<PAGE>
Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
_______________________________
P. H. GLATFELTER COMPANY
-----------------------------------------------------
(Exact name of issuer as specified in its charter)
Pennsylvania 23-0628360
--------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Spring Grove, Pennsylvania 17362
--------------------------------------- -----------
(Address of Principal Executive Offices) (Zip Code)
P. H. Glatfelter Company
401(k) Savings Plan
------------------------
(Full title of the plan)
Robert S. Wood, Secretary
228 S. Main Street
Spring Grove, PA 17362
-----------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(717) 225-4711
---------------------------------------------------------------
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPIES TO:
MORRIS CHESTON, JR., ESQUIRE
BALLARD SPAHR ANDREWS & INGERSOLL
1735 MARKET STREET - 51ST FLOOR
PHILADELPHIA, PENNSYLVANIA 19103
This document contains ___ pages.
The Exhibit Index is located on page ___ of this Registration Statement.
<PAGE>
CALCULATION OF REGISTRATION FEE
-------------------------------
<TABLE>
<CAPTION>
----------------------------------------------------------------------
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered (1) Share (2) Price (2) Fee
<S> <C> <C> <C> <C>
----------------------------------------------------------------------
Common Stock
$.01 par value 2,115,470 $ 22.69 $ 48,000,014 $ 16,552
____________________________________________________________________
</TABLE>
(1) Pursuant to Rule 416(a) under the Securities Act of 1933, this Registration
Statement shall be deemed to cover an indeterminate number of additional
shares of Common Stock issuable in the event the number of outstanding
shares of the Company is increased by split-up, reclassification, stock
dividend and the like.
(2) Estimated solely for the purpose of computing the registration fee. In
accordance with Securities and Exchange Commission Rule 457(c), the price
shown is based on the average of the high and low price per share of Common
Stock of the Company on August 29, 1995, $ 22.69, as traded on the American
Stock Exchange.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
2
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The documents containing the information required to be included in
Part I of this Registration Statement will be given or sent to all persons who
are eligible to participate in the P. H. Glatfelter 401(k) Savings Plan (the
"Plan").
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. - INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
The following documents filed with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934 by P. H. Glatfelter
Company (the "Company") (File No. 1-3560) are incorporated herein by reference:
(a) The Annual Report of the Company on Form 10-K for the year
ended December 31, 1994.
(b) The Quarterly Reports of the Company on Form 10-Q for the
quarters ended March 31, 1995 and June 30, 1995.
Each document filed by the Company subsequent to the date hereof
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of
1934, prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
then remaining unsold, shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing of such document.
3
<PAGE>
Item 4.- DESCRIPTION OF SECURITIES
-------------------------
Common Stock
------------
Holders of Common Stock, $.01 par value, are entitled to one vote per
share and to vote cumulatively for directors. Therefore, each shareholder is
entitled to cast as many votes in the election of directors as shall be equal to
the number of shares of Common Stock held by such shareholder on the record
date, multiplied by the number of directors to be elected. Under the Company's
Bylaws, the directors are divided into three classes, two classes consisting of
four directors each and one class consisting of five directors. As a result of
the classified Board, a shareholder will need to own a greater number of shares
in order to be assured of electing a director than would be necessary if the
Board were not classified. Holders of Common Stock do not have pre-emptive
rights.
The Common Stock is junior in all respects to the Company's Preferred
Stock, par value $50. The Common Stock is entitled to dividends as declared by
the Board of Directors and may be repurchased by the Company, subject to the
satisfaction of dividend and sinking fund requirements with respect to
outstanding Preferred Stock. There are currently no outstanding shares of
Preferred Stock.
The Transfer Agent and Registrar for the Common Stock is currently
American Stock Transfer & Trust Company. The Common Stock of the Company is
currently traded on the American Stock Exchange.
On August 9, 1995, there were 120,000,000 authorized shares of Common
Stock of the Company and 43,908,735 outstanding shares of Common Stock.
Item 5.- INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
Not applicable.
Item 6.- INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
See Section 2.11 and Sections 3.1 through 3.7 of the Company's Bylaws
and Section 1713 and Sections 1741 through 1750 of the Pennsylvania Business
Corporation Law of 1988.
The Company's Bylaws include a provision to eliminate the personal
liability of its directors for monetary damages for breach or alleged breach of
their duty of care to the full extent permitted by Pennsylvania law. In
addition, the Company's Bylaws provide that the Company shall indemnify its
directors and officers to the full extent permitted by Pennsylvania law.
4
<PAGE>
The Company has insurance coverage for losses by any person who is or
hereafter may be a director or officer of the Company arising from claims
against that person for any wrongful act (subject to certain exceptions) in his
capacity as a director or officer of the Company. The policy also provides for
reimbursement to the Company for indemnification given by the Company, pursuant
to common or statutory law or its Articles of Incorporation or Bylaws to any
such person arising from any such claim. The policy's coverage is limited to a
maximum of $15,000,000 for each loss and each policy year and there is a
deductible of $1,000,000 for the Company.
Item 7.- EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
Not applicable.
Item 8.- EXHIBITS
--------
4.1 Specimen copy of Common Stock Certificate (incorporated by reference
to Exhibit 4 to the Company's Registration Statement on Form S-8, Reg.
No. 33-54409)
4.2 Articles of Incorporation as amended by resolution adopted February 9,
1994 (incorporated by reference to Exhibit 3(c) to the Company's Form
10-K for the year ended December 31, 1993)
4.3 P. H. Glatfelter Company 401(k) Savings Plan
5 Opinion of Ballard Spahr Andrews & Ingersoll
15 Letter re unaudited interim financial information
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)
24 Power of Attorney (included on signature page)
The Company will submit the Plan and any amendment thereto to the
Internal Revenue Service ("IRS") in a timely manner and will make all changes
required by the IRS in order to qualify the Plan.
Item 9.- UNDERTAKINGS
------------
A. Rule 415 Offering
The undersigned Registrant hereby undertakes:
5
<PAGE>
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in the 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 in such information in the
registration statement;
Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii)
do not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the Registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from any registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
6
<PAGE>
B. Filings Incorporating Subsequent Exchange Act Documents By Reference
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration 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. Request for Acceleration of Effective Date or Filing of Registration
Statement on Form S-8
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
7
<PAGE>
SIGNATURES
----------
The Registrant. Pursuant to the requirements of the Securities Act of
--------------
1933, the Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Spring Grove, Commonwealth of Pennsylvania, on
August 28, 1995.
P. H. GLATFELTER COMPANY
September 1, 1995 By: /s/ R. P. Newcomer
--------------------
R. P. Newcomer
Vice President and
Treasurer (Principal
Financial Officer)
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints R. P. Newcomer and R. S. Wood and each of
them, as true and lawful attorneys-in-fact and agents with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign the Registration Statement and to file the same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
8
<PAGE>
Signature Title Date
--------- ----- ----
Chairman Emeritus
----------------------- and Director
P. H. Glatfelter III
/s/ T. C. Norris Chairman, President, September 1, 1995
----------------------- Chief Executive
T. C. Norris Officer and Director
/s/ R. P. Newcomer Vice President and September 1, 1995
----------------------- Treasurer (Principal
R. P. Newcomer Financial Officer)
/s/ C. M. Smith Comptroller September 1, 1995
-----------------------
C. M. Smith
/s/ G. Baldwin, Jr. Director September 1, 1995
-----------------------
G. Baldwin, Jr.
/s/ R. E. Chappell Director September 1, 1995
-----------------------
R. E. Chappell
/s/ G. H. Glatfelter Director September 1, 1995
-----------------------
G. H. Glatfelter
/s/ G. H. Glatfelter II Director September 1, 1995
-----------------------
G. H. Glatfelter II
/s/ R. S. Hillas Director September 1, 1995
-----------------------
R. S. Hillas
9
<PAGE>
/s/ M. A. Johnson II Director September 1, 1995
-----------------------
M. A. Johnson II
/s/ J. W. Kennedy Director September 1, 1995
-----------------------
J. W. Kennedy
Director
-----------------------
P. R. Roedel
/s/ J. M. Sanzo Director September 1, 1995
-----------------------
J. M. Sanzo
/s/ R. L. Smoot Director September 1, 1995
-----------------------
R. L. Smoot
10
<PAGE>
Director
-----------------------
N. DeBenedictis
11
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
----------- -----------
4.3 P. H. Glatfelter Company 401(k) Savings Plan
5 Opinion of Ballard Spahr Andrews & Ingersoll
15 Letter re unaudited interim financial information
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ballard Spahr Andrews & Ingersoll (included in
Exhibit 5)
<PAGE>
EXHIBIT 4.3
P.H. GLATFELTER COMPANY
401(K) SAVINGS PLAN
EFFECTIVE OCTOBER 1, 1995
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS
-----------
"Account".................................................................. 2
"Matching Contribution Account".................................... 2
"Profit Sharing Account"........................................... 2
"Rollover Account"................................................. 2
"Salary Reduction Account"......................................... 2
"Actual Deferral Percentage"....................................... 3
"Affiliated Company"....................................................... 3
"Age"...................................................................... 4
"Average Actual Deferral Percentage"....................................... 4
"Average Contribution Percentage".......................................... 4
Benefit Accrual Period".................................................... 4
"Benefit Commencement Date"................................................ 4
"Board of Directors"....................................................... 4
"Bonus Payment"............................................................ 4
"Break in Service"......................................................... 4
"Code"..................................................................... 4
"Committee"................................................................ 4
"Company".................................................................. 4
"Compensation"............................................................. 5
"Contribution Percentage".................................................. 6
"Covered Employee"......................................................... 7
"Effective Date"........................................................... 7
"Eligible Employee"........................................................ 7
"Employee"................................................................. 7
"Employment Commencement Date"............................................. 8
"ERISA".................................................................... 8
"Fund"..................................................................... 8
"Highly Compensated Eligible Employee"..................................... 8
"Highly Compensated Employee".............................................. 8
"Hour of Service".......................................................... 9
"Investment Medium"........................................................ 11
"Limitation Year".......................................................... 11
"Matching Contributions"................................................... 11
"Normal Retirement Age".................................................... 11
"Normal Retirement Date"................................................... 11
"Participant".............................................................. 11
"Participating Company".................................................... 11
"Plan"..................................................................... 11
"Plan Year"................................................................ 11
"Prior Plans".............................................................. 11
"Profit Sharing Contributions"............................................. 12
"Profit Sharing Participant"............................................... 12
"Required Beginning Date".................................................. 12
"Rollover Contributions"................................................... 12
i
<PAGE>
PAGE
----
"Salary Reduction Contributions"........................................... 12
"Separation from Service".................................................. 12
"Trust Agreement".......................................................... 12
"Trustee".................................................................. 12
"Valuation Date"........................................................... 12
"Year of Eligibility Service".............................................. 12
"Year of Service".......................................................... 12
ARTICLE II
ELIGIBILITY TO PARTICIPATE
--------------------------
2.1 Rights Affected.................................................... 13
