As filed with the Securities and Exchange Commission on July 26, 2000.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
UNITIL CORPORATION
(Exact name of registrant as specified in its charter)
New Hampshire 02-0381573
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6 Liberty Lane West, Hampton, New Hampshire 03842-1720
(Address of principal executive office, including zip code)
------------------
UNITIL CORPORATION
TAX DEFERRED SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
Anthony J. Baratta, Jr.
Senior Vice President and
Chief Financial Officer
UNITIL CORPORATION
6 Liberty Lane West
Hampton, New Hampshire 03842-1720
(603) 772-0775
(Name, address, and telephone number, including area code, of agent for service)
Copies to:
David S. Balabon, Esq.
LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
260 Franklin Street
Boston, Massachusetts 02110
(617) 439-9500
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CALCULATION OF REGISTRATION FEE
Title of Proposed maximum Proposed maximum
securities Amount to be offering price aggregate offering
to be registered 1 registered 2 per share3 price3 Amount of registration fee4
Common Stock, 150,000 $26.6875 $4,003,125 $1,056.83
no par value shares
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================================================================================
1 In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
Registration Statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
2 In addition, pursuant to Rule 416(a) under the Securities Act of 1933, this
Registration Statement also covers any additional securities to be offered or
issued in connection with a stock split, stock dividend or similar transaction.
3 Estimated solely for the purpose of calculating the registration fee pursuant
to Rule 457(h) under the Securities Act of 1933 on the basis of the average of
the high and low prices of the Common Stock as reported by the American Stock
Exchange on July 21, 2000 which date is within five (5) business days of the
filing hereof.
4 In accordance with Rule 457(h)(2) no separate fee calculation is made for plan
interests.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
- ------ ---------------------------------------
The following documents, which have heretofore been filed by Unitil
Corporation (the "Company") and/or the Unitil Corporation Tax Deferred Savings
and Investment Plan (the "Plan") with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), are hereby incorporated by reference in this Registration
Statement:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999, as amended by Form 10-K/A filed with the Commission on April
14, 2000.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended March
31, 2000.
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed with the Commission on
February 8, 1985, pursuant to Section 12 of the Exchange Act, and any amendment
or report filed with the Commission for the purpose of updating such
description.
(d) The Plan's Annual Report on Form 11-K for the year ended December 31,
1999.
All documents subsequently filed by the Company and the Plan with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the filing of a post- effective amendment that indicates that all
securities offered hereby have been sold or that deregisters all securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Registration Statement and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document that also is deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as to
modified or superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities.
- ------ -------------------------
Not applicable.
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Item 5. Interests of Named Experts and Counsel.
- ------ --------------------------------------
Paul K. Connolly, Jr., a member of the firm of LeBoeuf, Lamb, Greene &
MacRae, L.L.P., which is rendering an opinion on the validity of the securities
being registered hereunder, owns 2,631 shares of the Company's Common Stock as
of the date of this Registration Statement. Mr. Connolly is a participant in the
Company's Dividend Reinvestment and Stock Purchase Plan and, as such, acquires
additional shares of Common Stock at regular intervals.
Item 6. Indemnification of Directors and Officers.
- ------ -----------------------------------------
The Company is organized under the laws of the State of New Hampshire. The
New Hampshire Business Corporation Act (the "Act") provides that a corporation
may indemnify an individual made a party to a proceeding because he is or was a
director against liability incurred in the proceeding if: (1) he conducted
himself in good faith; and (2) he reasonably believed (i) in the case of conduct
in his official capacity with the corporation, that his conduct was in its best
interests; and (ii) in all other cases, that his conduct was at least not
opposed to its best interests; and (3) in the case of any criminal proceeding,
he had no reasonable cause to believe his conduct was unlawful. A corporation
may not indemnify a director (x) in connection with a proceeding by or in the
right of the corporation in which the director was adjudged liable to the
corporation; or (y) in connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that personal benefit was
improperly received by him. Unless limited by its articles of incorporation, a
corporation shall indemnify a director or officer who was wholly successful, on
the merits or otherwise, in the defense of any proceeding to which he was a
party because he is or was a director or officer of the corporation against
reasonable expenses incurred by him in connection with the proceeding. A
corporation may purchase and maintain insurance on behalf of an individual who
is or was a director, officer, employee, or agent of the corporation, or who,
while a director, officer, employee or agent of the corporation, is or was
serving at the request of the corporation as a director, officer, partner,
trustee, employee, or agent of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan, or other enterprise,
against liability asserted against or incurred by him in that capacity or
arising from his status as a director, officer, employee, or agent, whether or
not the corporation would have power to indemnify him against the same liability
under the Act.
Article X of the Company's By-Laws provides that the Company shall
indemnify any person who was or is a party or is threatened to be made a party,
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the person's
having served as, or by reason of the person's alleged acts or omissions while
serving as a director, officer, employee or agent of the Company, or while
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
against expenses, including attorney's fees, judgments, fines and amounts paid
in settlement or otherwise actually and reasonably incurred by him in connection
with the action, suit or proceeding, if the person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct
II-2
was unlawful, said indemnification to be to the full extent permitted by law
under the circumstances, including, without limitation, by all applicable
provisions of the Act. Any indemnification under this Article shall be made by
the Company with respect to Directors or other persons after a determination
that the person to be indemnified has met the standards of conduct set forth in
the Act, such determination to be made by the Board of Directors, by majority
vote of a quorum, or by other persons authorized to make such a determination
under the Act.
The right of indemnification arising under this Article is adopted for the
purpose of inducing persons to serve and to continue to serve the Company
without concern that their service may expose them to personal financial harm.
It shall be broadly construed, applied and implemented in light of this purpose.
It shall not be exclusive of any other right to which any such person is
entitled under any agreement, vote of the stockholders or the Board of
Directors, statute, or as a matter of law, or otherwise, nor shall it be
construed to limit or confine in any respect the power of the Board of Directors
to grant indemnity pursuant to any applicable statutes or laws of the State of
New Hampshire. The provisions of this Article are separable, and, if any
provision or portion hereof shall for any reason be held inapplicable, illegal
or ineffective, this shall not affect any other right of indemnification
existing under this Article or otherwise. As used herein, the term "person"
includes heirs, executors, administrators or other legal representatives. As
used herein, the terms "Director" and "officer" include persons elected or
appointed as officers by the Board of Directors, persons elected as Directors by
the stockholders or by the Board of Directors, and persons who serve by vote or
at the request of the Company as directors, officers or trustees of another
organization in which the Company has any direct or indirect interest as a
shareholder, creditor or otherwise.
The Company may purchase and maintain insurance on behalf of any person who
was or is a Director, officer or employee of the Company or any of its
subsidiaries, or who was or is serving at the request of the Company as a
fiduciary of any employee benefit plan of the Company or any subsidiary, against
any liability asserted against, and incurred by, such person in any such
capacity, or arising out of such person's status as such, whether or not the
Company would have the power to indemnify such person against such liability
under the provisions of the Act. The obligation to indemnify and reimburse such
person under this Article, if applicable, shall be reduced by the amount of any
such insurance proceeds paid to such person, or the representatives or
successors of such person.
The Company holds a directors and officers liability and corporate
indemnification policy to protect itself and its directors, officers, employees
and agents against any expense, liability or loss, subject to certain limits in
coverage and deductibles, whether or not the Company would have the power to
indemnify such person against such expense, liability or loss under the Act.
Item 7. Exemption from Registration Claimed.
- ------ -----------------------------------
Not applicable.
II-3
Item 8. Exhibits.
- ------ --------
Exhibit No.
4.1 Unitil Corporation Tax Deferred Savings and Investment Plan,
as amended and restated and effective as of January 1, 1989.
4.2 Amendment No. 1 to Unitil Corporation Tax Deferred Savings
and Investment Plan effective as of July 1, 1996.
4.3 Amendment No. 2 to Unitil Corporation Tax Deferred Savings
and Investment Plan effective as of January 1, 1997.
4.4 Unitil Corporation Tax Deferred Savings and Investment Plan
Trust Agreement.
4.5 Articles of Incorporation of the Company, as amended (filed
as Exhibit 3.1 to the Company's Registration Statement on
Form S-14, No. 2-93769, and incorporated herein by
reference).
4.6 Articles of Amendment to the Articles of Incorporation of
the Company (filed as Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 31,
1992, and incorporated herein by reference).
4.7 By-Laws of the Company (filed as Exhibit 4.4 to the
Company's Registration Statement on Form S-8, 333-73327, and
incorporated herein by reference).
5 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
23.1 Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included
in Exhibit 5).
23.2 Consent of Grant Thornton LLP.
24 Power of Attorney (included in Part II under the caption
"Signatures").
Pursuant to Item 8(b) of Form S-8, the undersigned Registrant hereby
undertakes that it will submit or has submitted the Plan and any amendments
thereto to the Internal Revenue Service ("IRS") in a timely manner and has made
or will make all changes required by the IRS in order to qualify the Plan under
Section 401 of the Internal Revenue Code of 1986, as amended.
II-4
Item 9. Undertakings.
- ------ ------------
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than 20 percent
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
Registration Statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information
in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 and that are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered that remain unsold at the termination of
the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration
II-5
Statement shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-6
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of Hampton, the State of New Hampshire, on this
26th day of July, 2000.
UNITIL CORPORATION
By: /s/ Anthony J. Baratta, Jr.
----------------------------
Anthony J. Baratta, Jr.
Senior Vice President and
Chief Financial Officer
II-7
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Anthony J. Baratta, Jr. and Mark H.
Collin, and each of them individually, his or her true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
of and supplements to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto each such attorney-in-fact and
agent, or his substitutes, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, to all intents and purposes and as fully as he or she might or could
do in person, hereby ratifying and confirming all that each such
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated:
Signature Title Date
/s/ Michael J. Dalton Director, President and July 26, 2000
- --------------------- Chief Operating Officer
Michael J. Dalton
/s/ Robert G. Schoenberger Director, Chairman of July 26, 2000
- -------------------------- the Board and Chief
Robert G. Schoenberger Executive Officer
/s/ William E. Aubuchon, III Director July 26, 2000
- ----------------------------
William E. Aubuchon, III
/s/ Albert H. Elfner, III Director July 26, 2000
- -------------------------
Albert H. Elfner, III
/s/ Ross B. George Director July 26, 2000
- ------------------
Ross B. George
II-8
Signature Title Date
/s/ Bruce W. Keough Director July 26, 2000
- -------------------
Bruce W. Keough
/s/ Eben S. Moulton Director July 26, 2000
- -------------------
Eben S. Moulton
/s/ M. Brian O'Shaughnessy Director June 26, 2000
- --------------------------
M. Brian O'Shaughnessy
/s/ J. Parker Rice, Jr. Director July 26, 2000
- -----------------------
J. Parker Rice, Jr.
/s/ Charles H. Tenney III Director July 26, 2000
- -------------------------
Charles H. Tenney III
/s/ Joan D. Wheeler Director July 26, 2000
- -------------------
Joan D. Wheeler
II-9
The Plan. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Hampton, the State of New
Hampshire, on this 26th day of July, 2000.
By: Plan Administrator
By:/s/ Mark H. Collin
------------------
Mark H. Collin
Treasurer and Secretary
II-10
EXHIBIT INDEX
Exhibit
No. Title of Exhibit
4.1 Unitil Corporation Tax Deferred Savings and Investment Plan, as
amended and restated and effective as of January 1, 1989.
4.2 Amendment No. 1 to Unitil Corporation Tax Deferred Savings and
Investment Plan effective as of July 1, 1996.
4.3 Amendment No. 2 to Unitil Corporation Tax Deferred Savings and
Investment Plan effective as of January 1, 1997.
4.4 Unitil Corporation Tax Deferred Savings and Investment Plan Trust
Agreement.
4.5 Articles of Incorporation of the Company, as amended (filed as
Exhibit 3.1 to the Company's Registration Statement on Form S-14,
No. 2-93769, and incorporated herein by reference).
4.6 Articles of Amendment to the Articles of Incorporation of the
Company (filed as Exhibit 3.2 to the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1992, and
incorporated herein by reference).
4.7 By-Laws of the Company (filed as Exhibit 4.4 to the Company's
Registration Statement on Form S-8, No. 333-73327, and
incorporated herein by reference).
5 Opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P.
23.1 Consent of LeBoeuf, Lamb, Greene & MacRae, L.L.P. (included in
Exhibit 5).
23.2 Consent of Grant Thornton LLP.
24 Power of Attorney (included in Part II under the caption
"Signatures").
II-11
EXHIBIT 4.1
UNITIL CORPORATION TAX DEFERRED SAVINGS AND INVESTMENT PLAN
Amendment and Restatement Effective as of January 1, 1989
TABLE OF CONTENTS
Page
INTRODUCTION...................................................................1
ARTICLE I
DEFINITIONS....................................................................3
1.01 Account......................................................3
1.02 Affiliated Employer..........................................3
1.03 Beneficiary..................................................3
1.04 Board of Directors or Board..................................3
1.05 Code or Internal Revenue Code................................3
1.06 Compensation.................................................3
1.07 Disability...................................................4
1.08 Effective Date...............................................4
1.09 Employee.....................................................4
1.10 Employee Contributions.......................................5
1.11 Employer.....................................................5
1.12 Employer Matching Contributions..............................5
1.13 Employment Commencement Date.................................5
1.14 Entry Date...................................................5
1.15 Fund or Trust Fund...........................................5
1.16 Highly Compensated Employee..................................6
1.17 Hour of Service..............................................7
1.18 Normal Retirement Age........................................8
1.19 One-Year Break in Service....................................8
1.20 Participant..................................................9
1.21 Pay Reduction Contributions..................................9
1.22 Plan.........................................................9
1.22 Plan Administrator...........................................9
1.23 Plan Year....................................................9
1.24 Rollover Contributions.......................................9
1.25 Trust or Trust Agreement....................................10
1.26 Trustee.....................................................10
1.27 Valuation Date..............................................10
1.28 Year of Service.............................................10
ARTICLE II
ELIGIBILITY AND PARTICIPATION.................................................11
2.01 Eligibility.................................................11
2.02 Election of Pay Reduction Contributions and/or
Employee Contributions......................................11
2.03 Reemployment................................................11
ARTICLE III
PARTICIPANT AND EMPLOYER CONTRIBUTIONS........................................12
3.01 Amount of Pay Reduction Contributions and/or
Employee Contributions......................................12
3.02 Changes in Pay Reduction Contributions and/or
Employee Contributions......................................12
3.03 Applicability of Code Sections 401(k) and 401(m) Rules......12
3.04 Employer Matching Contributions.............................13
3.05 Payment of Contributions to Trustee.........................13
3.06 Non-Discrimination Provisions...............................13
3.07 Maximum Limitations on Allocations to Members...............15
3.08 Limited Return of Contributions.............................16
3.09 Rollover Contributions......................................16
ARTICLE IV
INVESTMENT OF ASSETS..........................................................17
4.01 In General..................................................17
4.02 Dividends, Interest, Etc....................................17
4.03 Investment Directions.......................................17
4.04 Investment Options..........................................17
ARTICLE V
MAINTENANCE AND VALUATION OF ACCOUNTS.........................................19
5.01 Participants Accounts.......................................19
5.02 Valuation of Trust Fund and Allocation of Increases
and Decreases to Participants...............................19
ARTICLE VI
WITHDRAWALS DURING EMPLOYMENT.................................................20
6.01 General Rules...............................................20
6.02 Acceptable Purposes for Withdrawals.........................20
6.03 Withdrawal Rules for Pay Reduction Contributions............20
i
ARTICLE VII
VESTING..............................................................22
7.01 Vesting in Pay Reduction, Employee and
Rollover Contributions......................................22
7.02 Instances of Full Vesting in Employer Matching
Contributions...............................................22
7.03 Vesting Schedule for Employer Matching Contributions........22
7.04 Forfeitures.................................................22
7.05 Vesting Upon Reemployment...................................23
7.06 Suspension Account..........................................23
ARTICLE VIII
DISTRIBUTION OF BENEFITS......................................................25
8.01 Retirement or Termination of Employment.....................25
8.02 Death.......................................................25
8.03 Timing of Payment...........................................25
8.04 Deferral of Payment.........................................25
8.05 Forms, Manner and Medium of Payment.........................25
8.06 Designation of Beneficiary..................................26
8.07 Required Distributions......................................26
8.08 Payments to Alternate Payees................................28
8.09 Direct Rollovers............................................28
ARTICLE IX
EMPLOYEE LOANS................................................................30
9.01 Eligibility for Loans.......................................30
9.02 Limitations, Terms and Conditions for Loans.................30
9.03 Separate Loan Accounts......................................31
ARTICLE X
TOP-HEAVY PROVISIONS..........................................................32
10.01 Aggregation Group...........................................32
10.02 Determination Date..........................................32
10.03 Top Heavy Plan..............................................32
10.04 Minimum Allocation..........................................33
ARTICLE XI
TRUST ADMINISTRATION..........................................................35
11.01 Trust Agreement.............................................35
11.02 Trustee's Right to Retain Cash..............................35
11.03 Selection of Accountants, Etc...............................35
11.04 Trust Expenses, Etc.........................................35
11.05 Trust Agreement Part of Plan................................36
ARTICLE XII
ADMINISTRATION OF THE PLAN....................................................37
12.01 Appointment of Administrator................................37
12.02 Authority to Delegate.......................................37
12.03 Authority to Establish Rules, Etc...........................37
12.04 Instructions, Decisions, Compensation, Etc..................37
12.05 Maintenance of Accounts, Etc................................37
12.06 Responsibility of Delegates.................................38
12.07 Claims Procedure............................................38
ARTICLE XIII
AMENDMENT AND TERMINATION.....................................................39
13.01 Amendment...................................................39
13.02 Termination.................................................39
13.03 Procedure Upon Termination..................................39
13.04 Merger......................................................39
13.05 Retroactive Amendments......................................40
ARTICLE XIV
MISCELLANEOUS.................................................................41
14.01 Mergers, Etc. with Employer.................................41
14.02 Non-Alienation of Benefits..................................41
14.03 Participant and Employee Rights.............................41
14.04 Incapacity of Payee.........................................42
14.05 Actions by the Employer.....................................42
14.06 Governing Law...............................................42
14.07 Titles, Etc.................................................42
ii
INTRODUCTION
Effective as of July 1, 1987, the Concord Electric Company Tax Deferred
Savings and Investment Plan, initially adopted effective as of January 1, 1985
by Concord Electric Company, a wholly owned subsidiary of UNITIL Corporation
("UNITIL"), and the UNITIL Corporation Tax Deferred Savings and Investment Plan,
initially adopted effective as of January 1, 1985 by UNITIL Service Corp., also
a wholly owned subsidiary of UNITIL, were amended and restated and consolidated,
under the name of UNITIL Corporation Tax Deferred Savings and Investment Plan
(the "Plan").
Effective as of January 1, 1989, the Plan was also adopted by Exeter &
Hampton Electric Company, also a wholly owned subsidiary of UNITIL, for its
employees who were not covered by a collective bargaining agreement and was
merged with that portion of the Exeter & Hampton Electric Company Thrift Savings
Plan relating to those employees. Effective as of January 1, 1990, the Plan was
also adopted by said Exeter & Hampton Electric Company for its remaining,
collective-bargaining employees and merged with the remaining portion of said
Exeter & Hampton Electric Company Thrift Savings Plan relating to those
employees.
Pursuant to an Amended, and Restated Agreement and Plan of Merger dated May
23, 1991 by and among Fitchburg Gas and Electric Light Company ("Fitchburg"),
UNITIL and UMC Electric Company, Inc. ("UMC"), UNITIL acquired all of the issued
and outstanding voting stock of Fitchburg and merged UMC, a wholly owned
subsidiary of UNITIL, with and into Fitchburg ("Fitchburg Merger"), effective as
of April 29, 1992.
