As filed with the Securities and Exchange Commission on April 26, 1996
Registration No. 33-_____
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WAUSAU PAPER MILLS COMPANY
(Exact name of registrant as specified in its charter)
WISCONSIN 39-0690900
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE CLARK'S ISLAND
P.O. BOX 1408
WAUSAU, WISCONSIN 54402-1408
(Address of principal executive offices) (Zip Code)
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
(Full title of the plan)
STEVEN A. SCHMIDT
VICE PRESIDENT-FINANCE, SECRETARY AND TREASURER
WAUSAU PAPER MILLS COMPANY
P.O. BOX 1408
WAUSAU, WI 54402-1408
(715) 845-5266
Copies to:
ARNOLD J. KIBURZ III
RUDER, WARE & MICHLER, S.C.
P.O. BOX 8050
WAUSAU, WI 54402-8050
(715) 845-4336
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed maximum
Title of securities Amount to be Maximum offering aggregate offering Amount of
to be registered(1) registered price per unit price registration fee
<S> <C> <C> <C> <C>
Common stock, 25,000(2) $ (2) $ (2) $196.11(3)
no par value shares
<FN>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
<PAGE>
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Maximum number of shares which are estimated will be acquired by Plan
during the twelve-month period ending April 25, 1997.
(3) Estimated solely for purposes of calculating registration fee pursuant
to Rule 457(h); calculated pursuant to Rule 457(c) as of April 22,
1996.
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Wausau Paper Mills Company ("Registrant")
or the Wausau Paper Mills Company Hourly Savings and Investment Plan (the
"Plan") are incorporated by reference in and made a part of this
Registration Statement by this reference except to the extent that any
statement or information therein is modified, superseded or replaced by a
statement or by information contained in any other subsequently filed
document incorporated herein by reference:
(1) Registrant's annual report on Form 10-K for the year ended August
31, 1995;
(2) Registrant's quarterly report on Form 10-Q for the period ended
February 29, 1996;
(3) Descriptions of Registrant's common stock in:
(a) Item 14, Form 10, December, 1973;
(b) Item 4, caption "Amendment of Restated Articles of
Incorporation", quarterly report on Form 10-Q for the period
ended February 29, 1992;
(c) Description of common stock set forth in Exhibit (99)(a) to
Registrant's Form S-8, registration number 33-44922, as
filed on August 25, 1995;
(d) Item 5, caption "Common Stock Increase", quarterly report on
Form 10-Q for the period ended November 30, 1995; and
(e) Any amendment or report, including a report on Form 10-K,
Form 8-K or 10-Q, filed by the Registrant for the purpose of
updating the descriptions contained in the documents
described in (a), (b), (c) and (d).
(4) The Plan's annual report on Form 11-K for the year ended December
31, 1995.
(5) From the date of filing of such documents described in (1), (2),
(3) and (4), above, all documents filed by Registrant or the Plan
with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Securities Exchange Act of 1934 subsequent to the date of
this Registration Statement and prior to the filing of a post-
effective amendment to the Registration Statement which indicates
that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
<PAGE>
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Registrant is incorporated under the Wisconsin Business Corporation
Law pursuant to sections 180.0850 to 180.0859 of the Wisconsin statutes
and, subject to the limitations stated therein, is required to indemnify
any director or officer against liability and reasonable expenses
(including attorneys' fees) incurred by such person in the defense of any
threatened, pending or completed civil, criminal, administrative or
investigative action, suit or proceeding in which such person is made a
party by reason of being or having been a director or officer of
Registrant, unless liability was incurred because such person breached or
failed to perform a duty owed to the Registrant which constituted (i) a
willful failure to deal fairly with the Registrant or its shareholders in
connection with a matter in which such person has a material conflict of
interest; (ii) a violation of criminal law, unless such person had
reasonable cause to believe his or her conduct was lawful or no reasonable
cause to believe his or her conduct was unlawful; (iii) a transaction from
which such person derived an improper personal profit; or (iv) willful
misconduct. The statute provides that indemnification pursuant to its
provisions is not exclusive of other rights or indemnification to which a
person may be entitled under the Registrant's articles of incorporation or
bylaws, or any written agreement, vote of shareholders or disinterested
directors, or otherwise.
Section 180.0859 of the Wisconsin statutes provides that it is the
public policy of the State of Wisconsin that such indemnification
provisions apply, to the extent applicable to any other proceeding, to,
among other things, the offer, sale or purchase of securities in any
proceeding involving a state or federal statute.
Article III, Section 14, of the Registrant's bylaws essentially
parallels the provisions of sections 180.0850 to 180.0859 of the Wisconsin
statutes. The bylaws extend coverage to directors or officers serving in
a fiduciary or administrative capacity with respect to a Registrant-
sponsored employee benefit plan and also set forth procedures to be
followed in obtaining indemnification. Officers and directors of
Registrant are also insured, subject to certain specified exclusions and
deductible and maximum amounts, against loss from claims arising in
connection with their acting in their respective offices, which include
claims under the Securities Act of 1933, as amended.
The trust agreement of the Plan provides that individual trustees,
members of the committee which acts as the Plan administrator and the
directors, officers and employees of the Company and the Plan sponsor are
not personally liable for acts done or omitted to be done unless it is
judicially determined that such acts or omissions are attributable to the
gross negligence or willful misconduct of such person. To the extent
permitted by law, and to the extent not otherwise indemnified, such
persons shall be indemnified by the Company or the Plan sponsor against
liabilities, including all expenses reasonably incurred in their defense.
The Registrant has in effect insurance polices with total coverage of
$15,000,000 (subject to a deductible) which among other things insure
directors and officers of the Registrant against certain claims which are
not indemnified by the Registrant or the Plan.
<PAGE>
The Registrant also has in effect insurance policies with total
coverage of $15,000,000 (subject to a deductible) which among other things
provide for the payment by the insurer of amounts, excluding certain fines
and penalties which are legally uninsurable and certain other matters,
which the Registrant, certain other entities, or its officers, directors
or employees become obligated to pay by reason of any claim based upon an
act or omission in the management or administration of certain employee
benefit plans (including the Plan) sponsored by the Registrant and certain
subsidiaries of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
(4) Instruments defining the rights of security holders,
including debentures
(a) Restated articles of incorporation, as last amended
effective as of December 21, 1995<dagger>
(b) Restated bylaws, as last amended and restated
July 17, 1992*
(c) Wausau Paper Mills Company Hourly Savings
and Investment Plan
(5) (a) Internal Revenue Service determination letter
(b) Opinion of counsel re: subsequent amendments
(23) Consents of experts.
Consent of Wipfli Ullrich Bertelson
(24) Power of Attorney
Powers of attorney are set forth under "Signatures", page 9
of this Form S-8.
<dagger>Incorporated by reference to Exhibit (3) to Registrant's
quarterly report on Form 10-Q for the period ended February 29, 1996.
*Incorporated by reference to Exhibit 3(b) to Registrant's annual
report on Form 10-K for the year ended August 31, 1992.
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:
<PAGE>
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement. Notwithstanding
the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end
of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(i) and (a)(ii) do not
apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in the
periodic reports filed by the Registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 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 of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
<PAGE>
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer, or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement on Form S-8 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wausau, State of
Wisconsin, on April 17, 1996.
WAUSAU PAPER MILLS COMPANY
By: STEVEN A. SCHMIDT
Steven A. Schmidt
Vice President, Finance,
Secretary and Treasurer
(On behalf of Registrant and
as Principal Financial Officer)
<PAGE>
SIGNATURES
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Daniel D. King and Steven A.
Schmidt and each of them, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration
Statement on Form S-8 and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission and any other regulatory authority, granting unto said
attorney-in-fact and agent, full power and authority to do and perform
each and every act and thing required and necessary to be done in and
about the premises, 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 his substitute, may lawfully do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed on April 17, 1996 by
the following persons in the capacities indicated.
SAN W. ORR, JR. DANIEL D. KING
San W. Orr, Jr. Daniel D. King
Chairman of the Board President and Chief Executive
Officer and a Director
(Principal Executive Officer)
DAVID B. SMITH, JR. STANLEY F. STAPLES, JR.
David B. Smith, Jr. Stanley F. Staples, Jr.
Director Director
HARRY R. BAKER STEVEN A. SCHMIDT
Harry R. Baker Steven A. Schmidt
Director Vice President-Finance,
Secretary and Treasurer
(Principal Accounting Officer)
<PAGE>
EXHIBIT INDEX
PURSUANT TO <section>232.102(D), REGULATION S-T
1. EXHIBIT (4)(C) Wausau Paper Mills Company
Hourly Savings and Investment Plan
2. EXHIBIT (5)(A) Internal Revenue Service determination letter
3. EXHIBIT (5)(B) Opinion of counsel re: subsequent amendments
4. EXHIBIT (23) Consent of Wipfli Ullrich Bertelson
EXHIBIT (4)(C)
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
As Amended and Restated Effective January 1, 1996
<PAGE>
TABLE OF CONTENTS
SECTION 1 .....................................................2
DEFINITIONS ...............................................2
1.1 Definitions .....................................2
1.2 Accounting Date .................................2
1.3 Affiliated Employer .............................2
1.4 Beneficiary .....................................2
1.5 Break in Service ................................2
1.6 Certified Leave of Absence ......................2
1.7 Code ............................................2
1.8 Committee .......................................3
1.9 Company .........................................3
1.10 Compensation ....................................3
1.11 Disability ......................................3
1.12 Effective Date ..................................3
1.13 Employee ........................................3
1.14 Employer ........................................3
1.15 ERISA ...........................................3
1.16 Family Member ...................................3
1.17 401(k) Account ..................................3
1.18 Highly Compensated Employee .....................4
1.19 Hours of Service ................................4
1.20 Inactive Participant ............................5
1.21 Investment Funds ................................5
1.22 Member ..........................................5
1.23 Normal Retirement Age ...........................5
1.24 Participant .....................................5
1.25 Payroll Period ..................................5
1.26 Plan ............................................5
1.27 Plan Year .......................................5
1.28 Salary Deferral Agreement .......................5
1.29 Termination of Employment .......................5
1.30 Trust ...........................................6
1.31 Trustee .........................................6
1.32 Union ...........................................6
SECTION 2 .....................................................7
ELIGIBILITY AND ENROLLMENT ................................7
2.1 Eligibility .....................................7
2.2 Enrollment ......................................7
2.3 Assumption of Inactive Participant Status .......7
2.4 Return to Active Status .........................8
2.5 Reemployment ....................................8
SECTION 3 .....................................................9
PARTICIPANT CONTRIBUTIONS .................................9
3.1 Participant Salary Deferral Contributions .......9
3.2 Requirements of Nondiscriminatory
Salary Deferrals ..........................11
3.3 Additional Limitations on Contributions ........13
3.4 Maximum Contributions ..........................14
3.5 Non-Reversion of Employer Contributions ........15
3.6 Adjustment of Contributions by Committee .......15
3.7 Rollover Contributions .........................16
<PAGE>
SECTION 4 ....................................................17
ACCOUNTS, RECORDS OF THE PLAN, INVESTMENT ELECTIONS,
AND ALLOCATIONS TO PARTICIPANTS' ACCOUNTS.................17
4.1 Individual Accounts ............................17
4.2 Contributions ..................................17
4.3 Adjustments to Reflect Net Worth
of the Trust Fund .........................17
4.4 Investment Funds ...............................17
4.5 Investment Directions ..........................19
4.6 Transfers Between Investment Funds .............19
4.7 Transfer of Assets .............................20
SECTION 5 ....................................................21
WITHDRAWALS AND LOANS ....................................21
5.1 Withdrawal Upon Attainment of Age 59 1/2 .......21
5.2 Hardship Withdrawals ...........................21
5.3 Loans to Participants ..........................23
SECTION 6 ....................................................26
BENEFITS .................................................26
6.1 Retirement Benefits ............................26
6.2 Death Benefits .................................26
6.3 Disability Benefits ............................27
6.4 Termination for Other Reasons ..................27
6.5 Payment of Benefits ............................27
6.6 Eligible Rollover Distributions ................32
6.7 Code Compliance ................................32
6.8 Payments to Minors or Incompetents .............33
6.9 Inalienability of Benefits .....................33
6.10 Treatment of Benefits in a Divorce .............33
6.11 Application for Benefits and Data ..............33
6.12 Claims Procedure ...............................34
SECTION 7 ....................................................36
TOP-HEAVY PROVISIONS .....................................36
7.1 Top Heavy Defined ..............................36
7.2 Top-Heavy Minimum ..............................36
7.3 Definitions ....................................37
SECTION 8 ....................................................41
ADMINISTRATION ...........................................41
8.1 Plan Administrator and Fiduciary ...............41
8.2 Organization of Committee ......................41
8.3 Compensation and Expenses ......................41
8.4 Manner of Action ...............................41
8.5 Chairman, Secretary, and Employment
of Specialists ............................42
8.6 Subcommittees ..................................42
8.7 Records ........................................42
8.8 Rules ..........................................42
8.9 Administration .................................42
8.10 Effect of Mistake ..............................43
8.11 Notice of Address ..............................43
8.12 Indemnity of Committee, Officers
and Directors .............................43
SECTION 9 ....................................................44
TRUST AGREEMENT ..........................................44
9.1 Title to Trust Property ........................44
9.2 Combining of Participants' Accounts ............44
<PAGE>
9.3 Investment and Management Functions
of Trustee ................................44
9.4 Standard of Care ...............................46
9.5 Self Dealing ...................................46
9.6 Compensation ...................................47
9.7 Successor Trustee ..............................47
9.8 Bond or Security ...............................47
9.9 Investment Manager .............................47
9.10 Protection of Trustee ..........................48
SECTION 10 ...................................................50
RIGHTS RESERVED BY EMPLOYER ..............................50
10.1 Employer's Interest in Trust ...................50
10.2 Amendment of Agreement .........................50
10.3 Termination of Plan ............................50
SECTION 11 ...................................................52
SUCCESSOR EMPLOYER AND MERGEROR CONSOLIDATION OF PLANS ...52
11.1 Successor Employer .............................52
11.2 Merger or Transfer of Plan Assets ..............52
11.3 Limitations on Merger or Transfer ..............52
SECTION 12 ...................................................53
MISCELLANEOUS ............................................53
12.1 Nonguarantee of Employment .....................53
12.2 Action by Employer .............................53
12.3 Agreement Binding on Successors ................53
12.4 Litigation .....................................53
12.5 Illegality of Particular Provision .............53
12.6 Construction ...................................53
12.7 Titles .........................................53
12.8 Applicable Laws ................................54
<PAGE>
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
Wausau Paper Mills Company hereby amends and restates the Wausau Paper
Mills Company Hourly Savings and Investment Plan, a profit sharing plan,
effective as of January 1, 1996.
