THE CONNECTICUT WATER COMPANY EMPLOYEES RETIREMENT PLAN Amended and Restated as of January 1, 2010 (except as otherwise indicated herein) AMENDMENT AND RESTATEMENT OF THE CONNECTICUT WATER COMPANY EMPLOYEES RETIREMENT PLAN

APPENDIX C

BENEFITS FOR FORMER EMPLOYEES OF CRYSTAL WATER COMPANY

APPENDIX D

BENEFITS FOR EMPLOYEES OF BARNSTABLE WATER COMPANY

1.1

This Plan shall be known as The Connecticut Water Company Employees’ Retirement Plan.

1.2

The purpose of this Plan is to provide eligible Employees with retirement income benefits which will provide periodic income during the Employees’ retirement years, and support their beneficiaries upon the death of such Employees.

1.3

It is the intention of the Company that The Connecticut Water Company Employees’ Retirement Trust, which is a part of this Plan, shall meet the requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and shall be qualified and exempt under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986, as amended from time to time.

2.1

Actuarial Equivalent shall mean a benefit of equivalent current value to the benefit which would otherwise have been provided to the Participant, determined as described in Exhibit I attached to and made part of this Plan.

2.2

Actuary shall mean an actuary selected by the Committee who has been “enrolled” in accordance with ERISA.

2.3

Administrator shall mean the person or persons designated by the Committee in accordance with Article XI as the Administrator of the Plan within the meaning of Section 3(16) of ERISA.

2.4

Affiliated Company shall mean any company which is included within a “controlled group of corporations” within which the Company is also included, as determined under Section 1563 of the Code without regard to Subsections (a)(4) and (e)(3)(C) of said Section 1563.  Notwithstanding the foregoing, with respect to the benefit limitation set forth in Article XVI of this Plan, such determination under Section 1563 shall be made assuming the phrase “more than 50 percent” were substituted for the phrase “at least 80 percent” each place it appears in Section 1563(a)(1).

2.5

Anniversary Date shall mean January 1 of each year commencing on or after January 1, 1958; provided that, with respect to the Crystal Plan, Anniversary Date shall mean January 1 of each year commencing on or after January 1, 1964; and provided further that with respect to the Barnstable Plan, Anniversary Date shall mean January 1 of each year commencing on or after January 1, 1970.

2.6

Annual Earnings shall mean the regular basic earnings paid to a Participant by his Employer during a Plan Year, excluding any other items of compensation such as overtime earnings, bonuses, or contributions made by the Employer to or under any form of employee benefit program expressed on an annual basis.  For hourly Employees, Annual Earnings shall mean the average hourly straight time rate, determined by dividing total straight time earnings by actual hours worked, times 2080 hours.  Notwithstanding the foregoing, Annual Earnings shall include any amounts which would otherwise be Annual Earnings and which are deferred by a Participant pursuant to a cash or deferred arrangement qualified under Section 401(k) of the Code, or a cafeteria plan pursuant to Section 125 of the Code, or a nonqualified retirement plan or arrangement maint ained by the Employer.

 

In addition to other applicable limitations set forth in the Plan, and notwithstanding any provision of the Plan to the contrary, for Plan Years beginning on or after January 1, 1994, the Annual Earnings of each Employee taken into account under the Plan shall not exceed the OBRA ‘93 annual compensation limit.  The OBRA ‘93 annual compensation limit is $150,000, as adjusted by the Commissioner of Internal Revenue for increases in the cost of living in accordance with Section 401(a)(17)(B) of the Code.  The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) beginning in such calendar year.  If a determination period consists of fewer than 12 months, the OBRA’ 93 annual compensation limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12.

 

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

 

If Annual Earnings for any prior determination period is taken into account in determining an employee’s benefits accruing in the current Plan Year, the Annual Earnings for that prior determination period is subject to the OBRA ‘93 annual compensation limit in effect for that prior determination period.  For this purpose, for determination periods beginning before the first day of the first Plan Year beginning on or after January 1, 1994, the OBRA ‘93 annual compensation limit is $150,000.

2.7

Annuity Starting Date shall mean the first day of the first period for which an amount is paid as an annuity or any other form.

2.8

Average Earnings shall mean the average Annual Earnings earned during the sixty consecutive months of highest Annual Earnings of a Participant (or during his total employment if less than 60 months).

2.9

Beneficiary shall mean any person entitled to receive benefits under the Plan which are payable upon the death of a Participant.

2.13

Company shall mean The Connecticut Water Company, a Connecticut corporation, or any successor thereto.

2.14

Contingent Annuitant shall mean any person designated by a Participant and entitled to receive benefits pursuant to the Contingent Annuitant Option described in Section 10.3(b).

2.15

Covered Compensation shall mean for each Participant the average of the contribution and benefit bases in effect under Section 230 of the Social Security Act for each year in the thirty-five (35) year period ending with the year in which the Participant attains the Social Security Retirement Age.  The determination for any Plan Year preceding the year in which the Participant attains the Social Security Retirement Age shall be made by assuming that there is no increase in the bases described herein after the beginning of the Plan Year and before the Participant attains the Social Security Retirement Age.

2.16

Crystal Plan shall mean the Crystal Water Company of Danielson Defined Benefit Pension Plan.

2.17

Credited Service shall mean, effective September 1, 1996, the number of years of Service as an Employee, in completed calendar months, irrespective of whether such Service is completed within a consecutive twelve (12) month period.  No credit shall be granted for any period of employment during which an Employee waived his right to participate in the Plan pursuant to Section 3.3.

 

In addition, in any Plan Year in which an Employee has fewer than twelve (12) calendar months of Service, Credited Service shall be determined by crediting such Employee with two (2) calendar months of Credited Service for each completed calendar month of Service, but no more than one year of Credited Service shall be granted with respect to any Plan Year.

 

Notwithstanding any provision of the Plan to the contrary, for the Plan Year beginning January 1, 1996, an Employee’s Credited Service shall equal the greater of Credited Service for the period from January 1, 1996 to August 31, 1996 as calculated in accordance with the terms of the Plan as in effect prior to September 1, 1996, and Credited Service for the period from January 1, 1996 to December 31, 1996 as calculated in accordance with this Section 2.17.  Notwithstanding anything to the contrary contained in this Section 2.17, Section 2.36, or elsewhere in the Plan, in no event shall any Employee of Gallup Water Service, Inc. receive credit for Credited Service hereunder prior to January 1, 2001.  Notwithstanding anything to the contrary contained in this Section 2.17, Section 2.36, or elsewhere in the Plan, in no event shall any Employee of the Unionville Water Company receive credi t for Credited Service hereunder prior to January 1, 2004.

 

Notwithstanding anything to the contrary contained in Section 2.17, Section 2.36, or elsewhere in the Plan, in no event shall any former employee of Birmingham Utilities, Inc., Eastern Connecticut Water Company, Inc., or any corporation or other entity related thereto, receive credit for Credited Service hereunder for service with Birmingham Utilities, Inc., Eastern Connecticut Water Company, Inc., or any corporation or other entity related thereto.

2.18

Effective Date shall mean November 1, 1957, the original effective date of the Plan.  This amendment and restatement is effective as of January 1, 2010, except where otherwise indicated.

2.19

Employee shall mean any person qualifying as a common law employee of the Employer other than Non-Benefits Employees.

2.20

Employer shall mean the Company, any Predecessor Company and any Participating Company.

2.21

Employment Commencement Date shall mean the date on which an Employee first performed an Hour of service with the Employer.

2.22

ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and any regulations issued pursuant thereto.

2.23

Fiduciary shall mean any person who exercises discretionary authority or control over the management of the Plan, assets held under the Plan or disposition of Plan assets; who renders investment advice for direct or indirect compensation as to assets held under the Plan or has any authority or responsibility to do so; or who has any discretionary authority or responsibility in the administration of the Plan; but only to the extent required by ERISA.

2.24

Former Crystal Water Participant shall mean any Employee (as defined in Appendix C hereof) who, as of the day before the Merger Date, was an active participant in the Crystal Plan.

 

(a)

each hour for which the Employee is directly or indirectly paid, or entitled to payment, by the Employer for the performance of duties (to be credited as of the time when the duties are performed);

 

(b)

each hour for which the Employee is directly or indirectly paid, or entitled to payment, by the Employer for reasons other than the performance of duties, such as vacation or holidays (to be credited in accordance with Labor Department Regulation 2530.200b-2(c) or any successor regulation); and

 

(c)

each hour for which back pay, irrespective of mitigation of damages, has been either awarded or agreed to by the Employer (to be credited as of the time to which the award or agreement pertains).  The same hour shall not be credited under more than one of the above clauses.  In determining Hours of service for the purposes of clause (b) above, the provisions of Labor Department Regulation 2530.200b-2(b) or any successor regulation shall be applicable.  Hours of service shall also include each hour, based on the Employee’s standard work week and work day as in effect from time to time, during which an Employee is absent from work:

 

(i)

temporarily, on account of illness or with the consent of the Employer for a period not to exceed six months.  In the event of any absence approved by the Employer and exceeding six months the Committee shall establish uniform rules for the inclusion or exclusion of any hour as an Hour of service on account of such absence in excess of six months; or

 

(ii)

effective as of December 12, 1994, on account of qualified military service, as determined in accordance with USERRA and Section 414(u) of the Code.

2.26

Merger Date shall mean December 31, 2000.

2.27

Non-Benefits Employee shall mean any Employee designated by the Employer as a Non-Benefits Employee and any individual that the Employer considers to be an independent contractor, regardless of whether such individual may be determined to be an Employee by administrative, judicial or other decision.

2.28

Participant shall mean any Employee who is or becomes eligible to participate in the Plan pursuant to Article III and who has taken all the steps required by said Article III to participate in the Plan.

2.29

Participating Company shall mean any Affiliated Company which is designated by the Board as a Participating Company under the Plan and whose designation as such has become effective and has continued in effect.  The designation shall become effective only when it shall have been accepted by the Board of Directors of the Participating Company.  A Participating Company may revoke its acceptance of such designation at any time, but until such acceptance has been revoked, all of the provisions of the Plan and amendments thereto shall apply to the Employees (and their Beneficiaries) of the Participating Company.  In the event the designation of a Participating Company as such is revoked by the Board of Directors of the Participating Company, the Plan will be deemed terminated only as to such Participating Company in accordance with Article XIII.

2.30

Plan shall mean The Connecticut Water Company Employees’ Retirement Plan set forth in its entirety in this document and the Trust Agreement, as this document and such Agreement may be amended from time to time.

2.32

Predecessor Company shall mean any organization which was acquired by the Employer or an Affiliated Company.

2.33

Reemployment Commencement Date shall mean the first date following a period of severance from Service which is not required to be taken into account under Section 2.36, on which the Employee performs an Hour of service with the Employer.

2.34

Retirement Date shall mean a Participant’s Normal, Early or Postponed Retirement Date as defined in Articles IV through VI, whichever is applicable.

2.35

Retirement Income shall mean a Participant’s monthly benefit payable beginning on his Retirement Date.

