<PAGE>
As filed with the Securities and Exchange Commission on December 16, 1996
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM S-8
REGISTRATION STATEMENT
Under The Securities Act of 1933
--------------------------
UNISOURCE WORLDWIDE, INC.
(exact name of registrant as specified in charter)
DELAWARE
(State or other jurisdiction of 13-5369500
incorporation or organization) (I.R.S. Employer Identification No.)
825 Duportail Road
Wayne, Pennsylvania 19087-5589
(Address of principal executive offices)(Zip Code)
--------------------------------------
UNISOURCE WORLDWIDE, INC.
RETIREMENT SAVINGS PLAN
(Full title of the Plan)
-----------------------
Hugh G. Moulton
Executive Vice President and Chief Administrative Officer
Unisource Worldwide, Inc.
825 Duportail Road
Wayne, Pennsylvania 19087-5589
(Name and address of agent for service)
(610) 296-8000
(Telephone number, including area code, of agent for service)
------------------------------------
CALCULATION OF REGISTRATION FEE
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price offering registration
be registered registered per unit price fee
- --------------------------------------------------------------------------------
Common Stock 4,000,000 $19.50(1) $78,000,000 $23,636
$0.001
par value
- --------------------------------------------------------------------------------
Plan Interests (2) (2) (2) (2)
- ------------------------
(1) Calculated in accordance with Rule 457(c) and (h) based upon the
December 10, 1996 closing quotation for when - issued common stock on the
New York Stock Exchange.
(2) An indeterminate number of plan interests is hereby registered. No
additional filing fee is payable thereon, pursuant to Rule 457 (h)(2).
<PAGE>
PART I
------
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
- ------------------------
A prospectus setting forth the information required by Part I of Form
S-8 will be sent or given to participants as specified by Rule 428(b)(1).
Item 2. Registrant Information and Employee Plan Annual Information
- -------------------------------------------------------------------
The documents incorporated by reference in Item 3 of Part II of this
Form S-8 are incorporated by reference in the Section 10(a) prospectus relating
to this registration statement. The foregoing documents and all other documents
required to be delivered to employees pursuant to Rule 428(b) are available
without charge, upon written or oral request, to Unisource Worldwide, Inc., 825
Duportail Road, Wayne, Pa 19087, Attn: Corporate Communications Department
(telephone number: (610)296-8000).
PART II
-------
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
- -----------------------------------------------
The Registrant's Registration Statement on Form 10 (effective November
26, 1996) is incorporated by reference by the Registrant and the Plan in this
registration statement.
All documents subsequently filed by the Registrant pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, prior to the
filing of a post-effective amendment indicating that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this Registration Statement
and to be part thereof from the date of filing of such documents.
Item 4. Description of Securities
- ---------------------------------
Not Applicable.
Item 5. Interest of Named Experts and Counsel
- ---------------------------------------------
Not Applicable.
<PAGE>
Item 6. Indemnification of Directors and Officers
- -------------------------------------------------
The Delaware General Corporation Law (the "DGCL"), under which the
Registrant is organized, provides that the Registrant may indemnify persons who
incur certain liabilities or expenses by reason of such persons being or having
been directors, officers or employees of the Registrant or serving or having
served in such capacities or similar capacities at the Registrant's request for
other corporations or entities. Pursuant to the DGCL, the Registrant has
adopted, as part of its By-Laws, provisions whereby the Registrant shall
indemnify such persons against such liabilities and expenses resulting from
suits or other proceedings brought by third persons and against expenses
resulting from suits or other proceedings brought in the right of the
Registrant. No indemnification against expenses is to be made, however, in
respect of (i) any breach of the director's duty of loyalty to the Registration
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the DGCL, relating to prohibited dividends, distributions and
repurchases or redemptions of stock, or (iv) for any transaction for which the
director derives an improper personal benefit.
As permitted by law, the Registrant has purchased liability insurance
policies covering its directors and officers to provide protection where the law
does not allow the Registrant to indemnify a director or officer. The policies
also provide coverage for indemnifiable expenses, including expenses related to
claims arising under the Employment Retirement Income Security Act against a
director or officer based upon an alleged breach of fiduciary duty or other
wrongful act with respect to an employee benefit plan.
Item 7. Exemption from Registration Claimed
- -------------------------------------------
Not applicable.
Items 8. Exhibits
- -----------------
(4) Rights Agreement, between the Registrant and National City Bank,
the form of which was filed as Exhibit 2.2 to the Registrant's
Registration Statement on Form 10 (effective November 26, 1996),
is incorporated herein by reference.
(5) Opinion of Morgan, Lewis & Bockius as to the validity of the
securities. The Registrant hereby undertakes that it will submit
the Plan and any amendment thereto to the Internal Revenue Service
("IRS") in a timely manner and will make all changes required by
the IRS in order to qualify the Plan.
(23) Consent of Independent Auditors.
(99) Unisource Worldwide, Inc. Retirement Savings Plan.
<PAGE>
Item 9. Undertakings
- ---------------------
(a) The 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;
(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 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 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 which remain unsold at the
termination of the offering.
(b) The 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 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.
<PAGE>
(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 expressly
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.
<PAGE>
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 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 Valley Forge, Pennsylvania, on the 13th day of
December, 1996.
UNISOURCE WORLDWIDE, INC.
Date: December 13, 1996 By: /s/Jack H. Keeney
------------------------------
(Jack H. Keeney)
Vice President-Finance
(Principal Accounting Officer and
Acting Principal Financial Officer)
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 dates indicated.
Signature Title Date
--------- ----- ----
/s/Ray B. Mundt Chairman and Chief December 13, 1996
- ------------------------- Executive Officer
(Ray B. Mundt) (Principal Executive Officer)
/s/Charles F. White President and Chief December 13, 1996
- ------------------------- Operating Officer
(Charles F. White)
/s/Jack H. Keeney Vice President-Finance December 13, 1996
- ------------------------- (Principal Accounting
(Jack H. Keeney) Officer and Acting
Principal Financial Officer)
/s/John E. Stuart Sole Director December 13, 1996
- -------------------------
(John E. Stuart)
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 City of Valley Forge,
Commonwealth of Pennsylvania, on December 13, 1996.
By: /s/ ALISTAIR McCREE
--------------------------------------
Name: (Alistair McCree)
---------------------------------
Title: Director - Unisource Retirement Plans
---------------------------------------
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit
Number Exhibits
- ------- --------
(4.1) Rights Agreement between the Registrant and National City
Bank, the form of which was filed as Exhibit 2.2 to the
Registrant's Registration Statement on Form 10 (effective
November 26, 1996), is incorporated herein by reference.
(5) Opinion of Morgan, Lewis & Bockius as to the validity of the
securities.
(23) Consent of Independent Auditors.
(99) Unisource Worldwide, Inc. Retirement Savings Plan.
<PAGE>
December 11, 1996
Unisource Worldwide, Inc.
825 Duportail Road
Wayne, Pennsylvania 19087
Re: Unisource Worldwide, Inc. Registration Statement on Form S-8
-------------------------------------------------------------
Ladies and Gentlemen:
We have acted as counsel to Unisource Worldwide, Inc., a Delaware corporation
(the "Company"), in connection with the preparation of a registration statement
on Form S-8 (the "Registration Statement") to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended (the "Act"),
relating to 4,000,000 shares of the Company's common stock, $0.001 par value per
share (the "Shares"), under the Company's Retirement Savings Plan (the "Plan").
We have examined copies of the Plan, the Company's restated certificate of
incorporation and such certificates, records, statutes and other documents as we
have deemed relevant in rendering this opinion. As to matters of fact, we have
relied on representations of officers of the Company. In our examination we
have assumed the genuineness of documents submitted to us as originals and the
conformity with the original of all documents submitted to us as copies thereof.
Based on the foregoing, it is our opinion that the Shares, when allocated to
participants in accordance with the terms of the Plan, will represent validly
issued, fully paid and nonassessable shares of common stock of the Company.
The opinion set forth above is limited to the General Corporation Law of the
State of Delaware.
<PAGE>
Unisource Worldwide, Inc.
Page 2
We hereby consent to the use of this opinion as Exhibit 5 to the Registration
Statement. In giving such opinion, we do not thereby admit that we are acting
within the category of persons whose consent is required under Section 7 of the
Act or the rules or regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
/s/ Morgan, Lewis & Bockius LLP
<PAGE>
Exhibit 23
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement (Form
S-8) of Unisource Worldwide, Inc. pertaining to the Unisource Worldwide, Inc.
Retirement Savings Plan of our reports dated October 16, 1996 (except for Notes
1 and 9, as to which the date is November 22, 1996), with respect to the
consolidated financial statements and schedule of Unisource Worldwide, Inc.
included in its Registration Statement on Form 10 filed with the Securities and
Exchange Commission on November 26, 1996.
Ernst & Young LLP
Philadelphia, Pennsylvania
December 16, 1996
<PAGE>
UNISOURCE WORLDWIDE, INC.
RETIREMENT SAVINGS PLAN
EFFECTIVE JANUARY 1, 1997
<PAGE>
UNISOURCE WORLDWIDE, INC.
RETIREMENT SAVINGS PLAN
EFFECTIVE JANUARY 1, 1997
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C>
Preamble 1
I. Purpose 3
II. Definitions 4
III. Participation 25
IV. Participants' Contributions 28
V. Employer Contributions 36
VI. Participants' Accounts 40
VII. Distribution 42
VIII. Form of Benefit 51
IX. Vesting 69
X. Administration 76
XI. The Fund 83
XII. Amendment or Termination of the Plan 93
XIII. Withdrawals During Employment 96
XIV. Loans from the Plan 103
XV. General Provisions 114
Appendix A: ADP and ACP Tests and
Related Limits on Contributions 119
Appendix B: Limits on Annual Additions 138
Appendix C: Top-Heavy Provisions 143
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
Article Page
- ------- ----
<S> <C>
Appendix D: Determination of Highly
Compensated Employees 153
Appendix E: Qualified Nonelective Contribu-
tions and Qualified Matching Contributions 156
</TABLE>
-ii-
<PAGE>
UNISOURCE WORLDWIDE, INC.
RETIREMENT SAVINGS PLAN
Unisource Worldwide, Inc., a Delaware corporation, hereby establishes
the following defined contribution profit-sharing plan for the benefit of those
of its employees who are eligible to participate in the plan. The plan is
designed to allow for investment of certain plan benefits in qualified employer
securities, and its Unisource Stock Fund is a stock bonus plan. The plan is
effective January 1, 1997.
Background
----------
1. Alco Standard Corporation ("Alco") established the Alco Standard
Corporation Stock Participation Plan, effective January 1, 1975, for the benefit
of certain of its employees.
2. Two other defined contribution plans sponsored by Alco were
merged with and into the stock participation plan, effective October 1, 1995,
and the stock participation plan was then amended, restated, and renamed the
Alco Standard Corporation Retirement Savings Plan, effective October 1, 1995.
3. Unisource Worldwide, Inc. ("Unisource"), formerly a subsidiary of
Alco, split from Alco to become a separate, free-standing corporation as of
January 1, 1997. Unisource, wishing to create a plan mirroring the Alco
Standard Corporation Retire-
-1-
<PAGE>
ment Savings Plan for the benefit of its employees who formerly participated in
the Alco Standard Corporation Retirement Savings Plan, established the Unisource
Worldwide, Inc. Retirement Sav ings Plan, effective January 1, 1997.
4. The Unisource Stock Fund, one of the investment funds under the
Unisource Worldwide, Inc. Retirement Savings Plan, is a stock bonus plan within
the meaning of Treas. Reg. (S)1.401-1(b)(1)(iii).
-2-
<PAGE>
ARTICLE I
PURPOSE
-------
a. Unisource Worldwide, Inc., desiring to provide systematically for
the payment of benefits to its employees on account of retirement, death, or
total disability and to permit its employees to share in the product of their
efforts, herewith adopts this plan known as the Unisource Worldwide, Inc.
Retire-ment Savings Plan.
-3-
<PAGE>
ARTICLE II
DEFINITIONS
-----------
Except where otherwise clearly indicated by context, the masculine
shall include the feminine and the singular shall include the plural, and vice-
versa.
2.1 "Accounts" shall mean the separate entries maintained in the
--------
records of the Plan which represent a Participant's interest in the Fund.
(a) "After-Tax Account" shall mean the Account to which are
-----------------
credited after-tax contributions that were held by a Prior Plan and all earnings
and losses thereon. This Account is divided into three sub-accounts, which are
"Sub-Account A," "Sub-Account B," and "Sub-Account C," as follows:
(1) Sub-Account A consists of all after-tax contributions
that
(A) were held by the Alco DCP as of September 30, 1995
(other than after-tax contributions now held in Sub-Account C), or
(B) were held by a retirement plan subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into the Alco RSP before January 1, 1997 (other than after-tax
contributions now held in Sub-Account C), or
-4-
<PAGE>
(C) were held by a retirement plan subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into this Plan on or after January 1, 1997 (other than after-tax
contributions now held in Sub-Account C),
and all earnings and losses on these after-tax contributions.
(2) Sub-Account B consists of all after-tax contributions
that
(A) were held by the Alco SPP and the Alco CAP as of
September 30, 1995, or
(B) were held by a retirement plan not subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into the Alco RSP before January 1, 1997, or
(C) were held by a retirement plan not subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into this Plan on or after January 1, 1997,
and all earnings and losses on these after-tax contributions.
(3) Sub-Account C consists of all after-tax contributions
that
-5-
<PAGE>
(A) were initially contributed to a money purchase
pension plan and were held by the Alco DCP as of September 30, 1995, or
(B) were initially contributed to a money purchase
pension plan that was merged with and into the Alco RSP before January 1, 1997,
or
(C) were initially contributed to a money purchase
pension plan that was merged with and into this Plan on or after January 1,
1997,
and all earnings and losses on these after-tax contributions.
There shall also be separate accounting for the After-Tax Account to
distinguish between "pre-1987" and "post-1986" after-tax contributions and
earnings thereon. All after-tax contributions made prior to January 1, 1987
shall be considered "pre-1987," with all earnings and losses thereon. All
after-tax contributions made on and after January 1, 1987 shall be considered
"post-1986," with all earnings and losses thereon.
(b) "Before-Tax Account" means the Account to which are credited
------------------
a Participant's before-tax contributions and all earnings and losses thereon.
This Account is divided into two sub-accounts, which are "Sub-Account A" and
"Sub-Account B," as follows:
-6-
<PAGE>
(1) Sub-Account A consists of all before-tax contributions
that
(A) were held by the Alco DCP as of September 30, 1995,
or
(B) were held by a retirement plan subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into the Alco RSP before January 1, 1997, or
(C) were held by a retirement plan subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into this Plan on or after January 1, 1997,
and all earnings and losses on these before-tax contributions.
(2) Sub-Account B consists of all before-tax contributions
that
(A) were held by the Alco SPP and the Alco CAP as of
September 30, 1995, or
(B) were held by a retirement plan not subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into the Alco RSP before January 1, 1997, or
(C) were held by a retirement plan not subject to the
survivor annuity requirements of sections
-7-
<PAGE>
401(a)(11) and 417 of the Code and merged with and into this Plan on or after
January 1, 1997, or
(D) were contributed to the Alco RSP before January 1,
1997, or
(E) are contributed to this Plan on and after January
1, 1997,
and all earnings and losses on these before-tax contributions.
(c) "DCP Account" shall mean the following, taken together:
-----------
After-Tax Sub-Accounts A and C, Before-Tax
Sub-Account A, Employer Sub-Account A, the Money Purchase Plan Account, and
Rollover Sub-Account A.
(d) "Employer Account" shall mean the Account to which are
----------------
credited employer contributions other than money purchase plan contributions and
all earnings and losses thereon. This Account is divided into three sub-
accounts, which are "Sub-Account A," "Sub-Account B," and "Sub-Account C," as
follows:
(1) Sub-Account A consists of all employer contributions
other than money purchase plan contributions that
(A) were held by the Alco DCP as of September 30, 1995,
or
(B) were held by a retirement plan subject to the
survivor annuity requirements of sections 401(a)(11)
-8-
<PAGE>
and 417 of the Code and merged with and into the Alco RSP before January 1,
1997, or
(C) were held by a retirement plan subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into this Plan on or after January 1, 1997,
and all earnings and losses on these employer contributions.
(2) Sub-Account B consists of all employer contributions
other than money purchase plan contributions that
(A) were held by the Alco CAP as of September 30, 1995,
or
(B) were held by a retirement plan not subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into the Alco RSP before January 1, 1997, or
(C) were held by a retirement plan not subject to the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code and
merged with and into this Plan on or after January 1, 1997,
and all earnings and losses on these employer contributions.
-9-
<PAGE>
(3) Sub-Account C consists of
(A) all employer contributions other than money
purchase plan contributions that were held by the Alco SPP as of September 30,
1995, and
(B) all employer contributions other than money
purchase plan contributions that were contributed to the Alco RSP before January
1, 1997, and
(C) all Matching Contributions contributed to this
Plan on and after January 1, 1997,
and all earnings and losses on these employer contributions.
(e) "Money Purchase Plan Account" shall mean the Account to
---------------------------
which are credited all money purchase plan contributions made by an employer
under a Prior Plan and all earnings and losses thereon.
(f) "QMAC Account" shall mean the Account to which are credited
------------
Qualified Matching Contributions and all earnings and losses thereon.
(g) "QNEC Account" shall mean the Account to which are credited
------------
Qualified Nonelective Contributions and all earnings and losses thereon.
(h) "Rollover Account" shall mean the account to which are
----------------
credited an Employee's Rollover Savings and all earnings and losses thereon.
This Account is divided into two sub-
-10-
<PAGE>
accounts, which are "Sub-Account A" and "Sub-Account B," as follows:
(1) Sub-Account A consists of
(A) rollover savings held by the Alco DCP as of
September 30, 1995, and
(B) rollover savings subject to the survivor annuity
requirements of sections 401(a)(11) and 417 of the Code and held by a retirement
plan merged with and into the Alco RSP before January 1, 1997, or
(C) rollover savings subject to the survivor annuity
requirements of sections 401(a)(11) and 417 of the Code and held by a retirement
plan merged with and into this Plan on or after January 1, 1997,
and all earnings and losses on these rollover savings.
(2) Sub-Account B consists of
(A) rollover savings not subject to the survivor
annuity requirements of sections 401(a)(11) and 417 of the Code and held by a
retirement plan merged with and into the Alco RSP before January 1, 1997, and
(B) rollover savings contributed to the Alco RSP before
January 1, 1997, and
(C) Rollover Savings contributed to this Plan on and
after January 1, 1997,
-11-
<PAGE>
and all earnings and losses on these rollover savings.
2.2 "ACP Test" shall mean the tests described in Section A.6(a) of
--------
Appendix A.
2.3 "Actual Contribution Percentage" shall mean the percentage
------------------------------
described in Section A.6(b) of Appendix A.
2.4 "Actual Deferral Percentage" shall mean the percentage described
--------------------------
in Section A.3(b) of Appendix A.
2.5 "Actuarial Equivalent" shall mean of equal actu arial value,
--------------------
based upon the factors and assumptions utilized by the insurance company from
which the Administrator directs the purchase of any annuity contract for the
purpose of providing benefits under the Plan.
2.6 "Administrator" shall mean the person(s) designated pursuant to
-------------
Section 10.1.
2.7 "ADP Test" shall mean the tests described in Section A.3(a) of
--------
Appendix A.
2.8 "Affiliated Company" shall mean:
------------------
(a) any parent or subsidiary of the Employer (or company under
common control with the Employer) which is a member of the same controlled group
of corporations (within the meaning of section 1563(a) of the Code) as the
Employer;
(b) any member of an affiliated service group, as determined
under section 414(m) of the Code, of which the Employer is a member;
-12-
<PAGE>
(c) any trade or business under common control with the Employer,
as determined under section 414(c) of the Code; and
(d) any entity required to be aggregated with the Employer
pursuant to regulations under section 414(o) of the Code.
"50% Affiliated Company" shall mean an Affiliated Company, but with
----------------------
the phrase "more than 50%" substituted for the phrase "at least 80%" in section
1563(a) of the Code.
2.9 "Alco CAP" shall mean the Alco Standard Corporation Capital
--------
Accumulation Plan, as in effect prior to October 1, 1995.
2.10 "Alco DCP" shall mean the Alco Standard Corporation Defined
--------
Contribution Plan, as in effect prior to October 1, 1995.
2.11 "Alco RSP" shall mean the Alco Standard Corporation Retirement
--------
Savings Plan, as in effect prior to January 1, 1997.
2.12 "Alco SPP" shall mean the Alco Standard Corporation Stock
--------
Participation Plan, as in effect prior to October 1, 1995.
2.13 "Basic Contributions" shall mean a Participant's basic before-tax
-------------------
savings contributed to the Plan pursuant to an election under Section 4.1.
-13-
<PAGE>
2.14 "Board of Directors" shall mean the board of directors of
------------------
Unisource or a committee of the board of directors of Unisource having authority
and responsibility for employee benefit plan matters.
2.15 "Break in Service" shall mean any Plan Year during which an
----------------
employee incurs a break in service described in Article IX.
2.16 "Cash Equivalents" shall mean cash and/or bank deposits,
----------------
certificates of deposit, U.S. Treasury obligations, commercial paper, and
similar investments.
2.17 "Code" shall mean the Internal Revenue Code of 1986, as amended
----
from time to time.
