PAGE
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
Exhibit 1
As Amended March 26, 1996
and Effective May 1, 1996
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
TABLE OF CONTENTS
Page
ARTICLE I Amendment and Restatement - Purpose 39
Section 1.1 Amendment and Restatement of the Plan 39
Section 1.2 Purpose 39
ARTICLE II Definitions 39
Section 2.1 Account 39
Section 2.2 Active Participant 39
Section 2.3 Additional Lump Sum Deposits 39
Section 2.4 Affiliate 39
Section 2.5 Balanced Fund 40
Section 2.6 Basic Deposits 40
Section 2.7 Board of Directors 40
Section 2.8 Code 40
Section 2.9 Commissioner 40
Section 2.10 Committee or Employee Benefits Committee 40
Section 2.11 Company 40
Section 2.12 Compensation 40
Section 2.13 Deferred 42
Section 2.14 Deposits 42
Section 2.15 Director 42
Section 2.16 Disability 42
Section 2.17 Effective Date 42
Section 2.18 Eligible Employee 42
Section 2.19 Employee 42
Section 2.20 Employer 42
Section 2.21 Employer Contributions 42
Section 2.22 Enrollment Date 43
Section 2.23 Enterprise 43
Section 2.24 Enterprise Common Stock 43
Section 2.25 Enterprise Common Stock Fund 43
Section 2.26 Equities Fund 43
Section 2.27 Equities Index Fund 43
Section 2.28 ERISA 43
Section 2.29 ESOP Account 43
Section 2.30 Fixed Income Fund 43
Section 2.31 Funds 43
Section 2.32 Government Obligations Fund 43
Section 2.33 Highly Compensated Employee 44
Section 2.34 Highly Compensated Participant 46
Section 2.35 Hour of Service 46
Section 2.36 Investment Manager 46
Section 2.37 Lay Off or Laid Off 46
Section 2.38 Leased Employee 46
Section 2.39 Matured 46
Section 2.40 Nondeferred 46
Section 2.41 Participant 46
Section 2.42 Participating Affiliate 46
Section 2.43 Plan 47
Section 2.44 Plan Year 47
Section 2.45 Qualified Domestic Relations Order or "QDRO" 47
Section 2.46 Recordkeeper 47
Section 2.47 Required Beginning Date 47
Section 2.48 Retirement 48
Section 2.49 Rollover Contributions 48
Section 2.50 Supplemental Deposits 48
Section 2.51 Thrift Account 48
Section 2.52 Trust Agreement 49
Section 2.53 Trust Fund 49
Section 2.54 Trustee 49
Section 2.55 Year of Service 49
ARTICLE III Participation 49
Section 3.1 Participation 49
Section 3.2 Effective Date of Participation 50
ARTICLE IV Deposits 50
Section 4.1 Basic Deposits 50
Section 4.2 Supplemental Deposits 51
Section 4.3 Method of Deposits 51
Section 4.4 Additional Lump Sum Deposits 51
Section 4.5 Limit on Deferred Deposits 52
Section 4.6 Distribution of Excess Deferral Amounts 52
Section 4.7 Code Section 401(k) Limits on Deferred
Deposits 53
Section 4.8 Unmatched Employer Contributions 53
Section 4.9 Code Section 401(m) Limits on Nondeferred
Deposits and Employer Contributions 53
Section 4.10 Changing Deposit Percentages 54
Section 4.11 Suspension of Deposits 54
Section 4.12 Limit on Additional Lump Sum Deposits 54
Section 4.13 Elections 55
Section 4.14 Rollover Contributions 55
ARTICLE V Employer Contributions 55
Section 5.1 Amount and Payment of Employer
Contributions 55
Section 5.2 Reduction of Employer Contributions by
Forfeitures 56
Section 5.3 Maximum Annual Additions 56
Section 5.4 Return of Employer Contributions 56
ARTICLE VI Thrift Account Investments 56
Section 6.1 Investment of Deposits, Rollover Contributions
and Employer Contributions 56
Section 6.2 Change in Investment Direction 57
Section 6.3 Transfer of Investments 57
Section 6.4 Loans 57
ARTICLE VII Thrift Account Funds 58
Section 7.1 Establishment of Funds 58
Section 7.2 Enterprise Common Stock Fund 59
ARTICLE VIII Thrift Accounts 60
Section 8.1 Establishment of Thrift Accounts 60
Section 8.2 Measure of Thrift Accounts 60
Section 8.3 Valuation of Funds 61
Section 8.4 Valuation of Thrift Accounts 61
Section 8.5 Separate Accounting 61
ARTICLE IX ESOP Accounts 62
Section 9.1 Maintenance of Separate Accounts 62
Section 9.2 Allocation of Distributions 62
Section 9.3 Withdrawals or Transfers During Employment 62
Section 9.4 Dividends and Other Income 63
Section 9.5 Voting of ESOP Account Common Stock 63
ARTICLE X Vesting 63
Section 10.1 Vesting of Employer Contributions 63
Section 10.2 Vesting of Deposits, Rollover Contributions
and the ESOP Account 64
ARTICLE XI Account Distributions and Withdrawals 64
Section 11.1 Distribution Upon Retirement, Disability,
Lay Off or Death 64
Section 11.2 Distribution Upon Other Termination
of Employment 65
Section 11.3 Withdrawal of Nondeferred Deposits and
Employer Contributions During Employment 66
Section 11.4 Withdrawals of Deferred Deposits During
Employment After Age 59 1/2 67
Section 11.5 Hardship Withdrawals 67
Section 11.6 Suspension of Participation 69
Section 11.7 Transfer of Employment 69
Section 11.8 Form of Distributions 70
Section 11.9 Time of Distributions 71
Section 11.10 Limitation on Post Age 70 1/2 Distributions 72
Section 11.11 Distribution in the Case of Certain
Disabilities 73
Section 11.12 Loans 73
Section 11.13 Inability to Locate Payee 75
Section 11.14 Federal Income Tax Withholding on Distributions
and Withdrawals 75
ARTICLE XII Limits on Benefits and Contributions Under
Qualified Plans 75
Section 12.1 Definitions 75
Section 12.2 Annual Addition Limits 83
Section 12.3 Overall Limit 85
Section 12.4 Special Rules 86
ARTICLE XIII Top-Heavy Requirements 86
Section 13.1 Definitions 86
Section 13.2 General Requirements 88
Section 13.3 Maximum Compensation 89
Section 13.4 Vesting 89
Section 13.5 Minimum Contributions 89
Section 13.6 Participants Under Defined Benefit Plans 90
Section 13.7 Super Top-Heavy Plans 90
Section 13.8 Determination of Top Heaviness 91
Section 13.9 Determination of Super Top Heaviness 91
Section 13.10 Calculation of Top-Heavy Ratios 91
Section 13.11 Cumulative Accounts and Cumulative Accrued
Benefits 92
ARTICLE XIV Beneficiary in Event of Death 93
Section 14.1 Designation and Change of Beneficiary 93
ARTICLE XV Administration 94
Section 15.1 Named Fiduciary 94
Section 15.2 Administration 94
Section 15.3 Control and Management of Assets 96
Section 15.4 Benefits to be Paid from Trust 96
Section 15.5 Expenses 96
ARTICLE XVI Claims Procedure 96
Section 16.1 Filing of Claims 96
Section 16.2 Appeal of Claims 96
Section 16.3 Review of Appeals 97
ARTICLE XVII Merger or Consolidation 97
Section 17.1 Merger or Consolidation 97
ARTICLE XVIII Non-Alienation of Benefits 97
Section 18.1 Non-Alienation of Benefits 97
ARTICLE XIX Amendments 97
Section 19.1 Amendment Process 97
ARTICLE XX Termination 97
Section 20.1 Authority to Terminate 97
Section 20.2 Distribution Upon Termination 98
ARTICLE XXI Plan Confers No Right to Employment 98
Section 21.1 No right to Employment 98
ARTICLE XXII Alternate Payees 98
Section 22.1 Alternate Payees Under QDROs 98
ARTICLE XXIII Construction 99
Section 23.1 Governing Law 99
Section 23.2 Headings 99
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
THRIFT AND TAX-DEFERRED SAVINGS PLAN
ARTICLE I
AMENDMENT - PURPOSE
SECTION 1.1 AMENDMENT OF THE PLAN. Public Service Electric and Gas
Company hereby further amends, on November 16, 1993 and effective February
1, 1994, its Thrift and Tax-Deferred Savings Plan, a savings, profit-sharing and
tax-credit employee stock ownership plan for its Eligible Employees and those of
its Affiliates. The Plan as so amended reflects changes in plan administrative
procedures to permit daily valuations of and transactions in Participants'
Accounts. The Plan was originally adopted as of July 1, 1981 and was formerly
known as the Public Service Electric and Gas Company Thrift Plan.
SECTION 1.2 PURPOSE. The purpose of the Plan is to encourage and
assist thrift and savings by eligible non-bargaining unit employees of
Public Service Electric and Gas Company and certain of its Affiliates
through tax-sheltered forms of investment.
ARTICLE II
DEFINITIONS
When used herein, the words and phrases hereinafter defined shall
have the following meanings unless a different meaning is clearly required
by the context of the Plan:
SECTION 2.1 "Account" shall mean the separate account maintained in
the Plan for each Participant which consists of the Participant's Thrift
Account and/or the Participant's ESOP Account.
SECTION 2.2 "Active Participant" shall mean a Participant who is an
Eligible Employee presently making Nondeferred Deposits or for whom
Deferred Deposits are presently being made.
SECTION 2.3 "Additional Lump Sum Deposits" shall mean that amount
which is contributed to the Plan by a Participant on a lump sum basis.
Additional Lump Sum Deposits shall not be entitled to be matched by
Employer Contributions.
SECTION 2.4 "Affiliate" shall mean any organization which is a
member of a controlled group of corporations (as defined in Code section
414(b) as modified by Code section 415(h)) which includes the Company, or
any trades or businesses (whether or not incorporated) which are under
common control (as defined in Code section 414(c) as modified by Code
section 415(h)) with the Company, or a member of an affiliated service
group (as defined in Code section 414(m)) which includes the Company, or
any other entity required to be aggregated with the Company pursuant to
regulations promulgated pursuant to Code section 414(o).
SECTION 2.5 "Balanced Fund" shall mean the Fund or Funds established
pursuant to SECTION 7.1(f).
SECTION 2.6 "Basic Deposits" shall mean that amount, not less than
1%, nor more than 6% (or such lower maximum percentage as may be
established by the Committee) of a Participant's Compensation, contributed
to the Plan through payroll deduction by or on behalf of a Participant
which is entitled to be matched by Employer Contributions.
SECTION 2.7 "Board of Directors" shall mean the Board of Directors
of the Company.
SECTION 2.8 "Code" shall mean the Internal Revenue Code of 1986, as
amended, or as it may be amended from time to time.
SECTION 2.9 "Commissioner" shall mean the Commissioner of Internal
Revenue.
SECTION 2.10 "Committee" or "Employee Benefits Committee" shall mean
the Employee Benefits Committee of the Company appointed by the Board of
Directors.
SECTION 2.11 "Company" shall mean Public Service Electric and Gas
Company.
SECTION 2.12 "Compensation" shall mean the total remuneration paid
to a Participant for services rendered to an Employer excluding the
Employer's cost for any public or private employee benefit plan, but
including all Deferred Basic and Supplemental Deposits made by a
Participant or on a Participant's behalf to this Plan and all elective
contributions that are made by an Employer on behalf of a Participant
which are not includable in income under Code section 125, under rules
adopted by the Committee which are uniformly applicable to all
Participants similarly situated. However, Compensation shall not include
the following:
(a) any amounts which are deferred under any Deferred Compensation
Plan of any Employer and any payments from any such plans of
any previously deferred amount;
(b) any amounts received as an award pursuant to any of the
following incentive compensation programs:
(1) the Company's Management Incentive Compensation Plan;
(2) the Community Energy Alternatives Incorporated Executive
Long-Term Incentive Compensation Plan;
(3) the Energy Development Corporation Management Incentive
Plan;
(4) the Energy Development Corporation Long-Term Incentive
Compensation Plan;
(5) the Enterprise Diversified Holdings Incorporated
Management Incentive Compensation Plan;
(6) the Public Service Enterprise Group Incorporated 1989
Long-Term Incentive Plan;
(7) the Public Service Conservation Resources Corporation
Executive Long-Term Incentive Compensation Plan; and
(8) the Public Service Conservation Resources Corporation
Employee Long-Term Incentive Compensation Plan;
(c) any amounts which constitute reimbursement of expenses;
(d) the following miscellaneous payments:
(1) Separation pay;
(2) Gratuity Payments upon death;
(3) Payment for vacation due at time of death;
(4) Worker's Compensation for permanent partial disability; and
(5) Employer contributions for social security, unemployment
compensation or other taxes; and
(e) the following special international payments:
(1) International service premium;
(2) Cost of living allowance;
(3) Equalization Pay;
(4) Foreign service pay; and
(5) Hardship allowance.
In any case, however, for the purposes of the Plan, Compensation for
any Plan Year shall not exceed the limit imposed by Code section
401(a)(17).
SECTION 2.13 "Deferred" in reference to Deposits shall mean that
such Deposits are deferred from current federal income taxation under Code
section 401(k).
SECTION 2.14 "Deposits" shall mean the aggregate of Additional Lump
Sum Deposits, Basic Deposits and Supplemental Deposits made by or on
behalf of a Participant to his or her Thrift Account. The total of all
Deposits made by or on behalf of a Participant in any Plan Year shall not
exceed 25% of the Participant's Compensation for such Plan Year.
SECTION 2.15 "Director" shall mean the Director-Corporate Benefit
Planning and Services of the Company.
SECTION 2.16 "Disability" shall mean any physical or mental
condition which renders a Participant incapable of performing further work
for his or her Employer, as certified in writing by a Doctor of Medicine
designated and approved by the Committee.
SECTION 2.17 "Effective Date" shall mean February 1, 1994.
Section 2.18 "Eligible Employee" shall mean any Employee who has
completed at least one Year of Service whether or not he or she actually
elects to make any Deposits.
SECTION 2.19 "Employee" shall mean any individual in the employ of
an Employer who is not included in a unit of employees covered by a
collective bargaining agreement. The term "Employee" shall not include
a director of an Employer who serves in no capacity other than as a
director, a consultant or independent contractor doing work for an
Employer or a person employed by a consultant or independent contractor
doing work for an Employer.
SECTION 2.20 "Employer" shall mean the Company and any Participating
Affiliate.
SECTION 2.21 "Employer Contributions" shall mean the matching
amounts contributed to the Plan on behalf of Participants by an Employer
in accordance with SECTION 5.1.
SECTION 2.22 "Enrollment Date" shall mean the earliest of: (a) the
first day of the first payroll period in which payroll deductions from a
Participant's Compensation are made for Deposits under the Plan; (b) the
date an Additional Lump Sum Deposit is accepted by the Plan from a
Participant; (c) the date a Rollover Contribution is accepted from a
Participant for payment to the Trustee for investment in the Plan in
accordance with SECTION 4.12; or (d) the date an ESOP Account is
established on behalf of a Participant.