2.36

Service with respect to any Employee shall mean that period of time beginning with the Employee’s Employment Commencement Date or Reemployment Commencement Date, whichever is applicable, and ending on the date a break in service, as herein defined, begins.  In addition, if an Employee severs from Service with the Employer and is reemployed within twelve (12) consecutive months, his Service shall also include all days between his severance from Service and his subsequent reemployment.  An Employee’s Service shall be determined without regard to whether he is a Participant or eligible to participate in the Plan during his period of employment with the Employer.  An Employee’s Service shall be expressed in years and months and shall be measured in cumulative monthly increments, including holidays, vacations , weekends and other nonworking days.  Any partial month of Service shall be disregarded.  Service credited during an approved leave of absence shall be recognized for purposes of calculating an Employee’s Service.  For purposes hereof, a leave of absence shall mean a period of time during which an Employee is absent from work temporarily, on account of illness or with the consent of the Employer for a period not to exceed six months.  In the event of any absence approved by the Employer and exceeding six months, the Committee shall establish uniform rules for the inclusion or exclusion of such Service in respect of such absence in excess of six months.  Moreover, effective as of December 12, 1994, Service shall also include qualified military service, as determined in accordance with USERRA and Section 414(u) of the Code.   For purposes hereof, a break in service shall mean a period of severance of at least 12 consecutive months. &# 160;A period of severance is a continuous period of time during which an Employee is not employed by the Employer.  Such period begins on the Employee’s Retirement Date or Termination Date, or if earlier, the 12-month anniversary of the date on which the Employee is otherwise first absent from work.  In the case of an individual who is absent from work for maternity or paternity reasons, the 12-consecutive month period beginning on the first anniversary of the first date of such absence shall not constitute a break in service.  For purposes of this paragraph, an absence from work for maternity or paternity reasons means an absence (a) by reason of the pregnancy of the individual, (b) by reason of the birth of a child of the individual, (c) by reason of the placement of a child with the individual in connection with the adoption of such child by such individual, or (d) for purposes of caring for such child for a period beginning immediately following such birth or placement .  Service with the Employer or any Participating Company (while Participating), and the predecessors and successors thereto, shall be recognized for purposes of calculating an Employee’s Service, but not such Employee’s Credited Service, unless such Employee is eligible to participate in the Plan in accordance with Article III, in which case such eligible Employee’s Service shall also be recognized for purposes of calculating such Employee’s Credited Service.  An Employee’s Service with an Affiliated Company (while Affiliated) that is not the Company or a Participating Company shall be recognized for purposes of calculating an Employee’s Service, but not an Employee’s Credited Service if the Employee’s Service with the Affiliated Company is contiguous with the Employee’s Service with the Company or the Participating Company, as the case may be, within the meaning of Department of Labor Regulations Section 2530.210.

2.37

Social Security Retirement Age shall mean the age used as the retirement age under Section 216(1) of the Social Security Act, except that such Section shall be applied without regard to the age increase factor and as if the early retirement age under Section 216(1)(2) of the Social Security Act were 62.

2.38

Spouse shall mean the spouse of the opposite sex to whom a Participant shall be married on the Participant’s Annuity Starting Date or, in the case of the payment of a Pre-retirement surviving spouse benefit, to whom a Participant shall be married at the time of his death.

2.39

Termination Date shall mean the date on which the Participant ceases to be an Employee other than by reason of retirement.

2.40

Trust Agreement shall mean The Connecticut Water Company Employees’ Retirement Trust entered into between the Company and the Trustee to carry out the purposes of the Plan, as set forth herein, which Trust Agreement shall form a part of the Plan.

2.41

Trustee shall mean the Trustee selected by the Company in accordance with Article XII.

2.42

Trust Fund or Fund shall mean the cash and other properties held and administered by the Trustee in accordance with the provisions of the Trust Agreement and the Plan.

2.43

USERRA shall mean the Uniformed Services Employment and Reemployment Rights Act of 1994.  Notwithstanding any provision of this Plan to the contrary, effective as of December 12, 1994, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code Section 414(u).

2.44

Vesting Service shall mean, effective September 1, 1996,  the number of years of Service as an Employee, in completed calendar months, irrespective of whether such Service is completed within a consecutive twelve (12) month period.  No Vesting Service shall be granted for any period of employment during which an Employee waived his right to participate in the Plan pursuant to Section 3.3.

 

In addition, in any Plan Year in which an Employee has fewer than twelve (12) calendar months of Service, Vesting Service shall be determined by crediting such Employee with two (2) months of Vesting Service for each completed calendar month of Service, but no more than one year of Vesting Service shall be granted with respect to any Plan Year.  This paragraph shall not apply after March 31, 2000 to any Participant who had fewer than three years of Service as of March 31, 2000.

 

Notwithstanding any provision of the Plan to the contrary, for the Plan Year beginning January 1, 1996, an Employee’s Vesting Service shall equal the greater of Vesting Service for the period from January 1, 1996 to August 31, 1996 as calculated in accordance with the terms of the Plan as in effect prior to September 1, 1996 and Vesting Service for the period from January 1, 1996 to December 31, 1996 as calculated in accordance with this Section 2.44.

2.45

Barnstable Plan shall mean the Barnstable Water Company Pension Plan.

2.46

Barnstable Water Participant shall mean any employee or former employee of Barnstable Water Company who, as of the day before the Barnstable Merger Date, was a participant in the Barnstable Plan; and any other employee of Barnstable Water Company who subsequently satisfies the requirements for eligibility set forth in Article III of Appendix D hereof.

2.47

Barnstable Merger Date shall mean December 31, 2002.

3.1

Former Employees.  Any person who either retired or terminated employment prior to the effective dates of the provisions of this amendment and restatement of the Plan shall be entitled to benefits in accordance with the provisions of the Plan as in effect on his Retirement Date or Termination Date, whichever is applicable.

3.2

Current and Future Employees.  Effective as of September 1, 1996, except as provided for in Section 3.3, each Employee shall participate in the Plan, as described herein, provided that he has completed twelve (12) calendar months of Service.  If a Participant terminates his employment but is rehired by the Employer, he shall again be eligible to participate in the Plan as of his date of rehire.

 

Notwithstanding any provision of the Plan to the contrary, for the period from January 1, 1996 to April 1, 2000, an Employee’s Service for purposes of this Section 3.2 shall equal the greater of Service as calculated in accordance with the terms of the Plan as in effect prior to September 1, 1996 and Service as calculated in accordance with this Section 3.2.  Prior to September 1, 1996, an Employee became a Participant in the Plan upon the completion of 1,000 Hours of service within the consecutive 12-month period beginning on his date of hire or in any Plan Year beginning after his date of hire.

 

Employees of Gallup Water Service, Inc. shall be eligible to participate hereunder effective January 1, 2001, provided that they have satisfied the service requirements hereunder as of that date and are otherwise eligible to participate hereunder.  In no event shall any employee of Gallup Water Service, Inc. receive credit for Credited Service hereunder prior to January 1, 2001.

3.3

Waiver of Participation.  Any Employee may waive his right to become a Participant under this Plan by electing such waiver in writing on a form supplied by the Administrator.  Such Employee may, also in writing, withdraw such waiver and, subject to Section 3.2, be eligible to participate in this Plan.

3.4

Elimination of Further Participation.  Notwithstanding the foregoing, any person who commences employment with the Employer on or after January 1, 2009 shall not be eligible to participate in or accrue benefits under the Plan.  Furthermore, anyone who terminated employment with the Employer and who is rehired by the Employer on or after January 1, 2009 shall not be eligible to participate or accrue additional benefits under the Plan.

3.5

Independent Contractors.  The term “Participant” shall include only those individuals who are, in fact, treated as common law employees on the payroll records of the Employer and compensated by the Employer as common law employees, and who are otherwise eligible to participate hereunder.  Therefore, the term "Participant" will not include any individual who is compensated other than as a common law employee (for example, as an independent contractor, leased employee or agency employee) even if such individual is subsequently determined to be or to have been a common law employee of the Employer.

4.1

Normal Retirement Date.  The Normal Retirement Date of a Participant shall be the first day of the month coinciding with or next following his 65th birthday, or the fifth anniversary of his entry into the Plan, if later, but in no event later than the first day of the month coinciding with or next following his 70th birthday.

4.2

Basic Retirement Income - The monthly Basic Retirement Income with payments commencing at Normal Retirement Date under this Plan is equal to 1/12 of 1.6% of Average Earnings multiplied times years of Credited Service.  This provision is effective January 1, 2001 and shall not apply to any Participant who retires, terminates employment, or dies prior to such date.

 

Notwithstanding the foregoing, the minimum Basic Retirement Income with payments commencing at Normal Retirement Date under this Plan is equal to 1/12 of $1,000, except that for an Employee who has less than 10 years of Credited Service, the $1,000 shall be reduced by the ratio of Credited Service to 10 years.

 

(1)

the employee's accrued benefit determined with respect to the benefit formula applicable for the Plan Year beginning on or after January 1, 1994, as applied to the employee's total years of Service taken into account under the Plan for the purposes of benefit accruals, or

 

(2)

the sum of:

 

(a)

the employee's accrued benefit as of the last day of the last Plan Year beginning before January 1, 1994, frozen in accordance with Section 1.401(a)(4)-13 of the Treasury Regulations, and

4.3

Normal Retirement Income.  The Retirement Income of a Participant who retires on his Normal Retirement Date shall be determined as follows:

 

(a)

If the Participant does not have a Spouse on his Annuity Starting Date and has made no election as to the form of payment of pension benefits, then his Retirement Income shall be equal to his Basic Retirement Income as determined under Section 4.2 and shall be paid in the form of a Straight Life Annuity.

 

(b)

If the Participant has a Spouse on his Annuity Starting Date and has not made a qualified waiver of the 50% Contingent Annuitant Option described in Subsection 10.3(b) with his Spouse as Contingent Annuitant, his Retirement Income payable as of his Annuity Starting Date shall equal the product of (i) and (ii) where:

 

(i)

equals the Basic Retirement Income as determined under Section 4.2, and

 

(ii)

equals the Actuarial Equivalent factor for such Contingent Annuitant Option, and shall be paid in the manner described under such optional form.

 

(c)

If the Participant elects an optional form of payment under Article X, his Retirement Income payable as of his Annuity Starting Date shall equal the product of (i) and (ii) where:

 

(i)

equals his Basic Retirement Income as determined under Section 4.2, and

 

(ii)

equals the Actuarial Equivalent factor for the particular optional form elected as of the Annuity Starting Date, and shall be paid in the manner described under such optional form.

 

(a)

Any Plan Participant who dies on or after January 1, 2007 while performing “qualified military service” as that term is defined in the Heroes Earnings Assistance and Relief Act of 2008 (HEART Act) shall be treated as being reemployed and then dying for purposes of any survivor benefits (if any) that are available only when a Participant dies while an active employee of the Company.  Furthermore, any periods of qualified military service for such a Plan Participant shall count for purposes of vesting under the Plan, but not for purposes of the accrual of benefits.

 

(b)

Military differential pay, if any, paid after December 31, 2008 shall be taken into account as compensation for purposes of Article XVI hereof but not for any other purpose, and an individual receiving such pay shall be treated as an employee of the Company or Affiliated Company making such payment.

5.1

Early Retirement Date.  A Participant may retire on the first of any month between his 55th and 65th birthdays, provided he has then completed at least 10 years of Credited Service, any such date being his Early Retirement Date.  Any such Participant may elect to receive his Retirement Income commencing on his Early Retirement Date in a reduced amount as set forth in Section 5.2 or to receive his Retirement Income commencing on his Normal Retirement Date as determined under Section 4.3 based on his Average Earnings and Credited Service as of his Early Retirement Date.