<PAGE>
SECTION 1
DEFINITIONS
1.1 DEFINITIONS. As used in the Plan, the terms set forth in this
Section 1 shall have the meaning therein set forth and when the defined
meaning is intended, the term as used in the Plan is capitalized.
1.2 "ACCOUNTING DATE" shall mean the last day of each month of the
Plan Year, or such other date or dates as may be authorized or approved by
the Committee.
1.3 "AFFILIATED EMPLOYER" means (1) any corporation which is a member
of a controlled group of corporations (as defined in Code Section 414(b))
which includes the Company, (2) any trade or business (whether or not
incorporated) which is under common control (as defined in Code Section
414(c)) with the Company, (3) any organization (whether or not
incorporated) which is a member of an affiliated service group (as defined
in Code Section 414(m)) which includes the Company and, (4) any other
entity required to be aggregated with the Company pursuant to regulations
under Code Section 414(o).
1.4 "BENEFICIARY" shall mean a person or persons (natural or
otherwise) or organization or organizations designated by a Member
pursuant to Section 6.2 to receive any death benefit which shall be
payable under this Plan.
1.5 "BREAK IN SERVICE" shall occur in a Plan Year in which a
Participant or Inactive Participant has both incurred a Termination of
Employment and performed fewer than 501 Hours of Service.
1.6 "CERTIFIED LEAVE OF ABSENCE" shall mean any absence of any
Employee from active service of the Company and all Affiliated Employers
which is not treated as a Termination of Employment. In granting a
Certified Leave of Absence, all Employees in similar circumstances will be
treated alike. Any Employee in the military service of the United States,
whether as a volunteer or by induction, shall be deemed to have received a
Certified Leave of Absence for such period as may be required by
applicable state or federal law regarding veterans' reemployment rights.
1.7 "CODE" shall mean the Internal Revenue Code of 1986, as amended,
and reference to a particular section shall also include any succeeding
section or sections.
1.8 "COMMITTEE" shall mean the Wausau Paper Mills Company Employee
Benefits Committee acting and appointed in accordance with the terms and
conditions of Section 8.
1.9 "COMPANY" shall mean Wausau Paper Mills Company, a Wisconsin
corporation, or any successor or successors.
1.10 "COMPENSATION" shall mean the total of all earnings subject to
tax under Code Section 3101(a) (but without the dollar limitation of Code
Section 3121(a)) which would, but for an election made pursuant to Section
3.1 or any salary reduction pursuant to Code Section 125, be paid in cash
during the Plan Year to an Employee prior to his Termination of Employment
by the Employer for personal services. Notwithstanding the foregoing, the
maximum annual compensation taken into account hereunder for purposes of
calculating any Participant's accrued benefit (including the right to any
<PAGE>
optional benefit) and for all other purposes under the Plan shall be
$150,000 (or such other amount as may be provided under Code Section
401(a)(17)). For purposes of applying this limitation to a Participant
who is a 5% owner or Highly Compensated Employee who is in the group of 10
employees paid the greatest compensation during the year, pursuant to Code
Section 414(q)(6), the compensation of a spouse and any lineal descendants
who have not attained age 19 before the close of the Plan Year shall be
treated as if paid to the Participant.
1.11 "DISABILITY" shall mean a total incapacity of an Employee
resulting from personal injury or sickness to the extent that the Employee
is eligible for a disability benefit under Title II of the Federal Social
Security Act.
1.12 "EFFECTIVE DATE" shall mean June 1, 1994.
1.13 "EMPLOYEE" shall mean any person employed by the Company or an
Affiliated Employer.
1.14 "EMPLOYER" shall mean the Company and any other Affiliated
Employer that has elected, with the approval of the Committee, to become
an Employer under the Plan for the benefit of its eligible Employees and
where used herein, the term "Employer" shall refer to each such "Employer"
individually.
1.15 "ERISA" shall mean Public Law No. 93-406, the Employee
Retirement Income Security Act of 1974, as may be amended from time to
time.
1.16 "FAMILY MEMBER" shall mean an individual described in Code
Section 414(q)(6)(B).
1.17 "401(K) ACCOUNT" (hereinafter sometimes referred to collectively
with the Member's Rollover Contribution Account as "Accounts") shall mean
the account maintained for a Member to record (a) the deposits made by the
Employer on behalf of the Member pursuant to a Salary Deferral Agreement
described in Section 3.1, and (b) any adjustments for income or losses of
the Trust relating thereto.
1.18 "HIGHLY COMPENSATED EMPLOYEE" shall mean an Employee who is
highly compensated within the meaning of Code Section 414(q).
1.19 "HOURS OF SERVICE" means and shall be determined in accordance
with the following:
(a) An "Hour of Service" shall be credited for each hour of
service for which an Employee is directly or indirectly paid or
entitled to payment by the Company or an Affiliated Employer (1) for
the performance of duties during the applicable computation period,
(2) on account of a period of time during which no duties are
performed, or (3) as back pay, irrespective of mitigation of damages.
(b) For purposes of determining a Break in Service, the term
"Hour of Service" shall include (1) those normally scheduled working
hours during which an Employee is on a Certified Leave of Absence and
(2) whether or not the Employee has been granted a Certified Leave of
Absence, those Hours of Service which otherwise would normally have
been credited to such Employee (or 8 Hours of Service per day of
absence if the Committee is unable to determine such Hours) for any
<PAGE>
absence from work for any period (A) by reason of the pregnancy or the
birth of a child of the Employee, (B) by reason of the placement of a
child with the Employee in connection with the adoption of such child
by the Employee, or (C) for purposes of caring for such child for a
period immediately following such birth or placement; provided,
however, that the maximum number of Hours of Service credited under
this Section 1.19(b) shall be 501 and such Hours of Service shall be
credited only in the Plan Year in which the absence from work begins
if a Member would be prevented from incurring a Break in Service in
such Plan Year solely because periods of absence are treated as Hours
of Service as provided herein or, in any other case, in the
immediately following Plan Year.
(c) An Employee compensated on other than an hourly basis shall
be deemed to have accrued 45 Hours of Service for each week for which
Compensation was received. Hours of Service credited to an Employee
for periods of time during which the Employee is directly or
indirectly paid but performs no duties shall be credited in accordance
with Department of Labor regulations 29 C.F.R. <section> 2530.200-2(b)
and (c).
1.20 "INACTIVE PARTICIPANT" shall mean a Participant described in
Section 2.3 and/or a former Employee who has an Account or Accounts which
have not yet been fully distributed.
1.21 "INVESTMENT FUNDS" shall mean and include the funds established
pursuant to Section 7.7 and designated as an investment fund by the
Committee.
1.22 "MEMBER" shall mean each Participant or Inactive Participant who
still has an undistributed balance in one or more Accounts.
1.23 "NORMAL RETIREMENT AGE" shall mean a Participant's or Inactive
Participant's age when he has attained his 65th birthday.
1.24 "PARTICIPANT" shall mean any Employee who has met the
eligibility requirements of the Plan and who, at the time his status under
the Plan is being determined, has a Salary Deferral Agreement in effect.
1.25 "PAYROLL PERIOD" shall mean a period of time not in excess of 1
calendar month as from time to time and at any time used by the Employer
for the purpose of computing and paying Compensation.
1.26 "PLAN" shall mean the Wausau Paper Mills Company Hourly Savings
and Investment Plan.
1.27 "PLAN YEAR" shall mean the 12-month period beginning on January
1 and ending on December 31 thereafter.
1.28 "SALARY DEFERRAL AGREEMENT" shall mean an agreement in such form
as the Committee shall, from time to time and at any time, determine,
entered into between the Employer and an Employee providing for the
deferral of a portion of the Employee's Compensation in accordance with
the provisions of Section 3.1.
1.29 "TERMINATION OF EMPLOYMENT" of a Participant or Inactive
Participant shall mean, with respect to the Company and all Affiliated
Employers, (1) a resignation for any reason (including retirement), (2) a
dismissal for any reason, (3) a refusal or failure to return to work
<PAGE>
following a temporary layoff within 15 working days after the date
requested by the Company or an Affiliated Employer in a notice mailed to
his last known address, by registered or certified mail, (4) a failure to
return to work at the conclusion of a Certified Leave of Absence, or (5)
death.
1.30 "TRUST" shall mean the Wausau Paper Mills Company Hourly Savings
and Investment Plan Trust as made and entered into by and between the
Company and the Trustee or such other successor trust instrument as may be
provided for in accordance with the terms and provisions of Section 9.
1.31 "TRUSTEE" shall mean the corporation or individual from time to
time appointed and acting as trustee of the Trust.
1.32 "UNION" shall mean United Paperworkers International Union,
Locals 1260 and 1381, AFL-CIO.
<PAGE>
SECTION 2
ELIGIBILITY AND ENROLLMENT
2.1 ELIGIBILITY.
(a) Each Employee of an Employer who was a member of the Plan on
December 31, 1995, will, on January 1, 1996, be eligible to be a
Participant and will be a Member.
(b) Each Employee of an Employer who is a member of a bargaining
unit represented by the Union or who becomes an Employee of an
Employer who is a member of a bargaining unit represented by the
Union, who is not described in (a), above, will be eligible to become
a Participant in accordance with the provisions of Section 2.2 on the
first day of the month coincident with or next following his 60th full
working day of employment with the Employer.
(c) A person who is a "leased employee" within the meaning of
Code Section 414(n) and (o) shall not be eligible to participate in
the Plan, but in the event such a person was participating or
subsequently becomes eligible to participate herein, credit shall be
given for the person's service as a leased employee toward completion
of the Plan's eligibility and vesting requirements, including any
service for any Affiliated Employer.
2.2 ENROLLMENT. Each Employee who shall from time to time become
eligible to become a Participant in accordance with Section 2.1, above,
may enroll as a Participant (1) as of the first day of the Payroll Period
which is coincident with or next following the date on which he first
becomes eligible to become a Participant (as defined in Section 2.1) or
(2) as of the first day of any subsequent Payroll Period by filing an
effective Salary Deferral Agreement with his Employer. Except for an
Employee who is enrolling as of the first day of the first Payroll Period
coincident with or next following the date on which he first became
eligible to become a Participant (as defined in Section 2.1), such
Agreement must be filed on or before such date immediately prior to such
first day of the Payroll Period as is specified from time to time and at
any time by the Committee in order for the Employee to be enrolled in the
Plan as of such Payroll Period.
2.3 ASSUMPTION OF INACTIVE PARTICIPANT STATUS. A Participant shall
become an Inactive Participant upon the first to occur of the following:
(a) The date on which the Participant is transferred to a
position of employment in which he continues to accrue Hours of
Service, but is no longer included in the class of employees eligible
to participate in the Plan as set forth in Section 2.1.
(b) The effective date of an election filed pursuant to Section
3.1(b) which terminates or has the effect of terminating the
Participant's Salary Deferral Agreement.
2.4 RETURN TO ACTIVE STATUS. An Inactive Participant described in
Section 2.3 shall be eligible to become a Participant upon his enrollment
pursuant to Section 2.2 if he then satisfies the requirements of Section
2.1.
<PAGE>
2.5 REEMPLOYMENT. A former Employee who met the requirements of
Section 2.1 shall be eligible upon his reemployment to become a
Participant upon his enrollment pursuant to Section 2.2 if he then
satisfies the requirements of Section 2.1.