2.2 Year of Eligibility Service........................................ 13
2.3 Eligibility to Participate - Salary Reduction Contributions........ 13
2.4 Election to Make Salary Reduction Contributions.................... 14
2.5 Participation in Matching Contributions............................ 14
2.6 Eligibility to Participate - Profit Sharing
Contributions.................................................. 14
2.7 Participation in Profit Sharing Contributions...................... 14
2.8 Data............................................................... 14
ARTICLE III
CONTRIBUTIONS TO THE PLAN
-------------------------
3.1 Salary Reduction Contributions..................................... 15
3.2 Change of Percentage Rate.......................................... 15
3.3 Discontinuance of Salary Reduction Contributions................... 16
3.4 Matching Contribution.............................................. 16
3.5 Profit Sharing Contribution........................................ 16
3.6 Timing and Deductibility of Contributions.......................... 17
3.7 Fund............................................................... 17
3.8 Limitation on Salary Reduction Contributions and
Matching Contributions......................................... 18
3.9 Prevention of Violation of Limitation on Salary
Reduction Contributions and Matching Contributions............. 20
3.10 Maximum Allocation................................................ 24
ARTICLE IV
PARTICIPANTS' ACCOUNTS
----------------------
4.1 Accounts........................................................... 26
4.2 Valuation.......................................................... 26
4.3 Apportionment of Gain or Loss...................................... 26
4.4 Accounting for Allocations......................................... 26
ii
<PAGE>
ARTICLE V
DISTRIBUTION
------------
PAGE
----
5.1 General............................................................ 27
5.2 Separation from Service............................................ 27
5.3 Death.............................................................. 27
5.4 Valuation for Distribution......................................... 27
5.5 Timing of Distribution............................................. 27
5.6 Mode of Distribution............................................... 29
5.7 Beneficiary Designation............................................ 30
5.8 Recalculation of Life Expectancy................................... 32
5.9 Direct Rollover of Account to Other Plan........................... 32
5.10 Other Distributions................................................ 33
ARTICLE VI
VESTING
-------
6.1 Nonforfeitable Amounts............................................. 35
6.2 Years of Service for Vesting....................................... 35
6.3 Breaks in Service and Loss of Service.............................. 35
6.4 Restoration of Service............................................. 36
6.5 Forfeitures and Restoration of Forfeited Amounts
upon Reemployment.............................................. 37
ARTICLE VII
ROLLOVER CONTRIBUTIONS AND TRANSFERS
------------------------------------
7.1 Rollover Contributions............................................. 39
7.2 Transfers from Hourly Plan......................................... 40
ARTICLE VIII
WITHDRAWALS
-----------
8.1 Emergency and Financial Hardship Withdrawals....................... 41
8.2 Other Withdrawals.................................................. 45
8.3 Amount and Payment of Withdrawals.................................. 45
8.4 Withdrawals Not Subject to Replacement............................. 46
8.5 Pledged Amounts.................................................... 46
8.6 Investment Medium to be Charged with Withdrawal.................... 46
ARTICLE IX
LOANS TO PARTICIPANTS
---------------------
9.1 Loan Application................................................... 47
9.2 Loan Approval...................................................... 47
9.3 Amount of Loan..................................................... 47
iii
<PAGE>
PAGE
----
9.4 Terms of Loan...................................................... 48
9.5 Enforcement........................................................ 49
9.6 Additional Rules................................................... 49
ARTICLE X
ADMINISTRATION
--------------
10.1 Committee......................................................... 51
10.2 Duties and Powers of Committee.................................... 51
10.3 Functioning of Committee.......................................... 52
10.4 Disputes.......................................................... 52
10.5 Indemnification................................................... 53
ARTICLE XI
THE FUND
--------
11.1 Designation of Trustee. ............................................. 54
11.2 Exclusive Benefit..................................................... 54
11.3 No Interest in Fund................................................... 54
11.4 Trustee............................................................... 54
11.5 Investments and Voting of Shares...................................... 54
ARTICLE XII
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
12.1 Power of Amendment and Termination.................................... 56
12.2 Merger................................................................ 56
ARTICLE XIII
TOP-HEAVY PROVISIONS
--------------------
13.1 General............................................................... 57
13.2 Definitions........................................................... 57
13.3 Minimum Contribution for Non-Key Employees............................ 60
13.4 Social Security...................................................... 61
13.5 Adjustment to Maximum Benefit Limitation.............................. 61
ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1 No Employment Rights................................................. 63
14.2 Governing Law........................................................ 63
14.3 Severability of Provisions........................................... 63
14.4 No Interest in Fund.................................................. 63
14.5 Spendthrift Clause................................................... 63
14.6 Incapacity........................................................... 63
iv
<PAGE>
PAGE
----
14.7 Withholding.......................................................... 64
14.8 Missing Persons...................................................... 64
ARTICLE XVI
RIGHTS OF ALTERNATE PAYEES
--------------------------
15.1 General............................................................... 65
15.2 Distribution.......................................................... 65
15.3 Withdrawals........................................................... 65
15.4 Death Benefits........................................................ 66
15.5 Investment Direction.................................................. 66
SCHEDULE A
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE
v
<PAGE>
WHEREAS, P. H. Glatfelter Company (the "Company") sponsors the Profit
Sharing Plan of P. H. Glatfelter Company and The Glatfelter Pulp Wood Company
(Spring Grove Salaried Group), the Profit Sharing Plan of P. H. Glatfelter
Company (Corporate Group), the Profit Sharing Plan of P. H. Glatfelter Company
(Neenah Salaried Group), and the Profit Sharing Plan of P. H. Glatfelter Company
(Ecusta Salaried Group) (collectively, the "Prior Plans") and
WHEREAS, P. H. Glatfelter Company wishes to adopt a written profit sharing
plan, effective October 1, 1995, for certain of its employees and employees of
participating companies formerly covered under the Prior Plans, which plan is
intended to comply with the requirements of the Employee Retirement Income
Security Act of 1974 and with the Internal Revenue Code of 1986, as amended and
wishes to merge the Prior Plans into this new plan effective October 1, 1995;
NOW, THEREFORE, effective October 1, 1995, the P.H. Glatfelter Company
401(k) Savings Plan is established as hereinafter set forth and the Prior Plans
are merged into the P.H. Glatfelter Company 401(k) Savings Plan:
1
<PAGE>
ARTICLE I
DEFINITIONS
-----------
Except where otherwise clearly indicated by context, the masculine shall
include the feminine and the singular shall include the plural, and vice-versa.
Any term used herein without an initial capital letter that is used in a
provision of the Code with which this Plan must comply to meet the requirements
of section 401(a) of the Code shall be interpreted as having the meaning used in
such provision of the Code, if necessary for the Plan to comply with such
provision.
"Account" means the entries maintained in the records of the Trustee which
-------
represent the Participant's interest in the Fund. The term "Account" shall
refer, as the context indicates, to any or all of the following:
"Matching Contribution Account" -- the Account to which are credited
-----------------------------
Matching Contributions allocated to a Participant, adjustments for withdrawals
and distributions, and the earnings, losses and expenses attributable thereto.
"Profit Sharing Account" -- the Account to which are credited Profit
----------------------
Sharing Contributions allocated to a Participant, adjustments for withdrawals
and distributions, and the earnings, losses and expenses attributable thereto.
Nonelective Contributions credited to a Participant's account under a Prior Plan
before October 1, 1995 are credited to the Participant's "Nonelective
-----------
Contributions Account", along with earnings, losses and expenses attributable
---------------------
thereto and adjustments for withdrawals and distributions. As used in the Plan,
Profit Sharing Account includes the Participant's Nonelective Contributions
Account, unless stated otherwise.
"Rollover Account" -- the Account to which are credited a Participant's
----------------
Rollover Contributions, adjustments for withdrawals and distributions, and the
earnings, losses and expenses attributable thereto.
"Salary Reduction Account" -- the Account to which are credited a
------------------------
Participant's Salary Reduction Contributions, adjustments for withdrawals and
distributions, and the earnings, losses and expenses attributable thereto.
Elective Contributions credited to a Participant's account under a Prior Plan
before October 1, 1995 are credited to the Participant's "Elective Contributions
----------------------
Account", along with earnings, losses and expenses attributable thereto and
-------
adjustments for withdrawals and distributions. As used in the Plan, Salary
Reduction Account
2
<PAGE>
includes the Participant's Elective Contributions Account, unless stated
otherwise.
"Actual Deferral Percentage" means, for any Eligible Employee for a given
--------------------------
Plan Year, the ratio of:
(a) the sum of:
(1) such Eligible Employee's Salary Reduction Contributions for the Plan
Year, plus
(2) in the case of any Highly Compensated Eligible Employee, his elective
deferrals for the year under any other qualified retirement plan, other than an
employee stock ownership plan as defined in section 4975(e)(7) of the Code or a
tax credit employee stock ownership plan as defined in section 409(a) of the
Code, maintained by the Participating Company or any Affiliated Company, plus
(3) at the election of the Committee, any portion of the Eligible
Employee's Matching Contributions required or permitted to be taken into
account under section 401(k) of the Code and the regulations issued thereunder,
plus
(4) at the election of the Committee, any portion of the Profit Sharing
Contributions allocated to an Eligible Employee's Account and required or
permitted to be taken into account under section 401(k) of the Code and the
regulations issued thereunder; to
(b) the Eligible Employee's Compensation for the Plan Year.
"Affiliated Company" means, with respect to any Participating Company, (a)
------------------
any corporation that is a member of a controlled group of corporations, as
determined under section 414(b) of the Code, which includes such Participating
Company; (b) any member of an affiliated service group, as determined under
section 414(m) of the Code, of which such Participating Company is a member; (c)
any trade or business (whether or not incorporated) that is under common control
with such Participating Company, as determined under section 414(c) of the Code;
and (d) any other organization or entity which is required to be aggregated with
the Participating Company under section 414(o) of the Code and regulations
issued thereunder. "50% Affiliated Company" means an Affiliated Company, but
----------------------
determined with "more than 50%" substituted for the phrase "at least 80%" in
section 1563(a) of the Code, when applying sections 414(b) and (c) of the Code.
3
<PAGE>
"Age" means, for any individual, his age on his last birthday, except that
---
an individual attains Age 59 1/2 or Age 70 1/2 on the corresponding date in the
sixth calendar month following the month in which his 59th or 70th
(respectively) birthday falls (or the last day of such sixth month if there is
no such corresponding date therein).
"Average Actual Deferral Percentage" means, for a specified group of
----------------------------------
Eligible Employees for a Plan Year, the average of the Actual Deferral
Percentages for such Eligible Employees for the Plan Year.
"Average Contribution Percentage" means, for a specified group of Eligible
-------------------------------
Employees for a Plan Year, the average of the Contribution Percentages for such
Eligible Employees for the Plan Year.
"Benefit Accrual Period" means, with respect to any Participant, the
----------------------
portion of a Plan Year that begins on the later of January 1 or the date on
which he becomes an Eligible Employee and ends on the earliest of December 31,
the date on which he ceases to be an Eligible Employee but continues to be an
Employee, the date he retires under a qualified pension plan of the Company, or
the date he dies.
"Benefit Commencement Date" means, for any Participant or beneficiary, the
-------------------------
date as of which the first benefit payment, including a single sum, from the
Participant's Account is due.
"Board of Directors" means the board of directors of the P.H. Glatfelter
------------------
Company or its delegate.
"Bonus Payment" means a cash distribution under the Company's various non-
-------------
qualified profit sharing and incentive programs.
