<PAGE> 1
Registration No. 333-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
WALLACE COMPUTER SERVICES, INC.
----------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 36-2515832
- ------------------------------- ---------------------------------
(State or Other Jurisdiction of (IRS Employer Identification No.)
Incorporation or Organization)
2275 Cabot Drive, Lisle, Illinois 60532
-------------------------------------------- ----------
(Address of Principal Executive Offices) (ZIP Code)
Wallace Computer Services, Inc. Profit Sharing and Retirement Plan
(full title of plan)
Steven L. Carson
General Counsel
2275 Cabot Drive,
Lisle, Illinois 60532-3630
(630) 588-5000
-------------------------------------
(Name, Address and Telephone Number,
Including Area Code of Agent for Service)
-----------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of Each Class Amount to be Registered Proposed Maximum Proposed Maximum Amount of Registration
Securities to be Offering Price Aggregate Offering Fee
Registered Per Share Price
- ------------------------------------------------------------------------------------------------------------------------
Common Stock, $1.00
par value
1,750,000 (1)(2) $11.375(3) $19,906,250(3) $5,256
</TABLE>
(1) This registration also includes such indeterminable additional shares as may
become issuable pursuant to the anti-dilution provisions of the plans. In
addition,
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pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement also covers an indeterminate amount of interest to be offered or sold
pursuant to the Wallace Computer Services, Inc. Profit Sharing and Retirement
Plan (the "Plan").
(2) Preferred Stock Purchase Rights initially are attached to and trade with the
shares of Common Stock being registered hereby. Value attributable to such
Rights, if any, is reflected in the market price of the Common Stock.
(3) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act, pursuant to Rule
457(h)thereunder, based upon the average of the high and low prices of the
Common Stock on April 10, 2000, as reported in the New York Stock Exchange
Composite Quotation System.
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed (File No. 1-6528) with the
Securities and Exchange Commission (the "Commission") by Wallace Computer
Services, Inc. (the "Company") are incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the year ended July
31, 1999;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended October 31, 1999 and January 31, 2000;
(c) the Company's Current Reports on Form 8-K filed on January 20,
1999, January 19, 2000 and March 16, 2000;
(d) the Company's Registration Statement on Form S-3, Registration No.
333-46807, filed on February 24, 1998 and amended on April 10, 1998; and
(e) the description of the Company's Common Stock, par value $1.00 per
share, which is contained in a registration statement filed under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including any subsequent
amendment or any report filed for the purpose of updating such description.
All documents filed by the Company or the Plan pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act, after the date of this Registration
Statement and prior to the filing of a post-effective amendment which indicates
that all securities offered hereby have been sold or which deregisters all
securities then remaining unsold, are deemed to be incorporated by reference
into this Registration Statement and to be a part hereof from the respective
dates of filing of such documents (such documents, and the documents enumerated
above, being hereinafter referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
<PAGE> 3
ITEM 4. DESCRIPTION OF SECURITIES
Not Applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Section 145 ("Section 145") of the Delaware General
Corporation Law of the State of Delaware (the "Delaware GCL") which provides for
indemnification of directors and officers in certain circumstances.
In accordance with Section 102(b)(7) of the Delaware GCL, the Company's
Restated Certificate of Incorporation provides that directors shall not be
personally liable for monetary damages for breaches of their fiduciary duty as
directors except for (i) breaches of their duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or deliberate dishonesty, (iii) any improper personal
profit or benefit, or (iv) any income taxes in respect of compensation.
The Restated Certificate of Incorporation of the Company, as amended,
provides for indemnification of directors and officers to the full extent
provided by the Delaware GCL, as amended from time to time. It states that the
indemnification provided therein shall not be deemed exclusive. The Company may
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Company, or another corporation, partnership, joint
venture, trust or other enterprise against any expense, liability or loss,
whether or not the Company would have the power to indemnify him or her against
such expense, liability or loss, under the provisions of the Delaware GCL.
Pursuant to Section 145 and the Restated Certificate of Incorporation, the
Company maintains directors' and officers' liability insurance coverage.
Pursuant to the authority provided in the Restated Certificate of Incorporation,
the Company has entered into indemnification agreements with each of its
officers and directors, indemnifying them against certain potential liabilities
that may arise as a result of their service to the Company, and providing for
certain other protection.
The foregoing summaries are necessarily subject to the complete text of the
statute, the Certificate of Incorporation, the By-Laws and the agreements
referred to above and are qualified in their entirety by reference thereto.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Not applicable.
ITEM 8. EXHIBITS
The Exhibits accompanying this Registration Statement are listed on the
accompanying Exhibit Index.
The registrant will submit or has submitted the Plan and any amendment
thereto to the Internal Revenue Service ("IRS") in a timely manner and has made
or will make all changes required by the IRS in order to qualify the Plan.
<PAGE> 4
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(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; and notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and;
(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 information required to be included in a
post-effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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 undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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 Commission such
indemnification is against public policy as expressed in the Securities 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,
<PAGE> 5
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
Securities Act and will be governed by the final adjudication of such issue.
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the Village of Lisle, State of Illinois, on this 13th day of
April, 2000.
Wallace Computer Services, Inc.
By: Steven L. Carson
/s/ Steven L. Carson
--------------------
Steven L. Carson, Vice President,
General Counsel and Secretary
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints Steven L. Carson, his or her true and
lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his or her name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorney-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or any them, or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons on
the date and in the capacities indicated:
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Neele E. Stearns Chairman of the Board April 13, 2000
- ------------------------------
Neele E. Stearns
/s/ William J. Devers, Jr. Director April 13, 2000
- ------------------------------
William J. Devers, Jr.
/s/ Andrew J. McKenna, Jr. Director April 13, 2000
- ------------------------------
Andrew J. McKenna, Jr.
/s/ Bettye Martin Musham Director April 13, 2000
- ------------------------------
Bettye Martin Musham
/s/ John C. Pope Director April 13, 2000
- ------------------------------
John C. Pope
<PAGE> 7
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Michael O. Duffield Acting Chief Executive April 13, 2000
- ------------------------------ Officer, President, and
Michael O. Duffield Chief Operating Officer
/s/ John J. DeCoster Vice-President, Controller April 13, 2000
- ------------------------------ (Principal Accounting
John J. DeCoster Officer)
The Plan. Pursuant to the requirements of the Securities Act of 1933,
Wallace Computer Services, Inc., as plan administrator, has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Village of Lisle, State of Illinois on this 13th day of
April, 2000.
Wallace Computer Services, Inc.
Profit Sharing and Retirement Plan
By: Wallace Computer Services, Inc.,
as plan administrator
By: /s/ Robert Kelderhouse
---------------------------------------
Robert Kelderhouse
Vice President - Treasurer
<PAGE> 8
INDEX TO EXHIBITS TO REGISTRATION STATEMENT ON FORM S-8
Exhibit
Number Description of Exhibit
- ------- ----------------------
4.1 Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of the State of Delaware on January 7, 1987
(previously filed as part of Exhibit 3 to the Company's Annual Report on
Form 10-K for the fiscal year ended July 31, 1987, and incorporated
herein by reference to such Report).
4.1(A) Certificate of Amendment amending Section 1 of Article FOURTH of the
Certificate of Incorporation of the Company as filed with the Secretary
of State of the State of Delaware on November 28, 1989 (previously filed
as part of Exhibit 3 to the Company's Annual Report on Form 10-K for the
fiscal year ended July 31, 1987, and incorporated herein by reference to
such Report).
4.1(B) Certificate of Amendment amending Section 1 of Article FOURTH of the
Certificate of Incorporation of the Company as filed with the Secretary
of State of the State of Delaware on March 14, 1997 (previously filed as
part of Exhibit 3.1(C) to the Company's Annual Report on Form 10-K for
the fiscal year ended July 31, 1997, and incorporated herein by reference
to such Report).
4.2 Amended and Restated By-Laws of the Registrant as adopted on January 5,
1996 (previously filed as Exhibit 3.1 to the Registrant's Quarterly
Report on Form 10-Q dated January 31, 1996, and incorporated herein by
reference to such Report).
4.3 Form of Rights Agreement, dated as of March 14, 2000, between Company and
Harris Trust and Savings Bank, as Rights Agent, which includes the form
of Certificate of Designations setting forth the terms of the Series B
Preferred Stock as Exhibit A, the form of Rights Certificate as Exhibit B
and the Summary of Rights to Purchase Preferred Stock as Exhibit C, is
hereby incorporated by reference to Exhibit 4 of the Company's Current
Report on Form 8-K dated March 14, 2000.
4.4 The Wallace Computer Services, Inc. Retirement and Profit Sharing Plan. *
5. Opinion of Steven L. Carson, General Counsel to the Company. *
23.1 Consent of Arthur Andersen LLP. *
23.2 Consent of Counsel (contained on the opinion filed as Exhibit 5 to this
Registration Statement).
24. Powers of Attorney (included in the Signature Page of this Registration
Statement).
- ----------------
* Filed herewith
<PAGE> 1
EXHIBIT 4.4
Wallace Computer Services, Inc. Profit Sharing and Retirement Plan
<PAGE> 2
WALLACE PROFIT SHARING AND RETIREMENT PLAN
Effective January 1, 1998
Except as Specifically Provided Otherwise
<PAGE> 3
TABLE OF CONTENTS
PAGE
ARTICLE 1 General ................................................. 1
1.1 Purpose .................................................. 1
1.2 Source of Funds .......................................... 1
1.3 Effective Date ........................................... 1
1.4 Definitions .............................................. 1
ARTICLE 2 Eligibility and Participation ........................... 9
2.1 Eligibility Requirements ................................. 9
2.2 Leaves of Absence ........................................ 9
2.3 Qualified Military Service ............................... 10
ARTICLE 3 Contributions ........................................... 11
3.1 Contributions by Employer ................................ 11
3.2 Participant Contributions ................................ 11
3.3 Limitations on Before-Tax Contributions .................. 12
3.4 Limitation on After-Tax Contributions .................... 15
3.5 Multiple Use ............................................. 17
3.6 Rollover Contribution .................................... 18
ARTICLE 4 Accounting Provisions and Allocations ................... 19
4.1 Participant's Accounts ................................... 19
4.2 Investment Funds ......................................... 19
4.3 Allocation Procedure ..................................... 20
4.4 Determination of Value of Trust Fund ..................... 21
4.5 Allocation of Net Earnings or Losses ..................... 21
4.6 Eligibility to Share in the Employer's
Contribution and Forfeitures ............................. 21
4.7 Allocation of Before-Tax Contributions ................... 22
4.8 Allocation of After-Tax Contributions .................... 22
4.9 Allocation of Employer Contribution
and Forfeitures .......................................... 23
4.10 Provisional Annual Addition .............................. 23
4.11 Limitation on Annual Additions ........................... 24
4.12 Special Limitation on Maximum Contributions .............. 25
4.13 Transfer of Fund Balances ................................ 26
ARTICLE 5 Amount of Payments to Participants ...................... 28
5.1 General Rule ............................................. 28
5.2 Retirement ............................................... 28
5.3 Death .................................................... 28
5.4 Vesting .................................................. 28
<PAGE> 4
5.5 Resignation or Dismissal ................................. 28
5.6 Computation of Period of Service ......................... 29
5.7 Treatment of Forfeitures ................................. 29
ARTICLE 6 Distributions ........................................... 31
6.1 Commencement and Form of Distributions ................... 31
6.2 Distributions to Beneficiaries ........................... 33
6.3 Beneficiaries ............................................ 34
6.4 Installment or Deferred Distributions .................... 35
6.5 Form of Elections and Applications
for Benefits ............................................. 35
6.6 Unclaimed Distributions .................................. 35
6.7 Withdrawals .............................................. 35
6.8 Loans .................................................... 37
6.9 Facility of Payment ...................................... 39
6.10 Claims Procedure ......................................... 39
6.11 Eligible Rollover Distributions .......................... 40
ARTICLE 7 Top-Heavy Plan Requirements ............................. 42
7.1 Definitions .............................................. 42
7.2 Top-Heavy Plan Requirements .............................. 44
ARTICLE 8 Stockholder Rights with Respect to Company Stock ........ 46
8.1 Voting Shares of Company Stock ........................... 46
8.2 Tender Offers ............................................ 46
8.3 Designation of Participants and
Beneficiaries as Named Fiduciaries ....................... 48
ARTICLE 9 Change of Control ....................................... 49
9.1 Application .............................................. 49
9.2 Investment of Trust Fund ................................. 49
9.3 Administration of Plan and Trust ......................... 49
9.4 Maintenance of the Plan and Trust ........................ 49
9.5 Change of Control Defined ................................ 50
9.6 Related Company Defined .................................. 51
9.7 Attorneys' Fees and Other
Costs and Expenses ....................................... 51
9.8 Binding on Successors .................................... 51
9.9 Amendment of Article 9 ................................... 52
ARTICLE 10 Powers and Duties of Profit Sharing Committee .......... 53
10.1 Appointment of Profit Sharing Committee .................. 53
10.2 Powers and Duties of Committee ........................... 53
10.3 Committee Procedures ..................................... 54
10.4 Consultation with Advisors ............................... 54
10.5 Committee Members as Participants ........................ 55
10.6 Records and Reports ...................................... 55
<PAGE> 5
10.7 Investment Policy ........................................ 55
10.8 Designation of Other Fiduciaries ......................... 55
10.9 Obligations of Committee ................................. 56
10.10 Indemnification of Committee ............................. 56
ARTICLE 11 Trustee and Trust Fund ................................. 57
11.1 Trust Fund ............................................... 57
11.2 Payments to Trust Fund and Expenses ...................... 57
11.3 Trustee's Responsibilities ............................... 57
11.4 Reversion to the Employer ................................ 57
ARTICLE 12 Amendment or Termination ............................... 58
12.1 Amendment ................................................ 58
12.2 Termination .............................................. 58
12.3 Form of Amendment, Discontinuance of
Employer Contributions, and Termination .................. 58
12.4 Limitations on Amendments ................................ 58
12.5 Level of Benefits Upon Merger ............................ 59
12.6 Vesting Upon Termination or
Discontinuance of Employer Contributions;
Liquidation of Trust ..................................... 59
ARTICLE 13 Miscellaneous .......................................... 61
13.1 No Guarantee of Employment, Etc .......................... 61
13.2 Nonalienation ............................................ 61
13.3 Qualified Domestic Relations Order ....................... 61
13.4 Controlling Law .......................................... 61
13.5 Severability ............................................. 61
13.6 Notification of Addresses ................................ 62
13.7 Gender and Number ........................................ 62
ARTICLE 14 Adoption by Affiliates ................................. 63
14.1 Adoption of Plan ......................................... 63
14.2 The Company as Agent for Employer ........................ 63
14.3 Adoption of Amendments ................................... 63
14.4 Termination .............................................. 63
14.5 Data to Be Furnished by Employers ........................ 63
14.6 Joint Employees .......................................... 64
14.7 Expenses ................................................. 64
14.8 Withdrawal ............................................... 64
14.9 Prior Plans .............................................. 64
<PAGE> 6
I. ARTICLE General
A. Purpose . It is the intention of the Employer to provide the Wallace Profit
Sharing and Retirement Plan, and a Trust Fund in conjunction therewith, for the
benefit of eligible employees of the Employer, in accordance with the provisions
of Code Sections 401 and 501 and in accordance with other provisions of law
relating to profit sharing plans containing a Code Section 401(k) arrangement.
Except as otherwise provided in this Plan or the Trust, upon the transfer by the
Employer of any funds to the Trust Fund in accordance with the provisions of
this Plan, all interest of the Employer therein shall cease and terminate, and
no part of the Trust Fund shall be used for, or diverted to, purposes other than
the exclusive benefit of Participants and their beneficiaries.
A. Source of Funds . The Trust Fund shall be created, funded and maintained by
contributions of the Employer, by contributions of the Participants, and by such
net earnings or losses as are obtained from the investment of the funds of the
Trust Fund.
B.
C. Effective Date . The provisions of the Plan as herein restated shall be
effective as of January 1, 1998, except for certain provisions the effective
dates of which are set forth therein. Except as may be required by ERISA or the
Code, the rights of any person whose status as an employee of the Employer and
all Affiliates has terminated shall be determined pursuant to the Plan as in
effect on the date such employment terminated, unless a subsequently adopted
provision of the Plan is made specifically applicable to such person.
D.
E. Definitions . Certain terms are capitalized and have the respective meanings
set forth in the Plan.
F. G. "Account" means each of the individual accounts established pursuant to
Article 4 representing a Participant's allocable share of the Trust Fund.
H.
I. "Accounts" means the collective individual accounts established pursuant to
Article 4.
J.
K. "Active Participant" means a Participant who, on a given date, is employed by
the Employer as an Eligible Employee.
L.
M. "Actual Deferral Percentage" and "Actual Deferral Percentage Tests" are
described in Section 3.3.
N.
O. "Affiliate" means any corporation or enterprise, other than the Company,
which, as of a given date, is a member of the same controlled group of
corporations, the same group of trades or businesses under common control or the
same affiliated service group, determined in accordance with Code Sections
414(b), (c), (m) or (o), as is the Company. For purposes of determining the
amount of a Participant's Annual Addition or Total Compensation and applying the
limitations of Code Section 415 set forth in Article 4, "Affiliate" shall
include any
1
<PAGE> 7
corporation or enterprise, other than the Company, which, as of a given date, is
a member of the same controlled group of corporations or the same group of
trades or businesses under common control, determined in accordance with Code
Sections 414(b) or (c) as modified by Code Section 415(h), as is the Company.
P.
Q. "After-Tax Contributions" mean, with respect to a Participant, the
contributions made by such Participant pursuant to Section 3.2, and, with
respect to the Employer, the sum of all such contributions made by Participants.
R.
S. "Annual Addition" means for any Limitation Year, the sum of (a) all
Before-Tax Contributions, Employer Contributions, forfeitures and After-Tax
Contributions allocated to the Accounts of a Participant under this Plan; (b)
any employer contributions, forfeitures and employee after-tax contributions
allocated to such Participant under any other defined contribution plan
maintained by the Employer or an Affiliate; and (c) amounts allocated to an
individual medical account as defined in Code Section 415(l)(2) and amounts
attributable to post-retirement medical benefits allocated to an account
described in Code Section 419A(d)(2) maintained by the Employer or an Affiliate.