<PAGE>
SECTION 3
PARTICIPANT CONTRIBUTIONS
3.1 PARTICIPANT SALARY DEFERRAL CONTRIBUTIONS.
(a) Each Employee's Salary Deferral Agreement shall provide that
the Participant's Compensation during each Payroll Period of the
Employer shall be reduced and deposited in the Participant's 401(k)
Account, subject to the provisions of Section 3.6, the provisions of
any plan maintained by the Employer pursuant to Code Section 125, and
such other rules, regulations and procedures as the Committee may,
from time to time and at any time, adopt. Each such Salary Deferral
Agreement shall specify a percentage of the Participant's Compensation
as the amount of the deposits to be made to the Participant's 401(k)
Account; each such percentage shall be expressed only in whole
integers with no fractions of a percentage being permitted to be so
specified; provided, however, that in no event shall the Salary
Deferral Agreement provide for the deposit to a Participant's 401(k)
Account of an amount in excess of the lesser of (1) 16% of such
Participant's Compensation, or (2) $9,500 (or such other amount as may
be prescribed in accordance with the provisions of Code
Section 402(g)(5)). The Employer will cause the percentage of
Compensation specified in the Participant's Salary Deferral Agreement
and any amount provided for under any plan maintained by the Employer
pursuant to Code Section 125 to be deposited in the Participant's
401(k) Account at such time or times as may be convenient to the
Employer, but not later than the last day of the month following the
month in which such salary deferral was made and such amounts shall be
credited in accordance with the Member's election under Section 4.5 to
the 401(k) Account of such Participant as of the Accounting Date
coincident with or next following the date of receipt by the Trustee.
All amounts so contributed shall be held and invested in accordance
with the terms and conditions of the Plan. Such amounts, and any
adjustments thereto, shall be fully vested and nonforfeitable at all
times.
(b) In accordance with such other rules, regulations and
procedures the Committee may, from time to time and at any time,
adopt, a Participant may increase or decrease (including a reduction
to zero) the percentage specified in his Salary Deferral Agreement as
of the first day of any Payroll Period provided that a modified Salary
Deferral Agreement is filed with the Committee on or before the date
immediately prior to such first day of the Payroll Period as is
specified from time to time and at any time by the Committee.
(c) A Participant who elects to terminate all deposits which
would otherwise be made pursuant to a Salary Deferral Agreement shall
become an Inactive Participant as of the effective date of such
termination as provided for herein. An Inactive Participant who is an
eligible Employee under Section 2.1 may elect to again become a
Participant, and have his deposits to his 401(k) Account resumed,
effective as of the first day of the Plan Year which begins on or
after the date in which he files with his Employer a Salary Deferral
Agreement if at that time he qualifies as an eligible Employee under
Section 2.1.
<PAGE>
(d)(1) If the elective deferrals of a Participant for a calendar
year shall exceed $9,500, or such other higher amount as may be
prescribed in accordance with the cost-of-living adjustment
provisions of Code Section 402(g)(5) (hereinafter referred to as
the "excess deferrals"),
(A) not later than March 1 of the next subsequent
calendar year, a Participant who participates in more than
one plan maintained by the Employer or an Affiliated
Employer which provides a qualified cash and deferred
arrangement (as defined in Code Sections 401(k), 408(k) or
403(b)) may specify in writing to the Committee the amount
of such excess deferrals to be allocated among his 401(k)
Account, and any other account of the Participant under any
other plan maintained by the Employer or an Affiliated
Employer to which the Participant has elected to receive an
employer contribution under a qualified cash and deferred
arrangement (as defined in Code Sections 401(k), 408(k) or
403(b)).
(B) not later than April 15 of the next subsequent
calendar year, the Trustee shall distribute to such
Participant that portion of the excess deferrals allocated
to his 401(k) Account pursuant to subparagraph (A) and any
income allocable to such amount or, in the absence of a
Participant's election pursuant to subparagraph (A), or if
such subparagraph (A) is not applicable, the amount of any
excess deferral allocated to the Participant's 401(k)
Account, and any income allocable to such amount; provided,
however, that the excess deferral distributed under this
subparagraph (B) shall, if there is a loss allocable to such
excess deferrals, in no event be less than the lesser of (x)
the value of the Participant's Account as of the last day of
the preceding Plan Year or (y) the Participant's deposits
under his Salary Deferral Agreement as in effect for the
preceding Plan Year.
(2) For purposes of this paragraph (d), the term "elective
deferrals" shall mean the deposits by a Participant to his 401(k)
Account for the Plan Year and all other amounts not included in
the Participant's gross income by reason of deposits made by the
Participant under plans or arrangements described in Code
Sections 401(k), 408(k), or 403(b).
(3) For purposes of this paragraph (d), income allocable to
any amount or to any excess deferrals shall be computed for the
Plan Year and for any period between the end of the Plan Year and
the distribution of the excess deferrals in accordance with a
reasonable method specified by the Committee.
3.2 REQUIREMENTS OF NONDISCRIMINATORY SALARY DEFERRALS.
(a) The Plan is subject to the limitations of Code Section
401(k) which are incorporated herein by this reference. Despite any
other provision of this Plan and in addition to the limitations on
contributions elsewhere contained in this Plan, the actual deferral
percentage for Participants who are Highly Compensated Employees shall
bear a relationship to the actual deferral percentage for all other
eligible Employees which satisfies at least one of the following
tests:
<PAGE>
(1) The actual deferral percentage for the group of
Participants who are Highly Compensated Employees is not more
than (A) the actual deferral percentage of all other eligible
Employees multiplied by (B) 1.25, or
(2) The excess of the actual deferral percentage for the
group of Participants who are Highly Compensated Employees over
that of all other eligible Employees is not more than 2
percentage points, and the actual deferral percentage for the
group of Participants who are Highly Compensated Employees is not
more than the actual deferral percentage of all other eligible
Employees multiplied by 2;
provided, however, that if any Highly Compensated Employee is a
participant under two or more plans or arrangements meeting the
requirements of Code Section 401(k) that are maintained by an
Employer, the actual deferral percentage of such Highly Compensated
Employee shall be determined as if all such Section 401(k) plans or
arrangements and this Plan were one arrangement.
(b) For purposes of this Section 3.2, the "actual deferral
percentage" for a specified group of Employees for a Plan Year shall
be the average of the ratios (calculated separately for each Employee
in such group) of:
(1) the amount of Employer contributions actually paid over
to the Plan on behalf of each such Employee pursuant to Salary
Deferral Agreements, including, in the case of any Highly
Compensated Employee who is a 5% owner of the Employer or in the
group of 10 Highly Compensated Employees paid the greatest
compensation during the Plan Year, amounts contributed pursuant
to the Salary Deferral Agreements of Family Members for such Plan
Year to
(2) the Employee's Compensation, including, in the case of
any Highly Compensated Employee who is a 5% owner of the Employer
or in the group of 10 Highly Compensated Employees paid the
greatest compensation during the Plan Year, Compensation of
Family Members for such Plan Year.
(c) In the event the limitations set forth in paragraph (a),
above, have been or will, in the opinion of the Committee, be exceeded
for any Plan Year, the Committee shall reduce the amount deposited or
to be deposited on behalf of Participants by the Employer pursuant to
Section 3.1 under the Salary Deferral Agreements of all Highly
Compensated Employees by reducing the actual deferral percentage of
such Participants beginning with the highest of such percentages. To
the extent the deposits provided for under the Salary Deferral
Agreements of Highly Compensated Employees are required to be reduced
under this paragraph (c) and Section 3.6, such Agreements shall be
deemed to have been amended.
(d)(1) If excess contributions are made to the Plan during any
Plan Year, then, on or before a date which is 2 1/2 months after
the close of the Plan Year, and in no event later than the last
day of the next subsequent Plan Year, the Trustee shall
distribute to each Participant who is a Highly Compensated
Employee, his pro rata share of such excess contributions and
income allocable to such excess contributions; provided, however,
that if there is a loss allocable to such excess contributions,
<PAGE>
in no event shall the distribution to be made by the Trustee
pursuant to this paragraph (d), be less than the lesser of (x)
the value of the Participant's account as of the last day of the
preceding Plan Year or (y) the Participant's deposits under his
Salary Deferral Agreement as in effect for the preceding Plan
Year. The income or loss allocable to excess contributions shall
be determined by multiplying the income or loss allocable to the
Participant's deposits made pursuant to a Salary Deferral
Agreement for the Plan Year by a fraction, the numerator of which
is the excess contributions for the Plan Year and the denominator
of which is the balance in the Participant's 401(k) Account as of
the last day of the Plan Year.
(2) The term "excess contributions" shall mean for purposes
of this paragraph (d), the excess of (A) the deposits made to the
401(k) Accounts of Highly Compensated Employees over (B) the
maximum amount of such deposits permitted under the limitations
of paragraph (a) (determined by reducing deposits made on behalf
of Highly Compensated Employees in order of the actual deferral
percentages beginning with the highest of such percentages).
3.3 ADDITIONAL LIMITATIONS ON CONTRIBUTIONS. Despite any other
provisions of this Plan, and in addition to the limitations contained in
Section 3.2, contributions by the Employer pursuant to Section 3.1 shall
be made subject to the following:
(a) If the Employer's contribution (including deposits made on
behalf of Participants pursuant to Salary Deferral Agreements) for a
Plan Year, when added to all other contributions to pension plans
subject to ERISA made by the Employer for the same Plan Year, exceeds
the maximum permissible amount permitted as a deduction to the
Employer under the provisions of Code Section 404, such contributions
shall be reduced in accordance with the priorities set forth in
paragraph (c), below.
(b) If the Employer's contribution (including deposits made on
behalf of Participants pursuant to Salary Deferral Agreements) for a
Plan Year, when added to all other contributions to pension plans
subject to ERISA made by the Employer for the same Plan Year, exceeds
the maximum permissible amount permitted as a deduction to the
Employer under the provisions of Code Section 404(a)(3), such
contributions shall be reduced in accordance with the priorities set
forth in paragraph (c), below.
(c) If, following such reduction in contributions, if any, as
may be required under Section 3.2, the limitations set forth in either
or both of paragraphs (a) or (b), above, have been or will, in the
opinion of the Committee, be exceeded for any Plan Year, the Committee
may, in its discretion, reduce, on a PRO RATA basis the amount
deposited or to be deposited on behalf of Participants by the Employer
pursuant to Section 3.1 under the Salary Deferral Agreements of all
Participants.
3.4 MAXIMUM CONTRIBUTIONS.
(a) The Plan is subject to the limitations on benefits and
contributions imposed by Code Section 415 which are incorporated
herein by this reference, subject to such special rules as set forth
in this Section. The limitation year shall be the twelve-month period
beginning September 1 and ending August 31.
<PAGE>
(b) Notwithstanding the foregoing, for any Plan Year in which
the Plan is a Top Heavy Plan, as defined in Section 7.1(a), but not a
Super Top Heavy Plan, as defined in 7.1(b), and the minimum
contribution or benefit specified in Section 7.2 is not made or
provided for, the term "1.0" shall be substituted in Code Sections
415(e)(2)(B) and 415(e)(3)(B), for the term "1.25."
(c) For purposes of Code Section 415(b)(2), the term "annual
benefit" means the benefit payable annually under the terms of the
plan (exclusive of any benefit not required to be considered for
purposes of applying the limitations of Code Section 415 to the Plan)
payable in the form of a single-life annuity with no ancillary
benefits. If the benefit under the Plan is payable in any other form,
the "annual benefit" shall be adjusted to the actuarial equivalent
equal to the greater of a single-life annuity on the basis of the
interest rate specified in the applicable plan or 5%.
(d) If in any Plan Year a Participant's annual additions as
defined in Code Section 415(c)(2) exceed the applicable limitation
determined under Code Sections 415(c) or (e), as a result of (1) the
allocation of forfeitures, (2) a reasonable error in estimating a
Participant's compensation or (3) any other facts or circumstances
permitted by rule or regulation adopted by the Secretary of the
Treasury, such excess (referred to herein as the "Annual Addition
Excess") shall not be allocated to his accounts in any defined
contribution plan maintained by the Employer, but any reduction
necessary shall be made first in any defined benefit plan in which the
Participant was also participating, then to this Plan and then to any
other defined contribution plan maintained by the Employer. To the
extent the Annual Addition excess is allocated to the Plan, the
deposits contributed on the Participant's behalf by his Employer
pursuant to Section 3.1 shall be reduced to the extent of the Annual
Addition excess. An amount equal to the deposit reduced under the
preceding sentence shall be held in a suspense account to be
reallocated as a Section 3.1 deposit in the next subsequent Plan Year
for which such deposit is permitted hereunder.
3.5 NON-REVERSION OF EMPLOYER CONTRIBUTIONS.
(a) Subject to the provisions of paragraphs (b), (c), and (d),
below, contributions to the Plan shall not inure to the benefit of any
Employer and shall be held for the exclusive benefit of the Members
hereunder.
(b) Contributions made by the Employer by a mistake of fact
shall revert to the Employer if such return is made within 1 year
after the payment of such mistaken contribution.
(c) Employer contributions hereunder are conditioned upon their
deductibility under Code Section 404. Notwithstanding any provision
herein to the contrary, to the extent a deduction is disallowed,
contributions shall be returned to the Employer within 1 year after
such disallowance.
(d) Upon termination of the Plan, any unallocated amounts in the
suspense account described in Section 3.4(d) shall revert to the
Company.
