faith bargaining
between the Employer and its Employees.
2. If a Member becomes ineligible for participation because he is no
longer a member of an eligible class of Employees, such as becoming
employed by an Affiliate which is not an Employer, such Member shall
participate immediately upon his return to an eligible class of
Employees. If an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate on the Anniversary Date next following his becoming a
member of the eligible class.
3. A former Member who has terminated Service shall become a Member
immediately upon his return to the employ of the Employer.
4. Notwithstanding the foregoing, any person whom the Employer
determines, in its sole discretion based on the criteria set forth in
Treas. Reg. section 31.3401(c)-1, is not a common law employee shall
not be eligible to become a Member of this Plan. If a person who is
not classified as a common law employee is subsequently reclassified
by the Employer as a common law employee, for purposes of this plan,
such person shall be become eligible to become a Member of this Plan
from the actual (and not the effective) date of such reclassification.
3. CONTRIBUTIONS AND CREDITS OF MEMBERS
1. (a) A Member may, pursuant to a Compensation Deferral Agreement, have
the Employer contribute to the Plan on his behalf Elective
Contributions of up to 15% of his Compensation, up to a maximum of
$7,000 per Plan Year (or, for Plan Years after 1987, such larger
amount as may be permitted pursuant to the Code for such Plan Year)
through payments no less frequently
than monthly, to the Trustees. Each Compensation Deferral Agreement,
including the percentage of deferral designated by a Member, shall be
executed and delivered by the Member to the Company no later than 15
days prior to its commencement date, unless otherwise consented to by
the Company. Such Compensation Deferral Agreement shall be revocable
at any time by the Member upon delivery of a written revocation notice
to the Company, and may be modified by the Member, as of the end of
any fiscal quarter of any Plan Year. If a Compensation Deferral
Agreement is revoked by the Member, he may not enter into a new
Compensation Deferral Agreement until the next following Anniversary
Date. All Elective Contributions made on behalf of a Member shall be:
(1) credited to his Elective Account as of the day they are delivered
to the Trustees, (2) fully vested and nonforfeitable at all times, and
(3) be made no later than 30 days after the end of the Plan Year to
which they relate. Any Elective Contributions which are made pursuant
to the preceding sentence after the end of a Plan Year shall be
credited to Members' Elective Accounts as of the end of the Plan Year.
(b) In order to ensure that the provisions of the Plan with respect to
Elective Contributions constitute a qualified cash or deferred
arrangement under section 401(k) of the Code and applicable
regulations thereunder ("CODA"), the Committee shall monitor the
amounts of Elective Contributions made hereunder for each Member. In
the event the Committee, in its sole good-faith discretion, shall
determine that it is necessary or desirable for the amount of Elective
Contributions being made hereto for one or more Members to be altered
in order for the applicable Plan provisions to remain a CODA, it shall
take whatever actions are necessary to accomplish the alteration,
including a unilateral modification to any Compensation Deferral
Agreement, provided that in so doing it shall treat all Members who
are similarly situated in a nondiscriminatory manner and shall not
discriminate in favor of Members who are "Highly Compensated
Employees," as defined in Section 3.04(d). Such action by the
Committee may relate to future Elective Contributions and, to the
extent permitted by applicable law, may include (but is not limited
to) temporarily suspending certain Members' ability to have all or a
portion of the Elective Contributions made to the Plan for them.
2. (a) Subject to the provisions of this Plan, the Employer shall, as and
to the extent it lawfully may, contribute to each Member's Matching
Account an amount (called an "Employer Matching Contribution") equal
to: (i) 40% of the aggregate Elective Contributions for such Plan Year
for such Member (less the aggregate distributions to such Member of
the contributions to his Elective Account made for such Plan Year), up
to a maximum for such Member of $1,040 for such Plan Year, plus (ii)
20% of the aggregate contributions by such Member to his Voluntary
Account during such Plan Year (less the aggregate withdrawals by such
Member of contributions made to his Voluntary Account for such Plan
Year), up to a maximum for such Member of $520 for such Plan Year,
provided, however, that in no event shall the aggregate Employer
Matching Contributions for any Member exceed $1,040 for a Plan Year,
and provided further that Employer Matching Contributions shall not be
made with respect to that portion of the aggregate contributions made
for or by such Member to his Elective Account and his Voluntary
Account in excess of $2,600 for a Plan Year, as of the end of such
Plan Year. The Employer Matching Contribution on behalf of any Member
who is a "Highly Compensated Employee," as defined in Section 3.04(d),
shall be limited, to the extent necessary, in order to comply with the
provisions of Section 3.04(a), with respect to the "Matching/Voluntary
Actual Deferral Percentage," provided that all Members who are "Highly
Compensated Employees" shall be treated in a nondiscriminatory manner.
Except as otherwise provided to the contrary elsewhere in this Plan,
all amounts in a Member's Matching Account shall be subject to the
same distribution restrictions as amounts in that Member's Elective
Account.
(b) Matching Contributions may, to the extent permitted by applicable
law and at the discretion of an Employer, be made by transferring (i)
either treasury shares or newly-issued shares of Common Stock to a
Member's Matching Account or (ii) cash to the Plan with directions to
the Trustee to purchase shares of Common Stock on the open market for
a Member's Matching Account.
(c) Notwithstanding the foregoing, in the event that a Member
withdraws from his Voluntary Account during a Plan Year any amount
that had been utilized in determining the amount of an Employer
Matching Contribution for the Member in a prior Plan Year under
(a)(ii) of this Section 3.02, the amount of any Employer Matching
Contribution for the current Plan Year for the Member shall be
one-half of what it would otherwise be under (a)(ii) of this Section
3.02.
(d) For periods after December 11, 1994, a Member who returns to
employment with an Employer or an Affiliate following a period of
Qualified Military Service shall be permitted to make additional
Elective Contributions and voluntary contributions (as defined in
Section 3.05), within the limits described in Article IX and Sections
3.01, 3.03, 3.04, and 3.05, as applicable, up to an amount equal to
the contributions that the Member would have been permitted to
contribute if he had continued to be employed and received
Compensation during the period of Qualified Military Service. Elective
Contributions and voluntary contributions under this Section may be
made during the period which begins on the date such Member returns to
employment and which has the same length as the lesser of (i) 3
multiplied by the period of Qualified Military Service and (ii) 5
years. The Employer shall contribute to the Plan, on behalf of each
Member who returns from Qualified Military Service, an amount equal to
the Employer Matching Contribution that would have been required under
this Section 3.02 had such Elective Contributions and voluntary
contributions been made during the period of Qualified Military
Service.
3. Notwithstanding anything else contained in this Plan to the contrary,
the aggregate of Elective Contributions and Voluntary Contributions
for any Member for a Plan Year shall not exceed 15% of that Member's
Compensation for that Plan Year.
4. (a) Neither the Elective Actual Deferral Percentage nor the
Matching/Voluntary Actual Deferral Percentage (both as defined below)
for any Plan Year for Members who are "Highly Compensated Employees"
shall exceed the greater of (i) or (ii) as follows: (i) the applicable
Actual Deferral Percentage for the preceding Plan Year for the Members
who are not "Highly Compensated Employees" multiplied by 1.25, or (ii)
the applicable Actual Deferral Percentage for the preceding Plan Year
for the Members who are not "Highly Compensated Employees," multiplied
by 2.0, provided, however, that the Actual Deferral Percentage for the
Plan Year for the Members who are "Highly Compensated Employees" may
not exceed the applicable Actual Deferral Percentage for the preceding
Plan Year for the Members who are not "Highly Compensated Employees"
by more than two percentage points, provided, however, that the
Matching/Voluntary Actual Deferral Percentage shall comply solely with
(I), if required by regulations pursuant to the Code.
(b) The "Elective Actual Deferral Percentage" for a specific group of
Members for a Plan Year shall be the average of the ratios (calculated
separately) for each Member in such group of the amount of Elective
Contributions actually paid into the Plan on behalf of such Member for
such Plan Year to the Member's Compensation for such Plan Year.