Prior to the Fitchburg Merger, Fitchburg had established, initially
effective as of July 1, 1987, the Fitchburg Gas and Electric Light Company Tax
Deferred Savings and Investment Plan ("Fitchburg Management Plan") and the
Fitchburg Gas and Electric Light Company Union Tax Deferred Savings and
Investment Plan ("Fitchburg Union Plan"). As a result of the Fitchburg Merger,
the Fitchburg Management Plan was merged with the Plan, effective as of May 8,
1992. Also, the Fitchburg Union Plan is to be merged with the Plan, effective as
of January 1, 1994, with a one percent employer matching contribution added
effective as of May 1, 1994 for all participants covered by the applicable
collective-bargaining agreement.
The Plan is funded by a trust under a Trust Agreement entered into by the
Employer and The First National Bank of Boston, as current Trustee thereunder,
which Trust Agreement was an amendment, restatement and consolidation dated June
27, 1987, effective as of July 1, 1987, of the trusts under certain of the other
plans described above that were merged with the Plan and has been further
amended to provide for the merger with the Plan of the remaining such other
plans (collectively, the "Prior Plans").
Accordingly, UNITIL and its above-described subsidiaries (the "Employer")
have adopted this amendment and restatement of the Plan, and to the extent
applicable, of each of the Prior Plans, generally effective as of January 1,
1989, in order to (i) take into account the above-described events, and (ii)
comply with the provisions of the Tax Reform Act of 1986 and subsequent
legislation and related regulations, to the extent they have not already been
taken into account or complied with.
1
It is the intent of the Employer that the Plan and the trust thereunder
shall be established and maintained as (1) an employee benefit plan which
complies with the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); and (2) a plan that is designed to qualify as a profit- sharing for
purposes of sections 401(a), 401(k), 401(m), 402, 412, 417 and 501(a) of the
Code, regardless of whether the Employer has current or accumulated earnings or
profits for the Employer taxable year ending with or within the relevant Plan
Year.
2
ARTICLE I
DEFINITIONS
1.01 Account.
"Account" means the sum held for a Participant or Beneficiary at any
time, reflecting all Pay Reduction Contributions, Employer Matching
Contributions, Rollover Contributions, Employee Contributions and the
investment thereof. Unless specified otherwise, the net value of such
Account shall be determined as of the Valuation Date coincident with
or next preceding any distribution event.
1.02 Affiliated Employer.
"Affiliated Employer" means the Employer and any corporation which is
a member of a controlled group of corporations (as defined in section
414(b) of the Code) which includes the Employer; any trade or business
(whether or not incorporated) which is under common control (as
defined in section 414(c) of the Code) with the Employer; any
organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in section 414(m) of the Code)
which includes the Employer; and any other entity required to be
aggregated with the Employer pursuant to regulations under section
414(o) of the Code.
1.03 Beneficiary.
"Beneficiary" means the person or persons designated by a Participant,
or otherwise identified, pursuant to the provisions of Section 8.06 of
the Plan, to receive distributions of such Participant's Account upon
his death.
1.04 Board of Directors or Board.
"Board of Directors" or "Board" means the board of directors of each
respective Employer.
1.05 Code or Internal Revenue Code.
"Code" or "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time.
1.06 Compensation.
"Compensation" means total compensation as defined in Code section
415(c)(3) from the Employer in any one calendar year received by an
Employee during the period in which he is eligible to participate in
the Plan, including any amount which is contributed on behalf of an
Employee by the Employer through a salary reduction agreement and
which is not includible in the gross income of the Employee under
section 125, 402(e), 402(h) or 403(b) of the Code, but excluding
solely for the purposes of determining Employer Matching Contributions
hereunder any overtime pay and commissions. In no event shall an
Employee's annual Compensation for the purpose of determining any
benefits
3
provided under the Plan exceed (i), for periods occurring prior to
January 1, 1994, $200,000, and (ii), for periods occurring after
December 31, 1993, $150,000. These limitations shall be adjusted at
such times and in such manner as provided under section 401(a)(17) of
the Code.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code section 414(q)(6) shall apply, except
that in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of the year.
If, as a result of the application of such rules the adjusted $200,000
or $150,000 limitation, as applicable, is exceeded, then the
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under
this Section 1.06 prior to the application of this limitation.
1.07 Disability.
"Disability" means totally and permanently disabled as determined by
the Plan Administrator (a) on medical evidence furnished by a licensed
physician approved by the Plan Administrator, (b) on evidence that the
Participant is eligible for disability benefits under any long term
disability plan sponsored by an Affiliated Employer but administered
by an independent third party, or (c) on evidence that the Participant
is eligible for total and permanent disability benefits under the
Social Security Act in effect at the date of disability.
1.08 Effective Date.
"Effective Date" means January 1, 1989, the effective date of the Plan
(or applicable Prior Plan) as restated and amended among other things
to comply with the Tax Reform Act of 1986 and subsequent legislation
and applicable regulations thereunder, provided, however, that (i)
Section 8.07 hereof shall instead be effective as of January 1, 1985,
(ii) Sections 3.06 and 3.07 shall instead be effective as of January
1, 1987, (iii) Sections 3.09 and 8.09 hereof shall instead be
effective as of January 1, 1993, and (iv) Sections 13.04 (second
paragraph) hereof shall instead be effective as of January 1, 1994, in
each case superseding the corresponding provisions of the Plan (or
applicable Prior Plan) previously in effect. As so restated as of such
various dates, the respective provisions of the Plan shall apply only
to Employees who terminate their employment or participation in the
Plan (or applicable Prior Plan) on or after those respective dates.
The rights and benefits, if any, of each other Employee shall be
determined in accordance with the provisions of the Plan (or
applicable Prior Plan) in effect on the date such Employee terminated
his employment.
1.09 Employee.
"Employee" means any person employed by the Employer. The term
"Employee" shall also include any "leased employee" deemed to be an
employee of the Employer or any Affiliated Employer, provided,
however, that no such leased employee shall thereby be eligible to
participate in the Plan. The term "leased employee" means any person
(other than an employee of the recipient) who, pursuant to an
agreement between the recipient
4
and any other person ("leasing organization"), has performed services
for the recipient (or for the recipient and related persons determined
in accordance with Section 414(n)(6) of the Code) on a substantially
full-time basis for a period of at least one year, where such services
are of a type historically performed by employees in the business
field of the recipient employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to
services performed for the recipient employer shall be treated as
provided by the recipient employer.
A leased employee shall not be considered an employee of the recipient
if: (a) such employee is covered by a money purchase pension plan
providing: (1) a non-integrated employer contribution rate of at least
10 percent of compensation, but including amounts contributed pursuant
to a salary reduction agreement which are excludable from the
employee's gross income under section 125, section 402(a)(8), section
402(h) or section 403(b) of the Code, (2) immediate participation, and
(3) full and immediate vesting; and (b) leased employees do not
constitute more than 20 percent of the recipient's non-highly
compensated workforce.
1.10 Employee Contributions.
"Employee Contributions" means amounts contributed by a Participant on
an after-tax basis pursuant to Section 3.01.
1.11 Employer.
"Employer" means UNITIL Corporation and each of the following
wholly-owned subsidiaries thereof which have adopted the Plan: Concord
Electric Company, Exeter & Hampton Electric Company, Fitchburg Gas and
Electric Light Company, and UNITIL Service Company. The term Employer
also includes any other organization that has adopted the Plan with
the consent of the Employer and any successor of the Employer.
1.12 Employer Matching Contributions.
"Employer Matching Contributions" mean the amounts contributed by the
Employer pursuant to Sections 3.04.
1.13 Employment Commencement Date.
"Employment Commencement Date" means the date on which an Employee
first rendered an Hour of Service to the Employer.
1.14 Entry Date.
"Entry Date" means January 1 and July 1 of each Plan Year.
1.15 Fund or Trust Fund.
"Fund" or "Trust Fund" means all property held by the Trustee for
purposes of the Plan.
5
1.16 Highly Compensated Employee.
"Highly Compensated Employee" means each highly compensated active
employee and each highly compensated former employee.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination year and
who, during the look-back year: (a) received compensation from the
Employer in excess $75,000; (b) received compensation from the
Employer in excess of $50,000 and was a member of the top- paid group
for such year; or (c) was an officer of the Employer and received
compensation during the year in excess of 50 percent of the dollar
limitation in effect under section 415(b)(1)(A) of the Code. A highly
compensated active employee is also an Employee who meets both of the
following requirements: (a) an Employee who would be included in the
preceding sentence if the determination year were substituted for the
look-back year; and (b) the Employee is one of the 100 Employees who
received the most compensation from the Employer during the
determination year. A highly compensated active employee is also any
Employee who was a 5 percent owner at any time during the look-back
year or the determination year.
The number of officers treated as Highly Compensated Employees must be
at least 1, but it cannot exceed the lesser of (a) 50, or (b) the
greater of (1) 3 or (2) 10 percent of all Employees.
The dollar amounts reflected above shall be adjusted for inflation at
the same time and in the same manner as the indexing of dollar limits
under section 415(d) of the Code.
For purposes of this Section 1.16, the determination year shall be the
Plan Year. The look-back year shall be the calendar year ending with
the Plan Year for which testing is being performed.
The definition of compensation for purposes of this Section 1.16 shall
be total compensation received from the Employer as defined in section
414(q)(7) of the Code.
If, during the look-back year or the determination year, an Employee
is a family member of either (a) a 5 percent owner; or (b) a Highly
Compensated Employee who is one of the ten most highly paid Employees
ranked on the basis of compensation received from the Employer, the
Employee/family member and the 5 percent owner or top ten Highly
Compensated Employee shall be aggregated and treated as a single
Employee receiving compensation and contributions and benefits equal
to the sum of the respective amounts each receives. A family member is
defined as: (a) a spouse; (b) lineal ascendants and descendants; and
(c) the spouses of lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including
the determinations of the number and identity of Employees in the
top-paid group, the top 100 Employees, the number of Employees treated
as officers and the compensation that is considered, will be made in
accordance with section 414(q) of the Code and the regulations
thereunder.
6
The term highly compensated former employee includes any Employee who
separated from service (or who was deemed to have separated from
service) prior to the determination year and who was treated as a
Highly Compensated Employee in either: (a) his separation year; or (b)
any determination year ending on or after his 55th birthday.
1.17 Hour of Service.
"Hour of Service" means, with respect to any person, the following:
(a) Each hour for which such person is directly or indirectly paid,
or entitled to payment, by the Employer or an Affiliated Employer
for the performance of duties during the period in connection
with which the term is used.
(b) Each hour for which such person is directly or indirectly paid,
or entitled to payment, on account of any of the following
periods during which no duties are performed (irrespective of
whether the employment relationship has terminated), provided,
however, that no more than 501 Hours of Service shall be credited
under this Subsection (b) to any person on account of any single
continuous period during which he performs no duties, and
provided, further, that no such hours shall be credited with
respect to a payment that is made or due under a plan maintained
solely for the purpose of complying with applicable workers
compensation, unemployment compensation or disability insurance
laws:
(i) Periods of time during which such person has been excused
from work by the Employer or an Affiliated Employer by
reason of vacation, holiday, illness, incapacity (including
disability), layoff or jury duty, provided that, in the
event that such person fails to return to work upon the
expiration of the period for which he has been so excused,
his employment shall be deemed to terminate upon such
expiration;
(ii) Periods covered by leaves of absence authorized in writing
by the Employer or an Affiliated Employer, provided that, in
the event the person in question fails to return to the
active employ of the Employer or an Affiliated Employer upon
the expiration of the period of such authorized leave of
absence, his employment shall be deemed to terminate upon
such expiration;
(iii)Periods of service with the Armed Forces of the United
States if the person in question leaves the employ of the
Employer or an Affiliated Employer to enter, and directly
enters, such Armed Forces, provided that, in the event that
such person fails to return to the employ of the Employer or
an Affiliated Employer within ninety (90) days after his
release from such Armed Forces (or within such further
period as the Employer or an Affiliated Employer may allow)
without intervening employment elsewhere, his employment
shall terminate upon the expiration of such ninety (90) days
or such further period.
7
(c) To the extent not already credited under Subsection (a) or (b) of
this Section 1.17, each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer or an Affiliated Employer, subject to the limitation of
501 Hours of Service set forth in Subsection (b) of this Section
1.17 in crediting Hours of Service for back pay awarded or agreed
to with respect to periods described in said Subsection (b).
(d) To the extent not already described under Subsection (a), (b) or
(c) of this Section 1.17, each hour as then determined by the
Employer or an Affiliated Employer to be credited for periods
covered by leaves of absence authorized by it, provided, however,
that all such determinations shall be uniform in nature and
applicable to all persons similarly situated.
The provisions relating to the special rule for determination of hours
of service for reasons other than the performance of duties and to the
crediting of hours of service to computation periods in Section
2530.200b-2(b) and (c), respectively, of the United States Department
of Labor Regulations are incorporated herein by reference.
Notwithstanding the foregoing provisions of this Section 1.17, but
subject to the limitation of 501 Hours of Service set forth in
Subsection (b), for the purposes of determining the Hours of Service
of any person compensated on a salaried or commission basis, each day
for which such person shall have completed one Hour of Service as
otherwise herein provided shall be deemed the equivalent of ten (10)
Hours of Service.
1.18 Normal Retirement Age.
"Normal Retirement Age" means an Employee's attainment of age 65 or,
if later, the 5th anniversary of the date he first became a
Participant.
1.19 One-Year Break in Service.
"One-Year Break in Service" means a Plan Year in which a person is
credited with less than 501 Hours of Service, provided, however, that
solely for purposes of determining a One-Year Break in Service, any
person who is on maternity or paternity leave shall be credited with
501 Hours of Service during the first Plan Year in which he would have
sustained a One-Year Break in Service.
For this purpose, maternity or paternity leave means termination of
employment or absence from work due to the pregnancy of the Employee,
the birth of a child of the Employee, the placement of a child in
connection with the adoption of the child by the Employee, or the
caring for the Employee's child during the period immediately
following the child's birth or placement for adoption. The Plan
Administrator shall determine, under rules of uniform application and
based on information provided by the Employee, whether or not the
Employee's termination of employment or absence from work is due to
maternity or paternity leave.
8
1.20 Participant.
"Participant" means an Employee who has become such in accordance with
Section 2.01, and for whose Account an amount remains in the Trust
Fund.
1.21 Pay Reduction Contributions.
"Pay Reduction Contributions" means the amounts contributed by the
Employer on behalf of a Participant through salary reduction pursuant
to Section 3.01.
1.22 Plan.
"Plan" means the UNITIL Corporation Tax Deferred Savings and
Investment Plan as herein set forth, and as may be amended from time
to time, and to the extent applicable, any Prior Plan.
For the purposes hereof, "Prior Plan" means--
(i) each of the Concord Electric Company Tax Deferred Savings and
Investment Plan, as adopted by Concord Electric Company, and
UNITIL Corporation Tax Deferred Savings and Investment Plan, as
adopted by UNITIL Service Corp. (each consolidated into the Plan
as of July 1, 1987);
(ii) the Exeter & Hampton Electric Company Thrift Savings Plan (merged
in part with the Plan as of January 1, 1989);
(iii)the Fitchburg Gas and Electric Light Company Tax Deferred
Savings and Investment Plan (merged with the Plan as of May 8,
1992); and
(iv) the Fitchburg Gas and Electric Light Company Tax Deferred Savings
and Investment Plan (merged with the Plan as of January 1, 1994).
1.22 Plan Administrator.
"Plan Administrator" means the Employer.
1.23 Plan Year.
"Plan Year" means a twelve (12) month period commencing January I and
ending on December 31.
1.24 Rollover Contributions.
"Rollover Contributions" means an amount contributed by a Participant
pursuant to Section 3.09.
9
1.25 Trust or Trust Agreement.
"Trust" or "Trust Agreement" means the trust agreement entered into
with the Trustee, pursuant to Article XI herein, as amended from time
to time.
1.26 Trustee.
"Trustee" means the Trustee or Trustees acting as such under a Trust
Agreement, including any successor or successors.
1.27 Valuation Date.
"Valuation Date" means the any of the date established by the Plan
Administrator for the valuation of the assets and liabilities of the
Trust. Valuation Dates shall occur on March 31, June 30, September 30
and December 31 of each Plan Year and on such other dates as the Plan
Administrator deems necessary.
1.28 Year of Service.
"Year of Service" means each Plan Year during which an Employee has
completed at least 1,000 Hours of Service.
10
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 Eligibility.
Each Employee who was a Participant in the Plan on December 31, 1987
shall automatically be a Participant in the amended and restated Plan
on January 1, 1989. Each other Employee (other than a leased Employee)
shall become a Participant on the Entry Date coinciding with or next
following the date on which he has both attained 18 years of age and
complete 1,000 Hours of Service in an "Employment Year" (regardless of
whether the Employment Year has then been completed). The initial
"Employment Year" for an Employee shall be the 12-month period
commencing on his "Employment Commencement Date," and succeeding
Employment Years shall be Plan Years commencing with the Plan Year in
which occurs the first anniversary date of his Employment Commencement
Date. His "Employment Commencement Date" shall be the date he was
first credited with an Hour of Service.
2.02 Election of Pay Reduction Contributions and/or Employee Contributions.
A Participant may elect at any time, by completing and delivering to
the Plan Administrator a form approved by it for the purpose, a
percentage of his Compensation to be contributed to the Plan on his
behalf as a Pay Reduction Contribution and/or an Employee
Contribution. The Participant shall specify a whole percentage of
Compensation and may elect to contribute the amount in any combination
of Pay Reduction Contributions and Employee Contributions, provided,
however, that the Employer may impose reasonable, nondiscriminatory
restrictions on the percentages so elected and contributed in order to
ensure that no Pay Reduction Contributions exceed the amount
deductible by the Employer under section 404 of the Code. In no event
shall a Participant be permitted to make Pay Reduction Contributions
and Employee Contributions aggregating in excess of 12 percent of his
Compensation. Notwithstanding anything herein to the contrary, if the
amount of Pay Reduction Contributions made on behalf of a Participant
reaches the limit referenced in Section 3.01 in any calendar year, all
additional contributions made on behalf of the Participant will
automatically be made as Employee Contributions.
2.03 Reemployment.
A Participant who resumes employment with an Affiliated Employer after
a termination of employment shall be treated as a Participant
immediately upon his rehire and may elect to become a Participant as
of the next payroll period following his return to active employment.
11
ARTICLE III
PARTICIPANT AND EMPLOYER CONTRIBUTIONS
3.01 Amount of Pay Reduction Contributions and/or Employee Contributions.
In each Plan Year a Participant may authorize Pay Reduction
Contributions as described in Section 2.02. Pay Reduction
Contributions by a Participant are not to exceed $7,627 (for 1989), or
such higher indexed amount as set by the Secretary of the Treasury.
This maximum shall be reduced if the Participant participates in other
plans of the Employer or plans of another employer to which amounts
are contributed on his behalf at his election in accordance with
section 401 (k) of the Code. This maximum also may be reduced for
Highly Compensated Employees in the event that the Plan does not pass
the applicable nondiscrimination test described in Section 3.06(a). In
each Plan Year, the Participant may also authorize Employee
Contributions as described in Section 2.02. This amount may be reduced
for Highly Compensated Employees in the event the Plan does not pass
the applicable nondiscrimination test described in Section 3.06(a).