5.2

Early Commencement.  A Participant who retires in accordance with the provisions of Section 5.1 and elects to have payment of his Retirement Income commence on his Early Retirement Date shall be entitled to receive a reduced Annual Retirement Income in the form stated in Section 4.3.  The amount of such reduced Retirement Income shall equal (a) times (b) where:

(a)  

equals such Participant's Normal Retirement Income as determined under Section 4.3 based on his Average Earnings and his Credited Service as of his Early Retirement Date and with the Actuarial Equivalent factors described in Subsections 4.3(b) and 4.3 (c) being determined as of his Early Retirement Date; and

(b)  

(1)  In the case of Participants who are Participants as of December 31, 2003 and have attained a Vested Percentage of one hundred percent (100%) as of December 31, 2003, equals the appropriate percentage factor from the following table:

Complete Years by Which

Early Retirement Date

Precedes Normal

Retirement Date

Early Retirement

Percentage Factors

10

  .72

9

  .76

8

  .80

7

  .84

6

  .88

5

  .92

4

  .96

3

1.00

2

1.00

1

1.00

0

1.00

Complete Years by Which

Early Retirement Date

Precedes Normal

Retirement Date

Early Retirement

Percentage Factors

10

  .40

9

  .46

8

  .52

7

  .58

6

  .64

5

  .70

4

  .76

3

  .82

2

  .88

1

  .94

0

1.00

(c)  

The amendment to Section 5.2 was effective as of January 1, 2004.  In no event shall this change reduce the amount of a Participant’s benefit at Early Retirement Date below the amount of the benefit that the Participant would have been entitled to receive based upon the early retirement factors set forth in subparagraph (b)(1) of this Section 5.2, based upon his accrued benefit under the Plan as of December 31, 2003.

5.3

Delayed Commencement of Pension.  A Participant who retires in accordance with the provisions of Section 5.1 but elects to have payment of his Retirement Income commence at a later date, may defer such commencement of payment to the first of any subsequent month which is not later than his Normal Retirement Date.  Notice of the selected payment commencement date must be given to the Administrator at least 30 days prior to such date.  The amount of pension payable to the Participant shall be determined in accordance with Section 5.2, except that the selected Annuity Starting Date shall be considered the Participant’s Early Retirement Date for purposes of this benefit determination.

5.4

Special Early Retirement Benefit.  The Retirement Income payable to any Participant eligible for the Special Early Retirement Benefit described in Appendix A or B attached to and made a part of this Plan shall be determined as provided in such Appendix.

6.1

Delayed Retirement.  Subject to the provisions of Article XIV, Section 14.1, any Employee may remain in the Company’s employment after his Normal Retirement Date.

6.2

Commencement of Pension.  A Participant whose retirement is postponed beyond his Normal Retirement Date shall begin receiving his monthly Retirement Income on the first day of the month coinciding with or next following his actual retirement.  The amount and form of the Participant’s Retirement Income payable monthly commencing on his Postponed Retirement Date shall be the same as the Participant’s Retirement Income that would have been had he retired on his Normal Retirement Date except the Basic Retirement Income shall be determined based on Credited Service and Average Earnings of the Participant as of his Postponed Retirement Date.  The Retirement Income shall be offset by the Actuarial Equivalent of the total benefit distributions made to the Participant by the close of the Plan Year pursuant to Section 1 4.9.  If the Participant should die after Normal Retirement Date, but before his actual Retirement Date, it shall be presumed that the Participant had retired as of the first day of the month coinciding with or next preceding his date of death.

7.1

Vesting Requirements.  A Participant whose employment is terminated other than by retirement, disability or death, and prior to having completed 5 years of Vesting Service shall not be entitled to any benefit under this Plan.  A Participant whose employment is terminated after having completed at least 5 years of Vesting Service shall be entitled to receive a Retirement Income equal to his Vested Benefit determined as of his Termination Date as set forth in Section 7.2.

7.2

Vested Benefit.  A Participant’s Vested Benefit shall be the Retirement Income payable at Normal Retirement Date in the form and amount as set forth in Section 4.3 based on his Average Earnings and Credited Service as of his Termination Date, multiplied by the applicable percentage specified below:

If Years of Vesting

Service Are            

Then Vested

Percentage Is

Less than 5

    0%

5 or more

100%

 

Notwithstanding the foregoing, a Participant shall be 100% vested upon the later of his 65th birthday or the fifth anniversary of his entry into the Plan, provided that he is employed at such time by the Employer or an Affiliated Company.

7.3

Commencement of Payments.  Retirement Income payments in the form stated in Section 4.3 shall commence at the terminated Participant’s Normal Retirement Date unless the Participant elects in writing on a form supplied by the Administrator to have reduced payments commence at an earlier date provided that such earlier date shall not be prior to the first day of the calendar month coinciding with or next following the terminated Participant’s attainment of age 55.

8.1

Eligibility and Disability Determination.  If a medical examiner selected by the Employer certifies that an Employee who has completed 5 years of Credited Service is mentally or physically disabled for further performance of duty and that such disability is likely to be permanent, such that the Employee is considered eligible for full disability benefits under the provisions of the Social Security Act, this Employee shall be eligible for the monthly benefit described below.

8.2

Disability Benefit.  The monthly income of an Employee who becomes eligible for a monthly benefit in accordance with Section 8.1 shall equal the Basic Retirement Income as determined in Section 4.2 based on his Average Earnings and his Credited Service as of his Termination Date reduced by the Early Retirement Percentage Factor from the applicable table in Section 5.2(b) applicable to the number of complete years by which the commencement of payment of his Retirement Income precedes his attainment of age 65, with a Percentage Factor of .72 if the Participant is covered under the table in Section 5.2(b)(1) and the commencement of payment of his Retirement Income precedes his attainment of age 65 by more than 9 complete years; and with a Percentage Factor of .40 if the Participant is covered under the table in Section 5.2(b)(2) and the commenc ement of payment of his Retirement Income precedes his attainment of age 65 by more than 9 complete years.  Notwithstanding the foregoing to the contrary, effective January 1, 1998, the monthly income of an Employee who becomes eligible for a monthly benefit in accordance with Section 8.1, and with respect to whom the sum of his age and Credited Service as of his Termination Date is equal to or greater than 80, shall equal his Basic Retirement Income as determined in Section 4.2 based on his Average Earnings and his Credited Service as of his Termination Date unreduced for commencement prior to his attainment of age 65.

8.3

Form and Commencement of Payments.  An Employee who becomes eligible for a monthly benefit in accordance with Section 8.1 may elect to receive such benefit commencing on the first day of any month following his Termination Date; provided, however, that no payments shall be made under this Article VIII while the Employee is receiving disability benefits from the Employer’s long-term disability plan.  Such benefit shall be paid in the form provided in Section 4.3.

8.4

Reemployment.  If a former Employee is reemployed by the Employer after commencing to receive benefits under this Article VIII, payment of the Employee’s benefits will be suspended and benefits will continue to accrue under this Plan as described in Article IV when all of the following have occurred:

 

(a)

The Employee has been rehired by the Employer;

 

(b)

The Employee is credited with 40 or more Hours in a month; and

 

(c)

The Employee has elected to resume participation in the Plan.

9.1

Death While Employed and Eligible for Early Retirement.  If a Participant dies while he is actively employed and after he has become eligible for Early Retirement as provided in Section 5.1, his surviving Spouse (if designated or deemed his Beneficiary in accordance with Section 9.4), if any, shall receive monthly benefits equal to 50% of the Retirement Income the Participant would have received under Section 5.2 had he retired early as of the first day of the month coinciding with or next preceding his date of death and elected the 50% Contingent Annuitant Option under Subsection 10.3(b) with his Beneficiary as Contingent Annuitant.  Payment shall commence on the first day of the calendar month following the Participant’s death, unless such Spouse as Beneficiary elects a later date which shall be no later than what would hav e been the Participant’s Normal Retirement Date, and shall continue each month thereafter through the month in which the Beneficiary’s death occurs.  If a Participant dies while he is actively employed and after he has become eligible for Early Retirement as provided in Section 5.1, with no surviving Spouse designated or deemed his Beneficiary, his Beneficiary (as determined in accordance with Section 9.4), if any, shall receive a death benefit.  This death benefit shall be paid in the form of a lump sum which shall be the Actuarial Equivalent of the Retirement Income which the Beneficiary would have received had the Participant retired on the date of his death with the optional form of benefit under Subsection 10.3(d) (Five Years Certain and Life Option) in effect.

9.2

Death After Early Retirement But Before Annuity Starting Date.  If a Participant retires after he has become eligible for Early Retirement but dies before his Annuity Starting Date, his surviving Spouse (if designated or deemed his Beneficiary in accordance with Section 9.4), if any, shall receive monthly benefits equal to 50% of the Retirement Income the Participant would have received under Section 5.3 had he elected to have payment of his Retirement Income commence as of the first day of the month coinciding with or next preceding his date of death and elected the 50% Contingent Annuitant Option under Subsection 10.3(b) with his Spouse as Contingent Annuitant, provided that such Spouse may elect a later date for commencement of benefits which shall be no later than what would have been the Participant’s Normal Retirement Date.

9.3

Death Before Retirement.

 

(a)

Unless waived within the Waiver Period pursuant to a qualified waiver as described in Section 10.2, if a Participant who is no longer actively employed dies after attaining the Earliest Retirement Age, the Participant’s surviving Spouse (if any) shall receive the same benefit that would be payable if the Participant had retired with the 50% Contingent Annuitant Option as described in Subsection 10.3(b) on the day before the Participant’s date of death.

 

(b)

Unless waived within the Waiver Period pursuant to a qualified waiver as described in Section 10.2, if a Participant dies before attaining the Earliest Retirement Age, the Participant’s surviving Spouse (if any) shall receive the same benefit that would be payable if the Participant had:

 

(i)

separated from service on the date of death, or date of actual separation from service, if earlier,

 

(ii)

survived to the Earliest Retirement Age,

 

(iii)

retired with an immediate 50% Contingent Annuitant Option as described in Subsection 10.3(b) at the Earliest Retirement Age, and

 

(iv)

died on the day after the Earliest Retirement Age; provided, however, that in calculating the benefit of a surviving Spouse of a  Participant who dies while actively employed, the Retirement Income to which the Participant would have been entitled at his Normal Retirement Date shall be reduced in accordance with the formula described in Section 5.2 (a) or (b), whichever is applicable to that Participant, rather than that described in Section 7.3.

 

(c)

For purposes of this Section 9.3, a surviving Spouse shall begin to receive payments at the later of (i) the date of the Participant’s death, or (ii) the Earliest Retirement Age, unless such surviving Spouse elects a later date which shall be no later than what would have been the Participant’s Normal Retirement Date.

 

(i)

Waiver Period: The period which begins on the date the Participant separates from service and ends on the date of the Participant’s death.

 

(ii)

Earliest Retirement Age:  The earliest date on which, under the Plan, the Participant could have elected to receive retirement benefits.