SECTION 2.23 "Enterprise" shall mean the Company's parent, Public
Service Enterprise Group Incorporated.
SECTION 2.24 "Enterprise Common Stock" shall mean the Common Stock,
without nominal or par value, of Enterprise.
SECTION 2.25 "Enterprise Common Stock Fund" shall mean the Fund
established pursuant to SECTION 7.1(c).
SECTION 2.26 "Equities Fund" shall mean the Fund or Funds
established pursuant to SECTION 7.1(a).
SECTION 2.27 "Equities Index Fund" shall mean the Fund established
pursuant to SECTION 7.1(d).
SECTION 2.28 "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended, or as it may be amended from time to
time.
SECTION 2.29 "ESOP Account" shall mean that separate portion of an
Account established pursuant to Section 9.1 which evidences the shares of
Enterprise Common Stock transferred to the Plan for the Account of a
Participant, pursuant to the merger with this Plan with the Public Service
Electric and Gas Company Tax Reduction Act Employee Stock Ownership Plan
(TRASOP) and/or the Public Service Electric and Gas Company Payroll-Based
Employee Stock Ownership Plan (PAYSOP), including the net worth of the
Trust Fund attributable thereto.
SECTION 2.30 "Fixed Income Fund" shall mean the Fund or Funds
established pursuant to SECTION 7.1(b).
SECTION 2.31 "Funds" shall mean the several investment Funds
established pursuant to SECTION 7.1. As used in the singular, "Fund"
shall mean one of such Funds.
SECTION 2.32 "Government Obligations Fund" shall mean the Fund or
Funds established pursuant to SECTION 7.1(e).
SECTION 2.33 "Highly Compensated Employee" shall mean:
(a) For any Plan Year, any Employee who, during the Plan Year or
the preceding Plan Year--
(1) was at any time a 5% owner;
(2) received Compensation for such Plan Year from the Company
or an Affiliate in excess of the amount provided for by
Code section 414(q)(1)(B);
(3) received Compensation for such Plan Year from the Company
or an Affiliate in excess of the amount provided for by
Code section 414(q)(1)(C) and was in the top-paid group of
Employees; or
(4) was at any time an officer of the Company or of an
Affiliate and received Compensation for such Plan Year
greater than 50% of the amount provided for by Code
section 415(b)(1)(A).
(b) In the case of the Plan Year for which the relevant
determination is being made, an Employee not described in
subparagraph (a)(2), (a)(3) or (a)(4) of this Section for the
preceding Plan Year (without regard to this paragraph) shall
not be treated as described in such subparagraphs (a)(2),
(a)(3) or (a)(4) unless such Employee is a member of the group
consisting of the 100 Employees paid the greatest Compensation
during the year for which such determination is being made.
(c) For purposes of this Section, an Employee shall be treated as
a 5% owner for any Plan Year if at any time during such Plan
Year such Employee was a 5% owner (as defined in Code section
416(i)(1)) of the Company or an Affiliate.
(d) For purposes of this Section, an Employee shall be considered
as being in the top-paid group of Employees for any Plan Year
if such Employee is in the group consisting of the top 20% of
the Employees when ranked on the basis of Compensation paid
during such Plan Year.
(e) For purposes of determining the top-paid group under paragraph
(d), the following Employees shall be excluded:
(1) Employees who have not completed 6 months of service;
(2) Employees who normally work less than 17 1/2 hours per
week;
(3) Employees who normally work during not more than six
months during any year;
(4) Employees who have not attained age 21; and
(5) Employees who are nonresident aliens and who receive no
earned income (within the meaning of Code section
911(d)(2)) from the Company or an Affiliate which
constitutes income from sources within the United States
(within the meaning of Code section 861(a)(3)).
(f) For purposes of subparagraph (a)(4) of this Section, no more
than 50 Employees (or, if lesser, the greater of three
Employees or 10% of the Employees) shall be treated as
officers. If for any year no officer of the Company or an
Affiliate is described in subparagraph (a)(4) of this Section,
the highest paid of the officers of the Company or an Affiliate
for such Plan Year shall be treated as described in such
subparagraph.
(g) If any individual is a member of the family of a 5% owner or of
a Highly Compensated Employee in the group consisting of the 10
Highly Compensated Employees paid the greatest Compensation
during the Plan Year, then: (1) except for purposes of SECTION
4.5, such individual shall not be considered a separate
Employee; and (2) any Compensation paid to such individual (and
any applicable contribution on behalf of such individual) shall
be treated as if it were paid to (or on behalf of) the 5% owner
or Highly Compensated Employee. For purposes of this
subparagraph (g), the term "family" shall mean, with respect to
any Employee, such Employee's spouse and lineal ascendants or
descendants and spouses of such lineal ascendants or
descendants; provided, however, that for purposes of
determining whether the limit on includable Compensation
contained in Code section 401(a)(17) (see SECTION 2.12) has
been exceeded, the term "family" shall mean, with respect to
any Employee, such Employee's spouse and the children of such
Employee who have not attained age 19 by the close of the Plan
Year.
(h) For purposes of this Section, the term "Compensation" shall
mean Compensation within the meaning of Section 12.1(a)(4), but
including salary reduction contributions to a cafeteria plan,
a 401(k) plan and a simplified employee pension.
(i) A former Employee shall be treated as a Highly Compensated
Employee if (1) such Employee was a Highly Compensated Employee
when such Employee separated from service or (2) such Employee
was a Highly Compensated Employee at any time after attaining
age 55.
SECTION 2.34 "Highly Compensated Participant" shall mean:
(a) those Highly Compensated Employees who are Participants or
(b) those Highly Compensated Employees who are Eligible
Employees, who have satisfied all conditions for
participation under SECTION 3.1, whether or not they
actually elect to make any Deposits or Rollover
Contributions to the Plan.
SECTION 2.35 "Hour of Service" shall mean each hour for which an
Employee is directly or indirectly paid remuneration or entitled to such
payment by an Employer including any hours for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by
an Employer.
SECTION 2.36 "Investment Manager" shall mean an investment
manager as defined in ERISA section 3(38).
SECTION 2.37 "Lay Off" or Laid Off" shall mean a Participant's
involuntary separation from service with an Employer because of a
reduction in work forces at a time when there is no further work available
with the Employer for which the Participant is qualified.
Section 2.38 "Leased Employee" shall mean an individual who is not
an Employee but who would be a leased employee as defined in Code section
414(n), but for the one year service requirement of Code section
414(n)(2)(B).
SECTION 2.39 "Matured" in reference to Deposits and Employer
Contributions shall mean that the respective amount has been held in the
Plan for at least twenty-four months.
SECTION 2.40 "Nondeferred" in reference to Deposits shall mean that
such Deposits are not deferred from current federal income taxation under
Code section 401(k).
SECTION 2.41 "Participant" shall mean any person who has an interest
in the Trust Fund.
SECTION 2.42 "Participating Affiliate" shall mean any Affiliate of
the Company which: (a) adopts the Plan with the approval of the Board of
Directors; (b) authorizes the Board of Directors and the Employee Benefits
Committee to act for it in all matters arising under or with respect to
the Plan; and (c) complies with such other terms and conditions relating
to the Plan as may be imposed by the Board of Directors.
SECTION 2.43. "Plan" shall mean this Public Service Electric and Gas
Company Thrift and Tax-Deferred Savings Plan, including all amendments
hereto which may hereafter be made.
SECTION 2.44. "Plan Year" shall mean the calendar year.
SECTION 2.45. "Qualified Domestic Relations Order" or "QDRO" shall
mean any judgment, decree or order pursuant to a state domestic relations
or community property law which relates to the provision of child support
or marital property rights, which creates or recognizes the existence of
an alternate payee's right to (or assigns to an alternate payee the right
to) receive all or part of a Participant's Account, and which meets the
requirements of (a) and (b) below, as interpreted in accordance with Code
section 414(p):
(a) such order specifies:
(1) the name and last known mailing address of the
Participant and each alternate payee;
(2) the amount or the percentage of the Participant's
Account to be paid to each alternate payee, or the
manner in which such amount or percentage is to be
determined;
(3) the number of payments or the period to which the
order applies; and
(4) each plan to which such order applies;
(b) such order does not require the Plan to:
(1) provide any type or form of benefit or option not
otherwise provided under the Plan;
(2) provide increased benefits; or
(3) pay to an alternate payee amounts required to be paid
to another alternate payee under a prior QDRO.
SECTION 2.46 "Recordkeeper" shall mean the person(s) or entity(ies)
designated by the Committee to maintain the records of the Plan and Plan
Accounts and to perform such other functions as may be designated by the
Committee.
SECTION 2.47 "Required Beginning Date" shall mean with respect to
distributions to any Participant, April 1 of the calendar year following
the calendar year in which the Participant attains age 70 1/2; provided,
however, that with respect to distributions to any Participant who
attained age 70 before July 1, 1987 and who was not a "5% owner" as
defined in SECTION 13.1(f)(3), the Required Beginning Date for such
Participant shall be April 1 of the calendar year following the calendar
year in which (1) the Participant attains age 70 1/2 or (2) the
Participant retires, whichever is later.
SECTION 2.48. "Retirement" shall mean the termination of employment
by a Participant other than by reason of his or her death:
(a) under circumstances entitling the Participant to an
immediately payable retirement benefit under any pension
plan of an Employer, or
(b) at or after age 65.
SECTION 2.49 "Rollover Contributions" shall mean Employee
contributions transferred to the Plan, in accordance with SECTION 4.12,
from a trust under another corporate plan, each qualified under Code
sections 501(a) and 401(a), respectively.
SECTION 2.50 "Supplemental Deposits" shall mean the amount, if any,
of Compensation contributed to the Plan through payroll deduction by or
on behalf of a Participant which is greater than the maximum permitted
Basic Deposit.
SECTION 2.51 "Thrift Account" shall mean that separate portion of
an Account established pursuant to Section 8.1 and which consists of the
sum of the following subaccounts of such Participant:
(a) BASIC DEPOSIT SUBACCOUNT shall mean that portion of a
Participant's Thrift Account which evidences the value of
Basic Deposits by or on behalf of a Participant under the
Plan, including the net worth of the Trust Fund
attributable thereto.
(b) SUPPLEMENTAL DEPOSIT SUBACCOUNT shall mean that portion of
a Participant's Thrift Account which evidences the value
of Supplemental Deposits and Additional Lump Sum Deposits
under the Plan, assets transferred by the Participant from
his or her ESOP Account and Rollover Contributions to the
Plan by or on behalf of a Participant, including the net
worth of the Trust Fund attributable thereto.
(c) EMPLOYER CONTRIBUTION SUBACCOUNT shall mean that portion
of a Participant's Thrift Account which evidences the
value of Employer Contributions which have been credited
to a Participant's Account under SECTION 5.1 of the Plan
(less any forfeitures), including the net worth of the
Trust Fund attributable thereto.
SECTION 2.52 "Trust Agreement" shall mean the agreement between the
Company and the Trustee which provides for the management of the Trust
Fund and the investment of Deposits, Employer Contributions and Rollover
Contributions to the Plan and investment of the assets of ESOP Accounts.
SECTION 2.53 "Trust Fund" shall mean the aggregate of Basic and
Supplemental Deposits made by or on behalf of Participants, Rollover
Contributions and Employer Contributions, together with ESOP Accounts,
increased by any profits or income thereon, and decreased by any losses
thereon and by any payments made therefrom.
SECTION 2.54 "Trustee" shall mean any individual or individuals or
corporation or corporations by whom any assets of the Plan are held under
the Trust Agreement.
SECTION 2.55 "Year of Service" shall mean the twelve consecutive
month period beginning on the first day of the month in which an Employee
commences employment with the Company or an Affiliate and each succeeding
twelve consecutive month period beginning on the yearly anniversary of
such day, during which the Employee completes not less than 1,000 Hours
of Service; and the determination of whether an Employee shall have
completed not less than 1,000 Hours of Service during any such period
shall be made by crediting such Employee with 190 Hours of Service for
each calendar month during such period in which the Employee is entitled
to be credited with at least one Hour of Service for such month. For the
purposes of this Section, there shall be included service with the Company
or an Affiliate as an Employee or as a Leased Employee.
ARTICLE III
PARTICIPATION
SECTION 3.1 PARTICIPATION. Each Eligible Employee may become a
Participant by applying with the recordkeeper to establish a Thrift
Account or when an ESOP Account was established on his or her behalf. An
Employee may become a Participant by applying with the recordkeeper for
the Plan to accept a Rollover Contribution on such Employee's behalf.
By contacting the recordkeeper and using its automatic voice response
system, the Eligible Employee can (a) arrange for the payment of an
Additional Lump Sum Deposit to the Plan, (b) authorize his or her Employer
to withhold an amount in a specified percentage of his or her Compensation
and (c) authorize the recordkeeper and/or Employer to pay such amount to
the Trustee for investment in a Thrift Account under the Plan in
accordance with the Eligible Employee's instructions.
Also by contacting the recordkeeper and using its automatic voice
response system, the Employee can authorize his or her Employer to accept
a Rollover Contribution from another qualified corporate plan in
accordance with Section 4.12 and to pay such amount to the Trustee for
investment under the Plan in accordance with such Employee's instructions.
Participation in the Plan is entirely voluntary.
SECTION 3.2 EFFECTIVE DATE OF PARTICIPATION. Participation in the
Plan shall be effective for an Eligible Employee and payroll deductions
shall commence, as soon as practicable after the Eligible Employee has
applied to the recordkeeper for participation. Participation in the Plan
shall be effective for an Employee or an Eligible Employee making a
Rollover Contribution to the Plan as soon as practicable after such
Rollover Contribution is accepted for transfer in accordance with SECTION
4.12. An Employee making a Rollover Contribution may participate in the
Plan whether or not such Employee is an Eligible Employee. Participation
of an Employee in the Plan with respect to the ESOP Account became
effective upon receipt by the Plan of the assets credited to the account
of such Employee in the Company's TRASOP and/or PAYSOP pursuant to a
merger of such plan or plans with this Plan.
ARTICLE IV
DEPOSITS
SECTION 4.1 BASIC DEPOSITS. An Eligible Employee may elect:
(a) to make Basic Nondeferred Deposits to the Plan in an
amount equal to any of 1%, 2%, 3%, 4%, 5% or 6% of his or
her Compensation each pay period; or
(b) to have Basic Deferred Deposits made to the Plan by an
Employer on his or her behalf in an amount equal to any of
1%, 2%, 3%, 4%, 5% or 6% of his or her Compensation each
pay period; or
(c) to make, or have made by an Employer on his or her behalf,
any combination of amounts under (a) or (b) above,
totaling up to 6% of his or her Compensation each pay
period; subject to the limitations of SECTIONS 4.5 and
5.3. Basic Deposits made by or on behalf of a Participant
shall be paid over by the Employer to the Trustee and
deposited in the Trust Fund as soon as practicable after
deduction and, in any event, within 90 days of deduction.
Such Basic Deposits shall be credited as soon as
practicable to such Participant's Basic Deposit Subaccount
in the Plan.