T.
U. "Before-Tax Contributions" means, with respect to a Participant, the
contributions withheld from the earnings of such Participant and made by the
Employer as described in Section 3.2 and, with respect to the Employer, the sum
of all such contributions made on behalf of all Participants.
V.
W. "Business Day" means each day on which the Federal Reserve and the New York
Stock Exchange are open for business.
X.
Y. "Code" means the Internal Revenue Code of 1986, as from time to time amended.
Z.
AA. "Committee" means the plan administrator and named fiduciary appointed
pursuant to Section 10.1.
BB.
CC. "Company" means Wallace Computer Services, Inc., a Delaware corporation, a
predecessor of such corporation, or any successor to it in ownership of all or
substantially all of its assets.
DD.
EE. "Compensation" means a Participant's "Considered Compensation" or "Total
Compensation," as follows:
FF.
GG. (a) "Considered Compensation" for a period is the Participant's Total
Compensation for such period paid while he was an Active Participant including
the Participant's Before-Tax Contributions and elective contributions to a plan
of the Employer established under Code Section 125 and amounts paid to the
Participant from any unfunded, nonqualified deferred compensation plan of the
Employer, but excluding reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred
2
<PAGE> 8
compensation contributions, disability pay and welfare benefits; provided,
however, that Considered Compensation shall not include any amount in excess of
$160,000 as adjusted by the Commissioner for increases in the cost of living in
accordance with Code Section 401(a)(17)(B). The cost-of-living adjustment in
effect for a calendar year applies to any period, not exceeding 12 months, over
which compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12 months, the
annual compensation limit will be multiplied by a fraction, the numerator of
which is the number of days in the determination period, and the denominator of
which is 365, or if the determination period includes February 29, the
denominator shall be 366.
HH.
II. (b) "Total Compensation" for a period is the Participant's wages, as defined
in Code Section 3401(a) for purposes of income tax withholding at the source,
and all other payments of compensation to the Participant by the Employer for
which the Employer is required to furnish the Participant a written statement
under Code Sections 6041(d), 6051(a)(3) and 6052, but determined without regard
to any rules under Code Section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed but excluding amounts paid or reimbursed by the Employer for moving
expenses incurred by the Participant; effective with the 1998 Plan Year, plus
amounts excluded from the Participant's income for the period under Code
Sections 125, 401(k) or 403(b).
JJ.
KK. "Contribution Percentage" and "Contribution Percentage Tests" are described
in Section 3.4.
LL.
MM. "Defined Contribution Dollar Limitation" means an amount equal to $30,000,
prorated for any Limitation Year of less than 12 months; provided that, for
purposes of Section 4.11(a)(ii), such amount shall be reduced by the amounts
allocated to any medical accounts described in subsection (c) of "Annual
Addition."
NN.
OO. "Early Retirement Date" means the earliest of the following:
PP.
QQ. (a) the date the Participant's employment by the Employer is terminated for
any reason after the date on which the Participant attained the age of 60 years;
or
RR.
SS. (b) the date the Participant's employment is terminated for any reason prior
to attaining age 60, but after the date on which the Participant attains age 55
years and has completed 20 Years of Service. For purposes of this subsection,
service will include any service with a subsidiary of the Company or with any
business entity acquired by the Company or any of its subsidiaries; or TT.
UU. (c) the date the Participant's employment is terminated because of physical
or mental disability (as determined by a duly trained physician appointed by the
Company).
VV.
3
<PAGE> 9
WW. "Eligible Employee" means any employee of an Employer who is not a Leased
Employee or a Member of a Collective Bargaining Unit, or an individual treated
by an Employer as an independent contractor.
XX.
YY. "Eligible Participant" is a Participant as defined in Section 4.6.
ZZ.
AAA. "Eligibility Period" is a one-year period used for the purpose of
determining when an employee is eligible to participate in the Plan. An
employee's first Eligibility Period shall commence on the date on which he first
completes an Hour of Service. Subsequent Eligibility Periods shall commence on
the anniversary of such date. Notwithstanding the foregoing, the initial
Eligibility Period of a former employee who is reemployed after incurring one or
more One-Year Breaks in Service and who is not eligible for immediate
participation pursuant to Section 2.1(d), shall commence on the date on which he
first completes an Hour of Service after such One-Year Break in Service, and
subsequent Eligibility Periods shall commence on the anniversary of such date.
BBB.
CCC. "Employer" means the Company and any Affiliate which adopts this Plan
pursuant to Article 14.
DDD.
EEE. "Employer Contribution" means the Employer Contribution determined under
Section 3.1(a)(ii).
FFF.
GGG. "Employment Commencement Date" means the first date on which an individual
performs duties for the Employer or an Affiliate as an employee; provided that
in the case of an employee who returns to service following his Severance Date,
the employee's "Employment Commencement Date" is the first date on which he
performs duties for the Employer or an Affiliate as an employee following such
Severance Date.
HHH.
III. "Entry Date" means the first day of each month.
JJJ.
KKK. "ERISA" means the Employee Retirement Income Security Act of 1974, as from
time to time amended.
LLL.
MMM. "Fiscal Year" means a 12-month period beginning on August 1 and ending on
July 31.
NNN.
OOO. "Five-Percent Owner" means an employee described in Code Section 416(i)(1).
PPP.
QQQ. "Highly Compensated Employee" means, effective January 1, 1997, an employee
of the Employer or an Affiliate who was a Participant eligible during the Plan
Year to make Before-Tax Contributions and/or After-Tax Contributions and who:
RRR.
SSS. (a) was a Five-Percent Owner at any time during the Plan Year or the
preceding Plan Year; or
TTT.
4
<PAGE> 10
UUU. (b) received Total Compensation in excess of $80,000 (as adjusted for
increases in the cost of living by the Secretary of the Treasury) during the
preceding Plan Year and was among the top 20% of the employees (disregarding
those employees excludable under Code Section 414(q)(5)) when ranked on the
basis of Section 415 Compensation paid for that year.
VVV.
WWW. To the extent required by Code Section 414(q)(6), a former employee who was
a Highly Compensated Employee when he separated from service with the Employer
and all Affiliates or at any time after attaining age 55 shall be treated as a
Highly Compensated Employee.
XXX.
YYY. For purposes of determining a Highly Compensated Employee, Total
Compensation shall include amounts excluded under Code Sections 125, 402(e)(3),
402(h)(1)(B), and employee contributions made pursuant to a salary reduction
agreement under Code Section 403(b).
"Hour of Service" is:
(a) each hour for which an employee is paid or entitled to payment for
the performance of duties for the Employer or an Affiliate;
(b) each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer or an Affiliate; and
(c) each hour for which an employee is paid or entitled to payment for
a period during which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation, holiday, illness,
incapacity, layoff, jury duty, military duty, or leave of absence. In crediting
Hours of Service pursuant to this subparagraph (c), all payments made or due
shall be taken into account, whether such payments are made directly by the
Employer or an Affiliate or indirectly (e.g., through a trust fund or insurer to
which the Employer or an Affiliate makes payments, or otherwise), except that:
(i) no more than 501 such Hours of Service shall be credited for
any continuous period during which the employee performs no duties;
(ii) no such Hours of Service shall be credited if payments are
made or due under a plan maintained solely for the purpose of
complying with any workers' compensation, unemployment compensation or
disability insurance laws; and
(iii) no such Hours of Service shall be credited for payments
which are made solely to reimburse the employee for medical or
medically related expenses.
The Hours of Service, if any, for which an employee is credited for a period in
which he performs no duties shall be computed and credited to computation
periods in accordance with 29 C.F.R. 2530.200b-2 and other applicable
regulations promulgated by the Secretary of Labor. For purposes of computing the
Hours of Service to be credited to an employee for whom a record of
5
<PAGE> 11
hours worked is not maintained, an employee shall be credited with 45 Hours of
Service for each week in which he completes at least one Hour of Service. In
addition, an employee shall be credited with Hours of Service for each week the
employee is on a leave of absence in accordance with Section 2.2.
"Leased Employee" means any individual who is not carried on the
payroll of the Employer or an Affiliate and who provides services for the
Employer or an Affiliate if:
(a) such services are provided pursuant to an agreement between the
Employer or an Affiliate and any other person ("leasing organization");
(b) such individual has performed such services for the Employer or an
Affiliate (or a related person within the meaning of Code Section 144(a)(3)) on
a substantially full-time basis for a period of at least one year; and
(c) such services have been performed under the primary direction or
control of the Employer or an Affiliate.
Contributions or benefits provided a Leased Employee by the leasing
organization which are attributable to services performed for the Employer shall
be treated as provided by the Employer. To the extent and for the purposes
required by Code Sections 414(n) and (o), a Leased Employee shall be deemed to
be an Employee of the Employer, unless: (i) he is covered by a money purchase
pension plan providing (1) a nonintegrated employer contribution rate of at
least 10 percent of compensation, as defined in Code Section 415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement which are
excludable from the Employee's gross income under Code Sections 125, 402(e)(3),
402(h) or 403(b), (2) immediate participation, and (3) full and immediate
vesting; and (ii) Leased Employees do not constitute more than 20 percent of the
Employer's nonhighly compensated workforce.
"Limitation Year" means the Plan Year.
"Member of a Collective Bargaining Unit" means any employee who is included
in a collective bargaining unit and whose terms and conditions of employment are
or were covered by a collective bargaining agreement if there is evidence that
retirement benefits were the subject of good-faith bargaining between
representatives of such employee and the Employer, unless such collective
bargaining agreement makes this Plan applicable to such employee.
"Multiple Use" is defined in Section 3.5.
"Non-Highly Compensated Employee" means, for any Plan Year, any employee of
the Employer or Affiliate who (a) at any time during the Plan Year was a
Participant eligible to make Before-Tax Contributions and/or After-Tax
Contributions, and (b) was not a Highly Compensated Employee for such Plan Year.
6
<PAGE> 12
"Normal Retirement Date" means a Participant's 65th birthday.
"One-Percent Owner" means an employee described in Code Section 416(i)(1).
"One-Year Break in Service" is a one-year period during which an employee
does not perform duties for the Employer or an Affiliate. Such period shall
commence on the later of the employee's Severance Date or the date on which he
ceases to be employed by either the Employer or an Affiliate. Solely for
purposes of determining whether a One-Year Break in Service has occurred,
absences shall be disregarded if the employee otherwise would normally have been
credited with service but for the employee's absence on a maternity or paternity
absence. No more than one year of absence on a single maternity or paternity
absence shall be so disregarded. A maternity or paternity absence is an absence
from work:
(a) by reason of the pregnancy of the employee;
(b) by reason of the birth of a child of the employee;
(c) by reason of the placement of a child with the employee in
connection with the adoption of such child by the employee; or
(d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
Any employee requesting such credit shall promptly furnish the Committee such
information as the Committee requires to show that the absence from work is a
maternity or paternity absence, and the number of days for which there was such
an absence.
"Participant" means:
(a) a current employee of the Employer or an Affiliate who has become
a Participant in the Plan pursuant to Section 2.1 or;
(b) a former employee for whose benefit an Account in the Trust Fund
is maintained.
"Plan" means the Wallace Profit Sharing and Retirement Plan.
"Plan Year" means a 12-month period beginning on January 1 and ending on
December 31.
"Primary Employer Contribution" means the Primary Employer Contribution
determined under Section 3.1.
"Provisional Annual Addition" is the amount described in Section 4.10.
7
<PAGE> 13
"Required Beginning Date" means:
(a) for a Participant who is not a Five-Percent Owner, the April 1
following the later of the calendar year in which the Participant attains age
70-1/2 or the calendar year in which his employment terminates;
(b) for a Participant who at any time during or after the calendar
year in which he attained age 66-1/2 was or became a Five-Percent Owner, the
April 1 following the later of (i) the calendar year in which he attained age
70-1/2 or (ii) the earlier of the calendar year in which he became a
Five-Percent Owner or his employment terminates.
"Rollover Contribution" means amounts rolled over directly to this Plan by
the trustee of another qualified plan pursuant to the provisions of Code Section
401(a)(31) and to any other related laws and regulations as in effect at the
time of such direct rollover.
"Severance Date" for an employee is the earlier of:
(a) the date on which he quits, retires, dies or is discharged; or
(b) the first day following any one-year period during which he
performed no duties for the Employer and all Affiliates.
"Supplemental Employer Contribution" means the Supplemental Employer
Contribution determined under Section 3.1.
"The 1.25 Test" is the test described in Sections 3.3(b)(i)(A) and
3.4(a)(i).
"The 2.0 Test" is the test described in Sections 3.3(b)(i)(B) and
3.4(a)(ii).
"Trust" or "Trust Fund" means the Trust established in accordance with
Article 11.
"Trustee" means the Trustee or Trustees under the Trust referred to in
Article 11.
"Valuation Date" means each Business Day on which the value of each Account
is determined.
"Year of Service" is a unit of service credited to an employee for purposes
of determining the percentage of the balance in a Participant's Employer Account
which is nonforfeitable and the total amount available for loans and
withdrawals. An employee who is reemployed shall retain service credited to him
in his previous employment with the Employer or an Affiliate, except as
otherwise provided in the Plan.
(a) An employee shall be credited with one Year of Service for each
full year in the period commencing on his Employment Commencement Date and
ending on his
8
<PAGE> 14
Severance Date. An employee shall also be credited with 1/365 of a Year of
Service for each additional day in such period for which he did not receive
credit pursuant to the preceding sentence.
(b) A former employee who is reemployed and who performs duties for
the Employer or an Affiliate within one year after the date he last performed
duties for the Employer or an Affiliate shall also be credited with 1/365 of a
Year of Service for each day in the period commencing on his Severance Date and
ending on his Employment Commencement Date following such Severance Date. I.
9
<PAGE> 15
ARTICLE Eligibility and Participation
A. Eligibility Requirements .
B.
1. Every Participant on the first day of the 1998 Plan Year shall continue as
such subject to the provisions of the Plan.
1. An Eligible Employee shall first be eligible to participate with respect to
the ability to make Voluntary Contributions pursuant to Section 3.2(b), if he is
then employed by the Employer on the Entry Date coinciding with or next
following the earlier of the date the Eligible Employee has completed (i) 31
days as an employee whose customary employment is both more than 20 hours per
week and more than 6 months in a Plan Year or, (ii) the end of the first
Eligibility Period in which the Eligible Employee completes 1,000 Hours of
Service. 2.
3. An Eligible Employee shall first be eligible to participate with respect to
the right to be credited with Employer Contributions and forfeitures pursuant to
Section 3.1(a)(ii), if he is then employed by the Employer on the Entry Date
coinciding with or next following the end of the first Eligibility Period in
which the Eligible Employee completes 1,000 Hours of Service. Upon eligibility
to participate with respect to the right to be credited with Employer
Contributions and forfeitures pursuant to Section 3.1(a)(ii), an Eligible
Employee shall make the Required Contribution described in Section 3.2.
4.
5. Any former employee of the Employer or an Affiliate who was a Participant or
could have become a Participant under subsections (b) or (c) above had he been
employed on a prior Entry Date, and is reemployed by the Employer as an Eligible
Employee, shall be eligible to participate immediately on the date of such
reemployment, (i) with respect to the ability to make Voluntary Contributions if
the Eligible Employee was or could have become a Participant under subsection
(b) only and (ii) with respect to the right to be credited with Employer
Contributions and forfeitures, and the corresponding obligation to make the
Required Contribution, if the Eligible Employee was or could have become a
Participant under subsection (c).
6.
7. Notwithstanding any provisions of this Plan to the contrary, any individual
who was providing services to the Employer in the capacity of, or who was
designated by the Employer as an independent contractor, or a Leased Employee,
and who is subsequently re-classified as an Eligible Employee for the purposes
of this Plan (regardless of whether such re-classification is retrospective or
prospective), shall be eligible to participate in the Plan on a prospective
basis only from the date of the re-classification and shall not have any
retroactive claim for benefits.
8.
B. Leaves of Absence . An employee shall be credited with 40 Hours of Service
for each full week the employee is on a leave of absence if he is not otherwise
credited with such Hours of Service; however, if an employee customarily worked
fewer than 40 hours per week in the 6 months immediately preceding the inception
of his leave of absence, then he shall be credited,
10
<PAGE> 16
for each full week of such leave of absence, with the number of hours he
customarily worked per week during such 6 month period, if he is not otherwise
credited with such Hours of Service. Any such leave of absence must be granted
in writing and pursuant to the Employer's established leave policy, which shall
be administered in a uniform and nondiscriminatory manner to similarly situated
employees.
C.
D. Qualified Military Service . Notwithstanding any provision of this Plan to
the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Code Section
414(u).
11
<PAGE> 17
II. ARTICLE Contributions
A. Contributions by Employer .
B.
1. Subject to the right reserved to the Employer to alter, amend or discontinue
this Plan and the Trust, the Employer shall pay to the Trustee for each Plan
Year:
a. the aggregate amount of Required and Voluntary Contributions made on a
Before-Tax basis by Participants, as described in Sections 3.2(a) and
(b); and
a. the Employer Contribution, which shall be equal to or greater than, as
the Board of Directors may determine, the aggregate amount of all
Required Contributions, as described in Section 3.2(a), of those
participants entitled to an allocation of the Employer Contribution in
accord with Section 2.1(c). This amount may include a Primary Employer
Contribution, for basic retirement income of the Participants, and a
Supplemental Employer Contribution, for supplemental retiree medical
and other financial needs of the Participants.
1. Notwithstanding the foregoing, the Employer Contribution shall be conditioned
on qualification of the Plan under Section 401(a) of the Code.
2.
3. The failure of the Employer to make the Employer Contribution for any reason
shall not be deemed to effect a termination of the Trust or of this Plan.
4.