2.18 "Compensation" shall mean, for a given Plan Year, a Participant's
------------
regular salary or wages paid by his Employer, excluding overtime allowances,
bonuses, incentive pay, and other extra pay, but including commissions and Basic
and Supplemental Contributions and any elective contributions to a Unisource
plan under sections 125, 402(e)(3), 402(h), and 403(b) of the Code.
A Participant's annual Compensation shall not be more than the amount
set by section 401(a)(17) of the Code, as adjusted for cost-of-living
increases. In the case of a Plan Year which is less than 12 months long, the
dollar limit on Compensation shall be determined by multiplying the annual
limit by a fraction, the numerator of which is the number of full calendar
-14-
<PAGE>
months in the short Plan Year and the denominator of which is 12.
2.19 "Effective Date" shall mean (except as otherwise set forth
--------------
herein) January 1, 1997.
2.20 "Eligible Employee" shall mean any Employee who is entitled to
-----------------
contribute Basic and Supplemental Contributions and to have Matching
Contributions credited to his Employer Account for all or any portion of a given
Plan Year.
2.21 "Employee" shall mean any permanent employee of the Employer. An
--------
employee is considered "permanent" if he is expected to complete 500 or more
Hours of Service during the Plan Year.
The term Employee shall not include (a) any person who is a leased
employee, whether such person is a leased employee within the meaning of section
414(n) of the Code, or not; or (b) any person covered by a collective bargaining
agreement, unless he is covered by a collective bargaining agreement that
specifically provides for his participation hereunder.
Unisource reserves the right to amend the Plan or its Joinder
Agreement to change the class of employees who shall be Employees for purposes
of this Plan.
2.22 "Employer" shall mean Unisource and each division and subsidiary
--------
of Unisource (or division of a Unisource subsidiary) which is designated by the
Board of Directors to adopt this Plan and which (a) adopts the Plan by action of
its board of
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<PAGE>
directors, if applicable, and (b) executes a Joinder Agreement with respect to
the Plan.
2.23 "ERISA" shall mean the Employee Retirement Income Security Act of
-----
1974, as amended from time to time.
2.24 "Excess Deferral" shall mean the amount described in Section
---------------
A.1(c) of Appendix A.
2.25 "Fair Market Value" shall mean value as determined pursuant to
-----------------
guidelines developed by the Trustee, as revised by the Trustee from time to
time.
2.26 "Fund" shall mean the fund established for this Plan,
----
administered under the Trust Agreement, out of which benefits payable under
this Plan shall be paid.
2.27 "Highly Compensated Employee" shall mean, for a given Plan Year,
---------------------------
an employee who is found to be a Highly Compensated Employee within the meaning
of Treas. Reg. (S)1.414(q)-1T for that Plan Year. The determination under
Treas. Reg. (S)1.414(q)-1T shall be made in accordance with Appendix D.
2.28 "Hour of Service" shall mean an hour for which:
---------------
(a) an employee is directly or indirectly paid or entitled to
payment by the Employer, a Predecessor Company, or an Affiliated Company for the
performance of employment duties; or
(b) back pay, irrespective of mitigation of damages, is either
awarded or agreed to; or
-16-
<PAGE>
(c) an employee is directly or indirectly paid or entitled to
payment by the Employer, a Predecessor Company, or an Affiliated Company on
account of a period of time during which no duties are performed due to
vacation, holiday, illness, incapacity (including disability), layoff, jury
duty, military duty, or leave of absence; or
(d) an employee is absent from work without pay but receives
Hours of Service under Section 9.2(b); or
(e) an employee is absent from work without pay because of:
(1) leave of absence pursuant to his Employer's established
leave of absence policy;
(2) absence for military service such that reemployment
rights are guaranteed by law, provided that he applies for reemployment within
the time provided by law;
(3) absence due to illness or accident for a period of less
than 12 months, provided that he returns to work as soon as he is physically
able.
There shall be excluded from Subsections (a), (b), and (c) those
periods during which payments are made or due under a plan maintained solely for
the purpose of complying with applicable workers' compensation, unemployment
compensation, or disability insurance laws.
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<PAGE>
No more than 501 Hours of Service shall be credited under Subsection
(c) or (e), or under Subsections (c) and (e) together, on account of any single
continuous period during which no duties are performed, except to the extent
otherwise provided in this Plan.
Except as otherwise provided in Subsection (e), an Hour of Service
shall not be credited where an employee is being reimbursed solely for medical
or medically related expenses.
Hours of Service shall be credited in accordance with the rules set
forth in U.S. Department of Labor Reg. (S)2530.200b-2(b) and (c).
Hours of Service shall be credited for any individual who is
considered to be a leased employee for purposes of this Plan under section
414(n) of the Code.
2.29 "IKON Stock" shall mean the common stock of IKON Office
----------
Solutions, Inc.
2.30 "IKON Stock Fund" shall mean the Investment Fund invested solely
---------------
in IKON Stock and Cash Equivalents. The IKON Stock Fund may not be selected by
any Participant as an investment option for new contributions going into his
Accounts on and after January 1, 1997, but shall exist as a "frozen" Investment
Fund.
2.31 "Income" shall mean, until January 1, 1998, the sum of an
------
employee's Limitation Compensation and his elective deferrals under sections
125, 402(e)(3), 402(h)(1)(B), and 403(b) of the Code. Beginning on January 1,
1998, when the definition of Limitation Compensation changes to include elective
-18-
<PAGE>
deferrals (in accordance with an amendment to section 415(c)(3) of the Code), an
employee's Income shall be his Limitation Compensation.
2.32 "Investment Committee" shall mean the committee appointed by the
--------------------
Board of Directors to select the Plan's Investment Funds and monitor the
performance of such funds.
2.33 "Investment Fund" shall mean any fund, contract, obligation, or
---------------
other mode of investment selected by the Investment Committee to which a
Participant may direct the investment of the assets of his Accounts.
2.34 "Joinder Agreement" shall mean the instrument by which an
-----------------
employer joins and becomes a party to the Plan and the Trust Agreement.
2.35 "Limitation Compensation" shall mean, for a given Participant,
-----------------------
for a given period of time, the amount(s) which must be reported in the "wages,
tips, other compensation" box on the Form(s) W-2 provided to the Participant by
the Employer. After December 31, 1997, Limitation Compensation shall be the sum
of (a) the amount(s) which must be reported in the "wages, tips, other
compensation" box on the Form(s) W-2 provided to the Par ticipant by the
Employer and (b) the Participant's elective deferrals under sections 125,
402(e)(3), 402(h)(1)(B), and 403(b)
-19-
<PAGE>
of the Code.
2.36 "Mandatory Benefit Commencement Date" shall mean for any
-----------------------------------
Participant the date described in Section 7.7.
2.37 "Matching Contributions" shall mean the amounts contributed to
----------------------
the Fund by the Employer pursuant to Section 5.1 and matching contributions made
by an employer to the Alco SPP and the Alco RSP which are now held by this Plan.
2.38 "Money Purchase Plan Contributions" shall mean the money purchase
---------------------------------
pension plan contributions made by an employer to a Prior Plan.
2.39 "Participant" shall mean any Employee entitled to participate in
-----------
this Plan under Section 3.1, and any Employee or former Employee for whom one or
more Accounts are maintained under the Plan.
2.40 "Plan" shall mean the Unisource Worldwide, Inc. Retirement
----
Savings Plan, a profit sharing plan, as set forth herein and as hereafter
amended from time to time.
2.41 "Plan Year" shall mean the calendar year (January 1st through
---------
December 31st). The first Plan Year begins on January 1, 1997.
2.42 "Predecessor Company" shall mean each business entity that is a
-------------------
predecessor in interest to the Employer, whether due to merger, consolidation,
asset acquisition, or stock acquisition.
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<PAGE>
2.43 "Prior Plan" shall mean (a) the Alco SPP, as in effect on
----------
September 30, 1995; (b) the Alco CAP, as in effect on September 30, 1995; (c)
the Alco DCP, as in effect on Septem ber 30, 1995; (d) any retirement plan
merged with and into the Alco RSP before January 1, 1997, as in effect on the
day before the merger; (e) the Alco RSP, as in effect on December 31, 1996; or
(f) any retirement plan merged with and into this Plan on or after January 1,
1997, as in effect on the day before the merger.
2.44 "Projected Pay" shall mean, for any Participant who has been
-------------
absent from work due to military service and who meets the requirements for
coverage under USERRA (as set forth in Section 3.5), the annual rate of pay such
Participant would have received for a given Plan Year of military service if he
had been actively employed by the Employer during that Plan Year. If this rate
of pay is not reasonably certain, the Participant's Projected Pay for each Plan
Year of military service shall be the annualized average of the monthly
compensation paid to him by the Employer for the 12 months immediately preceding
the beginning of his period of military service (or the annualized average of
the monthly compensation paid to him by the Employer for his entire period of
employment, if he was employed for fewer than 12 months before his military
service began). A Participant's annual Projected Pay shall not be more than
the amount in effect under section 401(a)(17) of the Code for the Plan Year to
which the
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<PAGE>
Projected Pay relates.
2.45 "Qualified Matching Contributions" shall mean amounts which are
--------------------------------
contributed to the Fund by the Employer on behalf of Participants who are not
Highly Compensated Employees; which are allocated on the basis of Basic
Contributions; and which Participants may not elect to receive in cash.
2.46 "Qualified Nonelective Contributions" shall mean amounts which
-----------------------------------
are contributed to the Fund by the Employer on behalf of Eligible Employees who
are not Highly Compensated Employees; which are allocated on the basis of
Compensation; and which Eligible Employees may not elect to receive in cash.
2.47 "Recordkeeper" shall mean the recordkeeper chosen by the
------------
Unisource Committee.
2.48 "Retirement Age" shall mean the earlier of (a) the earliest age
--------------
at which a Participant may retire under his Employ er's defined benefit pension
plan or (b) age 62. If a Participant does not participate in a defined benefit
pension plan sponsored by his Employer, Retirement Age shall mean age 62.
2.49 "Retirement Date" shall mean the date on which a Participant who
---------------
has attained Retirement Age terminates his employment with the Employer and all
Affiliated Companies.
2.50 "Rollover Savings" shall mean a Participant's savings rolled over
----------------
to the Plan as provided in Section 4.6.
-22-
<PAGE>
2.51 "Supplemental Contributions" shall mean a Participant's
--------------------------
supplemental before-tax savings contributed to the Plan pursuant to an election
under Section 4.1.
2.52 "Spouse" shall mean the person to whom a Participant is married
------
on any date of reference.
2.53 "Total Disability" shall mean, with respect to a Participant who
----------------
is participating in any long-term disability plan maintained by the Employer,
only such disability as renders the Participant wholly and continuously unable
to perform the duties of his occupation during the entire elimination or waiting
period under the long-term disability plan.
The foregoing notwithstanding, disability resulting from the following
causes shall not constitute Total Disability under this Plan:
(a) service in the Armed Forces or Merchant Marine of the United
States or any other country;
(b) warfare or acts of a public enemy;
(c) willful participation in any criminal act;
(d) intentionally self-inflicted or self-incurred injury; or
(e) use of drugs or narcotics contrary to law.
2.54 "Trust Agreement" shall mean the agreement and declaration of
---------------
trust executed under this Plan.
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<PAGE>
2.55 "Trustee" shall mean the corporate trustee or one or more
-------
individuals collectively appointed and acting under the Trust Agreement.
2.56 "Unisource" shall mean Unisource Worldwide, Inc., a Delaware
---------
corporation, and its successors.
2.57 "Unisource Committee" shall mean the Unisource Worldwide, Inc.
-------------------
Retirement Plans Committee or any other committee appointed from time to time by
the Board of Directors to carry out the duties set forth in Section 10.2.
2.58 "Unisource Stock" shall mean the common stock of Unisource.
---------------
2.59 "Unisource Stock Fund" shall mean the Investment Fund invested
--------------------
solely in Unisource Stock and Cash Equivalents.
The Unisource Stock Fund shall be a stock bonus plan within the meaning of
Treas. Reg. (S)1.401-1(b)(1)(iii).
2.60 "USERRA" shall mean the Uniformed Services Employment and
------
Reemployment Rights Act of 1994, as amended from time to time.
2.61 "Valuation Date" shall mean each business day on which the New
--------------
York Stock Exchange is open.
2.62 "Vesting Service" shall mean that portion of an employee's
---------------
employment with the Employer and all Affiliated Companies which is used to
determine the employee's vesting status hereunder, as further described in
Article IX.
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<PAGE>
ARTICLE III
PARTICIPATION
-------------
3.1 Date of Participation.
---------------------
(a) Each person who was participating in the Alco RSP on December
31, 1996 and who is an Employee on the Effective Date shall be a Participant
hereunder as of the Effective Date.
(b) Each other person who is an Employee shall become a
Participant as soon as administratively practicable following the date on which
he first becomes an Employee.
3.2 Privileges of Participation. Once an Employee becomes a
---------------------------
Participant, he may (but is not required to) elect to contribute Basic and
Supplemental Contributions to the Plan in accordance with the provisions of
Article IV.
3.3 Participation After Reemployment. A Participant whose employment
--------------------------------
is terminated and who is later reemployed as an Employee shall resume his
participation in the Plan as soon as administratively practicable following the
date of his reemployment.
3.4 Data. Each Employee shall furnish to the Recordkeeper such data
----
as the Recordkeeper may consider necessary for the determination of the
Employee's rights and benefits under the Plan and shall otherwise cooperate
fully with the Recordkeeper in the administration of the Plan.
-25-
<PAGE>
3.5 USERRA Coverage.
---------------
(a) Certain provisions of this Plan apply only to an individual
who has been absent from work due to military service (either because he was
inducted or because he volunteered for military service) and who is covered
under USERRA. An individual is covered under USERRA if:
(1) he was employed by the Employer immediately before he
entered military service and he gave the Employer advance notice of his military
service, unless advance notice was prevented by military necessity or it was
impossible or unreasonable, under the circumstances, to give advance notice;
(2) he has been absent from work due to military service for
five years or less;
(3) he has received an honorable discharge or otherwise
satisfactorily completed his military service;
(4) he reports back to work or applies for reemployment in a
timely fashion, as specified in Subsection (b); and
(5) his reemployment is initiated on or after December 12,
1994.
(b) An employee returning from military service has reported back
to work or applied for reemployment in a timely fashion and meets the
requirement of Subsection (a)(4) if:
-26-
<PAGE>
(1) his period of military service was less than 31 days (or
he was absent due to a fitness exam) and he reports back to work not later than
the first regularly scheduled work period after he has had an eight-hour break
and time for travel back home; or
(2) his period of military service was 31 days to 180 days
long and he applies for reemployment not more than 14 days after he completes
military service; or
(3) his period of military service was more than 180 days
long and he applies for reemployment within 90 days after he completes military
service; or
(4) he does not meet the time limit applicable to him under
paragraph (1), (2), or (3) but he reports back to work or applies for
reemployment within a period of time that is "reasonable" within the meaning of
section 4312(e) of USERRA.
-27-
<PAGE>
ARTICLE IV
PARTICIPANTS' CONTRIBUTIONS
---------------------------
4.1 Basic and Supplemental Contributions.
------------------------------------
(a) (1) At the time an Employee becomes a Participant, he may
(but is not required to) elect a percentage to be deducted from his Compensation
as his Basic and Supplemental Contributions. This percentage may be from one
percent (1%) to six percent (6%) of the Participant's Compensation in the case
of Basic Contributions, or an additional one percent (1%) to ten percent (10%)
of the Participant's Compensation in the case of Supplemental Contributions. The
percentage so elected shall be deemed to be a contribution from the
Participant's Employer and shall be allocated to the Participant's Before-Tax
Account.
(2) An election under this Subsection shall be made in
accordance with procedures established by the Administrator, who may provide
for elections to be made by telephonic communication with the Recordkeeper. The
effective date of the election shall be the date on which the Employee first
becomes a Participant. In no event shall an election be effective for any
payroll period which begins before the date on which the Employee becomes a
Participant.
(b) A Participant who does not make an election under
Subsection (a) within 60 days of the date on which the
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<PAGE>
Recordkeeper first identifies him as an Eligible Employee shal l be deemed to
have elected to contribute to the Plan as soon as administratively practicable
following the expiration of the 60-day period. Such Participant shall be deemed
to have elected to contribute two percent (2%) of his Compensation to the Plan
as Basic Contributions. In no event shall a deemed election be effective for any
payroll period which begins before the expiration of the 60-day period.
(c) Each Participant who makes an election (or is deemed to
have made an election) under this Section shall be deemed to have agreed to the
terms and requirements of the Plan and the Trust Agreement.
(d) In any one taxable year, the amount of Basic and
Supplemental Contributions plus any other elective deferrals (as defined in
section 402(g)(3) of the Code) allocated to a Participant's Accounts under this
Plan and all other plans, contracts, and arrangements maintained by the
Employer and all Affiliated Companies shall in no event exceed the dollar limit
in effect under section 402(g) of the Code for that taxable year.
(e) If a Participant has been absent from work due to
military service and he meets the requirements for coverage under USERRA (as set
forth in Section 3.5), he shall have the right to make up the Basic and
Supplemental Contributions he might have contributed during his period of
military
-29-
<PAGE>
service, as provided in Section 4.8.
4.2 Change of Contribution Rate.
---------------------------
(a) A Participant may increase the percentage elected under Section
4.1 to any other percentage permitted under that Section. An increase in Basic
or Supplemental Contributions shall become effective as soon as administratively
practicable following the date on which the Recordkeeper receives notice of the
increase.
(b) A Participant may reduce or stop his Basic and Supplemental
Contributions at any time. A reduction or cancellation of Basic or Supplemental
Contributions shall become effective as soon as administratively practicable
following the date on which the Recordkeeper receives notice of the change.
(c) A Participant who has reduced or stopped his Basic and
Supplemental Contributions may increase or resume his Basic and Supplemental
Contributions by giving the Recordkeeper notice of the change he wishes to make.
Basic and Supplemental Contributions will be increased or will resume as soon as
administratively practicable following the date on which the Recordkeeper
receives notice of the change.
(d) If the individual deferral percentages of Participants who are
Highly Compensated Employees must be reduced as provided in Section A.4(a) of
Appendix A, the Administrator shall advise affected Participants of the action
it is taking.
-30-
<PAGE>
4.3 Remittance of Contributions. Amounts deducted as Basic and
---------------------------
Supplemental Contributions shall be remitted to the Trustee for deposit in the
Fund as soon as is practicable, but in no event more than 15 business days after
the end of the calendar month in which such contributions were withheld from the
Participant's Compensation.
4.4 Actual Deferral Percentage Test. The Plan must satisfy the ADP
-------------------------------
Test set forth in Appendix A as of the last day of each Plan Year.
4.5 Excess Deferrals. In a taxable year in which a Participant has
----------------
an Excess Deferral, the Excess Deferral shall be treated as described in
Appendix A.
4.6 Rollover Savings.
----------------
(a) An Employee may roll over into the Fund, from any qualified
retirement plan of a former employer, all or a portion of his interest in such
qualified plan, except that the interest being rolled over may not contain
nondeductible employee contributions.
(b) In addition, an Employee who has established an individual
retirement account to hold distributions received from qualified retirement
plans may roll over all of the assets of such individual retirement account into
the Fund. Such individual retirement account shall not contain nondeductible
employee contributions made by the Employee while he was par-
-31-
<PAGE>
ticipating in the distributing plan(s).
(c) The distribution(s) rolled over from another qualified
retirement plan or from an individual retirement account shall be credited to
the Employee's Rollover Account. If the Employee is not otherwise a Participant
in this Plan, he shall be deemed to be a Participant with respect to his
Rollover Account, but for no other Plan purpose, until he becomes a Participant
pursuant to Section 3.1.
(d) The Trustee shall not accept a distribution from any other
qualified retirement plan or from an individual retirement account unless (1)
the distribution being rolled over comes directly from the fiduciary of the
distributing plan, or comes from the Employee, within 60 days after the Employee
receives a distribution from such other qualified retirement plan or from the
individual retirement account; and (2) the distribution being rolled over will
not cause the Plan to be a direct or indirect transferee of a plan to which the
survivor annuity requirements of sections 401(a)(11) and 417 of the Code apply.
However, an Employee's Rollover Account may contain rolled-over amounts that are
subject to the survivor annuity requirements of sections 401(a)(11) and 417 of
the Code if there is acceptable separate accounting for such amounts under
Section 6.6.
4.7 Other Rollovers and Transfers Not Accepted. Except as
------------------------------------------
specifically provided in Section 4.6, no Employee shall
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<PAGE>
be permitted to roll over or transfer funds to the Plan from an individual
retirement account or individual retirement annuity, from another qualified
retirement plan or trust, or from an annuity plan.
4.8 USERRA Make-Up Contributions.
----------------------------
(a) (1) If a Participant has been absent from work due to
military service and he meets the requirements for coverage under USERRA (as set
forth in Section 3.5), he shall have the right to make up the Basic and
Supplemental Contributions he could have contributed during his period of
military service if he had been actively employed by the Employer during such
period.
(2) A Participant's make-up Basic Contributions may be
from one percent (1%) to six percent (6%) of his Projected Pay. His make-up
Supplemental Contributions may be an additional one percent (1%) to ten percent
(10%) of his Projected Pay.
(b) (1) Make-up contributions shall be made pursuant to a
written election made by the Participant on a form provided for that purpose by
the Recordkeeper or in any other manner prescribed by the Recordkeeper or
Administrator. Such election shall specify the percentage of his Projected Pay
that the Participant is contributing as make-up Basic Contributions and (if
applicable) the percentage of his Projected Pay that the
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<PAGE>
Participant is contributing as make-up Supplemental Contributions, and the year
to which such make-up contributions shall relate.