3.6 ADJUSTMENT OF CONTRIBUTIONS BY COMMITTEE. The Committee shall
have full and complete authority to adopt such rules, regulations and
<PAGE>
procedures as it may, from time to time and at any time, deem necessary
and appropriate to ensure that the limitations on contributions and/or
annual additions set forth in Sections 3.2, 3.3, and 3.4 are observed. In
carrying out its authority hereunder the Committee is hereby expressly
authorized to make, without the consent of any Participant, one or more
prospective or retroactive adjustments in each Participant's Salary
Deferral Agreement as will, in its sole opinion, carry out the purposes of
such sections if such adjustment is reasonably intended to ensure
compliance with any of the limitations of this Section 3; provided,
however, that in no event shall the Committee be authorized or empowered
to cause the annual amount deferred for any Plan Year under a Salary
Deferral Agreement to exceed the actual amount authorized by a
Participant.
3.7 ROLLOVER CONTRIBUTIONS. To the extent permitted by applicable
law, regulations or rulings, a Participant may elect to transfer (or cause
to be transferred) a rollover contribution which is attributable to a
Participant's prior employer's contributions, the Participant's pre-tax
contributions and/or any earnings on his voluntary after-tax contributions
and which satisfies the requirements of Code Sections 402(c)(4), 403(a)(4)
or 408(d)(3). Such contribution shall be held as a subaccount under his
Rollover Contribution Account; provided, however, that no such
contribution shall be permitted if such contribution would cause this Plan
to be a direct or indirect transferee of a defined benefit plan or a
defined contribution plan which is subject to the funding standards of
Code Section 412 or a plan to which Code Section 401(a)(11)(B)(iii)
applied with respect to the Participant. Such rollover contributions
shall be subject to all of the provisions contained in this Plan relating
to the Participant's Rollover Contribution Account and such other rules
and procedures as the Committee may from time to time and at any time
adopt; provided, however, that such funds shall at all times be fully
vested and nonforfeitable.
<PAGE>
SECTION 4
ACCOUNTS, RECORDS OF THE PLAN, INVESTMENT ELECTIONS, AND
ALLOCATIONS TO PARTICIPANTS' ACCOUNTS
4.1 INDIVIDUAL ACCOUNTS. The Committee shall direct the Trustee to
create and maintain adequate records of the interest in the Plan of each
Member. Such records shall be in the form of individual 401(k) Accounts
and Rollover Contribution Accounts and credits and charges shall be made
to such Accounts in the manner herein described. The maintenance of
individual Accounts is for accounting purposes only and an allocation of
the assets held in any Investment Fund of the Trust to each Account shall
not be required. Each Member's undivided proportionate interest in each
Investment Fund of the Trust shall be measured by the proportion that the
balance of his Accounts bears to the total balance of all Members'
Accounts as of the date that such interest is being determined.
Distribution and withdrawals made from an Account shall be charged to the
Account as of the date paid.
4.2 CONTRIBUTIONS. Contributions made on behalf of a Participant or
Inactive Participant shall be allocated pursuant to the provisions of
Section 3.
4.3 ADJUSTMENTS TO REFLECT NET WORTH OF THE TRUST FUND.
(a) As of each Accounting Date, the Trustee shall determine the
market value of each applicable Investment Fund of the Trust exclusive
of any contributions made pursuant to Section 3.1 and any suspense
accounts maintained pursuant to Section 3.4. As of such Accounting
Date, the difference between the value of each Investment Fund as
determined in accordance with the preceding sentence less the sum of
the aggregate Accounts of Members in each applicable Investment Fund
on such date shall be allocated to the Accounts of all Members in such
Investment Fund in the same proportion as each Account balance bears
to the aggregate of all Account balances in such Investment Fund.
(b) All determinations made by the Trustee with respect to fair
market values and net worth shall be made in accordance with generally
accepted principles of trust accounting and such determinations, when
so made by the Trustee, and any determinations by the Committee based
thereon shall be conclusive and binding upon all persons having an
interest under the Plan.
4.4 INVESTMENT FUNDS.
(a) The Committee shall, from time to time and at any time,
direct the Trustee to establish, modify, maintain or terminate one or
more Investment Funds for the purpose of providing investment media
for the assets of the Trust. The general investment objectives of
each such fund shall be as hereinafter described; provided, however,
that such descriptions shall be intended only as a general description
of the investment purpose and objective of each such Investment Fund
and shall not prohibit the Committee, the Trustee, or any investment
manager from altering, at any given time, the specific investments
held by such fund if such change is, in the opinion of such fiduciary,
necessary to meet applicable standards under ERISA or would not be
contrary to the general purpose of such fund. The Committee is
further specifically authorized to allocate, in whole or in such
increments as it deems appropriate, the responsibility of asset
<PAGE>
management of one or more Investment Funds to or among the Trustee and
one or more investment managers appointed pursuant to the Plan;
provided, however, that where more than one fiduciary has been charged
with the investment of a separable portion of any Investment Fund,
allocations to any Members' Accounts shall be made on the basis of the
Plan Assets in such Investment Fund as a whole and no Member shall
have the right to elect which such fiduciary shall manage the assets
held in his Account.
(b) The Investment Funds of the Trust shall consist of one or
more "Investment Funds" which the Committee shall from time to time
authorize or direct the Trustee to establish and designate as separate
and distinct funds. Each such Investment Fund shall have such general
investment objective as shall be established by the Committee and
shall be invested by the Trustee (or, if applicable, the investment
manager appointed with respect to such Investment Fund) in its
discretion in a manner consistent with such objectives in one or more
of the following types of investments permitted by the Investment
Fund: (A) any common trust fund or collective investment fund
maintained by the Trustee or any other bank or trust company for the
purpose of employee benefit plan investments or by similar financial
institutions supervised by the banking authorities of the United
States, (B) shares of equity securities, including qualifying employer
securities as defined in ERISA Section 407(d), (C) bonds, notes, and
other interest bearing securities, (D) mutual funds whose investment
objective is consistent with and appropriate to carry out the
investment objectives of the Investment Fund, (E) certificates of
deposit, money market funds and cash and cash equivalents, whether or
not issued by or representing a deposit in a bank or other financial
institution which is a fiduciary of the Plan within the meaning of
ERISA, without regard, except as provided herein and in ERISA, to any
rule of law or statute of any state or other sovereign body
prescribing investments eligible for trust funds or to any custom or
practice concerning a proper diversification of investment. The terms
of each common trust and collective investment fund maintained by the
Trustee, a bank or other entity for trust investment purposes are, to
the extent not inconsistent with the provisions of ERISA, hereby
incorporated by reference for each period during which any part of the
assets of the Trust are invested in such common trust or collective
investment fund.
4.5 INVESTMENT DIRECTIONS.
(a) Each Employee who becomes a Participant shall specify, by
written notice to the Committee, the Investment Fund or Investment
Funds to which contributions pursuant to Section 3 shall be credited.
Despite any other provision of this Plan, if an Employee fails to
specify an investment election hereunder, he shall be ineligible to
participate in the Plan.
(b) Each such election shall specify, in increments of 10%, or
such other increment as may, from time to time and at any time, be
required or permitted by the Committee, the Investment Fund or Funds
in which such contributions shall be invested.
(c) A Member may change his investment election as to any of
such contributions by written notice filed with the Committee on or
before such date prior to each Accounting Date as is specified by the
Committee. An investment election made pursuant to this subparagraph
(c) shall be effective as of the first Accounting Date subsequent to
<PAGE>
the date on which it was properly and timely filed in accordance with
the Committee's rules and procedures, as from time to time and at
anytime adopted, and shall remain in effect until the Member files a
new election in accordance with this subparagraph (c).
4.6 TRANSFERS BETWEEN INVESTMENT FUNDS.
(a) Subject to the limitations set forth herein, a Member may
elect, in increments of 10%, or such other increments as may from time
to time and at any time, be required or permitted by the Committee,
the proportion in which the balance of his Accounts shall be invested
in each Investment Fund. Such election may be made only in a written
form filed with the Committee on or before such date immediately prior
to an Accounting Date as is specified from time to time and at any
time by the Committee and each such election shall be effective for
the accounting period which begins immediately subsequent to its
timely filing and for each subsequent accounting period until changed
as provided in this sentence. The balance of a Member's Accounts
shall be determined as of the Accounting Date immediately preceding
the effective date of an election filed hereunder.
(c) Despite any other provision of the Plan, the percentages
specified by a Member pursuant to this Section 4.6 shall apply only as
of the Accounting Date immediately preceding the effective date of an
election filed hereunder and neither the Trustee, the Committee nor
any other fiduciary of the Plan shall be under any obligation, or have
any authority, to reallocate the assets in a Member's Accounts so as
to maintain the percentage allocations specified by the Member after
the effective date of an election.
4.7 TRANSFER OF ASSETS. The Committee shall direct the Trustee to
transfer moneys or other property from the appropriate Investment Fund to
the other Investment Fund as may be necessary to appropriately reflect the
aggregate transfer transactions after the Committee has caused the
necessary entries to be made reflecting the balance of the Members'
Accounts in the Investment Funds and has reconciled offsetting transfer
elections, in accordance with uniform rules therefor established by the
Committee.
<PAGE>
SECTION 5
WITHDRAWALS AND LOANS
5.1 WITHDRAWAL UPON ATTAINMENT OF AGE 59 1/2. Upon attainment of age
59 1/2, a Participant or Inactive Participant may file an application with
the Committee on a form approved by it to withdraw any portion of his
401(k) Account. Such withdrawal election shall be effective as of the
first day of the calendar quarter after such election has been on file
with the Committee for 20 days.
5.2 HARDSHIP WITHDRAWALS.
(a) In the event of a Participant's or Inactive Participant's
Hardship prior to a Termination of Employment and upon the filing of
an application by him with the Committee on a form approved by it, the
Committee shall, in accordance with uniform objective rules adopted
and consistently followed by it, grant such person a Hardship
withdrawal distribution from the Plan.
(b) Despite any other provisions of this Plan, the following
rules shall govern distributions made on account of a Participant's
Hardship:
(1) In no event shall the amount of the Hardship
distribution exceed the lesser of (A) the amount necessary to
satisfy the immediate and heavy financial need created by such
Hardship (including the amount deemed necessary to satisfy such
immediate and heavy financial need under regulations promulgated
by the Secretary of the Treasury and also including any amounts
necessary to pay any federal, state, or local income taxes or
penalties reasonably anticipated to result from the hardship
distribution) or (B) the amount described in (2), below.
(2) Amounts distributed on account of Hardship shall be
deducted from the amount actually contributed to the
Participant's or Inactive Participant's 401(k) Account, but not
income attributable to such contributions.
(3) The Participant shall have obtained all distributions
under Section 5.1 and all other distributions (other than
hardship distributions), and all nontaxable loans then available
under all other plans maintained by any employer for whom Hours
of Service are credited under this Plan prior to receipt of any
Hardship distribution under the Plan.
(4) The Participant shall be ineligible to enter into a
Salary Deferral Agreement or to make elective contributions
(employee contributions subject to a cash or deferred election
under a cash or deferred arrangement) or employee contributions
(contributions made on an after-tax basis by the Employee) under
any plan (qualified or nonqualified) maintained by any employer
for whom Hours of Service are credited under this Plan for a
period of 12 months after receipt of the Hardship distribution.
(5) The elective contributions (as defined in subparagraph
(4), above) made by the Participant under this Plan and all other
plans maintained by any employer for whom Hours of Service are
credited under this Plan for the Participant's taxable year
<PAGE>
immediately following the taxable year in which the Hardship
distribution occurred shall not exceed an amount equal to the
excess of (A) the applicable limit for such later taxable year
under Code Section 402(g), over (B) the amount of such
Participant's elective contributions in the taxable year in which
the Hardship distribution occurred.
(c) Each withdrawal distribution made hereunder shall be made as
soon after such Accounting Date as is administratively feasible for
the Trustee and shall be charged against the Participant's or Inactive
Participant's 401(k) Account in accordance with such rules or
procedures as the Committee may from time to time and at any time,
adopt. Any amount remaining in the Participant's or Inactive
Participant's 401(k) Account shall continue to receive allocations of
Trust income or loss pursuant to Section 4.3 until distributed in
accordance with the provisions of Section 6.
(d) For purposes of this Section 5.2, the term "Hardship" shall
mean the immediate and heavy financial need of a Participant or
Inactive Participant on account of:
(1) medical expenses described in Code Section 213(d)
previously incurred by the Participant or Inactive Participant,
his spouse or any dependents (as defined in Code Section 152) of
the Participant or Inactive Participant, or necessary for such
persons to obtain medical care described in Code Section 213(d);
(2) the purchase (excluding mortgage payments) of a
principal residence for the Participant or Inactive Participant;
(3) payment of tuition for the next 12 months of
post-secondary education for the Participant or Inactive
Participant, his spouse, children or dependents (as defined in
Code Section 152); or
(4) the need to prevent the eviction of the Participant or
Inactive Participant from his principal residence or foreclosure
on the mortgage of the Participant's or Inactive Participant's
principal residence.