SECTION 4.2 SUPPLEMENTAL DEPOSITS. Each Participant who is electing
the maximum permitted Basic Deposit to the Plan may also elect:
(a) to make Supplemental Nondeferred Deposits to the Plan in
an amount equal to any integral multiple of 1% of his or
her Compensation to a total of 19% of his or her
Compensation each pay period; or
(b) to have Supplemental Deferred Deposits made by an Employer
on his or her behalf in an amount equal to any integral
multiple of 1% of his or her Compensation up to a total of
19% of his or her Compensation each pay period; or
(c) to make, or have made by an Employer on his or her behalf,
any combination of the amounts specified in (a) or (b)
above, totaling up to 19% of his or her Compensation each
pay period; subject to limitations of SECTIONS 4.5 and
5.3. Supplemental Deposits made by or on behalf of a
Participant shall be paid over by an Employer to the
Trustee and deposited in the Trust Fund as soon as
practicable after deduction and, in any event, within 90
days of deduction. Such Supplemental Deposits shall be
credited as soon as practicable to such Participant's
Supplemental Deposit Subaccount in the Plan.
SECTION 4.3 ADDITIONAL LUMP SUM DEPOSITS. Within any Plan Year,
each Participant may make one or more Additional Lump Sum Deposits on a
Nondeferred basis in the minimum amount of $250.00 and in such total
amounts which, when aggregated with such Participant's Basic Deposits and
Supplemental Deposits, do not exceed 25% of his or her Compensation for
that Plan Year and subject to the limitations of SECTIONS 4.5, 4.12 and
5.3. Additional Lump Sum Deposits made by a Participant shall be paid
over by the recordkeeper to the Trustee and deposited in the Trust Fund
as soon as practicable, but no later than 90 days, after receipt. Such
Additional Lump Sum Deposits shall be credited as soon as practicable to
such Participant's Supplemental Deposit Subaccount in the Plan.
SECTION 4.4. METHOD OF DEPOSITS. Basic Deposits and Supplemental
Deposits by or on behalf of Active Participants shall be made by means of
payroll deduction. For convenience of administration, if the percentage
of Compensation elected to be contributed to the Plan by an Active
Participant is not equal to a whole dollar amount, such amount will be
increased to the next whole dollar amount in establishing the deduction
to be made from such Active Participant's pay. In addition, if an Active
Participant's Compensation is changed, the resulting change in deduction
shall be made as soon as practicable after such change in Compensation.
Additional Lump Sum Deposits shall be paid directly by Participants
to the recordkeeper who shall forward them to the Trustee for investment
in the Participant's Thrift Account in accordance with his or her then
current investment direction.
SECTION 4.5 LIMIT ON DEFERRED DEPOSITS. In no event may Deferred
Deposits for any Participant attributable to any taxable year of such
Participant (presumably the calendar year) exceed the amount permitted by
Code section 402(g). Where a Participant elects under SECTION 4.1 to have
Deferred Deposits made by an Employer to the Plan which would otherwise
exceed the limit of this SECTION 4.5, such excessive Deferred Deposits
shall be deemed to be Nondeferred Deposits to the Plan ("Deemed
Nondeferred Deposits") rather than Deferred Deposits to the Plan;
provided, however, that such Deemed Nondeferred Deposits shall be subject
to the limits and rules of SECTIONS 4.1 and 4.2; and provided further,
that such Deemed Nondeferred Deposits shall be deemed to be Basic
Nondeferred Deposits (and, therefore, matched by Employer Contributions
as set forth in Article V) to the extent possible under the limits of
SECTIONS 2.7 and 4.1, taking into account other Basic Deferred and
Nondeferred Deposits of the Participant.
SECTION 4.6. DISTRIBUTION OF EXCESS DEFERRAL AMOUNTS.
(a) Notwithstanding any other provision of the Plan to the
contrary, an Employer shall distribute any Excess Deferral
Amount (as defined below), adjusted according to SECTION
4.6(d), to Participants who claim such allocable Excess
Deferral Amounts for a calendar year. Such distribution
shall be made no later than the April 15th next following
the end of the calendar year for which such claim is made.
(b) For purposes of this Section 4.6, "Excess Deferral Amount"
shall mean the amount of Deferred Deposits for a calendar
year that the Participant allocates to this Plan and
claims pursuant to the election procedure set forth in
SECTION 4.6(c) below.
(c) A Participant's election to claim an Excess Deferral
Amount for a calendar year shall be in writing, shall be
submitted to the Committee no later than the March 1st
next following the end of such calendar year, shall
specify the Excess Deferral Amount and shall state that if
such amount is not distributed, such Excess Deferral
Amount, when added to amounts deferred under other plans
or arrangements described in Code sections 401(k), 408(k)
or 403(b), exceeds the limit imposed on the Participant by
Code section 402(g) for the taxable year (calendar year)
in which the deferral occurred.
(d) The amount distributed to a Participant pursuant to this
Section 4.6 with respect to a calendar year shall be
increased or decreased, as applicable, by investment
income or losses attributable thereto. If a loss is
allocable to the Excess Deferral Amount, the amount
distributed shall not be less than the lesser of (1) the
Participant's Deferred Deposit Subaccount or (2) the
Participant's Deferred Deposits for the Plan Year during
which the Excess Deferral Amount occurred.
SECTION 4.7 CODE SECTION 401(K) LIMITS ON DEFERRED DEPOSITS.
(a) LIMITATION. Deferred Deposits on behalf of Highly
Compensated Participants for a Plan Year shall not exceed
the amount permissible to meet the nondiscrimination test
of Code section 401(k)
(b) DISTRIBUTION OF EXCESS CONTRIBUTIONS. The Committee
shall, consistent with regulations under the Code,
establish nondiscriminatory rules to meet the requirements
of this SECTION 4.7.
SECTION 4.8 UNMATCHED EMPLOYER CONTRIBUTIONS. If, as the result of
the operation of SECTIONS 4.5, 4.6 and/or 4.7, and before the operation
of SECTION 4.9, the combined Deposits of a Participant are adjusted in
such a way that Employer Contributions previously made on behalf of a
Participant for a Plan Year are no longer matched by such Participant's
Basic Deposits, then the matching Employer Contributions allocated to such
Participant's Account for such Plan Year shall be reduced, under
nondiscriminatory rules established by the Committee, to the extent
necessary to equal the percentage of Employer Contributions (as set forth
in Article V) with respect to the Participant's remaining Basic Deposits
for such Plan Year. The amount, if any, of previously allocated Employer
Contributions in excess of the percentage of Employer Contributions (as
set forth in Article V) of the Participant's remaining Basic Deposits
shall be forfeited and applied to reduce future Employer Contributions to
the Plan.
SECTION 4.9 CODE SECTION 401(M) LIMITS ON NONDEFERRED DEPOSITS AND
EMPLOYER CONTRIBUTIONS.
(a) LIMITATION. Nondeferred Deposits by, together with
Employer Contributions on behalf of, Highly Compensated
Participants for a Plan Year shall not exceed the amount
permissible to meet the nondiscrimination tests of Code
section 401(m).
(b) DISTRIBUTION OF EXCESS CONTRIBUTIONS The Committee shall,
consistent with regulations under the Code, establish
nondiscriminatory rules to meet the requirements of this
SECTION 4.9.
SECTION 4.10 CHANGING DEPOSIT PERCENTAGES The percentage of
Compensation deposited in the Plan by or on behalf of an Active
Participant shall continue in effect until such Active Participant shall
change the rate of such Deposits. An Active Participant may change the
rate of Deposits to a higher or lower percentage of Compensation within
the limitations of SECTIONS 4.1, 4.2 and 4.5 by arranging for such change
with the recordkeeper or as otherwise prescribed by the Committee. Any
such change shall become effective as soon as practicable after receipt
of the notice of change by the recordkeeper.
SECTION 4.11 SUSPENSION OF DEPOSITS.
(a) An Active Participant may suspend all of the Deposits to
the Plan made by such Participant or on his or her behalf
at any time by arranging for such suspension with the
recordkeeper or as otherwise prescribed by the Committee.
Such suspension shall be effective as soon as practicable
after receipt of the notice of suspension by the
recordkeeper, and shall continue until such Participant
elects to have Deposits resumed by arranging therefor with
the recordkeeper. Payroll deductions under the Plan shall
begin again as soon as practicable after such notice is
received by the recordkeeper.
(b) If, after other required and authorized deductions from an
Active Participant's pay, there is not sufficient money
available in any pay period to make the entire authorized
payroll deduction for such Participant's Nondeferred
Deposits, no payroll deduction shall be made therefor for
that pay period.
(c) In case of any such total suspension of Deposits, pursuant
to Section 4.11(a), Employer Contributions on behalf of
such Participant shall be automatically suspended for a
like period.
SECTION 4.12 LIMIT ON ADDITIONAL LUMP SUM DEPOSITS. No Additional
Lump Sum Deposits may be made by any Participant in any Plan Year in which
the aggregate amount of all of such Participant's Deposits under the Plan
exceeds 25% of such Participant's Compensation for that Plan Year. Any
Additional Lump Sum Deposits inadvertently received in excess of this
limitation shall be refunded to the Participant as soon as practicable
following determination of such excess.
SECTION 4.13 ELECTIONS. All elections under this Article IV shall
be made at the time, in the manner and subject to the conditions as are
specified by the Committee. Elections of Deferred Deposits shall in all
cases be irrevocably made prior to the beginning of the payroll period for
which such elections shall apply. In any year in which the Committee
deems it necessary to do so to meet the requirements of SECTION 4.5, 4.7,
4.9 or 5.3 or the Code and the regulations thereunder, the Committee may
reduce, for that Plan Year, the permissible amount of Deposits by or on
behalf of any or all Active Participants.
SECTION 4.14 ROLLOVER CONTRIBUTIONS. Subject to such rules as may
be established by the Committee, an Employee may transfer Rollover
Contributions to the Plan, to be deposited in his or her Supplemental
Deposit Account. The Employee must certify that such amount to be
transferred as a Rollover Contribution qualifies for such transfer under
the Code and regulations thereunder and must submit such information or
evidence, satisfactory to the Committee, that it may require in order to
approve such transfer. The Committee may impose such nondiscriminatory
requirements on such transfer as it deems necessary or desirable. In
addition, Rollover Contributions shall then be subject to all terms and
conditions of this Plan and the Trust Agreement and shall be treated in
the same manner as Supplemental Deposits, unless the context of the Plan
or Trust requires otherwise.
ARTICLE V
EMPLOYER CONTRIBUTIONS
SECTION 5.1 AMOUNT AND PAYMENT OF EMPLOYER CONTRIBUTIONS. Each
Employer shall contribute to the Plan on behalf of Participants who are
its Employees and who are making or having their Employer make on their
behalf Basic Deposits to the Plan an amount equal to 50% of the aggregate
of such Basic Deposits, except to the extent that such Basic Deposits are
reduced or distributed as provided in SECTIONS 4.5 through 4.9, and except
as provided in this Article V and in SECTION 11.3. Employer Contributions
shall be allocated as Nondeferred. Employer Contributions with respect
to a Plan Year shall be paid to the Trustee not later than the due date
(including extensions of time) for filing Enterprise's consolidated
Federal income tax return for such year. All Employer Contributions may
be made without regard to current or accumulated earnings of the Company
or any Participating Affiliate. Notwithstanding the foregoing, the Plan
shall be designated a profit sharing plan for purposes of Code sections
401(a), 402, 412 and 417.
SECTION 5.2. REDUCTION OF EMPLOYER CONTRIBUTIONS BY FORFEITURES.
The amount of an Employer's Contribution shall be reduced by the amount
of the reduction of an unmatched Employer Contribution allocable to a
Highly Compensated Participant as provided in SECTIONS 4.7, 4.8 and 4.9,
by the amount of any forfeiture as a result of termination of the
employment of an Active Participant as provided in SECTION 11.2 or as a
result of the Employer's inability to locate a Participant or beneficiary
to whom a benefit hereunder is due as provided in SECTION 11.12.
SECTION 5.3. MAXIMUM ANNUAL ADDITIONS. The maximum Annual Addition,
as defined in SECTION 12.1, for any Plan Year to any Participant's Account
may not exceed the amount provided for by Code section 415(c). The rules
governing the application of this SECTION 5.3 and other limitations
imposed by Code section 415 are more fully set forth in Article XII.
SECTION 5.4. RETURN OF EMPLOYER CONTRIBUTIONS.
(a) Notwithstanding any provision of the Plan to the contrary,
any Employer Contribution made to the Plan by reason of
mistake of fact may be returned to the Employer making
such Employer Contribution, provided the return of such
Employer Contribution is made within one year from the
date the mistaken payment was made and any amount so
returned shall be disposed of as the Committee shall
direct.
(b) If the Internal Revenue Service determines that any
contribution by an Employer to the Plan is not deductible
under Code section 404, such Employer shall have the
option, which it may exercise within one year after the
date of the disallowance of such deduction, to have such
contribution returned to the Employer and any amount so
returned shall be disposed of as the Committee shall
direct.
ARTICLE VI
THRIFT ACCOUNT INVESTMENTS
SECTION 6.1 INVESTMENT OF DEPOSITS, ROLLOVER CONTRIBUTIONS AND
EMPLOYER CONTRIBUTIONS. Deposits, Rollover Contributions and Employer
Contributions to the Plan shall be invested by the Trustee under the Trust
Agreement in the Funds established pursuant to SECTION 7.1. Upon
enrolling in the Plan, each Participant shall specify, in such form as
shall be prescribed by the Committee, the percentage (which shall be an
integral multiple of 5% - including 0% but not exceeding 100% in the
aggregate) of Deposits and/or Rollover Contributions to his or her Thrif
Account which shall be invested in each of such Funds. Employer
Contributions with respect to Basic Deposits shall be invested by the
Trustee for the Account of the Active Participant in the same Funds and
in the same percentages as directed by such Participant with respect to
the Basic Deposits to his or her Thrift Account.
SECTION 6.2 CHANGE IN INVESTMENT DIRECTION. Any investment
direction given by a Participant under SECTION 6.1 shall continue in
effect until changed by the Participant. A Participant may change any
such direction by giving notice of such change in the form prescribed by
the Committee. Any such change shall become effective as soon as
practicable after receipt of the notice of change by the recordkeeper.
A change in investment direction under this SECTION 6.2 shall not
automatically cause a transfer of investments under SECTION 6.3.
SECTION 6.3 TRANSFER OF INVESTMENTS. A Participant may direct that
all or any part (in integral multiples of 5%) of his or her interest in
any one or more of the Funds be transferred to any one or more of the
other Funds, except that no transfer may be made into a Participant's ESOP
Account. A Participant may also transfer his or her ESOP Account assets
(in 5% integral multiples but not exceeding 100% in the aggregate) into
any one or several of the Funds. However, any transfer from a Fund shall
be subject to such contractual limitations regarding transfers from such
Fund as may exist from time to time under the contracts governing
investments held in such Fund. A direction to transfer all or a portion
of a Participant's interest in a Fund shall be made by giving notice in
the form prescribed by the Committee. Subject to any contractual
limitations that may be applicable, any such transfer shall be made as
soon as practicable after receipt of the notice of such transfer by the
recordkeeper.