9.4

Designation of Beneficiary.  The Administrator shall provide to each actively employed Participant at least 90 days before the date on which he meets the age and service requirements for early retirement, a form on which he may designate his Beneficiary.  The person whom a Participant designates as his Beneficiary must be his Spouse, unless a qualified waiver of the qualified pre-retirement survivor annuity has been made in accordance with Section 10.2.  If such a qualified waiver has been made, the Participant’s Beneficiary for this purpose must be one of the following: the Participant’s spouse, father, mother, sister, brother, son or daughter.  The beneficiary may also be a legal ward living with and dependent on the Participant at the time of his death.  If the Participant dies after sat isfying the requirements for early retirement, and has not designated a Beneficiary, his Beneficiary shall be his Spouse, if living; otherwise, he shall have no Beneficiary and no payments shall be made pursuant to this Article IX.

10.1

Normal Form of Payments.  If a Participant does not make a timely election of one of the optional forms of payment described below, then his Retirement Income shall be payable in the form and amount under Section 4.3, if he retires as of his Normal or Postponed Retirement Date; under Section 7.3, if he terminates his employment other than by reason of death, disability or retirement; and under Section 8.3, if he is disabled.

10.2

Election of Optional Form of Payment.  A Participant whose Retirement Income is otherwise payable under the Normal Form may elect in writing to the Employer to receive his benefit under one of the optional forms set forth in Section 10.3.  The Administrator shall provide to each active Participant and each terminated Participant with a vested interest whose benefits have not yet commenced, by personal delivery or mail, no less than 30 and no more than 180 days before his Annuity Starting Date, the following information in written nontechnical language: (1) a general description of the Normal Form and optional forms of payment and the availability of the election not to receive the Normal Form; (2) a general explanation of the relative financial effect of an election not to receive the Normal Form; (3) the right to make, and the eff ect of, a revocation of a previous election not to receive the Normal Form; (4) the rights of a Participant’s Spouse; and (5) notification of the availability upon written request of a written explanation of the financial effect (in dollars per annuity payment) upon the particular Participant’s annuity of an election not to take the Normal Form.

10.3

Optional Forms of Payment.  The optional forms of benefit payment available shall be the Actuarial Equivalent of the Retirement Income otherwise payable to the Participant.

 

(a)

Straight Life Annuity Option - Retirement Income payable monthly during the Participant’s lifetime, with no further payments on his behalf after his death.  If this option is elected, the Participant’s Retirement Income shall equal his Basic Retirement Income without actuarial adjustment except as provided for election of early commencement of payments, as applicable.

 

(b)

Contingent Annuitant Option - Retirement Income payable monthly during the Participant’s lifetime with the provision that after his death such Retirement Income shall be continued to the Contingent Annuitant, in the same or a lesser amount, as specified by the Participant, during the life of such Contingent Annuitant.  The lesser percentage which may be specified by a Participant shall be either 75% or 50% of the Participant’s Retirement Income.

 

(c)

Ten Years Certain and Life Option - Retirement Income payable monthly during the Participant’s lifetime and in the event of the Participant’s  death within a period of 10 years after benefits hereunder have commenced, the Actuarial Equivalent of the value of the Retirement Income remaining to be paid during the aforementioned 10-year period shall be paid to the Participant’s Beneficiary in a lump sum as soon as practicable following the Participant’s death, provided that such lump sum payment shall be subject to the requirements of Section 10.7(f) hereof.

 

(d)

Five Years Certain and Life Option - Retirement Income payable monthly during the Participant’s lifetime and in the event of the Participant’s death within a period of 5 years after benefits hereunder have commenced, the Actuarial Equivalent of the value of the Retirement Income remaining to be paid during the aforementioned 5-year period shall be paid to the Participant’s Beneficiary in a lump sum as soon as practicable following the Participant’s death, provided that such lump sum payment shall be subject to the requirements of Section 10.7(f) hereof.

 

(e)

Lump Sum Option - The Actuarial Equivalent of the Participant's Retirement Income, determined without regard to any early retirement subsidy, may be payable in a single sum in lieu of any other benefits under the Plan.  It is the intent of the Employer that this lump sum benefit may be payable following separation from service and prior to attainment of Early or Normal Retirement Date, as well as on or after attainment of such dates.  If any such payment is made prior to attainment of Early or Normal Retirement Date, the Participant, if married, will be offered a 50% Contingent Annuitant Option with his Spouse as Contingent Annuitant; and if single, a Straight Life Annuity.  In addition, effective January 1, 2008, such Participant will be offered a 75% Contingent Annuitant Option with his Spouse as Contingent Annuita nt.  The amount of any such annuity benefit prior to Early or Normal Retirement Date will be calculated to be Actuarially Equivalent to the amount of the lump sum payment, utilizing the assumptions for Actuarial Equivalent for lump sum payments.  The Participant (with the consent of his spouse, if applicable) must waive payment in the form of an annuity in order to receive payment of a lump sum in such instance.  The provisions of Section 10.2 regarding elections, spousal consents, revocations, and the like, shall apply here as well.  If the Participant elects to receive his Retirement Income at that time and if no such waiver occurs, payment would be in the form of a 50% Contingent Annuitant Option (with his Spouse as Contingent Annuitant) or (in the case of a Participant without a Spouse) a Straight Life Annuity, as the case may be.

10.4

Lump Sum Distributions.  Anything in the Plan to the contrary notwithstanding, effective as of March 28, 2005, the Committee shall pay benefits to a Participant who retires or otherwise terminates employment with the Employer in a lump sum that is the Actuarial Equivalent of a Participant’s Retirement Income; provided, however, that the lump sum value of such Retirement Income (including benefits under Appendix C and Appendix D) does not exceed $1,000.  A Participant who receives a lump sum distribution pursuant to this Section 10.4 shall forfeit all Credited Service accrued prior to such distribution, and such forfeited Credited Service shall be disregarded if such Participant is subsequently reemployed by the Employer unless the Participant repays the entire amount of the distribution, plus interest compounded ann ually from the date of the distribution at the rate of 5 percent per year, prior to the earlier of (1) the expiration of the fifth consecutive Plan Year in which the Participant completed 500 or fewer Hours of service or (2) the fifth anniversary of the date of the Participant’s reemployment.

10.5

Irrevocability of Elections.  All elections of forms of benefit payment shall be irrevocable on the Participant’s Annuity Starting Date and may not thereafter be revoked or modified.

10.6

(a)

Direct Rollovers.  This Section 10.6 applies to distributions made under the Plan on or after January 1, 2002.  Notwithstanding any provision of the Plan to the contrary that would otherwise limit a distributee's election under this Section, a distributee may elect, at the time and in the manner prescribed by the Plan Administrator, and subject to such rules as the Plan Administrator may adopt consistent with the provisions of the Code and regulations thereunder, to have any portion of an eligible rollover distribution paid directly to an eligible retirement plan specified by the distributee in a direct rollover.

 

10.7

MINIMUM DISTRIBUTION REQUIREMENTS

(1)  

Precedence and Effective Date.  Subject to Section 10.2, Joint and Survivor Annuity Requirements, the requirements of this Section 10.7 shall apply to any distribution of a Participant's interest and will take precedence over any inconsistent provisions of this Plan.  However, this Section 10.7 is not intended to and shall not create any additional benefits or any additional optional forms of benefit; rather, this provision is included in order to restrict the timing and payment of benefits to the extent necessary to satisfy the requirements of Section 401(a)(9) of the Code.  Unless otherwise specified, the provisions of this Section apply to calendar years beginning after December 31, 2002.

(2)  

Requirements of Regulations Incorporated.  All distributions required under this Section shall be determined and made in accordance with Section 401(a)(9) of the Code, including the incidental death benefit requirement in Section 401(a)(9)(G) and the Income Tax Regulations thereunder.

(3)  

Limits on Distribution Periods.  As of the first distribution calendar year, distributions to a Participant, if not made in a single sum, may only be made over one of the following periods:

(A)  

the life of the Participant,

(B)  

the joint lives of the Participant and a designated beneficiary,

(C)  

a period certain not extending beyond the life expectancy of the Participant, or

(D)  

a period certain not extending beyond the joint life and last survivor expectancy of the Participant and a designated beneficiary.

(1)  

Required Beginning Date.  The Participant's entire interest will be distributed, or begin to be distributed, no later than the Participant's Required Beginning Date.

(2)  

Death of Participant Before Distributions Begin.  If the Participant dies before distributions begin, the Participant's entire interest will be distributed, or begin to be distributed, no later than as follows:

(A)  

If the Participant's surviving Spouse is the Participant's sole designated beneficiary, then distributions to the surviving Spouse will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died, or by December 31 of the calendar year in which the Participant would have attained age 70½, if later.

(B)  

If the Participant's surviving Spouse is not the Participant's sole designated beneficiary, then distributions to the designated beneficiary will begin by December 31 of the calendar year immediately following the calendar year in which the Participant died.

(C)  

If there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, the Participant's entire interest will be distributed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.

(D)  

If the Participant's surviving Spouse is the Participant's sole designated beneficiary and the surviving Spouse dies after the Participant but before distributions to the surviving Spouse are required to begin, this subparagraph (2), other than subparagraph (2)(A), will apply as if the surviving Spouse were the Participant.

(E)  

For purposes of this subparagraph (2) and paragraph (e), unless subparagraph (2)(D) applies, distributions are considered to begin on the Participant's Required Beginning Date.  If subparagraph (2)(D) applies, distributions are considered to begin on the date distributions are required to begin to the surviving Spouse under subparagraph (2)(A).  If distributions under an annuity meeting the requirements of this Section commence to the Participant before the Participant's Required Beginning Date (or to the Participant's surviving Spouse before the date distributions are required to begin to the surviving Spouse under subparagraph (2)(A)), the date distributions are considered to begin is the date distributions actually commence.

(3)  

Forms of Distribution.  Unless the Participant's interest is distributed in the form of an annuity purchased from an insurance company or in a single sum on or before the Required Beginning Date, as of the first distribution calendar year distributions will be made in accordance with paragraphs (c), (d) and (e) of this Section.  If the Participant's interest is distributed in the form of an annuity purchased from an insurance company, distributions thereunder will be made in accordance with the requirements of Section 401(a)(9) of the Code and Section 1.401(a)(9) of the regulations.  Any part of the Participant's interest which is in the form of an individual account described in Section 414(k) of the Code will be distributed in a manner satis fying the requirements of Section 401(a)(9) of the Code and Section 1.401(a)(9) of the regulations that apply to individual accounts.