(c) The "Matching/Voluntary Actual Deferral Percentage" for a specific
group of Members for a Plan Year shall be the average of the ratios
(calculated separately) for each Member in such group of the amount of
Employer Matching Contributions and Voluntary Contributions actually
paid into the Plan on behalf of such Member for such Plan Year to the
Member's Compensation for such Plan Year.
(d) "Highly Compensated Employee" shall mean any Member who: (i) was a
five percent (5%) owner at any time during the Plan Year or the
preceding Plan Year, or (ii) had compensation from the Employer for
the preceding Plan Year in excess of $80,000 (or such figure as
adjusted pursuant to Section 414(q)(1) of the Internal Revenue Code),
and, if the Employer so elects, was a Member of the "Top Paid Group."
The "Top Paid Group" is the highest twenty percent (20%), in terms of
compensation, of all Employees of the Employer, excluding those
Employees: (I) employed for less than six (6) months, (II) working
less than seventeen and one-half (17 1/2) hours per week, (III)
working six (6) months or less per year, (IV) under age twenty-one
(21), or (V) who are non-resident aliens with no United States source
of earned income. Employees represented by a union and covered by a
collective bargaining agreement will not be excluded unless the
Internal Revenue Code and Regulations so require. For purposes of this
paragraph (d), "Compensation" shall have the same meaning as set forth
in Section 9.01(1)(B), but ignoring the exclusions therefrom set forth
in (i) and (iv) of Section 9.01(1)(B).
(e) If, notwithstanding the limits contained in paragraph (d) hereof,
the aggregate Elective Contributions for the Highly Compensated
Employees exceed such limits for a Plan year, the amounts of such
Elective Contributions for Highly Compensated Employees that are
determined to be "excess contributions" (and any earnings thereon)
shall be distributed to such Highly Compensated Employees prior to the
end of the Plan Year next following the Plan Year for which such
excess contributions are made. Any such distribution shall be made as
prescribed in section 401(k)(8) of the Code, and regulations
thereunder.
(f) If, notwithstanding the limits contained in paragraph (d) hereof,
the aggregate Employer Matching Contributions and Voluntary
Contributions for the Highly Compensated Employees exceed such limits
for a Plan Year, the amounts of such contributions for Highly
Compensated Employees that are determined to be "excess contributions"
(and any earnings thereon) shall be distributed to such Highly
Compensated Employees prior to the end of the Plan Year next following
the Plan Year for which such excess contributions are made. Any such
distribution shall be made as prescribed in section 401(m)(7) of the
Code, and regulations thereunder.
(g) In the event that a Member notifies the Committee by March 1
following the close of a Plan Year that he has made an "Excess
Deferral" under the Plan and the amount of the Excess Deferral, the
Committee shall direct the Trustees to distribute such Excess
Deferral, together with any income allocable to it, to the Member not
later than April 15 following such notification. For purposes hereof,
'Excess Deferral' shall mean that portion of the Elective
Contributions made for a Member under this Plan which causes the
Member to have more than the amount referred to in Section 3.01(a) of
this Plan in election contributions for the Plan Year made on his
behalf to this Plan and any other qualified plan of which he is a
member.
5. (a) A Member may make voluntary contributions, which are not
deductible by the Member for federal income tax purposes, and which
shall be paid to the Trustees and invested by them for his Voluntary
Account. Such contributions shall be paid in cash by the Member in
such manner and at such times as the Committee may determine
(including payments by means of payroll deduction), which
contributions shall be transmitted to the Trustees at regular
intervals, but in any event no less frequently than quarterly, and no
later than 30 days after the end of the Plan Year. The contributions
by a Member to his Voluntary Account in this Plan and all other
qualified plans shall not exceed 9% of his aggregate Compensation paid
to him by the Employer for all Plan Years in which he has been a
Member in this Plan and all other qualified plans of the Employer.
(b) A Member may make withdrawals from his Voluntary Account at the
end of any fiscal quarter of the Plan Year, provided that no single
withdrawal shall be greater than the balance in his Voluntary Account
or less than the smaller of such balance or $100. The withdrawals by a
Member from his Voluntary Account shall be deemed to be from amounts
first contributed to his Voluntary Account.
(c) Any balance of a Member's Voluntary Account not previously
withdrawn shall be paid to the Member as provided in Section 5.05 and
Article VI.
(d) In order to comply with applicable provisions of the Code with
respect to Employer Matching Contributions and Voluntary
Contributions, the Committee shall monitor the amounts of Voluntary
Contributions made by each Member. In the event the Committee in its
sole good-faith direction, shall determine that it
is appropriate, it may suspend or limit certain Members' ability to
make further Voluntary Contributions to the Plan for a Plan Year.
6. As of the last business day of each fiscal quarter of the Plan Year,
any increase or decrease in the fair market value of the Fund since
the last adjustment under this Article and all income of the Fund for
such period shall be credited to or deducted from the Accounts of
Members and former Members in direct proportion to the respective
amount of each after the credits under this Article III for the
preceding fiscal quarter, but before the credits under this Article
III for the current fiscal quarter; provided, however, that any
increase or decrease or income on loans pursuant to Section 10.04 or
directed investments pursuant to Section 10.06 shall only be credited
to or deducted from the accounts to which such loans or directed
investments relate.
7. Credits or deductions under this Article III shall be deemed to have
been made on the date to which they are related although actually
determined on some later date. Distributions to a Member or his
beneficiary shall be based on an adjustment of a Member's Accounts
made as soon as administratively feasible following the date of death
or other separation from service, but in no event later than the last
business day of the fiscal quarter of the Plan Year next following the
date of death or other separation from service.
8. The Employer shall, within 30 days after the death or other separation
from Service of a Member, notify the Committee and the Trustees in
writing of such death or other separation from service. Such Member's
Accounts shall be paid or segregated by the Trustees as soon as
practical after receipt of such notice in accordance with the
provisions of Article V.
9. Any portion of a former Member's Accounts which is retained in the
Fund after his death or other separation from service shall, upon
instructions of the Committee, be segregated in an interest-bearing
account and shall be debited or credited only with income and charges
attributable directly to it. Amounts placed in such a segregated
account shall not be considered an account for purposes of Article
III.
4. VESTING
1. Each Member shall always be 100% vested in all his Accounts.
2. If the aggregate vested amount in the Member's Accounts exceeds $3,500
(or, for Plan Years beginning on or after January 1, 1998, $5,000),
the Member must consent to any distributions from such Accounts,
provided, however, that if a Member does not consent to a distribution
from his Accounts prior to his normal retirement age, he may not
thereafter obtain a distribution from his Accounts until the earlier
of his normal retirement age or death without the consent of the
Committee.
5. BENEFITS
1. Normal Retirement
A Member shall have a non-forfeitable right to his normal retirement
benefits upon attainment of his normal retirement age, age 65, and
shall, upon retirement thereafter, be entitled to receive benefits
based upon the entire amount credited to his Accounts, which benefits
will be paid in accordance with the provisions of Section 5.05.
2. Disability
Any Member who separates from service because of Total and Permanent
Disability shall be entitled to receive benefits based on the entire
amount credited to his Accounts, which benefits will be paid in
accordance with the provisions of Section 5.05.
3. Other Separation
Any Member who separates from service for any reason except normal
retirement, Total and Permanent Disability, or death shall be entitled
to receive benefits based on his vested interest in his Accounts,
which benefits will be paid in accordance with the provisions of
Section 5.05.
4. A Member may apply in writing to the Committee for a distribution of
all or part of his Accounts to relieve financial hardship. 'Financial
hardship' shall mean immediate and heavy financial needs of the
Member, because of: (a) medical expenses described in section
213(d) of the Code incurred by the Member, the Member's spouse, or any
dependents of the Member (as defined in section 152 of the Code), (b)
purchase (excluding mortgage payments) of a principal residence of the
Member, (c) payment of tuition for the next semester or quarter of
post-secondary education for the Member, the member's spouse, the
Member's children or the Member's dependents, or (d) the need to
prevent the eviction of the Member from his principal residence or
foreclosure on the mortgage of the Member's principal residence. The
Committee shall approve a distribution hereunder only if it
determines: (1) that a financial hardship exists for the Member (and
only in an amount that is necessary to relieve such financial
hardship), (2) that such amount is not reasonably available from other
resources available to the Member (including, without limitation,
withdrawals pursuant to Section 3.05(b) and loans pursuant to Section
10.04 that are not treated as taxable distributions under section
72(b) of the Code, and (3) that the distribution is otherwise proper
under the terms of the Plan, the Code and regulations thereunder.