SECTION 6.4 LOANS. Participants may receive loans from their Thrift
Accounts under the provisions of SECTION 11.12. A loan to a Participant
shall be considered an investment of such Participant's Thrift Account and
the principal amount of the loan shall be treated as a separate investment
within the various subaccounts. Repayments of the principal amount of the
loan shall reduce such corresponding investments of each such subaccount
in the inverse order of such investment and repayments of such principal
along with any accrued interest thereon shall be invested in the Funds in
accordance with the Participant's then current investment direction. Loan
amounts shall be taken from subaccounts in the following order:
(a) Deferred Deposits;
(b) Unmatured Vested Employer Contributions;
(c) Matured Vested Employer Contributions;
(d) Rollover Contributions;
(e) Unmatured Post-1986 Nondeferred Deposits;
(f) Matured Post-1986 Nondeferred Deposits;
(g) Pre-1987 Nondeferred Deposits.
Loan proceeds shall not be taken from a Participant's ESOP Account.
ARTICLE VII
THRIFT ACCOUNT FUNDS
SECTION 7.1. ESTABLISHMENT OF FUNDS. The following Funds shall be
established exclusively for the collective investment of Trust Fund assets
attributable to Participant Thrift Accounts, as directed by Participants:
(a) One or more "Equities Funds", the assets of which shall
principally be invested, directly or indirectly, in common
stocks of domestic or foreign corporations. To the extent
practicable, no Equities Fund shall invest in Enterprise
Common Stock.
(b) One or more "Fixed Income Funds" the assets of which shall
principally be invested in (i) a general account and/or
separate accounts maintained by an insurance company(ies)
and/or a deposit account(s) in a bank(s) pursuant to an
agreement(s) between the Trustee and such bank(s) or
insurance company(ies) under which each bank or insurance
company agrees to pay a fixed rate of interest for a
specified period of time. The terms of such agreements
and the identity of such banks or insurance companies
shall be determined by the Committee from time to time.
(c) An "Enterprise Common Stock Fund", the assets of which
shall principally be invested in Enterprise Common Stock.
(d) An "Equities Index Fund", the assets of which shall
principally be invested, directly or indirectly, in common
stocks substantially comprising the Standard and Poor's
500 Index.
(e) One or more "Government Obligations Funds", the assets of
which shall principally be invested, directly or
indirectly, in debt obligations issued or guaranteed by
the U. S. Government, its agencies or instrumentalities.
(f) One or more "Balanced Funds", the assets of which shall be
principally invested, directly or indirectly, in a
combination of the common stocks and fixed-income
securities of domestic corporations.
Notwithstanding the foregoing, any or all of the above Funds may be
temporarily maintained in cash, or may be invested directly or indirectly
in certain short-term obligations as permitted by the Trust Agreement.
Dividends, interest and other income in respect of any Fund shall be
reinvested in the same Fund to the extent not used to pay expenses of the
Plan. Withdrawals, distributions and forfeitures, except as otherwise
specified in the Plan, shall be charged pro rata against the various Funds
in which the subaccounts from which such withdrawals, distributions or
forfeitures are then invested.
SECTION 7.2 ENTERPRISE COMMON STOCK FUND.
(a) Enterprise Common Stock purchased for the Enterprise
Common Stock Fund shall be purchased by the Trustee on the
open market or directly from Enterprise should Enterprise
elect to make such sales.
(b) If Enterprise shall elect to sell shares of Enterprise
Common Stock directly to the Plan, the price to be paid by
the Trustee for any such purchases shall be the average of
the high and low sales prices of Enterprise Common Stock
as reported by the New York Stock Exchange on the date of
purchase.
(c) All voting discretion, including the power to decide
whether or not to tender Enterprise Common Stock in
connection with a tender offer, with respect to the shares
of Enterprise Common Stock held under the Enterprise
Common Stock Fund for the Account of a Participant
(whether vested or not vested) shall be vested in the
Trustee. However, the Trustee shall vote all such shares
in accordance with the directions of such Participant.
Within a reasonable time before voting rights are to be
exercised, the Company or the Trustee shall cause to be
sent to each Participant entitled to give voting
instructions all information that Enterprise has or will
distribute to shareholders of Enterprise Common Stock
regarding the exercise of such voting rights. Shares with
respect to which no voting instructions are received shall
not be voted by the Trustee.
(d) If, during the course of the Plan, Enterprise should grant
to the holders of Enterprise Common Stock rights to
subscribe to an issue or issues of securities of
Enterprise, any such rights attaching to the shares of
Enterprise Common Stock held by the Trustee under the
Enterprise Common Stock Fund shall be sold by the Trustee
and the net proceeds applied by the Trustee to the
purchase of Enterprise Common Stock on the open market for
such Fund. Stock dividends on shares held by the
Enterprise Common Stock Fund, and stock issued upon any
split of such shares, shall be credited to such Enterprise
Common Stock Fund.
ARTICLE VIII
THRIFT ACCOUNTS
SECTION 8.1 ESTABLISHMENT OF THRIFT ACCOUNTS. The Committee shall
maintain or cause to be maintained a Thrift Account for each Participant
which shall consist of the following subaccounts: Basic Deposit
Subaccount, Supplemental Deposit Subaccount and Employer Contribution
Subaccount, the assets of which shall be invested pursuant to the
direction of the Participant as provided in Article VI. The assets of
each such subaccount of the Thrift Account shall be identified as to
Nondeferred or Deferred.
SECTION 8.2 MEASURE OF THRIFT ACCOUNTS.
(a) The interests of Participants in the Funds shall be
measured by participating units in the particular Fund,
the number and value of which shall be determined as of
each business day as provided in the next paragraph. Each
participating unit shall have an equal beneficial interest
in the Fund, and none shall have priority or preference
over any other.
(b) As soon as practicable at the end of each business day,
the Trustee shall determine the value of each such Fund as
of such business day in the manner prescribed in SECTION
8.3. The value so determined shall be divided by the
total number of participating units allocated to the
Accounts of Participants participating in such Fund in
accordance with subsection (a) as of the prior business
day. The resulting quotient shall be the value of a
participating unit as of such business day and
participating units shall be allocated, as such value, to
and from the Fund subaccounts of Participants for all
transactions by them or on their behalf with respect to
the current business day.
The value of all participating units allocated to
Participants' Fund subaccounts shall be redetermined in a
similar manner each succeeding business day and
participating units shall be allocated to and from the
Accounts of Participants participating in such Fund at
such value for all transactions with respect to such
business day. Fractional units shall be calculated to
such number of decimal places as shall be determined by
the Committee from time to time.
(c) If a Participant shall direct pursuant to SECTION 6.3
that his or her interest in a Fund or any part thereof
shall be transferred to another Fund or Funds, or if
such Participant's interest in a Fund or any part
thereof is distributed, withdrawn, borrowed or
forfeited under Articles IV or XI, the number of
participating units representing such interest or
portion thereof as of the applicable business day shall
be canceled for purposes of any subsequent
determination of the number of and value of the
participating units in such Fund.
SECTION 8.3 VALUATION OF FUNDS. The value of a Fund as of any
business day shall be the market value of all assets (including any
uninvested cash) held by the Fund as determined by the Trustee, reduced
by the amount of any accrued liabilities of the Fund on such business day
and by Deposits, Rollover Contributions and Employer Contributions with
respect to such business day. The Trustee's determination of market value
shall be binding and conclusive upon all parties.
SECTION 8.4 VALUATION OF THRIFT ACCOUNTS. The value of a
Participant's subaccount for any Fund as of any business day shall be the
value of the participating units allocated to the Participant's subaccount
for such Fund as of such business day. The value of a Participant's
Account as of any business day shall be the aggregate of the values of
such subaccounts, determined as provided in the preceding Sections of this
Article VIII.
SECTION 8.5 SEPARATE ACCOUNTING. The amounts of Deferred Deposits
in a Participant's Thrift Account shall at all times be separately
accounted for from other amounts in such Thrift Account, by allocating
investment gains and losses on Deferred Deposit amounts on a reasonable
pro rata basis and by adjusting the Deferred and other portions of the
subaccounts of a Participant's Thrift Account for withdrawals,
distributions, borrowings and contributions. Gains, losses, withdrawals,
distributions, borrowings, forfeitures and other credits or charges shall
be separately allocated between such Deferred Deposit amounts and other
portions of the subaccounts on a reasonable and consistent basis.
ARTICLE IX
ESOP ACCOUNTS
SECTION 9.1 MAINTENANCE OF SEPARATE ACCOUNTS. Each ESOP Account
shall be maintained on the basis of shares of Enterprise Common Stock
allocated to such ESOP Account, with each ESOP Account being credited with
the number of full and fractional shares of Enterprise Common Stock so
allocated.
SECTION 9.2 ALLOCATION OF DISTRIBUTIONS. Any distributions received
by the Plan with respect to Enterprise Common Stock allocated to a
Participant's ESOP Account shall be allocated to such ESOP Account.
SECTION 9.3 WITHDRAWALS OR TRANSFERS DURING EMPLOYMENT.
(a) Notwithstanding any provision in the Plan to the contrary,
a Participant may withdraw in accordance with Section 11.3
or transfer in accordance with SECTION 6.3, the shares of
Enterprise Common Stock allocated to Participant's ESOP
Account or the cash value thereof.
(b) With respect to an election of a Participant to withdraw
Enterprise Common Stock from Participant's ESOP Account,
the shares of Enterprise Common Stock, or the cash value
at the election of the Participant, shall be distributed
in accordance with Article XI, provided that such
Participant elects to withdraw all full and fractional
shares of Enterprise Common Stock allocated to such ESOP
Account or the cash value thereof. Such distribution
shall be made as soon as practicable after receipt by the
recordkeeper of the Participant's election to withdraw.
(c) With respect to an election of a Participant to transfer
the cash value of all full and fractional shares of
Enterprise Common Stock from the Participant's ESOP
Account to the Participant's Thrift Account, such transfer
shall be made as soon as practicable after receipt by the
recordkeeper of the Participant's election to transfer,
shall be deposited in the Participant's Thrift Account,
shall be invested in one or more (in multiples of 5% up to
an aggregate of 100%) of the Thrift Account Funds as such
Participant shall designate in writing and thereafter
shall be deemed a Rollover Contribution and treated
accordingly. The cash value of each share of Enterprise
Common Stock so transferred shall be equal to the price of
a share of Enterprise Common Stock actually received by
the Trustee.
(d) A Participant may not borrow from his or her ESOP Account.
SECTION 9.4 DIVIDENDS AND OTHER INCOME. Unless otherwise directed
as hereinafter provided, dividends paid in cash with respect to Enterprise
Common Stock allocated to a Participant's ESOP Account shall be
distributed to the Participant as soon thereafter as practicable and, in
any event, not later than 90 days after the close of the Plan Year in
which paid. Enterprise Common Stock delivered to the Trustee pursuant to
a stock dividend, stock split or reorganization, shall be allocated to the
ESOP Account of Participants in that proportion which the shares of each
Participant's ESOP Account bears to the total shares of all Participants'
ESOP Accounts.
SECTION 9.5 VOTING OF ESOP ACCOUNT COMMON STOCK. As provided in
SECTION 7.2 with respect to the Enterprise Common Stock Fund, all voting
discretion with respect to stock held in a Participant's ESOP Account,
including the power to decide whether or not to tender Enterprise Common
Stock in connection with a tender offer, shall be vested in the Trustee.
Each Participant shall be entitled to direct the Trustee as to the manner
in which voting rights attributable to Enterprise Common Stock (including
fractional shares or fractional rights to shares) allocated to such
Participant's ESOP Account are to be exercised. Within a reasonable time
before voting rights are to be exercised, the Trustee or the Company shall
cause to be sent to each Participant entitled to give voting instructions
all information that Enterprise has or will distribute to shareholders of
Enterprise Common Stock regarding the exercise of such voting rights. Such
voting rights shall be exercised by the Trustee but only to the extent
directed by a Participant. Shares with respect to which no voting
instructions are received shall not be voted by the Trustee.
ARTICLE X
VESTING
SECTION 10.1 VESTING OF EMPLOYER CONTRIBUTIONS.
(a) Upon completion of five Years of Service, a Participant
shall have a 100% vested interest in his or her Thrift
Account attributable to Employer Contributions made on
behalf of such Participant during any Plan Year. In
addition, if a Participant is eligible for Retirement,
suffers a Disability, is Laid Off or dies, such
Participant shall have a 100% vested interest in his or
her Thrift Account attributable to Employer Contributions
for all Plan Years.
(b) For purposes of determining Years of Service, a
Participant shall not be considered to have interrupted
his or her continuous service as a result of a leave of
absence or as a result of a termination of employment;
provided, however, that the periods of absence from
employment for these reasons shall not be counted toward
Years of Service for vesting purposes.
SECTION 10.2 VESTING OF DEPOSITS, ROLLOVER CONTRIBUTIONS AND THE
ESOP ACCOUNT. A Participant's interest in his or her Thrift Account
attributable to Deposits and Rollover Contributions for all Plan Years and
in his or her ESOP Account shall be 100% vested at all times.
ARTICLE XI
ACCOUNT DISTRIBUTIONS AND WITHDRAWALS
SECTION 11.1 DISTRIBUTION UPON RETIREMENT, DISABILITY, LAY OFF OR
DEATH. If a Participant
(a) terminates employment on account of Retirement or
Disability;
(b) is Laid Off; or
(c) dies, then, in that event, the Participant's Thrift
Account, determined as of the business day coinciding with
or next following the date of the last Deposit made by or
which would have been made on behalf of such Participant,
together with the Participant's ESOP Account, shall:
(1) if the value of such Account as so determined is $3,500 or
less, be distributed, subject to the provisions of SECTION
11.9(c), as soon as practicable to the Participant, or in
the case of death of the Participant, to the Participant's
beneficiary as determined in accordance with Article XIV
or, if none, to the Participant's estate; or
(2) if the value of such Account as so determined shall exceed
$3,500, be distributed upon the earliest of the
Participant's attainment of age 65, the death of such
Participant or the receipt by the recordkeeper of an
application for distribution in a form prescribed by the
Committee. Provided, however, that a Participant may, by
application to the recordkeeper made prior to the date the
Participant attains age 65, defer distribution to any date
up to such Participant's Required Beginning Date.
SECTION 11.2 DISTRIBUTION UPON OTHER TERMINATION OF EMPLOYMENT. Upon
Termination of a Participant's employment with an Employer or for reasons
other than Retirement, Disability, Lay Off or death, the vested portion
of the Participant's Account, determined as of the business day coinciding
with or next following the date of the last Deposit made by or which would
have been made on behalf of such Participant, or, if none, the business
day coinciding with or next following the date of termination, shall:
(a) if the value of such Account as so determined is $3,500 or
less, be distributed, subject to the provisions of SECTION
11.9(c), as soon as practicable to the Participant, or, in
the case of death of the Participant after termination of
employment but prior to such distribution, to the
Participant's beneficiary, or, if none, to the
Participant's estate; or
(b) if the value of such Account as so determined shall exceed
$3,500, be distributed upon the earliest of the
Participant's attainment of age 65, the death of the
Participant or the receipt by the recordkeeper of an
application for distribution in a form prescribed by the
Committee. Provided, however, that a Participant may, by
application to the recordkeeper made prior to the date the
Participant attains age 65, defer distribution to any date
up to such Participant's Required Beginning Date.