(1)  

General Annuity Requirements.  If the Participant's interest is to be paid in the form of annuity distributions under the Plan, payments under the annuity shall satisfy the following requirements:

(A)  

the annuity distributions will be paid in periodic payments made at uniform intervals not longer than one year;

(B)  

the distribution period will be over a life (or lives) or over a period certain not longer than the period described in paragraphs (d) or (e);

(C)  

once payments have begun over a period, the period will be changed only in accordance with paragraph (f) of this Section;

(D)  

payments will either be nonincreasing or increase only as follows:

(i)  

by an annual percentage increase that does not exceed the percentage increase in an eligible cost-of-living index for a 12-month period ending in the year during which the increase occurs or a prior year;

(ii)  

by a percentage increase that occurs at specified times and does not exceed the cumulative total of annual percentage increases in an eligible cost-of-living index since the Annuity Starting Date, or if later, the date of the most recent percentage increase;

(iii)  

by a constant percentage of less than 5 percent per year, applied not less frequently than annually;

(iv)  

as a result of dividend or other payments that result from actuarial gains, provided:

(I)  

actuarial gain is measured not less frequently than annually,

(II)  

the resulting dividend or other payments are either paid no later than the year following the year for which the actuarial experience is measured or paid in the same form as the payment of the annuity over the remaining period of the annuity (beginning no later than the year following the year for which the actuarial experience is measured),

(III)  

the actuarial gain taken into account is limited to actuarial gain from investment experience,

(IV)  

the assumed interest rate used to calculate such actuarial gains is not less than 3 percent, and

(V)  

the annuity payments are not increased by a constant percentage as described in subparagraph (iii) above;

(v)  

to the extent of the reduction in the amount of the Participant's payments to provide for a survivor benefit, but only if there is no longer a survivor benefit because the beneficiary whose life was being used to determine the distribution period described in paragraph (d) dies or is no longer the Participant's beneficiary pursuant to a qualified domestic relations order within the meaning of Section 414(p) of the Code;

(vi)  

to provide a final payment upon the Participant's death not greater than the excess of the actuarial present value of the Participant's accrued benefit (within the meaning of Section 411(a)(7) of the Code) calculated as of the Annuity Starting Date using the Applicable Interest Rate defined in Exhibit I of the Plan and the Applicable Mortality Table defined in Exhibit I of the Plan (or, if greater, the total amount of employee contributions) over the total of payments before the Participant's death;

(vii)  

to allow a beneficiary to convert the survivor portion of a joint and survivor annuity into a single sum distribution upon the Participant's death;

(viii)  

to pay increased benefits that result from a Plan amendment; or

(ix)  

to the extent otherwise permitted under applicable Income Tax Regulations.

(2)  

Amount Required to be Distributed by Required Beginning Date and Later Payment Intervals.  The amount that must be distributed on or before the Participant's Required Beginning Date (or, if the Participant dies before distributions begin, the date distributions are required to begin hereunder) is the payment that is required for one payment interval.  The second payment need not be made until the end of the next payment interval even if that payment interval ends in the next calendar year.  All of the Participant's benefit accruals as of the last day of the first distribution calendar year will be included in the calculation of the amount of the annuity payments for payment intervals ending on or after the Participant's Required Beginning Date.

(3)  

Additional Accruals After First Distribution Calendar Year.  Any additional benefits accruing to the Participant in a calendar year after the first distribution calendar year will be distributed beginning with the first payment interval ending in the calendar year immediately following the calendar year in which such benefit accrues.

(1)  

Joint Life Annuities Where the Beneficiary Is Not the Participant's Spouse.  If the Participant's interest is being distributed in the form of a joint and survivor annuity for the joint lives of the Participant and a nonspouse beneficiary, annuity payments to be made on or after the Participant's Required Beginning Date to the designated beneficiary after the Participant's death must not at any time exceed the applicable percentage of the annuity payment for such period that would have been payable to the Participant using the table set forth in Section 1.401(a)(9)-6, Q&A 2(c)(2) in the manner described in Q&A 2(c)(1) of the regulations, to determine the applicable percentage.  If the form of distribution combines a joint and survivor annuity for the joint liv es of the Participant and a nonspouse beneficiary and a period certain annuity, the requirement in the preceding sentence will apply to annuity payments to be made to the designated beneficiary after the expiration of the period certain.

(2)  

Period Certain Annuities.  Unless the Participant's Spouse is the sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain for an annuity distribution commencing during the Participant's lifetime may not exceed the applicable distribution period for the Participant under the Uniform Lifetime Table set forth in Section 1.401(a)(9)-9, Q&A-2, of the regulations for the calendar year that contains the Annuity Starting Date.  If the Annuity Starting Date precedes the year in which the Participant reaches age 70, the applicable distribution period for the Participant is the distribution period for age 70 under the Uniform Lifetime Table set forth in Section 1.401(a)(9) -9, Q&A-2 of the regulations plus the excess of 70 over the age of the Participant as of the Participant's birthday in the year that contains the Annuity Starting Date.  If the Participant's Spouse is the Participant's sole designated beneficiary and the form of distribution is a period certain and no life annuity, the period certain may not exceed the longer of the Participant's applicable distribution period, as determined under this subparagraph (d)(2), or the joint life and last survivor expectancy of the Participant and the Participant's Spouse as determined under the Joint and Last Survivor Table set forth in Section 1.401(a)(9)-9, Q&A-3, of the regulations, using the Participant's and Spouse's attained ages as of the Participant's and Spouse's birthdays in the calendar year that contains the Annuity Starting Date.

(1)  

Death After Distributions Begin.  If the Participant dies after distribution of his interest begins in the form of an annuity meeting the requirements of this Section, the remaining portion of the Participant's interest will continue to be distributed over the remaining period over which distributions commenced.

(2)  

Death Before Distributions Begin.

(A)  

Participant Survived by Designated Beneficiary.  If the Participant dies before the date distribution of his interest begins and there is a designated beneficiary, the Participant's entire interest will be distributed, beginning no later than the time described in paragraph (b)(2)(A) or (B), over the life of the designated beneficiary or over a period certain not exceeding:

(i)  

unless the Annuity Starting Date is before the first distribution calendar year, the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar year immediately following the calendar year of the Participant's death; or

(ii)  

if the Annuity Starting Date is before the first distribution calendar year, the life expectancy of the designated beneficiary determined using the beneficiary's age as of the beneficiary's birthday in the calendar year that contains the Annuity Starting Date.

(B)  

No Designated Beneficiary.  If the Participant dies before the date distributions begin and there is no designated beneficiary as of September 30 of the year following the year of the Participant's death, distribution of the Participant's entire interest will be completed by December 31 of the calendar year containing the fifth anniversary of the Participant's death.

(C)  

Death of Surviving Spouse Before Distributions to Surviving Spouse Begin.  If the Participant dies before the date distribution of his interest begins, the Participant's surviving Spouse is the Participant's sole designated beneficiary, and the surviving Spouse dies before distributions to the surviving Spouse begin, this paragraph (e) will apply as if the surviving Spouse were the Participant, except that the time by which distributions must begin will be determined without regard to paragraph (b)(2)(A).

(1)  

Permitted Changes.  An annuity payment period may be changed only in association with an annuity payment increase described in subparagraph (c)(1)(D) of this Section or in accordance with subparagraph (2).

(2)  

Reannuitization.  An annuity payment period may be changed and the annuity payments modified in accordance with that change if the conditions in subparagraph (3) are satisfied and:

(A)  

the modification occurs when the Participant retires or in connection with a Plan termination;

(B)  

the payment period prior to modification is a period certain without life contingencies, such as in Sections 10.3(c) and 10.3(d) hereof;

(C)  

the annuity payments after modification are paid under a qualified joint and survivor annuity over the joint lives of the Participant and a designated beneficiary, the Participant's Spouse is the sole designated beneficiary, and the modification occurs in connection with the Participant's becoming married to such Spouse; or

(D)  

to the extent otherwise permitted under applicable Income Tax Regulations.

(A)  

the future payments after the modification satisfy the requirements of Section 401(a)(9) of the Code, Section 1.401(a)(9) of the regulations, and this Section (determined by treating the date of the change as a new Annuity Starting Date and the actuarial present value of the remaining payments prior to modification as the entire interest of the Participant);

(B)  

for purposes of Section 415 and Section 417 of the Code, the modification is treated as a new Annuity Starting Date;

(C)  

after taking into account the modification, the annuity (including all past and future payments) satisfies the requirements of Section 415 of the Code (determined at the original Annuity Starting Date, using the interest rates and mortality tables applicable to such date); and

(D)  

the end point of the period certain, if any, for any modified payment period is not later than the end point available to the Employee at the original Annuity Starting Date under Section 401(a)(9) of the Code and this Section.

(1)  

Special rule.  For purposes of this Section, payments made to a Participant's surviving child until the child reaches the age of majority (or dies, if earlier) shall be treated as if such payments were made to the surviving Spouse to the extent the payments become payable to the surviving Spouse upon cessation of the payments to the child.

(2)  

Age of majority.  For purposes of this paragraph (g), a child shall be treated as having not reached the age of majority if the child has not completed a specified course of education and is under the age of 26.  In addition, a child who is disabled within the meaning of Section 72(m)(7) of the Code when the child reaches the age of majority shall be treated as having not reached the age of majority so long as the child continues to be disabled.

(1)  

Actuarial gain.  The difference between an amount determined using the. actuarial assumptions (i.e., investment return, mortality, expense, and other similar assumptions) used to calculate the initial payments before adjustment for any increases and the amount determined under the actual experience with respect to those factors.  Actuarial gain also includes differences between the amount determined using actuarial assumptions when an annuity was purchased or commenced and such amount determined using actuarial assumptions used in calculating payments at the time the actuarial gain is determined.

(2)  

Designated beneficiary.  The individual who is designated by the Participant (or the Participant's surviving Spouse) as the beneficiary of the Participant's interest under the Plan and who is the designated beneficiary under Section 401(a)(9) of the Code and Section 1.401(a)(9)-4 of the regulations.

(3)  

Distribution calendar year.  A calendar year for which a minimum distribution is required.  For distributions beginning before the Participant's death. the first distribution calendar year is the calendar year immediately preceding the calendar year which contains the Participant's required beginning date.  For distributions beginning after the Participant's death, the first distribution calendar year is the calendar year in which distributions are required to begin pursuant to subparagraph (b)(2).

(4)  

Eligible cost-of-living index.  An index described in paragraphs (b)(2), (b)(3) or (b)(4) of Section 1.401(a)(9)-6, Q&A-14, of the regulations.

(5)  

Life expectancy.  Life expectancy as computed by use of the Single Life Table in Section 1.401(a)(9)-9, Q&A-1 of the regulations.

(6)  

Required beginning date.  The required beginning date is the date specified in Section 14.9 hereof.

11.1

Appointment of Named Fiduciary.  The Committee is hereby designated as the named Fiduciary of the Plan, within the meaning of Section 402(a)(2) of ERISA.

11.2

Authority of Named Fiduciary.  Subject to the provisions of Section 11.4, the Committee shall have the authority to control and manage the operation and administration of the Plan in accordance with the terms hereof.

11.3

Discharge of Duties - Fiduciaries.  Any Fiduciary with respect to the Plan shall discharge its duties solely in the interest of the Participants and Beneficiaries for the exclusive purpose of providing benefits to Participants and Beneficiaries and defraying reasonable expenses of administering the Plan.  In addition any Fiduciary with respect to the Plan shall discharge its duties with the care, skill, prudence and vigilance under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.

11.4

Delegation of Duties.  The Committee shall have authority and discretion to designate or appoint in writing (i) persons to carry out specified fiduciary responsibilities, other than Trustee responsibilities, to manage and control the assets of the Plan, and (ii) investment advisors and managers to manage (including the power to acquire and dispose of) any assets of the Plan.  Any such person shall serve at the pleasure of the Committee and may resign by delivering a written notice to the Committee.  Any delegation of duties shall be made and acknowledged in writing and shall clearly state the powers and duties so delegated.

11.5

Appointment of Committee.  The Board shall appoint the Committee which shall consist of not less than three members, who shall serve at the pleasure of the Board.  The members of the Committee shall elect a chairman and a secretary, the latter of whom may, but need not be, a member of the Committee.