"Break in Service" means, for any Employee, any Plan Year described in
----------------
Section 6.3.
"Code" means the Internal Revenue Code of 1986, as amended, and any
----
regulations issued thereunder.
"Committee" means the individuals appointed as the Employee Benefits
---------
Committee by the Board of Directors to supervise the administration of the Plan,
as provided in Article X.
"Company" means the P. H. Glatfelter Company and its successors.
-------
4
<PAGE>
"Compensation" means, for any Eligible Employee, for any Plan Year or
------------
Limitation Year, as the case may be:
(a) For purposes of Sections 3.1 and 3.4, subject to the limitations set
forth in Subsection (e) of this definition, his total compensation from a
Participating Company including regular pay, premium pay, suggestion awards,
holiday and vacation pay, profit-sharing payments, incentive awards, sports
fees, Salary Reduction Contributions and salary deferrals under a plan described
in section 125 of the Code, and excluding special allowances, educational
reimbursements, moving expenses, taxable distributions from the P.H. Glatfelter
Company Management Incentive Plan, imputed income on supplemental life
insurance, fringe benefits, distributions under the Salary Continuation Plan,
and taxable compensation attributable to awards under the P.H. Glatfelter
Company 1988 Restricted Common Stock Award Plan and the P.H. Glatfelter Company
1992 Key Employee Long-Term Incentive Plan.
(b) For purposes of Section 3.5, subject to the limitations set forth in
subsection (e) of this definition, all cash compensation received during his
Benefit Accrual Period of the Plan Year, excluding premium for overtime, moving
expenses, severance pay, special allowances, suggestion awards, management
incentive bonuses, pay in lieu of vacation, amounts paid or credited as profit
sharing distributions, taxable compensation attributable to matching
contributions under the P.H. Glatfelter Company Employee Stock Purchase Plan,
and taxable compensation attributable to awards under the P.H. Glatfelter
Company 1988 Restricted Common Stock Award Plan and the P.H. Glatfelter Company
1992 Key Employee Long-Term Incentive Plan.
(c) for the purposes of the definitions of "Actual Deferral Percentage" and
"Contribution Percentage" in this Article (except as otherwise provided in such
definitions), and subject to the limitations set forth in Subsection (e) of this
definition, compensation as defined in section 414(s) of the Code as determined
by the Committee and applied on a uniform and consistent basis to all Eligible
Employees, provided that, in the sole discretion of the Committee, Compensation
may include:
(1) Salary Reduction Contributions and other amounts excluded from gross
income under section 125 (relating to cafeteria plans), 402(e)(3) (relating to
section 401(k) cash or deferred plans), 402(h)(1)(B) (relating to simplified
employee pensions) or 403(b) (relating to tax-deferred annuities) of the Code;
and
(2) compensation deferred under an eligible deferred compensation plan
within the meaning of section 457(b) of the Code; and
5
<PAGE>
(3) employee contributions described in section 414(h)(2) that are picked
up by the employing unit and thus are treated as employer contributions.
For the purpose of this Subsection (b), the Committee may elect to consider
only compensation as defined above for that portion of the Plan Year during
which the Employee was an Eligible Employee, provided that this election is
applied uniformly to all Eligible Employees for the Plan Year.
(d) for the purpose of Article XIII, Section 3.10, and the definition of
"Highly Compensated Employee" (except as otherwise provided in such definition),
the Employee's total wages as reported in the box titled "Wages, tips, other
compensation" of Form W-2 (i.e. wages as defined in section 3401(a) of the Code
and all other payments of compensation for which the Participating Company is
required to furnish the employee a written statement under sections 6041(d) and
6051(a)(3) of the Code), but including for the definition of "Highly Compensated
Employee" amounts that are excluded from gross income under section 125
(relating to cafeteria plans), 402(e)(3) (relating to section 401(k) cash or
deferred plans), 402(h)(1)(B) (relating to simplified employee pensions) or
403(b) (relating to tax-deferred annuities) of the Code, or a reasonable
approximation thereof.
(e) With respect to any Plan Year, only compensation not in excess of the
amount to which the $150,000 limit of Code section 401(a)(17) has been indexed
shall be taken into account, except that this Subsection (e) shall not apply for
purposes of Section 3.10, Section 13.2(c), and the definition of "Highly
Compensated Employee." In determining Compensation for purposes of this
limitation, the rules of section 414(q)(6) of the Code shall apply, except in
applying such rules, the term "family" shall include only the spouse of the
Employee and any lineal descendants who have not attained Age 19 before the
close of the Plan Year. In applying the rules of section 414(q)(6) of the Code,
the limit of this Subsection (e) shall be allocated among family members in
proportion to their Compensation as defined in Subsection (a) without regard to
this Subsection (e).
"Contribution Percentage" means for any Eligible Employee for a given Plan
-----------------------
Year, the ratio of:
(a) the sum of
(1) such Eligible Employee's Matching Contributions for the Plan Year (to
the extent not included in such Eligible Employee's Actual Deferral Percentage
for such Plan Year), plus
6
<PAGE>
(2) in the case of any Highly Compensated Eligible Employee, any employee
contributions and employer matching contributions, including any elective
deferrals recharacterized as employee contributions, under any other qualified
retirement plan, other than an employee stock ownership plan as defined in
section 4975(e)(7) of the Code or a tax credit employee stock ownership plan as
defined in section 409(a) of the Code, maintained by the Participating Company
or any Affiliated Company, plus
(3) at the election of the Committee, any portion of the Eligible
Employee's Profit Sharing Contributions required or permitted to be taken into
account in accordance with section 401(m) of the Code and the regulations issued
thereunder, plus
(4) at the election of the Committee, any portion of the Eligible
Employee's Salary Reduction Contributions for the Plan Year or elective
deferrals under any other qualified retirement plan maintained by a
Participating Company or any Affiliated Company that may be disregarded without
causing this Plan or such other qualified retirement plan to fail to satisfy the
requirements of section 401(k)(3) of the Code and the regulations issued
thereunder; to
(b) The Eligible Employee's Compensation for the Plan Year.
"Covered Employee" means any Employee who is either: (1) a salaried
----------------
employee or officer of the Company or a Participating Company in the Spring
Grove Salaried Group, or (2) a salaried employee or officer of the Company in
its Neenah, Wisconsin Group, or (3) a salaried employee or officer of the
Company in its Ecusta Division, or a salaried employee of Ecusta Fibres Ltd. who
is employed in its United States operations, or (4) a salaried employee or
officer of the Company in its Corporate Group, or (5) an employee of the Company
in its Conference Group. An Employee who is such solely by reason of being a
leased employee shall not be a Covered Employee.
"Effective Date" means October 1, 1995, the effective date of this merged
--------------
Plan.
"Eligible Employee" means an Employee who has become an Eligible Employee
-----------------
as set forth in Section 2.3, and who is a Covered Employee.
"Employee" means an individual who is employed by a Participating Company
--------
or an Affiliated Company. An individual who is not otherwise employed by a
Participating Company or Affiliated Company shall be deemed to be employed by
such Company
7
<PAGE>
if he is a leased employee with respect to whose services such Participating
Company or Affiliated Company is the recipient within the meaning of Code
section 414(n) or 414(o), but to whom Code section 414(n)(5) does not apply.
"Employment Commencement Date" means, for any Employee, the date on which
----------------------------
he is first entitled to be credited with an "Hour of Service" described in
Paragraph (a)(1) of the definition of Hour of Service in this Article.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended.
"Fund" means the fund established for this Plan, administered under the
----
Trust Agreement, out of which benefits payable under this Plan shall be paid.
"Highly Compensated Eligible Employee" means an Eligible Employee who is
------------------------------------
(or is treated as) a Highly Compensated Employee.
"Highly Compensated Employee" means the following:
---------------------------
(a) Subject to Subsections (b) and (c), a Highly Compensated Employee
means an Employee who:
(1) is a five-percent owner, as defined in section 416(i) of the Code;
(2) received more than $100,000 (as indexed) in Compensation from a
Participating Company or an Affiliated Company;
(3) received more than $66,000 (as indexed) in Compensation from a
Participating Company or an Affiliated Company and was among the top 20% of
Employees of all Participating Companies and Affiliated Companies ranked by
Compensation (excluding, for purposes of identifying the number of Employees in
the top 20%, Employees described in section 414(q)(8) of the Code to the extent
permitted under the Code and regulations thereunder and elected by the
Committee); or
(4) is among the 50 officers of a Participating Company or an Affiliated
Company (or, if lesser, the greater of 3 or 10% of all Employees, excluding
Employees described in section 414(q)(8) of the Code, to the extent (A)
permitted under the Code and regulations thereunder and (B) elected by the
Committee for purposes of identifying the top 20%) and received Compensation of
more than $60,000 (as indexed); provided, however, that, if no officer has
satisfied the compensation requirement described above during either the
8
<PAGE>
current Plan Year or the immediately preceding Plan Year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
(b) The Company may treat as Highly Compensated Employees either:
(1) those Employees who meet the criteria in Subsection (a) of this
definition during either the current Plan Year or the immediately preceding Plan
Year, provided however, that an Employee, other than a five-percent owner, who
was not a Highly Compensated Employee in the preceding Plan Year is a Highly
Compensated Employee for the current Plan Year only if he is among the top 100
Employees of all Participating Companies and Affiliated Companies ranked by
Compensation for the current Plan Year, or
(2) those Employees who meet the criteria in Subsection (a) of this
definition during the current Plan Year only, without regard to the preceding
Plan Year.
(c) If an Employee is, during the current Plan Year or the immediately
preceding Plan Year, a family member of either a 5 percent owner who is an
Employee or a former Employee or a Highly Compensated Employee who is one of the
10 most highly compensated Employees ranked by compensation during such year,
then the family member and the 5 percent owner or Highly Compensated Employee
shall be treated as a single Highly Compensated Employee, and the Compensation
and elective deferrals, employee contributions and employer matching
contributions of such family member and 5 percent owner or Highly Compensated
Employee shall be aggregated in determining the Actual Deferral Percentage and
Contribution Percentage of such "single" Highly Compensated Employee. For
purposes of this definition, "family member" shall include the spouse, lineal
ascendants and descendants of the Employee or former Employee and the spouse of
such lineal ascendants and descendants.
(d) If the Participating Company elects the alternative described in
Paragraph (b)(1) of this Section and if the Participating Companies and all
Affiliated Companies so elect with respect to the Plan and with respect to all
other plans, entities or arrangements of the Participating Companies and
Affiliated Companies, references to the "preceding Plan Year" shall refer
instead to the calendar year ending with or within the current Plan Year.
"Hour of Service" means, for any Employee, a credit awarded with respect
---------------
to:
(a) except as provided in (b) or (c),
9
<PAGE>
(1) each hour for which he is directly or indirectly paid or entitled to
payment by a Participating Company or an Affiliated Company for the performance
of employment duties; or
(2) each hour for which he is entitled, either by award or agreement, to
back pay from a Participating Company or an Affiliated Company, irrespective of
mitigation of damages; or
(3) each hour for which he is directly or indirectly paid or entitled to
payment by a Participating Company or an Affiliated Company on account of a
period of time during which no duties are performed due to vacation, holiday,
illness, incapacity (including disability), jury duty, layoff, leave of absence,
or military duty; or
(4) each hour credited pursuant to Section 6.3.