The nonvested portion of the Participant's Account, determined as of
the date of termination, shall be forfeited and shall be applied
thereafter to reduce a subsequent contribution or contributions of the
Employer as provided in SECTION 5.2. If such former Participant is
rehired by an Employer on or before the end of and is employed by an
Employer at the end of the fifth Plan Year after the Plan Year in which
such termination occurred, then such nonvested portion of the
Participant's Account shall be reinstated by the Employer and the
Participant's right thereto shall be determined as if the Participant had
not terminated employment, provided that the Participant repays to the
Plan the amount of any distribution paid to him or her on account of the
termination of employment.
Any Participant who receives a distribution under this SECTION 11.2
shall be prohibited from participating in the Plan for the period of three
months following such distribution.
SECTION 11.3 WITHDRAWAL OF NONDEFERRED DEPOSITS AND EMPLOYER
CONTRIBUTIONS DURING EMPLOYMENT.
(a) A Participant may, by application to the recordkeeper in
the form prescribed by the Committee, request to withdraw
from the Plan any or all of his or her Nondeferred
Deposits and earnings thereon and Vested Employer
Contributions as well as earnings thereon; provided,
however, that the amount withdrawn shall be at least $200,
unless such withdrawal is of 100% of the value of such
Participant's Thrift Account. A Participant who makes
such a withdrawal may not make a further withdrawal from
his or her Thrift Account for a period of at least six
months, except as provided in SECTION 11.5.
(b) If a withdrawal includes Deposits that are not Matured, in
addition to the prohibition on future withdrawals
contained in (a) above, Employer Contributions with
respect to such Participant shall be suspended for a
period of three months.
(c) Withdrawals shall be taken from a Participant's Thrift
Plan subaccounts in the following order:
(1) Pre-1987 Nondeferred Deposits;
(2) Matured Post-1986 Nondeferred Deposits and earnings
thereon;
(3) Earnings on pre-1987 Nondeferred Deposits;
(4) Matured Vested Employer Contributions and earnings
thereon;
(5) Unmatured Post-1986 Nondeferred Deposits and earnings
thereon;
(6) Unmatured Vested Employer Contributions and earnings
thereon.
(d) Any withdrawal made by a Participant pursuant to this
SECTION 11.3 shall be made from all Funds in which the
Nondeferred Deposits and Employer Contributions by or on
behalf of such Participant are invested and shall be
charged pro rata against such subaccounts in the
Participant's Thrift Account.
(e) The amount of any withdrawal made by a Participant
pursuant to this SECTION 11.3 shall be determined as of
the close of the business day on which the notice of
withdrawal is received by the recordkeeper.
SECTION 11.4 WITHDRAWALS OF DEFERRED DEPOSITS DURING EMPLOYMENT
AFTER AGE 59 1/2. A Participant over the age 59 1/2 may withdraw all or
a portion of the value of his or her Thrift Account attributable to the
Deferred Deposits. The value of such Deferred Deposits for the purpose
of such withdrawal shall be determined as of the close of the business day
in which the notice of withdrawal is received by the recordkeeper. The
minimum withdrawal permitted shall be $200, unless such withdrawal is 100%
of the current value of the Deferred portion of a Participant's Thrift
Account. A Participant who makes such a withdrawal may not make any
further withdrawal from his or her Thrift Account for a period of at least
six months, except as provided in SECTION 11.5.
SECTION 11.5 HARDSHIP WITHDRAWALS.
(a) Upon the application of any Participant, or his or her
legal representative, the Committee, in accordance with a
uniform nondiscriminatory policy, shall permit such
Participant to withdraw such portion of the value of his
or her vested Thrift Account as deemed to be necessary for
the purpose of:
(1) Expenses for medical care described in Code section
213(d) previously incurred by the Participant, the
Participant's spouse, or any dependents (as defined
in Code section 152) of the Participant or necessary
for these persons to obtain medical care described in
Code section 213(d);
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence of the
Participant;
(3) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for
the Participant, the Participant's spouse, children,
or any dependents (as defined in Code section 152) of
the Participant; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or
foreclosure on the mortgage of the Participant's
principal residence.
(b) A Participant or legal representative making application under
this SECTION 11.5 shall have the burden of presenting to the
Committee satisfactory proof of such need. The Committee shall
not permit withdrawal under this Section without first receiving
such proof as it shall deem necessary to demonstrate such
hardship.
(c) The amount which may be withdrawn shall be withdrawn, as
necessary, in the following order:
(1) Nondeferred Deposits together with vested Employer
Contributions, in the order prescribed by SECTION
11.3, but without regard to the limitations on
withdrawals of SECTION 11.3;
(2) Deferred Supplemental Deposits; and
(3) Deferred Basic Deposits.
(d) A withdrawal will be deemed to be necessary to satisfy an
immediate and heavy financial need of a Participant if all
of the following requirements are satisfied:
(1) The withdrawal is not in excess of the amount of the
immediate and heavy financial need of the
Participant,
(2) The Participant has obtained all distributions, other
than hardship withdrawals, and all nontaxable loans
currently available under all plans maintained by his
or her Employer,
(3) The Participant is prohibited under the terms of the
Plan or an otherwise legally enforceable agreement
from making elective contributions and employee
contributions to the Plan and all other plans
maintained by the Company or an Affiliate for at
least 12 months after receipt of the hardship
withdrawal, and
(4) The Plan and all other plans maintained by the
Employer, provide that the Participant may not make
elective contributions for the Participant's taxable
year immediately following the taxable year of the
hardship withdrawal in excess of the applicable limit
under Code section 402(g) for such next taxable year
less the amount of such Participant's elective
contributions for the taxable year of the hardship
withdrawal. A Participant shall not fail to be
treated as an eligible Participant for purposes of
paragraph (b) of this Section merely because he is
suspended in accordance with this provision.
(e) If a Participant shall make a withdrawal pursuant to this
SECTION 11.5, then
(1) the Participant shall not be permitted to make
Deposits (including Additional Lump Sum Deposits) to
the Plan during the one year period beginning on the
date of receipt of such withdrawal; and
(2) a Participant's Deferred Deposits for the
Participant's taxable year next following the taxable
year of the hardship withdrawal may not exceed the
limit established under Code section 402(g) less the
amount of Deferred Deposits made by the Participant
in the year of such withdrawal.
(f) Amounts available for hardship withdrawals with respect to
Deferred Deposits will be limited to the amount of a
Participant's Deferred Deposits, plus earnings allocable
thereto which were credited to Participant's Accounts as
of December 31, 1988, less the amount of any previous
hardship withdrawals.
(g) A hardship withdrawal from the Thrift Account shall not be
permitted unless and until a Participant has withdrawn,
pursuant to SECTION 9.3, all Enterprise Common Stock from
his or her ESOP Account.
(h) The hardship withdrawal shall be paid to the Participant
in the amount approved as soon as practicable after his or
her application is approved by the Committee.
SECTION 11.6. SUSPENSION OF PARTICIPATION. If a Participant shall
cease to be an Eligible Employee, Deposits and Employer Contributions to
his or her Thrift Account shall be suspended and no Additional Lump Sum
Deposits shall be permitted to be made during the period of ineligibility.
Distribution of such Participant's Account shall be deferred until such
Participant's termination of employment with an Employer, whereupon the
Participant's Thrift Account shall be distributed in accordance with the
applicable provisions of this Article XI. Such Participant shall continue
to be deemed a Participant for all purposes other than for Articles IV and
V during such period of ineligibility.
SECTION 11.7 TRANSFER OF EMPLOYMENT. If a Participant shall be
transferred to the employ of an Affiliate which is not an Employer,
distribution of such Participant's Account shall be deferred until the
Participant is no longer in the employ of the Employer or any Affiliate,
whereupon the Participant's Account shall be distributed in accordance with the
applicable provisions of this Article XI. Such transferred Participant shall
continue to be deemed a Participant for all purposes other than for Articles IV
and V during such period of deferral of distribution.
SECTION 11.8 FORM OF DISTRIBUTIONS.
(a) All distributions from the Plan shall be made in money by
check, except that in the case of a lump sum distribution
only, other than a hardship withdrawal in accordance with
SECTION 11.5, a Participant may, by notice to the
recordkeeper in the form prescribed by the Committee,
elect to have any whole shares of Enterprise Common Stock
held for such Participant's Enterprise Common Stock Fund
subaccount and/or ESOP Account distributed in shares of
Enterprise Common Stock. The value of any fractional
shares shall be paid in money by check. Such an election
may be made at any time prior to the distribution under
SECTION 11.1 and 11.2 or prior to receipt by the
recordkeeper of the notice of withdrawal in the case of a
distribution under SECTION 11.3. If no such election is
made, the entire value of the amount of the Participant's
Account being distributed shall be distributed in money by
check.
(b) All distributions from the Plan shall be made in one lump
sum, except that in the case of a distribution from a
Participant's Account on account of a Participant's
Retirement, such Participant may elect to have his or her
Account, including the ESOP Account, which is to be
transferred into one of the Thrift Account Funds,
distributed in annual or quarterly payments in money by
check by the Trustee in amounts as nearly equal as
possible for a specified number of years up to ten years.
Each payment shall be an amount equal to the Participant's
Thrift Account as of the applicable date divided by the
number of payments remaining. No installment election
shall be available to a Participant unless, based on the
business day coinciding with or next following his or her
election to receive distribution in installments, such
Participant would be entitled to receive a first annual
payment of not less than $1,000 or a first quarterly
payment of not less than $250. If a Participant shall die
prior to complete distribution of his or her Thrift
Account pursuant to this subparagraph (b), the value of
the Participant's Thrift Account shall be distributed as
soon as practicable in a lump sum to the Participant's
beneficiary, or, if none, to the Participant's estate.
The amount so distributed after a Participant's death
shall be the remaining value of Participant's Thrift
Account determined as of the business day coinciding with
or next following the date of the Participant's death.
(c) If no election is made under subparagraph (b) above, and
the value of a Participant's Thrift Account, when
aggregated with the value of any ESOP Account of the
Participant, determined in accordance with Article IX,
exceeds $3,500, a distribution will be made in one lump
sum at the time provided for in SECTION 11.1, except as
otherwise provided in SECTION 11.5.
(d) Anything to the contrary notwithstanding, any Thrift
Account distribution to be made to a Participant under
subparagraph (b) above shall be made in such a manner that
the present value of the payments to be made to the
Participant during his or her life expectancy are
calculated to be more than 50% of the present value of the
total payments to be made to the Participant and any
beneficiaries.
SECTION 11.9 TIME OF DISTRIBUTIONS.
(a) All distributions from the Plan shall commence as soon as
practicable, and in any event no later than 60 days after
the close of the Plan Year in which the Participant
terminates employment, or, if applicable, requests
distribution under SECTION 11.1 and 11.2, or 60 days after
the close of the Plan Year in which the Participant elects
to withdraw funds from the Plan in the case of
distributions under SECTIONS 9.3, 9.4, 11.3, and 11.4.
(b) In the case of a distribution over a period of years under
subparagraph (b) of SECTION 11.8, the initial payment
shall be made at a time determined in accordance with
subparagraph (a) of this SECTION 11.9. In the case of
annual distributions, the remaining annual payments shall
be made in successive calendar years on such date each
year as shall be determined by the Committee, subject to
the provisions of subparagraph (b) of SECTION 11.8 in the
case of the Participant's death. In the case of quarterly
distributions, the remaining payments shall be made each
successive three month period on such day during the
period as may be established by the Committee, subject to
the provisions of subparagraph (b) of SECTION 11.8 in the
case of the Participant's death.
(c) In the case of a distribution on account of a
Participant's Retirement, subject to the provisions of
subsection 11.10, the Participant may elect to have his or
her Account distributed as a lump sum during (1) the Plan
Year next following the Plan Year of his or her Retirement
or (2) the next succeeding Plan Year thereafter or (3) if
the Account value exceeds $3,500, at any time up to the
Participant's Required Beginning Date. If no such
election is made, distribution shall commence in
accordance with SECTION 11.1 and subparagraph (a) above.
SECTION 11.10 LIMITATION ON POST AGE 70 1/2 DISTRIBUTIONS.
Notwithstanding the provisions of SECTIONS 11.8 and 11.9:
(a) the entire interest of a Participant must:
(1) be distributed not later than the Participant's
Required Beginning Date, or,
(2) commence no later than such Required Beginning Date and be
payable in accordance with regulations under the Code over a
period not extending beyond the life expectancy of such
Participant.
(b) If a Participant dies before his or her entire interest
has been distributed, then such entire interest (or the
remaining part of such interest if distribution thereof
has commenced) shall be distributed within five years
after the Participant's death, and, if distribution has
commenced prior to death, shall be distributed at least as
rapidly as the method of distribution being used as of the
date of such Participant's death.
(c) The amount of the distribution required by this SECTION
11.10 is to be determined by Treasury Regulations SECTION
1.72-9, Table V using the attained age of the Participant
as provided in regulations without recalculation of the
life expectancy. Distribution will be made in accordance
with the regulations under Code section 401(a)(9),
including the minimum distribution incidental death
benefit requirement of section 1.401(a)(9)-2, and such
regulations shall override any inconsistent Plan
provisions.
SECTION 11.11 DISTRIBUTION IN THE CASE OF CERTAIN DISABILITIES. In
the event that the Committee shall find that any person entitled to a
distribution under the Plan is unable to care for his or her affairs
because of illness or accident or because the person is a minor or has
died, the Committee may direct that any distribution due such person,
unless claim shall have been made therefor by a duly appointed legal
representative, be paid or applied to or for the benefit of such person,
or his or her spouse, any child of such person (including an adopted
child), any parent or other blood relative of such person, or a person
with whom the person resides, or any of them, and any such payment or
application so made shall be a complete discharge of the liabilities of
the Plan therefore.
SECTION 11.12 LOANS.
(a) The Committee shall have complete authority to establish
and administer a loan program to provide loans to
Participants. The loan program shall be contained in a
separate written document which shall constitute part of
the Plan, and shall include the following:
(1) A procedure for applying for loans;
(2) The basis on which loans will be approved or denied;
(3) Limitations (if any) on the types and amounts of
loans offered;
(4) The procedure under the loan program for determining
a reasonable rate of interest;
(5) The types of collateral which may secure a loan; and
(6) The events constituting default and the steps that
will be taken to preserve plan assets in the event of
such default.
The rules and applicable limitations established by the loan
program shall be such as to prevent any loan from constituting
a prohibited transaction under Code section 4975 and ERISA
section 406, or a Plan distribution under Code section 72(p).
(b) The Trustee shall, subject to the approval of the Director
and compliance with the written loan program and the
provisions of the Code, lend a Participant, who is
employed by an Employer, an amount up to 50% of the vested
portion of his or her Account, including the ESOP Account,
but not more than $50,000 in the aggregate as of the date
on which the loan is approved reduced by the highest
outstanding loan balance during the preceding twelve
months. However, no amount may be loaned directly from
any ESOP Account. The Director shall review each
application for a loan in a nondiscriminatory manner and
in accordance with such rules as may be prescribed by the
Committee. Loans, if approved, shall be made as soon
thereafter as practicable.