3.02 Changes in Pay Reduction Contributions and/or Employee Contributions.
The amount of Pay Reduction Contributions and Employee Contributions
authorized by the Participant to be made on his behalf by the Employer
shall remain in effect until such time as he shall change the rate or
suspend such contributions by filing with the Plan Administrator a
form prescribed for such purpose. A Participant may increase his
contributions by completing and filing another election form with the
Plan Administrator at least 30 days (or such shorter period as the
Plan Administrator may permit) before the date on which the
modification is scheduled to take effect. A modification increasing
contributions shall only take effect on January 1st or July 1st.
A Participant may decrease or suspend his contributions at any time by
filing an election form with the Plan Administrator to that effect.
Any such election to decrease or suspend contributions shall take
effect as of the next following payroll period. A Participant may
resume making contributions as of the any following January 1st or
July 1st, provided he files an election form with the Plan
Administrator at least 30 days (or such shorter period as the Plan
Administrator may permit) before the date on which the resumption is
to take effect.
3.03 Applicability of Code Sections 401(k) and 401(m) Rules.
All Pay Reduction Contributions shall be subject to the rules set
forth in section 401(k) of the Code and the regulations issued
thereunder. All Employee Contributions shall be subject to the rules
set forth in section 401(m) of the Code and the regulations issued
thereunder. The Plan Administrator shall maintain separate accounting
records for Pay Reduction Contributions and Employee Contributions.
12
3.04 Employer Matching Contributions.
In each Plan Year, the Employer shall make such, if any, Employer
Matching Contributions within the meaning of Code section 401(m)(4)(a)
on behalf of each Participant, equal to the Participant's aggregate
Pay Reduction Contributions and Employee Contributions made in that
Plan Year as are deemed matchable under the following table:
Matchable Contributions
Collective-bargaining Employees of Fitchburg Gas
and Electric Light Company
o Prior to May 1, 1994 Nil
o From May 1, 1994 through April 30, 1995 1 percent
o From May 1, 1995 through April 30, 1996 2 percent
o After April 30, 1996 3 percent
All other Employees 3 percent
Notwithstanding any other provisions of the Plan, no Employer Matching
Contributions shall be made if they would exceed the amount deductible
by the Employer under section 404 of the Code, and no Employer
Matching Contributions shall be made or allocated to a Participant
with respect to any Pay Reduction Contributions required to be
returned to the Participant pursuant to Section 3.06(c) or (d), or
with respect to any Voluntary Contribution required to be returned to
the Participant pursuant to Section 3.06(e).
3.05 Payment of Contributions to Trustee.
As promptly as practicable after each pay period, the Employer shall
remit to the Trust Fund the aggregate amount of Pay Reduction
Contributions deducted by the Employer for such pay period, but in no
event later than 30 days after the close of the Plan Year. The
Employer shall remit to the Trust Fund the aggregate amount of
Employee Contributions made by the Participants for such pay period
within the time required by Code section 401(m) and the regulations
issued thereunder. Any Employer Matching Contributions to the Trust
Fund for each Plan Year shall be paid within the time required by law
in order for the Employer to obtain a tax deduction under the
provisions of the Code for such Plan Year.
3.06 Non-Discrimination Provisions.
(a) In General. The Plan shall at all times meet the applicable tests
under section 401(k)(3) and 401(m)(2) of the Code and the
regulations promulgated thereunder, which are incorporated herein
by reference.
(b) Compensation. For the purposes of such tests, compensation shall
mean all amounts paid to an Employee by the Employer (including
amounts for periods prior to becoming a Participant) for personal
services as reported on the Employee's Federal Income Tax
Withholding Statement (Form W-2) and excluding any benefits paid
13
under the Plan, but including any amount which is contributed by
the Employer pursuant to a salary reduction agreement and which
is not includible in his gross income under sections 125,
402(a)(8), 402(h) or 403(b) of the Code. For this purpose,
compensation shall not exceed (i), for periods occurring prior to
January 1, 1994, $235,840, and (ii), for periods occurring after
December 31, 1993, $150,000, each such amount to be adjusted at
such times and in such manner as provided under section
401(a)(17) of the Code.
(c) Correction of Excess Deferrals. If during any taxable year of a
Participant, the total amount of his salary reduction
contributions to all qualified cash or deferred arrangements
exceeds $7,000 (as from time to time adjusted by the Secretary of
the Treasury), then the amounts in excess of $8,994 (as adjusted
as aforesaid) are to be included in the Participant's gross
income for the taxable year to which such deferral relates.
Notwithstanding anything in the Plan to the contrary, if prior to
March 1 following the close of the Participant's taxable year,
the Participant notifies the Plan that he requests a return of
part or all of his prior Plan Year's Pay Reduction Contributions
which exceed said $7,000 limit (and any income allocable to such
amounts) pursuant to section 402(g) of the Code and the
regulations thereunder, the Plan may (but is not required to)
return (not later than the first April 15 after the Participant's
taxable year ends) the amount of the Participant's Pay Reduction
Contributions with allocable income which the Participant
requested to be returned. The Participant's request will be
limited solely to Pay Reduction Contributions deemed made in the
immediately prior taxable year. A Participant whose Pay Reduction
Contributions for a taxable year, standing alone, exceed the
limit imposed by section 402(g) of the Code shall be deemed to
have notified the Plan and requested the return of the amount by
which the Pay Reduction Contributions exceed that limit. The Plan
Administrator shall establish such rules and regulations as it
deems necessary to carry out the effect of this provision. The
Plan Administrator will apply its rules and regulations uniformly
with respect to each Participant.
(d) Correction of Excess Contributions. If the Pay Reduction
Contributions made on behalf of Participants cause the Plan to
fail the applicable nondiscrimination test described in Section
3.06(a), then any excess contributions and any allocable income
shall be returned to the affected Participants not later than 12
months after the close of the Plan Year in which the excess
contribution was made. Any excess contributions to be distributed
shall be reduced by excess deferrals previously distributed under
Section 3.06(c).
If a distribution becomes necessary, it will be first applied to
the Participant who is the Highly Compensated Employee electing
the highest percentage of Pay Reduction Contributions pursuant to
Section 2.02 until the applicable nondiscrimination test
described in Section 3.06(a) is met or until such Participant's
election pursuant to Section 2.02 is reduced to the same
percentage level as the Participant who is the Highly Compensated
Employee electing the second highest percentage of Pay Reduction
Contributions pursuant to Section 2.02. If further limitations
are required, then the two Participants' elections pursuant to
Section
14
2.02 shall be reduced until the applicable nondiscrimination test
of Section 3.06(a) is met or until the two Participants'
elections are reduced to the same percentage level as the
Participant who is the Highly Compensated Employee electing the
third highest percentage of Pay Reduction Contributions pursuant
to Section 2.02, and such distributions shall continue to be made
in a similar manner from the Participants who are Highly
Compensated Employees making the highest percentage elections to
the lowest until the applicable nondiscrimination test described
in Section 3.06(a) is satisfied. Excess contributions shall be
allocated to Participants who are subject to the family
aggregation rules of section 414(q)(6) of the Code in the manner
prescribed by the regulations.
(e) Correction of Excess Aggregate Contributions. If the Employer
Matching Contributions and Employee Contributions made on behalf
of Participants cause the Plan to fail the applicable
discrimination test under Section 3.06(a), then any excess
aggregate contributions and any allocable income shall be
distributed to the affected Participants, no later than 12 months
after the close of the Plan Year in which the excess aggregate
contribution was made.
If such distribution becomes necessary, it will be first applied
to the Participant who is the Highly Compensated Employee with
the highest aggregate contribution percentage of Employee
Contributions pursuant to Section 2.02 and Employer Matching
Contributions pursuant to Section 3.04(b) ("Aggregate
Contribution Percentage") until the applicable nondiscrimination
test of Section 3.06(a) is met or until such Participant's
Aggregate Contribution Percentage is reduced to the same
percentage level as the Participant who is the Highly Compensated
Employee with the second highest Aggregate Contribution
Percentage. If further limitations are required, then both such
Participants' percentages shall be reduced until the applicable
nondiscrimination test of Section 3.06(a) is met or until the two
Participants' Aggregate Contribution Percentages are reduced to
the same percentage level as the Participant who is the Highly
Compensated Employee with the third highest Aggregate
Contribution Percentage and such distributions shall continue to
be made in a similar manner from the Participants who are Highly
Compensated Employees with the highest Aggregate Contribution
Percentages to the lowest until the applicable nondiscrimination
test of Section 3.06(a) is satisfied. Excess aggregate
contributions shall be allocated to Participants who are subject
to the family member aggregation rules of section 414(q)(6) of
the Code in the manner prescribed by the regulations.
3.07 Maximum Limitations on Allocations to Members.
The limitations of section 415 of the Code and the regulations
thereunder are hereby incorporated herein by reference, provided,
however, that if the maximum benefit limitations of section 415(e) of
the Code would otherwise be exceeded, a reduction shall be made in the
benefit payable under, first, any qualified defined benefit plan, and
thereafter, any other qualified defined contribution plan, maintained
by the Employer to the extent necessary to prevent such excess, all in
accordance with section 415 of the Code and the regulations
thereunder.
15
3.08 Limited Return of Contributions.
In the event of a mistake of fact, or the disallowance of a deduction
(or the deemed disallowance of a deduction in accordance with
applicable regulations, rulings or procedures), Employer contributions
and the earnings thereon affected by such mistake or disallowance,
respectively, shall be returned to the Employer within one (1) year of
the mistaken payment of the contribution or disallowance of the
deduction, as the case may be, and likewise, Participants'
contributions and earnings thereon will be returned to Participants.
3.09 Rollover Contributions.
In addition to Pay Reduction Contributions made in accordance with
this Article III:
(a) Each Employee may contribute to the Plan up to the entire amount
of cash received in a lump sum distribution from another
qualified defined contribution or defined benefit retirement plan
intended to meet the requirements of section 401(a) of the
Internal Revenue Code, provided that such amount must be received
by the Trustee within sixty (60) days of the Employee's receipt
of the lump sum distribution; and
(b) Each Employee may direct the trustee, custodian or other
fiduciary holding assets for his benefit under the terms of a
qualified defined contribution or defined benefit plan of another
employer to transfer to the Plan, pursuant to section 401(a)(31)
of the Code, all or a portion of such assets.
Before accepting any such amount from an Employee or other person
under this Section (a "Rollover Contribution"), the Employer shall
determine to its satisfaction that such contribution does not contain
amounts from sources which would adversely affect the continued
qualification of the Plan. A Rollover Contribution shall not be
considered an annual addition for purposes of Section 3.07.
16
ARTICLE IV
INVESTMENT OF ASSETS
4.01 In General.
Each Participant shall direct that all contributions made in
accordance with Article III be invested in one or more of the
investment funds maintained by the Trustee in accordance with
procedures established by the Plan Administrator.
4.02 Dividends, Interest, Etc.
Dividends, interest and other distributions received by the Trustee
with respect to any investment fund shall be reinvested in the
investment fund from which such dividends, interest and other
distributions were received.
4.03 Investment Directions.
Investment directions given by a Participant shall be made in writing
to the Plan Administrator on a form prescribed for such purpose and
shall continue in effect until changed by such Participant by written
notice to the Plan Administrator on a form prescribed for such
purpose, subject to such other rules as the Plan Administrator in its
discretion may impose. Investment directions may be changed with
regard to future and past contributions as of such dates and otherwise
in such manner as from time to time prescribed by the Plan
Administrator, provided that no Participant shall be permitted to make
any such change more frequently than once each calendar quarter. Such
election may provide that all future contributions are to be invested
in one fund or split among any of the funds in any whole percentages.
Such election may also or in the alternative provide that existing
Account balances may be transferred out of one fund and into another
fund or funds in any whole percentages. In the event a Participant
does not make an election as to the investment of the contributions
made on his behalf, such contributions shall be invested in the Fund
A, as referenced in Section 4.04 hereof.
4.04 Investment Options.
The Plan Administrator, in its discretion, may expand, modify or
otherwise alter the funds available as investment vehicles under the
Plan. As of the Effective Date, the investment funds available are as
follows:
Fund A Guaranteed Investment Fund
A fund invested primarily in guaranteed investment contracts and
guaranteed annuity contracts issued by one or more insurance
companies.
Fund B Conservative Investment Fund (Fidelity Puritan Fund)
A fund invested in stocks and bonds, placing emphasis on
investment return and stability.
17
Fund C Aggressive Investment Fund (Fidelity Magellan Fund)
A fund invested in stocks, placing more emphasis on investment
return and less on stability.
Fund D Company Stock Fund
A fund invested primarily in qualifying employer securities (as
defined in section 4975(e)(8) of the Code) of UNITIL Corporation.
Part or all of such fund shall be invested in such qualifying
employer securities of UNITIL Corporation, except for investments
on an interim basis in short-term fixed income investments made
pending purchase of shares of such qualifying employer
securities. All cash dividends received by the Trustee with
respect to the qualifying employer securities held in this fund
shall be retained in such fund and invested in qualifying
employer securities. Notwithstanding the foregoing, the Plan
Administrator may establish such uniform rules with respect to
this qualifying employer security fund as it deems necessary and
appropriate. All rights, including voting and tendering rights,
attributable to such qualifying employer securities (whether
whole or fractional shares) shall be exercised pursuant to the
terms of the Trust Agreement.
18
ARTICLE V
MAINTENANCE AND VALUATION OF ACCOUNTS
5.01 Participants Accounts.
There shall be established for each Participant a separate Account in
the Trust Fund which shall reflect all Employee Contributions,
Employer Matching Contributions, Pay Reduction Contributions, Rollover
Contributions, and the investment thereof. Each participant will be
furnished a statement of his Account at least annually.
5.02 Valuation of Trust Fund and Allocation of Increases and Decreases to
Participants.
The interest of a Participant in the Trust Fund shall be valued at
fair market value and adjusted as of each Valuation Date to preserve
such Participant's proportionate interest in the fund or funds in
which the assets of his Account are invested. As of each Valuation
Date, each such fund or funds shall be adjusted to reflect the effect
of income collected accrued, realized and unrealized profits and
losses, expenses and all other transactions during the period between
such Valuation Date and the last preceding Valuation Date with respect
to such fund or funds.
19
ARTICLE VI
WITHDRAWALS DURING EMPLOYMENT
6.01 General Rules.
Subject to Section 6.03, a Participant whose employment with the
Employer has not terminated may withdraw all or part of his vested
Account for one of the purposes specified in Section 6.02. The Plan
Administrator shall determine the amount and timing of any such
payment.
6.02 Acceptable Purposes for Withdrawals.
Subject to Section 6.03, the purposes acceptable for withdrawals under
Section 6.01 are as follows:
(a) purchase, construction, improvement or preservation of a
principal place of residence for the Participant;
(b) education of the Participant or any dependent;
(c) unusual expenses associated with illness or accident of the
Participant or any dependent;
(d) unusual expenses associated with death of any dependent; and
(e) any similar severe financial need of the Participant or any
dependent.
6.03 Withdrawal Rules for Pay Reduction Contributions.
A Participant who (i) has attained age 59-1/2 or (ii) is experiencing
hardship due to an immediate and heavy financial need, and who in
either event otherwise has an acceptable purpose under Section 6.02,
may make a withdrawal from his Pay Reduction Contributions Account,
but not more than the aggregate amount of his Pay Reduction
Contributions and earnings credited thereto prior to January 1, 1989,
reduced by any previous withdrawals. For purposes of this Section
6.03, a distribution will be considered to be made on account of an
immediate and heavy financial need if it is made for any of the
following reasons, but shall be limited to the amount necessary to
satisfy that need (including any amounts necessary to pay federal,
state and local taxes and penalties reasonably anticipated to result
from the distribution):
(i) Purchase of a dwelling unit to be used as a principal
residence of the Participant;
(ii) Payment of tuition and related educational fees for the next
12 months of post-secondary education for the Participant or
his spouse or dependents;
(iii)Expenses of the Participant, his spouse, children and other
dependents for medical care described in section 213(d) of
the Code which have been previously incurred or are
necessary for these persons to obtain such care
20
and which are not covered by insurance or a medical plan
maintained by the Employer; or
(iv) Payment necessary to prevent the eviction of the Participant
from his principal residence or the foreclosure of a
mortgage on the Participant's principal residence.
A Participant who requests a distribution pursuant to this Section
6.03 must have obtained all other distributions (other than hardship
distributions) and nontaxable (at the time of the loan) loans, if any,
currently available to him under all plans maintained by the
Affiliated Employer. For this purpose, plan loans will not be deemed
to be "currently available" to the Participant if taking the plan loan
will not alleviate (in whole or in part) the Participant's financial
hardship need or if repaying any such loan would itself cause a
financial hardship for such Participant. A Participant who receives a
distribution from his Pay Reduction Contributions account pursuant to
this Section 6.03: (1) may not make Pay Reduction Contributions the
period of twelve (12) months immediately following the distribution,
and (2) in the calendar year immediately following the calendar year
in which the distribution occurs (the "distribution calendar year")
the Participant's Pay Reduction Contributions shall be limited to (i)
the limit established by section 402(g) of the Code, reduced by (ii)
the amount of the Participant's Pay Reduction Contributions in the
distribution calendar year.
21
ARTICLE VII
VESTING
7.01 Vesting in Pay Reduction, Employee and Rollover Contributions.
The portion of a Participant's Account attributable to Pay Reduction
Contributions, Employee Contributions and Rollover Contributions and
the earnings thereon shall be fully vested and nonforfeitable at all
times.
7.02 Instances of Full Vesting in Employer Matching Contributions.
The portion of a Participant's Account attributable to Employer
Matching Contributions and the earnings thereon shall be fully vested
and nonforfeitable upon:
(i) attainment of Normal Retirement Age;
(ii) death; or
(iii) Disability.
7.03 Vesting Schedule for Employer Matching Contributions.
Except as provided in Section 7.02, the portion of a Participant's
Account attributable to Employer Matching Contributions and the
earnings thereon shall be vested according to the following table:
Years of Vesting Service Vested Percentage
Fewer than 1 Nil
1 but fewer than 2 33%
2 but fewer than 3 67%
3 or more 100%
In applying this table, there shall be excluded any Years of Service
excluded under the applicable Prior Plan.
If a new vesting schedule takes effect because of an amendment to the
Plan, each Participant who has at least three Years of Vesting Service
at the time the new schedule takes effect may elect to have his vested
percentage determined in accordance with the old schedule.
7.04 Forfeitures.
A Participant who is not fully vested in his Employer Matching
Contributions Account shall forfeit the nonvested portion thereof upon
the later of the following events:
(a) the date on which there is no vested balance in his Employer
Matching Contributions Account; or
(b) the termination of his employment with the Employer.
22
In any event, however, a Participant shall forfeit the nonvested
portion of his Employer Matching Contributions Account upon incurring
five (5) consecutive One-Year Breaks in Service.
Until such forfeiture occurs, the Participant shall retain all the
rights of an active Participant under Article IV to direct the
investment of any amounts so credited to his Account. Forfeitures of
Employer Matching Contributions shall be used to reduce Employer
Matching Contributions otherwise required for the Plan Year and
reallocated at the end of the Plan Year as part of such Employer
Matching Contributions.
If a Participant whose Account has experienced a forfeiture is
reemployed by an Affiliated Employer before he has incurred at least
five (5) consecutive One-Year Breaks in Service, the balance forfeited
by the Participant shall be restored to his Account as of the
Valuation Date next following his return to employment with an
Affiliated Employer. The restoration shall be made first out of
amounts forfeited as of that Valuation Date and then, if that amount
is insufficient, out of an additional contribution made by the
Employer in an amount sufficient to effect the restoration.
7.05 Vesting Upon Reemployment.
A Participant who incurs one or more consecutive One-Year Breaks in
Service before returning to employment with an Affiliated Employer
shall have his Years of Vesting Service determined according to the
following rules:
(a) If the Participant incurred fewer than five (5) consecutive
One-Year Breaks in Service, then all of his Years of Vesting
Service will be taken into account in determining the vesting of
his Account immediately upon his reemployment.