(b) For any period that includes any hours for which an Hour of Service
would otherwise be credited to an Employee under (a), above, the Committee may,
in accordance with rules applied in a uniform and non-discriminatory manner,
elect instead to credit Hours of Service using one or more of the following
equivalencies:
Basis Upon Which Records Credit Granted to Individual
Are Maintained For Period
------------------------ ----------------------------
shift actual hours for full shift
day 10 Hours of Service
week 45 Hours of Service
semi-monthly period 95 Hours of Service
month 190 Hours of Service
(c) Anything to the contrary in Subsection (a) or (b) notwithstanding:
(1) No Hours of Service shall be credited to an Employee for any period
merely because, during such period, payments are made or due him under a plan
maintained solely for the purpose of complying with applicable workers'
compensation, unemployment compensation, or disability insurance laws.
(2) No more than 501 Hours of Service shall be credited to an Employee
under Paragraph (a)(3) of this definition on account of any single continuous
period during which no duties are performed by him, except to the extent
otherwise provided in the Plan.
10
<PAGE>
(3) No Hours of Service shall be credited to an Employee with respect to
payments solely to reimburse for medical or medically related expenses.
(4) No Hours of Service shall be credited twice.
(5) Hours of Service shall be credited at least as liberally as required by
the rules set forth in U.S. Department of Labor Reg. (S)2530.200b-2(b) and (c).
(6) In the case of an Employee who is such solely by reason of service as a
leased employee within the meaning of section 414(n) or 414(o) of the Code,
Hours of Service shall be credited as if such Employee were employed and paid
with respect to such service (or with respect to any related absences or
entitlements) by the Participating Company or Affiliated Company that is the
recipient thereof.
"Investment Medium" means any fund, contract, obligation, or other mode of
-----------------
investment to which a Participant may direct the investment of the assets of his
Account.
"Limitation Year" means the Plan Year.
---------------
"Matching Contributions" means the amounts contributed by the Company
----------------------
pursuant to Section 3.4.
"Normal Retirement Age" means, for any Participant, the date on which he
---------------------
attains Age 65.
"Normal Retirement Date" means, for any Participant, the first day of the
----------------------
month coincident with or next following his attainment of Normal Retirement Age.
"Participant" means an individual for whom one or more Accounts are
-----------
maintained under the Plan.
"Participating Company" means the Company, The Glatfelter Pulp Wood Company
---------------------
and each other organization which is authorized by the Board of Directors to
adopt this Plan and which adopts the Plan by action of its board of directors or
other governing body.
"Plan" means the P.H. Glatfelter Company 401(k) Savings Plan, a profit
----
sharing plan, as set forth herein.
"Plan Year" means the calendar year.
---------
"Prior Plans" means the Profit Sharing Plan of P.H. Glatfelter and The
-----------
Glatfelter Pulp Wood Company (Spring Grove
11
<PAGE>
Salaried Group), the Profit Sharing Plan of P.H. Glatfelter Company (Corporate
Group), the Profit Sharing Plan of P.H. Glatfelter Company (Neenah Salaried
Group), and the Profit Sharing Plan of P.H. Glatfelter Company (Ecusta Salaried
Group), as in effect before the Effective Date of this Plan.
"Profit Sharing Contributions" means the amounts contributed by the Company
----------------------------
pursuant to Section 3.5.
"Profit Sharing Participant" means an individual who has become a Profit
--------------------------
Sharing Participant as provided in Article II and is a Covered Employee.
"Required Beginning Date" means, for any Participant, except as provided in
-----------------------
a valid deferral election filed by the Participant with the Committee before
January 1, 1984, and not subsequently revoked, April 1 of the calendar year next
following the calendar year in which he attains Age 70-1/2.
"Rollover Contributions" means, for any Participant, his rollover
----------------------
contributions as provided in Section 7.1.
"Salary Reduction Contributions" means, for any Participant, contributions
------------------------------
on his behalf as provided in Section 3.1(a).
"Separation from Service" means, for any Employee, his death, retirement,
-----------------------
resignation, discharge or any absence that causes him to cease to be an
Employee.
"Trust Agreement" means any agreement and declaration of trust executed
---------------
under this Plan.
"Trustee" means the corporate trustee or one or more individuals
-------
collectively appointed and acting under the Trust Agreement.
"Valuation Date" means the last day of each Plan Year and each interim date
--------------
on which the Committee determines that a valuation of the Fund shall be made.
"Year of Eligibility Service" means, for any Employee, a credit used to
---------------------------
determine his eligibility to participate under the Plan, as further described in
Section 2.2.
"Year of Service" means, for any Employee, a credit used to determine
---------------
his vested status under the Plan, as further described in Section 6.2.
12
<PAGE>
ARTICLE II
ELIGIBILITY TO PARTICIPATE
--------------------------
2.1 Rights Affected. Any Employee or former Employee who is not a
---------------
Covered Employee on or after October 1, 1995 shall have no rights or benefits
hereunder.
2.2 Year of Eligibility Service.
---------------------------
(a) An Employee shall be credited with a Year of Eligibility Service
as of the close of the 12-consecutive-month period that begins on his Employment
Commencement Date if he is credited with 1,000 or more Hours of Service during
such period.
(b) An Employee who is not credited with 1,000 Hours of Service during
such period shall be credited with a Year of Eligibility Service as of the close
of the first Plan Year beginning on or after his Employment Commencement Date in
which he is credited with 1,000 or more Hours of Service.
(c) For purposes of determining whether an Employee has completed a
Year of Eligibility Service, an Employee's Hours of Service shall include his
"hours of service" credited under the Prior Plans before the Effective Date.
2.3 Eligibility to Participate - Salary Reduction Contributions.
-----------------------------------------------------------
(a) Each Covered Employee as of the Effective Date who was eligible to
participate in one of the Prior Plans immediately prior to the Effective Date
shall be an Eligible Employee as of the Effective Date.
(b) Each Covered Employee who was not eligible to participate in one
of the Prior Plans immediately prior to the Effective Date shall become an
Eligible Employee on the first day of the calendar month coincident with or next
following the date he completes one Year of Eligibility Service, if he is then a
Covered Employee.
(c) If an individual is not a Covered Employee on the date he would
otherwise become an Eligible Employee pursuant to Subsection (b) of this
Section, he shall become an Eligible Employee as of the first date thereafter on
which he is a Covered Employee.
(d) An Eligible Employee who ceases to be a Covered Employee, by
Separation from Service or otherwise, and who later becomes a Covered Employee,
shall become an Eligible
13
<PAGE>
Employee as of the date on which he first again completes an Hour of Service as
a Covered Employee.
2.4 Election to Make Salary Reduction Contributions. Each Eligible
-----------------------------------------------
Employee may elect to make Salary Reduction Contributions by making an election
in a form acceptable to the Committee. Such notice shall authorize the
Participating Company to reduce such Eligible Employee's regular salary or Bonus
Payment by an amount determined in accordance with Section 3.1 and to make
Salary Reduction Contributions on such Eligible Employee's behalf in the amount
of such reduction. An election with respect to a Participant's regular salary
shall be effective as soon as administratively practical following receipt of
his election by the Committee. An election shall be effective for a Bonus
Payment if the Committee receives the Participant's election prior to the date
the Bonus Payment is paid, by such time and according to rules adopted by the
Committee.
2.5 Participation in Matching Contributions. An Eligible Employee
---------------------------------------
shall share in Matching Contributions under Section 3.4 for any calendar month
if Salary Reduction Contributions are made on his behalf from his regular
payroll salary in such calendar month and he is an Employee on the last day of
such calendar month or if, during such calendar month, he retires under Article
V or dies. In addition, an Eligible Employee shall share in Matching
Contributions under Section 3.4 with respect to a Bonus Payment if he makes a
Salary Reduction Contribution from the Bonus Payment.
2.6 Eligibility to Participate - Profit Sharing Contributions. Each
---------------------------------------------------------
Covered Employee shall become a Profit Sharing Participant if and when he
becomes an Eligible Employee.
2.7 Participation in Profit Sharing Contributions. A Profit Sharing
---------------------------------------------
Participant shall share in Profit Sharing Contributions under Section 3.5 for
any Plan Year during which he (1) is an Eligible Employee as of the last day of
his Benefit Accrual Period for such Plan Year, and (2) completed 1,000 or more
Hours of Service during the Plan Year or completed during his Benefit Accrual
Period of the Plan Year a number of Hours of Service as an Eligible Employee at
least equal to 83-1/3 times the number of full calendar months in his Benefit
Accrual Period.
2.8 Data. Each Employee shall furnish to the Committee such data as
----
the Committee may consider necessary for the determination of the Employee's
rights and benefits under the Plan and shall otherwise cooperate fully with the
Committee in the administration of the Plan.
14
<PAGE>
ARTICLE III
CONTRIBUTIONS TO THE PLAN
-------------------------
3.1 Salary Reduction Contributions.
------------------------------
(a) When an Eligible Employee files an election under Section 2.4 to
have Salary Reduction Contributions made on his behalf, he shall elect the
percentage by which his Compensation shall be reduced on account of such Salary
Reduction Contributions. Elections will be made separately for regular payroll
salary and for Bonus Payments. Subject to Section 3.8, this percentage may be
between one percent (1%) and fifteen percent (15%) of such Compensation, rounded
to the nearer whole percent. The Participating Company shall contribute an
amount equal to such percentage of the Eligible Employee's Compensation to the
Fund for credit to the Eligible Employee's Salary Reduction Account provided
that such contributions may be prospectively limited as provided in Section 3.9.
(b) Salary Reduction Contributions made on behalf of an Eligible
Employee under this Plan together with elective deferrals under any other plan
or arrangement maintained by any Participating Company or Affiliated Company
shall not exceed $9,240 (as adjusted in accordance with section 402(g) of the
Code and regulations thereunder) for any calendar year. To the extent necessary
to satisfy this limitation for any year:
(1) elections under Subsection (a) of this Section shall be
prospectively restricted; and,
(2) after application of Subparagraph (1), the excess Salary
Reduction Contributions and excess elective deferrals under any other plan or
arrangement maintained by any Participating Company or Affiliated Company (with
earnings thereon, but reduced by any amounts previously distributed under
Subsection (a) of Section 3.9 for the year) shall be paid to the Participant on
or before the April 15 first following the calendar year in which such
contributions were made.
3.2 Change of Percentage Rate. A Participant may without penalty
-------------------------
change the percentage of Compensation designated by him as his contribution rate
for his regular payroll salary under Subsection (a) of Section 3.1 to any
percentage permitted by such Subsection, and such percentage shall remain in
effect for his regular payroll salary until so changed. Any such change shall
be made in a form and according to procedures determined by the Committee and
shall become effective as soon as administratively practical following receipt
of the change by the Committee.
15
<PAGE>
3.3 Discontinuance of Salary Reduction Contributions. A Participant
------------------------------------------------
may discontinue his Salary Reduction Contributions at any time. Such
discontinuance shall become effective as soon as administratively practical. A
Participant who discontinues his Salary Reduction Contributions may resume his
Salary Reduction Contributions by making a new election in accordance with
Section 3.2.