(2) The Participant may change the percentage he is
contributing as make-up Basic Contributions and/or make-up Supplemental
Contributions to any other percentage permitted under Subsection (a)(2). An
increase in make-up Basic or Supplemental Contributions shall become effective
as soon as administratively practicable following the date on which the
Recordkeeper receives notice of the increase.
(3) The Participant may reduce or stop his make-up Basic
Contributions and make-up Supplemental Contributions at any time. A reduction or
cancellation of make-up Basic or Supplemental Contributions shall become
effective as soon as administratively practicable following the date on which
the Recordkeeper receives notice of the change.
(c) Make-up Basic and Supplemental Contributions may be deducted
from a Participant's current Compensation or may be paid by the Participant to
the Trustee in cash, or both, as the Participant elects. Make-up contributions
must be made within a period that is three times the length of the
Participant's period of military service (not to exceed five years); such period
shall begin on the Participant's reemployment date.
-34-
<PAGE>
(d) Make-up Basic and Supplemental Contributions allocated to a
Participant's Accounts shall in no event exceed the dollar limit on elective
deferrals under section 402(g) of the Code for the prior taxable year of the
Participant to which they relate. If the dollar limit is exceeded with respect
to any prior taxable year, amounts that would otherwise be paid to the Trustee
as make-up Basic and Supplemental Contributions shall instead be paid out to the
Participant in cash.
(e) (1) Make-up Basic and Supplemental Contributions shall not
be included in any ADP Test unless and until federal law and/or regulations
promulgated by the Internal Revenue Service require their inclusion.
(2) As provided in Section B.2 of Appendix B, make-up
Basic and Supplemental Contributions shall be included in determining the amount
of a Participant's Annual Additions for the Limitation Year to which they relate
(not the Limitation Year in which they are actually contributed).
-35-
<PAGE>
ARTICLE V
EMPLOYER CONTRIBUTIONS
----------------------
5.1 Matching Contributions.
----------------------
(a) The Employer shall contribute to the Fund as Matching
Contributions an amount which is equal to two-thirds (2/3) of the Basic
Contributions of each Participant. Matching Contributions shall be allocated to
Sub-Account C of the Employer Account of each Participant for whom such
contributions are made.
(b) Subsection (a) notwithstanding, at the end of each Plan Year,
additional Matching Contributions shall be made in the discretion of the
Employer, as required, to provide each Participant with an annualized Matching
Contribution which is based on the Participant's Basic Contributions for such
Plan Year.
(c) The amount contributed as Matching Contributions under
Subsections (a) and (b) for a given Participant for a given Plan Year shall in
no event exceed two-thirds (2/3) of the lesser of (1) the Basic Contributions of
the Participant for that Plan Year, minus any amounts required to be distributed
under Section A.5 of Appendix A, or (2) the dollar limit described in Section
4.1(d) which is applicable for that Plan Year.
(d) If a Participant has been absent from work due to military service
and he meets the requirements for
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<PAGE>
coverage under USERRA (as set forth in Section 3.5), he shall have the right to
make up the Basic Contributions he might have contributed during his period of
military service, as provided in Section 4.8. If the Participant does make up
Basic Contributions, the Employer shall pay to the Fund as make-up Matching
Contributions an amount equal to a percentage of the Participant's make-up
Basic Contributions, as provided in Section 5.6.
5.2 Qualified Nonelective Contributions and Qualified Matching
----------------------------------------------------------
Contributions. To the extent provided in Appendix E, the Employer may make
- -------------
Qualified Nonelective Contributions and Qualified Matching Contributions to the
Plan.
5.3 Maximum Amount. For any Plan Year, the total of Matching
--------------
Contributions, Qualified Nonelective Contributions, and Qualified Matching
Contributions shall not exceed the maximum amount which will constitute an
allowable current deduction under the applicable provisions of the Code. All
Matching Contributions, Qualified Nonelective Contributions, and Qualified
Matching Contributions are expressly conditioned upon their deductibility for
federal income tax purposes.
5.4 Remittance of Contributions. Matching Contributions, Qualified
---------------------------
Nonelective Contributions, and Qualified Matching Contributions shall be
remitted to the Trustee as soon as is practicable, and in no event later than
the end of the period within which they may be paid and deducted for federal
-37-
<PAGE>
income tax purposes for the Plan Year for which they are contributed.
5.5 Actual Contribution Percentage Test. The Plan must satisfy the
-----------------------------------
ACP Test set forth in Appendix A as of the last day of each Plan Year.
5.6 USERRA Make-Up Match.
--------------------
(a) If a Participant has been absent from work due to military
service and he meets the requirements for coverage under USERRA (as set forth in
Section 3.5), he shall have the right to make up the Basic Contributions he
might have contributed during his period of military service, as provided in
Section 4.8. If the Participant does make up Basic contributions, the Employer
shall pay to the Fund as make-up Matching Contributions an amount equal to the
percentage of the Participant's make-up Basic Contributions specified in
Subsection (b).
(b) The Employer's make-up Matching Contributions shall equal
two-thirds (2/3) of the Participant's make-up Basic Contributions unless, for
the Plan Year to which the Participant's make-up Basic Contributions relate,
additional discretionary Matching Contributions were made pursuant to Section
5.1(b). In such event, the Participant's make-up Basic Contributions shall be
matched at the same rate as the Basic Contributions of other Participants for
the Plan Year in question.
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<PAGE>
(c) (1) Make-up Matching Contributions shall not be included in
any ACP Test unless and until federal law and/or regulations promulgated by the
Internal Revenue Service require their inclusion.
(2) As provided in Section B.2 of Appendix B, make-up
Matching Contributions shall be included in determining the amount of a
Participant's Annual Additions for the Limitation Year to which they relate (not
the Limitation Year in which they are actually contributed).
-39-
<PAGE>
ARTICLE VI
PARTICIPANTS' ACCOUNTS
----------------------
6.1 Accounts. All contributions and earnings thereon may be held in
--------
one commingled trust for the benefit of all Participants. However, in order
that the interest of each Participant may be accurately determined and
computed, separate Accounts and Sub-Accounts shall be maintained for each
Participant, as set forth in Section 2.1. These Accounts shall repre sent the
Participant's individual interest in the trust.
6.2 Apportionment of Gain or Loss. As of each Valuation Date, the
-----------------------------
value of each Investment Fund, as computed pursuant to Section 11.8, shall be
compared with the value of such Investment Fund as of the preceding Valuation
Date. Any difference in the value, not including contributions made since the
preceding Valuation Date, shall be the net gain or loss of such Investment Fund.
The net gain or loss shall be ratably apportioned by the Recordkeeper on its
books among the Participants' Accounts which are invested in such Investment
Fund at the current Valuation Date.
6.3 Accounting for Allocations. The Administrator shall establish or
--------------------------
provide for the establishment of accounting procedures for the purpose of making
the allocations, valuations, and adjustments to Participants' Accounts provided
for in this
-40-
<PAGE>
Article. From time to time such procedures may be modified for the purpose of
achieving equitable and nondiscriminatory allocations among the Accounts of
Participants in accordance with the general concepts of the Plan and the
provisions of this Article.
6.4 Maximum Allocation. A Participant's Annual Additions (as
------------------
defined in Appendix B) shall in no event exceed the limits set forth in Appendix
B.
6.5 Multiple Use Test. The Plan must satisfy the test set forth in
-----------------
Section A.9 of Appendix A for each Plan Year.
6.6 Separate Accounting for DCP Accounts. There shall be "acceptable
------------------------------------
separate accounting" (within the meaning of Treas. Reg. (S)1.401(a)-20, Q&A 5)
for all of the Accounts of each Participant who has a DCP Account.
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ARTICLE VII
DISTRIBUTION
------------
7.1 General. The interest of each Participant in the Fund shall be
-------
distributed in the manner, in the amount, and at the time provided in this
Article and Article VIII, except as provided in Article IX and except in the
event of the termination of the Plan.
7.2 Retirement.
----------
(a) A Participant who is employed by the Employer or an
Affiliated Company when he attains Retirement Age shall immediately become fully
vested in his Employer Account and shall have the right to receive retirement
benefits as soon as he actually retires.
(b) If a Participant is no longer employed by the Employer or an
Affiliated Company when he attains Retirement Age, his Accounts, valued in
accordance with Section 11.8, shall be distributed in accordance with the
provisions of this Article and Article VIII. However, if the value of the
Participant's Accounts is at least $3,500, no distribution shall be made until
(1) the Participant consents in writing to the distribution, or (2) he attains
age 62, or (3) he dies, whichever is earliest.
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<PAGE>
7.3 Late Retirement. A Participant who remains in the employ of the
---------------
Employer beyond Retirement Age shall participate in the Plan on the same basis
as other Participants. In general, the Participant's Accounts, valued in
accordance with Section 11.8, shall be distributed in accordance with the
provisions of this Article and Article VIII when the Participant actually
retires. However, if the Participant is affected by the distribution rule for
five-percent (5%) owners (set forth in Section 7.7(c)) and is still employed by
the Employer or an Affiliated Company when he reaches his Mandatory Benefit
Commencement Date, he shall receive benefits in accordance with Section 8.5.
7.4 Permanent Shutdown.
------------------
(a) A Participant whose employment with the Employer or an
Affiliated Company is terminated because of a "per manent shutdown" (as defined
in Subsection (b)) shall immediately become fully vested in his Accounts and
shall then be entitled to a distribution of his Accounts. However, if the value
of the Participant's Accounts is at least $3,500, no distribution shall be made
until (1) the Participant consents in writing to the dis tribution, or (2) he
attains age 62, or (3) he dies, whichever is earliest.
(b) For the purposes of this Section, the following definitions
shall apply:
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<PAGE>
(1) A "permanent shutdown" shall be:
(A) the sale or other disposition of a facility
or department by the Employer or an Affiliated Company;
(B) the sale or other disposition of the Employer of
which a facility or department is a part;
(C) the closing of a facility or depart ment, including
the cessation of the functions thereof, without any intention on the part of the
Employer or Affiliated Company to reopen the facility or reconstitute the
department or reassign the functions thereof; or
(D) other events or circumstances that are determined
by the Administrator, in a nondiscriminatory manner, to constitute a complete
and final cessation of the activities and functions of a facility or department.
(2) A "facility" shall include any building, plant,
warehouse, office, or other separately identifiable physical structure leased or
owned by the Employer or an Affiliated Company.
(3) A "department" shall include a profit center or other
smaller operating unit, division, or business segment of the Employer or an
Affiliated Company which has separate and clearly recognizable
responsibilities, functions, or reporting obligations, as evidenced by the
organizational structure of the Employer or Affiliated Company.
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<PAGE>
7.5 Death.
-----
(a) (1) A death benefit shall be payable if a Participant dies (A)
while he is employed by the Employer or an Affiliated Company or (B) after he
has terminated his employment with the Employer and all Affiliated Companies but
before distribution of his Accounts has begun. In either case, the
Participant's Accounts, valued in accordance with Section 11.8, shall be
distributed to the Participant's Spouse or designated beneficiary in accordance
with Section 8.6.
(2) As provided in Section 9.1, a Participant who is employed
by the Employer or an Affiliated Company when he dies shall immediately become
fully vested in his Employer Account.
(b) Upon the death of a Participant after the commencement of his
benefits in annuity or installment form (in accordance with Section 8.1(b) or
8.2(a)(2), (a)(3), (a)(4), or (a)(5)), the Participant's beneficiary generally
shall be entitled to receive only the amount (if any) payable under the form of
benefit in effect or under the annuity contract which has been distributed to
provide the Participant's benefits, and no other death benefits shall be payable
from the Plan. However, if benefits were being paid to the Participant directly
from the Fund, the Participant's beneficiary may elect to have the remaining
annuity or installment payments converted to one single-sum
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<PAGE>
payment.
(c) Upon the death of a former Participant after the distribution of
his benefits in a single-sum payment (in accordance with Section 8.1(a) or
8.2(a)(1)), no death benefit shall be payable from the Plan.
(d) In no event shall distribution of a death benefit payable under
this Section commence more than one year after the death of the Participant,
except in the case of a Participant's Spouse. The Participant's Spouse may
defer the commencement of the death benefit to a date no later than the date
that would have been the Participant's 62nd birthday.
(e) In determining the amount of the death benefit payable under this
Section, the deceased Participant's Accounts shall first be reduced by any
security held by the Plan by reason of a loan taken by the Participant, to the
extent that there is outstanding principal and interest.
7.6 Total Disability.
----------------
(a) If a Participant suffers a Total Disability prior to his
retirement and his employment is terminated because of such Total Disability, he
shall immediately become fully vested in his Employer Account. Following the
Administrator's finding of Total Disability, the Participant's Accounts, valued
in accordance with Section 11.8, shall be distributed in accordance with the
provisions of this Article and Article VIII.
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<PAGE>
However, if the value of the Participant's Accounts is at least $3,500, no
distribution shall be made until (1) the Participant consents in writing to the
distribution, or (2) he attains age 62, or (3) he dies, whichever is earliest.
(b) Total Disability shall be determined by the Administrator, who may
consult with a medical examiner he selects. The medical examiner shall have the
right to make such physical examinations and other investigations as may be
reasonably required to determine Total Disability.
7.7 Timing of Distribution.
----------------------
(a) In general, a Participant entitled to receive a benefit under this
Article shall commence to receive his benefit as soon as administratively
practicable. However, in accordance with applicable law, a benefit shall be
paid or shall commence before a Participant reaches Retirement Age only if the
Participant consents in writing to receive his benefit before Retirement Age.
The Participant's consent shall be valid only if it is given within 90 days
before his benefit commencement date. Such consent shall be given on a form
provided by the Committee.
(b) Distribution of a Participant's benefit under this Plan shall be
made or shall commence by his Mandatory Benefit Commencement Date. Unless
Subsection (c) applies, the Mandatory Benefit Commencement Date shall be the
April 1st that follows the later of:
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<PAGE>
(1) the end of the calendar year in which the Participant
attains age 70 1/2, or
(2) the end of the calendar year in which the Participant's
employment with the Employer and all Affiliated Companies terminates.
(c) Subsection (b) shall not apply in the case of a Participant
who is a five-percent (5%) owner (as defined in section 416(i)(1)(B) of the
Code) during the Plan Year in which he attains age 70 1/2. Such a Participant's
Mandatory Benefit Commencement Date shall be the April 1st that follows the end
of the calendar year in which he attains age 70 1/2, even if he is still working
on that date.
(d) If a Participant is affected by the distribution rule for
five-percent (5%) owners set forth in Subsection (c) and is still employed by
the Employer or an Affiliated Company when he reaches his Mandatory Benefit
Commencement Date, he shall receive benefits in accordance with Section 8.5.
Once distribution to a five-percent (5%) owner has commenced, distribution
shall continue even if the Participant ceases to be a five-percent (5%) owner.
(e) As provided in Section 8.5(b), any distribution which
commenced before a Participant's termination of employment, in accordance with
the provisions of a Prior Plan and applicable law as in effect before January 1,
1997, shall con-
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<PAGE>
tinue uninterrupted and shall not be affected by the provisions of this Plan.
(f) Assuming that he has made proper application for his
benefit, a Participant shall begin to receive his benefit no later than the
later to occur of:
(1) the 60th day after the end of the Plan Year
in which the Participant attains age 62, or
(2) the 60th day after the end of the Plan Year in which the
Participant's employment with the Employer and all Affiliated Companies
terminates.
(g) This Section shall be construed to comply with the
provisions of section 401(a)(9) of the Code and the regulations thereunder. Such
provisions shall override any distribution options in the Plan which are
inconsistent with section 401(a)(9) of the Code.
7.8 Claims for Benefits. Distribution of a Participant's benefit
-------------------
shall be made or shall commence when the Participant initiates proper
application for same with the Recordkeeper and completes and submits any written
forms requested by the Recordkeeper or Administrator. In the event that a
Participant fails to apply for payment of his benefit by his Retirement Date,
the Administrator and/or Recordkeeper shall make diligent efforts to locate such
Participant. Except as provided in Section 7.9, neither the Administrator nor
the Recordkeeper shall be under any
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<PAGE>
obligation to make payments at any time for the period during which all or any
portion of a Participant's benefit would have been payable if the Participant
had made timely application for distribution.
7.9 Mailing Address. Benefit payments and notifications hereunder
---------------
shall be deemed made when mailed to the last address furnished to the
Recordkeeper.
7.10 Election to Defer Distribution.
------------------------------
(a) A Participant who is entitled to a distribution of his
benefit before he attains age 62 has the right to elect to defer his
distribution. Not less than 30 days nor more than 90 days before the date on
which his benefit would otherwise be distributed, the Participant shall receive
from the Recordkeeper an election form explaining this right. The Participant
may elect to defer his distribution to age 62.
(b) As provided in Section 7.5(d), a surviving Spouse who is
entitled to a death benefit may elect to defer distribution to the date that
would have been the Participant's 62nd birthday.
(c) A non-spouse beneficiary who is entitled to a death benefit
payable in annuity or installment form may not elect to defer distribution
beyond the required commencement date for non-spouse beneficiaries set forth in
Section 7.5(d).
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<PAGE>
ARTICLE VIII
FORM OF BENEFIT
---------------
8.1 Normal Form of Benefit.
----------------------
(a) Except as provided in Subsection (b), the normal form of
benefit for all Participants shall be a single-sum distribution.
(b) There shall be "acceptable separate accounting" under
Section 6.6 for all of the Accounts of each Participant who has a DCP Account,
and the normal form of benefit for each such Participant shall be determined
under this Subsection (b).
(1) If the Participant is married, his normal form of
benefit shall be a joint and 50% survivor annuity (i.e., an annuity for the life
of the Participant with monthly installments payable after the death of the
Participant to such Participant's Spouse, if then living, for the life of such
Spouse, in an amount equal to fifty percent (50%) of the monthly benefit paid to
the Participant during his lifetime). The joint and 50% survivor annuity shall
be the Actuarial Equivalent of a single life annuity for the life of the
Participant and shall also be the Actuarial Equivalent of the vested portion of
the balance in the Participant's Accounts.
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<PAGE>
(2) If the Participant is unmarried, his normal form of
benefit shall be a single life annuity, with equal monthly installments payable
to the Participant for his lifetime. The single life annuity shall be the
Actuarial Equivalent of the vested portion of the balance in the Participant's
Accounts.
8.2 Optional Forms of Benefit.
-------------------------
(a) In lieu of the normal form of benefit described in Section
8.1, a Participant may elect, subject to the rules of Section 8.3, one of the
following optional forms of benefit:
(1) a single-sum payment; or
(2) a single life annuity, with equal monthly installments
payable to the Participant for his lifetime; or
(3) a period certain and life annuity, with equal monthly
installments payable to the Participant for his lifetime, and with 60, 120, or
180 monthly payments guaranteed; provided, however, that a Participant may not
elect this form of benefit if the period certain would at any time exceed the
maximum period given in Treas. Reg. (S)1.401(a)(9)-2; or
(4) a joint and survivor annuity with the Participant's
designated beneficiary, payable in monthly installments to the Participant for
his lifetime, with fifty percent (50%) or one hundred percent (100%) of the
amount of such monthly
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<PAGE>
installment payable after the death of the Participant to his designated
beneficiary, if then living, for the life of the beneficiary. If the beneficiary
named by the Participant is a person other than the Participant's Spouse, the
percentage payable to such beneficiary under the joint and survivor annuity may
not at any time exceed the applicable percentage given in Treas. Reg.(S)1.401
(a)(9)-2; or
(5) approximately equal monthly, quarterly, semiannual, or
annual installments over a period not to exceed the life expectancy of the
Participant or the joint life expectancies of the Participant and his
designated beneficiary (with such life expectancy or expectancies to be
determined on the basis of assumptions selected by the Administrator in
accordance with applicable regulations under the Code). The amount of each
installment may vary due to increases or decreases in the value of the
Participant's Accounts (determined in accordance with Section 11.8).
(b) Any optional form of benefit shall be the Actuarial
Equivalent of a single life annuity for the life of the Participant and shall
also be the Actuarial Equivalent of the vested portion of the Participant's
Accounts.
(c) A retired or terminated Participant shall elect his form of
distribution in accordance with the procedure set forth in Section 8.3. In the
event that a retired or termi-
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<PAGE>
nated Participant fails to make a valid election under this Article, his
Accounts shall be distributed to him in his normal form of benefit.
(d) A Participant shall have the right to elect a direct
rollover in accordance with Section 8.10 if he is to receive an "eligible
rollover distribution" (as defined in Section 8.10(c)).
8.3 Rules for Election of Optional Form of Benefit.
----------------------------------------------
(a) (1) Not more than 90 days nor less than 30 days before his
benefits are to commence, a Participant shall receive from the Administrator or
Recordkeeper benefit election materials that explain the options available to
him.
(2) If the Participant has a DCP Account, the benefit
election materials provided to him shall include a written explanation of:
(A) the terms and conditions of his normal form
of benefit;
(B) the Participant's right to elect an optional form
of benefit and the effect of electing not to receive his normal form of
benefit;
(C) the rights of the Participant's spouse with
respect to any election of an optional form of benefit; and
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<PAGE>
(D) the Participant's right to revoke an election to
receive an optional form of benefit and the effect of such a revocation.
(b) The date on which the Participant receives the benefit
election materials described in Subsection (a) marks the beginning of the
Participant's benefit election period. The benefit election period shall run for
at least 30 days but not more than 90 days, except as otherwise provided in
Subsection (f).
(c) The Participant may elect an optional form of benefit at any
time during his benefit election period by filing written notice with the
Recordkeeper in the form and manner prescribed by the Recordkeeper.