In order to determine the amount of the Member's financial need, the
Committee shall require the member to submit actual written evidence (such as
bills or invoices) of the financial obligations or expenses for which such
distribution on a standardized form designed by the Committee and shall require
the Member to obtain all distributions (other than hardship distributions) and
all nontaxable loans under the Plan and all other plans maintained by the
Employer. In order to determine that other financial resources are not
reasonably available to the Member, the Committee may require the Member to
submit a sworn statement to such effect on such standardized form referred to
above. No distribution hereunder shall be made from a Member's Elective Account
until all other Accounts of the Member had been depleted.
If such determinations are made, the Committee shall instruct the Trustee
to make such distribution. If a distribution is made hereunder from the Member's
Elective Account: (I) the member may not have contributions made to his Elective
Account, and may not make contributions to his Voluntary Account, for at least
twelve months after the date of receipt of such distribution, and (II) the
maximum amount that may be contributed to his Elective Account for the Plan Year
following the Plan Year in which such distribution is made shall be the maximum
amount set forth in Section 3.01(a) less the aggregate amount of Elective
Contributions made on behalf of the Member during the Plan Year in which such
distribution is made.
5. (a) The requirements of this Section 5.05 shall apply to any
distribution of a Member's benefits.
(b) Except as provided differently elsewhere in the Plan, distribution
of benefits from the Member's entire interest in the Plan will be made
to or for the benefit of the Member, or, in the event of his death to
or for the benefit of his designated beneficiary by payment in a
single lump sum.
For purposes hereof, a Member's surviving spouse shall be deemed to be
the designated beneficiary for purposes of this Plan, but if there is
no surviving spouse, or if the surviving spouse has already consented
in a manner conforming to a qualified election (as defined in
paragraph (e)), then to an otherwise designated beneficiary. For
purposes hereof, a former spouse shall be treated as a surviving
spouse to the extent provided under a qualified domestic relations
order as described in section 414(p) of the Code.
(c) Except as provided differently elsewhere in the Plan, unless the
Member otherwise elects, such payment shall be made as soon as
administratively feasible following the final adjustment made to his
Accounts pursuant to Section 3.07, but in any event not later than
April 1st of the calendar year after the close of the later of -
(1) the Plan Year in which the Member attains age 65 (Normal
Retirement Age), or
(2) the Plan Year in which the Member terminates his Service with the
Employer.
Notwithstanding the foregoing, distributions to any Member who is a
five percent (5%) owner of the Employer during the Plan Year in which
that Member attains age 70 1/2 must be made no later than the first
day of April following the calendar year in which such individual
attains age 70 1/2.
(e) A "qualified election" means a written consent of the surviving
spouse that acknowledges the effect of the consent and which is
witnessed by a plan representative or notary public.
6. Notwithstanding anything else to the contrary in this Plan, no
distribution may be made from a Member's Transfer Account, Matching
Account or Elective Account earlier than the Member's retirement,
death, Total and Permanent Disability, other separation from
Service or attainment of age 59-1/2, unless such distribution is made
on account of hardship, as provided in Section 5.04, or termination of
the Plan with respect to that Member, as provided in Section 13.02.
7. Distributions of a Member's Accounts shall be made in cash, except
that, if the Member so elects, the Committee shall distribute part or
all of the Member's Accounts in kind.
6. DEATH BENEFITS
1. Upon the death of a Member or former Member, or if Section 15.04
applies, all amounts credited to his Accounts as of the last
adjustment date under Section 3.07 shall be paid to the Member's
designated beneficiary (as defined in Section 5.05).
2. If there is no such designated beneficiary under Section 5.05
surviving at a Member's death, the designated beneficiary shall be
deemed to be, in equal shares per stirpes, his surviving children and
surviving issue of deceased children. If the Member leaves no such
surviving children or surviving issue of deceased children, the
designated beneficiary shall be deemed to be his personal
representative.
3. Death benefits shall be paid in accordance with the provisions of
Section 5.05.
7. TOP-HEAVY PROVISIONS
1. If the Plan is or becomes top-heavy in any Plan Year, the provisions
of this Article VII will supersede any conflicting provision in the
Plan.
2. (a) Key Employee: Any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual Compensation exceeds 150 percent of the dollar
limitation under section 415(c)(1)(A) of the Code, an owner (or
considered an owner under section 318 of the
Code) of one of the ten largest interests in the Employer if such
individual's Compensation exceeds 100 percent of such dollar
limitation, a 5-percent owner of the Employer, or a 1-percent owner of
the Employer who has an annual Compensation of more than $150,000. The
determination period is the Plan Year containing the Determination
Date and the four preceding Plan Years. The determination of who is a
Key Employee will be made in accordance with section 416(i)(1) of the
Code and the regulations thereunder.
(b) Top-Heavy Plan: For any Plan Year, this Plan is top-heavy if any
of the following conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans.
(2) If this Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the group of plans exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60 percent.
(c) Top-Heavy Ratio: A fraction, the numerator of which is the sum of
the account balances under the aggregated defined contribution plan or
plans of all Key Employees as of the Determination Date (including any
part of any account balance distributed in the five year period ending
on the Determination Date) and the present value of accrued benefits
under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date, and the denominator of which
is the sum of all account balances under the aggregated defined
contribution plan or plans for all Members as of the Determination
Date (including any part of any account balance distributed in the
five year period ending on the Determination Date) and the present
value of accrued benefits under the
aggregated defined benefit plan or plans for all Members as of the
Determination Date, all determined in accordance with section 416 of
the Code and the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the
Top-Heavy Ratio are adjusted for any distribution of an accrued
benefit made in the five year period ending on the Determination Date.
Both the numerator and denominator of the Top-Heavy Ratio are adjusted
to reflect any contribution not actually made as of the Determination
Date, but which is required to be taken into account on that date
under section 416 of the Code and the regulations thereunder. For
purposes hereof, the value of account balances and the present value
of accrued benefits will be determined as of the most recent Valuation
Date that falls within or ends with the twelve month period ending on
the Determination Date, except as provided in section 416 of the Code
and regulations thereunder for the first and second plan years of a
defined benefit plan. The account balances and accrued benefits of a
Member (i) who is not a Key Employee but who was a Key Employee in a
prior year or (ii) has not received any Compensation from any employer
maintaining the Plan at any time during the five year period ending on
the Determination Date will be disregarded. The calculation of the
Top-Heavy Ratio, and the extent to which distributions, rollovers, and
transfers are taken into account will be made in accordance with
section 416 of the Code and the regulations thereunder. Deductible
employee contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans, the value of
account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year.
(d) Permissive Aggregation Group: The Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of section 401(a)(4) and 410 of
the Code.
(e) Required Aggregation Group: (1) Each qualified plan of the
Employer in which at least one Key Employee participates, and (2) any
other qualified plan of the Employer which enables a plan described in
(1) to meet the requirements of section 401(a)(4) or 410 of the Code.
(f) Determination Date and Valuation Date: For any Plan Year
subsequent to the first Plan Year, the last day of the preceding Plan
Year. For the first Plan Year of the Plan, the last day of that Plan
Year.
(g) Present Value: Present Value shall be based on the following
interest and mortality rates: Interest Rate - 7%; Mortality Table -
1971 Group Annuity Mortality Table.
(h) Super Top-Heavy Plan: In any Plan Year, this Plan is super
top-heavy if any of the following conditions exist:
(i) If the Top-Heavy Ratio for this Plan exceeds 90 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Group of Plans.
(ii) If this Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy
Ratio for the group of plans exceeds 90 percent.
(iii) If this Plan is a part of a Required Aggregation group and part
of a Permissive Aggregation Group of Plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 90 percent.