11.6

Meetings.  The Committee shall hold meetings upon such notice, and at such place or places, and at such intervals as it may from time to time determine.

11.7

Quorum.  A majority of the members of the Committee at any time in office shall constitute a quorum for the transaction of business.  All resolutions or other actions taken by the Committee shall be by vote of a majority of those present at a meeting of the Committee; or without a meeting by instrument in writing signed by a majority of the members of the Committee.

11.8

Expenses.  The reasonable expenses incident to the operation of the Plan, including premiums for termination insurance payable to the Pension Benefit Guaranty Corporation, the compensation of the Trustee, Actuary, attorney, advisors, Fiduciaries, and such other technical and clerical assistance as may be required, shall be paid out of the Fund, but the Employer in its discretion may elect at any time to pay part or all thereof directly, and any such election shall not bind the Employer as to its right to elect with respect to the same or other expenses at any other time to have such compensation paid from the Fund.

11.9

Powers and Duties of the Committee.  In addition to any implied powers and duties which may be needed to carry out the provisions of the Plan, the Committee, subject to the provisions of Section 11.4, shall have the following specific powers, duties and discretion:

 

(a)

To make and enforce such rules and regulations as it shall deem necessary or proper for the efficient administration of the Plan;

 

(b)

To interpret the Plan and to decide any and all matters arising hereunder; including the right to remedy possible ambiguities, inconsistencies or omissions, and the discretionary authority to interpret the Plan, to make factual determinations, and to decide all questions of entitlement to benefits and the amount thereof; provided, however, that all such interpretations and decisions shall be applied in a uniform and nondiscriminatory manner to all Employees similarly situated;

 

(c)

To compute the amount of Retirement Income which shall be payable to any Participant, Spouse or Beneficiary in accordance with the provisions of the Plan; and

 

(d)

To authorize disbursements from the Fund, any instructions of the Committee to the Trustee to be evidenced in writing and signed by a member of the Committee delegated with such authority by a majority of the Committee.

11.10

Administrator.  The Committee may designate an Administrator of the Plan, and may delegate to the Administrator such duties as the Committee may decide including the responsibility to prepare and file, or to cause to be prepared and filed, such reports, descriptions, summaries financial and other statements as may be required from time to time under applicable provisions of ERISA, within the time prescribed for the preparation or filing of such documents, and to furnish such reports, statements and documents to Participants and Beneficiaries of the Plan as may be required by ERISA, within the time specified for furnishing such documents.  Any such designation and delegation shall be made in the manner provided in Section 11.4.

11.11

Agent for Service.  The Committee, or the Administrator if one shall be appointed, shall be the agent for service of legal process in connection with any claim or proceeding relating to the Plan.

11.12

Use of Enrolled Actuary.  The Company shall employ or engage an Actuary to make actuarial valuations of the liabilities under this Plan and to recommend the amounts of contributions to be made and to perform such other services deemed necessary or advisable in connection with the administration of the Plan.

11.13

Bonding; Liability of Committee.  The Committee, or its delegee, shall ensure that each Fiduciary of the Plan, including members of the Committee, is bonded in accordance with ERISA.  The Employer shall indemnify and hold harmless each member of the Committee, the Administrator, and any Director or Employee held to be a Fiduciary with respect to the Plan from any liability, claim, demand, suit or action of any type arising from any action or failure to act; provided that such person acted in good faith and in a manner he reasonably believed to be in the best interests of the Participants and Beneficiaries and consistent with the provisions of the Plan and, with respect to any criminal action or proceeding, that he had no reasonable cause to believe his conduct was unlawful.

11.14

Reliance on Reports and Certificates.  The Committee, and its delegees, shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports which will be furnished by an Actuary, accountant, controller, counsel or other person who is employed or engaged for such purposes.

11.15

Member’s Own Participation.  No member of the Committee may act, vote or otherwise influence a decision of the Committee specifically relating to his own participation under the Plan.

11.16

Claims Procedure.  Each Participant and Beneficiary of the Plan shall submit all claims for benefits, claims relating to the amount or manner of any distribution, and any other request relating to any account, in writing, to the Administrator of the Plan.  The Administrator shall within a reasonable period of time, but not later than 60 days after receipt thereof, either approve or deny such claim or request either wholly or in part, and notify the claimant in writing of the action taken.

11.17

Notice of Denial.  If such claim or request is wholly or partially denied, the written notice of the Administrator shall set forth in a manner calculated to be understood by the claimant:

 

(a)

specific reasons for the denial;

 

(b)

specific references to the pertinent Plan provisions on which the denial is based;

 

(c)

specific reference to any additional material or information necessary for the claimant to perfect review of the claim and an explanation of why such material or information is necessary;

 

(d)

an explanation of the Plan’s claims review procedure; and

 

(e)

such other information as may be required under Regulations of the U.S. Department of Labor.

11.18

Review.  Upon denial of such a claim or request, the claimant shall be entitled within 60 days after the receipt of written notice of denial by the Administrator:

 

(a)

to request, in writing, a review by the Committee of the denial;

 

(b)

to review pertinent documents; and

 

(c)

to submit issues and comments in writing.

12.1

Appointment of Trustee.  The Trustee under the Plan will be appointed by the Board, with such powers, as to investments, reinvestment, control and disbursement of the Fund, as set forth in the Trust Agreement, or in such Trust Agreement as modified from time to time.  The Board may remove the Trustee at any time on the notice required by the terms of such Trust Agreement, and upon such removal or upon the resignation of any such Trustee, such Board will designate a successor Trustee.

12.2

The Employer shall contribute to the Trust Fund such amounts as are deemed necessary by an Actuary to fund the benefits provided by the Plan on an acceptable basis in accordance with Title I, Section 302 and Title II, Section 1013 of ERISA.  Any actuarial gains arising from actual experience under the Plan will be used to reduce future Employer contributions and will not be used to increase any benefits payable under the Plan.

12.3

Except as provided in Section 12.6, Section 12.7, and Section 13.4, all Employer contributions when made to the Trust Fund and all property of the Trust Fund, including income from investments and all other sources, shall be retained for the exclusive benefit of Participants, Spouses, or their Beneficiaries and shall be used to pay benefits provided hereunder or to pay expenses of administration of the Plan and the Trust Fund to the extent not paid by the Employer.

12.4

The Employer shall not be required to make, but may make in any calendar or fiscal year, any contributions to the Trust Fund in any amount which is greater than the amount specified in Section 12.2.  The timing of all contributions shall be entirely discretionary with the Employer to the extent permitted by ERISA.

12.5

Participants will not be required or permitted to make contributions to the Plan.

12.6

Amounts forfeited by any Participant shall be used to reduce Employer contributions.

12.7

Recapture by Employer.  Contributions by the Employer are paid to the Trust on the condition that the same qualify for deduction under Section 404 of the Code.  Any such contribution for which deduction is disallowed (to the extent disallowed), reduced by any loss attributable thereto (if any) while held in Trust, shall be returned to the Employer within one year after the disallowance of the deduction, but not thereafter.  Furthermore, if any such contribution by the Employer is made under a mistake of fact, such contribution in excess of the amount that would have been contributed had no mistake of fact occurred, reduced by any loss attributable thereto (if any) while held in Trust, shall be returned to the Employer within one year after the payment of the contribution, but not thereafter.

13.1

Right to Amend or Terminate.  The Employer hopes and expects to continue the Plan indefinitely.  Nevertheless, each Employer maintains the right to suspend, terminate, or completely discontinue contributions under the Plan with respect to its Employees and the Board may terminate the Plan for any reason at any time; subject to the requirement that the Administrator shall file a notice of intent to terminate with the Pension Benefit Guaranty Corporation (“PBGC”) at least 60 days prior to the proposed date of termination of the Plan, and shall comply with all other provisions of ERISA or the PBGC relating to plan terminations.  In addition, the Company, by action of the Board (or a Committee authorized by the Board to act on its behalf), may amend or modify the Plan from time to time, provided, however, that no such action shall adversely affect Participants to the extent of their vested benefits, nor shall such action decrease a Participant’s accrued benefit or eliminate an optional form of distribution with respect to benefits accrued prior to such amendment, unless permitted under the Code and ERISA.  Notwithstanding the foregoing, however, any modification or amendment of the Plan may be made retroactively, if necessary or appropriate to qualify or maintain the Plan as a Plan meeting the requirements of the Code and ERISA.  Upon any termination of the Plan all accrued benefits, to the extent funded, shall become nonforfeitable on the date of the termination.  In the event of partial termination of the Plan, all accrued benefits for Participants affected by such partial termination, to the extent funded, shall become nonforfeitable on the date of the termination.

13.2

Change in Vesting.  If an amendment or a change in the top-heavy status of the Plan changes the vesting schedule of the Plan, as set forth in Section 7.2 hereof, any Participant having three (3) or more years of Service on the date which is sixty (60) days after such amendment or change is adopted or becomes effective (or, if later, sixty (60) days after written notice of the amendment is given) may, no later than the end of the election period, elect to remain subject to the vesting schedule in effect prior to such amendment or change.  For purposes of the foregoing, the “election period” shall begin on the date the amendment changing the vesting schedule is adopted or the date on which the Plan’s top-heavy status is changed and shall end no earlier than the latest of the following dates (provided that in the cas e of a change in the Plan’s top-heavy status, only clause (b) shall apply):

(a)  

the date which is 60 days after the day the Plan amendment is adopted;

(b)  

the date which is 60 days after the day the Plan amendment becomes effective or the top-heavy status of the Plan changes; or

(c)  

the date which is 60 days after the day the Participant is issued written notice of the Plan amendment by the Employer or Administrator.

13.3

Mergers, Consolidations and Transfers.  The Plan shall not be automatically terminated by the Employer’s acquisition by or merger into any other company, but the Plan shall be continued after such merger provided the successor company agrees to continue the Plan.  All rights to amend, modify, suspend, or terminate the Plan shall be transferred to the successor company, effective as of the date of the merger.

 

The merger or consolidation with, or transfer of assets and liabilities to, any other qualified retirement plan shall be permitted only if the benefit each plan participant would receive if the plan were terminated immediately after such merger or consolidation, or transfer of assets and liabilities, would be at least

 

as great as the benefit he would have received had the Plan been terminated immediately before any such transaction.

13.4

Distribution of Funds upon Termination.  In the event the Plan shall be terminated or contributions permanently discontinued, the then present value of benefits vested in each Participant in accordance with Article VII shall be determined as of the Plan termination date and the assets of any Fund then held by the Trustee as reserves for Retirement Income for Participants under this Plan shall be allocated to the extent that they shall be sufficient, after providing for expenses of administration, in the order of precedence set forth below:

(a)  

There shall first be set aside an amount which will provide Retirement Income for Participants, Spouses, or Beneficiaries who were receiving benefits or who were eligible to receive benefits at least three years prior to termination of the Plan based on Plan provisions in effect five years prior to the date of the Plan’s termination.

(b)  

There shall next be set aside an amount which will provide all other benefits insured by the PBGC.

(c)  

There shall next be set aside an amount which will provide all other vested benefits, under the provisions of the Plan on its termination date, but which are not incurred under ERISA.

(d)  

Finally, there shall be set aside an amount which will provide all other accrued benefits for Participants who were not vested as of the date of Plan termination.