(b) If the Participant incurred five (5) or more consecutive One-Year
Breaks in Service, then no Year of Service completed after his
reemployment will be taken into account in determining the
vesting of his Account as of any time before he incurred the
first One-Year Break in Service.
7.06 Suspension Account.
Notwithstanding any provisions hereof to the contrary, if a
Participant who prior to having completed the Years of Service to
become entitled to a vested right to his entire Employer Matching
Contributions Account (and prior to having incurred five (5)
consecutive One-Year Breaks in Service with respect to the amount
distributed) receives a distribution from such Employer Matching
Contributions Account, then upon each such distribution a separate
account (a "Suspension Account") shall be established for him
hereunder. On any particular date prior to the occurrence of five (5)
consecutive One-Year Breaks in Service, the Participant shall be
entitled to a nonforfeitable portion of the balance of his Suspension
Account, payable as otherwise herein provided, equal to an amount
determined by the following formula:
X = P(AB + D) - D,
23
where, for the purposes of applying the formula, X is said portion; P
is the applicable percentage from the table specified in Section 7.03
as of such particular date; AB is the balance in the Suspension
Account as of such particular date; D is the amount which was last
distributed from the Suspension Account or from his Employer Matching
Contributions Account when the Suspension Account was established. The
establishment of a Suspension Account for a Participant whose
employment with the Employer has terminated shall not prevent a
forfeiture of any portion of his Participant Account hereunder from
occurring and a reallocation thereof, all in accordance with the
general provisions hereof, provided, however, that any such forfeiture
shall be restored in the event such person again becomes a Participant
hereunder prior to incurring five (5) consecutive One Year Break in
Service with respect to such forfeiture. Except as otherwise provided
in this Section 7.06, any Suspension Account shall be treated as
though it were the Participant's Employer Matching Contributions
Account from which it was derived for all purposes hereof. Any
restoration of a Participant's Account balances shall be made first
from then-current forfeitures of other Participants' Accounts (and
such amounts shall not be dealt with as provided in Section 7.04) and
second from additional contributions of the Employer (which shall not
be allocated to any other Participants).
24
ARTICLE VIII
DISTRIBUTION OF BENEFITS
8.01 Retirement or Termination of Employment.
Benefits are payable to the Participant upon his incurring a
Disability, or upon retirement from or other termination of employment
with the Affiliated Employers. Payment of such benefit shall be made
as soon as practicable pursuant to Section 8.03, or in accordance with
Section 8.04.
8.02 Death.
In the event of the death of a Participant, the full amount credited
to his Account shall be paid from the Trust Fund to his Beneficiary.
Such payment shall be made as soon as practicable pursuant to Section
8.03 unless the Beneficiary elects to defer receipt of the benefit
pursuant to Section 8.04 below.
8.03 Timing of Payment.
Subject to Section 8.04, benefit payments under this Section 8.03
shall be made as soon as practicable, but in no event later than the
60th day following the last day of the Plan Year in which the latest
of the following events occurs:
(a) the Participant's sixty-fifth (65th) birthday;
(b) the Participant's date of termination; or
(c) the tenth anniversary of the Participant's commencement of
participation.
8.04 Deferral of Payment.
Notwithstanding the provisions of this Article VIII (other than
Section 8.07), if a Participant's Account balance exceeds $3,500 or
has ever exceeded $3,500 at the time of a prior distribution, it shall
not be immediately distributable without such Participant's consent
before the Participant has reached his Normal Retirement Age.
In the event of deferral of payment under this Section 8.04, the
unpaid portion of the Participant's Accounts in the applicable funds
shall be credited or debited with gains, losses or income of such
funds as provided in Section 5.02.
8.05 Forms, Manner and Medium of Payment.
Each Participant who separates from service with the Affiliated
Employer because of death, retirement at or after the attainment of
Normal Retirement Age or otherwise, or incurs a Disability may elect
(or in the event of the Participant's death, the Participant's
Beneficiary may elect) to receive his benefits as either:
(a) a lump sum; or
25
(b) a series of substantially equal annual installments.
A Participant (or Beneficiary) who elects a series of installments may
at any time elect to receive the balance of his benefits in a lump
sum.
All benefits hereunder shall be payable in cash, except that any
portion of a Participant's benefit which is invested in shares of
qualifying employer securities in the qualifying employer securities
separate investment Fund D hereunder (other than fractional shares)
shall be paid in such shares, provided, however, that the Participant
or Beneficiary may request the Trustee to liquidate such shares at the
Participant's or Beneficiary's expense and pay the cash proceeds
instead.
8.06 Designation of Beneficiary.
Each Participant shall have the right to designate one or more
Beneficiaries and contingent Beneficiaries to receive any benefit to
which such Participant may be entitled hereunder in the event of his
death prior to the complete distribution of such benefit, by filing a
written designation with the Plan Administrator on a form prescribed
by the Plan Administrator. However, if a Participant is married and
has not designated his or her spouse as his sole primary Beneficiary,
the spouse must consent to and acknowledge the effect of the
designation in writing, unless the spouse cannot be located or in such
other circumstances as permitted by regulation. The spouse's consent
must be witnessed by a notary public or Plan representative. Such
Participant may thereafter change such designation at any time and for
any number of times, with the consent of his or her spouse, if
married, by filing a new designation with the Plan Administrator. A
Beneficiary designation shall become effective only upon its receipt
by the Plan Administrator.
If a Participant fails to designate a Beneficiary pursuant to this
Section 8.06, or if no Beneficiary survives the Participant, payment
shall be made to the persons listed in the first of the following
categories which contains one or more persons surviving the
Participant: (i) his spouse; (ii) natural and adopted children and
survivors of them, in equal shares; (iii) parents and survivors of
them, in equal shares; or (iv) executor or administrator.
8.07 Required Distributions.
Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits whether under the Plan or
through the purchase of an annuity contract, shall be made in
accordance with the following requirements and shall otherwise comply
with Code section 401(a)(9) and the regulations thereunder (including
Treasury Regulation section 1.401(a)(9)-2), the provisions of which
are incorporated herein by reference:
(a) A Participant's benefits shall be distributed to him no later
than April 1st of the calendar year following the calendar year
in which the Participant attains age 70- 1/2, provided, however,
that such date shall instead be the April 1st of the calendar
year following the later of the calendar year of his retirement
or attainment of age
26
70-1/2 if he attained age 70-1/2 before January 1, 1988, and was
not a 5% owner (determined under Code section 416, but without
regard to whether the Plan is top- heavy). Alternatively,
distributions to a Participant must begin no later than the
applicable April 1st as determined under the preceding sentence
and must be made over the life of the Participant (or the lives
of the Participant and the Participant's designated Beneficiary)
or a period certain measured by the life expectancy of the
Participant (or the joint and last survivor life expectancy of
the Participant and his designated Beneficiary) in accordance
with applicable regulations.
(b) If the distribution of a Participant's interest has begun in
accordance with the method selected in Section 8.05 and the
Participant dies before his entire interest has been distributed
to him, the remaining portion of such interest shall be
distributed at least as rapidly as under the method of
distribution selected pursuant to Section 8.05 as of his date of
death.
(c) If a Participant dies before he has begun to receive any
distribution of his interest under the Plan, his death benefit
shall be distributed to his Beneficiaries by December 31st of the
calendar year in which the fifth anniversary of his date of death
occurs. It shall be paid to the Participant's Beneficiary by
either of the following methods, as elected by the Participant
(or if no election has been made prior to the Participant's
death, by his Beneficiary), subject to the rules specified below
in this Section 8.07:
(i) One lump-sum payment in cash;
(ii)Payment in monthly, quarterly, semi-annual, or annual cash
installments over a period to be determined by the
Participant or his Beneficiary. After periodic installments
commence, the Beneficiary shall have the right to direct the
Trustee to reduce the period over which such periodic
installments shall be made, and the Trustee shall adjust the
cash amount of such periodic installments accordingly.
(d) The five-year distribution requirements of subsection (c) above
shall not apply to any portion of the deceased Participant's
interest which is payable to or for the benefit of a designated
Beneficiary. In such event, such portion may at the election of
the Participant (or the Participant's designated Beneficiary) be
distributed over the life of such designated Beneficiary (or over
a period not extending beyond the life expectancy of such
designated Beneficiary) provided such distribution begins not
later than December 31st of the calendar year immediately
following the calendar year in which the Participant died.
However, in the event the Participant's spouse (determined as of
the date of the Participant's death) is his Beneficiary, the
requirement that the distributions commence within one year of a
Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December 31st
of the calendar year in which the Participant would have attained
age 70-1/2. If the surviving spouse dies before the distributions
to such
27
spouse begin, then the five-year distribution requirement of
subsection (c) above shall apply as if the spouse were the
Participant.
(e) For purposes of this Section 8.07, the election by a designated
Beneficiary to be excepted from the five-year distribution
requirement must be made no later than December 31st of the
calendar year following the calendar year of the Participant's
death. Except, however, with respect to a designated Beneficiary
who is the Participant's surviving spouse, the election must be
made by the earlier of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant
died or, if later, the calendar year in which the Participant
would have attained age 70-1/2; or (2) December 31st of the
calendar year which contains the fifth anniversary of the date of
the Participant's death. An election by a designated Beneficiary
must be in writing and shall be irrevocable as of the last day of
the election period stated herein. In the absence of an election
by the Participant or a designated Beneficiary, the five-year
distribution requirement shall apply.
(f) For purposes of this Section 8.07, the life expectancy of a
Participant and a Participant's spouse may, at the election of
the Participant or the Participant's spouse, be redetermined
annually in accordance with treasury regulations. The election,
once made, shall be irrevocable. If no election is made by the
time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in Tables
V and VI of Treasury Regulation Section ss. 1.72-9.
(g) The Plan Administrator may direct the Trustee to segregate into a
separate savings account the amount of payment owed to a
Participant or Beneficiary whom it is unable to locate.
8.08 Payments to Alternate Payees.
Notwithstanding any other provision of the Plan, the Plan
Administrator may authorize payment to an alternate payee in
accordance with the terms of a qualified domestic relations order in
any form available to Participants or Beneficiaries under this Article
VIII, and such payment may be made before the Participant to whom the
qualified domestic relations order applies has separated from service
or reached the earliest retirement age, within the meaning of section
414(p) of the Code.
8.09 Direct Rollovers.
(a) Notwithstanding any other provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this
Section 8.09, with respect to any distribution made on or after
January 1, 1993, a Distributee of a benefit under the Plan may
elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan
specified by the Distributee, in a Direct Rollover.
28
(b) Definitions. For the purposes of this Section 8.09, the following
words and phrases when used herein shall have the following
meanings and shall be in addition to any other words and phrases
defined elsewhere in the Plan:
(1) Eligible Rollover Distribution. An "Eligible Rollover
Distribution" is any distribution of all or any portion of
the balance to the credit of the Distributee, except: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the Distributee and the
Distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent
it is required under section 401(a)(9) of the Code; and the
portion of any distribution that is not includible in the
Distributee's gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(2) Eligible Retirement Plan. An "Eligible Retirement Plan" is
an individual retirement account described in section 408(a)
of the Code, an individual retirement annuity described in
section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described
in section 401(a) of the Code, that accepts the
Distributee's Eligible Rollover Distribution; except that in
the case of an Eligible Rollover Distribution to the
surviving spouse of a Participant, an Eligible Retirement
Plan is only an individual retirement account or individual
retirement annuity.
(3) Distributee. A "Distributee" is an Employee or former
Employee for whose Account an amount remains in the Trust
Fund, a Beneficiary who is the surviving spouse of a former
Participant, or an alternate payee who is the spouse or
former spouse of an Employee or former Employee.
(4) Direct Rollover. A "Direct Rollover" is a payment by the
Plan to the Eligible Retirement Plan specified by the
Distributee.
(c) The provisions of this Section 8.09 shall be administered in
accordance with the terms of a "Direct Rollover Program," not
inconsistent with this Section 8.09 or with any provision of
section 401(a)(31) or 402 of the Code, which is adopted and
amended from time to time by the Plan Administrator, and which is
incorporated herein by this reference.
29
ARTICLE IX
EMPLOYEE LOANS
9.01 Eligibility for Loans.
Each Participant shall be eligible to apply for a loan from the net
vested value of his Account in the Plan, excluding, however, any
portion thereof derived from Employee Contributions. For purposes of
this Section 9.01, the term "Participant" includes Employees with an
Account balance and former such Employees who are parties in interest
as defined at Section 3(14) of ERISA.
9.02 Limitations, Terms and Conditions for Loans.
Subject to the following provisions hereof, a Participant may borrow
from the net vested value of his Account an amount as of any Valuation
Date which, when aggregated with all of his outstanding loans under
the Plan, is not in excess of one-half of his vested Account as of the
date on which the loan is approved, and in no event greater than
$50,000 less his highest outstanding loan balance for the prior
12-month period. In addition to such rules and regulations as the Plan
Administrator may, from time to time, adopt in writing and which are
hereby incorporated herein by reference, all loans shall comply with
the following terms and conditions:
(a) An application for a loan shall be made in writing to the Plan
Administrator.
(b) Each loan shall be for a minimum of $1,000.
(c) Only one loan may be outstanding at any time, and no more than
one loan may be granted in any 12-month period.
(d) The period of repayment for any loan shall in no event exceed
five (5) years. Repayment of principal and interest shall be made
in substantially equal installments, not less frequently than
quarterly, on a payroll deduction basis in the case of active
Participants and by remittance of a check directly to the Plan
Administrator in the case of Participants on a leave of absence.
(e) Each loan shall be made against collateral being the assignment
of the borrower's entire right, title and interest in and to the
Trust Funds representing 50% of the total vested Account of that
borrower, supported by the borrower's collateral promissory note
for the amount of the loan, including interest, payable to the
order of the Trustee.
(f) Each loan shall bear interest at a rate to be fixed by the Plan
Administrator and, in determining the interest rate, the Plan
Administrator shall take into consideration interest rates
currently being charged by persons in the business of lending
money under similar circumstances. The Plan Administrator shall
not discriminate among Participants in the matter of interest
rate but loans granted at different times may bear different
interest rates if, in the opinion of the Plan Administrator, the
difference in rates is justified by a change in general economic
conditions or the practices of commercial lenders.
30
(g) While any loan amount remains outstanding, no distribution shall
be made from the Participant's Account with respect to the
portion of the Account balance representing the value of the loan
as an asset of the Account. If a Participant does not repay his
loan according to the terms agreed upon by the Participant and
Plan Administrator, the Plan Administrator may, upon termination
of his employment, reduce the balance of the Participant's
Accounts in the Plan by the outstanding loan amount and any
interest then due, or, alternatively, exercise such rights or
remedies as it may have as a creditor of the Participant. Any
expenses incurred by the Plan Administrator in exercising such
rights or remedies shall be chargeable to the Participant's
Account to the fullest extent permitted by law.
9.03 Separate Loan Accounts.
If a Participant has a loan in accordance with this Article IX, a
separate loan account shall be established as part of his Account
under the Plan. Interest and principal repayments under the terms of
the loan shall be credited to the Participant's Account, and a
delinquency or default in repayment of the loan shall not affect the
balance of any Account other than the Participant's. All repayments
and interest shall be invested in accordance with the Participant's
current loan investment elections in force at the time of the
repayment.
31
ARTICLE X
TOP-HEAVY PROVISIONS
The following definitions apply for purposes of this Article X:
10.01 Aggregation Group.
"Aggregation Group" means a group of retirement plans, either a
"Required Aggregation Group" or a "Permissive Aggregation Group," as
hereinafter determined.
(i) Required Aggregation Group. In determining a Required Aggregation
Group hereunder, each retirement plan of the Employer or an
Affiliated Employer qualified under section 401(a) of the Code,
in which a Key Employee is a participant, and each such other
plan (including terminated plans or Keogh plans, if any) of the
Employer or an Affiliated Employer which enables any plan in
which a Key Employee within the meaning of section 416(i) of the
Code participates to meet the requirements of sections 401(a)(4)
or 410 of the Code, will be required to be aggregated. Such group
shall be known as a "Required Aggregation Group."
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top-Heavy Plan if the Required
Aggregation Group is a Top-Heavy Group. No plan in the Required
Aggregation Group will be considered a Top- Heavy Plan if the
Required Aggregation Group is not a Top-Heavy Group.
(ii)Permissive Aggregation Group. The Employer also may include any
other plan not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a
whole, would continue to satisfy the provisions of sections
401(a)(4) and 410 of the Code. Such group shall be known as a
"Permissive Aggregation Group."
In the case of a Permissive Aggregation Group, only a plan that
is part of the Required Aggregation Group will be considered a
Top-Heavy Plan if the Permissive Aggregation Group is a Top-Heavy
Group. No plan in the Permissive Aggregation Group will be
considered a Top-Heavy Plan if the Permissive Aggregation Group
is not a Top-Heavy Group.
10.02 Determination Date.
"Determination Date" means the last day of the preceding Plan Year,
except for the initial Plan Year, in which case Determination Date
means the last day of such Plan Year.
10.03 Top Heavy Plan.
(a) The Plan shall be a "Top Heavy Plan" for any Plan Year in which,
as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the aggregate
Accounts of Key Employees under the Plan and all
32
plans of an Aggregation Group, exceeds sixty percent (60%) of the
Present Value of Accrued Benefits and the aggregate Accounts of
all Key and Non-Key Employees under the Plan and all other plans
of an Aggregation Group. The Present Value of Accrued Benefits
and/or the sum of the aggregate Accounts, for this purpose, shall
include distributions made within the Plan Year that includes the
Determination Date and the four preceding Plan Years.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or aggregate
Account balance shall not be taken into account for purposes of
determining whether the Plan is a Top Heavy Plan (or whether any
Aggregation Group which includes the Plan is a Top Heavy Group).
In addition, if a Participant or Former Participant has not
performed any services for any Employer maintaining the Plan at
any time during the five-year period ending on the Determination
Date, the Present Value of Accrued Benefit and/or the aggregate
Account of such Participant or Former Participant shall not be
taken into account for the purposes of determining whether the
Plan is Top Heavy.
(b) In the case of a defined benefit plan, the "Present Value of
Accrued Benefit" for a Participant other than a Key Employee,
shall be as determined using the single accrual method used for
all plans of the Employer and Affiliated Employers, or if no such
method exists, using a method which results in benefits accruing
not more rapidly than the slowest accrual rate permitted under
section 411(b)(1)(C) of the Code. The determination of the
Present Value of Accrued Benefit 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 years of a defined benefit plan.
10.04 Minimum Allocation.
Notwithstanding the provisions of Article III, for any Plan Year
during which the Plan is deemed a Top-Heavy Plan, the sum of Employer
contributions and forfeitures allocated to the Account of each non-Key
Employee shall be equal to at least three (3%) of such non-Key
Employee's "compensation." Moreover, if the non-Key Employee is also a
participant in any other defined contribution plan of an Affiliated
Employer, the minimum allocation set forth in this Section 10.04 shall
be reduced by any allocations under such other plan with respect to
the non-Key Employee. However, should the sum of the Employer
contributions and forfeitures allocated to the Account of each Key
Employee for such Top-Heavy Plan Year be less than three percent (3%)
of each Key Employee's Compensation, the sum of the Employer
contributions allocated to the Account of each Non-Key Employee shall
be equal to the largest percentage allocated to the Account of each
Key Employee. For purposes of the minimum allocations: (i)
Compensation shall be defined as it is in Treas. Reg. ss. 1.415-2(d);
and (ii) the percentage allocated to the Account of any Key Employee
shall be equal to the ratio of the sum of the contribution allocated
on behalf of such Key Employee divided by the Compensation for such
Key Employee.