5. In no event shall the amount of the contributions made by the Employer under
Section 3.1(a) for any Plan Year exceed the maximum amount allowable as a
deduction in computing its taxable income for that year for federal income tax
purposes.
6. The Employer Contribution may be made in cash or securities. If any Employer
Contribution is made in securities, the securities shall be valued at their fair
market value as of the date of the Employer Contribution for purposes of
determining the amount of such Employer Contribution.
12
<PAGE> 18
A. Participant Contributions .
B.
1. Required Contribution. Subject to the provisions of Sections 3.3 and 3.4,
each Participant, upon the satisfaction of the eligibility standards set forth
in Section 2.1(c), shall make a Required Contribution in an amount which shall
be equal to 3% (rounded to the nearest dollar) of his Considered Compensation.
The Required Contribution may be made on either a Before-Tax basis or an
After-Tax basis, or partially on either basis with each part expressed as a
whole percentage of his Considered Compensation, as the Participant elects in
writing on a form approved by the Committee. An Active Participant may change
his or her election once a month by filing written notice with the Committee,
subject to such limitations and conditions as the Committee shall prescribe. Any
such election may either discontinue or change the form of such contributions
effective as of the first subsequent payday, provided that the request is
received by the time prescribed by the Committee; otherwise such election will
not be effective until such later date as shall be determined by the Committee.
1. Voluntary Contribution. Each Active Participant may for each Plan Year elect
to make a Voluntary Contribution in an amount not in excess of 10% (rounded to
the nearest dollar) of his Considered Compensation. This Voluntary Contribution
may be made on a Before-Tax basis or an After-Tax basis, or partially on either
basis with each part expressed as a whole percentage of his Considered
Compensation, as the Participant elects in writing on a form approved by the
Committee. An Active Participant may change his or her election once a month by
filing written notice with the Committee, subject to such limitations and
conditions as the Committee shall prescribe. Any such election may either
discontinue or change such contributions effective as of the first subsequent
payday, provided that the request is received by the time prescribed by the
Committee; otherwise such election will not be effective until such later date
as shall be determined by the Committee.
2.
3. Payment of Participant Contributions. Participant Contributions will be paid
to the Trust Fund no later than the fifteenth business day next following the
month in which the Participant Contributions were made and will be credited to
the Participant's Before-Tax Account and After-Tax Account, as appropriate.
13
<PAGE> 19
A. Limitations on Before-Tax Contributions .
B.
1. In no event shall a Participant's total Before-Tax Contributions (contributed
on both a Required Basis and on a Voluntary Basis) during any calendar year
exceed the dollar limitation contained in Code Section 402(g) in effect at the
beginning of such calendar year. If a Participant's Before-Tax Contributions,
together with any additional elective contributions to a qualified cash or
deferred arrangement, and any elective deferrals under a tax-sheltered annuity
program or a simplified employee pension plan, exceed such dollar limitation for
any calendar year, such excess, and any earnings allocable thereto, shall be
distributed to the Participant by April 15 of the following year; provided that,
if such excess contributions were made to a plan or arrangement not maintained
by the Employer or an Affiliate, the Participant must first notify the Committee
of the amount of such excess allocable to this Plan by March 1 of the following
year.
1. Notwithstanding any other provision of this Plan to the contrary, the
Before-Tax Contributions for the Highly Compensated Employees for the Plan Year
shall be reduced in accordance with the following provisions:
2.
a. The Before-Tax Contributions of the Highly Compensated Employees shall
be reduced if neither of the Actual Deferral Percentage Tests set
forth in (A) or (B) below is satisfied after taking into account the
provisions of subsection (g):
(1) The 1.25 Test. The Actual Deferral Percentage of the Highly
Compensated Employees is not more than the Actual Deferral
Percentage of the Non-Highly Compensated Employees multiplied by
1.25.
(1) The 2.0 Test. The Actual Deferral Percentage of the Highly
Compensated Employees is not more than 2 percentage points
greater than the Actual Deferral Percentage of the Non-Highly
Compensated Employees and the Actual Deferral Percentage of the
Highly Compensated Employees is not more than the Actual Deferral
Percentage of the Non-Highly Compensated Employees multiplied by
2.0.
(1) As used in this subsection, "Actual Deferral Percentage"
means:
(a) With respect to Non-Highly Compensated Employees, the
average of the ratios of each Non-Highly Compensated
Employee's Before-Tax Contributions with respect to the
prior Plan Year to each such Participant's Considered
Compensation for such Plan Year; and
(a) With respect to Highly Compensated Employees, the
average of the ratios of each Highly Compensated Employee's
Before-Tax Contributions with respect to the current Plan
Year to each such Participant's Considered Compensation for
such Plan Year.
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<PAGE> 20
(1) All Before-Tax Contributions made under this Plan and
all before-tax contributions made under any other plan that
is aggregated with this Plan for purposes of Code Sections
401(a)(4) and 410(b) shall be treated as made under a single
plan. If any plan is permissively aggregated with this Plan
for purposes of Code Section 401(k), the aggregated plans
must also satisfy Code Sections 401(a)(4) and 410(b) as
though they were a single plan. The Actual Deferral
Percentage ratios of any Highly Compensated Employee will be
determined by treating all plans subject to Code Section
401(k) under which the Highly Compensated Employee is
eligible as a single plan.
a. If neither Actual Deferral Percentage test is satisfied as of
the end of the Plan Year, the Committee shall cause the voluntary
Before-Tax Contributions for the Highly Compensated Employees to
be reduced and refunded to each Highly Compensated Employee until
either Actual Deferred Percentage Test is satisfied. The sequence
of such reductions and refunds shall begin with Highly
Compensated Employees who elected to defer the greatest dollar
amount, then the second greatest dollar amount, continuing until
either Actual Deferred Percentage Test is satisfied.
Notwithstanding anything in the foregoing to the contrary, if a
lesser reduction, when added to the total dollar amount
previously reduced would equal the total excess contributions,
such lesser reduction shall be utilized. Once such reductions
have been determined, the Committee shall direct the Trustee to
distribute to the appropriate Highly Compensated Employees the
amount of the reduction of the voluntary Before-Tax Contributions
of each such Highly Compensated Employee, together with the net
earnings or losses allocable thereto. The Committee shall
designate such distribution as a distribution of excess
contributions, determine the amount of the allocable net earnings
or losses to be distributed in accordance with subsection (c)
below, and cause such distributions to occur prior to the end of
the Plan Year following the Plan Year in which the excess
Before-Tax Contributions were made.
a. Notwithstanding anything in this subsection (b) to the
contrary, the provisions of this subsection shall apply
separately with respect to each group of employees who are
Members of a Collective Bargaining Unit (if any) and the group of
employees who are not Members of a Collective Bargaining Unit.
1. Net earnings or losses to be refunded with the excess voluntary Before-Tax
Contributions shall be equal to the net earnings or losses on such contributions
for the Plan Year in which the contributions were made, determined in the manner
set forth in Article 4.
2.
3. For the purpose of avoiding the necessity of adjustments pursuant to this
Section or Section 4.12, or to comply with any applicable law or regulation:
4.
a. The Committee may adopt such rules as it deems necessary or desirable
to:
15
<PAGE> 21
(1) impose limitations during a Plan Year on the percentage of
Before-Tax Contributions elected by Participants pursuant to
Section 3.2; or
(1) increase during a Plan Year the percentage of Considered
Compensation with respect to which a Participant may elect a
Before-Tax Contribution for the purpose of providing Participants
with the opportunity to increase their Before-Tax Contributions
within the limitations of this Section 3.3;
a. The Employer may at its sole discretion make fully vested
contributions to the Plan which will be allocated to the Before-Tax
Accounts of one or more Participants who are Non-Highly Compensated
Employees in such amounts as the Employer directs for the purpose of
complying with the applicable limits on Before-Tax Contributions in
the Code.
1. The amount of the Before-Tax Contributions to be made pursuant to a
Participant's election shall reduce the compensation otherwise payable to him by
the Employer.
2.
3. The amount of each Participant's Before-Tax Contributions as determined under
this Section 3.3 is subject to the provisions of Section 4.12.
4.
B. Limitation on After-Tax Contributions . Notwithstanding any other provision
to the contrary, the After-Tax Contributions of the Highly Compensated Employees
shall be reduced in accordance with the following provisions:
C.
1. The After-Tax Contributions of the Highly Compensated Employees shall be
reduced if neither of the Contribution Percentage Tests set forth in (i) or (ii)
below is satisfied after taking into account the provisions of subsection (g):
a. The 1.25 Test. The Contribution Percentage of the Highly Compensated
Employees is not more than the Contribution Percentage of all
Non-Highly Compensated Employees multiplied by 1.25.
a. The 2.0 Test. The Contribution Percentage of the Highly Compensated
Employees is not more than 2 percentage points greater than the
Contribution Percentage of all Non-Highly Compensated Employees, and
the Contribution Percentage of the Highly Compensated Employees is not
more than the Contribution Percentage of all Non-Highly Compensated
Employees multiplied by 2.0.
1. As used in this Section 3.4, "Contribution Percentage" means:
(1) With respect to Non-Highly Compensated Employees, the average of
the ratios of each Non-Highly Compensated Employee's After-Tax
Contributions with respect to the prior Plan Year to each such
Participant's Considered Compensation for such Plan Year; and
16
<PAGE> 22
(1) With respect to Highly Compensated Employees, the average of the
ratios of each Highly Compensated Employee's After-Tax Contributions
with respect to the current Plan Year to each such Participant's
Considered Compensation for such Plan Year.
a. All After-Tax Contributions made under this Plan and all employee
contributions and matching contributions made under any other plan that is
aggregated with this Plan for purposes of Code Sections 401(a)(4) and
410(b) shall be treated as made under a single plan. If any plan is
permissively aggregated with this Plan for purposes of Code Section 401(m),
the aggregated plans must also satisfy Code Sections 401(a)(4) and 410(b)
as though they were a single plan. The Contribution Percentage ratio of any
Highly Compensated Employee will be determined by treating all plans
subject to Code Section 401(m) under which the Highly Compensated Employee
is eligible as a single plan.
1. To the extent necessary, and solely for the exclusive purpose of satisfying
the Contribution Percentage Test in Section 3.4(a), all or part of the
Before-Tax Contributions of Participants may be treated by the Committee as
After-Tax Contributions ("Designated Before-Tax Contributions"), provided that
each of the following is satisfied:
2.
a. The Before-Tax Contributions, including Designated Before-Tax
Contributions, satisfy the requirements of Section 3.3(b); and
a. The Before-Tax Contributions, excluding Designated Before-Tax
Contributions, satisfy the requirements of Section 3.3(b).
a. If neither Contribution Percentage Test is satisfied as of the end of
the Plan Year, the Committee shall cause the After-Tax Contributions of the
Highly Compensated Employees to be reduced and refunded to each affected
Highly Compensated Employee until either Contribution Percentage Test is
satisfied. The sequence of such reductions and refunds shall begin with
Highly Compensated Employees who elected the greatest dollar amount, and
then shall proceed with each lesser dollar amount until either contribution
Percentage Test is satisfied (notwithstanding anything in the foregoing to
the contrary, if a lesser reduction, when added to the dollar amount
previously received would equal the total excess contributions, such lesser
reduction shall be utilized).
a. Once either Contribution Percentage Test is satisfied, the Committee
shall direct the Trustee to distribute to the appropriate Highly
Compensated Employees the amount of the reduction of the After-Tax
Contribution of each such Highly Compensated Employee, together with the
net earnings or losses allocable thereto. The Committee shall designate
such distribution as a distribution of excess contributions, determine the
amount of the allocable net earnings or losses to be distributed in
accordance with
17
<PAGE> 23
subsection (f) below, and cause such distributions to occur prior to the
end of the Plan Year following the Plan Year in which such excess After-Tax
Contributions were made.
1. Notwithstanding anything in this Section 3.4 to the contrary, the provisions
of subsection (a) shall apply separately with respect to each group of employees
who are Members of a Collective Bargaining Unit (if any) and the group of
employees who are not Members of a Collective Bargaining Unit.
2.
3. Net earnings or losses to be refunded with the excess After-Tax Contributions
shall be equal to the net earnings or losses on such contributions for the Plan
Year in which the contributions were made. Net earnings or losses shall be
determined in the same manner as in Section 3.3(c), except that the phrase
"After-Tax Contributions" shall be substituted for the phrase "Before-Tax
Contributions" wherever used therein.
4.
5. For the purpose of avoiding the necessity of adjustments pursuant to this
Section or Section 4.12, or to comply with any applicable laws or regulation:
6.
a. the Committee may adopt such rules as it deems necessary or desirable to
impose limitations during a Plan Year on the percentage of After-Tax
Contributions made by Participants pursuant to Section 3.2; or
a. the Employer may in its sole discretion make fully vested contributions
to the Plan, which will be allocated to the Employer Accounts of one or
more Participants who are Non-Highly Compensated Employees, in such amounts
as the Employer directs for the purpose of complying with applicable limits
on Employer Contributions in the Code.
1. The amount of each Participant's After-Tax Contributions as determined under
this Section 3.4 is subject to the provisions of Section 4.12.
A. Multiple Use .
B.
1. This Section 3.5 will be applicable if The 2.0 Test is used to satisfy both
the Actual Deferral Percentage Test and the Contribution Percentage Test. If
this Section 3.5 is applicable, the Committee shall determine whether a
"Multiple Use" has occurred, and if such a Multiple Use has occurred, the
After-Tax Contributions of the Highly Compensated Employees shall be reduced in
accordance with the provisions of subsection (c) below.
1. A Multiple Use occurs when for the Highly Compensated Employees, the sum of
the Actual Deferral Percentage used to satisfy The 2.0 Test plus the
Contribution Percentage used to satisfy The 2.0 Test exceeds the "Aggregate
Limit." The Aggregate Limit is the greater of (i) or (ii) below, determined as
follows:
2.
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<PAGE> 24
(1) First, multiply 1.25 by the greater of (I) the Actual Deferral
Percentage, or (II) the Contribution Percentage of the Non-Highly
Compensated Employees;
(1) Second, add 2.0 to the lesser of (I) or (II) above provided that
such sum shall not exceed 2 times the lesser of (I) or (II) above; and
(1) Finally, add the results from (A) and (B) to determine the
Aggregate Limit; or
(1) First, multiply 1.25 by the lesser of (I) the Actual Deferral
Percentage, or (II) the Contribution Percentage of the Non-Highly
Compensated Employees;
(1) Second, add 2.0 to the greater of (I) or (II) above provided that
such sum shall not exceed 2 times the greater of (I) or (II) above;
and
(1) Finally, add the results from (A) and (B) to determine the
Aggregate Limit.
1. If a Multiple Use has occurred, such Multiple Use shall be corrected by
reducing the Contribution Percentage of Highly Compensated Employees in
accordance with the provisions of Section 3.4(d) until the sum of the Actual
Deferral Percentage plus the Contribution Percentage for the Highly Compensated
Employees equals the Aggregate Limit.
2.
3. Net earnings or losses to be refunded with the excess After-Tax Contributions
shall be equal to the net earnings or losses on such contributions for the Plan
Year in which the contributions were made. Net earnings or losses shall be
determined in the same manner as in Section 3.3(c) except that the phrase
"After-Tax Contributions" shall be substituted for the phrase "Before-Tax
Contributions" wherever used therein.
A. Rollover Contribution .
B.
1. A Rollover Contribution may be rolled over in cash to the Trust Fund for the
benefit of a Participant with the permission of the Committee. Prior to
accepting any transfer which is intended to be a Rollover Contribution, the
Committee may require the Participant to establish that the amount to be rolled
over meets the definition of a Rollover Contribution and any other limitations
of the Code applicable to such rollovers.
1. An Eligible Employee who is not eligible to participate in the Plan solely by
reason of failing to meet the eligibility requirements of Article 2 and who
reasonably expects to become a Participant when such requirements are met, may
be a Participant in the Plan solely for the limited purposes of making a
Rollover Contribution, and taking actions with respect to his Rollover Account
for the purposes of loans in accordance with Article 6, investment options in
accordance with Section 4.2, and the withdrawal of Rollover Contributions in
accordance with (e) below, subject to the same conditions as any other
Participant.
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<PAGE> 25
2.
3. If the Committee determines after a Rollover Contribution has been made that
such Rollover Contribution did not in fact constitute a Rollover Contribution as
defined in Section 1.4, the amount of such Rollover Contribution and any
earnings thereon shall be returned to the employee.
4.
5. Each Participant's Rollover Contribution shall be credited to his Rollover
Account and invested in accordance with Section 4.2. A Participant's Rollover
Account shall be fully vested and nonforfeitable.
6.
7. Amounts may be distributed from a Participant's Rollover Account under the
same terms and conditions and subject to the same restrictions as apply to
distributions of a Participant's After-Tax Account pursuant to Article 6.
8.
9. The Rollover Contribution of a Participant shall be allocated to his Rollover
Account as of the Valuation Date coinciding with or next succeeding the date on
which such amounts are received by the Trustee.
10.
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I. ARTICLE Accounting Provisions and Allocations
A. Participant's Accounts . For each Participant there shall be maintained as
appropriate a separate Employer Account, Before-Tax Account, After-Tax Account
and Rollover Account. Each Account shall be credited with the amount of
contributions, forfeitures, interest and earnings of the Trust Fund allocated to
such Account and shall be charged with all distributions, withdrawals and losses
of the Trust Fund allocated to such Account.
A. Investment Funds .
B.
1. The Trust Fund shall be divided into separate investment funds (each a
"Fund"), as provided in this Section 4.2. Each Fund, as may from time to time be
established, shall be a common fund in which each Participant shall have an
undivided interest in the respective assets of the Fund. Except as otherwise
provided, the value of each Participant's Accounts in such Funds shall be
measured by the proportion that the net credits to his Accounts bear to the
total net credits to the Accounts of all Participants and beneficiaries as of
the date that such share is being determined. For purposes of allocation of
income and valuation, each Fund shall be considered separately. No Fund shall
share in the gains and losses of any other, and no Fund shall be valued by
taking into account any assets or distributions from any other.