(d) If a married Participant has a DCP Account, his election of
an optional form of benefit shall be given effect only if his Spouse consents to
the election in the form and manner described in Section 8.4 (unless Section 8.4
provides an exception to this rule).
(e) The Participant shall have the right to revoke his election
of an optional form of benefit. A revocation may be made at any time (and any
number of times) during the Participant's benefit election period and may be
made without the consent of the Participant's Spouse.
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<PAGE>
(f) In general, the benefit election period must run for at
least 30 days before any distribution may be made. However, distribution may be
made or may commence at any time that is more than seven days after the
Participant has received the benefit election materials described in Subsection
(a), if the Participant elects (with spousal consent, if applicable) to waive
his right to a 30-day benefit election period.
(g) A Participant's "annuity starting date" (as defined in
Treas. Reg. (S)1.401(a)-20, Q&A-10) must be after the date on which the benefit
election materials described in Subsection (a) are provided to the Participant,
but may be before the date on which the Participant elects an optional form of
benefit and may also be before the Participant's actual benefit commencement
date.
(h) In the event of the death of a Participant's designated
beneficiary prior to the Participant's benefit commencement date, but after an
election of a joint and survivor annuity has been made hereunder, the election
shall be automatically revoked.
(i) The rules for electing an optional form of benefit shall be
applied in a uniform and nondiscriminatory manner.
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<PAGE>
8.4 Spousal Consent.
---------------
(a) A married Participant who has a DCP Account may elect to
receive an optional form of benefit only if:
(1) the Spouse consents in writing not to receive the
normal form of benefit and, if applicable, consents in writing to the specific
beneficiary designated by the Participant pursuant to his election;
(2) the Spouse's consent acknowledges its own effect; and
(3) the Spouse's consent is witnessed by a notary public.
(b) A married Participant who has a DCP Account may elect to
waive his right to a 30-day benefit election period only if his Spouse consents
in the form and manner described in Subsection (a).
(c) Except as specifically provided to the contrary in this
Plan, a married Participant who has a DCP Account may not change his form of
benefit and/or beneficiary without the consent of his Spouse, unless the
original consent of the Spouse expressly permits the Participant to make changes
without further spousal consent.
(d) A Participant with a DCP Account is not required to comply
with the spousal consent rules if he establishes to the satisfaction of a Plan
representative either that
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<PAGE>
he has no Spouse or that his Spouse cannot be located, or if he is legally
separated or has been abandoned (within the meaning of local law) and has a
court order to that effect.
(e) A Participant with a DCP Account is not required to obtain
his Spouse's consent to the optional form of benefit he is electing if that form
of benefit is a joint and 100% survivor annuity with the Participant's Spouse as
the joint annuitant.
8.5 Benefits Payable to Five-Percent (5%) Owners.
--------------------------------------------
(a) If a Participant is affected by the distribution rule for
five-percent (5%) owners set forth in Section 7.7(c) and is still employed by
the Employer or an Affiliated Company when he reaches his Mandatory Benefit
Commencement Date, he shall begin to receive benefits in accordance with the
minimum distribution rules of section 401(a)(9) of the Code. When he actually
retires, the balance remaining in his Accounts shall be distributed to him in
the normal form described in Section 8.1 or in the optional form he elects under
Section 8.2.
(b) If distribution to a Participant who is not a five-percent
(5%) owner commenced before the Participant terminated his employment with the
Employer and all Affiliated Companies, in accordance with the provisions of a
Prior Plan and applicable law as in effect before January 1, 1997, distribution
shall not be affected by the provisions of this Plan, but shall
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<PAGE>
continue uninterrupted.
(c) For the purpose of making a distribution required under
section 401(a)(9) of the Code to a Participant who is still employed, the
Participant's Accounts shall be valued as follows:
(1) The amount to be distributed on the Mandatory Benefit
Commencement Date shall be based on the value of the Participant's Accounts as
of the last Valuation Date in the second calendar year preceding the calendar
year in which the Mandatory Benefit Commencement Date occurs.
(2) The amount to be distributed by the end of the calendar
year which contains the Mandatory Benefit Commencement Date shall be based on
(A) the value of the Participant's Accounts as of the last Valuation Date in
the calendar year preceding the calendar year which contains the Mandatory
Benefit Commencement Date, reduced by (B) the amount distributed on the
Mandatory Benefit Commencement Date .
(3) The amount to be distributed by the end of each
calendar year after the calendar year which contains the Mandatory Benefit
Commencement Date, for so long as the Participant continues his employment,
shall be based on the value of the Participant's Accounts as of the last
Valuation Date in the preceding calendar year, not including the distribution
for the preceding calendar year.
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<PAGE>
(4) The value of the Participant's Accounts determined
under paragraph (1), (2), or (3) shall be increased by the additional
contributions, if any, which are allocated to the Accounts after the relevant
Valuation Date, but as of dates that fall within the calendar year containing
the relevant Valuation Date.
(d) This Section shall be construed to comply with the
provisions of section 401(a)(9) of the Code and the regulations thereunder.
8.6 Death Benefits.
--------------
(a) Except as provided in Subsection (b), a death benefit
payable under Section 7.5(a) shall be paid to the Participant's designated
beneficiary in the form of a single-sum payment that is equal to the vested
portion of the balance in the deceased Participant's Accounts.
(b) (1) If a Participant who has a DCP Account dies (1) while
he is employed by the Employer or an Affiliated Company or (2) after he has
terminated his employment with the Employer and all Affiliated Companies but
before distribution of his Accounts has begun, a death benefit shall be payable
under Section 7.5(a). If the Participant has a surviving Spouse, the death
benefit shall be paid to the Spouse in the form of an annuity for the life of
the Spouse that is the Actuarial Equivalent of the vested portion of the balance
in the deceased Par-
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<PAGE>
Participant's Accounts, unless an election under Subsection (c) is in effect. If
the Participant has no surviving Spouse, the death benefit shall be paid to the
Participant's designated beneficiary in the form of a single-sum payment that is
equal to the vested portion of the balance in the deceased Participant's
Accounts.
(2) If the deceased Participant's surviving Spouse is his
beneficiary, she may elect to receive the vested portion of the balance in the
deceased Participant's Accounts in the form of a single-sum payment, rather than
as a life annuity.
(3) A death benefit payable to a surviving Spouse shall commence
(A) on the first day of any month when the Participant could have elected to
receive immediate retirement benefits, but not later than the date that would
have been the Participant's 62nd birthday, as elected in writing by the
surviving Spouse; or (B) if the Participant has attained Retirement Age when he
dies, on the first day of the month following the month in which he dies. A
death benefit payable to any other beneficiary shall be distributed no later
than one year after the Participant's death.
(c) (1) Subsection (b) notwithstanding, a married Participant who
has a DCP Account may elect, during the period beginning on the first day of the
Plan Year in which he attains age 35 and ending on the date of his death, to
have death
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<PAGE>
benefits be payable to a beneficiary other than his Spouse and/or to have death
benefits be payable in a single sum, if the Participant's Spouse consents in
writing, in the form and manner described in Section 8.4(a), to the alternate
beneficiary and/or the single-sum form of death benefit.
(2) Except as provided in Section 7.10(b), death benefits
payable under this Subsection shall be distributed to the beneficiary named by
the Participant no later than one year after the Participant's death.
(d) Except as specifically provided to the con trary in this Plan, a
married Participant who has a DCP Account may not change his beneficiary or the
form of death benefit he has elected without the consent of his Spouse, unless
the origi nal consent of the Spouse expressly permits the Participant to make
changes without further consent of the Spouse, or unless the Participant's
change is to name his Spouse as his beneficiary and to specify a life annuity as
the form of death benefit.
(e) A married Participant who has a DCP Account is not required to
comply with the consent requirement of Sub section (c) (1) if he establishes to
the satisfaction of a Plan representative that his Spouse cannot be located, or
if he is legally separated or has been abandoned (within the meaning of local
law) and has a court order to that effect.
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<PAGE>
(f) A beneficiary who is a surviving Spouse shall have the right to
elect a direct rollover in accordance with Section 8.10 if she is to receive an
"eligible rollover distribution" (as defined in Section 8.10(c)).
8.7 Beneficiary Designation.
-----------------------
(a) Provided that he obtains any spousal consent that may be
required, a Participant may at any time designate or change the beneficiary or
beneficiaries who shall receive benefits after his death. A designation or
change of designation shall be made by executing and filing with the
Administrator a form provided by the Administrator for that purpose.
(b) Subsection (a) notwithstanding, the designation of a beneficiary
under a joint and survivor annuity shall be fixed and may not be changed on or
after the date on which benefit payments commence.
(c) No designation, revocation, or change of beneficiaries shall be
valid and effective unless and until filed with the Administrator. If no
designation is made, or if all of the beneficiaries named in his designation
predecease the Participant or cannot be located by the Administrator, the
interest, if any, of the deceased Participant shall be paid to the Participant's
surviving Spouse or, if none, to the Participant's estate.
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<PAGE>
8.8 Information to Participants.
---------------------------
(a) The Recordkeeper shall supply to each Participant who has a DCP
Account written information relating to the terms and conditions of the pre-
retirement surviving Spouse annuity and the joint and survivor annuity form of
benefit; the rules relating to the election of optional forms of benefit for
married Participants and the revocation of such elections; and the rights of the
Participant's Spouse with respect to all such benefits.
(b) The information relating to the pre-retirement surviving Spouse
annuity shall be provided:
(1) once during the Plan Year in which the Participant attains
age 32, 33, or 34, or, if later, within a reasonable period of time after the
Participant first begins to participate in the Plan;
(2) in the case of a Participant who terminates his employment
before attaining age 35 and before receiving such written information, within a
reasonable period of time after the Participant's termination of employment; and
(3) in the case of a Participant to whom the pre-retirement
surviving Spouse benefit has not previously applied, within a reasonable period
of time after such benefit first applies to the Participant.
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<PAGE>
(c) The information relating to the joint and survivor annuity form
of benefit shall be provided within a reasonable period of time before the
Participant's benefit commencement date.
8.9 Cash-Outs of Small Accounts.
---------------------------
(a) If a Participant's vested interest in his Accounts, valued in
accordance with Section 11.8 as of the date on which he terminates employment,
is less than $3,500, the Participant's Accounts shall be distributed in a
single-sum payment without the recipient's consent. A recipient who is a
Participant or a Participant's surviving Spouse shall have the right to elect a
direct rollover in accordance with Section 8.10 if the distribution is an
"eligible rollover distribution" (as defined in Section 8.10(c)).
(b) In no event shall a distribution be made under this Section
after (1) the first day of the first period for which an amount is payable as an
annuity or (2) in the case of a benefit not payable in annuity form, the first
day on which all events have occurred which entitle the Participant to receive
his benefit in a form other than an immediate single-sum payment, unless the
Participant and his Spouse (if applicable) (or, if the Participant has died, his
surviving Spouse) consent(s) in writing to receive an immediate single-sum
payment. Such consent shall be made in a form and manner similar to that
described in Section
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8.4(a).
8.10 Direct Rollover Option.
----------------------
(a) A Participant or a Participant's surviving Spouse or an
alternate payee under a qualified domestic relations order (as defined in
section 414(p) of the Code) who is to receive an "eligible rollover
distribution" (as defined in Subsection (c)) may elect to have the amount of
such distribution transferred directly in a direct rollover to an "eligible
retirement plan" (as defined in Subsection (d)).
(b) If a Participant or surviving Spouse or alternate payee is to
receive an eligible rollover distribution of more than $500, he may choose to
have part of the distribution transferred directly in a direct rollover to an
eligible retirement plan and to have the remainder paid to him. The amount
which is to be transferred must be at least $500.
(c) (1) For the purpose of this Section, an "eligible rollover
distribution" shall mean a distribution from the Plan that is a single-sum
payment or one of the payments in a series of installment payments made at least
annually over a period of less than 10 years. The dollar amount of an eligible
rollover distribution shall not include the portion of such distribution that
is a required minimum distribution under section 401(a)(9) of the Code or the
portion of such distribution that consists of voluntary or required
contributions, but shall
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include earnings on such contributions.
(2) No amount that is distributed to a Highly Compensated
Employee to prevent a violation of the ACP Test or the ADP Test shall be an
eligible rollover distribution. Similarly, no amount that is distributed to
prevent a violation of the dollar limit on employee before-tax contributions
under section 402(g) of the Code shall be an eligible rollover distribution.
(d) For the purpose of this Section, an "eligible retirement plan"
shall mean:
(1) in the case of a Participant or an alternate payee, one of
the following: an individual retirement account or an individual retirement
annuity, a qualified trust if it is part of a defined contribution plan, or an
annuity plan described in section 403(a) of the Code;
(2) in the case of a Participant's surviving Spouse, an
individual retirement account or an individual retirement annuity.
(e) (1) Within a reasonable period of time before an eligible
rollover distribution is to be made, the Recordkeeper shall provide to the
Participant or surviving Spouse or alternate payee an explanation of his right
to elect a direct rollover and the federal tax withholding consequences to him
if he does not elect a direct rollover.
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(2) A Participant or surviving Spouse or alternate payee who
elects a direct rollover must provide all information that may be required to
complete the direct rollover.
(3) A Participant or surviving Spouse or alternate payee who is
entitled to elect a direct rollover with respect to all or any portion of a
distribution from the Plan but who does not make any election shall be deemed to
have rejected the direct rollover option.
8.11 Payment of Stock. Distribution of benefits shall normally be
----------------
made in cash. However, a Participant who has elected to receive a single-sum
payment may request, in the manner and at the time prescribed by the
Recordkeeper:
(a) to receive his interest in the Unisource Stock Fund in the form
of whole shares of Unisource Stock, with cash for fractional shares, and/or
(b) to receive his interest in the IKON Stock Fund in the form of
whole shares of IKON Stock, with cash for fractional shares.
8.12 Annuity Contracts. At the direction of the Administrator, benefits
-----------------
payable in annuity form may be provided by an annuity contract purchased from an
insurance company. The terms of such annuity contract shall prohibit the cash
surrender of the annuity contract and shall make the payments due under the
annuity contract nonassignable. The distribution of such annuity
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contract shall be in complete discharge of the Plan's liability to the
Participant accepting the annuity contract.
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ARTICLE IX
VESTING
-------
9.1 Nonforfeitable Amounts.
----------------------
(a) A Participant who is employed by the Employer or an Affiliated
Company when he attains Retirement Age, suffers a Total Disability, or dies
shall immediately become fully vested in his Employer Account, to the extent
that he is not already fully vested in his Employer Account in accordance with
the following Subsections.
(b) Except as provided in the following Subsections, a Participant
shall be vested in his Employer Account in accordance with the following
schedule:
Years of
Vesting Service Percent Vested
--------------- --------------
less than 2 years 0 percent
2 years 25 percent
3 years 50 percent
4 years 75 percent
5 years 100 percent
(c) In general, Subsection (b) shall not apply to a Participant who
formerly participated in the Alco SPP and who had at least one Hour of Service
on or after January 1, 1989 as well as one Hour of Service before January 1,
1989. Such a Participant shall become vested in contributions to his Employer
Account in accordance with the "class-year" vesting schedule in
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effect under the Alco SPP on December 31, 1988 unless and until the vesting
schedule set forth in Subsection (b) provides more rapid vesting for the
Participant.
(d) Certain Participants who participated in retirement plans merged
with and into the Alco RSP before January 1, 1997 were permitted to elect,
under the Alco RSP, to continue to vest in accordance with the vesting
schedules of their respective Prior Plans. Any Participant who made such an
election under the Alco RSP shall continue to vest in his Employer Account
under this Plan in accordance with the vesting schedule of his Prior Plan.
(e) A Participant shall at all times be one hundred percent (100%)
vested in his After-Tax, Before-Tax, Money Purchase, Rollover, QMAC, and QNEC
Accounts and all accounts transferred from a Prior Plan.
9.2 Vesting Service.
---------------
(a) An employee shall earn a year of Vesting Service for each
calendar year during which he is credited with 500 or more Hours of Service.
(b) Beginning on August 5, 1993, an employee shall be credited with
Hours of Service toward a year of Vesting Service for any period during which he
is absent from work on unpaid leave under the Family and Medical Leave Act of
1993.
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(c) If an employee has been absent from work due to military service
and he meets the requirements for coverage under USERRA (as set forth in Section
3.5), he shall be credited with Hours of Service toward Vesting Service for his
period of military service.
9.3 Treatment of Terminated Vested Participant.
------------------------------------------
(a) In the case of a Participant whose employment with the Employer
and all Affiliated Companies has terminated (other than as described in Article
VII) and whose vested interest in his Accounts is valued at less than $3,500,
the vested portion of his Accounts shall be distributed to him in a single-sum
payment within 60 days after the end of the Plan Year in which his employment
terminates. The Participant shall have the right to elect a direct rollover in
accordance with Section 8.10 if his single-sum payment is an "eligible rollover
distribution" (as defined in Section 8.10(c)).
(b) In the case of a Participant whose employment with all Employees
and Affiliated Companies has terminated (other than as described in Article VII)
and whose vested interest in his Accounts is valued at $3,500 or more, the
vested portion of his Accounts shall be distributed to him pursuant to Article
VIII as if he had continued employment until age 62. However, the Recordkeeper
shall make distribution to the Participant earlier than his 62nd birthday if the
Participant requests earlier
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distribution.
9.4 Break in Service.
----------------
(a) An employee shall incur a Break in Service if he is credited
with fewer than 500 Hours of Service during the 12-month period of any Plan
Year.
(b) If an employee is absent from work by reason of pregnancy,
childbirth, or adoption, or for purposes of the care of his child immediately
after birth or adoption, he shall be credited, solely for purposes of
forestalling a Break in Service, with the Hours of Service with which he would
have been credited but for the absence; or, if such hours cannot be determined,
with eight Hours of Service per normal workday. The total number of hours to be
treated as Hours of Service under this Subsection shall not exceed 501. The
hours described in this Subsection shall be credited either in the Plan Year in
which the absence from work begins, if the employee would be prevented from
incurring a Break in Service in that Plan Year because the period of absence is
treated as Hours of Service under this Subsection, or, in any other case, in the
Plan Year immediately following the one in which the absence from work begins.
(c) If an employee is absent from work due to military service such
that he meets the requirements for coverage under USERRA (as set forth in
Section 3.5) or such that his right to reemployment is protected by any other
law, he shall not incur
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a Break in Service during or on account of his period of military service.
9.5 Forfeitures.
-----------
(a) If a Participant is not reemployed by the Employer or an
Affiliated Company before the end of the Plan Year in which occurs the earlier
of
(1) the date on which he receives a distribution of his
benefit, or
(2) the date on which he incurs a Break in Service,
his Employer Account shall be closed as of the end of such
Plan Year.
(b) The non-vested amounts held in a closed Account shall be
forfeited, and the Employer that last employed the Participant shall use the
forfeiture in the future as Matching Contributions.
9.6 Deemed Cash-Out. A Participant who terminates his employment with the
---------------
Employer and all Affiliated Companies before he is vested in his Employer
Account shall be deemed to have received a complete distribution of his Employer
Account on the date on which his other Accounts are distributed to him (or, if
he has no other Accounts, on the day after his employment terminates). His
Employer Account shall then be closed and forfeited, as provided in Section 9.5.
If he is subsequently reemployed by
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the Employer or an Affiliated Company before he incurs five consecutive Breaks
in Service, his Employer shall immediately contribute to his new Employer
Account an amount equal to the amount forfeited from his previous Accounts.
9.7 "Buy-Back" Provision.
--------------------
(a) If a terminated Participant who has a vested interest in his
Employer Account receives a distribution of his benefit before he incurs five
consecutive Breaks in Service, his Employer Account shall be closed and the non-
vested amount in it shall be forfeited, as provided in Section 9.5. If he is
subsequently reemployed by the Employer or an Affiliated Company, and if he
repays the full amount of the distribution he received (as provided in
Subsection (b)), his Employer shall immediately contribute to his new Employer
Account an amount equal to the amount forfeited from his previous Accounts.
(b) Repayment of an amount previously distributed must be made in
cash or in Unisource Stock before the earlier of (1) the end of the Plan Year in
which the Participant incurs his fifth consecutive Break in Service or (2) the
fifth anniversary of the Participant's date of reemployment.
(c) Any amount repaid under this Section shall be credited to the
reemployed Participant's new Employer Account. No portion of a repayment shall
be subject to the ACP Test or the ADP Test.
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9.8 Effect of Break in Service. A Participant who incurs a Break in
--------------------------
Service and who is then reemployed by the Employer or an Affiliated Company
shall have his pre-break and post-break Vesting Service aggregated hereunder if:
(a) he has a vested interest in his Employer Account, or
(b) (1) he does not have a vested interest in his Employer Account
and (2) the number of his consecutive Breaks in Service is less than the greater
of (A) the number of years of Vesting Service he had accrued prior to his Break
in Service or (B) five.
In any other case, a Participant shall receive no credit for his pre-break
Vesting Service.
9.9 Effect of Post-Break Vesting Service. If the number of a
------------------------------------
Participant's consecutive Breaks in Service is equal to or greater than five,
the Participant's post-break Vesting Service shall not increase the vesting
percentage (if any) in that part of his Employer Account accrued prior to his
Break in Service. However, if the number of a Participant's consecutive Breaks
in Service is less than five, the Participant's post-break Vesting Service shall
increase the vesting percentage in that part of his Employer Account accrued
prior to his Break in Service, including amounts restored on the repayment of
prior distributions under Section 9.7.