33
If a non-Key Employee is a member of both a defined contribution plan
and a defined benefit plan that are both part of a Top-Heavy Group,
then the three percent (3%) minimum allocation percentage in the
preceding paragraph shall instead be (i) zero percent (0%) if such
non-Key Employee is entitled to a minimum top-heavy benefit under Code
section 416 under the defined benefit plan without reference to the
Plan (that is, at least two percent (2%) times average compensation
times years of service up to a maximum of 10 years), or (ii) five
percent (5%) in any other case.
If a Key Employee is a member in both a defined contribution plan and
a defined benefit plan that are both part of a Top-Heavy Group (but
neither of such plans is a Super Top- Heavy Plan as described in
section 416(h)(2)(B) of the Code), the defined contribution and the
defined benefit fractions incorporated by reference into the Plan by
Section 3.07 shall remain unchanged, provided the Account of each
Non-Key Employee receives an extra allocation (in addition to the
minimum allocation set forth above) equal to not less than four and
one-half percent (4-1/2 %) of such Non-Key Employee's Compensation.
34
ARTICLE XI
TRUST ADMINISTRATION
11.01 Trust Agreement.
The Employer has entered into a Trust Agreement with a Trustee for the
purpose of holding the Fund. The Trust Agreement shall provide, among
other things, that all funds received by the Trustee thereunder shall
be held, administered, invested (in its discretion or as directed by
an investment advisor designated by the Plan Administrator) subject to
Article IV and distributed by the Trustee, and that no part of the
corpus or income of the Fund held by the Trustee shall be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries except as permitted under Sections
3.08 and 11.04. The Employer shall have the authority to remove such
Trustee or any successor Trustee in writing to this effect. Any
Trustee or any successor Trustee may resign and in this event the
Trustee or successor Trustee shall notify the Employer in writing to
this effect. Upon removal or resignation of a Trustee, the Employer
shall appoint a successor Trustee.
The Employer shall have authority to direct that there shall be more
than one Trustee under the Trust Agreement and to determine the
portion of the assets under the Trust Agreement to be held by each
such Trustee. If such a direction is given, the Employer shall
designate the additional Trustee or Trustees and each Trustee shall
hold and invest and keep records with respect to the portion of such
assets held by it.
The Plan Administrator shall also have the authority to direct that
any portion of the assets shall be invested as directed by an
investment manager (as defined in Section 3(38) of ERISA) designated
by the Plan Administrator.
11.02 Trustee's Right to Retain Cash.
The Trustee may keep uninvested an amount of cash sufficient in its
opinion to enable it to carry out the purposes of the Plan.
11.03 Selection of Accountants, Etc.
The Employer may select a firm of independent pubic accountants to
examine and report on the financial position and the results of
operations of the Fund created under the Plan, at such times as it
deems it proper and/or necessary.
11.04 Trust Expenses, Etc.
The Trustee without written directions may pay from the Fund all
expenses incurred in the administration thereof, including, but
without being limited to, all brokerage fees, taxes of any nature
which may be imposed upon the Fund or upon any asset included therein
or required to pay with respect to the interest of any person therein,
all handling expenses, and the reasonable fees and expenses of legal
counsel, accountants and other agents employed by the Trustee. All
disbursements shall be made out of the Fund only
35
to the extent that it is sufficient therefor. The Employer, in its
sole discretion, may reimburse the Fund for expenses charged against
it by the Trustee.
11.05 Trust Agreement Part of Plan.
Any Trust Agreement(s) entered into pursuant to this Article XI shall
form a part of the Plan.
36
ARTICLE XII
ADMINISTRATION OF THE PLAN
12.01 Appointment of Administrator.
The Employer may appoint one or more individuals, firms, corporations
or other entities to be the Plan Administrator. The Employer may, at
any time and from time to time, remove such persons as Plan
Administrator, with or without cause. If the Employer determines that
the Plan Administrator shall be a committee of individuals, it shall
appoint a committee (the "Committee") to consist of two (2) or more
persons who may, but need not be, Employees, and who may be Trustees.
A member of the Committee may be removed by the Employer at any time
with or without cause. Vacancies in the Committee may be filled by the
Employer. The Plan Administrator or a member of the Committee may
resign at any time by filing a written notice of the resignation with
the Employer. Each member of the Committee shall serve until such time
as he dies, resigns, or is removed by the Employer. In the absence of
any action by the Employer to appoint a Plan Administrator, the
Employer shall be the Plan Administrator.
12.02 Authority to Delegate.
The Plan Administrator may delegate to any person or entity any of its
powers or duties under the Plan.
12.03 Authority to Establish Rules, Etc.
The Plan Administrator shall, from time to time, establish rules for
the administration of the Plan and the transaction of its business.
Except as herein otherwise expressly provided, the Plan Administrator
shall have the exclusive right to interpret the Plan and to decide any
matters arising thereunder in connection with the administration of
the Plan. It shall endeavor to act by general rules so as not to
discriminate in favor of or against any person. The decisions and the
records of the Plan Administrator shall be conclusive and binding upon
the Employer, Participants, and all other persons having any interest
under the Plan.
12.04 Instructions, Decisions, Compensation, Etc.
Instructions of the Plan Administrator to the Trustee shall be in
writing. All decisions and determinations of the Plan Administrator
shall be recorded, and all such records, together with such other
documents as are required for the administration of the Plan, shall be
preserved. The Plan Administrator shall serve without compensation
from the Fund. The delegates of the Plan Administrator shall be
entitled to reimbursement for reasonable and proper expenses incurred
in the performance of their duties to be paid by the Plan
Administrator.
12.05 Maintenance of Accounts, Etc.
The Plan Administrator shall maintain accounts showing the fiscal
transactions of the Plan, and shall keep in convenient form such data
as may be necessary for valuations of
37
the assets and liabilities of the Plan and giving an account of the
operation of the Plan for the past year. Such valuations shall be
performed as of each Valuation Date, determining the current value of
the assets. Such report shall be submitted to the Employer.
12.06 Responsibility of Delegates.
To the extent that the Employer or the Plan Administrator delegates to
any person or entity any of its power or duties under the Plan, that
delegate shall become responsible for administrative duties so
delegated and references to the Employer or the Plan Administrator
shall apply instead to the delegate.
12.07 Claims Procedure.
A Participant's initial claim for benefits must be made in writing to
the Plan Administrator. In the event that any claim for benefits is
denied in whole or in part, the Participant or Beneficiary whose claim
for benefits has been so denied shall be notified of such denial in
writing by the Plan Administrator within 90 days of receipt of the
claim. The notice advising of the denial shall specify the reason or
reasons for denial, make specific reference to pertinent Plan
provisions, describe any additional material or information necessary
for the claimant to perfect the claim (explaining why such material or
information is needed), and shall advise the Participant or
Beneficiary, as the case may be, of the procedure for the appeal of
such denial. All appeals shall be made by the following procedure:
(a) The Participant or Beneficiary whose claim has been denied shall
file with the Plan Administrator a notice of desire to appeal the
denial. Such notice shall be filed within sixty (60) days of
notification by the Plan Administrator of claim denial, shall be
made in writing, and shall set forth all of the facts upon which
the appeal is based. The Plan Administrator shall not consider
any appeal that is not timely filed.
(b) Within sixty (60) days of receipt of the appeal, the Plan
Administrator shall make a determination as to the merits of the
appeal and notify the claimant.
(c) If necessary due to special circumstances, the ninety (90) day
period for initial determination of a claim and sixty (60) day
period for notification of the determination of an appeal may be
extended to 120 days.
38
ARTICLE XIII
AMENDMENT AND TERMINATION
13.01 Amendment.
The provisions of the Plan may be amended by the Employer from time to
time and at any time in whole or in part, provided that no amendment
shall be effective unless the Plan as so amended shall be for the
exclusive benefit of the Participants and their Beneficiaries, and
that no amendment shall operate to deprive any Participant of any
rights or benefits fully vested in him under the Plan prior to such
amendment.
13.02 Termination.
While it is the Employer's intention to continue the Plan indefinitely
in operation the right is, nevertheless, expressly reserved to
terminate the Plan in whole or in part at any time. Any such
termination shall be effected only upon conditions that such action is
taken under the Trust Agreement as shall render it impossible for any
part of the corpus of the Fund or the income thereof to be used for,
or diverted to, purposes other than for the exclusive benefit of the
Participants and their Beneficiaries except to the extent permitted in
Section 3.08.
13.03 Procedure Upon Termination.
If the Plan is to be terminated at any time the Employer shall give
written notice to the Trustee. The Trustee shall thereupon revalue the
assets of the Fund and the individual Accounts of the Participants as
of the date of termination, partial termination, or discontinuance of
contributions, and, after discharging and satisfying any obligations
of the Plan, shall allocate all unallocated assets to the Accounts of
the Participants at the date of termination. Upon termination of the
Plan or complete discontinuance of contributions, all individual
Participant Accounts shall be fully vested and shall not thereafter be
subject to forfeiture in whole or in part. Upon a partial termination
of the Plan, the provisions of the preceding sentence shall apply to
the Accounts of Participants as to whom the partial termination
applies. The Plan Administrator, in its sole discretion, shall
instruct the Trustee either (1) to pay over to each affected
Participant, in accordance with Article VIII, the net value of his
Account or (2) to continue to manage and administer the assets of the
Trust for the benefit of the Participants to whom distributions will
be made in later periods in the manner provided in Article VIII.
13.04 Merger.
No merger or consolidation with, or transfer of any of the Plan's
assets or liabilities to any other plan shall occur at any time unless
each Participant would (if the Plan had then terminated) receive a
benefit greater than the benefit the Participant would have been
entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated).
With respect to the contemplated merger, effective as of January 1,
1994, of the Fitchburg Gas and Electric Light Company Union Tax
Deferred Savings and Investment
39
Plan ("Fitchburg Union Plan") with the Plan, and subject to the
foregoing paragraph and to the favorable determination by the Internal
Revenue Service as to the qualification of the amendment and
restatement of the Plan generally effective as of January 1, 1989, and
the trust hereunder, and if necessary or desirable, the expiration
without disapproval of the appropriate time period after proper prior
notice is given to the Internal Revenue Service of the proposed
transfer of assets provided for by the following provisions of this
Section 13.04, the Trustee hereunder shall receive all assets of the
Fitchburg Union Plan, which assets shall be transferred to it by the
trustee under the Fitchburg Union Plan, to be held under the Plan in
separate predecessor plan accounts for the respective former Fitchburg
Union Plan participants.
Similarly, any other assets being held in predecessor plan accounts
under the Plan prior to its amendment and restatement generally
effective as of January 1, 1989, shall continue to be held hereunder
in such accounts.
13.05 Retroactive Amendments.
Notwithstanding the provisions of Section 13.01 or of any other
provisions hereof, any modifications or amendment of the Plan may be
made, retroactively, if necessary, which the Employer deems necessary
or appropriate to conform the Plan to, or to satisfy the conditions
or, any law, governmental regulation or ruling, or to permit the Plan
or the Trust to meet the requirements of the Internal Revenue Code, or
of any subsequent federal revenue law.
40
ARTICLE XIV
MISCELLANEOUS
14.01 Mergers, Etc. with Employer.
If any persons become employees of the Employer as the result of
merger or consolidation or as the result of acquisition of all or part
of the assets or business of another corporation, the Employer shall
determine to what extent, if any, previous service with such
corporation shall be recognized as service for purposes of eligibility
in the Plan, but subject to the continued qualification of the Plan
and Trust as tax exempt under the Code. Any corporation may terminate
its participation in the Plan upon appropriate action by it if such
corporation ceases to be an Affiliated Employer, in which event the
funds of the Plan held on account of Participants in the employ of
such corporation and any unpaid balances of the Accounts of
Participants who have separated from the employ of such corporation
shall be distributed as provided in Section 13.03 in the event of
termination of the Plan.
14.02 Non-Alienation of Benefits.
None of the payments, benefits or rights of any Participant shall be
subject to any claim of any creditor of such Participant and, in
particular, shall be free from attachment, garnishment, trustee's
process, or any other legal or equitable process available to any
creditor of such Participant. No Participant shall have the right to
alienate, commute, pledge, encumber or assign any of the benefits or
payments which he may expect to receive, contingently or otherwise,
under the Plan, except the right to designate a Beneficiary or
Beneficiaries as herein before provided and the right to assign up to
50% of the vested balance of his Account as collateral security for a
loan to him pursuant to Article IX.
The preceding paragraph also shall apply to the creation, assignment
or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is a qualified domestic relations order as defined in section 414(p)
of the Code.
14.03 Participant and Employee Rights.
Neither the establishment of the Plan, nor any modification thereof,
nor the creation of the Fund, Trust or Account, nor the payment of any
benefits shall be construed as giving any Participant or Employee of
the Employer or any person whomsoever, any legal or equitable right
against the Employer, the Trustee, or the Plan Administrator, unless
such right shall be specifically provided for in the Trust or the Plan
or conferred by affirmative action of the Plan Administrator or in
accordance with the terms and provisions of the Plan; or as giving any
Participant or Employee of the Employer the right to be retained in
the service of the Employer and all Participants and other Employees
shall remain subject to discharge to the same extent as if the Plan
had never been adopted.
41
14.04 Incapacity of Payee.
If the Plan Administrator deems any person incapable of receiving
benefits to which the Participant is entitled by reason of minority,
illness, infirmity or other incapacity, it may direct the Trustee to
make payment directly for the benefit of such person or to any person
selected by the Plan Administrator to disburse it, whose receipt shall
be complete acquittance thereof. Such payments shall, to the extent
thereof, discharge all liability of the Employer, the Plan
Administrator, the Trustee and the Fund.
14.05 Actions by the Employer.
Notwithstanding anything herein to the contrary, any of the actions
the Employer takes in accordance with Articles XI through XIII shall
be taken by majority vote of each Board of Directors, provided,
however, that any particular Employer that has adopted the Plan may
withdraw from further participation at any time with respect to some
or all of its Employees by action of its Board of Directors without
the approval of any other Board of Directors.
14.06 Governing Law.
Except as provided differently by federal law, the Plan shall be
construed under the laws of the state of New Hampshire.
14.07 Titles, Etc.
The titles of Articles are included for convenience only and if there
shall be any conflict between the titles and the text of the Plan, the
text shall control.
IN WITNESS WHEREOF, the Employer has caused this instrument to be executed
by its duly authorized representative this 23rd day of December,1994.
(CORPORATE SEAL) UNITIL CORPORATION
Attest: /s/ Gail A. Siart By: /s/ Michael J. Dalton
----------------- ---------------------
Its Secretary Its President
(CORPORATE SEAL) UNITIL SERVICE CORP.
Attest: /s/ Gail A. Siart By: /s/ Peter J. Stulgis
----------------- --------------------
Its Secretary Its President
(CORPORATE SEAL) CONCORD ELECTRIC COMPANY
Attest: /s/ Sandra L. Walker By: /s/ Michael J. Dalton
-------------------- ---------------------
Its Secretary Its President
42
(CORPORATE SEAL) EXETER & HAMPTON ELECTRIC
COMPANY
Attest: /s/ Sandra L. Walker By: /s/ Michael J. Dalton
-------------------- ---------------------
Its Secretary Its President
(CORPORATE SEAL) FITCHBURG GAS AND ELECTRIC
LIGHT COMPANY
Attest: /s/ Thomas J. Conry, Jr. By: /s/ Michael J. Dalton
------------------------ ---------------------
Its Clerk Its President
43
EXHIBIT 4.2
UNITIL CORPORATION TAX DEFERRED SAVINGS AND INVESTMENT PLAN
AMENDMENT NO. 1 TO RESTATED PLAN
GENERALLY EFFECTIVE AS OF JULY 1, 1996
WHEREAS, effective as of July 1, 1987, Concord Electric Company Tax
Deferred Savings and Investment Plan, initially adopted effective as of January
1, 1985 by Concord Electric Company, a wholly-owned subsidiary of UNITIL
Corporation ("UNITIL"), and the UNITIL Corporation Tax Deferred Savings and
Investment Plan, initially adopted effective as of January 1, 1985, by UNITIL
Service Corp., also a wholly-owned subsidiary of UNITIL, were amended and
restated and consolidated, under the name of UNITIL Corporation Tax Deferred
Savings and Investment Plan (the "Plan"); and
WHEREAS the Plan was also adopted by Exeter & Hampton Electric Company,
also a wholly-owned subsidiary of UNITIL, effective as of January 1, 1989 for
its employees not covered by a collective bargaining agreement, and effective as
of January 1, 1990 for its collective bargaining unit employees, and merged as
of such dates with the respective portions of the Exeter & Hampton Electric
Company Thrift Savings Plan; and
WHEREAS the Plan was also adopted by Fitchburg Gas and Electric Light
Company ("Fitchburg"), which had also become a wholly-owned subsidiary of
UNITIL, effective as of April 29, 1992, with respect to non-collective
bargaining employees, effective as of May 8, 1992, and with respect to its
collective bargaining employees, effective as of January 1, 1994, merging with
the Plan as of such respective dates the Fitchburg Gas and Electric Light
Company Tax Deferred Savings and Investment Plan, covering non-collective
bargaining employees, and the Fitchburg Gas and Electric Light Company Union Tax
Deferred Savings and Investment Plan, covering collective bargaining employees;
and
WHEREAS the Plan was most recently amended and restated by an instrument
dated December 23, 1994, generally effective as of January 1, 1989, in part to
comply with the provisions of the Tax Reform Act of 1986 and subsequent
legislation and related regulations; and
WHEREAS the current Trustee under the Plan is The First National Bank of
Boston under a Trust Agreement originally dated June 27, 1987, effective as of
July 1, 1987; and
WHEREAS each of said corporations desires to further amend the Plan,
generally effective as of July 1, 1996, in part to provide for daily valuation
of accounts thereunder
and to change the investment options, and in connection therewith is changing
the recordkeeper and Trustee thereunder;
NOW, THEREFORE, by execution of this instrument, each of said corporations
hereby amends, effective, except as specifically otherwise provided, as of July
1, 1996, the Plan, as most recently amended and restated, as follows:
1. Effective as of July 1, 1996, by changing each reference to "UNITIL"
wherever it may appear herein to "Unitil," instead.
2. By deleting the first full sentence of Section 1.14 therefrom, and
inserting, in lieu of said sentence so deleted, the following new sentence:
"'Entry Date' means the first day of each month of each Plan Year."
3. By deleting the two full sentences of Section 1.27 thereof and
inserting, in lieu of said sentences so deleted, the following two new
sentences:
"'Valuation Date' means any of the dates established by the Plan
Administrator for the valuation of the assets and liabilities of the Trust.
Valuation Dates shall occur on each day that the New York Stock Exchange is
open for business."
4. Effective as of January 1, 1989, by changing the reference to "December
31, 1987" in the first full sentence of Section 2.01 thereof to "December 31,
1988," instead.
5. By deleting the portion of Section 2.02 thereof beginning with the first
full sentence and continuing up to the words "provided, however," in the second
full sentence and inserting, in lieu of said portion so deleted, the following
new language:
"A Participant may elect at any time, by completing and delivering to the
Plan Administrator a form approved by it for the purpose, a percentage of
his Compensation (or at his election, of his Compensation excluding any
overtime pay and commissions) to be contributed to the Plan on his behalf
as a Pay Reduction Contribution and/or an Employee Contribution. The
Participant shall specify a whole percentage of either his Compensation (or
his Compensation excluding overtime and commissions, as aforesaid) and may
elect to contribute the amount in any combination of Pay Reduction
Contributions and Employee Contributions,".
6. By deleting the last sentence of the first paragraph of Section 3.02
thereof and inserting, in lieu of said sentence so deleted, the following new
sentence:
"A modification increasing contributions may take effect on the first
day of any month."