3.4 Matching Contribution.
---------------------
(a) Subject to Sections 3.8 and 3.10, each Participating Company shall
contribute to the Fund for each calendar month an amount equal to fifty percent
(50%) of all Participants' Salary Reduction Contributions from regular payroll
salary for such month not in excess of six percent (6%) of each Eligible
Employee's regular payroll salary, provided that such contributions may be
prospectively limited as provided in Section 3.9 and provided further that the
contribution under this Section shall not cause the total contributions by the
Participating Company to exceed the maximum allowable current deduction under
the applicable provisions of the Code. Matching Contributions shall be credited
to the Matching Contribution Accounts of Participants in proportion to their
Salary Reduction Contributions from regular salary for the calendar month not in
excess of six percent (6%) of each Eligible Employee's regular payroll salary
for the month.
(b) Subject to Sections 3.8 and 3.10, each Participating Company shall
contribute to the Fund an amount equal to fifty percent (50%) of all
Participants' Salary Reduction Contributions from each Bonus Payment not in
excess of six percent (6%) of each Eligible Employee's Bonus Payment, provided
that such contributions may be prospectively limited as provided in Section 3.9
and provided further that the contribution under this Section shall not cause
the total contributions by the Participating Company to exceed the maximum
current allowable current deduction under the applicable provisions of the Code.
Matching Contributions shall be credited to the Matching Contribution Accounts
of Participants in proportion to their Salary Reduction Contributions from the
Bonus Payment not in excess of 6% of each Eligible Employee's Bonus Payment.
3.5 Profit Sharing Contribution. Each Participating Company shall
---------------------------
contribute to the Fund for each Plan Year such amount as it shall determine in
its discretion as of the close of the Participating Company's fiscal year,
provided that the contribution for any Plan Year shall not cause the total
contributions by the Participating Company to exceed the maximum allowable
current deduction under the applicable provisions of the Code. Such
contributions may be allocated among the
16
<PAGE>
Company's profit centers according to profits credited to each profit center,
and within each profit center, shall be allocated to the Profit Sharing Accounts
of Profit Sharing Participants eligible to share in Profit Sharing Contributions
in accordance with Section 2.7 in proportion to their Compensation for the
portion of the Plan Year during which each is an Eligible Employee.
3.6 Timing and Deductibility of Contributions. Profit Sharing and
-----------------------------------------
Matching Contributions for any Plan Year under this Article shall be made no
later than the last date on which amounts so paid may be deducted for Federal
income tax purposes for the taxable year of the employer in which the Plan Year
ends. All Participating Company contributions are expressly conditioned upon
their deductibility for Federal income tax purposes. Amounts contributed as
Salary Reduction Contributions or Rollover Contributions will be remitted to the
Trustee as soon as practicable, but no later than 90 days after the date on
which such contributions were received or withheld from the Participant's
Compensation.
3.7 Fund. The contributions deposited by the Participating Company
----
in the Fund in accordance with this Article shall constitute a fund held for the
benefit of Participants and their eligible beneficiaries under and in accordance
with this Plan. No part of the principal or income of the Fund shall be used
for, or diverted to, purposes other than for the exclusive benefit of such
Participants and their eligible beneficiaries (including necessary
administrative costs); provided, that (a) in the case of a contribution made by
the Participating Company as a mistake of fact, or for which a tax deduction is
disallowed, in whole or in part, by the Internal Revenue Service, the
Participating Company shall be entitled to a refund of said contributions, which
must be made within one year after payment of a contribution made as a mistake
of fact, or within one year after disallowance of the tax deduction, to the
extent of such disallowance, and (b) in the case of contributions made by the
Participating Company which are conditioned on the initial qualification of the
plan under section 401 of the Code, if the Plan is the subject of an adverse
determination with respect to its initial qualification, then the Participating
Company shall be entitled to a refund of said contributions, but only if
application for the determination is made by the time prescribed by law for
filing the Participating Company's federal income tax return for the taxable
year in which the Plan is adopted or such later date as may be permitted by
applicable Treasury Regulation or other applicable administrative
pronouncements.
17
<PAGE>
3.8 Limitation on Salary Reduction Contributions and Matching
---------------------------------------------------------
Contributions.
-------------
(a) For any Plan Year, the Average Actual Deferral Percentage for the
Highly Compensated Eligible Employees shall not exceed the greater of:
(1) one hundred twenty-five percent (125%) of the Average Actual
Deferral Percentage for all other Eligible Employees; or
(2) the lesser of:
(A) two hundred percent (200%) of the Average Actual Deferral
Percentage for all other Eligible Employees; or
(B) two percent (2%) plus the Average Actual Deferral Percentage
for all other Eligible Employees.
(b) For any Plan Year, the Average Contribution Percentage for the
Highly Compensated Eligible Employees shall not exceed the greater of:
(1) one hundred twenty-five (125%) of the
Average Contribution Percentage for all other Eligible Employees; or
(2) the lesser of:
(A) two hundred percent (200%) of the Average Contribution
Percentage for all other Eligible Employees; or
(B) two percent (2%) plus the Average Contribution Percentage for
all other Eligible Employees.
(c) For any Plan Year, the sum of the Average Actual Deferral
Percentage and the Average Contribution Percentage for the Highly Compensated
Eligible Employees shall not exceed the greater of:
(1) the sum of:
(A) one hundred twenty-five percent (125%) of the greater of the
Average Actual Deferral Percentage or the Average Contribution Percentage for
all other Eligible Employees; plus
(B) the lesser of:
18
<PAGE>
(i) two hundred percent (200%) of the lesser of the Average Actual
Deferral Percentage or the Average Contribution Percentage for all other
Eligible Employees; or
(ii) two percent (2%) plus the lesser of the Average Actual Deferral
Percentage or the Average Contribution Percentage for all other Eligible
Employees; or
(2) the sum of:
(A) one hundred twenty-five percent (125%) of the lesser of the
Average Actual Deferral Percentage or the Average Contribution Percentage for
all other Eligible Employees; plus
(B) the lesser of:
(i) two hundred percent (200%) of the greater of the Average
Actual Deferral Percentage or the Average Contribution Percentage for all
other Eligible Employees; or
(ii) two percent (2%) plus the greater of the Average Actual
Deferral Percentage or the Average Contribution Percentage for all other
Eligible Employees.
(d) For purposes of this Section, the Salary Reduction Contributions
and Matching Contributions of any 5% owner or other Highly Compensated Employee
who is one of the top 10 Employees ranked by pay (without regard to this
sentence) for the Plan Year or the preceding Plan Year shall be increased by the
amount of the Salary Reduction Contributions and Matching Contributions,
respectively, of any Employee who is a spouse or lineal ascendant or descendant
(or a spouse thereof) ("family member") of such Highly Compensated Employee, and
the Compensation of the former shall be increased by the Compensation of the
latter, and such family member and such Highly Compensated Employee shall be
treated as a single Highly Compensated Eligible Employee and such family member
shall not be treated as a separate Eligible Employee for purposes of applying
this Section. The application of this Subsection (d) and the determination of
the Actual Deferral Percentage and Contribution Percentage of such single Highly
Compensated Eligible Employee shall be made in accordance with sections 414(q),
401(k) and 401(m) of the Code and regulations thereunder.
(e) If the Plan and any other plan(s) maintained by a Participating
Company or an Affiliated Company are treated as a single plan for purposes of
section 401(a)(4) or section
19
<PAGE>
410(b) of the Code, the limitations in Subsections (a) through (d) of this
Section shall be applied by treating the Plan and such other plan(s) as a single
plan.
(f) The application of this Section shall satisfy sections 401(k) and
401(m) of the Code and regulations thereunder and such other requirements as may
be prescribed by the Secretary of the Treasury.
3.9 Prevention of Violation of Limitation on Salary Reduction
---------------------------------------------------------
Contributions and Matching Contributions. The Committee shall monitor the level
----------------------------------------
of Participants' Salary Reduction Contributions and Matching Contributions and
elective deferrals, employee contributions, and employer matching contributions
under any other qualified retirement plan maintained by a Participating Company
or any Affiliated Company to insure against exceeding the limits of Section 3.8.
To the extent practicable, the Committee may prospectively limit (i) some or all
of the Highly Compensated Eligible Employees' Salary Reduction Contributions to
reduce the Average Actual Deferral Percentage of the Highly Compensated Eligible
Employees to the extent necessary to satisfy subsection (a) of Section 3.8
and/or (ii) some or all of the Highly Compensated Eligible Employees' Matching
Contributions to reduce the Average Contribution Percentage of the Highly
Compensated Eligible Employees to the extent necessary to satisfy subsection (b)
of Section 3.8 and/or (iii) some or all of the Highly Compensated Eligible
Employees' Salary Reduction Contributions and Matching Contributions to the
extent necessary to satisfy subsection (c) of Section 3.8. If the Committee
determines after the end of the Plan Year that the limits of Section 3.8 may be
or have been exceeded, it shall take the appropriate following action for such
Plan Year:
(a) (1) (A) The Average Actual Deferral Percentage for the
Highly Compensated Eligible Employees shall be reduced to the extent necessary
to satisfy Subsection (a) of Section 3.8.
(B) The reduction shall be accomplished by reducing the maximum Actual
Deferral Percentage for any Highly Compensated Eligible Employee to an adjusted
maximum Actual Deferral Percentage, which shall be the highest Actual Deferral
Percentage that would cause one of the tests in Subsection 3.8(a) to be
satisfied, if each Highly Compensated Eligible Employee with a higher Actual
Deferral Percentage had instead the adjusted maximum Actual Deferral Percentage,
reducing the Highly Compensated Eligible Employee's Salary Reduction
Contributions and elective deferrals under any other qualified retirement plan
maintained by the Participating Company or any Affiliated Company (less any
amounts previously distributed under Section 3.1 for the year) in order,
beginning with the Highly Compensated
20
<PAGE>
Eligible Employee(s) with the highest Actual Deferral Percentage; provided,
however, that excess contributions shall be allocated to Eligible Employees who
are subject to the family member aggregation rules of section 414(q)(6) of the
Code in the manner prescribed by regulations.
(C) Not later than the end of the Plan Year following the close of the
Plan Year for which the Salary Reduction Contributions were made, the difference
between a Highly Compensated Eligible Employee's Actual Deferral Percentage and
the Highly Compensated Eligible Employee's adjusted maximum Actual Deferral
Percentage shall be paid to the Highly Compensated Eligible Employee, with
earnings attributable thereto (as determined in accordance with applicable
Treasury Regulations); provided, however, that for any Participant who is also a
participant in any other qualified retirement plan maintained by the
Participating Company or any Affiliated Company under which the Participant
makes elective deferrals for such year, the Committee shall coordinate
corrective actions under this Plan and such other plan for the year.
(2) In lieu of or in addition to the action described in Paragraph
(a)(1) of this Section, the Participating Company may, in its sole discretion,
make:
(A) a Profit Sharing Contribution under Section 3.5, which
contribution shall be allocated pro rata based on Compensation among the Profit
Sharing Accounts of only those Profit Sharing Participants who are not Highly
Compensated Eligible Employees; and/or
(B) a Matching Contribution under Section 3.4, which contribution
shall be allocated pro rata based on Salary Reduction Contributions among the
Matching Contribution Accounts of only those Eligible Employees who are not
Highly Compensated Eligible Employees,
in an amount necessary to satisfy at least one of the tests in Subsection (a) of
Section 3.8. Profit Sharing and Matching Contributions made pursuant to this
Paragraph (a)(2) shall be accounted for separately, shall be 100% nonforfeitable
and shall not be eligible for withdrawal under Article VIII prior to the
Participant's attainment of Age 59-1/2.