3. (a) Except as otherwise provided in (c) and (d) below, the Employer
contributions and forfeitures allocated on behalf of any Member who is
not a Key Employee shall not be less than the lesser of three percent
of such Member's Compensation or the largest percentage of Employer
contributions and forfeitures, as a percentage of the first $200,000
of the Key Employee's Compensation, allocated on behalf of any Key
Employee for that year. The minimum allocation is determined without
regard to any Social Security contribution. This minimum allocation
shall be made even though, under other Plan provisions, the Member
would not otherwise be entitled to receive an allocation, or would
have received a lesser allocation for the year because of (i) the
Member's failure to complete 1,000 Hours of Service (or any equivalent
provided in the Plan), or (ii) the Member's failure to make mandatory
employee contributions to the Plan or (iii) Compensation less than a
stated amount.
(b) For purposes of computing the minimum allocation, Compensation
will mean all of such Member's compensation for the Limitation Year
(as that term is defined in Section 9.01(l)(E) for purposes of section
415 of the Code) ending with or within the Plan Year, which is
actually paid within such year.
(c) The provision in (a) above shall not apply to any Member who was
not employed by the Employer on the last day of the Plan Year.
(d) The provision in (a) above shall not apply to any Member to the
extent the Member is covered under any other plan or plans of the
Employer
and the Employer has provided the minimum allocation or benefit
accrual requirement applicable to top-heavy plans in the other plan or
plans.
4. The minimum allocation required (to the extent required to be
nonforfeitable under section 416(b) of the Code) may not be forfeited
under section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
5. For any Plan Year in which the Plan is top-heavy, only the first
$200,000 (or such larger amount as may be prescribed by the Secretary
of the Treasury or his delegate) of a Member's annual Compensation
shall be taken into account for purposes of determining Employer
contributions under the Plan.
6. For any Plan Year in which this Plan is top-heavy, the following
minimum vesting schedule will automatically apply to the Plan: 100%
vested at all times.
The minimum vesting schedule applies to all benefits within the meaning of
section 411(a)(7) of the Code, including benefits accrued before the effective
date of section 416 of the Code and benefits accrued before the Plan became
top-heavy. Further, no reduction in vested benefits may occur in the event the
Plan's status as top-heavy changes for any Plan Year. However, this section does
not apply to the account balances of any Employee who does not have an Hour of
Service after the Plan has initially become top-heavy and such Employee's
account balance attributable to Employer contributions and forfeitures will be
determined without regard to this section.
8. THE COMMITTEE
1. The Company shall appoint a Committee to administer the Plan
consisting of three or more persons who shall serve without
compensation at the Company's pleasure. Vacancies shall be filled by
the Company.
2. The Committee shall adopt such rules for the conduct of its business
and administration of the Plan as it considers desirable, provided
they do not conflict with the Plan.
3. The Committee may authorize one or more of its members or any agent to
act on its behalf and may contract for legal, medical, accounting,
clerical and other services to carry out the purposes of the Plan. The
cost
of such services and expenses of the Committee may be paid from the
Fund or by the Employer, and the Employer may reimburse the Fund for
any such payment from the Fund.
4. The Committee may construe the Plan, determine the percentage of
vesting for each Member, correct defects, supply omissions or
reconcile inconsistencies to the extent necessary to effectuate the
Plan and, subject to Section 8.07, such action shall be conclusive.
5. The Committee shall keep records reflecting its administration of the
Plan which shall be subject to audit by the Employer. Employees may
examine records pertaining directly to them.
6. No member of the Committee shall participate in any decision of the
Committee which involves the payment of benefits to him or in which he
has a financial interest other than as a Member of the Plan. If the
entire Committee is disqualified to act by reason of this Section 8.06
the Company's Board of Directors shall perform as the Committee for
such purpose.
7. A Member or other person entitled to benefits under the Plan may make
a claim for benefits by filing a written request with his Employer.
If a claim is wholly or partially denied, the Employer shall furnish
the claimant with written notice setting forth in a manner calculated
to be understood by the claimant:
a. the specific reason or reasons for the denial;
b. specific reference to pertinent Plan provisions on which the
denial is based;
c. a description of any additional material or information necessary
for the claimant to perfect his claim and an explanation why such
material or information is necessary; and
d. appropriate information as to the steps to be taken if the
claimant wishes to submit his claim for review.
Such notice shall be furnished to the claimant within ninety (90) days
after receipt of his claim, unless special circumstances require an
extension of time for processing his claim. If an extension of time
for processing is required, the Employer shall, prior to the
termination of the initial ninety (90) day period, furnish the
claimant with written notice indicating the special circumstances
requiring an extension and the date by which the Employer expects to
render its decision. In no event shall an extension exceed a period of
ninety (90) days from the end of the initial ninety (90) day period.
A claimant may request a review of a denied claim. Such review shall
be made by the Committee. Such request shall be in writing and must be
delivered to the Committee within sixty (60) days after receipt by the
claimant of written notification of denial of claim. A claimant or his
duly authorized representative may:
(a) review pertinent documents, and
(b) submit issues and comments in writing.
The Committee shall notify the claimant of its decision on review not
later than sixty (60) days after receipt of a request for review,
unless special circumstances require an extension of time for
processing, in which case a decision shall be rendered as soon as
possible, but not later than one hundred twenty (120) days after
receipt of a request for review. If an extension of time for review is
required because of special circumstances, written notice of the
extension must be furnished to the claimant prior to the commencement
of the extension. The Committee's decision on review shall be in
writing and shall include specific reasons for the decision, as well
as specific references to the pertinent Plan provisions on which the
decision is based.
8. The Committee and its assistants and representatives shall not be
liable for any loss to the Fund or any act done or omitted by it,
unless due to its own gross negligence, willful misconduct, lack of
good faith or violation of Part 4 of Title I of ERISA.
9. In the event and to the extent not insured against by any insurance
company pursuant to the provisions of any applicable insurance policy,
the Company shall indemnify and hold harmless the members of the
Committee and their assistants and representatives from any and all
claims, demands, suits or proceedings in connection with the Plan or
Trust that may be brought by
the Employees, Members or beneficiaries or legal representatives, or
by any other person, corporation, entity, government or agency
thereof; provided, however, that such indemnification shall not apply
to any such person for such person's acts of gross negligence or
willful misconduct in connection with the Plan or Trust.
9. LIMITATION ON ALLOCATIONS
1. Limitation on Allocations.
(1) Definitions. For the purpose of this Article IX, the following
definitions are added to those set forth in Article I or in Article
XVI:
(A) Annual Additions -- The sum of the following amounts allocated on
behalf of a Member for the Limitation Year:
(i) Employer contributions,
(ii) forfeitures, and
(iii) any contributions by the Member to this Plan (and any other
defined contribution plan adopted by the Employer).
(B) Compensation -- A Member's earned income, wages, salaries, fees
for professional service and other amounts received for personal
services actually rendered in the course of employment with the
Employer (including, but not limited to, commissions paid
salesman, compensation for services on the basis of a percentage
of profits, commissions on insurance premiums, tips, bonuses,
and, effective for Plan Years beginning on or after January 1,
1998, amounts that are excluded from gross income under sections
125, 402(e)(3), 402(h), 403(b) or 457 of the Code) and excluding
the following:
(i) Employer contributions to a plan of deferred compensation
to the extent contributions are not included in gross
income of the Member for the taxable year in which
contributed, or Employer contributions to a simplified
employee pension plan to the extent such contributions are
deductible by the Member, or any distributions from a plan
of deferred compensation;
(ii) Amount realized from the exercise of a non-qualified stock
option, or when restricted stock (or property) held by the
Member becomes freely transferable or is no longer subject
to a substantial risk of forfeiture; and
(iii) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option.
For purposes of applying the limitations in this Article IX,
Compensation for a Limitation Year is the Compensation actually
paid or includible in gross income during such year.
(C) Employer -- The Employer, and all members of: (i) a controlled
group of corporations (as defined in section 414(b) of the Code,
as modified by section 415(h) of the Code), (ii) all commonly
controlled trades or businesses (as defined in section 414(c) of
the Code, as modified by section 415(h) of the Code) and (iii)
"affiliated service groups" (as defined in section 414(m) of the
Code), of which the Employer is a part.