2
7. By deleting from the third sentence of the second paragraph of said
Section 3.02 the words "any following January 1st or July 1st" and by inserting,
in lieu of said words so deleted, the new words "first day of any month."
8. Effective as of January 1, 1987, by changing the reference to "$8,994"
in the first paragraph of Section 3.06(c) to "7,000," instead.
9. By deleting that portion of Section 4.03 thereof which begins with the
first full sentence and extends through the end, and inserting, in lieu of said
portion so deleted, the following new language:
"Investment directions shall be furnished by the Participant to the Plan
Administrator except to the extent such directions are transmitted
telephonically or otherwise by the Participant directly to the recordkeeper
under the Plan from time to time selected by the Plan Administrator or to
such recordkeeper's delegate, all in accordance with rules and procedures
established and approved by the Plan Administrator. Investment directions
may be changed in a similar manner with regard to future and past
contributions as of each Valuation Date. Such directions or change of
directions may provide that all future contributions are to be invested in
one fund or split among any of the funds in any multiple of five (5)
percent. Such directions or change of directions may also or in the
alternative provide that all existing Account balances of a Participant may
be transferred out of one fund and into another fund or funds in any
multiple of five (5) percent. In the event a Participant does not make an
election as to the investment of the contributions made on his behalf, such
contributions shall be invested in the capital preservation fund hereunder,
as referenced in Section 4.04 hereof."
10. By deleting that portion of Section 4.04 thereof which begins with
the second full sentence and extends through the end, and inserting, in lieu of
said portion so deleted, the following new language:
"As of July 1, 1996, in addition to a Company Stock Fund, the investment
funds available under the Plan shall include one or more funds in the
following categories: (i) a capital preservation fund, (ii) an S & P index
fund, (iii) an income fund, (iv) an equity income fund, (v) a balanced
fund, (vi) a growth fund, (vii) an aggressive growth fund, and (viii) a
global fund.
The Company Stock Fund is a fund invested primarily in qualifying employer
securities (as defined in section 4975(e)(8) of the Code) of Unitil
Corporation. Part or all of such fund shall be invested in such qualifying
employer securities of Unitil Corporation, except for investments on an
interim basis in short-term fixed income investments made pending purchase
of shares of such qualifying employer securities. All cash dividends
received by the Trustee with respect to the qualifying employer securities
held in this fund shall be retained in such fund and invested in qualifying
employer securities. Notwithstanding the foregoing, the Plan Administrator
may establish such uniform rules with respect to this
3
Company Stock Fund as it deems necessary and appropriate. All rights,
including voting and tendering rights, attributable to such qualifying
employer securities (whether whole or fractional shares) shall be exercised
pursuant to the terms of the Trust Agreement."
11. By deleting that portion of the last sentence of Section 8.05 thereof
which reads "qualifying employer securities separate investment Fund D
hereunder" and inserting, in lieu of said portion so deleted, the new words
"Company Stock Fund."
12. By changing each reference to "Trustee" in Sections 8.05 and
8.07(c)(ii) thereof to "Plan Administrator," instead.
13. By deleting in their entirety Sections 11.01 through 11.05 thereof and
inserting, in lieu of said Sections so deleted, a new Section 11.01 as follows,
with corresponding changes being made in the Table of Contents thereof:
"11.01 Trust Agreement
The Employer shall enter into one or more Trust Agreements with a
Trustee or Trustees for the purpose of holding the Fund. Any Trust
Agreement(s) entered into pursuant to this Article XI shall form a
part of the Plan."
IN WITNESS WHEREOF, said Unitil Corporation, Unitil Service Corp., Concord
Electric Company, Exeter & Hampton Electric Company, and Fitchburg Gas and
Electric Light Company have each caused this instrument to be executed as of
this 1st day of July, 1996.
CORPORATE SEAL UNITIL CORPORATION
Attest:
By: /s/ Gail A. Siart By: /s/ Peter J. Stulgis
----------------- --------------------
Its Secretary Its Chairman of the Board
CORPORATE SEAL UNITIL SERVICE CORP.
Attest:
By: /s/ Sandra L. Walker By: /s/ Mark H. Collin
-------------------- ------------------
Its Secretary Its Treasurer
4
CORPORATE SEAL CONCORD ELECTRIC COMPANY
Attest:
By: /s/ Sandra L. Walker By: /s/ Mark H. Collin
-------------------- ------------------
Its Secretary Its Treasurer
CORPORATE SEAL EXETER & HAMPTON ELECTRIC
COMPANY
Attest:
By: /s/ Sandra L. Walker By: /s/ Mark H. Collin
-------------------- ------------------
Its Secretary Its Treasurer
CORPORATE SEAL FITCHBURG GAS AND ELECTRIC
LIGHT COMPANY
Attest:
By: /s/ M. Bodnarchuk By: /s/ Mark H. Collin
----------------- ------------------
Its Clerk Its Treasurer
5
EXHIBIT 4.3
UNITIL CORPORATION TAX DEFERRED SAVINGS AND INVESTMENT PLAN
AMENDMENT NO. 2 TO RESTATED PLAN
GENERALLY EFFECTIVE AS OF JANUARY 1, 1997
WHEREAS, effective as of July 1, 1987, Concord Electric Company Tax
Deferred Savings and Investment Plan, initially adopted effective as of January
1, 1985 by Concord Electric Company, a wholly-owned subsidiary of Unitil
Corporation ("Unitil"), and the Unitil Corporation Tax Deferred Savings and
Investment Plan, initially adopted effective as of January 1, 1985, by Unitil
Service Corp., also a wholly-owned subsidiary of Unitil, were amended and
restated and consolidated, under the name of Unitil Corporation Tax Deferred
Savings and Investment Plan (the "Plan"); and
WHEREAS the Plan was also adopted by Exeter & Hampton Electric Company,
also a wholly-owned subsidiary of Unitil, effective as of January 1, 1989 for
its employees not covered by a collective bargaining agreement, and effective as
of January 1, 1990 for its collective bargaining unit employees, and merged as
of such dates with the respective portions of the Exeter & Hampton Electric
Company Thrift Savings Plan; and
WHEREAS the Plan was also adopted by Fitchburg Gas and Electric Light
Company ("Fitchburg"), which had also become a wholly-owned subsidiary of
Unitil, effective as of April 29, 1992, with respect to non-collective
bargaining employees, effective as of May 8, 1992, and with respect to its
collective bargaining employees, effective as of January 1, 1994, merging with
the Plan as of such respective dates the Fitchburg Gas and Electric Light
Company Tax Deferred Savings and Investment Plan, covering non-collective
bargaining employees, and the Fitchburg Gas and Electric Light Company Union Tax
Deferred Savings and Investment Plan, covering collective bargaining employees;
and
WHEREAS the Plan was most recently amended and restated by an instrument
dated December 23, 1994, generally effective as of January 1, 1989, in part to
comply with the provisions of the Tax Reform Act of 1986 and subsequent
legislation and related regulations, and further amended by an Amendment No. 1
to Restated Plan thereto, dated July 1, 1996; and
WHEREAS the current Trustee under the Plan is Putnam Fiduciary Trust
Company under a Trust Agreement originally dated May 16, 1996; and
WHEREAS each of said corporations desires to further amend the Plan,
effective as of July 1, 1998, to increase the limit any participant may annually
elect to contribute to the Plan from 12 percent to 15 percent of his/her
compensation and, generally effective as of January 1, 1997, to conform the Plan
to the requirements of the Small Business Job Protection Act of 1996, Uruguay
Round Agreements Act, Uniformed Services Employment and Reemployment Rights Act
of 1994, and Taxpayers Relief Act of 1997 and the regulations and other guidance
thereunder;
NOW, THEREFORE, by execution of this instrument, each of said corporations
hereby amends, effective, except as specifically otherwise provided, as of
January 1, 1997, the Plan, as most recently restated and amended, as follows:
1. By deleting in its entirety the last full paragraph of Section 1.06
thereof.
2. By deleting the words "of a type historically performed by employees in
the business field of the recipient employer" from the end of the next to last
sentence of the first paragraph of Section 1.09 thereof and by inserting, in
lieu of said words so deleted, the new words "performed under the primary
direction and control of the recipient" and by changing the reference from
"section 402(a)(8), section 402(h)" to "section 402(e)(3), section
402(h)(1)(B)," instead, in the last paragraph of said Section 1.09 and in the
first full paragraph of Section 3.06(b).
3. By deleting in its entirety Section 1.16 therefrom and by inserting, in
lieu of said Section so deleted, the following new Section 1.16:
"1.16 Highly Compensated Employee.
Highly Compensated Employee' means any Employee who: (1) was a
5-percent owner at any time during the year or the preceding year, or
(2) for the preceding year had compensation from the Employer in
excess of $80,000 and was in the top- paid group for the preceding
year. The $80,000 amount is adjusted at the same time and in the same
manner as under section 415(d) of the Code, except that the base
period is the calendar quarter ending September 30, 1996.
For this purpose the applicable year of the Plan for which a
determination is being made is called a determination year and the
preceding 12-month period is called a look-back year.
For this purpose any Employee is in the top-paid group of Employees
for any year if such Employee is in the group consisting of the top 20
percent of the Employees when ranked on the basis of compensation paid
during such year.
A 'Highly Compensated Former Employee' is based on the rules
applicable to determining highly compensated employee status as in
effect for that determination year, in accordance with temporary
Treasury Regulation section 1.414(q)-1T, A-4 and Internal Revenue
Service Notice 97-75.
In determining whether an Employee is a Highly Compensated Employee
for 1997, the amendments to section 414(q) stated above are treated as
having been in effect for 1996."
4. Effective as of July 1, 1998, by deleting the words "12 percent" from
the next to last sentence of Section 2.02 thereof and inserting, in lieu of said
words so deleted, the new words "15 percent."
5. By deleting in its entirety the second full paragraph of Section 3.06(d)
thereof and by inserting, in lieu of said paragraph so deleted, the following
new paragraph:
"If distribution becomes necessary, such excess contributions and any
allocable income will be first applied to the Highly Compensated
2
Employees with the largest amounts of Pay Reduction Contributions
pursuant to Section 2.02 for the Plan Year in which the excess arose,
beginning with the Highly Compensated Employee with the largest amount
of such Pay Reduction Contributions pursuant to Section 2.02 and
continuing in descending order until all such excess contributions
have been allocated. For the purposes of the preceding sentence, the
'largest amount' is determined after distribution of any such excess
contributions."
6. By deleting in its entirety the second full paragraph of Section 3.06(e)
thereof and by inserting, in lieu of said paragraph so deleted, the following
new paragraph:
"If distribution becomes necessary, such excess aggregate
contributions and any allocable income will be first applied to the
Highly Compensated Employees with the largest amounts of aggregate
contributions of Employee Contributions pursuant to Section 2.02 and
Employer Matching Contributions pursuant to Section 3.04 for the Plan
Year in which the excess arose, beginning with the Highly Compensated
Employee with the largest amount of such aggregate contributions and
continuing in descending order until all such excess aggregate
contributions have been allocated. For the purposes of the preceding
sentence, the 'largest amount' is determined after distribution of any
such excess aggregate contributions."
7. Effective as of January 1, 1998, by deleting in its entirety the first
full paragraph of Section 8.04 thereof and by inserting, in lieu of said
paragraph so deleted, the following new paragraph:
"Notwithstanding the provisions of this Article VIII (other than
Section 8.07), if a Participant's vested Account balance exceeds (or
at the time of any prior distribution (1) in Plan Years beginning
before August 6, 1997, exceeded $3,500 or (2) in Plan Years beginning
after August 5, 1997, exceeded) $5,000, it shall not be immediately
distributable without such Participant's consent before the
Participant has reached his Normal Retirement Age."
8. By deleting the first full sentence of Section 8.07(a) thereof and by
inserting, in lieu of said sentence so deleted, the following new sentence:
"A Participant's benefits shall be distributed to him no later than
the later of the April 1st of the calendar year following the calendar
year in which the Participant attains age 70-1/2 or retires, except
that benefits shall be distributed to a 5-percent owner (as described
in section 416(i) of the Code) by the April 1st of the calendar year
following the calendar year in which the Participant attains age
70-1/2."
9. Effective as of January 1, 1998, by inserting at the end of Section 9.02
thereof the following new Subsection (h):
3
"(h) Notwithstanding anything herein to the contrary, loan repayments
shall be suspended under the Plan as permitted under section 414(u) of
the Code."
10. Effective as of December 12, 1994, by renumbering Sections 14.06 and
14.07 thereof and Sections 14.07 and 14.08, respectively, and by inserting
immediately prior thereto the following new Section 14.06:
"14.06 Qualified Military Service.
Notwithstanding anything herein to the contrary, contributions,
benefits and service credit with respect to qualified military service
will be provided in accordance with section 414(u) of the Code."
IN WITNESS WHEREOF, said Unitil Corporation, Unitil Service Corp., Concord
Electric Company, Exeter & Hampton Electric Company, and Fitchburg Gas and
Electric Light Company have each caused this instrument to be executed as of
this 7th day of July,1998.
CORPORATE SEAL UNITIL CORPORATION
Attest:
By: /s/ Mark H. Collin By: /s/ Robert G. Schoenberger
------------------ --------------------------
Its Secretary and Treasurer Its Chairman and CEO
CORPORATE SEAL UNITIL SERVICE CORP.
Attest:
By: /s/ Sandra L. Whitney By: /s/ Robert G. Schoenberger
--------------------- --------------------------
Its Secretary Its President
CORPORATE SEAL CONCORD ELECTRIC COMPANY
Attest:
By: /s/ Sandra L. Whitney By: /s/ Michael J. Dalton
--------------------- ---------------------
Its Secretary Its President
CORPORATE SEAL EXETER & HAMPTON ELECTRIC
COMPANY
Attest:
By: /s/ Sandra L. Whitney
Its Secretary By: /s/ Michael J. Dalton
---------------------
Its President
CORPORATE SEAL FITCHBURG GAS AND ELECTRIC
LIGHT COMPANY
Attest:
By: /s/ Sandra L. Whitney
Its Assistant Clerk By: /s/ Michael J. Dalton
---------------------
Its President
5
EXHIBIT 4.4
UNITIL CORPORATION TAX DEFERRED SAVINGS AND INVESTMENT PLAN
TRUST AGREEMENT
This Trust Agreement is made as of this 1st day of July, 1996, by and
between Unitil Corporation, a New Hampshire corporation having its principal
office in Exeter, New Hampshire (the "Company") and Putnam Fiduciary Trust
Company, a Massachusetts trust company having its principal office in Boston,
Massachusetts (the "Trustee").
WITNESSETH:
1. Establishment of Plan. The Unitil Corporation Tax Deferred Savings and
Investment Plan (the "Plan") has been adopted by the Company and is
intended to satisfy those provisions of the Internal Revenue Code of 1986,
as the same may be amended from time to time (the "Code"), relating to
qualified employer plans.
2. Creation of Trust. There is hereby established a trust which shall be known
as the "Unitil Corporation Tax Deferred Savings and Investment Plan Trust."
The provisions of this Agreement shall supersede and take precedence over
any provision of the Plan which dealswith the Trustee's responsibilities
and/or which may conflict in any way with the Plan and any later signed
amendments thereto. All money and such property as shall be acceptable to
the Trustee as shall from time to time be paid or delivered to the Trustee
in its capacity as such, all investments made therewith and proceeds
thereof and all earnings and profits thereon, less the payments which at
the time of reference shall have been made by the Trustee, as authorized
herein, are referred to herein as the "Trust." The Trustee hereby accepts
the Trust created hereunder and agrees to perform the provisions of this
Agreement on its part to be performed. Subject to the conditions and
limitations set forth herein, the Trustee shall be responsible for the
property received by it as Trustee, but shall not be responsible for the
administration of the Plan or for those assets of the Plan which have not
been delivered to and accepted by the Trustee. The Trustee shall not have
any authority or obligation to determine the adequacy of or to enforce the
collection from the Company of any contribution to the Trust. Certain other
agreements and obligations between the Company and the Trustee or its
affiliates may be set forth from time to time in a service agreement
between such parties (the "Service Agreement").
The establishment of the Trust created by this Agreement shall not be
considered as giving any Plan member or any other person any legal or
equitable rights as against the Company or the Trustee of the property,
whether corpus or income, of the Trust unless such right is specifically
provided for in this Agreement, the Plan, or by law, nor shall it be
considered as giving any Plan member or other employee the right to
continue in the service of the Company.
3. Purposes. The Plan and the Trust have been established for the exclusive
benefit of the eligible employees and their beneficiaries. So far as
possible this Agreement shall be interpreted in a manner consistent with
the intention of the Company that the Trust satisfy those provisions of the
Code relating to qualified employees' trusts exempt from taxation under
Section 501(a) of the Code. It is specifically intended that the Company
shall have sole responsibility for maintaining the tax-qualified status of
the Plan and
Trust. No property of the Trust or contributions made by the Company
pursuant to the terms of the Plan shall revert to the Company or be used
for any purpose other than providing benefits to eligible employees or
their beneficiaries and defraying the expenses of the Plan and the Trust,
except that to the extent provided by the Plan:
(a) Upon request of the Company, contributions made to the Plan before the
issuance of a favorable determination letter by the Internal Revenue
Service with respect to the initial qualification of the Plan under
Section 401(a) of the Code may be returned to the contributor, with
all attributable earnings, within one year after the Internal Revenue
Service refuses in writing to issue such a letter.
(b) Any amount contributed under the Plan by the Company by a mistake of
fact as determined by the Company may be returned to the Company, upon
its request, within one year after its payment to the Trust.
(c) Any amount contributed under the Plan by the Company on the condition
of its deductibility under Section 404 of the Code may be returned to
the Company, upon its request, within one year after the Internal
Revenue Service disallows the deduction in writing.
(d) Earnings attributable to contributions returnable under paragraph (b)
or (c) shall not be returned to the Company, and any losses
attributable to those contributions shall reduce the amount returned.
4. Management of Trust. It shall be the duty of the Trustee:
(a) to hold and, subject to the provisions of this Agreement, to invest
and to reinvest the assets of the Trust, and
(b) to make payments therefrom in accordance with the written directions
of the Plan Administrator (the "Administrator") specified in the Plan
or otherwise appointed by the Board of Directors of the Company
pursuant to the Plan to administer the Plan. The Administrator shall
be the "plan administrator" of the Plan as defined in Section 3(16)(A)
of the Employee Retirement Income Security Act of 1974 ("ERISA"), and
a "named fiduciary" within the meaning of Section402(a) of ERISA. The
Administrator may direct payments to be made from the Trust to any
person, including any member of the Administrator, or to the Company,
or to any paying agent designated by the Administrator, and in such
amounts as the Administrator may direct. Each such direction of the
Administrator shall be in writing and shall be deemed to include a
certification that any payment directed thereby is one which the
Administrator is authorized to direct, and the Trustee may
conclusively rely on such certification without further investigation.
Payments by the Trustee may be made by its check to the order of the
payee and mailed to the payee at the address last furnished to the
Trustee by the Administrator or by the payee, or if no such address
has been furnished, to the payee in care of the Company. The Trustee
shall make disbursements in the amounts and in the manner that the
Administrator directs from time to time in writing. The Trustee shall
have
2
no responsibility to ascertain any direction's compliance with the
terms of the Plan or of any applicable law or the direction's effect
for tax purposes or otherwise; nor shall the Trustee have any
responsibility to see to the application of any disbursement. The
Trustee shall not be required to make any disbursement in excess of
the net realizable value of the assets of the Trust at the time of the
disbursement. The Trustee shall not be required to make any
disbursement in cash unless the Administrator has provided a written
direction as to the assets to be converted to cash for the purpose of
making the disbursement.