5.3 LOANS TO PARTICIPANTS. The Trustee may make a loan to a
Participant, Inactive Participant, or Beneficiary who is actively employed
by an Employer or any Affiliated Employer (hereinafter referred to as
"Borrower") who has a 401(k) Account balance in this Plan attributable to
his own participation herein or to the participation of a deceased
Participant of whom the Participant is a Beneficiary in accordance with
the provisions of this Section 5.3. Notwithstanding anything herein to
the contrary, this loan program shall be extended to all individuals with
401(k) Account balances who are Inactive Participants or Beneficiaries who
are not actively employed by an Employer or any Affiliated Employer if any
one or more of such individuals becomes parties in interest with respect
to this Plan as defined in Section 3(14) of ERISA. Loans shall be made
available to all Participants (and Inactive Participants and Beneficiaries
who are not actively employed by an Employer or any Affiliated Employer,
if applicable) on a reasonably equivalent basis. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the
amount made available to other Employees. All loans shall be subject to
the approval of the Committee which shall grant such loans on a
nondiscriminatory basis. In addition to such other rules and regulations
<PAGE>
as the Committee may adopt, all loans shall be made subject to the
following terms and conditions:
(a) The Borrower shall make written application for the loan to
the Committee.
(b) Each loan shall be evidenced by a promissory note payable to
the order of the Trustee and shall provide that repayment (principal
and interest) be amortized in level payments, not less frequently that
quarterly, but in no event shall the repayment period for such loan
exceed 5 years except for any loan used to acquire a dwelling unit
which, within a reasonable time, is to be used as a principal
residence of the Borrower, as determined within the meaning of such
Code Section 72. Every Borrower shall receive a clear statement of
the charges involved in each loan transaction, which shall include the
dollar amount and annual interest rate of the finance charge.
(c) No loan (when aggregated with all loans from all plans of
the Employer and any Affiliated Employer) shall be in excess of the
lesser of (A) 50% of the value, determined as of the Accounting Date
immediately preceding the date of the loan, of the Borrower's 401(k)
Account or (B) $50,000 reduced by the excess of (i) the highest
outstanding loan balance under this Section 5.3 of the Borrower during
the one year period ending on the day before such loan is made, over
(ii) the outstanding balance of all loans to such Borrower as of the
date on which such loan is made. An assignment or pledge of any
portion of the Borrower's interest in the Plan and a loan, pledge or
assignment with respect to any insurance contract purchased under the
Plan, will be treated as a loan under this paragraph.
(d) Each loan shall be secured by that portion of the Borrower's
401(k) Account which is not in excess of the outstanding principal
amount of the loan at any time in addition to such other security, if
any, as may be required by the Committee. A Borrower must obtain the
consent of his or her spouse, if any, within the 90-day period before
the time the 401(k) Account balance is used as security for the loan.
Spousal consent shall be obtained no earlier than the beginning of the
90-day period that ends on the date on which the loan is to be so
secured. The consent must be in writing, must acknowledge the effect
of the loan, and must be witnessed by a plan representative or notary
public. Such consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to that loan.
A new consent shall be required if the account balance is used for
renegotiation, extension, renewals, or other revision of the loan.
The consent shall comply with the requirements of Section
6.5(a)(1)(B), but shall be deemed to meet any requirements contained
in such section relating to the consent of any subsequent spouse.
(e) Each loan shall bear interest at a reasonable rate which
meets the requirement of Department of Labor Regulation 29 C.F.R.
<section>2550.408(b)-1. The Committee shall not discriminate among
Borrowers in the matter of interest rates, but loans granted at
different times may bear different rates of interest if, in the
opinion of the Committee, the difference is justified by a change in
general economic conditions and then prevailing market rates.
(f) Despite any other provision of this Plan, all loans shall be
due and payable upon the Borrower's Termination of Employment;
provided, however, that if the loan program is extended to Inactive
<PAGE>
Participants or Beneficiaries who are not actively employed by an
Employer or any Affiliated Employer in accordance with this section,
no loans made after such extension shall be due and payable upon a
Borrower's Termination of Employment; and provided further, that all
loans shall be due and payable when a taxable distribution is made (i)
in the case of a Borrower employed by the Employer, after Termination
of Employment or (ii) in the case of a Borrower not employed by the
Employer, after the death of the Participant or Inactive Participant.
In the event that the Borrower fails to make two or more consecutive
payments, the loan shall be in default. The Committee shall notify
the Borrower in writing of the default. If the Borrower fails to cure
the default by making all necessary payments within thirty days of
such written notice, the Committee may direct the Trustee to debit the
total amount from the Borrower's 401(k) Account, at such time which
will not disqualify the Plan. In the event of default, foreclosure on
the note and attachment of security will not occur until a
distributable event occurs in the Plan.
(g) Despite any other provision of this Plan, that portion of
the Borrower's Accounts which is equal to the unpaid principal balance
of the loan granted hereunder shall be segregated from the Accounts of
other Participants and any income or losses attributable to such loan
shall be credited solely to such Account. Such segregated Account
shall not share in the allocations made pursuant to Section 4.3. Any
amount repaid as principal or interest by the Borrower shall be
reinvested in the general assets on behalf of the Borrower's Accounts
and gains or losses shall be allocated to such portion of the Account
under Section 4.3.
<PAGE>
SECTION 6
BENEFITS
6.1 RETIREMENT BENEFITS.
(a) Upon attaining his Normal Retirement Age a Participant or
Inactive Participant shall have a fully vested interest in his
Accounts as well as any subsequent Employer contribution made on his
behalf by reason of Section 3.
(b) If a Participant continues in the employment of the Employer
after attaining his Normal Retirement Age, he shall continue to
participate in this Plan until the earlier of (1) his Termination of
Employment, or (2) the date on which he no longer meets the
eligibility requirements of Section 2. In the event of such deferred
retirement, the Trustee shall defer distribution of his Accounts.
(c) Retirement benefits shall be paid in accordance with
Sections 6.5 and 6.6.
6.2 DEATH BENEFITS.
(a) Upon the death of a Participant or Inactive Participant
prior to his Termination of Employment, or in the event of the death
of a Member prior to the complete distribution of the benefit to which
he was entitled under Section 6.1, 6.3 or 6.4, the Beneficiary of such
Member shall be entitled to receive the balance of the Member's
undistributed Accounts. Payment of death benefits shall be made in
accordance with Sections 6.5 and 6.6.
(b) A Member's Beneficiary shall be determined in accordance
with the following:
(1) The Member's surviving spouse, if any, shall be the
Beneficiary of such Member unless a different Beneficiary has
been designated in accordance with the procedures set forth
herein. The designation by a married Member of a Beneficiary
other than such Member's spouse shall be a valid and enforceable
designation under the terms of this Plan only if such spouse has
consented in writing to such designation and such consent
acknowledges the effect of such election and is witnessed by a
plan representative or a notary public or, if no consent shall
have been given, it is established to the satisfaction of the
Committee that such consent may not be obtained because the
spouse cannot be located or because of such other circumstances
as the Secretary of the Treasury may, by regulation, prescribe.
Any consent given pursuant to this subparagraph (1) shall be
effective only as to the Beneficiary so named unless the consent
expressly permits designation without further consent of the
spouse.
(2) The Beneficiary of a Member who has no spouse shall be
designated by the Member on a form supplied by the Committee.
(3) Each designation of a Beneficiary shall be revocable by
the Member by filing a similar written direction with the
Committee naming a new Beneficiary, and in case of more than one
such filing, the most recent valid designation shall prevail. In
<PAGE>
the absence of a valid designation, or, in the event the
Beneficiary should predecease the Member and no contingent
Beneficiary has been designated, the Beneficiary shall be deemed
to be the Member's children, PER STIRPES, or, if no such
descendants are then living, to the Member's father and mother,
in equal parts, or if no such individuals are then living, to his
estate.
6.3 DISABILITY BENEFITS. If a Participant or Inactive Participant
incurs a Termination of Employment as a result of his Disability, his
active participation in the Plan shall cease and he shall be entitled to,
in lieu of any other benefit payable hereunder, a Disability retirement
benefit equal to the balance of his Accounts as well as any subsequent
Employer contributions which may be made on his behalf by reason of
Section 3. Payments to a disabled Participant or Inactive Participant
shall be made in accordance with Sections 6.5 and 6.6.
6.4 TERMINATION FOR OTHER REASONS. When a Participant or Inactive
Participant incurs a Termination of Employment prior to attaining his
Normal Retirement Age, incurring a Disability or his death, such
Participant or Inactive Participant shall be entitled to 100% of his
401(k) Account. Payment of benefits accrued under this Section 6.4 and
the determination of the "value" of a Participant's or Inactive
Participant's Accounts shall be made in accordance with Sections 6.5 and
6.6.
6.5 PAYMENT OF BENEFITS.
(a) Benefits shall be paid in a form described below (A) to each
Participant upon retirement after attaining his Normal Retirement Age,
becoming eligible for a benefit pursuant to Section 6.4, or incurring
a Disability, (B) to each Beneficiary described in Section 6.2, and
(C) to any Participant or Inactive Participant who is required to
receive a distribution of his Account pursuant to paragraph (b),
below.
(1) In the case of a Participant or Inactive Participant
who is married on the date on which benefits are to be paid to
the Participant or Inactive Participant, payments of the Accounts
shall be made as follows:
(A) Unless otherwise elected by the Participant or
Inactive Participant and his spouse pursuant to (B), below,
the Trustee shall apply the value of the Participant's
Accounts to the purchase of an annuity for the life of the
Participant or Inactive Participant with a survivor annuity
for the life of the spouse which is 50% of the amount of the
annuity which is payable during the joint lives of the
Participant or Inactive Participant and the spouse and which
is the actuarial equivalent of a single annuity for the life
of the Participant or Inactive Participant. The value of
the Accounts shall be determined, for purposes of this
paragraph, as of the Accounting Date coincident with or
first following the date the annuity described herein is
purchased by the Trustee.
(B) A Participant or Inactive Participant described in
(A), above, may, at any time within the 90-day period
immediately prior to the date the annuity described in (A),
<PAGE>
above, is purchased, elect that payment of his Accounts
shall be made in a form described in (2)(A), (B) or (C),
below, provided, however, that no such election shall be
effective unless:
(i) The spouse of such Participant or Inactive
Participant has consented in writing to such election
and such consent acknowledges the effect of such
election and is witnessed by a Plan representative or a
notary public, or,
(ii) It is established to the satisfaction of the
Committee that such consent may not be obtained because
the spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may, by
regulation, prescribe.
(C) In accordance with such regulations as may be
prescribed by the Secretary of the Treasury, the Committee
shall furnish to each married Participant or Inactive
Participant no less than 30 days and no more than 90 days
prior to the date benefits are to commence a general
explanation of (i) the terms and conditions of the payment
option described in (1)(A), above, (ii) his right to make,
and the effect of an election to waive payment of benefits
in such form, (iii) the rights of the Participant's or
Inactive Participant's spouse with respect to such benefit,
(iv) the right to waive, and the effect of a revocation of
an election to waive, payment of benefits in such form and
(v) such other information as applicable regulations may
require.
(2) In the case of a Participant or Inactive Participant
who is not described in (1), above, or who has filed an effective
election pursuant to (1)(B), above, and a Beneficiary, payment of
the Participant's or Inactive Participant's Accounts shall be
made in accordance with the following as the Participant,
Inactive Participant or Beneficiary shall elect:
(A) In a lump sum, the value of which shall be
determined as of the Accounting Date coincident with or
first following the date on which the Member's Termination
of Employment occurs, or, with respect to clause (a)(C)
above, or an election made pursuant to paragraph (b) below,
the Accounting Date immediately preceding the date benefit
payments are to begin, or
(B) In periodic payments of such equal or unequal
amounts as the Member may, from time to time and at any
time, elect (but no election may be made more frequently
than once every 12 months) in which event the unpaid balance
at the end of each Plan Year shall receive an income or loss
allocation in accordance with Section 4.3; provided,
however:
(i) that such payments shall be made not less
frequently than annually;
(ii) that such payments shall be in such amounts
as will result in such amounts being paid over a period
<PAGE>
of time not in excess of the life expectancies of the
Participant or Inactive Participant and such person's
Beneficiary as redetermined not more frequently than on
an annual basis in accordance with such procedures as
the Secretary of the Treasury shall provide;
(iii) that upon the death of the Member, the
following distribution provisions shall take effect:
(a) If the Member dies after distribution
of his Accounts has commenced, the remaining portion
of such Accounts will continue to be distributed at
least as rapidly as under the method of distribution
being used prior to the Member's death.
(b) If the Member dies before distribution of
his Accounts has commenced, the Member's Accounts will
be distributed no later than 5 years after the
Member's death except to the extent that an election
is made to receive distributions in accordance with
subparagraphs (1) or (2) below:
(1) if any portion of the Member's Accounts
are payable to a Beneficiary, distributions may be
made in substantially equal installments over the
life or life expectancy of the Beneficiary commencing
no later than one year after the Member's death;
(2) if the Beneficiary is the Member's
surviving spouse, the date distributions are
required to begin in accordance with subparagraph
(1) above shall not be earlier than the date on
which the Member would have attained age 70 1/2,
and, if the spouse dies before payments begin,
subsequent distributions shall be made as if the
spouse had been the Member; and
(C) In the form of a nontransferable annuity purchased
by the Trustee for the life of the Member or Beneficiary, if
applicable, or a joint and survivor group annuity purchased
by the Trustee for such Member or Beneficiary, if
applicable, and his Beneficiary. If the Beneficiary is the
Member's spouse, payment of benefits to such Beneficiary
shall be in the form of an annuity pursuant to this Section
6.5(a)(2)(C) unless the Beneficiary elects another form of
benefit under this Section 6.5(a)(2).