1. Each Fund shall be established and invested by the Trustee in accordance with
investment policies determined, or as the Trustee may be directed, from time to
time by the Committee. The Committee may from time to time also direct that
Funds with similar investment objectives be consolidated.
2.
3. The Funds established and managed under subsections 4.2(a) and (b) consist of
Fund A and Fund B, although these Funds may be changed, added to or eliminated
at any time.
4.
a. The assets allocated to Fund A shall be invested to achieve the
highest total investment return consistent with prudent risk through a
fully managed investment policy. Total investment return shall mean
the aggregate of income and capital value changes. The assets of Fund
A may be invested in such proportions of common stock, straight debt
securities, convertible issues, and other prudent forms of investment
as from time to time appear appropriate to achieve highest total
investment return. To motivate employees toward increased Company
profits, it is contemplated that Fund A may, at any given time, be
invested as much as 100% in Company securities. However, any
investment in Company securities which after giving effect thereto
would result in the market value of Company securities exceeding 25%
of the market value of Fund A, must be authorized by the Board of
Directors of the Company.
a. The assets allocated to Fund B shall be invested to achieve stable
income, consistent with preservation of capital and prudent risk. The
assets of Fund B may be invested in prudent forms of investment as
from time to time appear appropriate to achieve the objective of this
Fund.
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<PAGE> 27
2. Contributions shall be credited as follows:
3.
a. Employer Contribution -- One hundred percent (100%) of the Employer
Contribution shall be allocated to Fund A.
a. Participant Contributions -- One hundred percent (100%) of a
Participant's Required Contribution shall be allocated to Fund B. With
respect to a Voluntary Contribution, a Participant may elect, in whole
percentages, to allocate such contribution between Fund A and Fund B.
The Participant may change the allocation for future contributions as
of the first day of each month, subject to such limitations and
conditions as the Committee shall proscribe. Notwithstanding the
foregoing, no Voluntary Contribution may be allocated to Fund A if it
is possible that an amount in excess of the Employer Contribution may
be allocated to the purchase of securities issued by the Employer, or
any entity directly or indirectly controlling, controlled by or under
common control with the Employer.
(iii) Rollover Contributions -- A Participant may elect to
allocate his Rollover Contribution to Fund A, Fund B, or, in whole
percentages, between Fund A and Fund B. Such election shall be made
within 31 days from the date of receipt by the Trust Fund of the
Rollover Contribution, and in the absence of an election or prior to
when an election is received, all Rollover Contributions shall be
allocated to Fund B. Notwithstanding the foregoing, no Rollover
Contribution may be allocated to Fund A if it is possible that an
amount in excess of the Employer Contribution may be allocated to the
purchase of securities issued by the Employer, or any entity directly
or indirectly controlling, controlled by or under common control with
the Employer.
1. Wherever in this Section 4.2 the term "Participant" is used, it shall be
deemed to include, where applicable, (i) the beneficiary of a deceased
Participant who is entitled to any portion of the deceased Participant's
Accounts, and (ii) an alternate payee under a qualified domestic relations order
described in Code Section 414(p).
A. Allocation Procedure .
B.
1. As of each Valuation Date, the Committee shall:
a. first, allocate the net earnings or losses of the Trust Fund pursuant to
Section 4.5;
a. second, allocate Before-Tax Contributions pursuant to Section 4.7;
a. third, allocate After-Tax Contributions pursuant to Section 4.8;
a. fourth, allocate the Employer Contribution and forfeitures pursuant to
Section 4.9; and
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<PAGE> 28
a. fifth, allocate Rollover Contributions pursuant to Section 3.6(f).
1. All contributions to the Trust made by or on behalf of a Participant shall be
deposited in the form of cash or other acceptable assets in the Trust Fund and
shall be credited to the appropriate Accounts of such Participant as of the
Valuation Date received by the Trust Fund; provided that, any contributions made
with respect to a Plan Year must be credited to the appropriate Accounts of such
Participant no later than the last day of such Plan Year. All contributions to
the Trust shall be credited at the values determined as of the date received by
the Trust Fund.
2.
B. Determination of Value of Trust Fund . As of each Valuation Date the Trustee
shall determine for the period then ended the sum of the net earnings or losses
of the Trust Fund which shall reflect accrued but unpaid interest, dividends,
gains or losses realized from the sale, exchange or collection of assets, other
income received, appreciation or depreciation in the fair market value of
assets, administration expenses, and taxes and other expenses paid. Gains or
losses realized and adjustments for appreciation or depreciation in fair market
value shall be computed with respect to the difference between such value as of
the preceding Valuation Date or date of purchase, whichever is later, and the
value as of the date of disposition or the current Valuation Date, whichever is
earlier. To the extent that any assets of the Trust have been invested in one or
more separate investment trusts, mutual funds, investment contracts or similar
investment media, the net earnings or losses attributable to such investments
shall be determined in accordance with the procedures of such investment media.
A. Allocation of Net Earnings or Losses . As of each Valuation Date, the net
earnings or losses of the Trust Fund for the period then ending shall be
allocated to the Accounts of all Participants (or beneficiaries of deceased
Participants) having credits in the Fund both on such date and at the beginning
of such period. Such allocation shall be in the ratio that (i) the net credits
to each such Account of each such Participant on the first day of such period,
less the total amount of any distributions from such Account to such Participant
during such period, bears to (ii) the total net credits to all such Accounts of
all Participants on said first day of the period, less the total amount of
distributions from all such Accounts to all Participants during such period.
Notwithstanding the foregoing, to the extent the assets of the Trust have been
invested in one or more separate investment trusts, mutual funds, investment
contracts or similar investment media, the net earnings or losses attributable
to such investments shall be allocated to the Accounts of Participants or
beneficiaries on the basis of the balances of such Accounts but in accordance
with the procedures of the respective investment media in which such assets are
invested.
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<PAGE> 29
A. Eligibility to Share in the Employer's Contribution and Forfeitures .
B.
1. An Active Participant shall be eligible to share in the Employer Contribution
and forfeitures for the Plan Year as of the last day of which such Employer
Contribution or forfeitures are being allocated if he is then employed by the
Employer as an Eligible Employee and has met the requirements of Section 2.1(c).
A Participant who, during a Plan Year, retires on or after his Normal Retirement
Date, dies or is initially deemed to be totally and permanently disabled shall
also be eligible to share in the Employer Contribution and forfeitures for said
Plan Year. A Participant who is eligible to share in the Employer Contribution
and forfeitures shall be known as an "Eligible Participant."
1. Notwithstanding anything in the Plan to the contrary, if the Plan would
otherwise fail to meet the requirements of Code Section 410(b) and the
regulations thereunder because Employer Contributions have not been allocated to
a sufficient number or percentage of Participants for a Plan Year, then the
following rules will apply:
2.
a. The group of Eligible Participants will be expanded to include the
minimum number of Participants who would not otherwise be eligible as are
necessary to satisfy the applicable test specified above. The specific
Participants who will become eligible under the terms of this paragraph
will be those who are actively employed on the last day of the Plan Year
and, when compared to similarly situated Participants, have completed the
greatest period of Service in the Plan Year.
a. If after application of the previous paragraph, the applicable test is
still not satisfied, then the group of Eligible Participants will be
further expanded to include the minimum number of former Participants who
are (a) not employed on the last day of the Plan Year, (b) Non-Highly
Compensated Employees and (c) are vested or partially vested in their
Accounts, as are necessary to satisfy the applicable test. The specific
former Participants who will become eligible under the terms of this
paragraph will be those former Participants, when compared to similarly
situated former Participants, who have completed the greatest period of
Service in the Plan Year before terminating employment.
a. Nothing in this Section will permit the reduction of a Participant's
benefit. Therefore any amounts that have previously been allocated to
Participants may not be reallocated to satisfy these requirements. In the
event allocations to additional Participants or former Participants are
required, the Employer will make an additional contribution equal to the
amount such persons would have received had they been included in the
allocations, even if it exceeds the amount which would be deductible under
Code Section 404. Any adjustment to the allocations pursuant to this
Section will be made by the 15th day of the tenth month after the end of
the Plan Year and will be considered a retroactive amendment adopted by the
last day of the Plan Year.
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<PAGE> 30
A. Allocation of Before-Tax Contributions . As of each Valuation Date, the
Before-Tax Contributions made on behalf of each Participant since the prior
Valuation Date shall be allocated to such Participant's Before-Tax Account.
B.
C. Allocation of After-Tax Contributions . As of each Valuation Date, the
After-Tax Contributions of a Participant received since the prior Valuation Date
shall be allocated to such Participant's After-Tax Account.
A. Allocation of Employer Contribution and Forfeitures .
B.
1. As of the last day of each Plan Year, the Primary Employer Contribution under
Section 3.1(a) and the amounts which become allocable as forfeitures during the
Plan Year shall be allocated among the Eligible Participants in the proportion
that each such Participant's Considered Compensation for the Fiscal Year ending
within the Plan Year bears to all such Eligible Participant's Considered
Compensation for that Fiscal Year.
1. As of the last day of each Plan Year, the Supplemental Employer Contribution
under Section 3.1(a) shall be allocated among the Eligible Participants. Each
Eligible Participant's share in the Supplemental Employer Contribution shall be
determined as follows:
2.
a. Each Eligible Participant's Considered Compensation for the Fiscal Year
ending within the Plan Year shall be adjusted by the applicable multiplier
based upon age at the end of the Plan Year, as listed below ("Adjusted
Considered Compensation"):
Age Under 35 35-44 45-54 Over 54
---
Multiplier 1.0 2.0 4.0 10.0
----------
a. All Eligible Participants shall share in 66% of the Supplemental
Employer Contribution on the basis of each Eligible Participant's
Adjusted Considered Compensation for such Fiscal Year as a percentage
of all Eligible Participants' Adjusted Considered Compensation for
such Fiscal Year.
a. Each Eligible Participant who has not elected to be covered by the
transitional rules applicable to retiree medical benefits adopted by
the Company's Board of Directors on August 5, 1993 (a "Non-Electing
Participant") shall share 33% of the Supplemental Employer
Contribution on the basis of each Non-Electing Participant's Adjusted
Considered Compensation for such Fiscal Year as a percentage of all
Non-Electing Participants' Adjusted Considered Compensation for such
Fiscal Year. No other Eligible Participant shall share in any part of
the amount set forth in this Section 4.9(b)(iii).
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<PAGE> 31
a. Notwithstanding the foregoing, in the event that the allocation of
the Supplemental Employer Contribution as provided for above, results
in discrimination in favor of Highly Compensated Employees, as
prohibited by Section 401(a)(4) or any other applicable provision of
the Code, an adjustment on allocation shall be made so as to satisfy
the non-discrimination requirements of the Code.
A. Provisional Annual Addition . The sum of the amounts allocated to the
Accounts of the Participants pursuant to Sections 4.7, 4.8 and 4.9 for a Plan
Year shall be known as the "Provisional Annual Addition" and shall be subject to
the limitation on Annual Additions in Section 4.11.
A. Limitation on Annual Additions .
B.
1. For the purpose of complying with the restrictions on Annual Additions to
defined contribution plans imposed by Code Section 415, for each Eligible
Participant and each other Participant who has made Before-Tax Contributions
and/or After-Tax Contributions during the Plan Year, there shall be computed a
Maximum Annual Addition, which shall be the lesser of
a. 25% of his Total Compensation for the Plan Year; or
a. the Defined Contribution Dollar Limitation for the Plan Year.
1. If the Maximum Annual Addition for a Participant equals or exceeds the
Provisional Annual Addition for that Participant, an amount equal to the
Provisional Annual Addition shall be allocated to the Participant's respective
Accounts.
2.
3. If the Provisional Annual Addition exceeds the Maximum Annual Addition for
that Participant, the Provisional Annual Addition shall be reduced as set forth
below until the Provisional Annual Addition as so reduced equals the Maximum
Annual Addition for such Participant:
4.
a. first, there shall be refunded to such Participant a portion or all
of his voluntary After-Tax Contribution allocated to Fund A;
a. second, there shall be refunded to such Participant a portion or
all of his voluntary After-Tax Contribution allocated to Fund B;
a. third, there shall be refunded to such Participant a portion or all
of his required After-Tax Contribution allocated to Fund B;
a. fourth, there shall be refunded to such Participant a portion of
all of his voluntary Before-Tax Contribution allocated to Fund A;
26
<PAGE> 32
a. fifth, there shall be refunded to such Participant a portion of all
of his voluntary Before-Tax Contribution allocated to Fund B;
a. sixth, there shall be refunded to such Participant a portion or all
of his required Before-Tax Contribution allocated to Fund B;
a. seventh, the Employer Contribution allocable to such Participant's
respective Accounts shall be reduced; and
a. eighth, the amount of forfeiture allocable to the Participant's
Employer Account shall be reduced.
The Provisional Annual Addition remaining after such reductions shall be
allocated to the Participant's respective Accounts.
1. Any contributions or forfeiture which cannot be allocated under the Plan and
is not refunded under (a) above because of the application of the above limit
shall be held in a Suspense Account for such Plan Year. In the next succeeding
Plan Year the amounts included in such Account shall be treated as a forfeiture
for such Plan Year and shall be allocated to the Eligible Participants' Employer
Accounts in accordance with the provisions of Section 4.9 (and as such will be
again subject to the limitations of this Section 4.11 for such Plan Year).
Amounts which are included in the Suspense Account as of the end of a Plan Year
shall be treated as a liability of the Trust Fund. Upon termination of the Plan,
amounts then held in the Suspense Account which cannot be allocated pursuant to
this Section shall revert to the Employer.
2.
3. Notwithstanding anything to the contrary in this Plan, any After-Tax or
Before-Tax Contributions reduced in accordance with subsection (c) above shall
be distributed to the Participant with allocable earnings in accordance with
Treasury Regulation Section 1.415-6(b)(6)(iv).
A. Special Limitation on Maximum Contributions .
B.
1. In the case of any Participant who is or was also a participant in a defined
benefit plan maintained by the Employer or an Affiliate, the sum of the Defined
Contribution Fraction and Defined Benefit Fraction (each as determined below) as
of the end of any Plan Year shall not exceed 1.0. In the event that the sum of
such Fractions would otherwise exceed 1.0, then the amount determined under
Section 4.11(a)(i) or (ii), whichever is applicable, in determining the Maximum
Annual Addition under Section 4.11(a) shall be equal to such applicable amount
multiplied by the difference between 1.0 and the Defined Benefit Fraction.
1. The "Defined Benefit Fraction" applicable to a Participant for any Limitation
Year is a fraction, the numerator of which is the sum of the Projected Annual
Benefit (as determined below) of the Participant under all of the defined
benefit plans maintained or previously maintained by the Employer or an
Affiliate in which the Participant was a participant
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<PAGE> 33
(determined as of the close of the Limitation Year) and the denominator of which
is the lesser of (i) the product of 1.25 multiplied by the maximum dollar
limitation on a Participant's Projected Annual Benefit if the plan provided the
maximum benefit allowable under Code Section 415(b) for such Limitation Year or
(ii) the product of 1.4 multiplied by 100% of the Participant's Highest Average
Compensation (as determined below). 2.
3. The "Defined Contribution Fraction" applicable to a Participant for any
Limitation Year is a fraction, the numerator of which is the sum of the
Participant's Annual Additions as of the close of such Limitation Year for that
Limitation Year and for all prior Limitation Years under this Plan and all other
defined contribution plans maintained by the Employer or an Affiliate, and the
denominator of which is the sum of the lesser of the following amounts
(determined for such Limitation Year and for each prior Limitation Year during
which the Participant performed services as an employee of the Employer or an
Affiliate regardless of whether a plan was in existence during those years): (i)
the product of 1.25 multiplied by the Defined Contribution Dollar Limitation (as
defined above) for the Limitation Year or (ii) the product of 1.4 multiplied by
25% of the Participant's Section 415 Compensation for the Limitation Year.
4.
5. In accordance with regulations issued by the Secretary of the Treasury or his
delegate pursuant to Section 1106(i)(4) of the Tax Reform Act of 1986, an amount
shall be subtracted from the numerator of the Defined Contribution Fraction (not
exceeding such numerator) so that the sum of the Defined Benefit Fraction and
the Defined Contribution Fraction does not exceed 1.0 as of December 31, 1986.
To the extent provided under applicable law and regulations, adjustments shall
be made to the Defined Benefit Fraction or the Defined Contribution Fraction
with respect to previous transition rules.
6.
a. "Highest Average Compensation" means the average of a Participant's
Total Compensation from the Employer and all Affiliates for the high three
consecutive Limitation Years (determined as of the close of the Limitation
Year) of employment with the Employer or an Affiliate (or the actual number
of years of employment for a Participant who is employed for less than 3
consecutive years for which the Participant's Total Compensation is the
highest).
a. "Projected Annual Benefit" means the annual benefit a Participant would
receive from employer contributions under a defined benefit plan, adjusted
in the case of any benefit payable in a form other than a single life
annuity or a qualified joint and survivor annuity, to the actuarial
equivalent of a single life annuity, assuming (A) the Participant continued
employment until reaching the plan's normal retirement age (or his current
age, if later), (B) his compensation remained unchanged and (C) all other
relevant factors used to determine benefits under the plan remained
constant in the future.
1. Notwithstanding anything herein to the contrary, this Section 4.12 shall
not be applicable to Plan Years beginning after December 31, 1999.
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<PAGE> 34
A. Transfer of Fund Balances
B.
1. Commencing with the first month following the month in which a Participant
attains age 55, at the end of each month a portion of the balance of the
Participant's Account invested in Fund A shall be transferred to Fund B. The
portion to be transferred shall be determined in accord with the following
formula: P x A/B = Y, where P equals the Participant's balance in Fund A at the
end of the previous month; A equals 1; B equals the number of months remaining
until the Participant reaches age 65; and Y equals the amount to be transferred
from Fund A to Fund B.