5. Investments. Except as otherwise provided in Sections 6, 7 and 8 below, the
Trustee shall invest and reinvest the assets of the Trust and keep the same
invested, without distinction between principal and income, in stocks,
bonds, stock options, option contracts of any type, contracts for the
immediate or future delivery of financial instruments and other property,
or other securities or certificates of participation or shares of any
mutual investment company, trust or fund (including mutual funds which are
sponsored, underwritten or managed by affiliates of the Trustee), or
deposits in the Trustee which bear a reasonable rate of interest, or
annuity or investment contracts issued by an insurance company, or other
property of any kind, real or personal, tangible or intangible, as it may
deem advisable, provided that the Trustee may hold assets of the Trust
uninfected from time to time if and to the extent that it may deem such to
be in the best interests of the Trust. Notwithstanding the foregoing,
unless an investment manager is appointed in accordance with Section 8, or
the Service Agreement otherwise specifically provides, all of the assets of
the Trust shall be invested as the Administrator directs in investment
products sponsored, underwritten or managed by affiliates of the Trustee,
loans to Plan members or securities issued by the Company satisfying the
conditions of Section 6.
6. Investment Funds. The Administrator from time to time may direct the
Trustee to establish one or more separate investment accounts within the
Trust, each such separate account being hereinafter referred to as an
"Investment Fund." The Trustee shall transfer to each such Investment Fund
such portion of the assets of the Trust as the Administrator or Plan
members direct in accordance with the specific provisions of the Plan and
in the manner provided in the Service Agreement. The Trustee shall invest
and reinvest the assets which have been allocated to an Investment Fund in
accordance with the investment guidelines, objectives and restrictions
which have been established by the Administrator for that Investment Fund
and, in the case of an Investment Fund for which an Investment Manager has
been appointed, the specific investment directions of such Investment
Manager. If, and to the extent, specifically authorized by the Plan, and
provided in the Service Agreement, the Administrator may direct the Trustee
to establish an Investment Fund all of the assets of which shall be
invested in shares of stock of the Company, subject to the terms and
conditions of Section 7.
The Trustee shall be under no duty to question or review the investment
guidelines, objectives and restrictions established, or the specific
investment directions given, by the Administrator or the Plan members for
any Investment Fund or to make suggestions to the Administrator in
connection therewith. The Trustee shall not be liable for any loss, or by
reason of any breach, which arises from the Administrator's or Plan
members'
3
exercise or non-exercise of rights under this Section 6, or from any
direction of the Administrator or Plan members unless it is clear on the
face of the direction that the actions to be taken under the direction are
prohibited by the fiduciary duty rules of Section 404(a) of ERISA. The
Trustee shall incur no liability on account of investing the assets of the
Trust in accordance with investment elections of the Administrator or Plan
members so delivered to the Trustee.
All interest, dividends and other income received with respect to, and any
proceeds received from the sale or other disposition of, securities or
other property held in an Investment Fund shall be credited to and
reinvested in such Investment Fund, and all expenses of the Trust which are
properly allocable to a particular Investment Fund shall be so allocated
and charged. The Administrator may at any time direct the Trustee to
eliminate any Investment Fund or Funds, and the Trustee shall thereupon
dispose of the assets of such Investment Fund and reinvest the proceeds
thereof in accordance with the directions of the Administrator.
Pending investment in the Investment Funds in accordance with the
directions of the Administrator or the Plan members, the Trustee shall
invest assets of the Trust as provided in the Service Agreement, or if
there is no such provision, the Trustee may invest assets of the Trust, in
whole or in part, at any time or from time to time, in interest-bearing
accounts or certificates of deposit (including deposits in the Trustee
which bear a reasonable interest rate), Treasury Bills, commercial paper,
money market funds (including any such fund sponsored, underwritten or
managed by one of its affiliates), short-term investment funds or other
short-term obligations in its discretion, and the investment return thereon
shall be allocated among the Plan members whose assets have been so
invested and added to their respective investments in the Investment Funds.
7. Trust Investments in Company Stock. Trust investments pursuant to this
Section 7 shall be made only in securities constituting "qualifying
employer securities" within the meaning of Section 407(d)(5) of ERISA.
Trust investments in such securities of the Company("Company Stock") shall
be subject to the following terms and conditions:
(a) Acquisition Limit. Pursuant to the Plan, the Trust may be invested in
Company Stock to the extent necessary to comply with investment
directions under Section 6 of this Agreement.
(b) Fiduciary Duties of Named Fiduciaries. The Administrator as named
fiduciary shall continually monitor the suitability of acquiring and
holding Company Stock under the fiduciary duty rules of Section
404(a)(1) of ERISA (as modified by Section 404(a)(2) of ERISA). The
Trustee shall not be liable for any loss, or by reason of any breach,
which arises from the direction of the Administrator with respect to
the acquisition and holding of Company Stock, unless it is clear on
the face of the direction that the actions to be taken under the
direction would be prohibited under ERISA. The Company hereby appoints
as named fiduciaries, solely with respect to the voting of Company
Stock held in the Trust and the tender or retention of such Company
Stock in response to a tender offer, the
4
eligible employees who are Plan members in the Plan at the time in
question. The Company shall be responsible for determining whether,
under the circumstances prevailing at a given time, its fiduciary duty
to Plan members and beneficiaries under the Plan and ERISA requires
that the Company follow the advice of independent counsel as to the
voting and tender or retention of Company Stock.
(c) Execution of Purchases and Sales. To implement transactions regarding
investments in Company Stock, including purchases, redemptions and
exchanges, the Trustee shall purchase or sell Company Stock on the
open market, as the case may be, as soon as practicable following the
date on which the Trustee receives from the Company in good order all
information and documentation necessary to effect such purchase or
sale. However, the Trustee may accumulate all like purchases into a
single batch and may accumulate all like sales as a result of
receiving instructions for redemptions and exchanges out of Company
Stock into a single batch, but shall not be required to do so.
The Trustee may purchase or sell Company Stock from or to the Company
if the purchase or sale is for no more than adequate consideration
(within the meaning of Section3(18) of ERISA) and no commission is
charged. To the extent that Company contributions under the Plan are
to be invested in Company Stock, the Company may transfer Company
Stock to the Trust in lieu of cash. The number of shares so
transferred shall be determined by dividing the amount of the
contribution by the closing price of Company Stock on any national
securities exchange on the trading day immediately preceding the date
as of which the contribution is made.
The Trustee and the Company may, in an appendix to this Section 7,
agree upon such prescribed dates for purchases and sales of Company
Stock and such rules and conventions in connection with such purchases
and sales as they may find mutually acceptable.
(d) Securities Law Reports. The Administrator shall be responsible for
filing all reports required under federal or state securities laws
with respect to the Trust's ownership of Company Stock, including,
without limitation, any reports required under Section 13 or 16 of the
Securities Exchange Act of 1934, and shall immediately notify the
Trustee in writing of any requirement to stop purchases or sales of
Company Stock pending the filing of any report. The Trustee shall
provide to the Administrator such information on the Trust's ownership
of Company Stock as the Administrator may reasonably request in order
to comply with federal or state securities laws.
(e) Voting. Notwithstanding any other provision of this Agreement, the
provisions of this Section 7(e) shall govern the voting of Company
Stock. When the issuer of Company Stock files preliminary proxy
solicitation materials with the Securities and Exchange Commission,
the Company shall cause a copy of all the materials to be
simultaneously sent to the Trustee, and the Trustee shall prepare a
voting instruction form based upon these materials. At the time of
mailing of
5
notice of each annual or special stockholders' meeting of the issuer
of Company Stock, the Company shall cause a copy of the notice and all
proxy solicitation materials to be sent to each Plan member, together
with the foregoing voting instruction form to be returned to the
Trustee or its designee. The form shall show the number of full and
fractional shares of Company Stock credited to the Plan member's
accounts, whether or not vested. For purposes of this Section 7(e),
the number of shares of Company Stock deemed credited to a Plan
member's accounts shall be determined as of the date of record
determined by the Company for which an allocation has been completed
and Company Stock has actually been credited to Plan members'
accounts. The Company shall provide the Trustee with a copy of any
materials provided to Plan members and shall certify to the Trustee
that the materials have been mailed or otherwise sent to Plan members.
Each Plan member shall have the right to direct the Trustee as to the
manner in which to vote that number of shares of Company Stock
credited to his accounts. Such directions shall be communicated in
writing or by facsimile or similar means and shall be held in
confidence by the Trustee and not divulged to the Company, or any
officer or employee thereof, or any other person. Upon its receipt of
directions, the Trustee shall vote the shares of Company Stock
credited to the Plan member's account as directed by the Plan member.
The Trustee shall vote those shares of Company Stock not credited to
Plan members' accounts, and those shares of Company Stock credited to
the accounts of Plan members for which no voting directions are
received, in the same proportion on each issue as it votes those
shares credited to Plan members' accounts for which it received voting
directions from Plan members.
(f) Tender Offers. Upon commencement of a tender offer for any Company
Stock, the Company shall notify each Plan member, and use its best
efforts to timely distribute or cause to be distributed to Plan
members the same information that is distributed to shareholders of
the issuer of Company Stock in connection with the tender offer, and
after consulting with the Trustee shall provide at the Company's
expense a means by which Plan members may direct the Trustee whether
or not to tender the Company Stock credited to their accounts (whether
or not vested). The Company shall provide to the Trustee a copy of any
material provided to Plan members and shall certify to the Trustee
that the materials have been mailed or otherwise sent to Plan members.
Each Plan member shall have the right to direct the Trustee to tender
or not to tender some or all of the shares of Company Stock credited
to his accounts. Directions from a Plan member to the Trustee
concerning the tender of Company Stock shall be communicated in
writing or by facsimile or such similar means as is agreed upon by the
Trustee and the Company. The Trustee shall tender or not tender shares
of Company Stock as directed by the Plan member. The Trustee shall not
tender shares of Company Stock credited to a Plan member's accounts
for which it has received no directions from the Plan members.
6
The Trustee shall tender that number of shares of Company Stock not
credited to Plan members' accounts determined by multiplying the total
number of such shares by a fraction, of which the numerator is the
number of shares of Company Stock credited to Plan members' accounts
for which the Trustee has received directions from Plan members to
tender (which directions have not been withdrawn as of the date of
this determination), and of which the denominator is the total number
of shares of Company Stock credited to Plan members' accounts.
A Plan member who has directed the Trustee to tender some or all of
the shares of Company Stock credited to his accounts may, at any time
before the tender offer withdrawal date, direct the Trustee to
withdraw some or all of the tendered shares, and the Trustee shall
withdraw the directed number of shares from the tender offer before
the tender offer withdrawal deadline. A Plan member shall not be
limited as to the number of directions to tender or withdraw that he
may give to the Trustee.
A direction by a Plan member to the Trustee to tender shares of
Company Stock credited to his accounts shall not be considered a
written election under the Plan by the Plan member to withdraw or to
have distributed to him any or all of such shares. The Trustee shall
credit to each account of the Plan member from which the tendered
shares were taken the proceeds received by the Trustee in exchange for
the shares of Company Stock tendered from that account. Pending
receipt of directions through the Administrator from the Plan member
as to the investment of the proceeds of the tendered shares, the
Trustee shall invest the proceeds as the Administrator shall direct.
(g) General. With respect to all rights other than the right to vote, the
right to tender, and the right to withdraw shares previously tendered,
the Trustee shall follow the directions of the Plan member as to
Company Stock credited to his accounts, and if no such directions are
received, the directions of the Administrator. The Trustee shall have
no duty to solicit directions from Plan members. With respect to all
rights other than the right to vote and the right to tender, in the
case of Company Stock not credited to Plan members' accounts. the
Trustee shall follow the directions of the Administrator. All
provisions of this Section 7 shall apply to any securities received as
a result of a conversion of Company Stock.
8. Appointment of Investment Managers. The Administrator from time to time may
appoint one or more Investment Managers (as that term is defined in Section
3(38) of ERISA) to manage (including the power to acquire and dispose of)
all or any portion or portions of the Trust. The Administrator may enter
into such agreements setting forth the terms and conditions of any such
appointment as it determines to be appropriate. The Administrator shall
retain the right to remove and discharge any Investment Manager. The
compensation of such Investment Managers shall be an expense payable in
accordance with Section 14. The Administrator shall notify the Trustee of
the appointment of any Investment Manager by delivering to the Trustee an
executed copy
7
of the agreement under which such Investment Manager was appointed together
with a written acknowledgment by such Investment Manager that it is:
(a) a fiduciary with respect to the Plan,
(b) bonded as required by ERISA, and
(c) either
(i) registered as an investment advisor under the Investment Advisers
Act of 1940, or
(ii) a bank as defined in said Act, or
(iii)an insurance company qualified to perform investment management
services under the laws of more than one state of the United
States.
The Trustee shall be entitled to rely upon such notice until such time as
the Administrator shall notify and direct the Trustee in writing that
another Investment Manager has been appointed in the place and stead of the
first-named Investment Manager, or in the alternative, that the Investment
Manager has been removed. In each case where an Investment Manager is
appointed, the Administrator shall determine the assets of the Trust to be
allocated to the Investment Manager from time to time and shall issue
appropriate instructions to the Trustee with respect thereto. The Trustee
shall carry out the written instructions of any Investment Manager with
respect to the management and investment of the assets then under control
of such Investment Manager and shall not incur any liability on account of
its compliance with such instructions. Purchase and sale orders may be
placed without the intervention of the Trustee and, in such event, the
Trustee's sole obligation shall be to make payment for purchased securities
and deliver those that have been sold when advised of the transaction. The
Trustee shall not incur any liability on account of its failure to exercise
any of the powers delegated to any Investment Manager because of the
failure of such Investment Manager to give instructions for the management
of the assets under the control of such Investment Manager. The Trustee
shall be under no duty to question any Investment Manager, nor to review
any securities or other property acquired or retained at the direction of
any Investment Manager, nor to make any suggestions to any Investment
Manager in connection therewith. The Trustee shall have no obligation to
vote upon any securities over which the Investment Manager has investment
management control unless the Trustee is instructed in writing by the
Investment Manager as to the voting of such securities within a reasonable
time before the time for voting thereof expires.
Each Investment Manager shall have the authority to exercise all of the
powers of the Trustee hereunder with respect to assets under its control
but-only to the extent that such powers relate to the investment of such
assets.
9. Insurance Contracts. If provided in the Service Agreement, the
Administrator may direct the Trustee to receive and hold or apply assets of
the Trust to the
8
purchase of individual or group insurance or annuity contracts ("policies"
or "contracts") issued by any insurance company and in a form approved by
the Administrator (including contracts under which the contract holder is
granted options to purchase insurance or annuity benefits), or financial
agreements which are backed by group insurance or annuity contracts
("financial agreements"). If such investments are to be made, the
Administrator shall direct the Trustee to execute and deliver such
applications and other documents as are necessary to establish record
ownership, to value such policies, contracts or financial agreements under
the method of valuation selected by the Administrator, and to record or
report such values to the Administrator or any investment manager selected
by the Administrator, in the form and manner agreed to by the
Administrator.
The Administrator may direct the Trustee to exercise or may exercise
directly the powers of contract holder under any policy, contract or
financial agreement, and the Trustee shall exercise such powers only
upon direction of the Administrator. The Trustee shall have no
authority to act in its own discretion, with respect to the terms,
acquisition, valuation, continued holding and/or disposition of any
such policy, contract or financial agreement or any asset held
thereunder. The Trustee shall be under no duty to question any
direction of the Administrator or to review the form of any such
policy, contract or financial agreement or the selection of the issuer
thereof, or to make recommendations to the Administrator or to any
issuer with respect to the form of any such policy, contract or
financial agreement.
The Trustee shall be fully protected in acting in accordance with
written directions of the Administrator, and shall be under no
liability for any loss of any kind which may result by reason of any
action taken or omitted by it in accordance with any direction of the
Administrator, or by reason of inaction in the absence of written
directions from the Administrator. In the event that the Administrator
directs that any monies or property be paid or delivered to the
contract holder other than for the benefit of specific individual
beneficiaries, the Trustee agrees to accept such monies or property as
assets of the Trust subject to all the terms hereof.
10. Powers of Trustee. Subject to the foregoing provisions and limitations, the
Trustee is authorized and empowered:
(a) to sell at public auction or by private contract, redeem, convey,
transfer, exchange, pledge, or otherwise realize upon, any securities,
investments or other property forming a part of the Trust, and for
such purposes may execute such instruments and writings and do such
things as it shall deem proper;
(b) to keep any or all securities or other property in the name of some
other person, nominee, firm or corporation or in its own name without
disclosing its fiduciary capacity, but the books and records of the
Trustee shall at all times show that all such securities and other
property are part of the Trust;
9
(c) except as otherwise provided in Sections 7 and 8, to the extent that
the Trustee receives direction from the Administrator or the Plan
members, as the case may be, to vote upon any stock, bonds or other
securities of any corporation, association or trust at any time
comprising the Trust, or otherwise consent to or request any action on
the part of such corporation, association or trust, and to give
general or special proxies or powers of attorney, with or without
power of substitution, and to exercise any conversion privileges,
subscription rights or other options, to participate in
reorganizations, recapitalizations, consolidations, mergers and
similar transactions with respect to such securities; to deposit such
stocks or other securities in any voting trust, or with any protective
or like committee, or with a trustee, or with depositories designated
thereby; and generally to exercise any of the powers of an owner with
respect to stocks or other securities or property comprising the Trust
which the Trustee deems to be for the best interests of the Trust. The
Trustee will not vote such stock or other securities as to which it
receives no written directions;
(d) when instructed or directed by the Administrator, to borrow money for
the purposes of this Trust in such amounts and upon such terms and
conditions as the Administrator, in its discretion, may approve, and
for any amount so borrowed to issue the promissory note of the Trustee
and to secure the repayment thereof by pledge, mortgage, or
hypothecation of all or any part of the property of the Trust, and no
person loaning money to the Trustee shall be bound to see to the
application of the money loaned or to inquire into the validity of any
such borrowing;
(e) to make, execute, acknowledge and deliver any and all instruments that
it shall deem necessary or appropriate to carry out the powers herein
granted;
(f) to manage, administer, operate, lease for any number of years,
develop, improve, repair, alter, demolish, mortgage, pledge, grant
options with respect to, or otherwise deal with any real property or
interest therein at any time held by it, and to cause to be formed a
corporation or trust to hold title to any such real property with the
aforesaid powers, all upon such terms and conditions as may be deemed
advisable;
(g) to renew or extend or participate in the renewal or extension of any
mortgage, upon such terms as may be deemed advisable, and to agree to
a reduction in the rate of interest on any mortgage or to any other
modification or change in the terms of any mortgage or of any
guarantee pertaining thereto, in any manner and to any extent that may
be deemed advisable for the protection of the Trust or the
preservation of the value of the investment, to waive any default
whether in the performance of any covenant or condition of any
mortgage or in the performance of any guarantee, or to enforce any
such default in such manner and to such extent as may be deemed
advisable, to exercise and enforce any and all rights of foreclosure,
to bid in property on foreclosure, to take a deed in lieu of
foreclosure with or without paying a consideration therefor and in
connection therewith to release the obligation on the bond secured by
such mortgage; and
10
to exercise and enforce in any action, suit or proceedings at law or
in equity any rights or remedies in respect to any such mortgage or
guarantee;
(h) upon express direction by the Administrator, or the Investment
Manager, as the case may be, to transfer assets of the Trust to itself
as trustee or to any other trustee of any trust which has been
qualified under Section401(a) and is exempt from tax under Section
501(a) of the Code, and which is maintained by it or such other
trustee as a medium for the collective investment of funds of pension,
profit-sharing or other employee benefit trusts, in which event such
trust shall be deemed to be a part of the Plan, and to withdraw any
assets of the Trust so transferred;
(i) when instructed or directed by the Administrator, to settle,
compromise or submit to arbitration any claims, debts, or damages, due
or owing to or from the Trust, to commence or defend suits or legal
proceedings and to represent the Trust in all suits or legal
proceedings in any court of law or before any other body or tribunal;
provided, however, that the Trustee shall have no obligation to take
any legal action for the benefit of the Trust unless it shall have
been first indemnified for all expenses in connection therewith,
including counsel fees;
(j) to lend to Plan members such amount or amounts, and upon such terms
and conditions, as the Administrator may direct in accordance with the
provisions of the Plan, if applicable;
(k) to employ such agents, consultants, custodians, depositories,
advisors, and legal counsel as may be reasonably necessary or
desirable in the Trustee's judgment in managing and protecting the
Trust and, subject to the provisions of Section 14, to pay them
reasonable compensation out of the Trust;
(1) to cause any securities or other property which may at any time form a
part of the Trust to be issued, held or registered in the individual
name of the Trustee, or in the name of its nominee (including any
custodian employed by the Trustee, any nominee of such a custodian,
and any depository, clearing corporation or other similar system), or
in such form that title will pass by delivery;
(m) to enter into stand-by agreements for future investment either with or
without a stand-by fee;
(n) to transfer any assets of the Trust to a custodian or sub-custodian
employed by the Trustee;
(o) when directed by the Administrator, to participate in a securities
lending program sponsored and administered by the Trustee and, in
connection therewith, the Trustee is authorized to release and deliver
securities and return collateral received for loaned securities in
accordance with the provisions of such program;
11
(p) to write options on securities held or to otherwise participate in
so-called covered option writing; and
(q) to do all other acts in its judgment necessary or desirable for the
proper administration of the Trust, in accordance with the provisions
of the Plan and this Agreement. although~h the power to do such acts
is not specifically set forth herein.