(b) Payment of benefits under this Plan shall begin as of any
Accounting Date following the Member's Termination of Employment as
the Member or, if applicable, the Member's Beneficiary shall elect;
provided, however, that
(1) Payment shall begin not later than the 60th day after
the last to occur of the close of the Plan Year in which (A) the
Member attains age 65 or (B) the Member incurs a Termination of
Employment unless the Member has elected to defer payment beyond
such date pursuant to a written election filed with the Committee
which is signed by the Member and describes the benefit and the
date upon which such payment shall begin.
<PAGE>
(2) Except with respect to (i) any benefit subject to a
valid deferral election under Section 242(b) of the Tax Equity
and Fiscal Responsibility Act of 1982 and Section 521(d) of the
Tax Reform Act of 1984, and (ii) any Member who attained age 70
1/2 before January 1, 1988 and was not a 5% owner (as defined in
Code Section 416)) during any Plan Year after the Plan Year
ending with or within the calendar year in which such Member
attained age 65 1/2, payment of a Member's Accounts shall begin
not later than April 1 of the calendar year following the
calendar year in which such Member attains age 70 1/2 whether or
not such Member has incurred a Termination of Employment, and
(3) In the event no election is filed within 30 days of the
later of the last date described in (1) or (2), above, such
Accounts shall be distributed in accordance with subparagraph
(a)(1), above, on or before such last date.
(c) Notwithstanding any provision in the Plan to the contrary,
with respect to a Member's Accounts the vested portion of which has
never exceeded $3,500, payment to the Member shall be made in a lump
sum as soon as reasonably administratively feasible for the Trustee
following the date on which the Participant's or Inactive
Participant's Termination of Employment occurs, but in no event later
than the time described in Section 6.5(b)(2), above.
6.6 ELIGIBLE ROLLOVER DISTRIBUTIONS.
(a) Notwithstanding any provision of the Plan to the contrary
that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner
prescribed by the 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.
(b) 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 Beneficiary, or
for a specified period of ten years or more; any distribution to the
extent such distribution is required under Section 6.5(b)(2); 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).
(b) 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), 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 an individual retirement
annuity.
(c) A Distributee includes an Employee or a 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
<PAGE>
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.
(d) A Direct Rollover is a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
6.7 CODE COMPLIANCE. The provisions of the Plan are intended to
comply with Code Section 401(a)(9) which prescribes certain rules
regarding minimum distributions and requires that death benefits be
incidental to retirement benefits. All distributions under the Plan shall
be made in conformance with Code Section 401(a)(9) and the regulations
thereunder which are incorporated herein by reference. The provisions of
the Plan governing distributions are intended to apply in lieu of any
default provisions prescribed in regulations; provided, however, that Code
Section 401(a)(9) and the regulations thereunder override any Plan
provisions inconsistent with such Code Section and regulations.
6.8 PAYMENTS TO MINORS OR INCOMPETENTS. Whenever, in the Committee's
opinion, a person entitled to receive any payment of a benefit hereunder
is under a legal disability or is incapacitated in any way so as to be
unable to manage his financial affairs, the Committee may direct the
Trustee to make payments to such person or to his legal representative or
the Committee may direct the Trustee to apply the payment for the benefit
of such person in such manner as the Committee considers advisable. Any
payment of a benefit or installment thereof in accordance with the
provisions of this section shall be a complete discharge of any liability
for the making of such payment under the provisions of the Trust.
6.9 INALIENABILITY OF BENEFITS. Subject to the provisions of Section
6.10, benefits payable under this Plan shall not be subject in any manner
to the claims of a Member's creditors or others and may not be assigned or
alienated and any attempt to assign or alienate such benefits shall be
void.
6.10 TREATMENT OF BENEFITS IN A DIVORCE. The Committee shall, from
time to time and at any time, establish and maintain procedures to
determine the qualified status of domestic relations orders and to
administer distributions of Plan benefits under such orders. Such
procedures shall be in writing and shall be in compliance with the
requirements for such procedures set forth in Section 206 of ERISA.
Notwithstanding anything herein to the contrary, if any qualified domestic
relations order so directs, distribution of benefits to the alternate
payee may be made at a time not permitted for distributions to the Member.
6.11 APPLICATION FOR BENEFITS AND DATA. All persons claiming
benefits from the Trust must make application and furnish to the Committee
or its designated agent, such documents, evidence, or information as the
Committee or its designated agent considers necessary or desirable for the
purpose of administering the Plan; and each such person must furnish such
information promptly and sign such documents as the Committee or its
designated agent may require before any benefits become payable from the
Trust.
6.12 CLAIMS PROCEDURE.
(a) Upon the denial of a claim for benefits filed by a claimant,
the Committee shall, within a reasonable period of time not to exceed
90 days (unless special circumstances require an extension of time for
<PAGE>
processing the claim, in which case a written notice of an additional
period of time not to exceed 90 days and stating the special
circumstances and expected date of decision shall be furnished the
claimant prior to the expiration of the first 90 day period), provide
to every such claimant notice of the denial, written in a manner
calculated to be understood by the claimant, and setting forth the
following:
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent Plan provisions on
which the denial is based;
(3) A description of any additional material or information
necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary;
(4) An explanation of the Plan's claim review procedure.
(b) Any claimant who has been denied a benefit, may, within 60
days after receipt by him of written notification of denial of the
claim, request review of the denial by the Committee. The request for
review shall be delivered to the Committee in written form and shall
be made by the claimant or his duly authorized representative.
Following the request for review, the claimant or his duly authorized
representative may review pertinent documents and may submit issues
and comments in writing to the Committee. No later than 60 days after
the Committee's receipt of a request for review, (unless special
circumstances require an extension of time for processing, in which
case the decision shall be rendered no later than 120 days after
receipt of a request for review and written notice of such extension
shall be furnished the claimant), the Committee shall issue its
decision; provided, however, that if the Committee is holding
regularly scheduled meetings at least quarterly, a review decision
shall be made not later than the next meeting of the Committee
following receipt of a request for review unless such request is filed
within 30 days of such meeting, in which case such decision may be
made at the next scheduled meeting and, if an extension of time for
processing is required by special circumstances, such decision must be
rendered not later than the third scheduled meeting following receipt
of such request for review. This decision shall be in writing and
shall contain specific reasons for the Committee's decision and
specific references to the pertinent Plan provision on which such
decision is based, written in a manner calculated to be understood by
the claimant.
<PAGE>
SECTION 7
TOP-HEAVY PROVISIONS
7.1 TOP HEAVY DEFINED.
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of Accrued
Benefits of Key Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an Aggregation Group,
exceeds 60% of the Present Value of Accrued Benefits and the Aggregate
Accounts of all Key and Non-Key Employees under this Plan and all
plans of an Aggregation Group.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds 90% of the Present Value of Accrued
Benefits and the Aggregate Accounts of all Key and Non-Key Employees
under this Plan and all plans of an Aggregation Group.
(c) If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or former Participant has
not performed any services for any Employer maintaining the Plan at
any time during the 5 year period ending on the Determination Date,
any accrued benefit and/or aggregate account for such Participant or
former Participant shall not be taken into account for the purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan.
7.2 TOP-HEAVY MINIMUM.
(a) The Employer Contribution Account of an Employee who is not
a Key Employee and who is eligible to participate in this Plan, but
who is not eligible or does not participate in any Defined Benefit
Plan maintained by the Employer which is a Top Heavy Plan shall be
credited with such additional Employer contributions, if any, as is
required so that the total amount contributed to such Account for each
Plan Year in which the Plan is a Top Heavy Plan shall be not less than
the lesser of (1) 3% of such Participant's compensation as reported on
Form W-2 ("compensation") for the Plan Year or (2) that percentage of
such Participant's compensation for the Plan Year as is equal to the
percentage of compensation of the Key Employee for whom the amount
contributed is the highest percentage of compensation.
(b) For each Plan Year in which the Plan is a Top Heavy Plan,
each Employee who is not a Key Employee and who was a Participant in a
retirement plan which is a Defined Benefit Plan qualified under Code
Section 401(a) (a "retirement plan"), during the applicable Plan Year
shall be entitled to receive (1) a benefit under the retirement plan
attributable to years of service performed by the Employee in which
the retirement plan was a Top Heavy Plan after December 31, 1983 which
is equal to the product of (A) the Employee's average Form W-2
<PAGE>
compensation for the period of consecutive years (not in excess of 5)
in which the Employee accrued a year of service for benefit accrual
purposes under such retirement plan beginning after December 31, 1983
in which such compensation was highest, multiplied by (B) the lesser
of (i) 2% (or 3% if the adjustment otherwise required by Section
3.4(b) is not to be made) per year of such benefit accrual service
accrued after December 31, 1983 or (ii) 20% (or if the adjustment
otherwise required by Section 3.4(b) is not to be made) 30%; less (2)
the actuarial equivalent (as defined in the retirement plan) of the
benefit attributable to Employer contributions which is paid or
payable to such Employee or that would, upon application, become
payable to him at the time any benefit is payable under this Plan. An
actuarially equivalent benefit shall be determined assuming benefits
under this Plan and the retirement plan are or would be paid in the
same form. In no event, shall an Employee described above be entitled
to receive a benefit under the provisions of this Section 7.2(b) from
more than one retirement plan.
7.3 DEFINITIONS. For purposes of this Section 7 and in applying the
top-heavy rules of Code Section 416, the following terms shall have the
meanings hereinafter set forth:
(a) The term "Aggregate Account" as of a Determination Date
shall mean the sum of:
(1) the Participant's Account balance as of the most recent
valuation occurring within a 12-month period ending on the
Determination Date.
(2) an adjustment for any contributions due as of the
Determination Date; such adjustment shall be the amount of any
contributions actually made after the Valuation Date, but on or
before the Determination Date, except for the first Plan Year
when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are
allocated as of the date in that first Plan Year.
(3) any plan distributions made within the Plan Year that
includes the Determination Date or within the 4 preceding Plan
Years; provided, however, in the case of distributions made after
the Valuation Date and prior to the Determination Date, such
distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already
included in the Participant's Aggregate Account balance as of the
valuation date; and, provided further, that all distributions,
including distributions made prior to January 1, 1984, and
distributions under a terminated plan which if it had not been
terminated would have been required to be included in an
Aggregation Group, will be counted and distributions from the
Plan because of death shall be treated as a distribution for the
purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory; provided, however, that amounts attributable to tax
deductible qualified deductible Employee contributions shall not
be considered to be a part of the Participant's Aggregate Account
balance.
<PAGE>
(5) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or made to a
plan maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section 7. If this Plan is the
plan accepting such rollover or plan-to-plan transfer, it shall
consider such rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective of the date
on which such rollover or plan-to-plan transfer is accepted. For
the purposes of determining whether two employers are to be
treated as the same employer, all employers aggregated under Code
Section 414(b), (c) or (m) are treated as the same employer.
(b) The term "Aggregation Group" shall mean either a Required
Aggregation Group or a Permissive Aggregation Group as hereinafter
determined.
(1) Each plan of the Employer in which a Key Employee is a
participant in the Plan Year containing the Determination Date or
any of the 4 preceding Plan Years, and each other plan of the
Employer which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections 401(a)(4)
or 410, will be required to be aggregated and such group shall be
known as a "Required Aggregation Group". In the case of a
Required Aggregation Group, each plan in the group will be
considered a Top Heavy Plan if the Required Aggregation Group is
a Top Heavy Group. No plan in the Required Aggregation Group
will be considered a Top Heavy Plan if the Required Aggregation
Group is not a Top Heavy Group.
(2) The Employer may include any other plan not required to
be included in a Required Aggregation Group, provided the
resulting group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410 and such group
shall be known as a "Permissive Aggregation Group." In the case
of a Permissive Aggregation Group, only a plan that is part of
the Required Aggregation Group will be considered a Top Heavy
Plan if the Permissive Aggregation Group is a Top Heavy Group.
No plan in the Permissive Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is not a Top
Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top Heavy
Plans.
(4) An Aggregation Group shall include any terminated plan
of the Employer if it was maintained within the last 5 years
ending on the Determination Date.
(c) The term "Determination Date" shall mean:
(1) the last day of the preceding Plan Year, or
(2) in the case of the first Plan Year, the last day of
such Plan Year.
<PAGE>
(d) In the case of a Defined Benefit Plan, the term "Present
Value of Accrued Benefit" for a Participant other than a Key Employee
shall be as determined using the single accrual method used for all
plans of the Employer and Affiliated Employers, or if no such single
method exists, using a method which results in benefits accruing not
more rapidly than the slowest accrual rate permitted under Code
Section 411(b)(1)(C). For Plan Years beginning prior to January 1,
1987, a Participant's Present Value of Accrued Benefit shall be as
determined under the provisions of the applicable Defined Benefit Plan
without regard to the preceding sentence.
(e) The term "Top Heavy Group" shall mean an Aggregation Group
in which, as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group, exceeds 60% of
a similar sum determined for all Participants.