(c) In addition to such rules and regulations as the Committee
may adopt, all loans shall comply with the following terms
and conditions:
(1) An application for a loan by an eligible Participant
shall be made by making application therefor to the
recordkeeper in the form prescribed by the Committee.
(2) An eligible Participant may not apply for more than
one loan in any calendar year nor for a loan with an
initial principal amount of less than $1,000 and, in
any event, may not have more than two (2) loans
outstanding at any one time.
(3) All loans, including interest thereon, shall be repaid by
payroll deduction in equal monthly installments over a
period of 12, 24, 36, 48 or 60 months as selected by the
Participant. Nothing herein, however, shall prohibit a
Participant from prepaying such loan in whole or in part
in a lump sum in accordance with such rules as may be
established from time to time by the Committee.
(4) Each loan shall be secured by an assignment of the
Participant's entire right, title and interest in and to
the Trust Fund to the extent of the loan and accrued
interest thereon and shall be evidenced by the
Participant's promissory note for the amount of the loan,
including interest, payable to the order of the Trustee.
(5) Each loan shall bear interest at a reasonable rate (which
rate may be a variable rate) to be established from time
to time by the Committee, not in violation of any
applicable usury laws. In determining the interest rate,
the Committee shall take into consideration interest rates
being charged by other lenders at the time of such
determination.
(d) No distribution shall be made to any Participant or
beneficiary thereof unless and until all unpaid loans,
including interest thereon, have been repaid.
SECTION 11.13 INABILITY TO LOCATE PAYEE. Any benefit payable to a
Participant or beneficiary shall be forfeited if the Employer, after
reasonable effort, is unable to locate such Participant or beneficiary to
whom payment is due. The amount of any such forfeited benefit shall be
applied to reduce the amount of Employer Contribution required under the
Plan as provided in SECTION 5.3. However, any such forfeited benefit
shall be reinstated and become payable if a claim therefor is made by such
Participant or beneficiary.
SECTION 11.14 FEDERAL INCOME TAX WITHHOLDING ON DISTRIBUTIONS AND
WITHDRAWALS. Distributions and withdrawals under this Plan shall be
subject to Federal income tax withholding as prescribed by Code section
3405 and the regulations thereunder.
ARTICLE XII
LIMITS ON BENEFITS AND CONTRIBUTIONS UNDER QUALIFIED PLANS
SECTION 12.1. DEFINITIONS. For purposes of this Article XII, the
following definitions and rules of interpretation shall apply:
(a) "Annual Additions" to a participant's account under a
defined benefit plan or a defined contribution plan is the
sum, credited to a participant's account for any
Limitation Year, of:
(1) Company contributions,
(2) Forfeitures, if any,
(3) Employee contributions and
(4) Amounts, if any, attributable to medical benefits
allocated to an account established under Code
section 419 A (d)(2) on behalf of such Participant.
(b) "Annual Benefit"
(1) A benefit which is payable annually in the form of a
straight life annuity under a defined benefit plan.
Such benefit does not include any benefits
attributable to either employee contributions or
rollover contributions. If the defined benefit plan
provides for a benefit which is not payable in the
form of a straight life annuity, the benefit is
adjusted in accordance with SECTION 12.1(b)(5) below.
(2) Where a defined benefit plan provides for mandatory
employee contributions (as defined in Code section
411(c)(2)(C)), the Annual Benefit attributable to
such contributions is not taken into account. The
Annual Benefit attributable to mandatory
contributions is determined by using the factors
described in Code section 411(c)(2)(B) and the
regulations thereunder. However, mandatory employee
contributions and any voluntary employee
contributions are all considered a separate defined
contribution plan maintained by the Company.
(3) If rollover contributions are made to a defined
benefit plan, the Annual Benefit attributable to
these contributions is determined on the basis of
reasonable actuarial assumptions.
(4) When there is a transfer of assets or liabilities
from one qualified defined benefit plan to another,
the Annual Benefit attributable to the assets
transferred shall not be taken into account by the
transferee plan in applying the limitations of Code
section 415. The Annual Benefit payable on account
of the transfer for any individual that is
attributable to the assets transferred will be equal
to the Annual Benefit transferred on behalf of such
individual multiplied by a fraction, the numerator of
which is the total assets transferred and the
denominator of which is the total liabilities
transferred.
(5) If a defined benefit plan provides a retirement
benefit in any form other than a straight life
annuity, the plan benefit is adjusted to a straight
life annuity beginning at the same age which is the
actuarial equivalent of such benefit in accordance
with the rules determined by the Commissioner.
However, the following values are not taken into
account:
(i) The value of a qualified joint and survivor
annuity (as defined in Code section 417 and the
regulations thereunder) provided by the plan to
the extent that such value exceeds the sum of
(A) the value of a straight life annuity
beginning on the same date and
(B) the value of any post-retirement death
benefits which would be payable even if
the annuity was not in the form of a joint
and survivor annuity.
(ii) The value of benefits that are not directly related
to retirement benefits (such as pre-retirement
disability and death benefits and post-retirement
medical benefits).
(iii) The value of benefits provided by the plan which
reflect post-retirement cost of living increases
to the extent that such increases are in
accordance with Code section 415(d) and the
regulations thereunder.
(6) Where a defined benefit plan provides a retirement
benefit beginning before a participant has attained
the Social Security Retirement Age, the plan benefit
shall, in accordance with rules determined by the
Commissioner, be adjusted to the actuarial equivalent
of a benefit commencing at the Social Security
Retirement Age. This adjustment is only for purposes
of applying the dollar limitation described in Code
section 415(b)(1)(A) and Section 12.1(f)(1) to the
Annual Benefit of the participant.
(7) Where a participant has less than 10 Years of Service
with the Company at the time the Participant begins
to receive retirement benefits under the defined
benefit plan, the benefit limitations described in
Code sections 415(b)(1)(B) and 415(b)(4) and Section
12.1(f)(2) are to be reduced by multiplying the
otherwise applicable limitation by a fraction:
(i) the numerator which is the Years of Service (and
fractions thereof) with the Company as of, and
including the current Limitation Year, and
(ii) the denominator of which is 10.
The preceding sentence shall also apply for purposes
of reducing the benefit limitation described in Code
section 415(b)(1)(A) and SECTION 12.1(f)(1), by
substituting years of participation for Years of
Service wherever it appears in such sentence.
(iii) If the retirement benefit under a defined
benefit plan begins after the Participant has
attained the Social Security Retirement Age, the
determination as to whether the Maximum
Permissible Defined Benefit Amount limitation
has been satisfied shall be made in accordance
with regulations prescribed by the Commissioner
by adjusting such benefit so that it is
actuarially equivalent to such a benefit
beginning at the Social Security Retirement Age.
This adjustment is only for purposes of applying the
limitation described in Code section 415(b)(1)(A)
and SECTION 12.1(f)(1) to the Annual Benefit of the
participant.
(8) The Annual Benefit to which a participant is entitled
at any time under all defined benefit plans
maintained by the Company shall not, during the
Limitation Year, exceed the Maximum Permissible
Defined Benefit Amount.
(9) In determining the actuarial equivalency for purposes
of SECTIONS 12.1(b)(5), 12.1(b)(6) and 12.1(b)(8)
above, the interest rate shall be 5%.
(c) "Company" shall mean the Company, as described in SECTION
2.11 and any Affiliate as defined in SECTION 2.4.
(d) "Compensation" with respect to a Limitation Year -
(1) includes amounts paid to a Participant (regardless of
whether he or she was such during the entire
Limitation Year);
(i) as wages, salaries, fees for professional
services and other amounts received (without
regard to whether or not an amount is paid in
cash) for personal services actually rendered in
the course of employment with any Company
including but not limited to commissions,
compensation for services on the basis of a
percentage of profits, fringe benefits,
reimbursements and other expense allowances
under nonaccountable plans (as described in
Treasury Regulation 1.b2-2(c)) and bonuses;
(ii) for purposes of (A) above, earned income from
sources from outside the United States (as
defined in Code section 911(b)), whether or not
excludable from gross income under Code section
911 or deductible under Code sections 931 and
933;
(iii) amounts described in Code sections 104(a)(3),
105(a) and 105(h) but only to the extent that
these amounts are includable in the gross income
of the Participant;
(iv) in the case of an employee within the meaning of
Code section 401(c)(1) and the regulations
thereunder, the Participant's earned income (as
described in Code section 401(c)(2) and the
regulations thereunder);
(iv) amounts paid or reimbursed by the Company for
moving expenses incurred by the Participant, but
only to the extent that these amounts are not
deductible by the Participant under Code section
217.
(v) The value of a nonqualified stock option granted
to a Participant by a Company, but only to the
extent that the value of the option is
includable in the gross income of the
Participant for the taxable year in which
granted.
(vi) The amount includable in the gross income of a
Participant upon making the election described
in Code section 83(b).
(2) Compensation does not include -
(i) notwithstanding subsection (1)(A) of this
SECTION 12.1(d), there shall be excluded from
Compensation amounts contributed to a plan
qualified under section 401(k) of the Code as
salary reduction contributions (and not
recharacterized as employee contributions
thereunder);
(ii) other contributions made by the Company to a
plan of deferred compensation to the extent
that, before the application of the Code section
415 limitations to the plan, the contributions
are not includable in the gross income of the
Participant for the taxable year in which
contributed. In addition, Company contributions
made on behalf of a Participant to a simplified
Participant pension described in Code section
408(k) are not considered as Compensation for
the taxable year in which contributed to the
extent such contributions are deductible by the
Participant under Code section 219(b)(7).
Additionally, any distributions from a plan of
deferred compensation are not considered as
Compensation, regardless of whether such amounts
are includable in the gross income of the
Participant when distributed. However, any
amounts received by a Participant pursuant to an
unfunded nonqualified plan shall be considered
as Compensation in the year such amounts are
includable in the gross income of the
Participant;
(iii) amounts realized from the exercise of a
nonqualified stock option or when restricted
stock (or property) held by a Participant either
becomes freely transferable or is no longer
subject to a substantial risk of forfeiture (see
Code section 83 and the regulations thereunder);
(vi) amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option;
(v) other amounts which receive special tax
benefits, such as premiums for group term life
insurance (but only to the extent that the
premiums are not includable in the gross income
of the Participant);
(e) "Limitation Year" - the Plan Year;
(f) "Maximum Permissible Defined Benefit Amount" - for a
Limitation Year the Maximum Permissible Defined Benefit
Amount with respect to any Participant shall be the lesser
of:
(1) $90,000, or,
(2) 100% of the Participant's average Compensation for
his or her high three consecutive Years of Service,
subject to the following rules:
(i) As of January 1 of each calendar year commencing
with the calendar year 1988, the dollar
limitation set forth in Paragraph (1) above
shall be adjusted automatically to equal the
dollar limitation as determined by the
Commissioner for that calendar year under Code
section 415(d)(1)(A). This adjustment dollar
limitation applies for the Limitation Year
ending with or within the calendar year. It is
applicable to Employees who are Participants in
the Plan and to Employees who have retired or
otherwise terminated their service under the
Plan with a nonforfeitable right to accrued
benefits, regardless of whether they have
actually begun to receive such benefits. The
Annual Benefit payable to a terminated
Participant which is otherwise limited by the
dollar limitation shall be increased to take
into account the adjustment of the dollar
limitation.
(ii) With regard to Participants who have separated
from service with a nonforfeitable right to an
accrued benefit, the compensation limitation
described in paragraph (2) above applicable to
Limitation Years commencing on and after January
1, 1976 shall be adjusted annually to take into
account increases in the cost of living. For
any Limitation Year beginning after the
separation occurs, the adjustment of the
compensation limitation is made as specified in
regulations and rules prescribed by the
Commissioner. In the case of a Participant who
separated from service prior to January 1, 1976,
the cost of living adjustment of the
compensation limitation under this paragraph for
all Limitation Years prior to January 1, 1976,
is to be determined as provided by the
Commissioner.
(iii) Anything herein to the contrary notwithstanding,
in the case of an individual who was a
Participant in the Plan before January 1, 1983,
if such Participant's "current accrued benefit"
(as defined in section 235(g)(4) of the Tax
Equity and Fiscal Responsibility Act of 1982
("TEFRA")) under the Plan as of the close of the
last Limitation Year beginning before January 1,
1983 exceeded the dollar limitation with respect
to such Participant under SECTION 12.1(g)(1)
shall be equal to such current accrued benefit.
(iv) Anything herein to the contrary notwithstanding,
for any individual who was a Participant in the
Plan on January 1, 1987, if such Participant's
"current accrued benefit" under the Plan, as
that term is defined in section 1106(i)(3)(B) of
the Tax Reform Act of 1986, as of the close of
the last Limitation Year beginning before
January 1, 1987 exceeded the limitation
described in SECTION 12.1(f)(1) above, the
dollar limitation with respect to such
Participant under SECTION 12.1(f)(1) shall be
equal to such current accrued benefit.
(g) "Maximum Permissible Defined Contribution Amount" - for a
Limitation Year the Maximum Permissible Defined
Contribution Amount with respect to any Participant shall
be the lesser of:
(1) $30,000, or if greater, one fourth of the limitation
in effect under Code section 415(b)(1)(A) (as
adjusted by Code section 415(d)(1)(A)).
(2) 25% of the Participant's Compensation for the
Limitation year.
Notwithstanding the foregoing, or anything herein to
the contrary, the percentage of compensation
limitation of this SECTION 12.1(g)(2) shall not apply
to any Annual Additions pursuant to SECTION
12.1(a)(4) above.
(h) "Projected Annual Benefit" - the Annual Benefit to which
a Participant would be entitled under the Plan on the
assumption that he or she continues employment until the
normal retirement age (or current age, if that is later)
thereunder, that his or her Compensation continues at the
same rate as in effect for the Limitation Year under
consideration until such age, and that all other relevant
factors used to determine benefits under the Plan remain
constant as of the current Limitation Year for all future
Limitation Years;
(i) "Social Security Retirement Age" - the age used as the
retirement age under Social Security Act section 216(1)
except that such section shall be applied:
(1) without regard to the age increase factor, and,
(2) as if the early retirement age under Social Security
Act section 216(1)(2) were 62.
(j) For purposes of applying the limitations of Code sections
415(b), (c) and (e) to a Participant for a particular
Limitation Year, all qualified defined benefit plans
(without regard to whether a plan has been terminated)
ever maintained by the Company will be treated as one
defined benefit plan and all qualified defined
contribution plans (without regard to whether a plan has
been terminated) ever maintained by the Company will be
treated as part of this Plan.