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ARTICLE X
ADMINISTRATION
--------------
10.1 Administrator.
-------------
(a) The Administrator of the Plan shall be the person(s) from time
to time appointed to that position by the Board of Directors. The Administrator
shall be responsible for the general administration of the Plan under the policy
guidance of the Unisource Committee. The Administrator may be in the employ of
Unisource and may be a member of the Unisource Committee or a Trustee. The
Administrator shall receive no special or additional compensation, other than
reimbursement of expenses, for his service as Administrator.
(b) The Administrator shall have all powers necessary to administer
the Plan in accordance with its terms and applicable law, and shall also have
discretionary authority to determine eligibility for participation or benefits
and to construe the terms of the Plan. Any construction, interpretation, or
application of the Plan by the Administrator (or the Unisource Committee with
regard to appeals under Section 10.6) shall be final, conclusive, and binding on
all persons.
10.2 Duties and Powers of Unisource Committee. In addition to the
----------------------------------------
duties and powers described elsewhere herein, the Unisource Committee shall have
the following special duties and
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powers:
(a) to enact uniform and nondiscriminatory rules, regulations, and
procedures to carry out the provisions of the Plan;
(b) to decide appeals under Section 10.6; and
(c) to retain such consultants, accountants, actuaries, and
attorneys as may be deemed necessary or desirable to render statements, reports,
and advice with respect to the Plan and to assist the Administrator in complying
with all applicable rules and regulations affecting the Plan. Any consultants,
accountants, or attorneys may be the same as those retained by Unisource or
another Employer.
10.3 Duties and Powers of Administrator. In addition to the duties
----------------------------------
and powers described elsewhere herein, the Administrator shall have the
following specific duties and powers:
(a) to enact uniform and nondiscriminatory rules, regulations, and
procedures to carry out the provisions of the Plan;
(b) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan;
(c) to conduct the day-to-day administration of the Plan subject to
the control and guidance of the Unisource Committee;
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(d) to interpret the provisions of the Plan;
(e) to set uniform policies in order that the Plan may be operated
in a nondiscriminatory manner;
(f) to evaluate administrative procedures;
(g) to appoint, at the Administrator's discretion, an administrative
committee; and
(h) to delegate such duties and powers as the Administrator shall
determine from time to time to any person or persons, including the Unisource
Committee.
10.4 Functioning of Administrator. The Administrator and the
----------------------------
Unisource Committee shall keep accurate records and minutes of meetings,
interpretations, and decisions. The Unisource Committee shall act by majority
vote of the members, and such action shall be evidenced by a written document.
10.5 Adverse Determinations.
----------------------
(a) If at any time the Administrator makes a determination adverse
to a Participant or any other claimant with respect to a written claim for
benefits or participation under the Plan (including a withdrawal request), the
Administrator shall notify the claimant in writing of such determination,
setting forth:
(1) the specific reason(s) therefor,
(2) the reference to the specific provision(s) hereof on which
such determination is based,
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(3) a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary, and
(4) an explanation of the rights and procedures set forth in
this Section.
(b) The Administrator's written decision shall be forwarded to the
claimant within 90 days of the Administrator's receipt of the claim; provided,
however, that in special circumstances the Administrator may extend the
response period for up to an additional 90 days, in which event the
Administrator shall notify the claimant in writing of the extension and shall
specify the reason(s) for the extension.
10.6 Appeal from Adverse Determination.
---------------------------------
(a) A Participant or any other claimant who receives notice of an
adverse determination by the Administrator with respect to his claim may himself
or through his duly authorized representative request a review of the adverse
determination by the Unisource Committee. Such a request must be in writing
and must be made within 60 days of receipt of the notice of the adverse
determination. The claimant or his duly authorized representative shall also
have the right to review pertinent documents and to submit issues and comments
with respect to the controversy to the Unisource Committee in writing.
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(b) The Unisource Committee shall render a decision, in writing,
within 60 days of receipt of a request for review. The Unisource Committee's
decision shall set forth the specific reason(s) for the decision reached and the
specific provisions of the Plan on which the decision is based. A copy of such
decision shall be delivered to the Participant or other claimant and shall be
maintained in the records of the Unisource Committee. In special circumstances,
the Unisource Committee may extend the 60-day response period for up to an
additional 60 days, in which event written notice of the extension shall be sent
to the claimant prior to the commencement of the extension.
10.7 Deemed Denials. If for any reason the written notice of adverse
--------------
determination described in Section 10.5 is not furnished within 90 days of the
Administrator's receipt of a claim for benefits or participation, the claim
shall be deemed to be denied. Likewise, if for any reason the written decision
on review described in Section 10.6 is not furnished within the time prescribed,
the claim shall be deemed to be denied on review.
10.8 Qualified Domestic Relations Orders.
-----------------------------------
(a) The Administrator shall have the duty to determine whether any
domestic relations order received by the Plan is a qualified domestic relations
order as defined in section 414(p) of the Code. To the extent provided in any
domestic relations order which is found to be a qualified domes-
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tic relations order (as defined in the Code), the former Spouse of a Participant
shall be treated as a surviving Spouse for purposes of this Plan, and any other
Spouse of the Participant shall not be treated as a Spouse of the Participant.
(b) If so ordered by a court of competent jurisdiction, a domestic
relations order shall not fail to be a qualified domestic relations order
pursuant to section 414(p) of the Code even if the order requires payments to be
made to an alternate payee (as defined in section 414(p)(8) of the Code) prior
to (1) the Participant's earliest retirement age (as defined in section
414(p)(4)(B) of the Code) or (2) any date on which the Participant would be
entitled to a Plan withdrawal or distribution.
10.9 Indemnification. The Administrator and each member of the Unisource
---------------
Committee shall be indemnified by Unisource against expenses (other than amounts
paid in settlement to which Unisource does not consent) reasonably incurred by
him in connection with any action to which he may be a party by reason of his
performance of administrative functions and duties under the Plan, except in
relation to matters as to which he shall be adjudged in such action to be
personally guilty of willful misconduct or gross negligence in the performance
of his duties. The foregoing right to indemnification shall be in addition to
such other rights as the Administrator or Unisource
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Committee member may enjoy as a matter of law or by reason of insurance coverage
of any kind. Rights granted hereunder shall be in addition to and not in lieu of
any rights to indemnification to which the Administrator or Unisource Committee
member may be entitled pursuant to the by-laws of Unisource. The foregoing
indemnification provisions shall not contravene applicable state law.
10.10 Use of the Telephone. To the extent provided in the Plan or in
--------------------
Plan procedures adopted by the Administrator or the Unisource Committee, a
Participant may issue instructions or requests to the Recordkeeper by telephone.
Any instructions or requests received by the Recordkeeper from a Participant by
telephone shall be deemed to include the Participant's signature and shall
constitute complete approval from the Participant for the Recordkeeper to
proceed with the request or instructions.
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ARTICLE XI
THE FUND
--------
11.1 Designation of Trustee. Unisource, by appropriate resolution of the
----------------------
Board of Directors, shall name and designate a Trustee and shall enter into a
Trust Agreement with such Trustee. Unisource shall have the power, by
appropriate resolution of the Board of Directors, to amend the Trust Agreement,
remove the Trustee, and designate a successor Trustee, all as provided in the
Trust Agreement. All of the assets of the Plan shall be held by the Trustee for
use in accordance with this Plan in providing for the benefits hereunder.
11.2 Fund.
----
(a) The contributions deposited by the Employer in the Fund in
accordance with this Plan shall constitute a fund held for the benefit of
Participants and their eligible beneficiaries under and in accordance with this
Plan. Prior to the satisfaction of all liabilities under the Plan in the event
of termination of the Plan, no part of the corpus or income of the Fund shall be
used for or diverted to purposes other than for the exclusive benefit of such
Participants and beneficiaries (including necessary administrative costs),
except as expressly provided hereafter in this Plan and in the Trust Agreement.
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(b) Subsection (a) notwithstanding, in the case of a contribution
made by the Employer (1) as a mistake of fact; or (2) for which a tax deduction
is disallowed, in whole or in part, by the Internal Revenue Service; or (3)
which is conditioned upon the qualification of the Plan under section 401(a) of
the Code, and an application for determination is made to the Internal Revenue
Service within the time prescribed by law, but a determination of qualification
cannot be obtained, the Employer shall be entitled to a refund of said
contributions.
(c) Any refund of contributions described in Subsection (b) must be
made (1) within one year after payment of a contribution made as a mistake of
fact, or (2) within one year after disallowance of the tax deduction, to the
extent of such disallowance, or (3) within one year of the date on which the
initial qualification of the Plan is denied by the Internal Revenue Service, as
the case may be.
11.3 No Interest in Fund. No person shall have any interest in or right
-------------------
to any part of the assets or income of the Fund, except to the extent expressly
provided in this Plan and in the Trust Agreement.
11.4 Trustee. The Trustee shall be a fiduciary with respect to management
-------
and control of Plan assets held by it and shall have exclusive and sole
responsibility for the custody and investment thereof in accordance with this
Article XI and
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the Trust Agreement. The Trustee's accounts shall be audited annually by
auditors selected by Unisource.
11.5 Investment Committee. The Investment Committee shall be the
--------------------
named fiduciary with respect to the investment of Plan assets and the selection
of Investment Funds to which Participants may direct their accounts.
11.6 Investment of Matching Contributions.
------------------------------------
(a) Except as provided in Subsection (b) and in Section 11.13, the
Trustee shall invest all Matching Contributions in Unisource Stock. Unisource
Stock acquired in the manner prescribed by this Plan shall be held by or for the
Trustee.
(b) Subject to the provisions of Section 11.13, all Matching
Contributions not invested in Unisource Stock shall be held by the Trustee in
Cash Equivalents. It is intended, however, that such contributions shall be
held in Cash Equivalents only temporarily, pending the purchase of Unisource
Stock, or to eliminate fractional shares of Unisource Stock, or pending a
distribution to a Participant in cash.
(c) The Trustee shall hold for future allocation any shares of
Unisource Stock which it decides to retain upon a Participant's withdrawal and
any shares forfeited when an Employer Account is closed as provided in Section
9.5(b).
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11.7 Investment of Other Accounts.
----------------------------
(a) Participants shall be permitted to direct the investment of
their Accounts only with respect to the types of contributions and only to the
extent specified in this Section.
(b) In general, the Trustee shall invest a Par ticipant's Accounts
and income thereon in the Investment Funds selected by the Participant. However,
a Participant may not select the IKON Stock Fund as an investment option, and a
Participant shall have no choice as to the investment of new Matching
Contributions going into his Employer Sub-Account C, which shall be invested
entirely in the Unisource Stock Fund.
(c) Each Participant shall specify the percentage (in increments of
one percent (1%)) to be invested in each Investment Fund he chooses. A
Participant may change his choice(s) with respect to new contributions by giving
prior notice to the Recordkeeper. If notice is given to the Recordkeeper by
4:00 p.m. Eastern Time on a business day on which the New York Stock Exchange is
open, the change shall be effective as of the close of that business day.
Otherwise, the change shall be effective as of the close of the next business
day on which the New York Stock Exchange is open.
(d) Basic Contributions made pursuant to a deemed election under
Section 4.1(b) shall be invested in the Investment Funds selected by the
Participant as specified in Subsection (b).
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If the Participant fails to direct the investment of these Basic Contributions,
the Trustee shall invest the contributions in the Stable Value Fund.
(e) The amounts assigned by all Participants to each Investment Fund
shall be commingled for investment purposes. Investments acquired in the manner
prescribed by this Plan shall be held by or for the Trustee.
(f) All interest, dividends, capital gains distributions, and other
income received with respect to any shares of an Investment Fund credited to a
Participant's Accounts shall be reinvested by the Trustee in additional shares
of that Investment Fund and credited to the Participant's Accounts. Any
dividends paid with respect to the Unisource Stock Fund or the IKON Stock Fund
shall be used to purchase additional shares of the stock of that Investment
Fund, except as provided in Section 11.13.
(g) The other provisions of this Section notwithstanding, the
Trustee may hold assets of the Fund and make distributions from the Fund in the
form of cash, without interest, if, for administrative purposes, it becomes
necessary or practical to do so.
11.8 Valuation of Investment Funds.
-----------------------------
(a) The amount in any Investment Fund debited or credited to the
Accounts of a Participant shall be determined by
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the Recordkeeper on the basis of the Fair Market Value of that Investment Fund.
If the Recordkeeper receives a Participant's request for a transfer, loan,
withdrawal, or distribution before 4:00 p.m. Eastern Time on a business day on
which the New York Stock Exchange is open, the valuation shall be based on the
Fair Market Value as of the close of that business day, or, in the case of a
loan, the Fair Market Value as of the business day immediately preceding the
business day on which the loan is approved. Otherwise, the valuation shall be
based on the Fair Market Value as of the close of the next business day on which
the New York Stock Exchange is open.
(b) For the purpose of making a distribution required under section
401(a)(9) of the Code to a Participant who is still employed, the Participant's
Accounts shall be valued in accordance with Section 8.5.
(c) If the value of a Participant's Accounts at the time of a
distribution is at least $3,500, the value of his Accounts at any later time
shall be deemed to be at least $3,500 for purposes of determining whether the
Participant's benefit may be cashed out.
11.9 Purchase of Unisource and IKON Stock.
------------------------------------
(a) Shares of Unisource Stock and IKON Stock shall be purchased by
the Trustee out of funds held by the Trustee under the Plan on the open market
or, to the extent
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allowed by law, from Unisource or from other private parties.
(b) Each purchase of Unisource Stock and IKON Stock shall be made at
not more than the current Fair Market Value of the stock at the time the
purchase is made. No commission shall be paid in connection with any purchase
from a person who is a party in interest (as defined in section 3(14) of ERISA).
11.10 Stock Rights, Stock Splits, and Dividends. The Trustee in its sole
-----------------------------------------
discretion may exercise or sell any rights to purchase any securities
appertaining to shares of Unisource Stock and IKON Stock held by it, whether
such shares are allocated to individual Accounts, or not; and in the event that
such rights are exercised or sold, Participants' Accounts shall be appropriately
credited. Securities received by the Trustee by reason of a stock split or stock
dividend or other distribution shall be appropriately allocated to Participants'
Accounts.
11.11 Voting of Unisource Stock.
-------------------------
(a) The Trustee shall vote all shares of Unisource Stock in
accordance with the directions of the Participants in whose Accounts the shares
are held. Participants shall have the right to give such directions whether
they are vested or not.
(b) The Trustee shall vote shares of Unisource Stock for which no
directions have been received from Partici-
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pants in the same proportion as shares of Unisource Stock for which directions
have been received.
11.12 Tender Offer.
------------
(a) In the event that Unisource Stock or IKON Stock is the object of
a tender offer pursuant to Regulation 14D of the Securities Exchange Act of 1934
(or any substantially similar federal or state statute or regulation), the
Trustee shall not tender any shares of stock held by it unless it is instructed
to tender the shares by the Participant for whom the shares are held.
(b) The purchase by the tender offerer of any shares tendered by the
Trustee shall be deemed to result in the withdrawal of the shares so purchased
from the Participant's Account. However, no purchase of tendered Unisource Stock
or IKON Stock shall be deemed to be a withdrawal from any Account prior to the
time that a withdrawal from that Account may be made pursuant to the other terms
of this Plan.
11.13 Pre-Retirement Reinvestment Option.
----------------------------------
(a) Each Participant who has attained age 55 has the right to direct
that all or a portion of the Unisource Stock that is attributable to matching
contributions held in his Employer Sub-Account C be reinvested in the Investment
Funds selected by the Participant. However, no Participant may select the IKON
Stock Fund as an investment option.
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(b) A Participant exercising his right under this Section shall
convey the proper investment instructions to the Recordkeeper by telephonic
communication. If the Recordkeeper receives a Participant's request for a
transfer before 4:00 p.m. Eastern Time on a business day on which the New York
Stock Exchange is open, the transfer shall be effective as of the close of that
business day. Otherwise, the transfer shall be effective as of the close of the
next business day on which the New York Stock Exchange is open.
(c) Separate records shall be maintained to reflect the portion of
each Participant's Employer Sub-Account C which has been reinvested pursuant to
this Section.
(d) The value of Unisource Stock in a Participant's Account shall be
determined on the basis of Fair Market Value.
(e) All elections and investment transfers under this Section shall
be subject to any rules that may be prescribed by the Administrator.
11.14 Transfer Out of the IKON Stock Fund.
-----------------------------------
(a) A Participant may at any time transfer all or a portion of his
interest in the IKON Stock Fund out of the IKON Stock Fund. Once an amount has
been transferred out of the IKON Stock Fund, it may not be transferred back into
the IKON Stock Fund.
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(b) The portion of a Participant's Employer Sub-Account C that is
invested in the IKON Stock Fund may be transferred only to the Unisource Stock
Fund, and not to any other Investment Fund. In the case of all other Accounts
and Sub-Accounts, an amount invested in the IKON Stock Fund may be trans ferred
to any other Investment Fund the Participant selects (including the Unisource
Stock Fund).
(c) If the Recordkeeper receives a Participant's request for a
transfer out of the IKON Stock Fund before 4:00 p.m. Eastern Time on a business
day on which the New York Stock Exchange is open, the transfer shall be
effective as of the close of that business day. Otherwise, the transfer shall be
effective as of the close of the next business day on which the New York Stock
Exchange is open .
11.15 Expenses of Plan. Costs and expenses incurred in administering
----------------
the Plan (including the expenses of the Trustee, other administrative and legal
expenses, and brokerage commissions) shall be paid by the Employer unless the
Board of Directors or the Unisource Committee directs that such costs and
expenses shall be paid directly from the Fund.
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ARTICLE XII
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
12.1 Amendment.
---------
(a) Each Employer reserves the right to terminate its participation
in this Plan at any time by action of its board of directors or other governing
body. Furthermore, the Plan may be amended or terminated at any time by written
action of the Board of Directors. The Plan also may be amended by the Uni source
Committee, provided such amendment does not materially change the benefits or
the formula by which benefits are determined under the Plan.
(b) Each amendment to the Plan shall be in writing and shall be
binding on each Employer. No amendment shall have the effect of retroactively
depriving Participants of benefits already accrued under the Plan.
(c) Any amendment of the Plan shall become effective as of the date
designated by the Board of Directors, or, if appropriate, the Unisource
Committee. Except as provided in Section 11.2, it shall be impossible for any
part of the corpus or income of the Fund to be used for or diverted to any
purpose other than for the exclusive benefit of Participants and their
beneficiaries.
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12.2 Termination. The Plan and the Fund forming part of the Plan may
-----------
be terminated, or contributions may be completely discontinued, by Unisource at
any time by action of the Board of Directors. In the event of a termination, a
partial termination, or a complete discontinuance of contributions, or in the
event that the Employer is dissolved, liquidated, or adjudicated a bankrupt, the
interests of the affected Participants, their estates, and their beneficiaries
shall be fully vested. Unless there is a successor plan (as defined in Treas.
Reg. (S)1.401(k) 1(d)(3)), distributions shall be made in cash or in property or
in any combination of cash and property. When all assets have been paid out by
the Trustee, the Fund shall cease.
12.3 Merger.
------
(a) The Plan shall not be merged with or consolidated with, nor
shall its assets be transferred to, any other qualified retirement plan unless
each Participant would receive a benefit after such merger, consolidation, or
transfer (assuming the Plan then terminated) which is of actuarial value equal
to or greater than the benefit he would have received from his Accounts if the
Plan had been terminated on the day before such merger, consolidation, or
transfer.
(b) No amounts shall be transferred to this Plan which would cause
the Plan to be a direct or indirect transferee of a plan to which the survivor
annuity requirements of sections
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401(a)(11) and 417 of the Code apply. However, an Employee's Rollover Account
may contain rolled-over amounts that are subject to the survivor annuity
requirements of sections 401(a)(11) and 417 of the Code if there is acceptable
separate accounting for such amounts under Section 6.6.
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ARTICLE XIII
WITHDRAWALS DURING EMPLOYMENT
-----------------------------
13.1 Withdrawals from After-Tax Account. Subject to the spousal
----------------------------------
consent rules of Section 13.11, a Participant may at any time withdraw all or
any portion of his After-Tax Account other than After-Tax Sub-Account C.
13.2 Withdrawals from Employer Account. Subject to the spousal consent
---------------------------------
rules of Section 13.11:
(a) A Participant who has participated in the Plan (or a Prior Plan)
for at least five years may withdraw all or any portion of his vested interest
in his Employer Account, including earnings. A Participant who has not
participated in the Plan (or a Prior Plan) for five years may withdraw all or
any portion of the part of his vested interest in his Employer Account which has
been held by the Plan (or a Prior Plan) for at least two full Plan Years.
(b) After he has attained age 59 1/2, a Participant may at any time
withdraw all or any portion of his vested interest in his Employer Account.
(c) In the event of hardship, a Participant may withdraw all or any
portion of his vested interest in his Employer Account under Section 13.8.
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13.3 Withdrawals from Before-Tax Account. Except as provided in Section
-----------------------------------
13.8, a Participant may not withdraw any portion of his Before-tax Account until
he has attained age 59 1/2. After he has attained age 59 1/2, and subject to the
spousal consent rules of Section 13.11, a Participant may at any time withdraw
all or any portion of his Before-Tax Account.
13.4 Withdrawals from Rollover Account. A Participant may at any
---------------------------------
time withdraw all or any portion of his Rollover Account.
13.5 Withdrawals from Money Purchase Plan Account. A Participant
--------------------------------------------
shall not be permitted to withdraw any portion of his Money Purchase Plan
Account under this Article. Similarly, a Participant shall not be permitted to
withdraw any portion of his After-Tax Sub-Account C (which consists of after-tax
contributions originally contributed to money purchase pension plans) under
this Article.