1. Notwithstanding the foregoing Section 4.13(a), until the attainment of age
65, a Participant may elect to defer transfer of the portion of Fund A to Fund B
which would be transferred under Section 4.13(a). Nevertheless, commencing with
the first month following the month in which a Participant attains age 65, at
the end of each month a portion of the balance of the Participant's Account
invested in Fund A shall be transferred to Fund B. The portion to be transferred
shall be determined in accord with the following formula: P x A/B = Y, where P
equals the Participant's balance in Fund A at the end of the previous month; A
equals 1; B equals the number of months remaining until the Participant reaches
age 70; and Y equals the amount to be transferred from Fund A to Fund B. 2.
3. If a Participant terminates or retires after age 55 and does not elect lump
sum distribution, the Participant may make a one-time election to:
4.
a. continue the periodic transfer schedule set forth in subsection (a) or
(b) above, or
a. transfer the balance remaining in Fund A to Fund B at the end of the
month in which such termination or retirement occurs.
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<PAGE> 35
I.ARTICLE Amount of Payments to Participants
A. General Rule . Upon the retirement, disability, resignation or dismissal of a
Participant, he, or in the event of his death, his beneficiary, shall be
entitled to receive from his respective Accounts in the Trust Fund the following
amounts as of the latest Valuation Date for which values are available to the
Plan Administrator as of the date the distribution is processed by the Plan
Administrator:
1. an amount equal to the Participant's Before-Tax Account, After-Tax Account
and Rollover Account, plus any of the Participant's Contributions made to the
Trust Fund but not allocated to the Participant's Accounts as of such Valuation
Date; and 2.
3. the nonforfeitable portion of the Participant's Employer Account determined
as hereafter set forth.
4.
5. The time and manner of distribution of a Participant's Accounts shall be
determined in accordance with Article 6. 6. B. Retirement . Any Participant may
retire on or after his Early Retirement Date or his Normal Retirement Date, at
which date the forfeitable portion, if any, of his Employer Account shall become
nonforfeitable. If the retirement of a Participant is deferred beyond his Normal
Retirement Date, he shall continue in full participation in the Plan and Trust
Fund.
C.
D. Death . As of the date any Participant shall die while in the employ of the
Employer or an Affiliate, the forfeitable portion, if any, of his Employer
Account shall become nonforfeitable.
E.
F. Vesting . A Participant's interest in his Before-Tax Account, After-Tax
Account and Rollover Account shall be nonforfeitable at all times. Except as
otherwise provided in this Article 5, a Participant's nonforfeitable interest in
his Employer Account at any point in time shall be determined under Section 5.5.
A. Resignation or Dismissal .
B.
1. If any Participant shall resign or be dismissed from the service of the
Employer and all Affiliates, there shall become nonforfeitable a portion or all
of his Employer Account determined as of his Valuation Date in accordance with
the following schedule:
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<PAGE> 36
Years of Service Nonforfeitable
Percentage
Less than 2 0
2 but less than 3 10
3 but less than 4 20
4 but less than 5 40
5 but less than 6 60
6 but less than 7 80
7 or more 100
Any part of the Employer Account of such Participant which does not become
nonforfeitable shall be treated as a forfeiture pursuant to Section 5.7.
1. A Participant who has elected to take withdrawals pursuant to Section 6.7
shall upon resignation or dismissal have his nonforfeitable interest in his
Employer Account determined as of the Valuation Date coincident with or next
succeeding his resignation or dismissal as follows:
2.
a. add to his Employer Account the amount of any such withdrawals charged
to his Employer Account pursuant to Section 6.7;
a. determine the nonforfeitable portion of his Employer Account as adjusted
under (i) above; and
a. subtract from the nonforfeitable amount, determined under (ii) above,
the withdrawals charged to his Employer Account pursuant to Section 6.7.
A. Computation of Period of Service . For purposes of determining the
nonforfeitable percentage of the Participant's Employer Account, all Years of
Service shall be taken into account.
A. Treatment of Forfeitures .
B.
1. Upon termination of a Participant's employment with the Employer and all
Affiliates, that part of his Employer Account which becomes a forfeiture
pursuant to this Section 5.7 shall become allocable pursuant to Section 4.9 at
the end of the Plan Year in which the termination of employment occurred if the
Participant is not then reemployed by the Employer or an Affiliate.
1. If the Participant is reemployed by the Employer or an Affiliate without
incurring 5 consecutive One-Year Breaks in Service, the amount of the forfeiture
shall be credited to a
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<PAGE> 37
separate account for the Participant, called the Forfeiture Restoration Account,
as of the last day of the Plan Year in which he is reemployed and shall be
deducted from the forfeitures which otherwise would be allocable for such Plan
Year or, to the extent such forfeitures are insufficient, shall require a
supplemental contribution from the Employer.
2.
3. Upon a subsequent termination of a Participant's employment with the Employer
and all Affiliates (the "Relevant Time"), the Participant's vested interest in
the Company Contribution portion of his Forfeiture Restoration Account
(including earnings thereon) shall be the sum of the following:
4.
(1) the product of the amount of the account growth
since rehire (the account balance at the Relevant Time less the amount
of forfeiture restored at time of rehire) times the vested percentage
at the Relevant Time,
plus
(2) the sum of the product of the account balance at
the time of the prior distribution times the vested percentage at the
Relevant Time less the amount of the prior distribution.
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<PAGE> 38
I. ARTICLE Distributions
A. Commencement and Form of Distributions .
B.
a. Distribution of a Participant's Accounts in the Trust Fund following
termination of employment with the Employer and all Affiliates shall commence on
or as soon as practicable after the first to occur of:
(1) the date set forth in the Participant's request for distribution;
provided that (1) such date is not earlier than the date on which he
is entitled to a distribution, (2) the Committee has notified the
Participant of the availability of such distribution in a manner that
would satisfy the notice requirements of Section 1.411(a)-11(c) of the
income tax regulations, and (3) such notification is given no more
than 90 days prior to the distribution date requested by the
Participant; provided, further, that such distribution may commence
less than 30 days after the date the notice required under Section
1.411(a)-11(c) of the income tax regulations is given if:
(a) the Committee clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution, and
(a) the Participant, after receiving the notice, affirmatively
elects a distribution;
(1) the 60th day after the close of the later of the Plan Year in
which the Participant attains his Normal Retirement Date or terminates
employment with the Employer and all Affiliates, unless the
Participant has requested to defer the distribution to a later date.
a. Subject to Section 6.1(f) below, effective January 1, 1997, if a Participant
is employed with the Employer or an Affiliate on the last day of the Plan Year
in which the Participant attains age 70 1/2, distribution of such Participant's
Accounts in the Trust Fund shall commence on the April 1 of the Plan Year
following the Plan Year during which such individual attains age 70 1/2, unless
such individual has elected to defer such distribution (in the form and manner
prescribed by the Committee for such purpose) on or before such date (December
31, 1997 with respect to distributions otherwise required by April 1, 1997). A
Participant who has filed a deferral election pursuant to this subsection (b)
may elect distribution of his Accounts to commence on any subsequent December
31, or such other dates as the Committee may provide. The Participant's right to
elect distribution pursuant to this subsection (b) shall be in addition to any
rights to elect distributions set forth in Section 6.7. A Participant's election
to begin distribution pursuant to the previous sentence shall be made in the
form and manner prescribed for such purpose by the Committee.
b.
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<PAGE> 39
c. Notwithstanding the foregoing, no required distribution shall be made,
deferral election required or subsequent distribution election permitted under
this subsection (b) with respect to any Participant who attains age 70 1/2 in or
after calendar year 1999.
d.
2. Distributions pursuant to subsection (a)(ii) above shall be made in the
manner described in subsection (a)(i) above.
3.
4. In all events, distribution shall commence no later than the Required
Beginning Date, and subsequent distributions required to be made each year for
compliance with Code Section 401(a)(9) and the regulations promulgated
thereunder shall be made no later than December 31 of such year.
5.
6. The Accounts distributable to a Participant shall be distributed in one or
more of the following ways, as the Participant may request by filing such notice
as shall be prescribed by the Committee, and in accordance with applicable laws
and regulations:
7.
a. by payment in one lump sum;
a. in substantially equal monthly, quarterly, semi-annual or annual
installments which, except for the final payment, shall not be less
than $100; or
a. by a direct rollover to an employee's trust in which he is a
participant, which is described in Code Section 401(a) and which is
exempt from tax under Code Section 501(a), or to an individual
retirement arrangement described in Code Section 408, in accordance
with Section 6.11.
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<PAGE> 40
1. The value of the Participant's Accounts shall be paid to the Participant over
a period not to exceed his life expectancy or the joint life expectancy of the
Participant and his Individual Beneficiary. The minimum amount of any
installment distribution and determination of the life expectancy of a
Participant and the joint life expectancy of a Participant and his Individual
Beneficiary shall be determined in accordance with the regulations prescribed
under Code Section 401(a)(9); provided that the life expectancy of a Participant
or his spouse shall be redetermined annually. In no event shall the amount
distributable in any year under this Section 6.1 or under Section 6.2 be less
than the amount determined in accordance with the minimum distribution
incidental benefit requirements of Treasury Regulation Section 1.401(a)(9)-2.
2.
3. Notwithstanding anything in this Section 6.1 to the contrary, if the vested
balance of the Participant's Accounts does not exceed $5,000 at the time a
distribution is to be made from the Plan (or at the time of any prior
distributions did not exceed $5,000) and distribution pursuant to this Section
6.1 has not otherwise commenced, the Committee shall direct the Trustee to
distribute such amount in a lump sum payment to the individual so entitled and
the payment thereof shall be in full satisfaction of any liability of the Trust
to such individual. Any Participant whose vested balance of his Employer Account
is 0% shall be deemed to have received a lump sum payment upon termination of
employment.
1. Notwithstanding anything in this Section 6.1 to the contrary, if the amount
of any distribution required to commence on a certain date cannot be ascertained
by such date, a payment retroactive to such date may be made no later than 60
days after the earliest date on which such amount can be ascertained.
A. Distributions to Beneficiaries .
B.
1. If the beneficiary of a Participant is someone other than the Participant's
spouse at the time of the Participant's death, the balance of the deceased
Participant's Accounts which is distributable to a beneficiary shall be paid in
one lump sum within a reasonable time after the Participant's death, but in no
event later than the December 31 coinciding with or next following the 5th
anniversary of the Participant's death.
1. Except as otherwise provided in this Section 6.2(b), if the beneficiary of a
Participant is either the Participant's spouse at the time of the Participant's
death or the trustee of a trust (which complies with Code Section 401(a)(9) and
regulations promulgated thereunder) which has the Participant's spouse at the
time of the Participant's death as a beneficiary, the balance of a deceased
Participant's Accounts which is distributable to a beneficiary shall be
distributed in one of the forms described in Section 6.1(e)(i) or (ii), as the
beneficiary shall elect.
2.
a. In the event that the distribution of the Participant's Accounts has
begun in accordance with Section 6.1, any form of distribution to a
beneficiary under this Section 6.2(b) shall be designed to distribute the
balance of the deceased Participant's
35
<PAGE> 41
Accounts at least as rapidly as under the method of distribution in effect
at the time of the Participant's death.
a. If the distribution of a Participant's Accounts has not commenced at the
time of his death, any form of distribution to a beneficiary under this
Section 6.2(b) shall be designed to distribute the balance of the deceased
Participant's Accounts as follows:
(1) Any portion of the Accounts payable to or for the benefit of the
beneficiary may be distributed over a period not to exceed the life
expectancy of such beneficiary if such payments commence not later
than (1) the December 31 coinciding with or next following the first
anniversary of the Participant's death, or (2) the December 31 of the
calendar year in which the Participant would have attained age 70-1/2.
(1) If the Participant's surviving spouse dies prior to the
commencement of benefit payments to such spouse, subsection (A) above
shall be applied as if the Participant's death had occurred on the
date of such spouse's death.
(1) Unless distribution is made in accordance with subsections (A) or
(B) above, the balance of the Participant's Accounts shall be
distributed in full no later than the December 31 coinciding with or
next following the 5th anniversary of the Participant's death.
b. The life expectancy of a beneficiary who is the surviving spouse of the
Participant shall be redetermined annually in accordance with regulations
prescribed under Code Section 401(a)(9).
1. If a beneficiary to whom payments have commenced dies prior to receipt of all
such payments, the remaining balance of the Participant's Accounts shall be
distributed to any contingent or successor beneficiary in one lump sum in
accordance with Section 6.2(a), or if there is no such contingent or successor
beneficiary, in a lump sum to the deceased beneficiary's estate.
A. Beneficiaries .
B.
1. Unless a Participant has effectively elected otherwise in accordance with
this Section 6.3, the distributable balance of a deceased Participant's Accounts
shall be paid to his surviving spouse.
1. The balance of a deceased Participant's Accounts shall be distributed to the
persons effectively designated by the Participant as his beneficiaries. To be
effective, the designation shall be filed with the Committee in such written
form as the Committee requires and may include contingent or successive
beneficiaries; provided that any designation by a Participant who is married at
the time of his death or, if earlier, the date his benefit payments
36
<PAGE> 42
commence, which fails to name his surviving spouse as the sole primary
beneficiary shall not be effective unless such surviving spouse has consented to
the designation in writing, witnessed by a Plan representative or notary public,
acknowledging the effect of the designation and the specific non-spouse
beneficiary, including any class of beneficiaries or any contingent beneficiary.
Such consent shall not be required if, at the time of filing such designation,
the Participant established to the satisfaction of the Committee that the
consent of the Participant's spouse could not be obtained because there is no
spouse, such spouse could not be located or by reason of such other
circumstances as may be prescribed by regulations. Any consent (or establishment
that the consent could not be obtained) shall be effective only with respect to
such spouse. Any Participant may change his beneficiary designation at any time
by filing with the Committee a new beneficiary designation (with such spousal
consent as may be required). Notwithstanding the foregoing, designation of a
beneficiary by a Participant who did not have any service after August 22, 1984,
shall not require the consent of his surviving spouse to be effective.
2.
a. If a Participant dies, and to the knowledge of the Committee after
reasonable inquiry leaves no surviving spouse, has not filed an effective
beneficiary designation or has revoked all such designations, or has filed
an effective designation but the beneficiary or beneficiaries predeceased
him, the distributable portion of the Participant's Accounts shall be paid
to the executor or administrator of the Participant's estate or if there is
no executor or administrator, to the Participant's heirs as dictated by
applicable state law.
a. If the beneficiary, having survived the Participant, shall die prior to
the final and complete distribution of the Participant's Accounts, then the
distributable portion of said Accounts shall be paid:
(1) to the contingent or successive beneficiary named in the most
recent effective beneficiary designation filed by the Participant in
accordance with such designation; or
(1) if no such beneficiary has been named, to the executor or
administrator of the beneficiary's estate.
A. Installment or Deferred Distributions . If a distribution made to a
Participant or to the beneficiary of a deceased Participant is deferred, the
undistributed vested balance shall share in the net earnings or losses as
provided in Section 4.5.
B.
C. Form of Elections and Applications for Benefits . Any election, revocation of
an election or application for benefits pursuant to the Plan shall not be
effective unless it is (a) made on such form, if any, as the Committee may
prescribe for such purpose; (b) signed by the Participant and, if required by
Section 6.3, by the Participant's spouse; and (c) filed with the Committee.
D.
E. Unclaimed Distributions . In the event any distribution cannot be made
because the person entitled thereto cannot be located and the distribution
remains unclaimed for 2 years after
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<PAGE> 43
the distribution date established by the Committee, then such amount shall be
treated as a forfeiture and allocated in accordance with Section 4.9. In the
event such person subsequently files a valid claim for such amount, such amount
shall be restored to the Participant's Accounts and removed from forfeitures for
that Plan Year.
A. Withdrawals.
B.
1. Upon the determination by the Committee that a Participant has incurred a
financial hardship, a Participant may make a hardship withdrawal, the amount of
which will be subject to the limits specified under Section 6.7(b), provided,
however, that such withdrawals shall not reduce the nonforfeitable portion of
the Participant's Accounts below an amount equal to the amount of any unpaid
loan made pursuant to Section 6.8. Any distribution hereunder shall be deemed to
be made first from the Participant's After-Tax Contributions made prior to
January 1, 1987, second, pro rata, from After-Tax Contributions made after
December 31, 1986 and from the earnings on such After-Tax Contributions, third,
from the earnings on After-Tax Contributions made prior to January 1, 1987,
fourth, from the Participant's Before-Tax Account, and fifth, from the vested
portion of the Participant's Employer Account.
1. An application for a withdrawal shall be made in writing to the Committee, in
accordance with procedures prescribed by the Committee, and shall include
justification and documentation for its purpose. The maximum amount of a
Participant's outstanding loans and accumulated withdrawals shall not exceed the
sum of the following percentages as of the last Valuation date, after restoring
previous withdrawals to such balances: 2. 3.
<TABLE>
<CAPTION>
COMBINED BALANCE OF BALANCE OF
PARTICIPANT'S ROLLOVER ACCOUNT
EMPLOYER ACCOUNT, ----------------
BEFORE-TAX ACCOUNT
AND AFTER-TAX ACCOUNT
---------------------
<S> <C> <C>
Participant with less than 5 Years of Service: 0% 50%
- ---------------------------------------------- -- --
Participant with at least 5 Years of Service: 30% 50%
- ---------------------------------------------- -- --
Participant with at least 10 Years of Service: 40% 50%
- ---------------------------------------------- -- --
Participant with at least 15 Years of Service: 50% 50%
- ---------------------------------------------- -- --
</TABLE>
1. A withdrawal may be granted only to satisfy an immediate and heavy financial
need. The following expenses shall be deemed to constitute an immediate and
heavy financial need:
2.
a. expenses for medical care (as described in Code Section 213(d))
previously incurred by the Participant, the Participant's spouse or any
dependents of the Participant (as defined in Code Section 152) or necessary
for these persons to obtain such medical care;
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<PAGE> 44
a. the purchase (excluding mortgage payments) of a principal residence for
the Participant;
a. tuition and related educational fees (including room and board) due for
the next 12 months of post-secondary education for the Participant, the
Participant's spouse, children or dependents;
a. the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's principal
residence; or
a. any other event or expense deemed an immediate and heavy financial need
by the Department of the Treasury.