SECTION 12.2 ANNUAL ADDITION LIMITS. The amount of the Annual
Addition which may be credited under this Plan to any Participant's
Account as of any allocation date shall not exceed the Maximum Permissible
Defined Contribution Amount (based upon his or her Compensation up to such
allocation date) reduced by the sum of any credits of Annual Additions
made to the Participant's Account under all defined contribution plans as
of any preceding allocation date within the Limitation Year. If an
allocation date of this Plan coincides with an allocation date of any
other qualified defined contribution plan maintained by the Company, the
amount of the Annual Additions which may be credited under this Plan to
any Participant's Account as of such date shall be an amount equal to the
product of the amount to be credited under this Plan without regard to
this SECTION 12.2 multiplied by the lesser of one or a fraction, the
numerator of which is the amount described in this SECTION 12.2 during the
Limitation Year and the denominator of which is the amount that would be
otherwise credited on this allocation date under all defined contribution
plans without regard to this Section 12.2. However, if a security is not
allocated to a Participant's Account under any qualified tax credit
employee stock ownership plan of the Company because of the operation of
the limitations of Code section 415 and the provisions of this SECTION
12.2, no other amount may be allocated to the Participant's Account under
this Plan after the allocation date for such tax credit employee stock
ownership plan's plan year, until all such unallocated securities have
been allocated in accordance with the provisions of such tax credit
employee stock ownership plan. If contributions to this Plan on behalf
of a Participant are to be reduced as a result of this SECTION 12.2, such
reduction shall be effected by reducing contributions in the following
order: Supplemental Nondeferred Deposits, Basic Nondeferred Deposits and
corresponding matching Company Contributions, Supplemental Deferred
Deposits and finally, if necessary, Basic Deferred Deposits and
corresponding remaining matching Company Contributions. If, as a result
of a reasonable error in estimating a Participant's Compensation, or under
the limited facts and circumstances which the Commissioner finds justify
the availability of the rules set forth in paragraphs (a)-(c) of this
SECTION 12.2, the allocation of Annual Additions under the terms of the
Plan for a particular Participant would cause the limitations of Code
section 415 applicable to that Participant for the Limitation Year to be
exceeded, the excess amounts shall not be deemed to be Annual Additions
in that Limitation Year if they are treated as follows:
(a) To the extent necessary, Deferred Deposits to the Plan
shall be recharacterized as Nondeferred Deposits and the
Participant's Nondeferred Deposits to the Plan (including
Deferred Deposits recharacterized as Nondeferred Deposits
hereunder) and earnings thereon shall be returned to the
Participant.
(b) The excess amounts in the Participant's Account consisting
of Company Contributions shall be used to reduce Company
Contributions for the next Limitation Year (and succeeding
Limitation Years, as necessary) for that Participant if
that Participant is covered by the Plan as of the end of
the Limitation Year. However, if that Participant is not
covered by the Plan as of the end of the Limitation Year
then the excess amounts must be held unallocated in a
suspense account for the Limitation Year and allocated and
reallocated in the next Limitation Year to all of the
remaining Participants in the Plan. If a suspense account
is in existence at any time during a particular Limitation
Year, other than the first Limitation Year described in
the preceding sentence, all amounts in the suspense
account must be allocated and reallocated to Participants'
Accounts (subject to the limitations of Code section 415)
before any Company Contributions, may be made to the Plan
for that Limitation Year. Furthermore, the excess amounts
must be used to reduce Company Contributions for the next
Limitation Year (and succeeding Limitation Years, as
necessary) for all of the remaining Participants in the
Plan. For purposes of this subdivision, except as
provided in (a) of this Section 12.2, excess amounts may
not be distributed to Participants or former Participants.
(c) In the event of a termination of the Plan, the suspense
account described in (b) of this SECTION 12.2 shall
revert to the Company to the extent it may not then be
allocated to any Participant's Account.
(d) Notwithstanding any other provision in this SECTION 12.2,
the Company shall not contribute any amount that would
cause an allocation to the suspense account as of the
date the contribution is allocated. If the contribution
is made prior to the date as of which it is to be
allocated, then such contribution shall not exceed an
amount that would cause an allocation to the suspense
account if the date of contribution were an allocation
date.
SECTION 12.3 OVERALL LIMIT. For any Participant of this Plan who
at any time participated in a defined benefit plan maintained by the
Company, the rate of benefit accrual by such Participant in each defined
benefit plan in which the Participant participates during the Limitation
Year will be reduced to the extent necessary to prevent the sum of the
following fractions, computed as of the close of the Limitation Year,
from exceeding 1.0:
(a) DEFINED BENEFIT PLAN FRACTION. Projected Annual Benefit
of the Participant under all defined benefit plans
divided by: the lesser of (1) the product of 1.25,
multiplied by the dollar limitation in effect under Code
section 415(b)(1)(A) for such Limitation Year, or (2) the
product of 1.4 multiplied by the amount which may be
taken into account under Code section 415(b)(1)(B) with
respect to such Participant for such Limitation Year.
and
(b) DEFINED CONTRIBUTION PLAN FRACTION. Sum of Annual
Additions to such Participant's Account under all defined
contribution plans in such Limitation Year and for all
prior Limitation Years divided by: the sum of the lesser
of the following amounts determined for such year and for
each prior Year of Service with the Company: (1) the
product of 1.25, multiplied by the dollar limitation in
effect under Code section 415(c)(1)(A) for such
Limitation Year, or (2) the product of (a) 1.4,
multiplied by (b) 25% of the Participant's Compensation
for such Limitation Year.
SECTION 12.4 SPECIAL RULES.
(a) For purposes of applying the Defined Contribution Plan
Fraction in Section 12.3 for any Limitation Year
beginning after December 31, 1975 to Limitation Years
before January 1, 1976, the aggregate amount taken into
account in determining the numerator of such fraction is
deemed not to exceed the aggregate amount taken into
account in determining the denominator of the fraction.
(b) In any case where the sum of the fractions in SECTION
12.3 is greater than 1.0, calculated as of the close of
the last Limitation Year beginning before January 1, 1983
for a Participant, in accordance with regulations
prescribed by the Commissioner pursuant to TEFRA section
235(g)(3), an amount shall be subtracted from the
numerator of the defined contribution plan fraction so
that the sum of such fractions does not exceed 1.0 for
such Limitation Year.
(c) If the sum of the fractions in SECTION 12.3 would exceed
1.0, calculated as of the close of the last Limitation
Year beginning before January 1, 1987 for a Participant,
in accordance with regulations prescribed by the
Commissioner pursuant to section 1106(i)(4) of the Tax
Reform Act of 1986, an amount shall be subtracted from
the numerator of the defined contribution plan fraction
(not exceeding such numerator) so that the sum of such
fractions does not exceed 1.0. This numerator, as
adjusted herein, will be used for the calculation of the
defined contribution plan fraction for Limitation Years
commencing on or after January 1, 1987.
ARTICLE XIII
TOP-HEAVY REQUIREMENTS
SECTION 13.1 DEFINITIONS. For purposes of this Article XIII, the
following definitions shall apply, to be interpreted in accordance with
the provisions of Code section 416 and the regulations thereunder:
(a) "Aggregation Group" shall mean a plan or group of plans
which includes all plans maintained by the Employers in
which a Key Employee is a Participant or which enables
any plan in which a Key Employee is a Participant to meet
the requirements of Code section 401(a)(4) or Code
section 410, as well as all other plans selected by the
Company for permissive aggregation inclusion of which
would not prevent the group of plans from continuing to
meet the requirements of such Code sections.
(b) "Compensation" with respect to a Plan Year shall be as
defined in Section XII without regard to SECTION
12.1(d)(2)(A).
(c) "Determination Date" shall mean, with respect to any Plan
Year,
(1) the last day of the preceding Plan Year, or,
(2) in the case of the first Plan Year of any Plan, the
last day of such Plan Year.
(d) "Employee" shall mean, for purposes of this Article XIII,
any person employed by an Employer and shall also include
any beneficiary of such person, provided that the
requirements of Sections 13.3, 13.4 and 13.5 shall not
apply to any person included in a unit of Employees
covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement between
Employee representatives and one or more Employers if
there is evidence that retirement benefits were the
subject of good faith bargaining between such Employee
representatives and such Employer or Employers.
(e) "Employer" shall mean, any corporation which is a member
of a controlled group of corporations (as defined in Code
section 414(b)) which includes the Company or any trades
or business (whether or not incorporated) which are under
common control (as defined in Code section 414(c)) with
the Company, or a member of an affiliated service group
(as defined in Code section 414(m)) which includes the
Company.
(f) "Key Employee" shall mean, any Employee or former
Employee who is, at any time during the Plan Year, or
was, during any one of the four preceding Plan Years any
one or more of the following:
(1) An officer of an Employer having an annual
Compensation greater than 50% of the amount in
effect under Code section 415(b)(1)(A) for any Plan
Year unless 50 other such officers (or, if lesser,
a number of such officers equal to the greater of
three or 10% of the Employees) have higher annual
Compensation.
(2) One of the 10 persons employed by an Employer having
annual Compensation greater than the limitation in
effect under Code section 415(c)(1)(A) for any Plan
Year, and owning (or considered as owning within the
meaning of Code section 318) the largest interests
in the Employers. For purposes of this paragraph
(2), if two Employees have the same interest, the
one with the greater Compensation shall be treated
as owning the larger interest.
(3) Any person owning (or considered as owning within
the meaning of Code section 318) more than 5% of the
outstanding stock of an Employer or stock possessing
more than 5% of the total combined voting power of
such stock.
(4) A person who would be described in paragraph (3)
above if "1%" were substituted for "5%" each place
it appears in paragraph (3) above, and who has
annual Compensation of more than $150,000. For
purposes of determining ownership under this Section
13.11(f), Code section 318(a)(2)(C) shall be applied
by substituting "5%" for "50%" and the rules of
subsections (b), (c) and (m) of Code section 414
shall not apply.
(g) "Year of Service" shall mean, a year which constitutes a
"Year of Service" under the rules of paragraphs (4), (5)
and (6) of Code section 411(a) to the extent not
inconsistent with the provisions of this Article XIII.
SECTION 13.2 GENERAL REQUIREMENTS. For any Plan Year beginning
after 1983 in which the Plan is a Top-Heavy Plan, the requirements of
this Article XIII must be met in accordance with Code section 416 and the
regulations thereunder. The provisions of this Article XIII shall be
inapplicable unless and until the Plan is a Top-Heavy Plan.
SECTION 13.3 MAXIMUM COMPENSATION. Compensation for any Employee
shall not be taken into account under the Plan in excess of the amount
provided for pursuant to Code section 401(a)(17) and the regulations
thereunder.
SECTION 13.4 VESTING. A Participant who is credited with an Hour
of Service while the Plan is Top-Heavy, or in any Plan Year after a Plan
Year in which the Plan is Top-Heavy, and who has completed at least three
Years of Service shall have a nonforfeitable right to 100% of his or her
accrued benefit derived from Employer Contributions and no such amount
may become forfeitable if the Plan later ceases to be Top-Heavy nor may
such amount be forfeited under the provisions of Code sections
411(a)(3)(B) or 411 (a)(3)(D). Such accrued benefit shall include
benefits accrued before the Plan becomes Top-Heavy, including benefits
accrued prior to January 1, 1984. Notwithstanding any other provisions
of this Plan to the contrary, once the vesting requirements of this
SECTION 13.4 become applicable, they shall remain applicable even if the
Plan later ceases to be Top-Heavy.
SECTION 13.5 MINIMUM CONTRIBUTIONS. Minimum Employer Contributions
for a Participant (not including a beneficiary of any Participant) who
is not a Key Employee shall be required under the Plan for the Plan Year
as follows:
(a) The amount of the minimum contribution shall be the lesser of the
following percentages of Compensation:
(1) four percent, or,
(2) the highest percentage at which such contributions
are made under the Plan for the Plan Year on behalf
of a Key Employee.
(i) For purposes of this paragraph (2), all defined
contribution plans required to be included in
an Aggregation Group shall be treated as one
plan.
(ii) This paragraph (2) shall not apply if the Plan
is required to be included in an Aggregation
Group and the Plan enables a defined benefit
plan required to be included in the Aggregation
Group to meet the requirements of Code sections
401(a)(4) or 410.
(iii) For purposes of this paragraph (2), the
calculation of the percentage at which Employer
Contributions are made for a Key Employee shall
be based only on his or her Compensation not in
excess of maximum counted compensation as
provided in SECTION 13.3.
(b) There shall be disregarded for purposes of this SECTION
13.5, contributions or benefits under Code section 3111,
Title II of the Social Security Act or any other federal
or state law, and for Plan Years beginning before
December 31, 1984, there shall also be disregarded any
contributions attributable to a salary reduction or a
similar arrangement.
(c) For purposes of this SECTION 13.5, the term "Participant"
shall be deemed to refer to all Participants who have not
separated from service at the end of the Plan Year
including, without limitation, individuals who:
(1) failed to complete 1000 Hours of Service during the
Plan Year, or
(2) declined to make mandatory contributions to the
Plan, or
(3) are excluded from the Plan because their
Compensation is less than a stated amount but who
must be considered Participants for the Plan to
satisfy the coverage requirements of Code section
410(b) in accordance with Code section 401(a)(5).
SECTION 13.6 PARTICIPANTS UNDER DEFINED BENEFIT PLANS. If any Plan
Participant other than a Key Employee is also a Participant under a defined
benefit plan of an Employer, then SECTION 13.5(a) shall not apply and the
required minimum annual Employer Contribution for such Participant (not
including a beneficiary of a Participant) under this Plan shall be 7 1/2% of
Compensation, or such lesser amount as may be required to satisfy the
requirements of the Code related to Top-Heavy Plans. Such Employer Contribution
shall be made without regard to the amount of contributions, if any, made to the
Plan on behalf of Key Employees.
SECTION 13.7 SUPER TOP-HEAVY PLANS. If for any Plan Year in which
the Plan is a Top-Heavy Plan it is also a Super Top-Heavy Plan, then for
purposes of the limitations on Employer Contributions and benefits
provided in Code section 415, and SECTION 5.3. and Article XII of the
Plan, the dollar limitations in the defined benefit plan fraction and the
defined contribution plan fraction shall be multiplied by 1.0 rather than
1.25. However, if the application of the provisions of this SECTION 13.7
would cause any Participant to exceed the combined Code section 415
limitations on Employer Contributions and benefits, then the application
of the provisions of this SECTION 13.7 shall be suspended as to such
Participant until such time as he or she no longer exceeds such
limitations as modified by this SECTION 13.7. During the period of such
suspension, there shall be no Employer Contributions, forfeitures or
Non-Deferred Supplemental Deposits allocated to such Participant under this
or any other defined contribution plan of the Employers and there shall
be no accruals for such Participant under any defined benefit plan of the
Employers.
SECTION 13.8 DETERMINATION OF TOP-HEAVINESS. The determination of
whether this Plan is Top-Heavy shall be made as follows:
(a) If the Plan is not required to be included in an
Aggregation Group with other plans, then it shall be Top-Heavy
only if when considered by itself it is a Top-Heavy Plan and it
is not included in a permissive Aggregation Group that is not a
Top-Heavy Group.
(b) If the Plan is required to be included in an Aggregation
Group with other plans, it shall be Top-Heavy only if the
Aggregation Group, including any permissively aggregated
plans is Top-Heavy.
(c) If a plan is not a Top-Heavy Plan and is not required to
be included in an Aggregation Group, then it shall not be
Top-Heavy even if it is permissively aggregated in an
Aggregation Group which is a Top-Heavy Group.
SECTION 13.9 DETERMINATION OF SUPER TOP-HEAVINESS. This Plan shall
be a Super Top-Heavy Plan if it would be a Top-Heavy Plan under the
provisions of SECTION 13.8, but substituting "90%" for "60%" in the ratio
test of SECTION 13.10.