13.5

Provision of Benefits.  The Retirement Income payable in accordance with Section 13.4 shall be provided through continuance of the existing Trust Agreement or through a new instrument entered into for that purpose or through the purchase of nontransferable annuity contract or contracts from a commercial life insurance company or by a combination thereof.  If the allocations produce Retirement Income of less than $120 a year, a lump sum payment which is the Actuarial Equivalent of such Retirement Income may be paid in lieu thereof.

13.6

Special Limitations.

14.1

No Guarantee of Employment.  The Plan shall not be deemed to constitute a contract between an Employer and any Employee or to be a consideration for, or an inducement for, the employment of any Employee by an Employer.  Nothing contained in the Plan shall be deemed to give any Employee the right to be retained in the service of any Employer or to interfere with the right of the Employer to discharge or to terminate the service of any Employee at any time without regard to the effect such discharge or termination may have on any rights under the Plan.

14.2

Payments to Minors and Incompetents.  If a Participant, Contingent Annuitant or Beneficiary entitled to receive any benefits hereunder is a minor or is deemed by the Committee or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, they will be paid to such persons as the Committee might designate or to the duly appointed guardian.  Such payment shall, to the extent made, be deemed a complete discharge of any liability for such payment under the Plan.

14.3

Nonalienation of Benefits.  To the extent permitted by law and with the exception of payments pursuant to a qualified domestic relations order within the meaning of Section 414(p) of the Code, no benefit payable under this Plan will be subject in any manner to anticipation, alienation, assignment, garnishment, or pledge; and any attempt to anticipate, alienate, assign, garnishee or pledge the same will be void; and no such benefits will be in any manner liable for or subject to the debts, liabilities, engagements, or torts of any Participant; and if any Participant is adjudicated bankrupt or attempts to anticipate, alienate, assign, or pledge any benefits, then such benefits will, in the discretion of the Committee, cease, and in this event, the Committee will have the authority to cause the same or any part thereof to be held or applied to or for the benefit of such Participant, his Spouse, his children or other dependents, or any of them, in such manner and in such proportion as the Committee may deem proper.

14.4

Purchase of Annuities.  If the Committee for any reason deems it advisable, the Retirement Income benefits payable at Retirement Date under the Plan may be provided through the purchase of non-transferable annuities from such insurance company or companies as may be approved by the Committee.  Payment thereof will be made from the Fund held by the Trustee.

14.5

Notwithstanding any other provision of the Plan, a former Participant shall not be entitled to payment of duplicate benefits upon again becoming a Participant.

14.6

A Participant shall not, with or without cause, be divested of any annual benefits that are vested under the terms of the Plan.

14.7

Governing Law.  The provisions of the Plan will be construed according to the laws of the State of Connecticut, subject to ERISA.

14.8

Preservation of Prior Methods of Payment.  Notwithstanding any of the methods of payment of benefits provided in Articles IX and X, in the case of a Participant who has made a designation prior to January 1, 1984 which conforms to the requirements of Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 and which provides that one or more of the payment methods contained in the Plan prior to January 1, 1984 shall apply to such Participant’s benefits, the Participant and any Beneficiary shall be entitled to receive such benefits in accordance with the payment methods in effect under the Plan prior to January 1, 1984.  The Committee shall be authorized to disregard any designation, or any portion thereof, which has been made in accordance with the preceding sentence if it determines that such action is necessary to preserve the tax qualification of the Plan.

14.9

Commencement of Benefits.  In no case shall distributions of benefits under the Plan be made or commence later than April 1 of the calendar year following the calendar year in which a Participant attains age 70½ whether or not he has retired or otherwise terminated his employment at that time; provided that, however, if a Participant had attained age 70½ before January 1, 1988 and was not a five percent (5%) owner at any time during the Plan Year ending with or within the calendar year in which the Participant had attained age 66 ½ or any subsequent Plan Year, such Participant may elect to delay his distribution until the calendar year in which the Participant retires.  This date shall constitute the “Required beginning date,” see Section 10.7(h)(6) hereof.  Furthermore, if a Participant ha s made a designation prior to January 1, 1984 which conforms to the requirements of Section 242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982, distributions of benefits under the Plan may be made or commence in accordance with the terms of such designation.

14.10

Notwithstanding any other provision of the Plan, in no event shall a Participant’s benefit payments under the Plan decrease due to any increase in such Participant’s social security benefits.

14.11

Suspension of Benefits.

(a)  

Except for payments required by Section 14.9 hereof, benefits under this Plan are payable only after termination of employment; provided, however, that benefits shall be paid to a Participant who is otherwise entitled to receive benefits hereunder even if such Participant has not terminated employment, but only if such Participant does not complete at least 40 Hours of service during a calendar month in Section 203(a)(3)(B) service, within the meaning of Section 203(a)(3)(B) of ERISA and Section 2530.203-3 of the Code of Federal Regulations.  In addition, normal or early retirement benefits in pay status will be suspended for each calendar month during which the Participant completes at least 40 Hours of service in Section 203(a)(3)(B) service.  In accordance with the foregoing, the actuarial value of benefits which commence later than a Participant’s Normal Retirement Date will be computed without regard to amounts which would have been suspended under the preceding sentences as if the Participant had been receiving benefits since Normal Retirement Date.

(b)  

If benefit payments have been suspended, payments shall resume no later than the first day of the third calendar month after the calendar month in which the Participant ceases to be employed for at least 40 Hours of service for a calendar month in Section 203(a)(3)(B) service.  The initial payment upon resumption shall include the payment scheduled to occur in the calendar month when payments resume and any amounts withheld during the period between the cessation of such Section 203(a)(3)(B) service and the resumption of payments.

(c)  

No payment shall be withheld by the Plan pursuant to this Section unless the Plan notifies the Participant by personal delivery or first class mail during the first calendar month or payroll period in which the Plan withholds payments that his or her benefits are suspended.  Such notification shall contain a description of the specific reasons why benefit payments are being suspended, a description of the Plan provision relating to the suspension of payments, a copy of such provisions, and a statement to the effect that applicable Department of Labor regulations may be found in Section 2530.203-3 of the Code of Federal Regulations.  In addition, the notice shall inform the Participant of the Plan’s procedures for affording a review of the suspension of benefits.  Requests for such review may be considered in accorda nce with the claims procedure adopted by the Plan pursuant to Section 503 of ERISA and applicable regulations.

(d)  

The amount suspended shall be an amount equal to the portion of a monthly benefit payment derived from Company contributions.

(e)  

This Section 14.11 does not apply to the minimum benefit to which the Participant may become entitled under the top-heavy rules of Article XV.

 

(f)

This Section 14.11 does not apply to benefits which a Participant had accrued as of November 15, 1989.  The effective date of this provision is June 7, 2004.

14.12

Transfers of Plan Participants.

 

(a)

The Plan provides benefits under three separate benefit structures.  One structure applies to Former Crystal Water Participants and is described in Appendix C.  Another structure relates to Participants who are employees of Barnstable Water Company and is described in Appendix D.  The third structure is the general structure applicable under the Plan for all other Participants.  The Plan document does not address what happens in the event a Participant transfers from one group to another.  The purpose of this Section 14.12 is to set forth the rules which are intended to apply in such instances.

 

(b)

If a Former Crystal Water Company Participant transfers to the Company or a Participating Company at the request of the Company or a Participating Company, he shall continue to participate in the Plan based upon all of the Plan provisions applicable to Former Crystal Water Participants.  If any other Participant transfers to Barnstable Water Company at the request of the Company or a Participating Company, he shall continue to participate in the Plan based upon all of the Plan provisions applicable to Participants who are employed by the Company or Participating Company from which he transferred.  If a Participant who is employed by Barnstable Water Company transfers to the Company or a Participating Company, whether or not at the request of the Company or a Participating Company, however, he shall be covered under the provisions of paragraph (c) below.

 

(c)

In all other cases, if a Participant transfers from the Company or a Participating Company to another Employer, or if a Participant ceases work for the Company or a Participating Company and commences work for another Employer, and in either case a benefit formula applicable with respect to the second Employer is different than the benefit formula applicable to the first Employer, then except as otherwise provided in paragraph (d) below, no further benefits shall be earned under the first formula when he ceases work for the first Employer, and the Participant shall accrue benefits under the Plan formula applicable with respect to the second Employer from the time he commences work for such second Employer based upon compensation and service with the second Employer and the Plan provisions applicable to that Employer.  Service with both Employers shall count, however, for vesting purposes.

 

(d)

There are different methods of crediting service under the Plan for different Employers, for both vesting purposes and for purposes of accruing benefits.  Therefore, if the provisions of paragraph (c) apply, then notwithstanding anything to the contrary set forth in such paragraph (c), the following rules apply in computing Credited Service (or Benefit Service) and Vesting Service for the calendar year in which work commences for the second Employer:

 

(1)

If the first Employer counts Hours of Service in determining Credited Service or Benefit Service, and the second Employer does not, and if the Participant receives credit for any Hours of Service from the first Employer for the calendar year in which the Participant commences employment with the second Employer, then for that year he shall be deemed to have earned a full Year of Credited Service or Benefit Service (as the case may be) under the provisions of the Plan applicable to the first Employer, and no Credited Service or Benefit Service for that year under the provisions of the Plan applicable to the second Employer.  In such event, he shall also earn one full year of Vesting Service under the Plan for that calendar year.

 

(2)

If the first Employer does not count Hours of Service in counting Credited Service or Benefit Service and the second Employer does count Hours of Service, and if the Participant receives credit for any period of service for the first Employer for the calendar year in which the Participant commences employment with the second Employer, then for that year, he shall be deemed to have earned a full year of Credited Service or Benefit Service under the provisions of the Plan applicable to the first Employer and no Credited Service or Benefit Service for that year under the provisions of the Plan applicable to the second Employer.  In such event, he shall also earn one full year of Vesting Service under the Plan for that year.

 

(e)

If both Employers count hours in determining Credited Service or Benefit Service, and if the provisions of paragraph (c) apply, then for the year in which the Participant commences work for the second Employer, a year of Credited Service or Benefit Service shall be earned under the Plan provisions applicable to the first Employer (and not the second Employer) if it had been earned immediately prior to the time he commences work for the second Employer; otherwise, it shall be earned for that calendar year, if at all, under the Plan provisions applicable to the second Employer.

 

(f)

If a Participant transfers to an Affiliated Company that has not adopted the Plan, whether voluntarily or at the request of the Company or an Affiliated Company, then he shall accrue no further benefits under the Plan; and, in no event shall the provisions of this Section 14.12 be construed so as to provide for benefit accruals for any period during which an individual was (or is) employed by an Affiliated Company that has not adopted the Plan.

15.1  

Compensation. Compensation of an Employee as defined in Section 16.6(b) hereof (subject to any limitation prescribed under Section 401(a)(17) of the Code).

15.2  

Key Employee.  Key Employee means any Employee or former Employee (including any deceased employee) who at any time during the Plan Year that includes the Determination Date was an officer of the Employer having annual compensation greater than $130,000 (as adjusted under Section 416(i)(1) of the Code for Plan Years beginning after December 31, 2002), a 5 percent owner of the Employer, or a 1 percent owner of the Employer having annual compensation of more than $150,000.  For this purpose, annual compensation means compensation within the meaning of Section 16.6(b) hereof.  The determination of who is a Key Employee will be made in accordance with Section 416(i)(1) of the Code and the applicable regulations and other guidance of general applicability is sued thereunder.