(f) The term "Key Employee" shall mean any Employee or former
Employee (and any Beneficiary of such Employee or former Employee)
who, at any time during the Plan Year or any of the preceding 4 Plan
Years, is:
(1) An officer of the Employer having an annual
compensation greater than 50% of the amount described in Code
Section 415(b)(1)(A) for any such Plan Year; provided, however,
that no more than 50 Employees (or, if lesser, the greater of 3
Employees or 10% of all Employees) shall be treated as officers,
(2) One of the 10 Employees having an annual compensation
from the Employer of more than the amount described in Code
Section 415(c)(1)(A) for any such Plan Year and owning (or
considered as owning within the meaning of Code Section 318 as
modified by Section 416(i)) the largest interests in the
Employer; provided, however, that if 2 Employees have the same
ownership interest in the Employer, the Employee having greater
annual compensation from the Employer shall be treated as having
a larger interest,
(3) A 5% owner of the Employer, or
(4) A 1% owner of the Employer having an annual
compensation of more than $150,000.
<PAGE>
SECTION 8
ADMINISTRATION
8.1 PLAN ADMINISTRATOR AND FIDUCIARY. The Committee shall be the
administrator of the Plan and shall be a named fiduciary in accordance
with ERISA.
8.2 ORGANIZATION OF COMMITTEE. The Committee shall be composed of as
many members as the Board of Directors of the Company may, from time to
time and at any time, appoint and such members shall hold office at the
pleasure of such Board. Any member of the Committee may resign upon
presentation of his written resignation to such Board of Directors.
Vacancies, however caused, shall be filled by such Board of Directors and
any member appointed to fill such vacancies shall be subject to and have
such authority as is contained in this Section 8.
8.3 COMPENSATION AND EXPENSES.
(a) A member of the Committee shall serve without compensation
for services as such if he is receiving Compensation from the Company
or any Affiliated Employer as an Employee. Any other member of the
Committee may receive compensation for services as a member, which may
be paid by an Employer at the option of its Board of Directors. Any
such compensation not paid by an Employer shall be paid by the Plan.
At the option of the Board of Directors of the Company, any member of
the Committee may receive reimbursement by an Employer of expenses
properly and actually incurred, but any such expenses not reimbursed
by an Employer shall be paid by the Plan.
(b) All expenses of the Committee shall be paid by the Company,
or if not, by the Trustee based upon the determination of the
Committee. Such expenses shall include any expenses incident to the
functioning of the Committee, including but not limited to, fees of
accountants, counsel and other specialists and other costs of
administering the Plan.
8.4 MANNER OF ACTION. A majority of the members of the Committee at
the time in office shall constitute a quorum for the transaction of
business. All resolutions adopted, and other actions taken by the
Committee at any meeting shall be by the vote of a majority of those
present at any such meeting. Upon concurrence in writing of a majority of
the members at the time in office, action of the Committee may be taken
otherwise than at a meeting.
8.5 CHAIRMAN, SECRETARY, AND EMPLOYMENT OF SPECIALISTS. The Company
shall appoint a Chairman of the Committee. The Chairman shall appoint a
Secretary who may, but need not, be a member of the Committee. The
Committee may appoint such agents, who need not be members of such
Committee, as it may deem necessary for the effective performance of its
duties, may engage legal counsel and accountants, and may delegate to such
agents such powers and duties, whether ministerial or discretionary, as
the said Committee may deem expedient or appropriate and may delegate one
of their members to sign documents on behalf of all.
8.6 SUBCOMMITTEES. The Committee may appoint one or more
subcommittees and delegate such of its power and duties as it deems
desirable to any such subcommittee, in which case every reference herein
made to the Committee shall be deemed to mean or include the subcommittees
as to matters within their jurisdiction.
<PAGE>
8.7 RECORDS. All resolutions, proceedings, acts and determinations
of the Committee shall be recorded by the Secretary thereof or under his
supervision, and all such records, together with such documents and
instruments as may be necessary for the administration of the Plan, shall
be preserved in the custody of the Secretary.
8.8 RULES. Subject to the limitations contained in the Plan, the
Committee shall be empowered from time to time and at any time, in its
discretion, to adopt bylaws and establish rules for the conduct of its
affairs and the exercise of the duties imposed upon it under the Plan.
8.9 ADMINISTRATION. The Committee shall be responsible for the
administration of the Plan. The Committee shall have all such powers as
may be necessary to carry out the provisions hereof and may, from time to
time and at any time, establish rules or procedures it deems necessary or
appropriate for the administration of the Plan and the transaction of the
Plan's business. In making any such determination, rule or procedure, the
Committee shall pursue uniform policies as from time to time established
by the Committee and shall not discriminate in favor of or against any
Member. The Committee shall have the exclusive right to make any finding
of fact necessary or appropriate for any purpose under the Plan,
including, but not limited to, the determination of the eligibility for
and the amount of any benefit payable under the Plan. The Committee shall
have the exclusive right to interpret the terms and provisions of the Plan
and to determine any and all questions arising under the Plan or in
connection with the administration thereof, including, without limitation,
the right to remedy or resolve possible ambiguities, inconsistencies, or
omissions, by general rule or particular decision. The Committee shall
make, or cause to be made, all reports or other filings, necessary to meet
the reporting and disclosure requirements of ERISA which are the
responsibility of "plan administrators" under ERISA. To the extent
permitted by law, all findings of fact, determinations, interpretations,
and decisions of the Committee shall be conclusive and binding upon all
persons having or claiming to have any interest or right under the Plan.
8.10 EFFECT OF MISTAKE. In the event of a mistake or misstatement as
to the age or eligibility or Vesting Service or participation of a Member,
or the allocations made to the Accounts of any Member, or the amount of
distributions made or to be made to a Member or other person, the
Committee shall, to the extent it deems possible, cause to be allocated
from future Employer contributions or future forfeitures, or cause to be
withheld or accelerated, or otherwise make adjustment of, such amounts as
will in its judgment accord to such Member or other person, the credits to
the account or distributions to which he is properly entitled under the
Plan.
8.11 NOTICE OF ADDRESS. Each person entitled to benefits from the
Trust must file with the Committee, in writing, his post office address
and each change of post office address. Any communication, statement, or
notice addressed to such a person at his latest reported post office
address will be binding upon him for all purposes of the Plan and neither
the Committee nor any Employer or Trustee or insurance company shall be
obliged to search for, or ascertain his whereabouts.
8.12 INDEMNITY OF COMMITTEE, OFFICERS AND DIRECTORS. To the extent
not prohibited by applicable law, the members of the Committee and any
persons who are or were directors, officers, agents, or employees of the
Employer and each of them shall be indemnified by the Company and saved
harmless by the Company against any and all claims, losses, damages,
<PAGE>
expenses, including counsel fees, incurred by the Committee or such
individual and any liability, including any amounts paid in settlement
with the Committee's approval, arising from such individual's or
Committee's action or failure to act, except when the same is judicially
determined to be attributable to the gross negligence or willful
misconduct of such individual.
<PAGE>
SECTION 9
TRUST AGREEMENT
9.1 TITLE TO TRUST PROPERTY. The title to all Trust property shall
be vested in, and remain exclusively in, the Trustee, subject to its right
to hold title in the name of a nominee or nominees, as hereinafter
provided. The Company, the Employer, the Trustee, Participants, Inactive
Participants, Beneficiaries or any other person or persons shall have no
right, title or interest in Trust property except to have the same held,
invested and applied in accordance with the terms of the Trust.
9.2 COMBINING OF PARTICIPANTS' ACCOUNTS. Subject to the right of
Participants to elect the manner in which their Accounts will be invested,
the Trustee shall have the right to combine the Accounts of Participants
for the purpose of investment in the Investment Funds.
9.3 INVESTMENT AND MANAGEMENT FUNCTIONS OF TRUSTEE. Subject to the
authority granted to an investment manager pursuant to Section 9.9, the
Trustee shall be vested with the following powers:
(a) To establish and maintain the Investment Funds of the Trust
and to take all steps necessary for the proper administration of such
funds except to the extent such authority is granted hereunder to any
other person, including the power to acquire and dispose of Trust
assets in connection with such administration.
(b) To institute, maintain, defend, compromise, settle, or
otherwise dispose of all actions or suits, at law or in equity, in
connection with the administration of the Trust, and to pay, settle,
compromise, collect and abandon all claims or demands in favor of, or
against the Trustee or the Trust, provided the Trustee shall be under
no duty to take any action under this agreement unless it shall have
been indemnified to its satisfaction against all expenses and
liabilities which it may sustain or anticipate by reason thereof.
(c) To determine the method of accounting of the Trust and to
change the same from time to time.
(d) To cause evidences of any securities or other property of
the Trust to be issued, registered, or held in its name as Trustee, in
the name of a nominee, or in bearer form.
(e) To collect all interest, dividends, rents, issues, income
and profits arising from Trust property.
(f) To pay, and to have a lien on Trust property for all costs,
taxes, assessments, charges and expenses incurred by the Trustee in
connection with management, administration and investment of the
Trust.
(g) To exercise any voting right, conversion privilege,
subscription right, or other rights and privileges, including
agreements with reference to the reorganization, consolidation,
merger, dissolution, readjustment of financial structure, or sale of
assets of any corporation or other organization, as owner of any
securities or other obligations which form a part of the Trust
property.
<PAGE>
(h) To select depositaries, if desirable, for the care, custody
and safekeeping of all or any part of Trust property, which
depositaries may act upon the direction of the majority of the
Trustees without any duty to inquire into the extent of authority of
the Trustee or the propriety of its action.
(i) To keep all accounts, books and records relating to the
Trust and each Participant's, Inactive Participant's or Beneficiary's
Accounts, and to prepare and render to said Participants or
Beneficiary such reports as are required hereunder, as may be required
by the federal government or other sovereign bodies, and as may be
required from time to time by the Company.
(j) To require the Company to furnish in writing, from time to
time, full and accurate information in respect to the amount and
computation of its contributions to the Trust, and the name, date and
period of employment, compensation, age, retirement, death, leave of
absence, termination of employment, reemployment and disability of
Participants or Inactive Participants, together with such other
evidence, data or information as the Trustee considers necessary or
desirable for it to exercise its powers, duties and authority
hereunder, which, when furnished, shall be conclusive upon all
persons.
(k) To require a Participant, Inactive Participant or
Beneficiary to furnish in writing, from time to time, such evidence,
data, or information as the Trustee considers necessary or desirable
for it to exercise its powers, duty and authority hereunder.
(l) To adopt rules or procedure and regulations governing the
administration of the Trust which are consistent with the terms of
this Trust, and which shall be binding upon all persons.
(m) To delegate from time to time, by instrument in writing, any
or all ministerial or clerical duties to any other person or persons.
(n) To merge into the assets of the Trust, at the direction of
the Company, the assets of any employee benefit plan qualified under
Code Section 401(a) which has been established for the benefit of
employees of corporations which have been merged into, or consolidated
with, the Company.
(o) To merge the assets of the Trust, in accordance with the
provisions of Section 11.2 and at the direction of the Company, into
any employee benefit plan qualified under Code Section 401(a) which
has been established for the benefit of a corporation into which the
Company has been merged or consolidated.
(p) To perform any and all other acts which in the judgment of
the Trustee, are necessary and appropriate for the proper
administration of this Trust.
9.4 STANDARD OF CARE. In all its dealings the Trustee shall act with
the care, skill, prudence and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character
and with like aims.
<PAGE>
9.5 SELF DEALING. The Trustee shall not deal with the income or
assets of the Trust in its own interest or for its own account. Neither
shall in its individual or any other capacity act in any transaction
involving the Trust on behalf of a party (or represent a party) whose
interests are adverse to the interests of the Trust or the interests of
its Participants, Inactive Participants or Beneficiaries. The Trustee
shall not receive any consideration for its own personal account from any
party dealing with such Trust in connection with a transaction involving
the assets of the Trust, nor shall it engage knowingly in any other
prohibited transactions (other than those for which the Secretary of Labor
and the Secretary of the Treasury have granted an exemption under ERISA or
the Code,) which transactions include:
(a) The sale or exchange, or leasing, of any property between
the Trust and a party in interest or disqualified person.
(b) The lending of money or other extension of credit between
the Trust and a party in interest or disqualified person.
(c) The furnishing of goods, services or facilities between the
Trust and a party in interest or disqualified person.
(d) The transfer to, or use by or for the benefit of, a party in
interest or disqualified person, of any assets of the Trust.
9.6 COMPENSATION. Nothing in this Section 9 shall prevent the
Trustee from receiving reasonable compensation for services rendered,
payable either from the assets of the Trust or by the Company, as the
Company shall elect; provided, however, that no compensation shall be paid
from the Trust to a Trustee who is then receiving full-time pay from the
Company, except for reimbursement of expenses properly and actually
incurred.
9.7 SUCCESSOR TRUSTEE. The Trustee shall serve at the pleasure of
the Committee or until resignation at any time by written notice to the
Committee 30 days prior to such resignation. Upon the resignation,
removal, death of an individual Trustee or termination of corporate
existence of the Trustee, the Company shall fill such vacancy and shall
deliver an instrument in writing to the successor Trustee indicating the
effective date of appointment of the successor Trustee. Each successor
Trustee shall have all the powers, duties, and authority herein granted to
or imposed upon the Trustee, and any successor Trustee shall have no duty
to examine the accounts, records, and acts of any preceding Trustee, and
such successor Trustee shall not be responsible for any act or failure to
act on the part of any preceding Trustee. Title to all Trust property
shall automatically vest in any successor Trustee without the execution or
filing of any instrument or the doing of any act, but any resigning or
removed Trustee shall execute all instruments and do all acts necessary to
vest the title of record in any successor Trustee.