(b) (1) (A) The Average Contribution Percentage for the Highly
Compensated Eligible Employees shall be reduced to the extent necessary to
satisfy at least one of the tests in Subsection (b) of Section 3.8.
(B) The reduction shall be accomplished by reducing the maximum
Contribution Percentage for any Highly
21
<PAGE>
Compensated Eligible Employee to an adjusted maximum Contribution Percentage,
which shall be the highest Contribution Percentage that would cause one of the
tests in Section 3.8(b) to be satisfied, if each Highly Compensated Eligible
Employee with a higher Contribution Percentage had instead the adjusted maximum
Contribution Percentage, reducing, in the following order of priority, the
Highly Compensated Eligible Employees', Matching Contributions and employee
contributions and employer matching contributions under any other qualified
retirement plan maintained by the Participating Company or an Affiliated
Company, in order beginning with the Highly Compensated Eligible Employee(s)
with the highest Contribution Percentage; provided, however, that excess
contributions shall be allocated to Eligible Employees who are subject to the
family member aggregation rules of section 414(q)(6) of the Code in the manner
prescribed in regulations.
(C) Not later than the end of the Plan Year following the close of the
Plan Year for which such contributions were made, the difference between a
Highly Compensated Eligible Employee's Contribution Percentage and the Highly
Compensated Eligible Employee's adjusted maximum Contribution Percentage, with
earnings attributable thereto (as determined in accordance with applicable
Treasury Regulations), at the Committee's direction, shall be treated as a
forfeiture of the Highly Compensated Eligible Employee's Matching Contribution
for the Plan Year to the extent such contributions are forfeitable (which
forfeiture shall be used to reduce future Matching Contributions), or paid to
the Highly Compensated Eligible Employee to the extent such contributions are
nonforfeitable; provided, however, that, for any Participant who is also a
participant in any other qualified retirement plan maintained by the
Participating Company or any Affiliated Company under which the Participant
makes employee contributions or is credited with employer matching contributions
for the year, the Committee shall coordinate corrective actions under this Plan
and such other plan for the year.
(2) In lieu of or in addition to the action described in Paragraph
(b)(1) of this Section, the Participating Company may, in its sole discretion,
make:
(A) a Profit Sharing Contribution under Section 3.5, which
contribution shall be allocated pro rata based on Compensation among the Profit
Sharing Accounts of only those Profit Sharing Participants who are not Highly
Compensated Eligible Employees; and/or
(B) a Matching Contribution under Section 3.4, which
contribution shall be allocated pro rata based on Salary Reduction Contributions
among the Matching Contribution
22
<PAGE>
Accounts of only those Eligible Employees who are not Highly Compensated
Eligible Employees,
in an amount necessary to satisfy at least one of the tests in Subsection (b) of
Section 3.8. Profit Sharing and Matching Contributions made pursuant to this
Paragraph (b)(2) shall be accounted for separately, shall be 100% nonforfeitable
and shall not be eligible for withdrawal under Article VIII prior to the
Participant's attainment of Age 59-1/2.
(c) (1) The Average Contribution Percentage and/or the Average
Actual Deferral Percentage (as determined under Subparagraph (2) below) for the
Highly Compensated Eligible Employees shall be reduced to satisfy the test in
Subsection (c) of Section 3.8 in a manner and to the extent determined by the
Committee.
(2) The reduction(s) shall be accomplished in the same manner as is
set forth in Subsections (a) and (b) of Section 3.9, whichever is appropriate.
A reduction to the Average Actual Deferral Percentage shall be charged against
the appropriate Highly Compensated Eligible Employees' Salary Reduction
Accounts. A reduction to the Average Contribution Percentage shall be charged
against the appropriate Highly Compensated Eligible Employees' Matching
Contribution Accounts. Notwithstanding the foregoing, for any Participant who
is also a participant in any other qualified retirement plan maintained by a
Participating Company or any Affiliated Company under which the Participant
makes employee contributions or elective deferrals or is credited with employer
matching contributions for such year, the Committee shall coordinate corrective
actions under this Plan and such other plan for the year.
(d) If the corrective payment to a Highly Compensated Eligible
Employee of his Salary Reduction Contributions pursuant to Subparagraph
(a)(1)(C) or Subsection (c) of this Section causes Matching Contributions made
on his behalf for the Plan Year (excluding such Matching Contributions that were
forfeited or paid to the Participant pursuant to Subsection (b)(2) or Subsection
(c) of this Section) to exceed fifty percent (50%) of his remaining Salary
Reduction Contributions up to 6% of Compensation for the Plan Year, the Matching
Contributions in excess of fifty percent (50%) of his Salary Reduction
Contributions up to 6% of Compensation for the Plan Year that were not
distributed to him shall be forfeited, and used to offset future Matching
Contributions.
(e) If the Plan and any other plan maintained by a Participating
Company or an Affiliated Company are treated as a single plan pursuant to
Subsection (e) of Section 3.8, the
23
<PAGE>
Committee shall coordinate corrective actions under the Plan and such other plan
for the year.
3.10 Maximum Allocation. The provisions of this Section shall be
------------------
construed to comply with section 415 of the Code. In no event shall amounts
allocated to a Participant's Account under the Plan exceed the limitations set
forth in Section 415 of the Code which are hereby incorporated into the Plan and
supersede any inconsistent provisions in this Section 3.10.
(a) Notwithstanding anything in this Plan to the contrary, in no
event shall the sum of:
(1) any Matching Contributions, Profit Sharing Contributions, Salary
Reduction Contributions and other employer contributions; any forfeitures, and
any employee contributions allocated for any Limitation Year to any Participant
(including any such amounts distributed pursuant to Section 3.9 but not amounts
distributed pursuant to Section 3.1) under this and any other defined
contribution plan maintained by the Participating Company or any 50% Affiliated
Company; and
(2) all amounts allocated to any Participant after March 31, 1984 to
an individual medical account (within the meaning of Code section 415(l)(2))
which is part of a pension or annuity plan maintained by a Participating Company
or any 50% Affiliated Company; and
(3) all amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date which are
attributable to post-retirement medical benefits allocated to a separate account
of a Participant who is a key employee, as defined in section 419A(d)(3) of the
Code, under a welfare benefit fund maintained by a Participating Company or any
50% Affiliated Company;
exceed the lesser of $30,000, (or such other dollar limitation in effect for the
Limitation Year under section 415(c)(1)(A) of the Code) or twenty-five percent
(25%) of such Participant's Compensation for the Limitation Year. For any
Limitation Year that is less than 12 months, the dollar limitation otherwise
applicable under this paragraph shall be multiplied by fraction, the numerator
of which is the number of months in the Limitation Year and the denominator of
which is 12. The 25% Compensation limitation shall not apply to any
contribution for medical benefits (within the meaning of section 401(h) or
419A(f)(2) of the Code) which is otherwise treated as an annual addition under
section 415(l)(1) or 419A(d)(2) of the Code.
24
<PAGE>
(b) If the amount otherwise allocable to the Account of a Participant
would exceed the amount described in Subsection (a) of this Section as a result
of the reallocation of forfeitures, a reasonable error in estimating the
Participant's Compensation, a reasonable error in determining the amount of
Salary Reduction Contributions that may be made with respect to a Participant
under the limits of this Section or such other circumstances as permitted by
law, the Committee shall determine which portion, if any, of such excess amount
is attributable to the Participant's Salary Reduction Contributions, and/or
Matching Contributions and/or Profit Sharing Contributions, if any, until such
amount has been exhausted, and shall take the following appropriate steps to
correct such violation:
(1) Excess Salary Reduction Contributions and earnings thereon shall
be paid to the Participant as soon as is administratively feasible.
(2) (A) While the Participant remains a Covered Employee, his excess
Matching Contributions and Profit Sharing Contributions shall be held in a
suspense account (which shall share in investment gains and losses of the Fund)
by the Trustee until the following Plan Year (or any succeeding Plan Years), at
which time such amounts shall be allocated to the Participant's Account before
any Matching Contributions or Profit Sharing Contributions, as appropriate, are
made on his behalf for such Plan Year; and
(B) When the Participant ceases to be a Covered Employee, his excess
Matching Contributions and Profit Sharing Contributions, along with earnings
thereon, held in the suspense account shall be allocated in the following Plan
Year (or any succeeding Plan Years) to the Accounts of other Participants in the
Plan.
25
<PAGE>
ARTICLE IV
PARTICIPANTS' ACCOUNTS
----------------------
4.1 Accounts. All contributions and earnings thereon may be invested
--------
in one commingled Fund for the benefit of all Participants. However, in order
that the interest of each Participant may be accurately determined and computed,
separate Accounts shall be maintained for each Participant and each
Participant's Accounts shall be made up of subaccounts reflecting his investment
elections pursuant to Section 11.5. These Accounts shall represent the
Participant's individual interest in the Fund. All contributions shall be
credited to Participants' Accounts as set forth in Article III, and paid to the
Participants' Accounts when received by the Trustee.
4.2 Valuation. The value of each Investment Medium in the Fund shall
---------
be computed by the Trustee as of the close of business on each Valuation Date on
the basis of the fair market value of the assets of the Fund.
4.3 Apportionment of Gain or Loss. The value of each Investment
-----------------------------
Medium in the Fund, as computed pursuant to Section 4.2, shall be compared with
the value of such Investment Medium in the Fund as of the preceding Valuation
Date. Any difference in the value, not including contributions, distributions,
fees, forfeitures, transfers, loan issues, and loan repayments made since the
preceding Valuation Date, shall be the net increase or decrease of such
Investment Medium in the Fund, and such amount shall be ratably apportioned by
the Trustee on its books, among the Participants' Accounts which are invested in
such Investment Medium at the current Valuation Date.
4.4 Accounting for Allocations. The Committee shall establish or
--------------------------
provide for the establishment of accounting procedures for the purpose of making
the allocations, valuations and adjustments to Participants' Accounts provided
for in this Article. From time to time such procedures may be modified for the
purpose of achieving equitable and non-discriminatory allocations among the
Accounts of Participants in accordance with the general concepts of the Plan and
the provisions of this Article.
26
<PAGE>
ARTICLE V
DISTRIBUTION
------------
5.1 General. The interest of each Participant in the Fund shall be
-------
distributed in the manner, in the amount, and at the time provided in this
Article, except as provided in Article VIII (with respect to withdrawals) and
except in the event of the termination of the Plan. The provisions of this
Article shall be construed in accordance with section 401(a)(9) of the Code and
regulations thereunder, including the incidental death benefit requirements of
section 401(a)(9)(G) of the Code.
5.2 Separation from Service. A Participant who has a Separation from
-----------------------
Service for reasons other than death shall have his nonforfeitable interest in
his Account paid to him or applied for his benefit in accordance with the
provisions of this Article.