(D) Excess Amount -- The excess of the Member's Annual Additions for
the Limitation Year over the Maximum Permissible Amount or
otherwise applicable limit.
(E) Limitation Year -- A calendar year. All qualified plans
maintained by the Employer must use the same Limitation Year. If
the Limitation Year is amended to a different twelve consecutive
month period, the new Limitation Year must begin on a date within
the new Limitation Year in which the amendment was made.
(F) Maximum Permissible Amount -- The lower of $30,000 or 25 percent
of the Member's Compensation for the Limitation Year. Beginning
January 1, 1988, the dollar amounts shall be any such larger
amount as may be permitted pursuant to the Code for the
Limitation Year.
(G) Defined Benefit Fraction -- A fraction, the numerator of which is
the sum of the Member's Projected Annual Benefits under all the
defined benefit plans (whether or not terminated) maintained by
the Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation in effect for the Limitation
Year under section 415(b)(1)(A) of the Code or 140 percent of the
Highest Average Compensation (provided, however, that, if the
Plan is a Super Top-Heavy Plan, as defined in Section 7.02(h),
the denominator shall be the lesser of 100 percent of the dollar
limitation in effect for the Limitation Year under section
415(b)(1)(A) of the Code or 140 percent of the Highest Average
Compensation).
Notwithstanding the above, if the Member was a participant in one
or more defined benefit plans maintained by the Employer which
were in existence on July 1, 1982, the denominator of this
fraction will not be less than 125 percent of the sum of the
annual benefits under such plans which the Member had accrued as
of the later of September 30, 1983, or the end of the last
Limitation Year beginning before January 1, 1983. The preceding
sentence applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of section 415 of
the Code as in effect at the end of the 1982 Limitation Year.
(H) Defined Contribution Fraction -- A fraction, the numerator of
which is the sum of the Annual Additions to the Member's accounts
under all the defined contribution plans (whether or not
terminated) maintained by the Employer for the current and all
prior Limitation Years (including the Annual Additions
attributable to the Member's nondeductible employee contributions
to all defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions attributable
to all welfare benefits funds, as defined in section 419(e) of
the Code, maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the current
and all prior Limitation Years of Service with the Employer
(regardless of whether a defined contribution plan was maintained
by the Employer). The maximum aggregate amount in any Limitation
Year is the lesser of 125 percent of the dollar limitation in
effect under section 415(c)(1)(A) of the Code or 35 percent of
the Member's Compensation for such year (provided, however, that,
if the Plan is a Super Top-Heavy Plan, as defined in Section
7.02(h), the maximum aggregate amount shall be the lesser of 100
percent of the dollar limitation in effect under section
415(c)(1)(A) of the Code or 35 percent of the Member's
Compensation for such year).
If the Member was a participant in one or more defined
contribution plans maintained by an Employer which were in
existence on July 1, 1982, the numerator of this fraction will be
adjusted if the sum of this fraction and the Defined Benefit
Fraction would otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from
the numerator of this fraction. The adjustment is calculated
using the fractions as they would be computed as of the later of
the end of the last Limitation Year beginning before January 1,
1983. This adjustment also will be made if at the end of the last
Limitation Year beginning before January 1, 1984, the sum of the
fractions exceeds 1.0 because of accruals or additions that were
made before the limitations of this Article IX became effective
to any plans of the Employer in existence on July 1, 1982.
(I) Highest Average Compensation -- The average Compensation for the
three consecutive Years of Service with the Employer that
produces the highest average. A Year of Service is the
12-consecutive month period defined in Section 16.03.
(J) Projected Annual Benefit -- The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity if
such benefit is expressed in a form other than a straight life
annuity or qualified joint and survivor annuity) to which the
Member would be entitled under the terms of the plan assuming:
(1) the Member will continue employment until normal retirement
age under the plan (or current age, if later), and
(2) the Member's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits
under the plan will remain constant for all future
Limitation Years.
(K) Restricted Members -- a group of Members consisting of (1)
officers of an Employer; (2) shareholders owning more than ten
percent (disregarding stock in the Trust) of the total combined
voting power of all classes of stock issued by an Employer
entitled to vote or more than ten percent of the total value of
shares of all classes of stock issued by an Employer; and (3)
Employees receiving Compensation for a Limitation Year which
exceeds an amount equal to twice the dollar limitation in effect
under section 415(c)(1)(A) of the Code.
(2) General Limitation. With respect to any Member who does not
participate in, and has never participated in, another qualified plan
or a welfare benefit fund, as defined in section 419(e) of the Code,
maintained by the Employer, the amount of Annual Additions which may
be credited to the Member's account for any Limitation Year will not
exceed the Maximum Permissible Amount. If the Employer Contributions
that would otherwise be contributed or allocated to the Member's
account would cause the Annual Additions for the Limitation Year to
exceed the above limits, the amount contributed or allocated will be
reduced so that the Annual Additions for the Limitation Year will
exceed the applicable limit.
(3) Corrective Action. If there is an Excess Amount, the excess will be
disposed of as follows:
(A) Any nondeductible voluntary employee contributions, to the extent
they would reduce the Excess Amount, will be returned to the
Member;
(B) If after the application of paragraph (A) an Excess Amount still
exists, and the Member is covered by the Plan at the end of the
Limitation Year, the Excess Amount in the Member's account will
be used to reduce Employer contributions (including any
allocation of forfeitures) for such Member in the next Limitation
Year, and each succeeding Limitation Year if necessary;
(C) If after the application of paragraph (A) an Excess Amount still
exists, and the Member is not covered by the Plan at the end of
the Limitation Year, the Excess Amount will be held unallocated
in a suspense account. The suspense account will be applied to
reduce future Employer contributions (including allocation of any
forfeitures) for all remaining Members in the next Limitation
Year, and each succeeding Limitation Year if necessary;
(D) If a suspense account is in existence at any time during the
Limitation Year pursuant to this section, it shall not
participate in the allocation of the trust's investment gains and
losses.
(4) Combined Limitation.
(A) If the Member is covered under another defined contribution plan,
or a welfare benefit fund, as defined in section 419(e) of the
Code, maintained by the Employer during the Limitation Year, the
Annual Additions which may be credited to a Member's account
under this Plan for any such Limitation Year will not exceed the
lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan, reduced by the Annual Additions credited
to the Member's accounts under such other plans and welfare
benefit funds for the same Limitation Year. If a Member's Annual
Additions under this 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 welfare benefit fund will
be deemed to have been allocated first regardless of the actual
allocation date. If an Excess Amount was allocated to a Member or
an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount attributed to
this Plan will be the product of the total Excess Amount
allocated as of such date, times the ratio of (I) the Annual
Additions allocated to the Member for the Limitation Year as of
such date under this Plan to (II) the total Annual Additions
allocated to the Member for the Limitation Year as of such date
under this and all other such plans. Any Excess Amount attributed
to this Plan will be disposed of in the manner described in
paragraph (3).
(B) For Plan Years beginning prior to January 1, 2000, in the case of
a Member who is also a participant under any defined benefit plan
maintained by an Employer, no amount of Annual Additions shall be
allocated to the account of such a Member under this Plan in any
Limitation Year in excess of the amount which will cause the sum
of the applicable Defined Contribution Fraction and the
applicable Defined Benefit Fraction of such Member to equal 1.0.