1. Unless the Committee has actual knowledge to the contrary, the Committee
shall determine that a distribution is necessary to satisfy an immediate and
heavy financial need of the Participant if the Participant supplies a written
representation that the immediate and heavy financial need cannot be relieved:
2.
a. through reimbursement or compensation by insurance or otherwise;
a. by reasonable liquidation of the Participant's assets to the extent such
liquidation would not itself cause an immediate and heavy financial need;
a. by cessation of all contributions to any retirement plan (other than
mandatory employee contributions to a defined benefit plan) maintained by
the employer or any Affiliate;
a. by other distributions or nontaxable loans currently available under all
of the plans maintained by the Employer or any Affiliate; or
a. by borrowing from commercial sources on reasonable commercial terms in
an amount sufficient to satisfy the need.
A. Loans
B.
1. Upon the submission by the Participant of a written loan application form as
prescribed by the Committee, signed by the Participant, the Committee shall
grant a loan to such Participant from his Accounts; provided, however, that if
the Committee reasonably believes that the Participant either does not intend to
repay the loan or lacks proper financial ability to repay the loan, it shall not
grant such a loan. In the event a loan is not repaid, it will be charged to the
Participant's Account as of the beginning of the month in which the loan
repayment was due. The charge will be processed as a withdrawal from the
Participant's Account.
2.
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<PAGE> 45
3. The maximum amount of a Participant's outstanding loans and accumulated
withdrawals shall not exceed the sum of the following percentages as of the last
Valuation Date, after restoring previous withdrawals to such balances:
4.
<TABLE>
<CAPTION>
COMBINED BALANCE OF BALANCE OF ROLLOVER
PARTICIPANT'S ACCOUNT
EMPLOYER ACCOUNT, -------------------
BEFORE-TAX ACCOUNT AND
AFTER-TAX ACCOUNT
-----------------
<S> <C> <C>
Participant with less than 5 Years of Service: 0% 50%
Participant with at least 5 Years of Service: 30% 50%
Participant with at least 10 Years of Service: 40% 50%
Participant with at least 15 Years of Service: 50% 50%
</TABLE>
1. The amount of any loan shall not exceed 50% of the amount which the
Participant would be entitled to receive from his Accounts if he had resigned
from the service of the Employer and all Affiliates on the Valuation Date
immediately preceding the date of such authorization; provided, however, that
the amount of such loan shall not exceed $50,000 reduced by the greater of (i)
the highest outstanding balance of loans to the Participant from the Trust Fund
during the one-year period ending on the day before the date on which such loan
is made or modified, or (ii) the outstanding balance of loans to the Participant
from the Trust Fund on the date on which such loan is made or modified.
2.
3. A loan may be granted only to satisfy an immediate and heavy financial need
caused by one of the following:
4.
a. expenses for medical care (as described in Code Section 213(d))
previously incurred by the Participant, the Participant's spouse or any
dependents of the Participant (as defined in Code Section 152) or necessary
for these persons to obtain such medical care;
a. the purchase (excluding mortgage payments) of a principal residence for
the Participant;
a. expansion of a Participant's home due to increased family size,
including the addition of the parents of the Participant or the parents of
the Participant's spouse;
a. preservation of a Participant's home, other than normal repair expense;
a. tuition and related educational fees (including room and board) for the
Participant, the Participant's spouse, children or dependents;
40
<PAGE> 46
a. the need to prevent the eviction of the Participant from his principal
residence or foreclosure on the mortgage of the Participant's principal
residence;
a. emergency financial need due to unforseen events that could not have
been anticipated; or
a. any other event or expense deemed an immediate and heavy financial need
by the Department of the Treasury.
The Committee must determine for each loan application that it
satisfies one of the above reasons. The Committee must also determine that the
requested amount for the loan does not exceed the amount needed to meet the
immediate and heavy financial need and that the requested funds are not
reasonably available from the Participant's other resources.
1. Such loans shall be made available on a reasonably equivalent basis to all
Participants and beneficiaries who have vested Account balances in the Plan and
who either (i) are active employees or (ii) are determined by the Committee to
be "parties in interest" as that term is defined in Section 3(14) of ERISA, so
long as the making of such loans does not discriminate in favor of Highly
Compensated Employees.
2.
3. Loans shall be made on such terms as the Committee may prescribe, provided
that any such loan shall be evidenced by a note, shall bear interest on the
unpaid balance thereof at a reasonable rate per annum to be set from time to
time by the Committee which is commensurate with the interest rates charged by
persons in the business of lending money for loans which would be made under
similar circumstances.
4. Loans shall be repaid by the Participant by payroll deduction or any other
method approved by the Committee which requires level amortization of principal
and repayments not less frequently than quarterly. Such loans shall be repaid
over a period not to exceed 5 years in accordance with procedures established by
the Committee from time to time.
5.
B. Facility of Payment . When, in the Committee's opinion, a Participant or
beneficiary is under a legal disability or is incapacitated in any way so as to
be unable to manage his affairs, the Committee may direct the Trustee to make
payments:
C.
1. directly to the Participant or beneficiary;
2.
3. to a duly appointed guardian or conservator of the Participant or
beneficiary;
4.
5. to a custodian for the Participant or beneficiary under the Uniform Gifts to
Minors Act;
6.
7. to an adult relative of the Participant or beneficiary; or
8.
9. directly for the benefit of the Participant or beneficiary.
41
<PAGE> 47
10.
11. Any such payment shall constitute a complete discharge therefor with respect
to the Trustee and the Committee.
A. Claims Procedure .
B.
1. Any person who believes that he is then entitled to receive a benefit under
the Plan, including one greater than that initially determined by the Committee,
may file a claim in writing with the Committee.
1. The Committee shall within 90 days of the receipt of a claim either allow or
deny the claim in writing. A denial of a claim shall be written in a manner
calculated to be understood by the claimant and shall include:
2.
a. the specific reason or reasons for the denial;
a. specific references to pertinent Plan provisions on which the
denial is based;
a. 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
a. an explanation of the Plan's claim review procedure.
1. A claimant whose claim is denied (or his duly authorized representative) may,
within 60 days after receipt of denial of his claim:
2.
a. submit a written request for review to the Committee;
a. review pertinent documents; and
a. submit issues and comments in writing.
1. The Committee shall notify the claimant of its decision on review within 60
days of receipt of a request for review. The decision on review shall be written
in a manner calculated to be understood by the claimant and shall include
specific reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
2.
3. The 90-day and 60-day periods described in subsections (b) and (d),
respectively, may be extended at the discretion of the Committee for a second
90- or 60-day period, as the case may be, provided that written notice of the
extension is furnished to the claimant prior to the termination of the initial
period, indicating the special circumstances requiring such extension of time
and the date by which a final decision is expected.
42
<PAGE> 48
4.
5. Participants and beneficiaries shall not be entitled to challenge the
Committee's determinations in judicial or administrative proceedings without
first complying with the procedures in this Article. The Committee's decisions
made pursuant to this Section are intended to be final and binding on
Participants, beneficiaries and others.
A. Eligible Rollover Distributions .
B.
1. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article 6, a distributee may
elect, at the time and in the manner prescribed by the Committee, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
1. An eligible rollover distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that is one of a series
of substantially equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the distributee or the joint lives (or
joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any distribution to
the extent such distribution is required under Code Section 401(a)(9); and the
portion of any distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
2.
3. Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Code Section 408(a), an individual retirement
annuity described in Code Section 408(b), an annuity plan described in Code
Section 403(a), or a qualified trust described in Code Section 401(a), that
accepts the distributee's eligible rollover distribution. However, in the case
of an eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.
4.
5. A distributee includes an employee or former employee. In addition, the
employee's or former employee's surviving spouse and the employee's or former
employee's spouse or former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code Section 414(p), are distributees
with regard to the interest of the spouse or former spouse.
6.
7. A direct rollover is a payment by the Plan to the eligible retirement plan
specified by the distributee.
43
<PAGE> 49
II. ARTICLE Top-Heavy Plan Requirements
A. Definitions. For purposes of this Article 7:
B.
1. A "Key Employee" is any current or former employee (and the
beneficiaries of such employee) who at any time during the Determination Period
was an officer of the Employer or an Affiliate if such individual's annual
compensation exceeds 50% of the Defined Benefit Dollar Limitation, an owner (or
considered an owner under Code Section 318) of one of the 10 largest interests
in the Employer if such individual's compensation exceeds 100% of the Defined
Contribution Dollar Limitation, a Five-Percent Owner, or a One-Percent Owner of
the Employer who has an annual compensation of more than $150,000. Annual
compensation means Total Compensation plus amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable from the
employee's gross income under Code Section 125, 402(e)(3), 402(h) or 403(b). The
"Determination Period" is the Plan Year containing the Top-Heavy Determination
Date and the 4 preceding Plan Years.
The determination of who is a Key Employee will be made in accordance
with Code Section 416(i)(1) and the regulations thereunder.
1. For any Plan Year beginning after December 31, 1983, this Plan is
"Top-Heavy" if any of the following conditions exists:
2. a. The Top-Heavy Ratio for this Plan exceeds 60% and this Plan is
not part of any Required Aggregation Group or Permissive Aggregation Group
of plans;
a. This Plan is a part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the Top-Heavy Ratio
for the group of plans exceeds 60%;
a. This Plan is a part of a Required Aggregation Group and part of
a Permissive Aggregation Group of plans and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
44
<PAGE> 50
1. The "Top-Heavy Ratio" shall be determined as follows:
2.
a. If the Employer maintains one or more defined contribution
plans and the Employer has not maintained any defined benefit plan which
during the 5-year period ending on the Top-Heavy Determination Date(s) has
or has had accrued benefits, the Top-Heavy Ratio for this Plan alone or for
the Required or Permissive Aggregation Group as appropriate is a fraction,
the numerator of which is the sum of the account balances of all Key
Employees as of the Top-Heavy Determination Date(s) (including any part of
any account balance distributed in the 5-year period ending on the
Top-Heavy Determination Date(s)), and the denominator of which is the sum
of all account balances (including any part of any account balance
distributed in the 5-year period ending on the Top-Heavy Determination
Date(s)), both computed in accordance with Code Section 416 and the
regulations thereunder. Both the numerator and denominator of the Top-Heavy
Ratio are increased to reflect any contribution not actually made as of the
Top-Heavy Determination Date, but which is required to be taken into
account on that date under Code Section 416 and the regulations thereunder.
a. If the Employer maintains one or more defined contribution
plans and the Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the Top-Heavy
Determination Date(s) has or has had any accrued benefits, the Top-Heavy
Ratio for any Required or Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees,
determined in accordance with (i) above, and the Present Value of accrued
benefits under the aggregated defined benefit plan or plans for all Key
Employees as of the Top-Heavy Determination Date(s), and the denominator of
which is the sum of the account balances under the aggregated defined
contribution plan or plans for all Participants, determined in accordance
with (i) above, and the Present Value of accrued benefits under the
aggregated defined benefit plan or plans for all Participants as of the
Top-Heavy Determination Date(s), all determined in accordance with Code
Section 416 and the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the Top-Heavy
Ratio are increased for any distribution of an accrued benefit made in the
5-year period ending on the Top-Heavy Determination Date.
a. For purposes of (i) and (ii) above the value of account
balances and the Present Value of accrued benefits will be determined as of
the most recent valuation date that falls within or ends with the 12-month
period ending on the Top-Heavy Determination Date, except as provided in
Code Section 416 and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and accrued
benefits of a Participant (A) who is not a Key Employee but who was a Key
Employee in a prior year, or (B) who has not been credited with at least
one hour of service with any employer maintaining the Plan at any time
during the 5-year
45
<PAGE> 51
period ending on the Top-Heavy Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which distributions,
rollovers, and transfers are taken into account, will be made in accordance
with Code Section 416 and the regulations thereunder. Deductible employee
contributions will not be taken into account for purposes of computing the
Top-Heavy Ratio. When aggregating plans the value of account balances and
accrued benefits will be calculated with reference to the Top-Heavy
Determination Date(s) that fall within the same calendar year. The accrued
benefit of a Participant other than a Key Employee shall be determined
under (1) the method, if any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the Employer, or (2) if there
is no such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code Section
411(b)(1)(C).
1. "Permissive Aggregation Group" means the Required Aggregation Group of
plans plus any other plan or plans of the Employer which, when considered as a
group with the Required Aggregation Group, would continue to satisfy the
requirements of Code Sections 401(a)(4) and 410.
2.
3. "Required Aggregation Group" means (i) each qualified plan of the
Employer in which at least one Key Employee participates or participated at any
time during the Determination Period (regardless of whether the plan has
terminated), and (ii) any other qualified plan of the Employer which enables a
plan described in (i) to meet the requirements of Code Section 401(a)(4) or 410.
4.
5. "Top-Heavy Determination Date" means, for any Plan Year subsequent to
the first Plan Year, the last day of the preceding Plan Year or, for the first
Plan Year of the Plan, the last day of that year.
6.
7. "Present Value" shall be based on the interest assumption and
post-retirement mortality assumption specified in the defined benefit plan.
8.
9. "Employer" means the Employer and all Affiliates except for purposes of
determining ownership under Code Section 416(i)(1).
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<PAGE> 52
A. Top-Heavy Plan Requirements.
---------------------------
B.
a. Except as otherwise provided in (ii) and (iii) below, the Employer
contributions and forfeitures allocated on behalf of any Participant who is
not a Key Employee shall not be less than the lesser of three percent of
such Participant's Considered Compensation, as limited by Code Section
401(a)(17), or in the case where the Employer has no defined benefit plan
which designates this Plan to satisfy Code Section 401, the largest
percentage of Employer contributions and forfeitures, as a percentage of
the Key Employee's Considered Compensation, as limited by Code Section
401(a)(17), allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any Social Security
contribution. This minimum allocation shall be made even though, under
other Plan provisions, the Participant would not otherwise be entitled to
receive an allocation, or would have received a lesser allocation for the
year because of (A) the Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan), (B) the Participant's
failure to make mandatory employee contributions to the Plan, or (C)
Considered Compensation less than a stated amount.
a. The provision in (i) above shall not apply to any Participant
who was not employed by the Employer or an Affiliate on the last day of the
Plan Year.
a. The provision in (i) above shall not apply to any Participant
to the extent the Participant is covered under any other plan or plans of
the Employer and the Employer's contribution and forfeitures allocated
under such plan or plans are equal to or exceed the amount required to be
allocated under (i) above.
1. The minimum allocation required (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited under Code
Section 411(a)(3)(B) or 411(a)(3)(D).
2.
3. For any Plan Year in which this Plan is Top-Heavy, the following
schedule shall be substituted for the schedule set forth in Section 5.6,
provided that Section 5.6 shall apply to the extent that the nonforfeitable
percentage thereunder is greater than the following schedule:
4.
Years of Service Nonforfeitable
---------------- Percentage
----------
Less than 2 0
2 but less than 3 20
3 but less than 4 40
4 but less than 5 60
5 but less than 6 80
6 or more 100
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<PAGE> 53
The minimum vesting schedule applies to all benefits within the meaning of Code
Section 411(a)(7) except those attributable to after-tax contributions,
including benefits accrued before the effective date of Code Section 416 and
benefits accrued before the Plan became Top-Heavy. Further, no reduction in
vested benefits may occur in the event the Plan's Top-Heavy status changes for
any Plan Year. However, this Section does not apply to the Account balances of
any employee who does not have any Service after the Plan has initially become
Top-Heavy and such employee Account balance attributable to Employer
Contributions and forfeitures will be determined without regard to this Section.
1. If a Participant has 3 Years of Service as of the last day of the Plan
Year for which the vested percentage of his Employer Account was subject to
subparagraph(c), he may elect to have the vested percentage of his Employer
Account determined under subparagraph (c) in any subsequent Plan Year when
Section 7.2 is not applicable. II.
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<PAGE> 54
II. ARTICLE Stockholder Rights with Respect to Company Stock
A. Voting Shares of Company Stock. The Trustee shall vote, in person or by
proxy, shares of common stock of the Company ("Company Stock") held by the
Trustee in Fund A as instructed by Participants and Beneficiaries in accordance
with the terms of the Trust Agreement. Each Participant or Beneficiary shall be
entitled to give voting instructions, in the time and manner prescribed by the
Trustee with respect to the number of shares represented by the balance
allocated to his or her Accounts representing the proportional interest in Fund
A of such Participant or Beneficiary, determined as of the Valuation Date which
coincides with or immediately precedes the record date of any vote. Written
notice of any meeting of stockholders of the Company and a request for voting
instructions shall be given by the Trustee, at such time and in such manner as
the Trustee shall determine to each Participant or Beneficiary entitled to give
instructions for voting shares of Company stock at such meeting and the Company
shall establish and pay for a means by which such voting instructions can
expeditiously be delivered to the Trustee. All such instructions shall be
confidential and shall not be disclosed to any person, including the Company.
Subject to applicable law, the Trustee shall vote those shares of Company Stock
credited to the Accounts of Participants and Beneficiaries for which no voting
directions were received, plus shares not credited to such Accounts (if any).
A. Tender Offers.
B.
1. Rights of Participants. In the event a tender offer is made generally
to the stockholders of the Company to transfer all or a portion of their shares
of Common Stock in return for valuable consideration, including, but not limited
to, offers regulated by Section 14(d) of the Securities Exchange Act of 1934, as
amended, the Trustee shall respond to such tender offer in respect to the number
of shares of Company Stock held by the Trustee in Fund A pursuant to
instructions obtained from Participants and Beneficiaries, in accordance with
the terms of the Trust Agreement. Each Participant or Beneficiary shall be
entitled to instruct the Trustee regarding how to respond to any such tender
offer with respect to the number of shares of Company Stock represented by the
balance allocated to his or her Accounts representing the proportional interest
in the Fund A of such Participant or Beneficiary, determined as of the latest
Valuation Date for which information is available which coincides with or
precedes the record date of any tender offer. A Participant or Beneficiary shall
not be limited in the number of instructions to tender or withdraw from tender
which he can give, but a Participant or Beneficiary shall not have the right to
give instructions to tender or withdraw from tender after a reasonable time
established by the Trustee in accordance with the terms of the Trust Agreement.