5.3 Death. If a Participant dies before his entire nonforfeitable
-----
interest in his Account has been paid to him, his remaining nonforfeitable
interest shall be paid to, or applied for the benefit of, his beneficiary in
accordance with the provisions of this Article.
5.4 Valuation for Distribution. For the purposes of paying the
--------------------------
amounts to be distributed to a Participant or his beneficiaries under the
provisions of this Article, the value of the Fund and the amount of the
Participant's nonforfeitable interest shall be determined in accordance with the
provisions of Article IV as of the Valuation Date coincident with or immediately
preceding the date of any payment under this Article. Such amount shall be
adjusted to take into account any additional contributions and forfeitures, if
any, which have been or are to be allocated to the Participant's Account since
that Valuation Date, and any distributions or withdrawals made since that date.
Notwithstanding the above, the Participants' Account shall be reduced if
directed by the Committee by the amount necessary to repay any outstanding loan
from the Plan and interest thereon to the date the Committee declares such loan
satisfied, unless such loan is repaid as provided in Section 9.4(d).
5.5 Timing of Distribution.
----------------------
(a) Any Participant who has a Separation from Service for any reason
other than death shall be entitled to receive his nonforfeitable interest in his
Account, pursuant to the following rules:
27
<PAGE>
(1) If the Participant's nonforfeitable interest in his Account is
$3,500 or less, or the Participant has attained Normal Retirement Age, the
Participant's Benefit Commencement Date shall be the earliest practicable date
following the Valuation Date coincident with or next following his Separation
from Service.
(2) If the Participant has not attained Normal Retirement Age and his
nonforfeitable interest exceeds, or has ever exceeded at the time of any prior
distribution, $3,500, his Benefit Commencement Date shall be the earliest
practicable date following his Separation from Service, except that, if the
Participant does not consent to such distribution, distribution of his benefits
shall commence on any later date elected by the Participant that is not later
than his Normal Retirement Date, at which time his nonforfeitable interest shall
be automatically paid to him. A Participant's election to receive payment prior
to his Normal Retirement Date may be made no earlier than 90 days prior to the
Benefit Commencement Date elected by the Participant.
(3) The Committee shall inform each Participant who is subject to
Paragraph (a)(2) of his right to defer distribution, the material features of
the forms of payment available to him, and the relative values of such forms of
payment. Such notice shall be furnished not less than 30 days nor more than 90
days prior to the date of any distribution that occurs prior to his Normal
Retirement Date, except that such notice may be furnished and the distribution
may be paid less than 30 days prior to the date of distribution if (1) the
Committee informs the Participant that the Participant has the right to a period
of at least 30 days after receiving such notice to consider the decision whether
to elect a distribution and the mode in which he desires such distribution to be
made, and (2) the Participant, after receiving such notice, affirmatively elects
a distribution.
(4) Notwithstanding the foregoing, the Participant's Benefit
Commencement Date shall be no later than the 60th day following the close of the
Plan Year in which the Participant attains his Normal Retirement Age or has a
Separation from Service, whichever occurs last. In no event, however, shall a
Participant's Benefit Commencement Date be later than his Required Beginning
Date.
(b) If a Participant dies before his entire nonforfeitable interest in
his Account has been paid to him, his remaining nonforfeitable interest shall be
distributed to his beneficiary commencing as soon as practicable following the
Participant's death.
28
<PAGE>
5.6 Mode of Distribution.
--------------------
(a) Notwithstanding any other provision in this Article to the
contrary, if the Participant's nonforfeitable interest under the Plan as of his
Separation from Service or death, whichever applies, does not exceed $3,500, and
has never exceeded $3,500 at the time of any prior distribution, the
nonforfeitable interest of such Participant shall be paid to the Participant (or
his beneficiary) in a single sum.
(b) Except as provided to the contrary in this Article, a Participant
may elect, in a form acceptable to the Committee, to have his nonforfeitable
interest paid to him or applied for his benefit in accordance with either of the
following modes of payment:
(1) a single sum payment; or
(2) approximately equal monthly, quarterly or annual
installments over a period not to exceed the lesser of:
(A) the life expectancy of the Participant or the joint and survivor
life expectancy of the Participant and his beneficiary (with such life
expectancy to be determined in accordance with applicable regulations under the
Code); or
(B) unless the sole beneficiary is the Participant's spouse, the
maximum number of years determined under Schedule A;
provided, however, that in the event of the Participant's death prior to his
receipt of the prescribed number of annual payments, the unpaid portion of his
Account shall be paid in a single sum to his designated beneficiary.
(c) Except as provided to the contrary in this Article, a beneficiary
entitled to benefits under Section 5.3 upon the death of a Participant may elect
in writing to have the Participant's non-forfeitable interest in his Account
paid in accordance with either of the following modes of payment:
(1) a single sum payment; or
(2) approximately equal monthly, quarterly or annual installments over
a period not to exceed the life expectancy of the beneficiary (with such life
expectancy to be determined in accordance with applicable regulations under the
Code); provided, however, that:
29
<PAGE>
(A) the form of payment described in Paragraph (2) shall not be
available with respect to a beneficiary that is not an individual; and
(B) if a Participant dies on or after his Required Beginning Date, the
balance of his nonforfeitable interest under the Plan, if any, shall continue to
be paid to his beneficiary in the same manner as in effect prior to the
Participant's death, unless the beneficiary elects to receive payment of the
balance of the Participant's nonforfeitable interest in some other form
permitted under this Subsection, but at a rate no less rapid than the form of
payment in effect prior to the Participant's death.
Notwithstanding the foregoing, in the event that the Participant's death
constitutes a default on an outstanding loan such that the unpaid balance
becomes due and payable pursuant to Article IX and the beneficiary fails to
repay the loan in accordance with Section 9.4(d), that portion of the
Participant's Account pledged as security for the loan shall be applied to repay
the loan; in which case, the beneficiary may elect to receive the balance of the
Participant's Account in accordance with this Subsection.
(d) Except as provided in this Article, a Participant or beneficiary
may elect the mode of payment at any time prior to his Benefit Commencement
Date. Such election shall be on a form prescribed by the Committee. If a
Participant, or a beneficiary entitled to benefits under Section 5.3 upon the
death of a Participant fails to make a valid election under this Section, the
value of the Participant's Account shall be distributed as a single sum payment.
5.7 Beneficiary Designation.
-----------------------
(a) Except as provided in this Section, a Participant may designate
the beneficiary or beneficiaries who shall receive, on or after his death, his
interest in the Fund. Such designation shall be made by executing and filing
with the Committee a written instrument in such form as may be prescribed by the
Committee for that purpose. Except as provided in this Section, the Participant
may also revoke or change, at any time and from time to time, any beneficiary
designations previously made. Such revocations and/or changes shall be made by
executing and filing with the Committee a written instrument in such form as may
be prescribed by the Committee for that purpose. If a Participant names a trust
as beneficiary, a change in the identity of the trustees or in the instrument
governing such trust shall not be deemed a change in beneficiary.
30
<PAGE>
(b) No designation, revocation, or change of beneficiaries shall be
valid and effective unless and until filed with the Committee.
(c) A Participant who does not establish to the satisfaction of the
Committee that he has no spouse may not designate someone other than his spouse
to be his beneficiary unless:
(1) (A) such spouse (or the spouse's legal guardian if the spouse is
legally incompetent) executes a written instrument whereby such spouse consents
not to receive such benefit and consents either:
(i) to the specific beneficiary or beneficiaries designated by
the Participant; or
(ii) to the Participant's right to designate any beneficiary
without further consent by the spouse;
(B) such instrument acknowledges the effect of the election to
which the spouse's consent is being given; and
(C) such instrument is witnessed by a Plan representative or
notary public;
(2) the Participant:
(A) establishes to the satisfaction of the Committee that his
spouse cannot be located; or
(B) furnishes a court order to the Committee establishing that
the Participant is legally separated or has been abandoned (within the meaning
of local law), unless a qualified domestic relations order pertaining to such
Participant provides that the spouse's consent must be obtained; or
(3) the spouse has previously given consent in accordance with this
Subsection and consented to the Participant's right to designate any beneficiary
without further consent by the spouse.
The consent of a spouse in accordance with this Subsection (c) shall not be
effective with respect to other spouses of the Participant prior to the
Participant's Benefit Commencement Date, and an election to which Paragraph (2)
of this Subsection (c) applies shall become void if the circumstances causing
the consent of the spouse not to be required no longer exist prior to the
Participant's Benefit Commencement Date.
31
<PAGE>
(d) If a Participant has no beneficiary under Subsection (a) of this
Section, if the Participant's beneficiary(ies) predecease the Participant, or if
the beneficiary(ies) cannot be located by the Committee, the interest of the
deceased Participant shall be paid to the Participant's estate.
5.8 Recalculation of Life Expectancy. For purposes of Section 5.6,
--------------------------------
life expectancies shall be determined when installments begin and shall be
redetermined each year thereafter in which such a redetermination would increase
the payment period (so measured) by at least one year.
5.9 Direct Rollover of Account to Other Plan.
----------------------------------------
(a) If (1) a Participant entitled to receive a distribution from the
Plan, either pursuant to this Article or pursuant to Article VIII, or (2) the
spouse or former spouse of a Participant who is entitled to receive a
distribution from the Plan pursuant to a qualified domestic relations order,
directs the Committee to have the Trustee transfer all or a portion (not less
than $500) of the amount to be distributed directly to:
(1) an individual retirement account described in section
408(a) of the Code,
(2) an individual retirement annuity described in section
408(b) of the Code (other than an endowment contract),
(3) a qualified defined contribution retirement plan described in
section 401(a) of the Code the terms of which permit the acceptance of rollover
contributions, or
(4) an annuity plan described in section 403(a),
all or a portion (not less than $500) of the amount to be distributed shall be
so transferred.
(b) In addition, if a Participant's surviving spouse is entitled to
receive a distribution from the Plan under Section 5.3, and such surviving
spouse directs the Committee to have the Trustee transfer all or a portion (not
less than $500) of the amount to be distributed directly to:
(1) an individual retirement account described in section 408(a)
of the Code, or
32
<PAGE>
(2) an individual retirement annuity described in section 408(b)
of the Code (other than an endowment contract),
all or a portion (not less than $500) of the amount to be distributed shall be
so transferred.
(c) The Participant, spouse or former spouse must specify the name of
the plan to which the Participant, spouse or former spouse wishes to have the
amount transferred, plus such other information as may be requested by the
Committee, on a form and in a manner prescribed by the Committee.
(d) Subsections (a) and (b) shall not apply to the following
distributions:
(1) any distribution which is one of a series of substantially
equal payments (not less frequently than annually) over either (1) a period of
10 years or more, or (2) a period equal to the life or life expectancy of the
Participant or the joint lives or joint life expectancy of the Participant and
his beneficiary, or
(2) any distribution if the total distributions paid or payable
from the Plan to the same individual during the same calendar year are
reasonably expected by the Committee to be less than $200, or
(3) that portion of any distribution after the Participant's
Required Beginning Date that is required to be distributed to the Participant by
the minimum distribution rules of section 401(a)(9) of the Code, or
(4) such other distributions as may be exempted by applicable
statute or regulation from the requirements of section 401(a)(31) of the Code.