10. INVESTMENT
1. The Trustees shall invest the Fund as directed by the Committee.
2. Except as otherwise provided herein, and subject to Section 10.01 the
Trustees may:
a. Except as hereinafter limited, invest in any form of property
without restriction to investments authorized for fiduciaries,
including, without limitation on the amount that may be invested
therein, any common trust fund; provided that as long as the Fund
has any investments in a common trust fund available only to
retirement plans which meet the requirements of section 401(a) of
the Code, such common trust funds shall constitute an integral
part of the Plan and Trust;
b. Hold cash uninvested and deposit the same with any banking or
savings institution;
c. Join in or oppose the reorganization, recapitalization,
consolidation, sale or merger of corporations or properties,
including those in which they are interested as Trustees, upon
such terms as they deem wise;
d. Dispose of property for such prices and on such terms as seems
best without liability on the purchasers to see to application of
the purchase money;
e. Borrow money with the Committee's approval, upon such terms as
the Trustees deem advisable, and pledge all or part of the Fund
as security therefor. No person lending to the Trustees need see
to application of the money lent or the propriety of the
borrowing;
f. Hold investments in nominee or bearer form;
g. Give proxies; and
h. Sell, write and otherwise deal in calls and other options for the
sale and purchase of securities.
3. Except as provided herein, the Trustees shall not invest in any
obligations of, or lease any property to, the Company or any affiliate
of the Company. Since this Plan is intended to be an "eligible
individual account plan," as defined in Section 407(d)(3) of ERISA, up
to 100 percent of the Fund may be invested in Common Stock. Until such
time as all registration requirements of all applicable securities
laws are met, no portion of the Accounts of Members may be invested in
securities of the Company or any affiliate of the Company.
4. The Plan is intended to constitute a plan described in section 404(c)
of ERISA and Title 29 of the Code of Federal Regulations section
2550.404c-1. Thus, no fiduciary of the Plan shall be liable for any
loss, or by reason of any breach, which results from any investment
direction made by a Member, beneficiary or alternate payee. The
Company or its delegate shall comply with, or monitor compliance with,
as required, all disclosure and other responsibilities described in
Title 29 of the Code of Federal Regulations section
2550.404c-1(b)(2)(i)(A) and (b)(2)(i)(B)(1) except that the trustee
shall monitor compliance with these procedures established to provide
confidentiality of information relating to the exercise of voting and
tender rights by Members. If the Company determines that a situation
has potential for undue influence by the Company, the Company shall
direct an independent party to perform such activities as are
necessary to ensure the confidentiality of the rights of Members.
5. Any Member may direct the investment of his or her own Accounts (other
than such Member's Transfer Account and Matching Account). In such
event, neither the Trustee nor the Company nor the Employer nor the
Committee shall be responsible for any losses or diminution in value
of the Member's Accounts arising out of such investment direction by
the Member. Each Member who elects to direct the investment of such
Accounts shall by such action release and agree, on his or her behalf
and on the behalf of such Member's heirs and beneficiaries, to
indemnify and hold harmless the Trustee, the Company, the Employer and
the Committee from and against any and all liability, cost or expense
(including reasonable attorney's fees) arising out of or connected
with the investment directions of the Member, including, without
limitation, any diminution in value or losses incurred from such
investment directions. A Member may direct the investment of such
Accounts only in the following investment vehicles: (i) a fund
investing in the Common Stock (but not until such time as applicable
securities regulation requirements are met) (the "Common Stock Fund"),
(ii) an equity fund, (iii) a balanced fund, (iv) a stable value fund,
(v) a value fund, (vi) an aggressive equity fund, or (vii) such other
investment options as may be designated in writing by the Company.
Unless otherwise authorized by the Committee, investment directions
may be changed by a Member, such changes to be effective as soon as
administratively feasible, but no later than the first day of any
fiscal quarter of the Plan Year. Changes in investment direction must
be made in such form as designated by the Committee. If the Committee
requires that a Member's change in investment direction be made in
writing, the Committee will deliver a change of investment form to the
Personal Representative of such Member's Employer not later than
fifteen (15) days prior to the first day of such fiscal quarter. Under
no circumstances may a Member engage in a prohibited transaction as
defined in ERISA or the Code.
6. Funds held in the Common Stock Fund shall be invested and reinvested
exclusively in Common Stock except to the extent that cash is held to
facilitate purchases and sales within the fund. Shares of Common Stock
and cash received by the fund that are attributable to dividends,
stock dividends, stock splits or to any reorganization or
recapitalization of Philadelphia Suburban Corporation shall remain in
or be invested in, as applicable, the Common Stock Fund and allocated
to the Members' Accounts in proportion to the number of shares of the
Common Stock Fund held in such Accounts. The transfer taxes, brokerage
fees and other expenses incurred in connection with the purchase, sale
or distribution of Common Stock shall be paid by the Common Stock
Fund, and shall be deemed part of the cost of such Common Stock, or
deducted in computing the sale proceeds therefrom, as the case may be,
unless paid by an Employer. The
Committee shall determine to what extent a Member shall bear any other
administrative fee incurred by the Plan in connection with the
transfer of the Member's interest in the Common Stock Fund and provide
appropriate written notice to such Members.
7. Common Stock contributed to a Member's Account shall be valued at the
average closing price for the 5 days preceding (but not including) the
date of purchase or contribution, as applicable, with respect to
newly-issued or treasury shares or the purchase price thereof, with
respect to open market purchases. For cash distribution purposes, such
Common Stock shall be valued at the actual sales price of such shares.
8. The voting and tendering of Common Stock held in the Common Stock Fund
shall be subject to the following:
a. For purposes of this subsection, shares of Common Stock shall be
deemed to be allocated and credited to a Member's Accounts in an
amount to be determined based on the number of shares of Common
Stock in such account on the record date of any vote or tender
offer and the closing price of company stock on such accounting
date or if not traded on that date, on the business day on which
shares of company stock were last traded before that accounting
date.
b. Each Member who has Common Stock credited to his Account shall be
given notice by the Trustee of the date and purpose of each
meeting of the stockholders of Philadelphia Suburban Corporation
at which shares of Common Stock are entitled to be voted, and
instructions shall be requested from each such Member as to the
voting at the meeting of such stockholders. If the Member
furnishes instructions within the time specified in the
notification given to him, the Trustee shall vote such Common
Stock in accordance with the Member's instructions. Shares of
Common Stock that have not been credited to any Member's Account
or for which no instructions were timely received by the Trustee,
whether or not credited to the account of any Member shall be
voted by the Trustee in the same proportion that the allocated
and voted shares of Common Stock have been voted by Members. The
Committee shall establish procedures under which notices shall be
furnished to Members as required by this subparagraph (b) and
under which the Members' instructions shall be furnished to the
Trustee.
c. Each Member who has shares of Common Stock credited to his
Account shall be furnished notice of any tender offer for, or a
request or invitation for tenders of, Common Stock made to the
Trustee. Instructions shall be
requested from each such Member as to the tendering of shares of
Common Stock credited to his Account and for this purpose Members
shall be provided with a reasonable period of time in which they
may consider any such tender offer for, or request or invitation
for tenders of, Common Stock made to the Trustee. The Trustee
shall tender such Common Stock as to which the Trustee has
received instructions to tender from Members within the time
specified. Common Stock credited to Member Accounts as to which
the Trustee has not received instructions from Members shall not
be tendered. Shares of Common Stock that have not been credited
to any Member's Account shall be tendered by the Trustee in the
same proportion that the allocated and tendered shares of Common
Stock have been tendered by Members. The Committee shall
establish procedures under which notices shall be furnished to
Members as required by this subparagraph (c) and under which the
Members' instructions shall be furnished to the Trustee. In
carrying out their responsibilities under this subsection the
Trustees may rely on information furnished to them by (or under
procedures established by) the Committee.
d. With respect to Members subject to Section 16 of the Securities
Exchange Act of 1934 (the `Exchange Act'), the Committee shall
apply any requirements or restrictions required for the Plan to
obtain the protections of Rule 16b-3 under the Exchange Act or
any successor Rule or regulation intended to replace Rule 16b-3.
9. Upon the written application of any Member, the Committee may, in its
discretion, direct the Trustee to make a loan or loans to such Member,
provided, however, that nothing contained herein shall obligate the
Committee to direct the Trustees to make loans to Members, and
provided, further, that the total amount of any such loan or loans
shall not exceed the value of the amount vested in all Accounts of
such Member. If the Committee determines that loans should be made to
Members, such loans shall be available to all Members on a reasonably
equivalent basis, and shall not be made available to
highly-compensated Employees, officers or shareholders as a percentage
of their vested Accounts greater than the percentage of the vested
Accounts made available to other Employees. All such loans shall be
considered as investments of the Accounts referred to above of the
Member to whom such loans are made. All such loans shall bear a
reasonable interest rate and shall be adequately secured, and in any
event shall be secured by such Member's Accounts as the Committee
deems appropriate. Any such loan or loans shall be repaid by the
Member in such manner and at such time as the Committee may determine;
provided, however, that in no event shall the term of any such loan be
for a term longer than the lesser of (I) five years or (ii) a period
commencing on the date of the making of such loan and ending at the
Member's normal retirement age.