13.6 Withdrawals from Other Accounts. When a Participant attains
-------------------------------
age 59 1/2, he may withdraw up to the total value of his QMAC and QNEC Accounts;
provided, however, that any such withdrawal may be subject to the consent of the
Participant's Spouse (as described in Section 13.11).
13.7 Provisions Relating to Withdrawals.
----------------------------------
(a) Requests for withdrawals under this Article shall be initiated by
the Participant upon proper application to
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the Recordkeeper by telephonic communication. The Participant must complete and
return any forms which the Recordkeeper or Administrator determines are needed
in order to process a withdrawal.
(b) A Participant must make withdrawals in the following order of
priority: (1) his After-Tax Account (other than After-Tax Sub-Account C); (2)
his Rollover Account; (3) his Employer Account; and (4) his Before-Tax Account.
(c) A Participant may not replace any portion
of his Accounts withdrawn under this Article.
13.8 Hardship Withdrawals.
--------------------
(a) In the event of unusual hardship as presented in writing to,
demonstrated to the satisfaction of, and specifically approved by the
Administrator, a Participant may withdraw (1) any amount from his After-Tax
Account (other than After-Tax Sub-Account C); (2) any amount from his Rollover
Account; (3) all or any portion of his vested interest in his Employer Account;
and (4) the contributions credited to his Before-Tax Account, plus earnings
thereon credited as of December 31, 1988.
(b) A withdrawal in the event of unusual hardship shall be permitted
only if:
(1) the Administrator determines that in light of the
Participant's immediate and heavy financial need, the withdrawal is necessary to
pay:
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(A) medical expenses described in section 213(d) of the Code and
incurred by the Participant, his Spouse, or any of the Participant's dependents
(as defined in section 152 of the Code), or amounts necessary for such individ
uals to obtain such medical care, so long as such expenses are ineligible for
reimbursement by an insurance carrier;
(B) costs directly related to the purchase (excluding mortgage
payments) or payment for construction or substantial rehabilitation of a
principal residence for the Participant, with "substantial rehabilitation"
defined as renovations or repairs of a non-cosmetic nature that are required to
establish or maintain the habitability of a primary residence;
(C) tuition, related educational fees, and room and board
expenses for up to the next 12 months of post-secondary education for the
Participant or his Spouse or any of his children or dependents;
(D) payments to prevent the eviction of the Participant from his
principal residence or to prevent foreclosure on the mortgage on his principal
residence;
(E) tax levies assessed by federal, state, or local taxing
authorities, including interest and penalties assessed thereon, or excise taxes;
(F) funeral expenses for a Participant's Spouse, dependents,
parents, or other immediate family
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(G) medically-related travel expenses which are tax-deductible
under section 213(d) of t he Code for a Participant, his Spouse, or his
dependents; or
(H) expenses incurred under such other circumstances or because
of such other events as may be prescribed by the Secretary of the Treasury;
and
(2) the Participant represents on forms provided by the Administrator
(A) that the amount of the withdrawal does not exceed that amount required to
meet the immediate financial need created by the hardship and (B) that the
financial need cannot be satisfied from other resources reasonably available to
the Participant, and the Administrator finds that it may reasonably rely upon
the Participant's representation and does not have actual knowledge of facts to
the contrary.
For this purpose, a Participant's financial need cannot reasonably be
satisfied from other resources (such as a loan from the Plan) if the effect
would be to increase the amount of the need.
(c) The amount of a hardship withdrawal shall automatically be
increased by twenty-five percent (25%) in order to pay federal income tax
withholding attributable to the hardship withdrawal.
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(d) The provisions of this Section shall be applied in a uniform and
nondiscriminatory manner.
13.9 Special Withdrawals. A Participant may withdraw the total value
-------------------
of his Accounts in a single sum after a determination by the Administrator that
one of the following events has occurred:
(a) the termination of the Plan, where there is no successor plan (as
defined in Treas. Reg. (S)1.401(k)-1(d)(3));
(b) the sale by the Employer of substantially all of its assets used
in a trade or business, if the Participant making the withdrawal begins
employment with the corporation acquiring such assets; or
(c) the sale by the Employer of its interest in a subsidiary, if the
withdrawal is made by a Participant who continues employment with such
subsidiary.
13.10 Withdrawal of Pledged Amount. No amount that is security for a loan
----------------------------
under Article XIV may be withdrawn.
13.11 Spousal Consent. If a Participant who has a DCP Account
---------------
wishes to withdraw any amount held in his DCP Account, the Participant and his
Spouse must first execute and deliver to the Recordkeeper a written statement
acknowledging (a) that the Spouse consents to the withdrawal and (b) that they
understand that the withdrawal will reduce the amount of benefits that will
later be payable to the Participant and/or the Spouse under the
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Plan. Such statement shall be made in a form and manner similar to that
described in Section 8.4(a). In any other case, spousal consent to a withdrawal
shall not be required.
13.12 Payment of Withdrawals.
----------------------
(a) The maximum amount available for withdrawal from any Account
shall be determined on the basis of the Fair Market Value of the Account as of
the Valuation Date coincident with or immediately preceding the date on which
the withdrawn amount is paid to the Participant.
(b) In general, a withdrawal from a given Account or Sub-Account
shall be paid pro-rata from the various Investment Funds in which that Account
or Sub-Account is invested. However, in the case of a non-hardship withdrawal
from an Account other than the After-Tax Account, a Participant may elect to
have the withdrawal paid entirely from the IKON Stock Fund.
(c) Hardship withdrawals under Section 13.8 shall be paid to a
Participant in cash, in a single sum. All nonhardship withdrawals shall be paid
in cash, except as provided in Subsection (d).
(d) Non-hardship withdrawals from amounts invested in the Unisource
Stock Fund or the IKON Stock Fund shall be paid in cash or in stock, as the
Participant elects. However, any portion of the amounts invested in Cash
Equivalents in the Unisource Stock Fund or the IKON Stock Fund, and amounts
rein-
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vested in accordance with Section 11.13, shall be paid in cash.
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ARTICLE XIV
LOANS FROM THE PLAN
-------------------
14.1 Loan Program.
------------
(a) The Trustee is authorized to establish a program under which
assets of the Plan may be loaned to certain Participants and beneficiaries of
deceased Participants. This loan program shall be administered by the
Recordkeeper in accordance with the provisions of this Article and in accordance
with any related documents describing procedures to be followed in the
administration of the loan program which have been made a part of the Plan.
(b) The Trustee shall not be liable for any act or omission of the
Recordkeeper in its administration of the loan program, except to the extent set
forth in section 405 of ERISA.
(c) The loan program authorized by this Article is effective on the
Effective Date.
(d) If a Participant who participated in a Prior Plan took a loan
from that Prior Plan, the loan shall continue to be governed by the terms of the
Prior Plan, to the extent that such terms are not contrary to the terms of this
Plan.
14.2 Persons Who May Borrow from the Plan.
------------------------------------
(a) Except as provided in Subsections (b) and (c), all vested
Participants and beneficiaries of deceased
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Participants who are "parties in interest," as that term is defined in section
3(14) of ERISA, shall be eligible to apply for loans from the Plan. When
applying for a loan, a vested Participant or beneficiary shall agree, in
writing, to comply with the Plan's procedures and obligations with respect to
loans, including the enforceability of any personal installment note issued in
accordance with Section 14.10.
(b) If the Employer is an S Corporation, no shareholder-employee
who owns more than five percent (5%) of the stock of the Employer shall be
permitted to apply for a loan.
(c) If the Recordkeeper, the Administrator, or any Unisource
Committee member knows that an individual otherwise eligible to apply for a loan
has filed or is about to file for personal bankruptcy, and the personal
bankruptcy matter has not been resolved, the individual in question shall not be
permitted to apply for a loan (or, if he does apply, his loan application shall
be turned down).
(d) An individual who is eligible to apply for a loan from the
Plan shall hereinafter be called a "Borrower."
14.3 Accounts Available.
------------------
(a) A Borrower shall be able to borrow against his Accounts in the
following order: (1) first, his Before-Tax Account; (2) then, his After-Tax
Account (other than After-Tax Sub-Account C); (3) then, the vested portion of
his Employer
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Account; (4) then, his Rollover Account; (5) then, his After-Tax Sub-Account C;
and (6) finally, his Money Purchase Plan Account.
(b) Amounts borrowed from the Plan shall be taken from the
Investment Funds on a pro-rata basis.
14.4 Accounts Attributed to Beneficiary. For the purposes of this
----------------------------------
Article, the Accounts of a deceased Participant shall be deemed to belong to the
beneficiary of that deceased Participant.
14.5 Application for and Approval of Loan.
------------------------------------
(a) All applications for loans shall be made to the Recordkeeper
by telephonic communication. In his application, the Borrower shall specify:
(1) the amount of the loan being requested, which shall not be less
than the minimum loan amount described in Section 14.7(a); and
(2) the intended repayment period, which shall be a period authorized
under Section 14.10(b).
(b) The Recordkeeper shall rule upon loan applications in a
uniform and nondiscriminatory manner, taking into consideration only those
factors which would be considered in a normal commercial setting by an entity in
the business of making similar types of loans. In ruling on a loan application,
the Recordkeeper shall not consider the Borrower's race, color, religion, sex,
age, or national origin, but may consider his
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creditworthiness, collateral, and financial need.
(c) The Recordkeeper shall not approve any loan which would
exceed the maximum amount described in Section 14.7(b). The Administrator may
approve a loan of less than the amount requested in a Borrower's application.
(d) As provided in Section 14.2(c), an individual known to be
filing for personal bankruptcy shall not be permitted to apply for a loan, or,
if he does apply, his loan application shall be turned down.
(e) In no event shall a Borrower be permitted to have more than
one loan from this Plan outstanding at any time.
(f) If a request for a loan is approved, the loan proceeds shall
be paid to the Borrower as of the Valuation Date coincident with or immediately
following the date on which the loan is approved. Any fees or charges associated
with the processing of the loan shall be paid by the Borrower. Upon approval of
a loan request, the Recordkeeper shall issue to the Borrower a personal
installment note in accordance with Section 14.10 (in substantially the form
attached to and made a part of the Plan's loan procedures), which shall specify
the terms and conditions of the loan.
(g) If a request for a loan is denied, the Borrower may appeal
the denial in the manner described in Section 10.6.
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14.6 Spousal Consent. If a married Borrower who has a DCP Account
---------------
wishes to borrow against any portion of his DCP Account, the Borrower and his
spouse must execute and deliver to the Recordkeeper, within the 90-day period
ending on the Valuation Date as of which the loan proceeds are paid, a written
statement acknowledging (a) that the spouse consents to the loan and (b) that
they understand that a default on the loan may reduce the amount of the benefits
to be paid under the Plan. Such statement shall be made in a form and manner
similar to that described in Section 8.4(a). In any other case, spousal consent
to a loan shall not be required.
14.7 Amount of Loan.
--------------
(a) The Administrator, in its discretion, shall establish a
minimum loan amount, which shall be no more than $1,000.
(b) The value of a Borrower's outstanding loans under this Plan
and all other plans qualified under section 401(a) of the Code which are
sponsored by the Employer and Affiliated Companies shall not exceed the lesser
of:
(1) $50,000 reduced by the excess of (A) the highest
outstanding loan balance during the 12 months before a new loan is made over (B)
the outstanding loan balance on the date of the new loan, or
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(2) fifty percent (50%) of the value of the Borrower's vested interest
in the Plan, determined as of the Valuation Date as of which the loan proceeds
are paid to the Borrower.
14.8 Security for Loan.
-----------------
(a) Security for a loan granted pursuant to this Article must be
at least equal to the proceeds of the loan and shall consist, unless the
Administrator requests otherwise, of the personal installment note agreed to by
the Borrower and held by the Plan in accordance with Section 14.10.
(b) To the extent that the Administrator determines that
additional security is required, the additional security shall consist of such
collateral as the Administrator and the Borrower mutually agree upon. The value
and liquidity of any additional security shall be such that it may reasonably be
anticipated that, in the event of default, the Plan will not lose principal and
interest.
14.9 Interest Rate. The rate of interest to be charged on a given
-------------
loan shall be set when the loan is made. The interest rate shall be the prime
lending rate as published in The Wall Street Journal on the last Wednesday of
-----------------------
the month, plus one percent (1%).
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14.10 Installment Note.
----------------
(a) Each loan shall be evidenced by a personal installment note
issued to the Borrower, following approval of the loan by the Recordkeeper, on a
form prescribed by the Administrator. Such note shall be an asset of the
Accounts of the Borrower.
(b) Each personal installment note shall specify the period of
repayment, which shall be 12, 24, 36, 48, or 60 months from the Valuation Date
as of which the loan proceeds are paid to the Borrower. However, if the purpose
of the loan is to acquire a dwelling unit which is to be used as the principal
residence of the Borrower, the period of repayment may be as long as, but shall
not exceed, 180 months.
(c) Each personal installment note shall specify the rate of
interest being charged on the loan.
14.11 Repayment of Loan.
-----------------
(a) All loans shall be repaid in equal installments through
payroll deductions or, in the case of a Participant on unpaid leave, by monthly
checks submitted to the Recordkeeper; provided, however, that payments shall be
made at least quarterly. Substantially level amortization of each loan is
required over the term of the loan.
(b) A Borrower may repay all of the outstanding balance of a
loan in a single sum at any time by notifying the
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Recordkeeper of his intent to do so and by forwarding to the Recordkeeper
payment of all of the outstanding balance, plus interest accrued to the date of
payment.
(c) All loans from the Plan shall be nonrenewable.
(d) The amount of principal and interest repaid by a Borrower
shall be credited to that Borrower's Accounts as each repayment is made.
(e) Payments shall be invested in the Investment Funds selected
by the Participant at the time for new contributions being made to the Plan.
14.12 Default on Loan.
---------------
(a) Anything in this Plan to the contrary not withstanding, in
the event that
(1) a loan is not repaid by the time the note matures;
(2) no payments of principal and/or interest are made for
three consecutive months;
(3) the Borrower dies;
(4) the Plan ceases to constitute a qualified plan within
the meaning of section 401(a) of the Code;
(5) except in the case of unpaid leave of absence, where
repayment of the loan is being accomplished by payroll deduction, the Borrower's
employment with the Employer
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terminates for any reason, or the Borrower's compensation is discontinued;
(6) the Borrower is placed or places himself in bankruptcy;
(7) any other event occurs which the Administrator,
applying standards which would be used in a normal commercial setting by an
entity in the business of making similar types of loans, judges to be an event
of default or an event which may jeopardize the repayment of the loan, the full
balance of the loan, plus accrued interest, shall immediately become due and
payable unless the Administrator, in its sole discretion, waives the event of
default and makes alternate arrangements to prevent the loss to the Plan of the
balance of the loan, plus interest.
(b) The Recordkeeper shall give written notice of an event of default
described in Subsection (a) to the Borrower who has defaulted on his loan (or,
in the case of default by death, to the estate of the Borrower). If the balance
of the loan and accrued interest are not paid within 30 days after the date of
such notice, the Recordkeeper shall be entitled to foreclose upon the Borrower's
security immediately or at any later time it may select; provided, however, that
the first consideration in selecting a date of foreclosure shall be to prevent
disqualification of the Plan.
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14.13 Foreclosure.
-----------
(a) When the Recordkeeper forecloses upon a Borrower's
security, it shall first reduce that Borrower's vested interest in the Plan by
the lesser of (1) the full amount of the unpaid balance of the loan, plus
accrued interest (determined as of the date of default), or (2) the entire
portion of the Borrower's vested interest in the Plan which is security for the
loan.
(b) (1) Subsection (a) notwithstanding, in the case of a
Borrower who is a Participant, the Recordkeeper shall in no event use that
Borrower's Before-Tax, QMAC, or QNEC Accounts to reduce his indebtedness unless,
as of the date of foreclosure, the Borrower has reached age 59 1/2, retired,
terminated his employment with the Employer, or suffered a Total Disability, or
is eligible to withdraw his Accounts because one of the events described in
Section 13.9 has occurred. This restriction shall not apply in the case of
foreclosure upon the security of a Borrower who is the beneficiary of a deceased
Participant.
(2) Subsection (a) notwithstanding, the Recordkeeper shall
not use Matching Contributions which were allocated to the Borrower's Employer
Account less than 24 months prior to the date of foreclosure to reduce that
Borrower's indebtedness unless, as of the date of foreclosure, the Borrower has
retired or terminated his employment with the Employer.
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(c) If foreclosing upon his vested interest in the Plan is not
sufficient to discharge the Borrower's indebtedness, the Recordkeeper shall
then foreclose upon the Borrower's other collateral (if any).
(d) When the full amount of the unpaid balance of the loan,
plus accrued interest, has been restored to the Plan, any portion of the
Borrower's security which remains shall be released and shall no longer be
security for any loan.
(e) Foreclosing upon a Borrower's security shall not operate as
a waiver of the rights of the Recordkeeper, the Administrator, the Employer, or
the Plan to pursue additional means of preventing loss to the Plan in the event
of default on a loan.
14.14 Deemed Distribution. The provisions of Article VII
-------------------
notwithstanding, if a Borrower defaults on a loan and the Recordkeeper is
entitled to foreclose upon the Borrower's security, the unpaid balance of the
loan, plus accrued interest, shall be deemed to be immediately distributed to
the Borrower. However, in the case of a Borrower to whom the consent rule of
Section 14.6 applied at the time the loan was made, deemed dis tribution shall
occur only if the spousal consent described in Section 14.6 was delivered to the
Recordkeeper and the restrictions set forth in Section 14.13(b) do not apply.
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ARTICLE XV
GENERAL PROVISIONS
------------------
15.1 No Employment Rights. Neither the action of Unisource in
--------------------
establishing the Plan, nor any provisions of the Plan, nor any action taken by
the Employer, the Unisource Committee, or the Administrator, shall be construed
as giving to any employee of the Employer the right to be retained in its
employ, or any right to payment except to the extent of the benefits provided in
the Plan to be paid from the Fund.
15.2 Source of Benefits. All benefits payable under the Plan shall
------------------
be paid or provided for solely from the Fund, and the Employer assumes no
liability or responsibility therefor.
15.3 Governing Law. This Plan shall be governed, construed, and
-------------
administered under the laws of the Commonwealth of Pennsylvania, except to the
extent preempted by ERISA.
15.4 Spendthrift Clause.
------------------
(a) No benefit payable at any time under this Plan and no
interest or expectancy herein shall be anticipated, assigned, or alienated by
any Participant or beneficiary, or subject to attachment, garnishment, levy,
execution, or other legal or equitable process, except for (1) an amount
necessary to satisfy a federal tax levy made pursuant to section 6331 of the
Code and (2) any benefit payable pursuant to a domestic relations
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order which is determined to be a qualified domestic relations order within the
meaning of the Code.
(b) Any attempt to alienate or assign a benefit hereunder,
whether currently or hereafter payable, shall be void. No benefit shall in any
manner be liable for or subject to the debts or liability of any Participant or
beneficiary. If any Participant or beneficiary attempts to or does alienate or
assign his benefit under the Plan or any part thereof, or if by reason of his
bankruptcy or other event happening at any time such benefit would devolve upon
anyone else or would not be enjoyed by him, then the Administrator may terminate
payment of such benefit and hold or apply it for the benefit of the Participant
or beneficiary.
15.5 Incapacity. If the Administrator finds that any Participant or
----------
beneficiary to whom a benefit is payable hereunder is unable to take care of his
affairs because of physical, mental, or legal incompetence, any payment due
hereunder may (unless prior claim therefor has been made by a duly qualified
guardian or other legal representative), in the discretion of the Administrator,
be paid to the person or institution deemed by the Administrator to be
maintaining or responsible for the maintenance of such Participant or
beneficiary. Any such payment shall be deemed a payment for the account of the
Participant or beneficiary and shall constitute a complete discharge of any
liability
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therefor under the Plan.
15.6 Participation by Affiliated Companies.
-------------------------------------
(a) With the prior consent of the Board of Directors, an
Affiliated Company may adopt this Plan for its employees by action of its board
of directors or other governing body. Each Affiliated Company that adopts the
Plan shall execute a Joinder Agreement.
(b) Each amendment to the Plan shall be binding on an
Affiliated Company which has adopted the Plan, and, by its adoption of the Plan,
the Affiliated Company shall be deemed to have appointed Unisource, the
Unisource Committee, the Administrator, and the Trustee as its exclusive agents
to exercise on its behalf all the power and authority conferred by the Plan and
the Trust Agreement upon Unisource, the Unisource Committee, the Administrator,
and the Trustee, respectively. The authority of Unisource, the Unisource
Committee, the Administrator, and the Trustee to act as such agents shall
continue until the Affiliated Company terminates its participation in the Plan
and the benefits payable to Participants employed (or formerly employed) by the
Affiliated Company have been distributed as provided herein.
(c) An Affiliated Company may terminate its participation in
the Plan at any time by action of its board of directors or other governing
body. If the Affiliated Company ceases to be an Affiliated Company, it may no
longer participate
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in the Plan.
15.7 Severability of Provisions. If any provision of this Plan is
--------------------------
determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate, and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provisions determined to be void.
15.8 Headings. Article and paragraph headings are supplied for
--------
convenience only and shall not be construed as altering the text of the Plan in
any way.
15.9 Withholding. The Recordkeeper and the Trustee shall have the
-----------
right to withhold any and all federal, state, and local taxes which may be
withheld in accordance with applicable law.