SECTION 13.10 CALCULATION OF TOP-HEAVY RATIOS. A Plan shall be
Top-Heavy and an Aggregation Group shall be a Top-Heavy Group with
respect to any Plan Year as of the Determination Date if the sum as of
the Determination Date of the Cumulative Accrued Benefits and the
Cumulative Accounts of Employees who are Key Employees for the Plan Year
exceeds 60% of a similar sum determined for all Employees, excluding
former Key Employees.
SECTION 13.11 CUMULATIVE ACCOUNTS AND CUMULATIVE ACCRUED BENEFITS.
The Cumulative Accounts and Cumulative Accrued Benefits for any Employee
shall be determined as follows:
(a) "Cumulative Account" shall mean the sum of the amount of
an Employee's Account under a defined contribution plan
(for an unaggregated Plan) or under all defined
contribution plans included in an Aggregation Group (for
aggregated plans) determined as of the most recent plan
valuation date within a 12-month period ending on the
Determination Date, increased by any contributions due
after such valuation date and before Determination Date.
(b) "Cumulative Accrued Benefit" shall mean the sum of the
present value of an Employee's accrued benefits under a
defined benefit plan (for an unaggregated plan) or under
all defined benefit plans included in an Aggregation
Group (for aggregated plans), determined under the
actuarial assumptions set forth in such Plan or Plans, as
of the most recent plan valuation date used by the Plan
actuary within the 12-month period ending on the
Determination Date as if the Employee voluntarily
terminated service as of such valuation date. The
accrued benefit of any Employee who is not a Key Employee
shall be determined under the method used for accrual
purposes for all plans in the Aggregation Group or, if
there is no such method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted
under Code section 411(b)(1)(c).
(c) Accounts and benefits shall be calculated to include all
amounts attributable to both Employer and Employee
contributions but excluding amounts attributable to
voluntary deductible Employee contributions.
(d) Accounts and benefits shall be increased by the aggregate
distributions during the five-year period ending on the
Determination Date made with respect to an Employee under
the Plan or Plans as the case may be or under a
terminated plan which, if it had not been terminated,
would have been required to be included in the
Aggregation Group.
(e) Rollover Contributions and direct plan to plan transfers
shall be handled as follows:
(1) If the transfer is initiated by the Employee and
made from a plan maintained by one employer to a
plan maintained by another employer, the
transferring plan continues to count the amount
transferred under the rules for counting
distributions. The receiving plan does not count
the amount if accepted after December 31, 1983, but
does count it if accepted prior to December 31,
1983.
(2) If the transfer is not initiated by the Employee or
is made between plans maintained by the Employers,
the transferring plan shall no longer count the
amount transferred and the receiving plan shall
count the amount transferred.
(3) For purposes of this subsection (e), all Employers
aggregated under the rules of Code sections 414(b),
(c) and (m) shall be considered a single employer.
(f) For plan years beginning after December 31, 1984, the
accrued benefits and accounts of any Employee who has not
performed services for any Employer at any time during
the five-year period ending on the Determination Date
shall not be taken into account.
ARTICLE XIV
BENEFICIARY IN EVENT OF DEATH
SECTION 14.1 DESIGNATION AND CHANGE OF BENEFICIARY. Upon the death
of a married Participant, the spouse of the Participant shall be deemed
the designated beneficiary of the Participant, unless such spouse has
consented, in writing, to the designation of another beneficiary or
beneficiaries (which may include the estate of the Participant) or any
change thereof. If such other designated beneficiary or beneficiaries
predecease a married Participant, such Participant's spouse shall be
deemed the designated beneficiary of the Participant. If, in such case,
the Participant's spouse has also predeceased the Participant, the
Participant's Account shall be paid to his or her estate.
Each unmarried Participant shall have the right to designate a
beneficiary or beneficiaries to receive any distributions to be made
under Article XI upon the death of such Participant. An unmarried
Participant may from time to time, without the consent of any
beneficiary, change or cancel any such designation. If no beneficiary
has been named by a deceased unmarried Participant, or the designated
beneficiary has predeceased such Participant, the Participant's Account
shall be paid to his or her estate as beneficiary.
Any spousal consent, beneficiary designation and any change therein
shall be made in the form and manner prescribed by the Committee and
shall be filed with the Director. Any distribution made to a beneficiary
of a deceased Participant under the Plan shall be made to the beneficiary
as soon as practicable after such Participant's death and shall be in the
form of a lump sum payment, regardless of the form of benefit selected
by the deceased Participant. The beneficiary may elect to have such
payment made in money by check, or may elect to have any whole shares of
Enterprise Common Stock held for the deceased Participant's Enterprise
Common Stock Fund subaccount and ESOP Account distributed in shares of
Enterprise Common Stock and the balance of the deceased Participant's
Account (including the value of any fractional shares of Enterprise
Common Stock) paid in money by check. If no election is made, the entire
distribution to the beneficiary shall be made in money by check.
ARTICLE XV
ADMINISTRATION
SECTION 15.1 NAMED FIDUCIARY. The Committee (and each member of
the Committee acting as such) shall be the named fiduciary of the Plan
with authority to control and manage the operation and administration of
the Plan.
SECTION 15.2 ADMINISTRATION.
(a) The Committee shall have full discretionary authority to
interpret the Plan and to answer all questions which
arise concerning the application, administration and
interpretation of the Plan. The Committee shall adopt
such rules and procedures as in its opinion are necessary
and advisable to administer the Plan and to transact its
business. Subject to the other requirements of this
Article XV, the Committee may --
(1) Employ agents to carry out non-fiduciary
responsibilities;
(2) Employ agents to carry out fiduciary
responsibilities (other than trustee
responsibilities as defined in ERISA Section
405(c)(3));
(3) Consult with counsel, who may be of counsel to the
Employer or an Affiliate; and
(4) Provide for the allocation of fiduciary
responsibilities (other than trustee
responsibilities as defined in ERISA Section
405(c)(3)) among its members. However, any action
described in subparagraphs (2) or (4) of this
subparagraph (a) and any modification or rescission
of any such action, may be effected by the Committee
only by a resolution approved by a majority of the
Committee.
(b) The Committee shall keep written minutes of all its
proceedings, which shall be open to inspection by the
Board of Directors. In the case of any decision by the
Committee with respect to a claim for benefits under the
Plan, the Committee shall include in its minutes a brief
explanation of the grounds upon which such decision was
based.
(c) In performing their duties, the members of the Committee
shall act solely in the interest of the Participants in
the Plan and their beneficiaries and:
(1) for the exclusive purpose of providing benefits to
the Participants and their beneficiaries;
(2) with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man
or woman acting in like capacity and familiar with
such matters would use in the conduct of an
enterprise of a like character and with like aims;
and
(3) in accordance with the documents and instruments
governing the Plan insofar as such documents and
instruments are consistent with the provisions of
Title I of ERISA. In addition to any other duties
the Committee may have, the Committee shall
periodically review the performance of the Trustee
and any Investment Managers and the performance of
all other persons to whom fiduciary duties have been
delegated or allocated pursuant to the provisions of
this Article XV.
(d) The Company agrees to indemnify and reimburse, to the
fullest extent permitted by law, members of the
Committee, directors and Employees of an Employer and all
such former members, directors and Employees, for any and
all expenses, liabilities or losses arising out of any
act or omission relating to the rendition of services for
or the management and administration of the Plan.
(e) No member of the Committee nor any of its delegates shall
be personally liable by virtue of any contract, agreement
or other instrument made or executed by him or her or on
his or her behalf in such capacity.
SECTION 15.3 CONTROL AND MANAGEMENT OF ASSETS. The assets of the
Plan shall be held by the Trustee, in trust, and shall be managed by the
Trustee and/or one or more Investment Managers appointed from time to
time by the Committee; provided, however, that the Committee shall have
investment authority with respect to loans approved pursuant to SECTION
11.12, and may, from time to time, determine that the Trustee shall be
subject to the direction of the Committee with respect to certain other
investments, in which case the Trustee shall be subject to proper
directions of the Committee which are in accordance with the terms of the
Plan and which are not contrary to applicable law.
SECTION 15.4 BENEFITS TO BE PAID FROM TRUST. Benefits under the
Plan shall be payable only from the Trust Fund and only to the extent
that such Trust Fund shall suffice therefor and each Participant assumes
all risk connected with any decrease in market price of any securities
in the respective Funds. Neither the Company nor any Affiliate shall
have any liability to make or continue from its own funds the payment of
any benefits under the Plan.
SECTION 15.5 EXPENSES. There shall be paid from the Trust Fund all
expenses incurred in connection with the administration of the Plan,
including but not limited to the compensation of the Trustee, the
reasonable fees of counsel for the Trustee for legal services rendered
to the Trustee and the fees of Investment Managers appointed with respect
to the investment and reinvestment of the Trust Fund, except to the
extent that such expenses and fees are paid by the Employer. There shall
be paid from the Trust Fund all taxes of any and all kinds whatsoever
that may be levied or assessed under existing or future laws upon or in
respect of the Trust Fund or any property of any kind forming a part
thereof, and all expenses including brokerage costs and transfer taxes
incurred in connection with the investment and reinvestment of the Trust
Fund.
ARTICLE XVI
CLAIMS PROCEDURE
SECTION 16.1 FILING OF CLAIMS. Claims for benefits under the Plan
shall be filed in writing on such form or forms as may be prescribed by
the Committee with the Director.
SECTION 16.2 APPEAL OF CLAIMS. Written notice shall be given to the
claiming Participant or beneficiary of the disposition of such claim, setting
forth specific reasons for any denial of such claim in whole or in part. If a
claim is denied in whole or in part, the notice shall state that such
Participant or beneficiary may, within sixty days of the receipt of such denial,
request in writing that the decision denying the claim be reviewed by the
Committee and provide the Committee with information in support of his or her
position by submitting such information in writing to the Secretary of the
Committee.
SECTION 16.3 REVIEW OF APPEALS. The Committee shall review each
claim for benefits which has been denied in whole or in part and for
which such review has been requested and shall notify, in writing, the
affected Participant or beneficiary of its decision and of the reasons
therefor. All decisions of the Committee shall be final and binding upon
all of the parties involved.
ARTICLE XVII
MERGER OR CONSOLIDATION
SECTION 17.1 MERGER OR CONSOLIDATION. In the case of any merger
or consolidation of the Plan with, or transfer of assets or liabilities
to, any other plan, each Participant or beneficiary shall be entitled to
receive a benefit immediately after the merger, consolidation or transfer
(if the Plan had been terminated) which is equal to or greater than the
benefit he or she would have been entitled to receive immediately before
the merger, consolidation or transfer (if the Plan had then terminated).
A merger or consolidation of the Plan with, or transfer of assets or
liabilities to, any other plan shall not be deemed to be a termination
or discontinuance of deposits and contributions having the effect of such
termination of the Plan.
ARTICLE XVIII
NON-ALIENATION OF BENEFITS
SECTION 18.1 NON-ALIENATION OF BENEFITS. Except as provided under
SECTIONS 11.12 and 22.1, no benefit or right under the Plan shall in any
manner or to any extent be assigned, alienated or transferred by any
Participant or beneficiary under the Plan or be subject to attachment,
garnishment or other legal process.
ARTICLE XIX
AMENDMENTS
SECTION 19.1 AMENDMENT PROCESS. The Company reserves the right,
by action of the Board of Directors, but subject to applicable law, at
any time and from time to time, to modify, suspend or amend in whole or
in part any or all of the provisions of the Plan, provided that no
modification, suspension or amendment shall make it possible to deprive
any Participant or beneficiary of a previously acquired right; and
provided further that no such modification, suspension or amendment shall
make it possible for any part of the assets of the Plan to be used for
or diverted to purposes other than for the exclusive benefit of
Participants and their beneficiaries under the Plan and for the payment
of expenses of the Plan.
ARTICLE XX
TERMINATION
SECTION 20.1 AUTHORITY TO TERMINATE. The Plan may be terminated
in whole or in part at any time by the Board of Directors, but only upon
condition that such action is taken as shall render it impossible for any
part of the corpus or income of the Trust Fund to be used for or diverted
to purposes other than for the exclusive benefit of the Participants or
their beneficiaries and for the payment of expenses of the Plan.
SECTION 20.2 DISTRIBUTION UPON TERMINATION. Upon termination or
partial termination of the Plan or upon the complete discontinuance of
Deposits and Employer Contributions under the Plan, the assets of the
Trust Fund shall )e administered and distributed to the Participants or
their beneficiaries at such time or times and in such nondiscriminatory
manner as is determined by the Committee. Upon termination or partial
termination of the Plan or upon the complete discontinuance of Deposits
and Employer Contributions under the Plan, the rights of all affected
Participants as of the date of such termination, partial termination or
discontinuance of Deposits and Employer Contributions shall be
nonforfeitable.
ARTICLE XXI
PLAN CONFERS NO RIGHT TO EMPLOYMENT
SECTION 21.1 NO RIGHT TO EMPLOYMENT. Nothing contained in the Plan
shall be construed as conferring any legal rights upon any Employee for
a continuation of employment or shall interfere with the rights of an
Employer or an Affiliate to discharge any Employee or otherwise to treat
him or her without regard to the effect which such treatment might have
upon such Employee with respect to the Plan, except as may be limited by
applicable law.
ARTICLE XXII
ALTERNATE PAYEES
SECTION 22.1 ALTERNATE PAYEES UNDER QDROS. In the event that a
domestic relations order of any State is received by the Plan and
thereafter determined to be a Qualified Domestic Relations Order (QDRO)
within the meaning of Code section 414p, the vested portion of the
Account of the Participant to which such QDRO is directed shall be
apportioned as specified in such QDRO, valued as of the business day
preceding the date specified in such QDRO. Upon notice to the Committee
that a QDRO is being sought with respect to a Participant's Account, no
distribution or loan shall be made to a Participant until such time as
the status of the QDRO is determined. The alternate payee of the
Participant's Account shall thereafter participate in the Plan in
accordance with its terms, except such person shall not have the rights
or benefits provided in Article IV, Article V and in SECTION 11.12. If
a QDRO is issued and the amount awarded the alternate payee exceeds the
value of the Participant's Account less the outstanding loan balance,
such loan shall be deemed to be in default and the Participant shall
immediately repay the loan. Notwithstanding the provisions of this
Article, the Plan may, without the consent of any such alternate payee,
pay to such alternate payee the value of his or her respective share of
the apportioned Account of the Participant, if the value thereof as so
determined is $3,500.00 or less. If a QDRO so provides, benefits may be
paid to an alternate payee before they would otherwise be distributable
under the Plan, and no such distribution to an alternate payee shall be
treated as a withdrawal by the Participant for purposes of Article XI.
ARTICLE XXIII
CONSTRUCTION
SECTION 23.1 GOVERNING LAW. The Plan shall be governed by and
construed and administered under the laws of the State of New Jersey,
except to the extent superseded by ERISA.
SECTION 23.2 HEADINGS. The headings are for reference only. In
the event of a conflict between a heading and the content of an Article
or Section, the content shall control.