10. The Committee may appoint in writing an Investment Manager, as defined
in ERISA, to direct the investments of the Fund. If the Committee
appoints an Investment Manager, such Investment Manager shall
acknowledge in writing that he is a fiduciary with regard to the Plan
and the Trust. If the Committee appoints an Investment Manager, the
Company agrees to indemnify and hold harmless the Trustees from and
against all liability, cost or expense (including reasonable
attorney's fees) arising out of or connected with the investment of
Trust assets by the Investment Manager.
11. Notwithstanding anything herein the contrary, in no event shall the
Fund be so invested that the ratio, (stated as a percentage) of the
market value of equity securities with respect to which, in the
absence of an exemption under the Securities and Exchange Act of 1934,
reports under section 16(a) of that Act would be required, to the
market value of all securities held by the Fund having a readily
ascertainable market value, determined as of the end of the preceding
Plan Year, equal or exceed twenty percent (20%).
11. ACCOUNTINGS
1. A separate account shall be maintained by the Trustees for each
Member.
2. The Trustees shall keep accounts of transactions hereunder which shall
be open to inspection and audit by persons designated by the Committee
or by the Employer.
3. Within 90 days after each Plan Year and within 90 days after its
removal or resignation, the Trustees shall file with the Committee an
account of their administration of the Fund during such year or form
the end of the preceding Plan Year to the date of removal or
resignation. Neither the Employer, the Committee nor any other person
shall be entitled to any further accounting by the Trustees.
4. The Committee shall, within 90 days after filing of the account, file
with Trustees a written statement stating any objections to the
account, including claims relating to negligence, willful misconduct
or lack of good faith on the part of the Trustees. If such a statement
is filed, the Trustees shall, unless the matter be compromised with
the Committee, file their account in any court or competent
jurisdiction for audit and adjudication.
12. GENERAL PROVISIONS CONCERNING TRUSTEES
1. The Trustees shall make investments and pay benefits only as directed
by the Committee and shall be fully protected in so doing.
2. Whenever the Trustees must or may act upon the direction or approval
of the Committee, the Trustees may act upon written communication
signed by any Committee member or any agent appointed in writing by
the whole Committee to act on its behalf whose authority shall be
deemed to continue until revoked in writing. The Trustees shall incur
no liability for failure to act without such a communication.
3. Whenever the Committee is appointed or its membership changes, the
Company shall advise the Trustees in writing of the names of the
Committee members and the Trustees may assume that those persons
continue in office until advised differently in the same manner.
4. All unreimbursed expenses of the Fund including legal fees and
expenses incurred by the Trustees in administering the Trust, taxes
and other items may be paid from the Fund or by the Employer, and the
Employer may reimburse the Fund for any such payment from the Fund.
5. The Trustees shall not be liable for any loss to the Fund or any act
done or omitted by them, unless due to their own negligence, willful
misconduct, lack of good faith or violation of Part 4 of Title I of
ERISA, and, except as herein provided, all claims against the Trustees
shall be limited to the Fund.
6. The Trustees need not engage in litigation unless first indemnified
against expense by the Company or unless the litigation is occasioned
by the fault of the Trustees or involves a question of their fault.
7. Any Trustee may resign by written notice to the Company which shall be
effective 30 days after delivery. Any Trustee may be removed by the
Company by written notice to the Trustee which shall be effective upon
delivery. The Company and the Trustees may agree to waive all or part
of any such waiting period. In the event of such resignation or
removal, the Company shall promptly appoint a new Trustee. The
remaining Trustees shall continue to serve as Trustees, with all power
and authority to act, until a new Trustee is appointed.
13. AMENDMENT: TERMINATION: EXCLUSIVE BENEFIT
1. The Company hopes and expects to continue the Plan indefinitely, but
necessarily reserves the right to amend, modify or terminate the Plan,
provided, however, that no amendment, modification or termination
shall:
a. decrease a Member's account balance, or
b. provide that the Fund shall be used for purposes other than for
the exclusive benefit of Members or their beneficiaries, or that
the Fund shall ever revert to or be used or enjoyed by the
Employer except as specifically authorized herein, provided,
however, this agreement may be amended retroactively to qualify
the Plan as a tax exempt profit-sharing plan, or to qualify a
portion of the Plan as a CODA.
2. The Plan may also be partially or completely terminated by the Company
at any time, and any Employer shall have the right to terminate its
participation in the Plan at the end of any Plan Year. If the Plan is
partially terminated, all amounts credited to the Accounts of Members
who are terminated from the Plan (including amounts held for a
terminated Member pursuant to Section 16.06 not previously forfeited
by him) shall fully vest and become non-forfeitable. If the Plan is
completely terminated, or if there is a complete discontinuance of
contributions under the Plan, or if any Employer terminates its
participation in the Plan, all amounts credited to the Accounts of
affected Members (including amounts held for a terminated Member
pursuant to Section 16.06 not previously forfeited by him) shall fully
vest and become non-forfeitable. Upon partial or complete termination
of the Plan, or upon complete discontinuance of contributions under
the Plan, the Trustees, as directed by the Committee, with respect to
part or all of the Fund, as the case may be, or in the absence of such
direction, in their own discretion, shall distribute the Fund at once,
any such distribution to be in the manner provided in Section 5.05, or
shall continue to hold the Fund for distribution, provided that if the
Commissioner of Internal Revenue determines that the Plan as adopted
fails to meet the requirements of section 401(a) of the Code for the
first Plan Year, the Plan shall terminate and all property held in the
Fund shall be returned to the Employer or to the contributors (with
respect to voluntary contributions) free of trust, within one year
after the date of denial of qualification of the Plan. In the event
that a contribution is made to the Plan conditioned upon qualification
of the Plan as amended, such contribution must be returned to the
Employer upon the determination that the amended Plan fails to qualify
under the Code provided that:
a. The Plan amendment is submitted to the Internal Revenue Service
for qualification within one year from the date the amendment is
adopted;
b. Such contribution that was made conditioned upon Plan
requalification is returned to the Employer within one year after
the date the Plan's requalification is denied. Following the
completion of such distributions, the Trust will terminate, the
Trustees will be relieved from all liability under the Trust and
no Member or other person will have any claims thereunder, except
as required by applicable law.
3. No termination or amendment of the Plan or of the Trust and no other
action shall divert any part of the Fund to any purpose other than the
exclusive benefit of Employees or their beneficiaries.
14. CONCERNING OTHER QUALIFIED PLANS
1. The Committee may, in its sole discretion, allow to be transferred to
the Trustees all or any of the assets held by any other plan or trust
which satisfies the applicable requirements of the Code relating to
qualified plans and trusts on behalf of a Member in this Plan. Any
such assets so transferred shall be accompanied by written information
from the trustee holding such assets, setting forth the Member or
Members in this Plan for whose benefit such assets have been
transferred and showing separately the respective current value of the
assets attributable to each such Member. Upon receipt of such assets
and instructions the Trustees shall thereafter proceed in accordance
with the provisions of the Plan. Such transferred amounts shall be
maintained in each such Member's Transfer Account. This Plan will not
accept a transfer of "accumulated deductible employee contributions,"
within the meaning of section 72(o)(5) of the Code.
2. The Company by written direction to the Trustees may transfer some or
all of the assets held under the Plan to another plan or trust meeting
the requirements of the Code relating to qualified plans and trusts.
Upon receipt of such written direction, the Trustees shall cause to be
transferred the assets so directed.