No person dealing with the Trustee shall be required to take any notice of
this Agreement, but all persons so dealing shall be protected in treating
the Trustee as the absolute owner with full power of disposition of all the
monies, securities and other property of the Trust, and all persons dealing
with the Trustee are released from inquiry into the decision or authority
of the Trustee and from seeing to the application of monies, securities or
other property paid or delivered to the Trustee.
11. Liquidation of Assets. Upon termination of the Trust as provided herein,
the Trustee shall not be required to make any payments hereunder until it
has received such documentation as it shall consider necessary to establish
that the termination complies with applicable law, or to make any payments
in excess of the net realizable value of the assets of the Trust at the
time of such payment. The Trustee shall not be required to make any
payments in cash unless there shall be in the Trust at the time an amount
of cash sufficient for the purpose. In case of a deficiency in cash, the
Trustee shall take such action as to the disposition of securities or other
property forming a part of the Trust as will provide the amount of cash for
such payments. The Trustee shall not be required to make any payment in
cash until the Administrator has provided direction as to the assets to be
converted to cash for the purpose of making such payment.
12. Direction by Company or Administrator. The Company shall certify to the
Trustee the names and specimen signatures of the Administrator. The Company
shall give prompt notice to-the Trustee of changes in the Administrator,
and until such notice is received by the Trustee, the Trustee shall be
fully protected in assuming that the Administrator is unchanged and in
acting accordingly. The Administrator may certify to the Trustee the names
of persons authorized to act for it in relation to the Trustee and may
designate a person, corporation or other entity, whether or not affiliated
with the Company, to so act. Whenever the Trustee is required or authorized
to take any action hereunder pursuant to any written direction or
determination of the Company or the Administrator, such direction or
determination shall be sufficient protection to the Trustee if contained in
a writing signed by any one or more of the persons authorized to execute
documents on behalf of the Company or the Administrator, as the case may
be, pursuant to the Plan. The Trustee shall act, and shall be fully
protected in acting, in accordance with such orders, requests and
instructions of the Company or the Administrator. By such a writing the
Company or the Administrator, as the case may be, may ratify, approve or
confirm any action taken by the Trustee, and upon such ratification,
approval or confirmation the Trustee shall be protected as though
authorization or determination by the Company or the Administrator had
preceded such action. In the absence of direction by the Company or the
Administrator as to any matter provided in this Agreement or the Plan, the
Trustee may in its discretion take such action as it deems fit and proper
with respect thereto after
12
reasonable attempts to secure Company or Administrator direction, provided,
however, that the Trustee shall not be obligated to take any such action.
The Trustee may deliver documents to the Company or the Administrator by
delivering the same, or by mailing the same, postage prepaid, addressed to
the Company or the Administrator, as the case may be, at its principal
place of business.
13. Records and Accounting. The Trustee shall keep adequate and accurate
accounts of investments, receipts, disbursements and other transactions
hereunder, and all accounts, books and records relating thereto shall be
open at all reasonable times to inspection and audit by the Administrator
and its authorized representatives. The Trustee shall render to the Company
and the Administrator in writing, at least once each twelve (12) months and
at such times as required by the Plan and, in any event, within ninety (90)
days after its removal or resignation as provided in Section 15 hereof,
accounts of its transactions under this Agreement, and the Administrator
may approve such accounts of the Trustee by an instrument in writing
delivered to the Trustee. In the absence of the filing in writing with the
Trustee by the Administrator of exceptions or objections to any such
account within one year after the receipt thereof, the Administrator shall
be deemed to have approved such account; and in such case, or upon the
written approval of the Administrator of any such account, the Trustee, to
the extent permitted by applicable law, shall be released, relieved and
discharged with respect to all matters and things set forth in such
account. The Trustee shall from time to time make such other reports and
furnish such other information concerning the Trust (including valuations
of each Investment Fund established pursuant to Section 6) to the
Administrator as the Administrator may reasonably request or as may be
required by the Plan. The Administrator shall arrange for each Investment
Manager appointed pursuant to Section 8, and each insurance company issuing
contracts held by the Trustee pursuant to Section 9, to furnish the Trustee
with such valuations and reports as are necessary to enable the Trustee to
fulfill its obligations under this Section 13, and the Trustee shall be
fully protected in relying upon such valuations and reports. In any
proceeding instituted by the Trustee, the Company or the Administrator or
all of them with respect to any account of the Trustee, only the Company,
the Administrator and the Trustee shall be necessary parties.
14. Trustee's Compensation and Expenses. The Trustee shall be paid such
reasonable compensation as provided in the Service Agreement. The
compensation of the Trustee and any reasonable expenses, including
reasonable attorneys' fees and the cost of any bond, surety or other
security which may be required of the Trustee by ERISA, incurred by the
Trustee in the performance of its duties, and all other proper charges and
disbursements of the Trustee may be paid by the Company within thirty (30)
days after so billed, and will automatically be deducted from the Trust if,
upon the expiration of thirty (30) days, such fees are not separately paid
by the Company. All expenses (including taxes pursuant to Section 21) of
the Trust, other than those expenses which are paid by the Company, which
are allocable to an Investment Fund established pursuant to Section 6 shall
be charged to such Investment Fund. All such expenses which are not so
allocable shall be charged against each of the Investment Funds in the same
proportion as the value of the assets held in such Investment Fund bears to
the value of the total assets held in all of the Investment Funds. Any
account maintenance or
13
administration fees applicable to any Plan member's account which are not
paid hereunder by the Company shall be charged against the interest of the
Plan member and, in the case of a loan of a Plan member, if applicable, all
expenses (including taxes pursuant to Section 21) of the Trust, other than
those expenses which are paid by the Company, which are allocable to such
loan, shall be charged against the interest of such Plan member under the
Plan.
15. Resignation or Removal of Trustee. The Trustee may resign at any time upon
sixty (60) days' written notice to the Company, and the Company may remove
the Trustee at any time upon sixty (60) days' written notice to the
Trustee; provided, however, that the parties may by written instrument
waive such notice. The Trustee reserves the right at any time to resign
immediately if the Company transfers the Plan's administration to a
recordkeeper other than the recordkeeper designated in the Service
Agreement, without the Trustee's prior written consent, by delivering to
the Company a notice of resignation certified by the Trustee. The Trustee
further reserves the right at any time to resign immediately by delivering
to the Company a notice of resignation certified by the Trustee if the
assets of the Trust are not invested in investment products which are
sponsored, underwritten or managed by affiliates of the Trustee, unless the
Service Agreement otherwise specifically provides. If the Trustee shall
resign, be removed or for any other reason cease to be Trustee, the Company
shall appoint a successor Trustee or Trustees to whom the Trustee, upon
receipt of acceptance by such successor, shall promptly deliver all of the
assets of the Trust less any unpaid fees or expenses. Subject to the
foregoing provisions, any resignation or removal of the Trustee or
appointment of a new Trustee shall be by instrument in writing and shall
become effective on the date therein specified. Any successor Trustee shall
have the same powers and duties as the succeeded Trustee, subject to such
changes as the Company may then determine. Upon request of such successor
Trustee or Trustees, the Company and the Trustee ceasing to act shall
execute and deliver such instruments of conveyance and further assurance
and do such things as may reasonably be required for more fully and
certainly vesting and confirming in such successor Trustee or Trustees all
the right, title and interest of the retiring Trustee in and to the assets
of the Trust. The Trustee is authorized, however, to reserve such sums of
money as may be reasonable for payment of its compensation and expenses
(including legal fees) in connection with the settlement of its account or
otherwise, and any balance of such reserve remaining after payment of such
compensation and expenses shall be promptly paid over to the successor
Trustee or Trustees.
16. Duties of Trustee. The Trustee shall discharge its duties with respect to
the Trust solely in the interests of the Plan members and their
beneficiaries and with the care, skill, prudence and diligence 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
like character and with like aims. The duties of the Trustee shall be only
those specifically undertaken by the Trustee pursuant to this Trust
Agreement. The Trustee shall have no responsibility for the administration
of the Plan (including, but not limited to, the determination of Plan
participation rights of employees of the Company, the determination of
benefits of members of the Plan and the maintenance of individual accounts
of members of the Plan). Except as otherwise provided by ERISA, in no event
shall the Trustee be responsible for any act or omission of any other
fiduciary of the Plan.
14
The Trustee shall have no liability for the acts or omissions of any
predecessors and successors in office.
17. Indemnification. The Company hereby agrees to indemnify and hold harmless
the Trustee from and against any losses, damages, liabilities, claims,
costs or expenses (including reasonable attorneys' fees) which the Trustee
may incur by reason of this Trust Agreement, (including, without
limitation, by reason of the Trustee's making benefit payments pursuant to
fraudulent or unauthorized instructions) excepting only losses, damages,
liabilities, claims, costs or expenses arising from the Trustee's
negligence or willful misconduct. A waiver by the Trustee of any signature
guarantee requirement relating to the investments held hereunder shall not
be construed as negligence or willful misconduct on the part of the
Trustee. The provisions of this Section 17 shall survive the termination of
this Trust Agreement.
18. Amendment or Termination. The Company reserves the right at any time and
from time to time to amend, in whole or in part, any or all of the
provisions of, or to terminate, this Agreement by delivering to the Trustee
a copy of an amendment or a notice of termination certified by an officer
of the Company; provided, that no such amendment which affects the rights,
duties or responsibilities of the Trustee may be made without its consent,
and provided further that no such amendment shall authorize or permit any
part of the corpus or income of the Trust to be used for or diverted to
purposes other than those set forth in Section 3. Any such amendment shall
be effective upon delivery to the Trustee unless a different effective date
is specifically stated and any such amendment may be made retroactively as
shall be permitted under applicable law. Upon termination of this
Agreement, the Trustee, upon direction of the Administrator shall liquidate
the Trust to the extent required for distribution and, after the final
account of the Trustee has been approved and settled, shall distribute the
balance of the Trust remaining in its hands as directed by the
Administrator or in the absence of such direction, as may be directed by a
judgment or decree of a court of competent jurisdiction. Following any such
termination the powers of the Trustee hereunder shall continue as long as
any of the assets of the Trust remain in its hands, but only as to those
assets which during such time remain in the Trust.
19. Additional Participating Companies. Any affiliate or subsidiary of the
Company may, with the consent of the Company, become a participating
employer by action of the board of directors of such affiliate or
subsidiary to adopt the Trust as a trust for the benefit of its employees.
Each such additional participating employer shall be deemed the "Company"
hereunder and shall have and exercise all the rights, powers, and duties
thereof with respect to the Trust as applied to itself and its employees
and that part of the Trust which represents the interest of members
employed by it; provided, however, that each such additional participating
employer hereby delegates all such rights, powers, and duties, including
amendment or termination of the Trust, to Unitil Corporation acting alone,
except as such additional participating employer may exercise the same for
itself with the approval of Unitil Corporation.
20. Spendthrift Provision. Except as otherwise provided in the Plan, to the
maximum extent permitted by law, beneficial interests in the Trust of
members or former members under
15
the Plan or their beneficiaries shall not be assignable nor subject to
alienation, sale, transfer, pledge, encumbrance, mortgage, attachment,
execution, levy or receivership, nor shall they pass to any trustee in
bankruptcy or be reached or applied by any legal process for the payment of
any obligations of any such person; provided, however, that nothing herein
shall prevent a member from assigning his interest in the Trust as security
for the repayment of any loan made to him from the Trust pursuant to the
Plan, and further provided that nothing herein shall prevent the Trustee
from making payments in accordance with a Qualified Domestic Relations
Order, as that term is defined in Code Section 414(p). Any attempt at any
other assignment, alienation, sale, transfer, pledge, encumbrance,
mortgage, attachment, execution or levy shall be void and unenforceable.
21. Payment of Taxes. The Trustee may pay out of the Trust (or the appropriate
Investment Fund or Funds) any and all taxes of any and all kinds, including
without limitation property taxes and income taxes levied or assessed under
existing or future laws upon or in respect of the Trust or any monies,
securities or other property forming a part thereof or the income therefrom
subject to the terms of any agreements or contracts made with respect to
trust investments which make other provision for such tax payments. The
Trustee may assume that any taxes assessed on or in respect of the Trust or
its income are lawfully assessed unless the Administrator shall in writing
advise the Trustee that in the opinion of counsel for the Company such
taxes are or may be unlawfully assessed. In the event that the
Administrator shall so advise the Trustee, the Trustee will, if so
requested in writing by the Administrator contest the validity of such
taxes in any manner deemed appropriate by the Company or its counsel but at
the expense of the Trust; or the Company may contest the validity of any
such taxes at the expense of the Trust and in the name of the Trustee; and
the Trustee agrees to execute all documents, instruments, claims, and
petitions necessary or advisable in the opinion of the Company or its
counsel for the refund, abatement, reduction or elimination of any such
taxes. At the direction of the Administrator, the Trustee shall collect all
income tax to be withheld from any benefit payments from the Trust and
shall report and pay over such taxes to the Internal Revenue Service,
except for payments made directly by an insurer to a Plan member or
beneficiary under an annuity or insurance contract, if applicable.
22. Successor to Company or Trustee. Any successor to all or a major part of
the business of the Trustee, by whatever form or manner resulting, shall
ipso facto succeed to all the rights, powers and duties hereunder of the
Trustee. Any successor to all or a major part of the business of the
Company, by whatever form or manner resulting, may continue the Plan and
Trust by executing appropriate amendments thereto, and thereupon such
successor shall ipso facto succeed to all the rights, powers and duties
hereunder of the Company.
23. Construction. In any question of interpretation or other matter of doubt,
the Trustee, the Administrator and the Company may rely upon the opinion of
counsel for the Company or any other attorney at law designated by the
Company with the approval of the Trustee. The provisions of this Agreement
shall be construed, administered and enforced according to the laws of the
United States and, to the extent permitted by such laws, by
16
the laws of the Commonwealth of Massachusetts. All contributions to the
Trust shall be deemed to be made in the Commonwealth of Massachusetts.
24. Impossibility of Performance. In case it becomes impossible for the
Company, the Administrator or the Trustee to perform any act under this
Trust Agreement, that act shall be performed which in the judgment of the
Administrator will most nearly carry out the intent and Purpose of the Plan
and Trust. All parties to this Agreement or in any way interested in the
Trust shall be bound by any acts performed under such condition.
25. Definition of Words. Feminine or neuter pronouns shall be substituted for
those of the masculine form, and the plural shall be substituted for the
singular, in any place or places herein where the context may require such
substitution or substitutions.
26. Titles. The titles of Sections are included only for convenience and shall
not be construed as part of this Agreement or in any respect affecting or
modifying-its provisions.
27. Execution of Trust Agreement. This Trust Agreement may be executed in any
number of counterparts and each fully executed counterpart shall be deemed
an original.
IN WITNESS WHEREOF these presents have been signed and sealed for and in behalf
of the Company and the Trustee by their duly authorized officers as of the 16th
day of May, 1996.
UNITIL CORPORATION
/s/George E. Long, Jr. By:/s/Gail S. Siart
- --------------------------------------------- -----------------
Witness Title: Chief Financial Officer
Date: May 16, 1996
PUTNAM FIDUCIARY TRUST COMPANY
/s/ Heather Manthorne By:/s/ Debra Beal
- ---------------------------------------------- --------------
Witness Title: Senior Vice President
Date: May 16, 1996
17
EXHIBIT 5
LEBOEUF, LAMB, GREENE & MACRAE, L.L.P.
A LIMITED LIABILITY PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS
260 FRANKLIN STREET
BOSTON, MA 02110
July 26, 2000
Unitil Corporation
6 Liberty Lane West
Hampton, NH 03842-1720
Ladies and Gentlemen:
We have acted as counsel to Unitil Corporation, a New Hampshire corporation
(the "Company"), in connection with the filing of a Registration Statement by
the Company under the Securities Act of 1933, as amended (the "1933 Act"), on
Form S-8 (the "Registration Statement"), providing for the registration of
150,000 shares (the "Plan Shares") of the Company's common stock, no par value,
to be issued pursuant to the Company's Tax Deferred Savings and Investment Plan
(the "Plan").
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such instruments,
certificates, records and documents, and have reviewed such questions of law, as
we have deemed necessary or appropriate for purposes of this opinion. In such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to the original
documents of all documents submitted to us as copies and the authenticity of the
originals of all such latter documents. As to any facts material to this
opinion, we have relied upon the aforesaid instruments, certificates, records
and documents and inquiries of Company representatives.
Unitil Corporation
July 26, 2000
Page two
Based upon the foregoing examination, and subject to the limitations set
forth below, we are of the opinion that the Plan Shares will be validly issued,
fully paid and nonassessable when:
(a) the Registration Statement shall have become, and for so long as it
shall remain, effective for the purpose of the issuance and sale of the Plan
Shares; and
(b) the consideration therefor provided for in the Plan has been received
by the Company.
This opinion is rendered under and limited to the New Hampshire Business
Corporation Act (without reference to "blue sky" matters) and the federal law of
the United States. We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and in any amendments thereto. In giving such consent, we
do not thereby concede that we are within the category of persons whose consent
is required under Section 7 of the 1933 Act, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ LeBoeuf, Lamb, Greene & MacRae, L.L.P.
EXHIBIT 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 7, 2000 accompanying the
consolidated financial statements and schedule included in the Annual Report of
Unitil Corporation and subsidiaries on Form 10-K for the year ended December 31,
1999, as amended by Form 10-K/A filed on April 14, 2000, and our report dated
June 9, 2000 accompanying the statements of changes in net assets for benefits
of the Unitil Corporation Tax Deferred Savings and Investment Plan (the "Plan").
We hereby consent to the incorporation by reference of said reports in the
Registration Statement of Unitil Corporation on Form S-8, relating to the Plan.
/s/ Grant Thornton LLP
Boston, Massachusetts
July 26, 2000