15.10 Participant Statements. At least annually, each Participant
----------------------
shall receive a statement showing information relating to the Investment Funds
in which the Participant's Accounts are invested.
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15.11 Number; Gender. Wherever required by context, the singular of
--------------
any word used in this Plan shall include the plural and the plural may be read
in the singular. Words used in the masculine shall be read and construed in the
feminine where they would so apply.
To record the adoption of this Plan, Unisource has caused the Plan to
be executed this _____ day of _____________, 19__.
[SEAL] UNISOURCE WORLDWIDE, INC.
By:___________________________
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APPENDIX A
ADP AND ACP TESTS AND RELATED LIMITS ON CONTRIBUTIONS
-----------------------------------------------------
A.1 Definitions. The following definitions shall supplement those
-----------
set forth in Article II of the Plan:
(a) "Excess Aggregate Contributions" shall mean, for a given Plan
------------------------------
Year, the excess of (1) the amount of Matching Contributions made on behalf of a
Highly Compensated Employee in that Plan Year, over (2) the maximum amount of
Matching Contributions permitted to be made for that Plan Year, as determined
by the Administrator under Section A.8(d).
(b) "Excess Contributions" shall mean, for a given Plan Year, the
--------------------
excess of (1) the amount of Basic and Supplemental Contributions made in that
Plan Year pursuant to a Highly Compensated Employee's election, over (2) the
maximum amount of Basic and Supplemental Contributions permitted to be made for
that Plan Year, as determined by the Administrator under Section A.5(c).
(c) "Excess Deferral" shall mean the excess of (1) the amount of
---------------
Basic and Supplemental Contributions plus any other elective deferrals (as
defined in section 402(g)(3) of the Code) made in an individual's taxable year
pursuant to the individual's election, over (2) the dollar limit in effect
under section 402(g) of the Code for that taxable year (which was $9,500
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for 1996).
A.2 Return of Excess Deferral.
-------------------------
(a) (1) If a Participant has an Excess Deferral in any taxable
year, he may notify the Administrator of the Excess Deferral and request that
all or a portion of such Excess Deferral be returned to him. His notification
must be in writing and must be received by the Administrator by the March 1st
after the taxable year of the Participant in which the Excess Deferral occurred.
(2) If a Participant has an Excess Deferral in any taxable
year, taking into account only this Plan and any other cash or deferred
arrangement(s) maintained by the Employer and Affiliated Companies, he shall be
deemed to have notified the Administrator of the Excess Deferral, whether he
does so in accordance with paragraph (1), or not.
(3) When the Administrator is notified of an Excess
Deferral as described in paragraph (1) or (2), it shall direct the Trustee to
distribute to the Participant either:
(A) the amount of the Excess Deferral requested under
paragraph (1) (or, if less, the portion of such amount that does not exceed the
amount of Basic and Supplemental Contributions made on behalf of the Participant
for such year), plus any income attributable to such amount; or
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(B) the total amount of the Excess Deferral,
determined by taking into account only this Plan and any other cash or deferred
arrangement(s) maintained by the Employer and Affiliated Companies, plus any
income attributable to such amount.
(4) An Excess Deferral may be distributed in the taxable
year in which it occurs or after the end of that taxable year, but shall in no
event be distributed later than April 15th of the year after the year in which
it occurs.
(b) The Trustee shall determine the income attributable to an
Excess Deferral using any reasonable method that does not violate section
401(a)(4) of the Code and is also used for allocating income to Participants'
Accounts. Such method shall be applied consistently to all Excess Deferrals for
a given taxable year. Income shall be allocated to an Excess Deferral solely for
the taxable year in which the Excess Deferral occurs (or, in the case of an
Excess Deferral that is distributed in the taxable year in which it occurs, for
the period from the beginning of such taxable year to the date on which the
Excess Deferral is distributed) and not for any period thereafter.
A.3 Actual Deferral Percentage Test.
-------------------------------
(a) The Administrator shall cause the ADP Test to be run as of
the last day of each Plan Year and may also cause the ADP Test to be run at any
time during the Plan Year. The
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Plan satisfies the ADP Test at a given point in time if it satisfies one of the
two tests described below.
(1) The Plan satisfies the ADP Test if the Actual Deferral
Percentage of the eligible Highly Compensated Employees for the Plan Year is not
more than:
(A) the Actual Deferral Percentage of the non-highly
compensated Eligible Employees for the preceding Plan Year, multiplied by
(B) 1.25.
(2) The Plan satisfies the ADP Test if:
(A) the excess of (i) the Actual Deferral Percentage
of the eligible Highly Compensated Employees for the Plan Year, over (ii) the
Actual Deferral Percentage of the non-highly compensated Eligible Employees for
the preceding Plan Year, is not more than two percentage points, and
(B) the Actual Deferral Percentage of the eligible
Highly Compensated Employees for the Plan Year is not more than the Actual
Deferral Percentage of the non-highly compensated Eligible Employees for the
preceding Plan Year, multiplied by 2.0.
(b) (1) The Actual Deferral Percentage for a specific group of
Eligible Employees is the average (expressed as a percentage rounded to the
nearer one-hundredth of one percent) of the individual deferral percentages of
the Eligible Employees
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in the group. An Eligible Employee's individual deferral percentage is the
ratio of:
(A) the Basic and Supplemental Contributions
made on behalf of such Eligible Employee for a given Plan Year, to
(B) such Eligible Employee's compensation (as defined
under a definition of compensation which meets the requirements of Code Section
414(s) and the regulations thereunder) for that Plan Year; provided, however,
that any compensation attributable to a period before the Eligible Employee
becomes a Participant shall not be taken into account.
(2) (A) The denominator of an Eligible Employee's
individual deferral percentage shall not be more than the amount set by section
401(a)(17) of the Code, as adjusted for cost-of-living increases.
(B) In the case of an Eligible Employee who is a
Highly Compensated Employee, the numerator of the individual deferral percentage
shall include any Excess Deferral made in the Plan Year. In the case of an
Eligible Employee who is not a Highly Compensated Employee, the numerator shall
not include any Excess Deferral.
(C) At the election of the Administration, all or any
portion of the Qualified Matching Contributions and/or Qualified Nonelective
Contributions allocated to an
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Eligible Employee for a given Plan Year may be included for that Plan Year in
the numerator of the individual deferral percentage, provided that such
contributions satisfy the requirements of Treas. Reg. (S)1.401(k)-1(b)(5).
(D) Qualified Matching Contributions and/or Qualified
Nonelective Contributions included in the numerator of the Actual Deferral
Percentage shall in no event be included in the numerator of the Actual
Contribution Percentage.
(3) If in any Plan Year a Highly Compensated Employee
participates in this Plan and in any other cash or deferred arrangement(s) (as
described in section 401(k) of the Code) maintained by the Employer or an
Affiliated Company, then, in computing the individual deferral percentage for
such Highly Compensated Employee, this Plan and the other cash or deferred
arrangement(s) shall be treated as one plan. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements with plan years ending with or
within the same calendar year shall be treated as a single arrangement.
(4) (A) In determining the Actual Deferral Percentage, the
Administrator may treat this Plan and any other plan maintained by the Employer
or an Affiliated Company which contains a cash or deferred arrangement as a
single plan.
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(B) If this Plan is treated, for purposes of section
401(a)(4) or 410(b) of the Code, as one plan with any other cash or deferred
arrangement(s) maintained by the Employer or an Affiliated Company, this Plan
and the other cash or deferred arrangement(s) shall be treated as one plan in
determining the Actual Deferral Percentage.
(C) Plans that are aggregated under this paragraph (4)
must have the same plan year.
(5) Paragraphs (3) and (4) notwithstanding, cash or
deferred arrangements that must be treated as separate arrangements to comply
with Treas. Reg. (S)1.401(k)-1(b)(3) and (S)1.401(k)-1(g)(11)(ii)(B) shall in no
event be aggregated.
A.4 ADP Test -- Corrective Action.
-----------------------------
(a) If at any time before the end of a Plan Year the
Administrator determines that the Plan does not satisfy the ADP Test, it may
reduce the individual deferral percentages of one or more Participants who are
Highly Compensated Employees so that the ADP Test is satisfied. The
Administrator shall prescribe such reductions in a uniform and nondiscriminatory
manner.
(b) If the Administrator determines that the Plan does not
satisfy the ADP Test, the Employer may make Qualified Nonelective Contributions
and/or Qualified Matching Contributions on behalf of the Eligible Employees who
are not Highly Compensated Employees, as provided in Appendix E.
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(c) If, in spite of any corrective action that has been taken,
the Plan does not satisfy the ADP Test as of the last day of a given Plan Year,
the Administrator shall return Excess Contributions as described in Section A.5.
A.5 Return of Excess Contributions.
------------------------------
(a) If Excess Contributions must be returned to Highly
Compensated Employees, the Administrator shall direct the Trustee to distribute
each Highly Compensated Employee's Excess Contributions to him, and also to
distribute any income attributable to the Excess Contributions. Such amounts
shall be distributed no later than the last day of the Plan Year following the
Plan Year in which the Excess Contributions were contributed to the Plan.
(b) The determination of the amount of Excess Contributions
shall be made after determining the amount of Excess Deferrals, as reported to
the Administrator in accordance with Section A.2, and before determining the
amount of Excess Aggregate Contributions.
(c) The amount of a Highly Compensated Employee's Excess
Contributions shall be determined by the Administrator using the following
leveling process:
(1) First, the individual deferral percentage of the Highly
Compensated Employee with the greatest dollar amount of Basic and Supplemental
Contributions shall be reduced
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by characterizing as Excess Contributions an amount which either:
(A) enables the Plan to satisfy the ADP Test, or
(B) reduces the Highly Compensated Employee's Basic
and Supplemental Contributions to the point at which they equal the Basic and
Supplemental Contributions of the Highly Compensated Employee with the second
greatest dollar amount of Basic and Supplemental Contributions.
(2) Next, the individual deferral percentages of the two
Highly Compensated Employees who then have the greatest dollar amount of Basic
and Supplemental Contributions shall be reduced by characterizing as Excess
Contributions an amount which either:
(A) enables the Plan to satisfy the ADP Test, or
(B) reduces the Highly Compensated Employees' Basic
and Supplemental Contributions to the point at which they equal the Basic and
Supplemental Contributions of the Highly Compensated Employee with the third
greatest dollar amount of Basic and Supplemental Contributions.
(3) This leveling process shall be repeated until the Plan
is able to satisfy the ADP Test.
(d) The Trustee shall determine the income attributable to
Excess Contributions using any reasonable method
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that does not violate section 401(a)(4) of the Code and is also used for
allocating income to Participants' Accounts. Such method shall be applied
consistently to all Excess Contributions for a given Plan Year. Income shall be
allocated to Excess Contributions solely for the Plan Year in which the Excess
Contributions are contributed to the Plan and not for any period thereafter.
A.6 Actual Contribution Percentage Test.
-----------------------------------
(a) The Administrator shall cause the ACP Test to be run as of
the last day of each Plan Year and may also cause the ACP Test to be run at any
time during the Plan Year. The Plan satisfies the ACP Test at a given point in
time if it satisfies one of the two tests described below.
(1) The Plan satisfies the ACP Test if the Actual
Contribution Percentage of the eligible Highly Compensated Employees for the
Plan Year is not more than:
(A) the Actual Contribution Percentage of the non-
highly compensated Eligible Employees for the preceding Plan Year, multiplied by
(B) 1.25.
(2) The Plan satisfies the ACP Test if:
(A) the excess of (i) the Actual Contribution
Percentage of the eligible Highly Compensated Employees for the Plan Year, over
(ii) the Actual Contribution Percentage
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of the non-highly compensated Eligible Employees for the preceding Plan Year,
is not more than two percentage points, and
(B) the Actual Contribution Percentage of the eligible
Highly Compensated Employees for the Plan Year is not more than the Actual
Contribution Percentage of the non-highly compensated Eligible Employees for the
preceding Plan Year, multiplied by 2.0.
(b) (1) The Actual Contribution Percentage for a specific group
of Eligible Employees is the average (expressed as a percentage rounded to the
nearer one-hundredth of one percent) of the individual contribution percentages
of the Eligible Employees in the group. An Eligible Employee's individual
contribution percentage is the ratio of:
(A) the Matching Contributions made on behalf of such
Eligible Employee for a given Plan Year, to
(B) such Eligible Employee's compensation (as defined
under a definition of compensation which meets the requirements of Code Section
414(s) and the regulations thereunder) for that Plan Year; provided, however,
that any compensation attributable to a period before the Eligible Employee
becomes a Participant shall not be taken into account.
(2) (A) The denominator of an Eligible Employee's
individual contribution percentage shall not be more than the amount set by
section 401(a)(17) of the Code, as ad-
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justed for cost-of-living increases.
(B) At the election of the Administrator, all or any
portion of the Basic and Supplemental Contributions, Qualified Matching
Contributions and/or Qualified Nonelective Contributions made on behalf of an
Eligible Employee in a given Plan Year may be included in the numerator of the
individual contribution percentage, provided that such contributions satisfy the
requirements of Treas. Reg. (S)1.401(m)-1(b)(5).
(C) Qualified Matching Contributions and/or Qualified
Nonelective Contributions included in the of the numerator of the Actual
Contribution Percentage shall in no event be included in the numerator of the
Actual Deferral Percentage.
(3) If in any Plan Year a Highly Compensated Employee
participates in this Plan and in any other plan(s) maintained by the Employer or
an Affiliated Company to which matching contributions (as defined in section
401(m)(4)(A) of the Code) and/or voluntary employee contributions are made,
then, in computing the individual contribution percentage for such Highly
Compensated Employee, all matching contributions and voluntary employee
contributions shall be included in the numerator. If a Highly Compensated
Employee participates in two or more such plans that have different plan years,
all plans with plan years ending with or within the same calendar year shall be
treated as a single plan.
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(4) (A) In determining the Actual Contribution Percentage,
the Administrator may treat this Plan and any other plan maintained by the
Employer or an Affiliated Company to which matching contributions and/or
voluntary employee contributions are made as a single plan.
(B) If this Plan is treated, for purposes of section
401(a)(4) or 410(b) of the Code, as one plan with any other plan(s) maintained
by the Employer or an Affiliated Company to which matching contributions and/or
voluntary employee contributions are made, this Plan and such other plan(s)
shall be treated as one plan in determining the Actual Contribution Percentage.
(C) Plans that are aggregated under this paragraph (4)
must have the same plan year.
(5) Paragraphs (3) and (4) notwithstanding, plans (or
portions of plans) that must be treated as separate plans to comply with Treas.
Reg. (S)1.401(m)-1(b)(3) shall in no event be aggregated.
A.7 ACP Test -- Corrective Action.
-----------------------------
(a) If at any time before the end of a Plan Year the
Administrator determines that the Plan does not satisfy the ACP Test, it may
reduce the individual contribution percentages of one or more Participants who
are Highly Compensated Employees so that the ACP Test is satisfied. The
Administrator shall pre-
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scribe such reductions in a uniform and nondiscriminatory manner.
(b) If the Administrator determines that the Plan does not
satisfy the ACP Test, the Employer may make Qualified Matching Contributions
and/or Qualified Nonelective Contributions on behalf of the Eligible Employees
who are not Highly Compensated Employees, as provided in Appendix E.
(c) If, in spite of any corrective action that has been taken,
the Plan does not satisfy the ACP Test as of the last day of a given Plan Year,
the Administrator shall dispose of Excess Aggregate Contributions as described
in Section A.8.
A.8 Disposition of Excess Aggregate Contributions.
---------------------------------------------
(a) If Excess Aggregate Contributions must be disposed of, a
percentage of each Highly Compensated Employee's Excess Aggregate Contributions
shall be distributed to him, and the remainder shall be forfeited, as follows:
(1) The percentage to be distributed shall be equal to the
Highly Compensated Employee's vested percentage (if any), determined in
accordance with the vesting provisions of the Plan. This percentage of the
Excess Aggregate Contributions, plus any income attributable thereto, shall be
distributed to the Highly Compensated Employee no later than the last day of the
Plan Year following the Plan Year in which the Excess Aggregate Contributions
were contributed to the Plan.
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(2) The amount to be forfeited shall be the remainder of
the Excess Aggregate Contributions, plus any income attributable thereto.
(b) Amounts forfeited under this Section shall be reallocated to
the Employer Accounts of all Participants who do not have Excess Aggregate
Contributions, but shall not be reallocated to the Employer Account of any
Highly Compensated Employee if (or to the extent that) such reallocation would
cause the Highly Compensated Employee to have Excess Aggregate Contributions.
The forfeitures shall be reallocated in the proportion that the Basic and
Supplemental Contributions of each Participant who does not have Excess
Aggregate Contributions bears to the Basic and Supplemental Contributions of all
such Participants for the Plan Year.
(c) The determination of the amount of Excess Aggregate
Contributions shall be made after (1) determining the amount of Excess
Deferrals, as reported to the Administrator in accordance with Section A.2, and
(2) determining the amount of Excess Contributions.
(d) The amount of a Highly Compensated Employee's Excess
Aggregate Contributions shall be determined by the Administrator using the
following leveling process:
(1) First, the individual contribution percentage of the
Highly Compensated Employee with the greatest
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dollar amount of Matching Contributions shall be reduced by characterizing as
Excess Aggregate Contributions an amount which either:
(A) enables the Plan to satisfy the ACP Test, or
(B) reduces the Highly Compensated Employee's Matching
Contributions to the point at which they equal the Matching Contributions of the
Highly Compensated Employee with the second greatest dollar amount of Matching
Contributions.
(2) Next, the individual contribution percentages of the
two Highly Compensated Employees who then have the greatest dollar amount of
Matching Contributions shall be reduced by characterizing as Excess Aggregate
Contributions an amount which either:
(A) enables the Plan to satisfy the ACP Test, or
(B) reduces the Highly Compensated Employees' Matching
Contributions to the point at which they equal the Matching Contributions of the
Highly Compensated Employee with the third greatest dollar amount of Matching
Contributions.
(3) This leveling process shall be repeated until the Plan
is able to satisfy the ACP Test.
(e) The Trustee shall determine the income attributable to
Excess Aggregate Contributions using any reason-
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able method that does not violate section 401(a)(4) of the Code and is also used
for allocating income to Participants' Accounts. Such method shall be applied
consistently to all Excess Aggregate Contributions for a given Plan Year. Income
shall be allocated to Excess Aggregate Contributions solely for the Plan Year in
which the Excess Aggregate Contributions are contributed to the Plan and not for
any period thereafter.
A.9 Multiple Use Test.
-----------------
(a) (1) In addition to complying with the limitations imposed
by other provisions of this Plan, the Plan must satisfy the aggregate limit test
described in this Section. The Plan satisfies such test if the sum of the Actual
Deferral Percentage of the entire group of Eligible Employees who are Highly
Compensated Employees and the Actual Contribution Percentage of that entire
group does not exceed the aggregate limit described in Subsection (b).
(2) For a given Plan Year, the Plan automatically
satisfies the aggregate limit test unless the Plan both (A) satisfies the ADP
Test by means of the test described in Section A.3(a)(2), and (B) satisfies the
ACP Test by means of the test described in Section A.6(a)(2).
(b) For the purposes of this Section, the aggregate limit for
any Plan Year is the greater of the amounts described in paragraphs (1) and (2)
below:
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(1) This amount is the sum of:
(A) one hundred twenty-five percent (125%) of the
greater of (i) the Actual Deferral Percentage of the group of Eligible Employees
who are not Highly Compensated Employees in the Plan Year or (ii) the Actual
Contribution Percentage of the group of Eligible Employees who are not Highly
Compensated Employees in the Plan Year, and
(B) 2.0 plus the lesser of the percentage in (A)(i) or
the percentage in (A)(ii) above. In no event, however, shall the resulting
percentage be more than two hundred percent (200%) of the lesser of the
percentage in (A)(i) or the percentage in (A)(ii).
(2) This amount is the sum of:
(A) one hundred twenty-five percent (125%) of the
lesser of (i) the Actual Deferral Percentage of the group of Eligible Employees
who are not Highly Compensated Employees in the Plan Year or (ii) the Actual
Contribution Percentage of the group of Eligible Employees who are not Highly
Compensated Employees in the Plan Year, and
(B) 2.0 plus the greater of the percentage in (A)(i)
or the percentage in (A)(ii) above. In no event, however, shall the resulting
percentage be more than two hundred percent (200%) of the greater of the
percentage in (A)(i) or the percentage in (A)(ii).
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(c) For purposes of this Section, the Actual Deferral Percentage
and Actual Contribution Percentage of the group of Eligible Employees who are
Highly Compensated Employees shall be determined after any corrective
distributions of Excess Deferrals, Excess Contributions, and Excess Aggregate
Contributions have been made.
(d) If the Plan does not satisfy the aggregate limit test of
this Section as of the last day of a given Plan Year, the Actual Deferral
Percentage and, to the extent necessary, the Actual Contribution Percentage, of
the group of Eligible Employees who are Highly Compensated Employees shall be
reduced by the leveling process described in Section A.8(d).
A.10 Disaggregation.
--------------
(a) Sections A.3, A.4, and A.5 (ADP Test), Sections A.6, A.7,
and A.8 (ACP Test), and Section A.9 (multiple use test) shall be applied
separately to the group of Eligible Employees who are covered by collective
bargaining agreements and the group of Eligible Employees who are not covered by
any collective bargaining agreement.
(b) If for any Plan Year the Plan is disaggregated into
component plans for purposes of coverage testing under section 410(b) of the
Code, it shall be disaggregated in the same manner for purposes of Sections A.3,
A.4, and A.5 (ADP Test), Sections A.6, A.7, and A.8 (ACP Test), and Section A.9
(multiple use test).