15.3  

Top-Heavy Plan.  For any Plan Year, this Plan is top-heavy if any of the following conditions exists:

(a)  

If the Top-Heavy Ratio for this Plan exceeds 60 percent and this Plan is not part of any Required Aggregation Group or Permissive Aggregation Group of plans.

(b)  

If this Plan is a part of a Required Aggregation Group of plans (but which is not part of a Permissive Aggregation Group) and the Top-Heavy Ratio for the Required Aggregation Group of plans exceeds 60 percent.

(c)  

If this Plan is a part of a Required Aggregation Group of plans and part of a Permissive Aggregation Group and the Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60 percent.

15.4  

Top-Heavy Ratio.

(a)  

If the Employer maintains one or more defined benefit plans and the Employer has not maintained any defined contribution plan (including any simplified employee pension plan) which during the five year period ending on the Determination Date(s) has or has had account balances, the Top-Heavy Ratio for this Plan alone or for the Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the Present Values of accrued benefits of all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the Present Values of all accrued benefits, determined in accordance with Section 416 of the Code and the Regulations thereunder.

(b)  

If the Employer maintains one or more defined benefit plans and the Employer maintains or has maintained one or more defined contribution plans (including any simplified employee pension plan) which during the five year period ending on the Determination Date(s) has or has had any account balances, the Top-Heavy Ratio for any Required or Permissive Aggregation Group as appropriate is a fraction, the numerator of which is the sum of the Present Values of accrued benefits under the aggregated defined benefit plan or plans for all Key Employees, determined in accordance with (a) above, and the sum of account balances under the aggregated defined contribution plan or plans for all Key Employees as of the Determination Date(s), and the denominator of which is the sum of the Present Values of accrued benefits under the aggregated defined benefit plan or pla ns, determined in accordance with (a) above for all Participants, and the sum of the account balances under the aggregated defined contribution plan or plans for all Participants as of the Determination Date(s), all determined in accordance with Section 416 of the Code and the Regulations thereunder.

 

(c)

Distributions During Year Ending on the Determination Date.  The present values of accrued benefits and the amounts of account balances of an Employee as of the Determination Date shall be increased by the distributions made with respect to the Employee under the Plan and any plan aggregated with the Plan under Section 416(g)(2) of the Code during the 1 year period ending on the Determination Date.  The preceding sentence shall also apply to distributions under a terminated plan which, had it not been terminated, would have been aggregated with the Plan under Section 416(g)(2)(A)(i) of the Code.  In the case of a distribution made for a reason other than severance from employment, death, or disability, this provision shall be applied by substituting "5 year period" for "1 year period."

(d)  

For purposes of (a) and (b) above, the value of account balances and the Present Value of accrued benefits shall be determined as of the most recent Valuation Date that falls within or ends with the 12-month period ending on the Determination Date, except as provided in Section 416 of the Code and the Regulations thereunder for the first and second plan year of a defined benefit plan.  The account balances and accrued benefits of a Participant (1) who is not a Key Employee but who was a Key Employee in a prior year, or (2) who has not performed services for the Employer maintaining the plan at any time during the one-year period ending on the Determination Date shall be disregarded.  The calculation of the Top-Heavy Ratio, and the extent to which distributions, rollovers, and transfers are taken into account will be made in accorda nce with Section 416 of the Code and the Regulations thereunder.  Deductible Employee contributions shall not be taken into account for purposes of computing the Top-Heavy Ratio.  When aggregating plans, the value of account balances and accrued benefits shall be calculated with reference to the Determination Date(s) that falls within the same calendar year.

(e)  

Permissive Aggregation Group.  The Required Aggregation Group of plans plus any other plan or plans of the Employer which, when considered as a group with the Required Aggregation Group, would continue to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.

(f)  

Required Aggregation Group.  (1) Each qualified plan of the Employer in which at least one Key Employee participates or participated at any time during the Plan Year containing the Determination Date or any of the four preceding Plan Years (regardless of whether the plan has terminated), and (2) any other qualified plan of the Employer which enables a plan described in (1) to meet the requirements of Sections 410(a)(4) and 410 of the Code during the Determination Period.

(g)  

Determination Date.  For any Plan Year, the last day of the preceding Plan Year.

(h)  

Valuation Date.  For purposes of computing the Top- Heavy Ratio, the Valuation Date shall be the normal annual valuation date for the Plan.

(i)  

Present Value.  For purposes of computing the Top-Heavy Ratio, any benefit shall be discounted only for mortality and interest as follows:

(j)  

If the Plan is or becomes a Top-Heavy Plan in any Plan Year beginning after December 31, 1983, the following provisions shall supersede any conflicting provision in the Plan.

(k)  

Vesting.

If Years of

Vesting Service Are

Then Vested

Percentage Is

 

Less than 2

0%

2 but less than 3

20%

3 but less than 4

40%

4 but less than 5

60%

5 but less than 6

80%

6 or more

100%

 

Notwithstanding the foregoing, a Participant shall be 100% vested upon the later of his 65th birthday or the fifth anniversary of his entry into the Plan.  In the event of a change in the top-heavy status of the Plan, Section 13.2 of the Plan shall apply.

 

(i)

Notwithstanding any other provision in this Plan except (iii), (iv) and (v) below, for any Plan Year in which this Plan is a Top Heavy Plan, each Participant who is not a Key Employee and has completed 1,000 Hours of service shall accrue a benefit (to be provided solely by Employer contributions and expressed as a life annuity commencing at normal retirement age) of not less than two percent of his or her highest average Compensation for the five consecutive years for which the Participant had the highest  Compensation.  The minimum accrual is determined without regard to any Social Security contribution.  The minimum accrual applies even though under other Plan provisions the Participant would not otherwise be entitled to receive an accrual, or would have received a lesser accrual for the year because (1) the non-Key Employee fails to make mandatory contributions to the Plan, (2) the non-Key Employee’s Compensation is less than a stated amount, (3) the non-Key Employee is not employed on the last day of the accrual computation period, or (4) the Plan is integrated with Social Security.

 

(ii)

No additional benefit accruals shall be provided pursuant to (i) above to the extent that the total accruals on behalf of the Participant attributable to Employer contributions will provide a benefit expressed as a life annuity commencing at age 65 that equals or exceeds 20 percent of the Participant’s highest average Compensation for the five consecutive years for which the Participant had the highest Compensation.

 

(iii)

The provisions in (i) above shall not apply to any Participant to the extent that the Participant is covered under any other plan or plans of the Employer which provide(s) for the minimum allocation or benefit applicable to Top-Heavy Plans.

 

(iv)

All accruals of Employer derived benefit, whether or not attributable to years for which the Plan is a Top-Heavy Plan, may be used in computing whether the minimum accrual requirements of Section (ii) above are satisfied.

 

(v)

For purposes of satisfying the minimum benefit requirements of Section 416(c)(1) of the Code and the Plan, in determining years of service with the Employer, any service with the Employer shall be disregarded to the extent that such service occurs during a Plan Year when the Plan benefits (within the meaning of Section 410(b) of the Code) no Key Employee or former Key Employee.  No accrual shall be provided pursuant to this paragraph (b) for a year in which the Plan does not benefit any Key Employee or former Key Employee.

16.1

The limitations of this Article XVI shall apply in Limitation Years beginning on or after July 1, 2007, except as otherwise provided herein.

16.2

The Annual Benefit otherwise payable to a Participant under the Plan at any time shall not exceed the Maximum Permissible Benefit.  If the benefit the Participant would otherwise accrue in a Limitation Year would produce an Annual Benefit in excess of the Maximum Permissible Benefit, the benefit shall be limited (or the rate of accrual reduced) to a benefit that does not exceed the Maximum Permissible Benefit.

16.3

If the Participant is, or has ever been, a Participant in another qualified defined benefit plan (without regard to whether the plan has been terminated) maintained by the Employer or a predecessor employer, the sum of the Participant's Annual Benefits from all such plans may not exceed the Maximum Permissible Benefit.  Where the Participant's employer-provided benefits under all such defined benefit plans (determined as of the same age) would exceed the Maximum Permissible Benefit applicable at that age, then the Participant’s Annual Benefits under this Plan shall be limited so that the Maximum Permissible Benefit is not exceeded.

16.4

The application of the provisions of this Article shall not cause the Maximum Permissible Benefit for any Participant to be less than the Participant's accrued benefit under all the defined benefit plans of the Employer or a predecessor employer as of the end of the last Limitation Year beginning before July 1, 2007 under provisions of the plans that were both adopted and in effect before April 5, 2007.  The preceding sentence applies only if the provisions of such defined benefit plans that were both adopted and in effect before April 5, 2007 and satisfied the applicable requirements of statutory provisions, regulations, and other published guidance relating to Section 415 of the Code in effect as of the end of the last Limitation Year beginning before July 1, 2007, as described in Section 1.415(a)-1(g)(4) of the Income Tax Regulations.

16.5

The limitations of this Article shall be determined and applied taking into account the rules in Section 16.7.

16.6

Definitions.

 

(a)

Annual Benefit:

 

90% (less)(plus) .5% for each year by which the age of the Contingent Annuitant (is less than)(exceeds) the age of the Participant.  Such factor not to exceed 1.0.

 

86% (less)(plus) .6% for each year by which the age of the Contingent Annuitant (is less than)(exceeds) the age of the Participant.  Such factor not to exceed 1.0.

 

82% (less)(plus) .7% for each year by which the age of the Contingent Annuitant (is less than)(exceeds) the age of the Participant.  Such factor not to exceed 1.0.

 

(1)  The “Applicable Mortality Table” shall be the mortality table prescribed by the Secretary of the Treasury pursuant to Section 417(e)(3)(B) of the Code.  This provision is intended to automatically incorporate changes to such table without requirement for Plan amendment.

 

(2)  The “Applicable Interest Rate” shall be the rates determined in accordance with Section 417(e)(3) of the Code, as amended by the Pension Protection Act, including the transition rules from 2008-2011, for the Lookback Month.  The “Lookback Month” shall be the month of November preceding the “Stability Period” and the “Stability Period” shall be the Plan Year.

 

(a)

Each Eligible Participant who, pursuant to Section B.1, has elected to retire and receive the special early retirement benefit shall be credited with an additional five (5) years of Credited Service for purposes of the calculation of the benefit under Articles IV, V and VI.

 

(b)

Each Eligible Participant who, pursuant to Section B.1, has elected to retire and receive the special early retirement benefit and whose retirement occurs prior to attainment of age sixty-two (62) shall also receive an additional benefit of $500 each month ending with the month in which such Eligible Participant attains age sixty-two (62), or, if earlier, dies.  The benefit described in this subsection (b) shall not be provided to an Eligible Participant who is age sixty-two (62) or older as of the date of commencement of his Retirement Income and no benefits shall be payable to any Contingent Annuitant with respect to the benefit described in this subsection (b) following an Eligible Participant’s death regardless of the form in which such Eligible Participant’s Retirement Income is being paid.

 

Mortality Table:

For Participants, Disabled Participants, Retired Participants and Terminated Participants:

a.                                                                Vesting Years

b.                                                                Vested Percentage

c.                                                                Less than 5

d.                                                                0%

e.                                                                At least 5

f.                                                                100%