2.
3. Duties of the Company.
a. Within a reasonable time after the commencement of a tender
offer, the Company shall cause the Trustee to provide to each Participant
or Beneficiary, as the case may be:
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<PAGE> 55
(1) the offer to purchase as distributed by the offeror to the
stockholders of the Company;
(1) the statement of the shares of Company Stock attributable to
the proportional interest in Fund A represented by the balance
allocated to his or her Accounts; and
(1) directions as to the means by which instructions with respect
to the tender offer can be given.
a. The Company shall establish and pay for a means by which
instructions with respect to a tender offer can expeditiously be delivered
to the Trustee. All such instructions shall be confidential and shall not
be disclosed to any person, including the Company. The Company at its
election may engage an agent to receive such instructions and transmit them
to the Trustee.
a. For purposes of allocating the proceeds of any sale or exchange
pursuant to a tender offer, the Trustee shall then treat as having been
sold or exchanged from each of the individual Accounts of Participants and
Beneficiaries who provided timely directions to the Trustee under this
Section that number of shares of Company Stock represented by the
Participant's or Beneficiary's proportional interest in Fund A (if any), or
such fewer number of shares of Company Stock if the Participant's or
Beneficiary's directions to the Trustee so indicate. If needed, the number
of shares treated as sold or exchanged shall be further reduced if less
than all shares tendered by Participants and Beneficiaries are accepted.
The shares tendered by each Participant and Beneficiary shall be
proportionately reduced by the ratio of (A) the shares accepted of those
tendered hereunder, divided by (B) the total shares tendered hereunder. The
proceeds of such sale or exchange shall be allocated accordingly, including
allocation in installments if the proceeds are received in installments.
The shares sold or exchanged for any individual shall not exceed the
proportional shares accepted and the amounts credited to any Participant or
Beneficiary shall not exceed the proportional installment amounts received
with respect to that Participant's or Beneficiary's shares. Any proceeds
shall be invested in Fund A.
1. Duties of the Trustee. In accordance with the terms of the Trust
Agreement, the Trustee shall follow the instructions of the Participants
and Beneficiaries with respect to the tender offer as transmitted to the
Trustee, and shall establish a reasonable time, taking into account the time
restrictions of the tender offer, after which it shall not accept instructions
of Participants or Beneficiaries. Subject to applicable law, the Trustee shall
tender a number of shares of Company Stock for which it receives no
instructions, or which are not reflected in the balances allocated to the
Accounts of Participants and
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<PAGE> 56
Beneficiaries, if any, determined by multiplying the total number of such shares
by a fraction, the numerator of which is the number of shares of Common Stock in
Fund A reflected in the balances of Accounts of Participants and Beneficiaries
for which instructions to tender are given, and the denominator of which is the
total number of shares reflected in such Accounts.
2.
B. Designation of Participants and Beneficiaries as Named Fiduciaries. Each
Participant and Beneficiary shall be a "named fiduciary" (as defined in Section
402(a) of ERISA) for purposes of directing the Trustee with respect to the
voting or tendering of shares of Company stock pursuant to this Article. II.
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<PAGE> 57
II. ARTICLE Change of Control
A. Application. Notwithstanding any other provision of the Plan, the
provisions of this Article 9 shall apply on and after the date that a Change of
Control (as defined below) occurs.
A. Investment of Trust Fund. All assets of the Plan and Trust attributable to
contributions made for any Plan Year beginning prior to the Change of Control
shall be held in the Wallace Computer Services, Inc. Profit Sharing and
Retirement Trust (the "Trust"). At all times after the Change of Control occurs,
the assets of the Plan and Trust attributable to contributions made for any Plan
Year beginning prior to the Change of Control shall not be invested in any
"employer security" or "employer real property" within the meaning of Section
407 of ERISA, except to the extent such employer securities or Company real
property were held in the Trust immediately prior to the Change of Control.
B.
C. Administration of Plan and Trust. At all times after the Change of Control
occurs, the exercise of authority and responsibility in the administration of
the Plan with respect to each individual who was a Participant in the Plan
immediately prior to the date that the Change of Control occurs (a "Protected
Participant") or with respect to the beneficiary of a Protected Participant,
shall be subject to a de novo standard of review by a court in any action
brought under Title I of ERISA. At all times after the Change of Control occurs,
a bank that is organized under the laws of the United States of America or one
of its States, that has a combined capital and surplus in excess of
$250,000,000.00, and that is otherwise independent of and has no material
business relationships with the Company or a Related Company (as defined below)
shall be the Trustee of the Trust and the authority to manage, acquire, and
dispose of all assets of the Trust shall be vested in that Trustee to the extent
not vested in one or more investment managers (as defined in Section 3(38) of
ERISA) who are selected by that Trustee and otherwise independent of, and have
no material business relationships with, the Company or a Related Company. After
the Change of Control occurs, no cost or expense of administration of the Plan
shall be paid out of assets of the Plan or Trust. After the Change of Control
occurs, the Company shall pay directly to the Trustee the Trustee's fees and
expenses and if, at any time after the Change of Control, the Company fails to
pay the Trustee's fees and expenses when due and the Trustee deducts the amounts
owed from the Trust Fund, then the Company shall immediately reimburse the Trust
Fund in the amount of the deduction plus the additional amount that the Trust
Fund would have earned if the deduction had not been made, as determined by the
Trustee.
D.
E. Maintenance of the Plan and Trust. The Plan and the Trust may be
terminated with respect to Protected Participants only if the termination does
not have an adverse effect on the qualified status of the Plan and Trust under
Section 401(a) of the Internal Revenue Code of 1986, as amended (the "Code").
Prior to the termination of the Plan and Trust, the Plan and Trust shall be
maintained, in operation and in form, in accordance with the requirements of
Section 401(a) of the Code and Title I of ERISA.
F.
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<PAGE> 58
G. Change of Control Defined. For purposes of this Article 9, a "Change of
Control" shall be deemed to have occurred if any of the following occurs:
1. The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 35% or more of
either (i) the then outstanding shares of capital stock of the Corporation (the
"Outstanding Corporation Capital Stock") or (ii) the combined voting power of
the then outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the "Corporation Voting Securities");
provided, however, that (X) any acquisition by or from the Corporation or any of
its subsidiaries; (Y) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any of its subsidiaries or
(Z) any acquisition by any corporation with respect to which, following such
acquisition, more than 65% of the then outstanding shares of capital stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Corporation Capital Stock and
Corporation Voting Securities immediately prior to such acquisition, in
substantially the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Corporation Capital Stock and Corporation Voting
Securities, as the case may be, shall not constitute a Change of Control; or
2.
3. Individuals who, as of September 6, 1995, constituted the Board of
Directors of the Corporation (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided, however, that any
individual who becomes a member of the Board of Directors of the Corporation
subsequent to such date whose election, or nomination for election by the
stockholders of the Corporation, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board shall be deemed to be a
member of the Incumbent Board; but provided further, that no individual whose
election or initial assumption of office as a director of the Corporation occurs
as a result of an actual or threatened election contest (as such terms are used
in Rule 14a-11 of the Regulation 14A promulgated under the Exchange Act) with
respect to the election or removal of directors, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board of Directors of the Corporation, shall be deemed to be a
member of the Incumbent Board; or
4.
5. Approval by the stockholders of the Corporation of a reorganization,
merger or consolidation (a "Business Combination") with respect to which all or
substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Corporation Capital Stock and Corporation
Voting Securities immediately prior to such Business Combination do not,
following such Business Combination, beneficially own, directly or indirectly,
more than 65% of, respectively, the then outstanding shares of capital stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from the Business Combination, in substantially the same
proportion as their ownership immediately prior to such
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<PAGE> 59
Business Combination of the Outstanding Corporation Capital Stock and
Corporation Voting Securities, as the case may be; or
6.
7. Approval by the stockholders of the Corporation of a sale or other
disposition of all or substantially all of the assets of the Corporation other
than to a corporation with respect to which, following such sale or disposition,
more than 65% of, respectively, the then outstanding shares of capital stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors is then owned beneficially, directly
or indirectly, by all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Corporation Capital
Stock and Corporation Voting Securities immediately prior to such sale or
disposition, in substantially the same proportion as their ownership of the
Outstanding Corporation Capital Stock and Corporation Voting Securities, as the
case may be, immediately prior to such sale or disposition; or
8.
9. A complete liquidation or dissolution of the Corporation.
10.
H. Related Company Defined. For purposes of this Article 9, the term
"Related Company" means any corporation, trade, or business during any period
that is, along with the Company, a member of a controlled group of corporations,
a controlled group of trades or businesses, or an affiliated service group, as
described in Sections 414(b), 414(c), or 414(m), respectively, of the Code.
I.
J. Attorneys' Fees and Other Costs and Expenses. Any Protected Participant
(or a Beneficiary of a Protected Participant) who brings any legal action after
a Change of Control to enforce the provisions of the Plan or the Trust shall be
entitled to recover from the Company any and all attorneys' fees and other costs
and expenses incurred in enforcing such provisions for his benefit or for the
benefit of any or all Protected Participants (or Beneficiaries of Protected
Participants).
K.
L. Binding on Successors. The provision of the Plan and the Trust shall
be binding upon and shall inure to the benefit of the Company, any Related
Company that adopts the Plan, the Participants, and their respective successors
in interest and assigns, including, without limitation, the surviving
corporation in any merger or consolidation with the Company or such Related
Company and, to the extent provided in the Plan, the Beneficiaries of the
Participants. After a Change of Control, except as may otherwise be determined
by a resolution of the Board of Directors of the Company adopted prior to the
occurrence of the Change of Control, a successor in interest to the Company or a
Related Company that adopts the Plan shall be deemed to have adopted the Plan
and Trust and shall have all of the liabilities and obligations of the Company
or that Related Company under the Plan and Trust. Except as may otherwise be
determined by a resolution of the Board of Directors of the Company adopted
prior to the occurrence of a Change of Control, the Company shall require any
person or entity that becomes a successor in interest to the Company or a
Related Company that adopts the Plan to expressly assume the Plan and Trust and
agree to perform all of the obligations of the Company or that Related Company,
as the case may be, under the Plan and Trust. For purposes of this Section 9.8,
following a Change of
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<PAGE> 60
Control, a "successor in interest" to the Company or a Related Company that
adopts the Plan shall include, without limitation, any person or entity (or
group of related or affiliated persons or entities) that acquires (in a single
transaction or a series of related transactions) any businesses or assets of the
Company or such Related Company representing twenty-five percent (25%) or more
of the Company's or such Related Company's sales, operating profits, or
operating assets.
M.
N. Amendment of Article 9. Notwithstanding any other provision of the Plan,
except as may otherwise be provided in a resolution of the Board of Directors
of the Company adopted prior to the occurrence of a Change of Control, the
provisions of this Article 9 may not be amended and shall continue to apply,
without amendment, in any successor plan.
O.
P.
Q.
R.
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<PAGE> 61
I. ARTICLE Powers and Duties of Profit Sharing Committee
A. Appointment of Profit Sharing Committee.
B.
1. The Board of Directors of the Company (the "Board of Directors") may
name a Profit Sharing Committee (the "Committee") to consist of not less than 3
persons, one of whom shall be the President of the Company, to serve as plan
administrator and named fiduciary of the Plan. Any person, including directors,
shareholders, officers and employees of the Company, shall be eligible to serve
on the Committee. Every person appointed a member of the Committee shall signify
his acceptance in writing to the Board of Directors. In the event the Board of
Directors does not appoint a Committee pursuant to this Section 10.1, the
Company shall act as the administrator and named fiduciary of the Plan and all
references to the Committee shall mean references to the Company so acting as
administrator and named fiduciary of the Plan.
1. Members of the Committee shall serve at the pleasure of the Board of
Directors and may be removed by the Board of Directors at any time with or
without cause. Any member of the Committee may resign by delivering his written
resignation to the Board of Directors, and such resignation shall become
effective at delivery or at any later date specified therein. Vacancies in the
Committee shall be filled by the Board of Directors.
2.
3. Usual and reasonable expenses of the Committee may be paid in whole or
in part by the Employer and any such expenses not paid by the Employer shall be
paid by the Trustee out of the principal or income of the Trust Fund. The
members of the Committee shall not receive any compensation for their services
as such.
4.
B. Powers and Duties of Committee. The Committee shall have final and
binding discretionary authority to control and manage the operation and
administration of the Plan, including all rights and powers necessary or
convenient to the carrying out of its functions hereunder, whether or not such
rights and powers are specifically enumerated herein. In exercising its
responsibilities hereunder, the Committee may manage and administer the Plan
through the use of agents who may include employees of the Employer.
C.
D. Without limiting the generality of the foregoing, and in addition to
the other powers set forth in this Article 10, the Committee shall have the
following discretionary authorities:
E.
1. To construe and interpret the Plan, decide all questions of eligibility
and determine the amount, manner and time of payment of any benefits hereunder.
2.
3. To prescribe procedures to be followed by Participants or beneficiaries
filing applications for benefits.
4.
5. To prepare and distribute, in such manner as the Committee determines
to be appropriate, information explaining the Plan.
6.
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<PAGE> 62
7. To request and receive from the Employer, Participants and others such
information as shall be necessary for the proper administration of the Plan.
8.
9. To furnish the Employer upon request such annual and other reports with
respect to the administration of the Plan as are reasonable and appropriate.
10.
11. To receive, review and maintain on file reports of the financial
condition and of the receipts and disbursements of the Trust Fund from the
Trustee or Custodian.
12.
13. To determine all questions relating to the eligibility, benefits and
other Plan rights of employees, Participants, Beneficiaries and distributees.
14.
15. To administer the Plan, to allocate the assets of the Trust Fund, to
monitor the diversification of the investment of the Trust Fund, to assure that
the Plan does not violate any restrictions limiting the acquisition or holding
of securities or other property of the Company.
A. Committee Procedures.
B.
1. The Committee may adopt such bylaws and regulations as it deems
desirable for the conduct of its affairs.
1. A majority of the members of the Committee at the time in office shall
constitute a quorum for the transaction of business. All resolutions or other
actions taken by the Committee at any meeting shall be by the vote of the
majority of the members of the Committee present at the meeting. The Committee
may act without a meeting by written consent of a majority of its members.
2.
3. The Committee, by unanimous written consent, may authorize one of its
members to execute any document, instrument or direction on its behalf. A
written statement by a majority of the Committee members or by an authorized
Committee member shall be conclusive in favor of any person (including the
Trustee) acting in reliance thereon.
4.
5. The Committee may elect one of its members as chairman and may appoint
a secretary, who may or may not be a Committee member, and shall advise the
Trustee and the Employer of such actions in writing. The secretary shall keep a
record of all actions of the Committee and shall forward all necessary
communications to the Employer or the Trustee.
6.
7. Filing or delivery of any document with or to the secretary of the
Committee in person or by registered or certified mail, addressed in care of the
Employer, shall be deemed a filing with or delivery to the Committee.
8.
B. Consultation with Advisors. The Committee (or any fiduciary designated by
the Committee) may employ or consult with counsel, actuaries, accountants,
physicians or other
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<PAGE> 63
advisors (who may be counsel, actuaries, accountants, physicians or other
advisors for the Employer).
C.
D. Committee Members as Participants. Any Committee member may also be a
Participant, but no Committee member shall have power to take part in any
discretionary decision or action affecting his own interest as a Participant
under this Plan unless such decision or action is upon a matter which affects
all other Participants similarly situated and confers no special right, benefit
or privilege not simultaneously conferred upon all other such Participants.
E.
F. Records and Reports. The Committee shall take all such action as it deems
necessary or appropriate to comply with governmental laws and regulations
relating to the maintenance of records, notifications to Participants,
registrations with the Internal Revenue Service, reports to the U.S. Department
of Labor and all other requirements applicable to the Plan.
A. Investment Policy.
B.
1. The Committee from time to time shall determine the Plan's short-term
and long-term financial needs, with which the investment policy of the Trust
shall be appropriately coordinated, and such needs shall be communicated from
time to time to the Trustee, Investment Managers or others having any
responsibility for management and control of the Trust assets.
1. Subject to (c) below, the Trustee shall have exclusive authority and
discretion to manage and control the assets of the Trust pursuant to an
investment policy coordinated with the needs of the Plan as determined by the
Committee.
2.
3. The Committee may in its discretion appoint one or more Investment
Managers to manage (including the power to direct the Trustee to acquire and
dispose of) any assets of the Plan pursuant to an investment policy coordinated
with the needs of the Plan as determined by the Committee, in which event the
Trustee shall not be liable for the acts or omissions of any such Investment
Manager or be under an obligation to invest or otherwise manage any asset of the
Plan which is subject to the management of any such Investment Manager except as
directed. Any such Investment Manager shall acknowledge in writing that he is a
fiduciary with respect to the Plan.
4.
5. The term "Investment Manager" shall mean investment manager as defined
in ERISA ss. 3(38).
6.
B. Designation of Other Fiduciaries. The Committee may designate in writing
other persons to carry out a specified part or parts of its responsibilities
hereunder (including the power to designate other persons to carry out a part of
such designated responsibility), but not including the power to appoint
Investment Managers. Any such designation shall be accepted by the designated
person, who shall acknowledge in writing that he is a fiduciary with respect to
the Plan.
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<PAGE> 64
A. Obligations of Committee.
B.
1. The Committee or its properly authorized delegate shall make such
determinations as are necessary to accomplish the purposes of the Plan with
respect to individual Participants or classes of such Participants. The Employer
shall notify the Committee of facts relevant to such determinations, including,
without limitation, length of service, compensation for services, dates of
death, permanent disability, granting or terminating of leaves of absence, ages,
retirement and termination of service for any reason (but indicating such
reason), and termination of participation. The Employer shall also be
responsible for notifying the Committee of any other facts which may be
necessary for the Committee to discharge its responsibilities hereunder.