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APPENDIX B
LIMITS ON ANNUAL ADDITIONS
--------------------------
B.1 General. The provisions of this Appendix shall be construed to
-------
comply with section 415 of the Code. The definitions in Sections B.2 and B.3
shall supplement those set forth in Article II of the Plan.
B.2 "Annual Additions" shall mean, for any Participant, for any
----------------
Limitation Year, the sum of:
(a) Basic, Supplemental, Matching, Qualified Matching, and
Qualified Nonelective Contributions, and any other employer contributions;
(b) the Participant's after-tax contributions; and
(c) any forfeitures allocated to the Participant's Accounts
under this Plan and any other defined contribution plan(s) maintained by the
Employer or a 50% Affiliated Company.
Any excess amounts distributed to a Participant under Sections A.2,
A.5, A.8, and A.9 of Appendix A shall be included in determining the amount of
that Participant's Annual Additions for the Limitation Year for which such
amounts are contributed to the Plan.
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Rollover Contributions shall not be included in determining the amount
of a Participant's Annual Additions.
Make-up contributions under Sections 4.8 and 5.6 shall be included in
determining the amount of a Participant's Annual Additions for the Limitation
Year to which they relate (not for the Limitation Year in which they are
actually contributed).
B.3 "Limitation Year" shall mean the Plan Year or such other 12-month
---------------
period as may be designated by Unisource.
B.4 Maximum Allocation.
------------------
(a) A Participant's Annual Additions shall in no event exceed
the lesser of:
(1) $30,000 (or, if greater, one-quarter of the dollar
limitation in effect under section 415(b)(1)(A) of the Code), or
(2) twenty-five percent (25%) of such Participant's
Limitation Compensation for the Limitation Year.
(b) If a Participant's Annual Additions would exceed the amount
described in Subsection (a) for a reason described in the first paragraph of
Treas. Reg. (S)1.415-6(b)(6), the Trustee shall dispose of the excess amount by
taking one or both of the following steps:
(1) First, Basic and Supplemental Contributions shall be
distributed to the Participant to the extent required to correct the amount of
the Participant's Annual
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Additions, or until all Basic Contributions and Supplemental Contributions have
been distributed. Income attributable to the excess Basic and Supplemental
Contributions shall also be distributed to the Participant.
(2) Then, to the extent required to correct the amount of
the Participant's Annual Additions and Matching Contributions shall be
segregated and shall be held in a suspense account until the following Plan Year
(or succeeding Plan Years), at which time the money shall be converted to
Matching Contributions and allocated to the Participant's Employer Account; or,
if the Participant is no longer participating in the Plan in the following Plan
Year, the money in the suspense account shall be converted to Matching
Contributions and allocated to the Employer Accounts of all Participants.
Amounts held in the suspense account must be allocated to the fullest extent
possible before the Employer or Participants may make any contributions for a
Plan Year. Amounts held in the suspense account shall share in investment gains
and losses of the Fund.
(c) The provisions of this Subsection shall not apply on or after
January 1, 2000. Until January 1, 2000, if in any Limitation Year a Participant
in this Plan is also a participant in one or more defined benefit plans
maintained by the Em ployer or a 50% Affiliated Company, the annual benefit
under the defined benefit plan(s) shall be reduced, if necessary, so that
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the sum of the defined benefit and defined contribution fractions (defined
below) does not exceed 1.0 for such Limitation Year.
(1) (A) The defined benefit fraction is a fraction, the
numerator of which is the Participant's projected annual benefit under all
defined benefit pension plans sponsored by the Employer and 50% Affiliated
Companies in which he has participated, determined as of the close of the
limitation years of such plans, and the denominator of which is the lesser of:
(i) 1.25 x $90,000 (as adjusted for cost-of-
living increases), or
(ii) one hundred forty percent (140%) of the
Participant's highest average pay over any three consecutive calendar years.
(B) For the purpose of this Subsection, "projected
annual benefit" shall mean the annual benefit to which a Participant would be
entitled under the terms of a defined benefit plan if he had continued
employment until his normal retirement date under such plan and if his
compensation for the purpose of such plan had continued at the same rate.
(C) For the purpose of determining the denominator of
the defined benefit fraction, a Participant's "pay" shall mean his annual
compensation as defined in Treas. Reg. (S)1.415-2(d).
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(2) The defined contribution fraction is a fraction, the
numerator of which is the sum of the Participant's Annual Additions under all
defined contribution plans sponsored by the Employer and 50% Affiliated
Companies for all limitation years, and the denominator of which is the sum of
the lesser of the following amounts, determined for each limitation year of
service with the Employer or 50% Affiliated Company:
(A) 1.25 x $30,000, or
(B) thirty-five percent (35%) of the Participant's
Limitation Compensation for such limitation year.
(3) A defined benefit plan sponsored by the Employer or a
50% Affiliated Company to which nondeductible employee contributions are made is
considered to be a separate defined contribution plan, to the extent that the
employee con tributions constitute annual additions in the current and prior
limitation years.
(d) The dollar limitations described in Subsec tions (a) and (c)
shall be adjusted annually in accordance with section 415(d) of the Code.
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APPENDIX C
TOP-HEAVY PROVISIONS
--------------------
C.1 General. The following provisions shall auto matically apply to
-------
the Plan for each Plan Year in which it is a Top-Heavy Plan. It is intended
that this Appendix shall be construed in accordance with the provisions of
section 416 of the Code.
C.2 Definitions. The following definitions shall supplement those
-----------
set forth in Article II of the Plan:
(a) "Aggregation Group" shall mean:
-----------------
(1) each plan (including a frozen plan or a plan which has
been terminated during the 60-month period ending on the Determination Date) of
the Employer or an Affiliated Company in which a Key Employee is a Participant,
(2) each other plan (including a frozen plan or a plan
which has been terminated during the 60-month period ending on the Determination
Date) of the Employer or an Affiliated Company which enables any plan in which
a Key Employee participates to meet the requirements of section 401(a)(4) or
410 of the Code, and
(3) each other plan (including a frozen plan or a plan
which has been terminated during the 60-month period ending on the Determination
Date) of the Employer or an Affili-
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ated Company which is included by the Administrator if the Aggregation Group,
including such a plan, would continue to meet the requirements of sections
401(a)(4) and 410 of the Code.
(b) "Determination Date" shall mean the last day of the
------------------
preceding Plan Year.
(c) "Key Employee" shall mean any Employee or former Employee
------------
who at any time during the 60-month period ending on the Determination Date is
described below. The term Key Employee shall also include the beneficiaries of
such persons. The foregoing notwithstanding, the number of persons described in
Subsection (c)(2) for the entire 60-month period shall be limited to 10.
(1) An officer of the Employer having Income for a Plan
Year during such 60-month period greater than fifty percent (50%) of the amount
in effect under section 415(b)(1)(A) of the Code for the calendar year in which
such Plan Year ends.
(2) One of the 10 employees with annual Income greater than
the amount described in section 415(c)(1)(A) of the Code who own (or are
considered as owning, within the meaning of section 318 of the Code) the largest
interests in any Employer or Affiliated Company, provided that such interest
exceeds one-half of one percent (0.5%) of the total share owner ship of the
Employer or Affiliated Company.
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(3) A five-percent (5%) owner of the Em ployer.
(4) A one-percent (1%) owner of the Employer who has annual
Income which, in the aggregate, is in excess of $150,000.
The above determinations shall be made in accordance with section
416(i) of the Code. No more than 50 employees (or, if less, the greater of
three employees or ten percent (10%) of the greatest number of employees,
including leased employees within the meaning of section 414(n) of the Code,
employed by the Employer and all Affiliated Companies during the 60-month period
ending on the Determination Date) shall be treated as officers.
(d) "Key Employee Ratio" shall mean the ratio for any Plan Year,
------------------
calculated as of the Determination Date of such Plan Year, determined by
comparing the amount described in Subsection (d)(1) with the amount described
in Subsection (d)(2) after deducting from each such amount any portion thereof
de scribed in Subsection (d)(3).
(1) The sum of (A) the present value of all accrued
benefits of Key Employees under all qualified defined benefit plans included in
the Aggregation Group, (B) the balances in all of the accounts of Key Employees
under all qualified defined contribution plans included in the Aggregation
Group, and (C) the amounts distributed from all plans in such Aggregation
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Group to or on behalf of any Key Employee during the period of five Plan Years
ending on the Determination Date, except benefits paid on account of death in
excess of the accrued benefit or account balances immediately prior to death.
(2) The sum of (A) the present value of all accrued
benefits of all Participants under all qualified defined benefit plans included
in the Aggregation Group, (B) the balances in all of the accounts of all
Participants under all qualified defined contribution plans included in the
Aggregation Group, and (C) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any Participant during the period of five
Plan Years ending on the Determination Date.
(3) The sum of (A) all rollover contributions (or fund-to-
fund transfers) to the Plan or a Prior Plan by an Employee after December 31,
1983 from a plan sponsored by a company which is not the Employer or an
Affiliated Company, (B) any amount that is included in Subsections (d)(1) and
(2) for a person who is a Non-Key Employee as to the Plan Year of refer ence but
who was a Key Employee as to any earlier Plan Year, and (C) any amount that is
included in Subsections (d)(1) and (2) for a person who has not performed any
service for any Employer during the five-year period ending on the Determination
Date.
(4) The present value of accrued benefits under all
qualified defined benefit plans included in the
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Aggregation Group shall be determined on the basis of the 1971 Group Annuity
Mortality Table for Males and an interest rate of eight percent (8%). The value
of proportional subsidies, including subsidized pre-retirement survivor's
benefits, subsidized early retirement benefits, and optional forms of payment,
shall be ignored in determining the present value of accrued benefits.
(5) Solely for the purpose of determining whether the Plan,
or any other plan included in a required Aggregation Group of which this Plan
is a part, is top-heavy, the accrued benefit of an Employee other than a Key
Employee shall be determined under (A) the method, if any, that uniformly
applies for accrual purposes under all plans maintained by the Employer and
Affiliated Companies, or (B) if there is no such method, as if such benefit
accrued not more rapidly than at the slowest accrual rate permitted under the
fractional accrual method of section 411(b)(1)(C) of the Code.
(e) "Non-Key Employee" shall mean any person who is an Employee
----------------
or a former Employee in any Plan Year but who is not a Key Employee as to that
Plan Year. The term Non-Key Employee shall also include the beneficiaries of
such persons.
(f) "Super Top-Heavy Plan" shall mean each plan in an
--------------------
Aggregation Group if, as of the applicable Determination Date, the Key Employee
Ratio exceeds ninety percent (90%), determined in accordance with section 416 of
the Code.
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(g) "Top-Heavy Plan" shall mean each plan in an Aggregation
--------------
Group if, as of the applicable Determination Date, the Key Employee Ratio
exceeds sixty percent (60%), determined in accordance with section 416 of the
Code.
(h) "Top-Heavy Valuation Date" shall mean the most recent
------------------------
Valuation Date occurring within the 12-month period ending on the Determination
Date.
C.3 Minimum Contribution for Non-Key Employees.
------------------------------------------
(a) (1) In each Plan Year in which the Plan is a Top-Heavy
Plan, each Participant who is a Non-Key Employee and who is employed by the
Employer on the last day of such Plan Year shall receive a total minimum
Employer contribution (including forfeitures) under all plans described in
Section C.2(a)(1) and (2) of not less than three percent (3%) of the
Participant's annual Limitation Compensation.
(2) For the purpose of this Subsection, neither salary
reduction contributions nor matching contributions made on behalf of a
Participant shall be deemed to be Employer contributions.
(3) The minimum Employer contribution shall be
provided to each Participant who is a Non-Key Employee employed by a Employer on
the last day of the Plan Year, regardless of the number of Hours of Service
completed by the Participant during the Plan Year, and regardless of the
Participant's level
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of compensation. Minimum Employer contributions shall be allocated to Employer
Accounts. Minimum Employer contributions shall not be subject to the ACP Test or
the ADP Test.
(b) The percentage set forth in Subsection (a)(1) shall be
reduced to the percentage at which contributions, including salary reduction
contributions, matching contributions, and forfeitures, are made (or are
required to be made) for a Plan Year for the Key Employee for whom such
percentage is the highest for that Plan Year. This percentage shall be
determined for each Key Employee by dividing the contribution for such Key
Employee by his Limitation Compensation for the Plan Year. All defined
contribution plans required to be included in an Aggregation Group shall be
treated as one plan for the purpose of this Section; however, this Section shall
not apply to any plan which is required to be included in an Aggregation Group
if such plan enables a defined benefit plan in the group to meet the
requirements of section 401(a)(4) or section 410 of the Code.
(c) If a Participant who is a Non-Key Employee employed by
the Employer on the last day of the Plan Year participates in both a defined
benefit plan and a defined contribution plan described in Section C.2(a)(1) and
(2), the Employer is not required to provide such Participant with both the
minimum benefit under the defined benefit plan and the minimum contribution
described above. In such event, the Participant
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shall have the minimum benefit provided under the defined benefit Top-Heavy
Plan.
(d) The compensation taken into account for the purpose of
determining minimum Company contributions under this Section shall not not be
more than the amount in effect under section 401(a)(17) of the Code for the Plan
Year in question.
C.4 Vesting.
-------
(a) Change in Schedule. Each Participant's vested interest in
------------------
his Employer Account shall be determined in accordance with the following
schedule for any Plan Year in which the Plan is a Top-Heavy Plan unless the
vesting schedule in Section 9.1 provides more rapid vesting for such
Participant:
Years of
Vesting Service Percent Vested
--------------- --------------
less than 2 years 0 percent
2 years 20 percent
3 years 40 percent
4 years 60 percent
5 years 80 percent
6 years 100 percent
(b) Shift Out of Top-Heavy Status. If the Plan ceases to be a
-----------------------------
Top-Heavy Plan, the vesting schedule in Section 9.1 shall again apply to all
Participants. However, a Participant shall remain at the point on the vesting
schedule set forth in Subsection (a) that he had attained immediately before the
Plan ceased to be a Top-Heavy Plan until he has sufficient years
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of Vesting Service to have a greater vested percentage under the schedule in
Section 9.1.
(c) Special Election of Vesting Schedule. Each Participant
------------------------------------
who has at least three years of Vesting Service when the Plan ceases to be a
Top-Heavy Plan may elect to continue to have his vested percentage computed
under the Plan in accordance with the vesting schedule set forth in Subsection
(a). The period during which the election may be made shall commence on the date
on which the Participant is informed that the Plan is no longer a Top-Heavy Plan
and shall end 60 days thereafter.
C.5 Social Security. For each Plan Year in which it is a Top-Heavy
---------------
Plan, the Plan must meet the requirements of this Article without regard to any
Social Security or similar contributions or benefits.
C.6 Adjustment to Maximum Allocation Limitation.
-------------------------------------------
(a) For each Plan Year in which the Plan is (1) a Super Top-
Heavy Plan or (2) a Top-Heavy Plan and the Unisource Committee does not make the
election described in Subsection (b) and for which a similar election has not
been made as to another plan in the Aggregation Group, the 1.25 factor in the
defined benefit and defined contribution fractions described in Appendix B
shall be reduced to 1.0. The adjustment described in this Subsection shall not
apply to any Participant during any period in which the Participant earns no
additional accrued benefit
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under any defined benefit plan and has no employer contributions, forfeitures,
or voluntary contributions allocated to his accounts under any defined
contribution plan.
(b) If, in any Plan Year in which the Plan is a Top-Heavy Plan
but not a Super Top-Heavy Plan, the Aggregation Group described in Section
C.2(a)(1) and (2) also includes a defined benefit plan, the Unisource Committee
may elect to use a factor of 1.25 in computing the denominator of the defined
benefit and defined contribution fractions described in Appendix B. In the event
of such an election, the minimum Employer contribution described in Section
C.3(a)(1) for each Non-Key Employee who is not covered by a defined benefit plan
shall be increased from three percent (3%) to four percent (4%), and the minimum
benefit described in Section C.3(c) for each Non-Key Employee who is covered by
a defined benefit plan shall be the increased minimum benefit provided under the
defined benefit Top-Heavy Plan.
(c) In the case of any Top-Heavy Plan to which Section B.4(e)(1)
of Appendix B applies, "$41,500" shall be substituted for "$51,875" in the
calculation of the numerator of the transition fraction.
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APPENDIX D
DETERMINATION OF HIGHLY COMPENSATED EMPLOYEES
---------------------------------------------
D.1 Introduction. Highly Compensated Employees for a given Plan Year
------------
shall be the employees who are described below. The determination as to whether
an employee is a Highly Compensated Employee shall be made in accordance with
section 414(q) of the Code and the regulations thereunder and shall be made on a
Plan Year basis. For the purpose of determining which employees are Highly
Compensated Employees for the first Plan Year, the provisions of this Appendix
shall be treated as if they were in effect during 1996.
D.2 Determination. "Highly Compensated Employee" shall mean any
-------------
employee of the Employer or an Affiliated Company who:
(a) was at any time during either the Determination Year or the
Look-Back Year a five-percent (5%) owner (as defined in section 416(i)(1)(B) of
the Code); or
(b) (1) was in the Top-Paid Group for the Look-Back Year, if
the Board of Directors elects to have this condi tion apply, and (2) had Income
during the Look-Back Year which is in excess of $80,000 (as adjusted for
cost-of-living increases).
Employees who are non-resident aliens who receive no U.S.-source
income from the Company or any Affiliated Company
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shall not be treated as employees for the purpose of this Section.
D.3 Definitions. The following definitions shall supplement those
-----------
set forth in Article II of the Plan:
(a) "Determination Year" shall mean the Plan Year for which the
------------------
determination of Highly Compensated Employees is being made.
(b) "Look-Back Year" shall mean the 12 months preceding the
--------------
Determination Year.
(c) "Top-Paid Group" shall mean the group consisting of the top
--------------
twenty percent (20%) of employees of the Company and all Affiliated Companies
for the Look-Back Year, when employees are ranked on the basis of their Income
for the Look-Back Year. Solely for purposes of determining the number of
employees to be included in such group, the following employees shall not be
counted:
(1) employees who have not completed six months of
employment by the end of the Look-Back Year;
(2) employees who normally work fewer than 17 1/2 hours per
week;
(3) employees who normally work not more than six months
during any year;
(4) employees who have not attained age 21 by the end of
the Look-Back Year.
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Employees covered by a collective bargaining agreement shall be
counted in determining the number of employees to be included in the Top-Paid
Group unless ninety percent (90%) or more of the employees of the Company and
all Affiliated Companies are covered by collective bargaining agreements and
this Plan covers only employees who are not covered by collective bar gaining
agreements. In such a case, employees covered by a collective bargaining
agreement shall not be counted in determining the number of employees to be
included in the Top-Paid Group.
D.4 Highly Compensated Former Employees. For a given Determination
-----------------------------------
Year, an individual is a Highly Compensated Former Employee if he separated from
service before the first day of the Determination Year and if he was a Highly
Compensated Employee (as determined under Section D.2) during either (a) the
year he separated from service or (b) any Determination Year ending on or after
his 55th birthday.
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APPENDIX E
QUALIFIED NONELECTIVE CONTRIBUTIONS
AND
QUALIFIED MATCHING CONTRIBUTIONS
------------------------------------
E.1 Qualified Nonelective Contributions and Qualified Matching
----------------------------------------------------------
Contributions.
- -------------
(a) If the Administrator determines that the Plan does not
satisfy the ADP Test and/or the ACP Test, the Employer may make Qualified
Nonelective Contributions to be allocated among the QNEC Accounts of the
Eligible Employees who are not Highly Compensated Employees.
(b) In addition to or instead of making Qualified Matching
Contributions, the Employer may make Qualified Matching Contributions to be
allocated among the QMAC Accounts of the Participants who are not Highly
Compensated Employees.
(c) Allocation of Qualified Nonelective Contributions and
Qualified Matching Contributions shall be in accor dance with Section E.2.
E.2 Allocation to QNEC and QMAC Accounts.
------------------------------------
(a) Qualified Nonelective Contributions shall be allocated to
the QNEC Accounts of the Eligible Employees who are not Highly Compensated
Employees in the Plan Year for which the Qualified Nonelective Contributions are
made. Qualified Non elective Contributions shall be allocated to the QNEC
Account of
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each such Eligible Employee in the proportion that his Compensa-tion for the
Plan Year bears to the Compensation of all such Eligible Employees for the Plan
Year.
(b) Qualified Matching Contributions shall be allocated to the
QMAC Accounts of the Participants who are not Highly Compensated Employees in
the Plan Year for which the Qualified Matching Contributions are made. Qualified
Matching Contributions shall be allocated to the QMAC Account of each such
Participant in the proportion that his Basic Contributions for the Plan Year
bears to the Basic Contributions of all such Participants for the Plan Year.
E.3 Use of Qualified Nonelective Contributions and Qualified
--------------------------------------------------------
Matching Contributions.
- -----------------------
(a) As provided in Section A.3(b)(2)(D), Quali fied Matching
Contributions and Qualified Nonelective Contribu tions included in the numerator
of the Actual Deferral Percentage to help the Plan satisfy the ADP Test shall in
no event be in cluded in the numerator of the Actual Contribution Percentage.
(b) As provided in Section A.6(b)(2)(C), Quali fied Matching
Contributions and Qualified Nonelective Contribu tions included in the numerator
of the Actual Contribution Percentage to help the Plan satisfy the ACP Test
shall in no event be included in the numerator of the Actual Deferral
Percentage.
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