3. An Employee eligible to participate in the Plan, regardless of whether
he has satisfied the age and service requirements, may file a written
petition with the Committee requesting that the Trustee accept a
Rollover Contribution from such Employee. The Committee, in its sole
discretion, shall determine whether or not such Employee shall be
permitted to make a Rollover Contribution to the Trust. Any written
petition filed pursuant to this Section 14.03 shall set forth the
amount of such Rollover Contribution, the nature of the property
contained in the Rollover Contribution, and a statement, satisfactory
to the Committee, that such contribution constitutes a Rollover
Contribution. In the event the Committee permits an Employee to make a
Rollover\Contribution, such Rollover Contribution shall become part of
the Fund and shall be maintained in the Transfer Account.
15. MISCELLANEOUS PROVISIONS
1. The Plan shall not confer upon an Employee any right to be continued
as such.
2. The corpus or income of the Trust may not be diverted to or used for
other than the exclusive benefits of Members or their beneficiaries.
No benefit or interest
available hereunder shall be subject to assignment or alienation,
either voluntary or involuntary. The preceding sentence shall also
apply to the creation, assignment, or recognition of a right to any
benefit payable with respect to a Member pursuant to a domestic
relations order, unless such order is determined to be a qualified
domestic relations order, as defined in section 414(p) of the Code. A
domestic relations order entered before January 1, 1985 will be
treated as a qualified domestic relations order if payment of benefits
pursuant to the order has commenced as of such date.
3. If the Committee deems any person incapable of receiving benefits to
which he is entitled by reason of minority, illness, infirmity or
other incapacity, it may direct the Trustees to make payment directly
for the benefit of such person or to any person selected by the
Committee to disburse it. Such payments shall, to the extent thereof,
discharge all liability of the Company, the Employer, the Committee,
the Trustees and the Fund.
4. If any benefit hereunder has been payable and unclaimed for four years
since the whereabouts or continued existence of the person entitled
thereto was last known to the Committee, such benefit shall be
distributed following a determination by a court of competent
jurisdiction that such Member is legally dead as if such Member had
died on the date specified in such determination, as provided in
Article VI. The four year period may be extended by the Committee
whenever, in its discretion, special circumstances justify such
action.
5. The Employer shall have no liability for payments under the Plan or
administration of the Fund except to make the contributions required
by Article III. Persons entitled shall look solely to the Fund for any
payments under the Plan.
6. In the case of any merger or consolidation with, or transfer of assets
or liabilities of the Plan to, any other plan, each Employee and
beneficiary shall (if the Plan then terminates) receive a benefit
immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan
had then terminated).
7. Construction, validity and administration of the Plan and Trust shall
be governed by the laws of the United States and, to the extent not
preempted by such laws, by the laws of the State of Maine.
8. This Plan shall not become a direct or indirect transferee of the
assets of a defined benefit plan, money purchase plan, stock bonus
plan, or profit sharing plan which provides for a life annuity form of
payment of benefits.
16. ADDITIONAL PROVISIONS
1. "Break in Service" shall mean a 12-consecutive month period during
which the Employee has not completed more than 500 Hours of Service
with the Employer; provided that any period during which an Employee
is employed by an Affiliate which is not an Employer shall not be
counted in determining a Break in Service.
2. "12 consecutive month period." The measurement of a 12 consecutive
month period for purposes of determining a Year of Service and a Break
in Service shall begin on the date on which the Employee first
performs an Hour of Service and each anniversary thereof.
3. Except as provided below, "Year of Service" for purposes of
eligibility and vesting shall mean a 12-consecutive month period
during which the Employee completes at least 1,000 Hours of Service.
Any 12-consecutive month period during which an Employee has less than
1,000 Hours of Service shall not be considered in computing Years of
Service.
In the case of any Employee who has a Break in Service, Service before
such break shall be considered in computing Years of Service for
purposes of eligibility under Article II and for purposes of
determining such Employee's vested portion of his Accounts after such
break, but Service after such break shall be considered in computing
Service for purposes of determining the Employee's vested portion of
his Accounts before such break except, that, in the case of an
Employee who has five or more consecutive Breaks in Service, all
Service after such breaks shall not be considered in computing Service
for purposes of determining the Employee's vested portion of his
Accounts that accrued before such breaks. Separate accounts will be
maintained for the Employee's pre-Break and post-Break
Employer-derived accrued benefit. Both accounts will share in the
earnings and losses of the Fund.
4. No amendment to the vesting schedule as set forth above or in any
prior vesting schedule under the Plan shall deprive a Member of his
non-forfeitable rights to benefits accrued to the date of the
amendment. Further, if a vesting schedule of the Plan is amended, or
if the Plan is amended in any way that directly or indirectly affects
the computation of a Member's non-forfeitable rights to benefits, or
if the Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Member with at least five Years of
Service with the Employer may elect, within a reasonable period after
the adoption of the amendment, to have his non-forfeitable percentage
computed under the Plan without regard to such amendment. The period
during which the election may be made shall commence with the date of
the amendment is adopted and shall end on the later of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Member is issued written notice of the
amendment by the Employer or plan administrator.
5. If a distribution is made at a time when a Member has a nonforfeitable
right to less than 100 percent of the account balance derived from
Employer contributions and the Member may increase the nonforfeitable
percentage in the account: (1) a separate account shall be established
for the Member's interest in the Plan as of the time of the
distribution, and (2) at any relevant time, the Member's
nonforfeitable portion of the separate account will be equal to an
amount ("x") determined by the formula: x = P(AB + (R x D)) - (R x D).
For purposes of applying the formula: P is the nonforfeitable
percentage at the relevant time; AB is the account balance at the
relevant time; R is the ratio of the account balance at the relevant
time to the account balance after distribution; and D is the amount of
the distribution.
6. Forfeitures
Any balance in the Accounts of a Member who has separated from service
to which he is not entitled under Article IV shall be subject to
forfeiture and held in a separate account, administered by the
Trustees, and treated as though it were a Member's Regular Account. If
a Member who has separated from service as provided in Section 5.03 is
subsequently rehired without incurring five consecutive Breaks in
Service, then such amount shall be restored in such Member's Regular
Account and shall vest in accordance with Article IV, but if such
Member incurs five consecutive Breaks in Service, then the amounts
held in the separate account shall be forfeited in the Plan Year in
which such fifth consecutive Break in Service occurs. No forfeitures
will occur solely as a result of a Member's withdrawal of
contributions to his Voluntary Account. The amounts forfeited shall be
allocated to the Accounts of other Members in direct proportion to
their respective Compensation for the Plan Year.
17. DISTRIBUTIONS
1. Applicability. This Article applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the plan to the
contrary that would otherwise limit a distributee's election under
this Article, a distributee may elect, at the time and in the manner
prescribed by the plan administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
2. Definitions.
a. 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 years or more; any
distribution to the extent such distribution is required under
section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
b. Eligible retirement plan: An eligible retirement plan is an
individual retirement account described in section 408(a) of the
Code, an individual retirement annuity described in section
408(b) of the Code, an annuity plan described in section 403(a)
of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the distributee's eligible rollover
distribution. However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible retirement plan
is an individual retirement account or individual retirement
annuity.
c. Distributee: A distributee includes an employee or former
employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse
or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in section 414(p) of the
Code, are distributees with regard to the interest of the spouse
or former spouse.
d. Direct rollover: A direct rollover is a payment by the plan to
the eligible retirement plan specified by the distributee.
IN WITNESS WHEREOF, the parties hereto have signed this Trust Agreement, to
be effective as of May 20, 1999.
WITNESS: CONSUMERS WATER COMPANY
/s/ Lisa S. Piotrowski /s/ Roy H. Stahl
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Lisa S. Piotrowski Roy H. Stahl, Vice President
/s/ Lisa S. Piotrowski /s/ Roy H. Stahl
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Lisa S. Piotrowski Roy H. Stahl, Trustee
/s/ Lisa S. Piotrowski /s/ Robert G. Liptak
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Lisa S. Piotrowski Robert G. Liptak, Trustee
/s/ Lisa S. Piotrowski /s/ David P. Smeltzer
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Lisa S. Piotrowski David P. Smeltzer, Trustee