1. The Committee is hereby authorized to act solely upon the basis of such
notifications from the Employer and to rely upon any document or signature
believed by the Committee to be genuine and shall be fully protected in so
doing. For the purpose of this Section, a letter or other written instrument
signed in the name of the Employer by any officer thereof shall constitute a
notification therefrom; except that any action by the Company or its Board of
Directors with respect to the appointment or removal of a member of the
Committee or the amendment of the Plan and Trust or the designation of a group
of employees to which the Plan is applicable shall be evidenced by an instrument
in writing, signed by a duly authorized officer or officers, certifying that
said action has been authorized and directed by a resolution of the Board of
Directors of the Company.
2.
3. The Committee shall notify the Trustee of its actions and
determinations affecting the responsibilities of the Trustee and shall give the
Trustee directions as to payments or other distributions from the Trust Fund to
the extent they may be necessary for the Trustee to fulfill the terms of the
Trust Agreement.
4.
5. The Committee shall be under no obligation to enforce payment of
contributions hereunder or to determine whether contributions delivered to the
Trustee comply with the provisions hereof relating to contributions, and is
obligated only to administer this Plan pursuant to the terms hereof.
6.
B. Indemnification of Committee. The Company shall indemnify members of the
Committee and its authorized delegates who are employees of the Employer for any
liability or expenses, including attorneys' fees, incurred in the defense of any
threatened or pending action, suit or proceeding by reason of their status as
members of the Committee or its authorized delegates, to the full extent
permitted by the law of the Company's state of incorporation or as set forth in
separate agreements between the Company and the members of the Committee.
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II. ARTICLE Trustee and Trust Fund
A. Trust Fund. A Trust Fund known as the Wallace Computer Services, Inc.
Profit Sharing and Retirement Trust (herein referred to as the "Trust" or the
"Trust Fund") has been established by the execution of a trust agreement with
one or more Trustees and is maintained for the purposes of this Plan. The assets
of the Trust will be held, invested and disposed of by the Trustee, in
accordance with the terms of the Trust, for the benefit of the Participants and
their beneficiaries.
A. Payments to Trust Fund and Expenses. All contributions hereunder will be
paid into and credited to the Trust Fund and all benefits hereunder and expenses
chargeable thereto will be paid from the Trust Fund and charged thereto.
B.
C. Trustee's Responsibilities. The powers, duties and responsibilities of the
Trustee shall be as setforth in the Wallace Computer Services, Inc. Profit
Sharing and Retirement Trust and nothing contained in this Plan, either
expressly or by implication, shall impose any additional powers, duties or
responsibilities upon the Trustee.
D.
E. Reversion to the Employer. The Employer has no beneficial interest in the
Trust Fund and no part of the Trust Fund shall ever revert or be repaid to the
Employer, directly or indirectly, except that the Employer shall upon written
request have a right to recover:
F.
1. within one year of the date of payment of a contribution by the
Employer, any amount (less any losses attributable thereto) contributed through
a mistake of fact;
2.
3. within one year of the date on which any deduction for a contribution
by the Employer under Code Section 404 is disallowed, an amount equal to the
amount disallowed (less any losses attributable thereto); and
4.
5. at the termination of the Plan, any amounts remaining in the Excess
Forfeiture Suspense Account.
6.
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I. ARTICLE Amendment or Termination
A. Amendment. The Company reserves the right to amend this Plan at any time
to take effect retroactively or otherwise, in any manner which it deems
desirable including, but not by way of limitation, the right to increase or
diminish contributions to be made by the Company hereunder, to change or modify
the method of allocation of its contributions, to change any provision relating
to the distribution or payment, or both, of any assets of the Trust.
A. Termination. The Company further reserves the right to terminate this Plan
at any time. The Plan will terminate on the earliest of the following dates:
B.
1. The date the Company is judicially declared bankrupt or insolvent;
2.
3. The date the Company permanently discontinues its contribution under
the Plan; or
4.
5. The date the Company is dissolved, merged, consolidated or
reorganized, or sells all or substantially all of its assets, except that,
provision may be made by the successor or purchaser for continuing the Plan and
in that event the successor or purchaser shall be substituted for the Company
under the Plan. However, see Article 9 regarding a "Change of Control" in the
ownership or management of the Company.
6.
C. Form of Amendment, Discontinuance of Employer Contributions, and
Termination. Any such amendment, discontinuance of Employer contributions or
termination shall be made only by resolution of the Board of Directors of the
Company or by any person so duly authorized by the Board of Directors.
D.
E. Limitations on Amendments. The provisions of this Article are subject to
the following restrictions:
F.
1. Except as provided in Section 11.4, no amendment shall operate either
directly or indirectly to give the Employer any interest whatsoever in any funds
or property held by the Trustee under the terms hereof, or to permit corpus or
income of the Trust to be used for or diverted to purposes other than the
exclusive benefit of the Participants and their beneficiaries.
2.
3. Except to the extent necessary to conform to the laws and regulations
or to the extent permitted by any applicable law or regulation, no amendment
shall operate either directly or indirectly to deprive any Participant of his
nonforfeitable beneficial interest in his Accounts as at the date of the
amendment.
4.
5. No amendment shall change any vesting schedule unless each Participant
who has completed 3 or more Years of Service is permitted to elect to have the
nonforfeitable percentage of his Employer Account computed under the Plan
without regard to such amendment. The period for making such election shall
commence no later than the date of the adoption of such
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<PAGE> 67
amendment and shall expire no earlier than 60 days after the latest of the
following dates: (i) the date the Plan amendment is adopted, (ii) the date the
Plan amendment becomes effective, or (iii) the date the Participant is issued
written notice of the Plan amendment by the Committee. Notwithstanding the
foregoing, no election need be offered to a Participant whose nonforfeitable
percentage of his Employer Account cannot at any time be lower than such
percentage determined without regard to such amendment.
6.
7. Except as permitted by applicable law, no amendment shall eliminate or
reduce an early retirement benefit or a retirement-type subsidy or eliminate an
optional form of benefit.
8.
G. Level of Benefits Upon Merger. This Plan shall not merge or consolidate
with, or transfer assets or liabilities to, any other plan, unless each
Participant shall be entitled to receive a benefit immediately after said
merger, consolidation or transfer (if such other plan were then terminated)
which shall be not less than the benefit he would have been entitled to receive
immediately before said merger, consolidation or transfer (if this Plan were
then terminated).
A. Vesting Upon Termination or Discontinuance of Employer Contributions;
Liquidation of Trust.
B.
1. This Plan shall be deemed terminated if and only if
the Plan terminates by operation of law or pursuant to Section 12.2. In the
event of any termination or partial termination within the meaning of the Code,
or in the event the Employer permanently discontinues the making of
contributions to the Plan, the Employer Account of each affected Participant who
is employed by the Employer on the date of the occurrence of such event shall be
nonforfeitable; provided, however, that in no event shall any Participant or
beneficiary have recourse to other than the Trust Fund for the satisfaction of
benefits hereunder.
1. In the event the Employer permanently discontinues the making of
contributions to the Plan, the Trustee shall make or commence distribution to
each Participant or his beneficiaries of the value of such Participant's
Accounts as provided herein within the time prescribed in Article 6. However,
if, after such discontinuance, the Company shall determine it to be
impracticable to continue the Trust any longer, the Company may, in its
discretion, declare a distribution date and Valuation Date for all Participants
and beneficiaries, including each Participant or beneficiary whose Accounts are
being distributed in installments.
2.
3. The liquidation of the Trust, if any, in connection with any Plan
termination shall be accomplished by the Committee acting on behalf of the
Company. After directing that sufficient funds be set aside to provide for the
payment of all expenses incurred in the administration of the Plan and the
Trust, to the extent not paid or provided for by the Employer, the Committee
shall, as promptly as shall then be reasonable under the circumstances,
liquidate the Trust assets and distribute to each Participant or beneficiary his
Accounts in the Trust Fund. Notwithstanding the foregoing, if the Employer or an
Affiliate maintains another defined contribution plan, other than an employee
stock ownership plan (as defined in Code Section 4975(e) or 409) or a simplified
employee pension plan (as defined in Code
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Section 408(k)), the Accounts of such Participant shall be transferred to such
other plan; provided, however, that if fewer than 2% of the Participants in this
Plan at the time this Plan is terminated are or were eligible to participate
under such other defined contribution plan at any time during the 24-month
period beginning 12 months before the time of termination, a Participant's
Accounts shall be transferred to such other plan only if the vested balance of
such Accounts exceeds $5,000 (or at the time of any prior distribution exceeded
$5,000) and the Participant does not consent to the distribution of such
Accounts. Upon completion of such liquidation and distribution, the Trust shall
finally and completely terminate. In the event the Committee is no longer in
existence, the actions to be taken by the Committee pursuant to this Section
shall be taken by the Trustee.
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II. ARTICLE Miscellaneous
A. No Guarantee of Employment, Etc. Neither the creation of the Plan nor
anything contained in the Plan, trust agreement or any other document or form
pertaining to the Plan shall be construed as a contract of employment between
the Employer and the Participant or as giving any Participant hereunder or other
employee of the Employer any right to remain in the employ of the Employer, any
equity or other interest in the assets, business or affairs of the Employer, or
any right to complain about any action taken or any policy adopted or pursued by
the Employer.
A. Nonalienation.
B.
1. Except as may be provided in the Plan with respect to loans to
Participants, no Participant shall have any right to sell, assign, pledge,
hypothecate, anticipate or in any way create a lien upon any part of the Trust
Fund. Except to the extent required by law or provided in the Plan, no interest
in the Trust Fund, or any part thereof, shall be assignable in or by operation
of law, or be subject to liability in any way for the debts or defaults of
Participants, their beneficiaries, spouses or heirs-at-law, whether to the
Employer or to others.
1. Prior to the time that distributions are to be made hereunder, the
Participants, their spouses, beneficiaries, heirs-at-law or legal
representatives shall have no right to receive cash or other things of value
from the Employer or the Trustee from or as a result of the Plan and Trust.
2.
B. Qualified Domestic Relations Order. Notwithstanding anything in this
Plan to the contrary, the Committee shall distribute a Participant's Accounts,
or any portion thereof, in accordance with the terms of any domestic relations
order entered on or after January 1, 1985, which the Committee determines to be
a qualified domestic relations order described in Code Section 414(p).
C.
D. Controlling Law. To the extent not preempted by the laws of the United
States of America, the laws of the State of Illinois shall be controlling state
law in all matters relating to the Plan. Notwithstanding this Section 13.4,
where a Section of the Plan explicitly references a state law other than
Illinois, that state law shall be controlling for the matter arising under that
Plan section.
E.
F. Severability. If any provision of this Plan shall be held illegal or
invalid for any reason, said illegality or invalidity shall not affect the
remaining parts of this Plan, but this Plan shall be construed and enforced as
if said illegal or invalid provision had never been included herein.
G.
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H. Notification of Addresses. Each Participant and each beneficiary of a
deceased Participant shall file with the Committee from time to time in writing
his post-office address and each change of post-office address. Any
communication, statement or notice addressed to the last post-office address
filed with the Committee, or if no such address was filed with the Committee,
then to the last post-office address of the Participant or beneficiary as shown
on the Employer's records, will be binding on the Participant and his
beneficiary for all purposes of this Plan and neither the Committee nor the
Employer shall be obliged to search for or ascertain the whereabouts of any
Participant or beneficiary.
I.
J. Gender and Number. Whenever the context requires or permits, the
masculine gender includes the feminine and neuter genders, words in the singular
include the plural and words in the plural include the singular.
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<PAGE> 71
II. ARTICLE Adoption by Affiliates
A. Adoption of Plan. Subject to any resolution or terms of any agreement
approved by the Board of Directors of the Company or a committee thereof to the
contrary, any Affiliate may adopt this Plan for the benefit of its eligible
employees if authorized to do so by the Board of Directors of the Company. Such
adoption shall be by resolution of such Affiliate's board of directors, a
certified copy of which shall be filed with the Company, the Committee and the
Trustee. Upon such adoption, such Affiliate shall become an "Employer." Adopting
Affiliates include, but are not limited to, Visible Computer Supply Corp. and
Wallace Commercial Printing, Inc.
A. The Company as Agent for Employer. Each Employer which has adopted this
Plan pursuant to Section 14.1 hereby irrevocably gives and grants to the Company
full and exclusive power conferred upon it by the terms of the Plan and Trust to
take or refrain from taking any and all action which such Employer might
otherwise take or refrain from taking with respect to the Plan, including sole
and exclusive power to exercise, enforce or waive any rights whatsoever which
such Employer might otherwise have with respect to the Trust, and each such
Employer, by adopting this Plan, irrevocably appoints the Company its agent for
such purposes. Neither the Trustee nor the Committee nor any other person shall
have any obligation to account to any such Employer or to follow the
instructions of or otherwise deal with any such Employer, the intention being
that all persons shall deal solely with the Company as if it were the sole
company which had adopted this Plan. Each such Employer shall contribute such
amounts as determined under Article 3.
A. Adoption of Amendments.
B.
1. Any Employer which adopts this Plan pursuant to Section 14.1 may amend
this Plan with respect to its own employees by resolution of its board of
directors, if authorized to do so by the Board of Directors of the Company or
any person so duly authorized by the Board of Directors of the Company.
1. Any Employer shall be deemed conclusively to have assented to any
amendment of this Plan by the Company without the necessity of any affirmative
action on the part of such Employer.
2.
B. Termination. Any Employer which adopts this Plan pursuant to Section 14.1
may terminate this Plan with respect to its own employees by resolution of its
board of directors, if authorized to do so by the Board of Directors of
the Company, or any person so duly authorized by the Board of Directors of the
Company.
C.
D. Data to Be Furnished by Employers. Each Employer which adopts this Plan
pursuant to Section 14.1 shall furnish information and maintain such records
with respect to its Participants as called for hereunder, and its determinations
and notifications with respect thereto shall have
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<PAGE> 72
the same force and effect as comparable determinations by the Company with
respect to its Participants.
E.
F. Joint Employees. If a Participant receives Considered Compensation during a
Plan Year from more than one Employer, the total amount of such Considered
Compensation shall be considered for the purposes of the Plan, and the
respective Employers shall share in contributions to the Plan on account of said
Participant based on the Considered Compensation paid to such Participant by the
Employer.
G.
H. Expenses. Each Employer shall pay such part of any expenses incurred in the
administration of the Plan as the Company shall determine.
I.
J. Withdrawal. An Employer may withdraw from the Plan by giving 60 days'
written notice of its intention to the Company and the Trustee, unless a
shorter notice shall be agreed to by the Company.
K.
L. Prior Plans. If an Employer adopting the Plan already maintains a defined
contribution plan covering employees who will be covered by this Plan, it may,
with the consent of the Company, provide in its resolution adopting this Plan
for the termination of its own plan or for the merger, restatement and
continuation, of its own plan by this Plan. In either case, such Employer may,
subject to the approval of the Company, provide in its resolution of adoption of
this Plan for the transfer of the assets of such plan to the Trust for this Plan
for the payment of benefits accrued under such other plan.
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WALLACE PROFIT SHARING PLAN
PLAN CHANGE INDEX
for Plan effective 1998
<TABLE>
<S> <C>
ITEM Approved
1. Good Decal Unit Participation 9/14/98
2. Fiscal Comp...effective 1999 9/14/98
3. Participant Directed Transfers 9/14/98
4. 5% transition rule for "Old Money" 9/14/98
5. Eliminate Mandatory Age Transfer 9/14/98
6. Create Company Stock Fund 9/14/98
7. Multiple Investment Funds 9/14/98
8. Loan & Withdrawal Simplification 9/14/98
9. Daly Valuation 9/14/98
10. Retiree/Beneficiary Fund Transfers 12/14/98
11. Late Enrollment 12/14/98
12. Fund A Default Allocation: Company and Required 12/14/98
13. Stock Fund Sell Repurchased Shares 2/24/99
14. Combine Required and Voluntary into Participant Contribution 8/20/99
15. Raise 5% Quarterly Reclassification to 10% 8/20/99
16. Raise Participant Contribution Maximum to 15% 10/12/99
17. Remove inter-fund transfer limitations 11/15/99
18. Add Participant Internet access option 11/15/99
19. Add provision to provide for inter-plan account transfers for participants 11/15/99
transferring to units participating in different Wallace plan
20. Change Company Stock Fund to active, participant directed 11/15/99
21. Provide for additional vesting credit for specific reorganization situations 3/23/00
</TABLE>
<PAGE> 1
EXHIBIT 5
April 3, 2000
Wallace Computer Services, Inc.
2275 Cabot Drive,
Lisle, Illinois 60532-3630
RE: Registration Statement on Form S-8 for Wallace Computer Services, Inc.
Profit Sharing and Retirement Plan.
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-8 to be filed with the
Securities and Exchange Commission on or about April 13, 2000 (the "Registration
Statement") in connection with the registration under the Securities Act of
1933, as amended, of 1,750,000 additional shares of Wallace Computer Services,
Inc.'s Common Stock, $1,00 par value, authorized for issuance under the Wallace
Computer Services, Inc. Profit Sharing and Retirement Plan (the "Profit Sharing
Plan"). The shares of Wallace Common Stock to be registered under the
Registration Statement are hereinafter referred to collectively as the "Shares".
As counsel in connection with this transaction, I have examined the actions
taken, and I am familiar with the actions proposed to be taken, in connection
with the issuance and sale of the Shares pursuant to the Profit Sharing Plan.
It is my opinion that, when issued and sold in the manner described in the
Profit Sharing Plan, the Shares will be legally and validly issued, fully paid
and nonassessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of my name wherever appearing in the
Registration Statement.
Very truly yours,
/s/ Steven L. Carson
Steven L. Carson
General Counsel
<PAGE> 1
EXHIBIT 23.1
Consent of Independent Public Accountants
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-8 of Wallace Computer
Services, Inc. of our reports dated September 7, 1999 included in Wallace
Computer Services, Inc.'s form 10-K for the year ended July 31, 1999 and to all
references to our firm included in this Registration Statement.
Arthur Andersen LLP
Chicago, Illinois
April 13, 2000