9.8 BOND OR SECURITY. The Trustee shall not be required to give any
bond or other security for the faithful performance of its duties
hereunder so long as it is a bank or trust company organized under the
laws of the United States or any state thereof.
9.9 INVESTMENT MANAGER.
(a) The Committee may appoint one or more investment managers to
direct the Trustee in the investment of one or more Investment Funds.
Any investment manager so appointed may be directed to safeguard the
<PAGE>
physical security of Trust property in addition to performing
investment management functions or may be appointed solely to direct
the Trustee in the investment of Trust property. Any investment
manager so appointed shall be a fiduciary (and shall acknowledge such
fiduciary status with respect to the Plan and Trust in writing) and
shall be (1) a registered investment adviser under the Investment
Advisers Act of 1940, or (2) a bank as defined in that Act, or (3) an
insurance company qualified under the laws of more than one state to
perform asset management services. An investment manager shall have
the powers otherwise conferred on the Trustee by Section 9.3 with
respect to the discretionary investment of and receipt of income from
Trust property and shall be subject to all fiduciary limitations and
responsibilities elsewhere contained in Section 9.
(b) The Trustee shall have no liability for acting in accordance
with the direction of an investment manager to purchase or retain any
Trust asset so long as such act by the Trustee is done in good faith
and (1) the Trustee does not knowingly participate or undertake to
conceal an act or omission of the investment manager, knowing the same
to be a breach of fiduciary duty, (2) the Trustee's own breach of
fiduciary duty does not allow the investment manager to commit a
breach, or (3) unless the Trustee has knowledge of a breach of
fiduciary duty by the investment manager and makes no reasonable
effort under the circumstances to remedy the breach.
9.10 PROTECTION OF TRUSTEE. The Trustee shall be fully protected and
held harmless for relying upon any written communication, or oral
communication which is to be followed by written communication, of an
officer or agent of the Committee and in continuing to rely upon such
communication until subsequent communications are filed with the Trustee.
The Trustee shall be under no duty to investigate or inquire as to the
accuracy of any statement contained in such communications. The Trustee
shall not be obligated to inquire as to whether any payee of funds or
recipient of benefits designated by the Committee is entitled thereto or
whether any payment, allocation, or distribution directed or authorized by
the Committee is proper or within the terms of the Plan and Trust. The
Trustee shall be accountable only to the Committee, the Company and the
Plan to make payments, allocations or distributions in good faith upon the
order or direction of the Committee in accordance with the provisions of
the Plan and shall not be responsible for any payment or distribution made
without actual notice of the changed condition or status of the payee or
distributee. The Trustee shall have no power, authority or duty with
respect to the determination of rights and interest of any person in and
to the Trust or under the Plan or to question or to examine the
determination of any right or interest by the Committee.
<PAGE>
SECTION 10
RIGHTS RESERVED BY EMPLOYER
10.1 EMPLOYER'S INTEREST IN TRUST. The Plan and Trust has been
created and shall be maintained for the exclusive benefit of its Members
as a qualified Plan and Trust under Code Sections 401(a) and 501(a),
respectively. Subject to the provisions of Section 3.5, in no event shall
the Employer have any right, claim, or beneficial or reversionary interest
in any assets of the Plan or Trust, but nothing contained in the Agreement
shall be construed to impair the right of the Employer to see to the
proper administration of either the Plan or Trust in accordance with the
provisions hereof.
10.2 AMENDMENT OF AGREEMENT. The Company reserves the right, upon
recommendation by the Committee, to amend the Plan or Trust at any time,
and from time to time, effective as of any specified current, prior, or
later date; provided, however, that no such amendment shall vest any
Employer with any right, title or interest in or to the assets of the
Plan, divest any Member of any credits to his Accounts, decrease his
vested percentage, or eliminate an optional form of distribution for a
previously accrued benefit, (except to the extent necessary to conform to
the Plan or Trust to the requirements of any applicable future
legislation, rule of law, or regulations), or allow any part of the assets
of the Plan to be used for, or diverted to, purposes other than for the
exclusive benefit of the Members within the meaning of the Code.
10.3 TERMINATION OF PLAN.
(a) The Plan shall continue until terminated under the
provisions set forth herein. Each Employer reserves the right to
terminate the Plan as to its own participation and that of its
Employees by giving prior written notice to that effect to the
Trustee. In the event that an Employer shall be judicially declared
bankrupt or insolvent or shall be dissolved, this Plan shall terminate
immediately as to such Employer and its Employees unless provision is
made for a successor to the Employer to continue this Plan, in which
event such successor shall be substituted for the Employer hereunder.
(b) Upon the termination or partial termination of the Plan or
in the event that contributions to the Plan are discontinued, the
interest of each Participant covered by such event shall be fully
vested and nonforfeitable and benefits shall be distributed in
accordance with Sections 6.5 and 6.6 as if the Plan had continued in
existence, and, for purposes of effecting such distribution, the Trust
shall continue as a legal entity until all such vested benefits have
been distributed. In the event that contributions to the Plan are
discontinued as a result of a merger or consolidation of an Employer
with one or more other corporations, and the interest of each
Participant or Inactive Participant who continues as an Employee of
the successor corporation is transferred to an employee benefit plan
established by such successor corporation, pursuant to the provisions
of Section 11.2, such transfer of such Participant's or Inactive
Participant's Accounts shall not be deemed to be a termination or
partial termination of this Plan.
<PAGE>
SECTION 11
SUCCESSOR EMPLOYER AND MERGER
OR CONSOLIDATION OF PLANS
11.1 SUCCESSOR EMPLOYER. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, provision may be made by
which the Plan will be continued by the successor; and, in that event,
such successor shall be substituted for the Employer under the Plan. The
substitution of the successor shall constitute an assumption of all
obligations of the Employer by the successor and the successor shall have
all of the powers, duties and responsibilities of the Employer under the
Plan.
11.2 MERGER OR TRANSFER OF PLAN ASSETS. In the event of any merger
or consolidation of the Plan with, or transfer in whole or in part of the
assets and liabilities of the Trust to another trust held under any other
employee benefit plan maintained or to be established for the benefit of
all or some of the Members of this Plan, the assets of the Trust
applicable to such Member shall be transferred to the Trust of the other
plan only if:
(a) Each Member would (if either this Plan or the other plan
then terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the
benefit he would have been entitled to receive immediately before the
merger, consolidation or transfer if this Plan had then terminated;
(b) Resolutions of the Board of Directors of the Employer under
this Plan, or of any new or successor employer of the affected
Members, shall authorize such transfer of assets; and, in the case of
the new or successor employer of the affected Members, its resolutions
shall include an assumption by the new employer's plan, and
(c) Such other plan and trust are qualified under Code Sections
401(a) and 501(a).
11.3 LIMITATIONS ON MERGER OR TRANSFER. Despite any other provision
of this Plan, no merger or transfer of any assets of another plan shall be
made to this Plan if such transfer would cause this Plan to be a direct or
indirect transferee of a defined benefit plan or a defined contribution
plan which is subject to the funding standards of Code Section 412 or a
plan to which Code Section 401(a)(11)(B)(iii) applied with respect to a
Member.
<PAGE>
SECTION 12
MISCELLANEOUS
12.1 NONGUARANTEE OF EMPLOYMENT. Nothing contained in this Plan
shall be construed as a contract of employment between the Company or any
Affiliated Employer and any Employee, or as a right of any Employee to be
continued in the employment of the Company or any Affiliated Employer, or
as a limitation of the right of the Company or any Affiliated Employer to
discharge any of its Employees, with or without cause.
12.2 ACTION BY EMPLOYER. Any action by the Company and any other
Employer under this Plan may be by resolution of their respective Board of
Directors, or by any officer or officers duly authorized to take such
action.
12.3 AGREEMENT BINDING ON SUCCESSORS. This agreement shall be
binding upon all persons entitled to benefits hereunder, and upon their
respective heirs and legal representatives; upon the Company, each other
Employer, its successors and assigns; and upon the Trustee and any
successor or additional Trustees.
12.4 LITIGATION. In order to protect the Plan and Trust against
depletion as a result of litigation, in the event that any Member may
bring any legal or equitable action arising under the Plan against the
Trustee or the Employers or the Committee, or in the event that the
Employers or the Trustee or the Committee may find it necessary to bring
any legal or equitable action arising under the Plan against any person,
the Committee shall have the right to join the Trustee as a party
defendant or party plaintiff in any such actions, and all expenses of
defending or bringing such action shall be paid by the Trustee from the
Trust to the extent permitted by ERISA.
12.5 ILLEGALITY OF PARTICULAR PROVISION. The illegality of any
particular provision of this Plan shall not affect the other provisions
thereof, but the Plan shall be construed in all respects as if such
invalid provision were omitted.
12.6 CONSTRUCTION. Except when otherwise indicated by the context,
any masculine terminology herein shall also include feminine, and the
definition of any term herein in singular shall also include the plural.
12.7 TITLES. Article and Section titles are included for reference
purposes only, and in the event of a conflict between a title and its
respective text, the text shall control.
12.8 APPLICABLE LAWS. The Plan shall be governed by and construed
according to the laws of the State of Wisconsin to the extent not
preempted by the law of the United States.
In Witness Whereof, this Plan, as set forth herein has been executed
on behalf of the Company as of the 1st day of January, 1996.
WAUSAU PAPER MILLS COMPANY
By: LARRY A. BAKER
Larry A. Baker
Senior Vice President,
Administration
EXHIBIT (5)(A)
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P O BOX A-3617 DPN20-6
CHICAGO, IL 60690
Employer Identification Number:
Date: August 23, 1995 39-0690900
File Folder Number:
WAUSAU PAPER MILLS COMPANY 390010284
C/O MARY ELLEN SCHILL Person to Contact:
RUDER WARE & MICHLER SC TECHNICAL SCREENER
P.O. BOX 8050 Contact Telephone Number:
WAUSAU, WI 54402-8050 (312) 435-1040
Plan Name:
HOURLY SAVINGS AND INVESTMENT
PLAN
Plan Number: 004
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your
permanent records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation
periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the
qualified status of your employee retirement plan, and provides
information on the reporting requirements for your plan. It also
describes some events that automatically nullify it. It is very important
that you read the publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other
federal or local statutes.
This determination letter is applicable for the plan adopted on
June 1, 1994.
This plan satisfies the minimum coverage and nondiscrimination
requirements of sections 410(b) and 401(a)(4) of the Code because the plan
benefits only collectively bargained employees or employees treated as
collectively bargained employees.
This letter is issued under Rev. Proc. 93-39 and considers the
amendments required by the Tax Reform Act of 1986 except as otherwise
specified in this letter.
This plan qualifies for Extended Reliance described in the last
paragraph of Publication 794 under the caption "Limitations of a Favorable
Determination Letter".
<PAGE>
This letter may not be relied upon with respect to whether the plan
satisfies the qualification requirements as amended by the Uruguay Round
Agreements Act, Pub. L. 103-465.
The information on the enclosed addendum is an integral part of this
determination. Please be sure to read and keep it with this letter.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the
person whose name and telephone number are shown above.
Sincerely yours,
ROBERT W. BROCK
Robert W. Brock
District Director
Enclosures:
Publication 794
Addendum
This is a reproduction of letter created at or around October 19,
1994.
EXHIBIT (5)(B)
April 23, 1996
MR LARRY A BAKER
TRUSTEE
WAUSAU PAPER MILLS COMPANY
HOURLY SAVINGS AND INVESTMENT PLAN
WAUSAU PAPER MILLS COMPANY
ONE CLARK'S ISLAND
PO BOX 1408
WAUSAU WI 54402-1408
Dear Mr. Baker:
We serve as employee benefits counsel for Wausau Paper Mills Company
("Company"). In so acting, we have advised the Company in its role as
sponsor of the Wausau Paper Mills Company Hourly Savings and Investment
Plan ("Plan") and have assisted the Company in the preparation of the Plan
documents and amendments thereto. We have examined the Plan documents and
amendments and such other documents as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below.
A favorable letter of determination dated August 23, 1995 was received
from the Internal Revenue Service with respect to the qualification of the
Plan under Section 401(a) of the Internal Revenue Code, as amended
("Code"). Subsequent to the receipt of that letter, the Plan was amended
in certain respects. Based upon the above described review and
examination, it is our opinion that the amendments to the Plan adopted
subsequent to the receipt of the favorable determination letter did not
adversely affect the Plan's compliance with Code Section 401(a) and with
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
We have not been asked to and do not render any opinions with respect
to any matters except as expressly set forth above. Specifically, we have
not been asked to nor have we examined the Plan in operation with respect
to compliance with the Code and ERISA.
Very truly yours,
RUDER, WARE & MICHLER, S.C.
ARNOLD J. KIBURZ III
Arnold J. Kiburz III
EXHIBIT (23)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 of Wausau Paper Mills Company relating to the
registration of 25,000 shares of its common stock, no par value, in
connection with the Wausau Paper Mills Company Hourly Savings and
Investment Plan (the "Plan") of our report dated September 19, 1995
appearing in Registrant's annual report on Form 10-K for the year ended
August 31, 1995 and our report dated April 18, 1996 appearing the Plan's
annual report on Form 11-K for the year ended December 31, 1995.
WIPFLI ULLRICH BERTELSON
WIPFLI ULLRICH BERTELSON
April 25, 1996
Wausau, Wisconsin