5.10 Other Distributions.
-------------------
(a) Upon the sale to an entity that is not an Affiliated Company, of
substantially all the assets used by a Participating Company in the trade or
business of such Participating Company, a Participant who continues employment
with the corporation acquiring such assets shall be entitled to have his Account
paid to him.
(b) Upon the sale by a Participating Company to an entity that is not
an Affiliated Company of such Participating Company's interest in a subsidiary,
a Participant who continues employment with such subsidiary shall be entitled to
have his Account paid to him.
33
<PAGE>
(c) Distributions to Participants described in Subsections (a) and (b)
above shall be made pursuant to the provisions of this Article as if the
Participant's Separation from Service had occurred on the closing date of the
sale; provided, however that no distribution shall be made under this Section
unless:
(1) it is a lump sum distribution as defined by section 402(d)(4)
of the Code, without regard to clauses (i), (ii), (iii) and (iv) of subparagraph
(A), subparagraph (B), or subparagraph (H); and
(2) the Participating Company continues to maintain the Plan.
34
<PAGE>
ARTICLE VI
VESTING
-------
6.1 Nonforfeitable Amounts.
----------------------
(a) A Participant shall have a 100% nonforfeitable interest at all
times in his Salary Reduction and Rollover Accounts and in his Nonelective
Contributions Account.
(b) (1) A Participant shall have a nonforfeitable interest in his
Matching Contribution and Profit Sharing Account (other than his Nonelective
Contributions Account) determined in accordance with the following schedule:
Years of Service Nonforfeitable Interest
---------------- -----------------------
less than 2 years 0 percent
2 years 25 percent
3 years 50 percent
4 years 75 percent
5 years or more 100 percent
(2) Notwithstanding the foregoing, a Participant shall have a
100% nonforfeitable interest in his entire Account upon his attainment of Normal
Retirement Age or his death while an Employee.
6.2 Years of Service for Vesting. For the purposes of this Article, an
----------------------------
Employee shall be credited with a Year of Service for each calendar year during
which he is credited with 1,000 or more Hours of Service, including Hours of
Service after the Effective Date and "hours of service" credited under the Prior
Plans before the Effective Date.
6.3 Breaks in Service and Loss of Service.
-------------------------------------
(a) An Employee's Years of Service shall be cancelled if he incurs a
Break in Service before his Normal Retirement Date and at a time when (1) he has
no nonforfeitable interest in any of his Accounts, other than his Rollover
Account or (2) he has no Account under the Plan.
(b) Except as provided in Subsections (c) and (d) of this Section, an
Employee or former Employee shall incur a Break in Service in any Plan Year in
which he is not credited with more than 500 Hours of Service.
(c) If an Employee is absent for one or more of the following reasons,
then, to the extent he is not otherwise
35
<PAGE>
credited with Hours of Service with respect to such absence, he shall be
credited with an Hour of Service, solely for purposes of Subsection (b) of this
Section, for each Hour of Service with which he would have been credited if he
had continued to be actively employed during the period of absence due to:
(1) layoff for a period not in excess of one year;
(2) leave of absence with the approval of the Committee for a
period not in excess of one year, unless such period is extended by the
Committee;
(3) military service such that his right to reemployment is
protected by law.
(d) If an Employee is absent from work by reason of pregnancy,
childbirth, or placement in connection with adoption, or for purposes of the
care of such Employee's child immediately after birth or placement in connection
with adoption, such Employee shall be credited, solely for purposes of
Subsection (b) of this Section, with the Hours of Service with which such
Employee would have been credited but for the absence; or, if such hours cannot
be determined, with eight Hours of Service per normal workday. The total number
of hours to be treated as Hours of Service under this Subsection shall not
exceed 501. The hours described in this Subsection shall be credited either for
the Plan Year in which the absence from work begins, if the Employee would be
prevented from incurring a Break in Service in such Plan Year because the period
of absence is treated as Hours of Service under this Subsection, or, in any
other case, for the Plan Year next following the one in which the absence from
work begins.
(e) If an Employee is absent under a family or medical leave, to the
extent required by the Family and Medical Leave Act such Employee shall be
credited, solely for purposes of Subsection (b), with the Hours of Service with
which such Employee would have been credited but for the absence.
6.4 Restoration of Service. The Years of Service of an Employee whose
----------------------
Years of Service have been cancelled pursuant to Section 6.3 shall be restored
to his credit if he thereafter completes a Year of Service at a time when the
number of his consecutive Breaks in Service is less than the greater of (a) the
number of Years of Service to his credit when the first such Break in Service
occurred, or (b) five.
36
<PAGE>
6.5 Forfeitures and Restoration of Forfeited Amounts upon Reemployment.
------------------------------------------------------------------
(a) If a Participant who has had a Separation from Service does not
thereafter complete an Hour of Service before the end of the Plan Year in which
occurs the earlier of:
(1) the date on which he receives or is deemed to receive a
distribution of his entire nonforfeitable interest in his Account, which is less
than 100%; or
(2) the date on which he incurs his fifth consecutive one-year
Break in Service,
his Profit Sharing Account (other than his Nonelective Contributions Account)
and Matching Contribution Account shall be closed, and the forfeitable amount
held therein shall be forfeited. For purposes of this Subsection (a), a
Participant who has a Separation from Service at a time when his nonforfeitable
interest in the Plan is zero shall be deemed to have received a distribution
described in Paragraph (1) of this Subsection on the date of such Separation
from Service.
(b) Amounts forfeited from a Participant's Profit Sharing Account
under Subsection (a) of this Section shall be reallocated to the Profit Sharing
Accounts of Profit Sharing Participants pursuant to Section 3.5. Amounts
forfeited from a Participant's Matching Contribution Account under Subsection
(a) of this Section shall be used to reduce future Matching Contributions.
(c) If a Participant who has received (or is deemed to have received)
a distribution described in Paragraph (a)(1) of this Section, whereby any part
of his Account has been forfeited, again becomes a Covered Employee prior to
incurring five consecutive one-year Breaks in Service, the amount so forfeited
shall be restored to his new Profit Sharing Account and Matching Contribution
Account, if, and only if, he repays the full amount of such distribution (if
any) prior to the earlier of (1) the fifth anniversary of the date on which he
subsequently becomes a Covered Employee or (2) the first date the Participant
incurs five consecutive one-year Breaks in Service following the date of the
distribution; provided, however, that a Participant described in the preceding
sentence who is deemed to receive a distribution of his entire nonforfeitable
interest shall be deemed to repay such distribution on the date he again becomes
a Covered Employee. Amounts restored under this Subsection shall be charged
against the following amounts in the following order of priority: (A)
forfeitures for the Plan Year, (B) income or gains to the Plan, and (C) Company
contributions for the Plan Year. If the foregoing amounts are insufficient, the
37
<PAGE>
Participating Company by whom such Participant is reemployed shall make any
additional contribution necessary to accomplish the restoration.
(d) If a Participant has received a distribution under the Plan, other
than a distribution of his entire nonforfeitable interest in his Account upon
his Separation from Service, at a time when he has less than a 100%
nonforfeitable interest in his entire Account and prior to the date on which he
incurs his fifth consecutive one-year Break in Service, his nonforfeitable
interest in his Account at all times prior to the date on which he incurs his
fifth consecutive one-year Break in Service, shall be the difference between:
(1) the amount his nonforfeitable interest would have been if he
had not received the distribution; and
(2) the amount to which the distribution would have increased or
decreased if it had remained in the Fund.
Immediately after the Participant has five consecutive one-year Breaks in
Service, his nonforfeitable interest determined under this Subsection, if in
excess of zero, shall be established as a separate account, and he shall at all
times have a nonforfeitable interest therein. If the Participant is later
reemployed as a Covered Employee, any allocations to him shall be credited to a
new account, and his nonforfeitable interest therein shall be determined under
Section 6.1.
(e) If a Participant has had five consecutive one-year Breaks in
Service and again becomes a Covered Employee, the amount forfeited under
Subsection (a) of this Section shall not be restored to his new Profit Sharing
Account and Matching Contribution Account under any circumstances.
38
<PAGE>
ARTICLE VII
ROLLOVER CONTRIBUTIONS AND TRANSFERS
------------------------------------
7.1 Rollover Contributions.
----------------------
(a) Subject to the restrictions set forth in Subsection (b), a Covered
Employee may transfer or have transferred directly to the Fund, from any
qualified retirement plan of a former employer, all or a portion of his interest
in the distributing plan.
(b) The Trustee shall not accept a distribution from any other
qualified retirement plan unless the following conditions are met:
(1) (A) the distribution being transferred must come directly
from the fiduciary of the plan of the former employer, or
(B) it must come from the Employee within 60 days after the
Employee receives a distribution from such other qualified retirement plan and
must comply with the provisions of section 402(c), 403(a)(4), or 408(d)(3) of
the Code, whichever applies;
(2) distributions from a plan for a self-employed person shall
not be transferred to this Plan, unless the transfer is directly to the Fund
from the funding agent of the distributing plan;
(3) the interest being transferred shall not include assets from
any plan to the extent that the Committee determines that the transfer of such
interest (A) would impose upon this Plan requirements as to form of distribution
that would not otherwise apply hereunder or (B) would otherwise result in the
elimination of Code section 411(d)(6) protected benefits or (C) would cause the
Plan to be a direct or indirect transferee of a plan to which the joint and
survivor annuity requirements of sections 401(a)(11) and 417 of the Code apply;
and
(4) the interest being transferred shall not contain
nondeductible contributions or employee after-tax contributions made to the
distributing plan by the Employee unless the transfer to the Fund is directly
from the funding agent of the distributing plan.
(c) The distributions transferred by or for a Covered Employee from
another qualified retirement plan shall be credited to the Employee's Rollover
Account. An Employee shall
39
<PAGE>
be fully vested at all times in his Rollover Account. An Employee's Rollover
Account shall be distributed as otherwise provided under the Plan.
7.2 Transfers from Hourly Plan. A Participant who has been an Eligible
--------------------------
Employee for twelve months shall have his account, if any, in the Profit Sharing
Plan of P.H. Glatfelter Company and the Glatfelter Pulp Wood Company (Spring
Grove Hourly Group) transferred to this Plan, if he is an Eligible Employee at
such time. Amounts transferred attributable to "nonelective contributions" to
that plan shall be credited to the Participant's Nonelective Contributions
Account and amounts transferred attributable to "elective contributions" to that
plan shall be credited to the Participant's Elective Contributions Account. A
Participant's years of participation under the Profit Sharing Plan of P.H.
Glatfelter Company and the Glatfelter Pulp Wood Company (Spring Grove Hourly
Group) shall count as years of participation under this Plan.
40
<PAGE>
ARTICLE VIII
WITHDRAWALS
-----------
8.1 Emergency and Financial Hardship Withdrawals.
--------------------------------------------
(a) A Participant may withdraw, under the rules set forth in
Subsections (b) through (e) of this Section, the following amounts which shall
be charged against his Account in the following order:
(1) his Rollover Account;
(2) his Nonelective Contribution Account, other than Nonelective
Contributions (and income thereon) counted in the Participant's actual deferral
percentage for any year;
(3) his Matching Contribution Account, other than Matching
Contributions (and income thereon) counted in the Participant's Actual Deferral
Percentage for any Plan Year;
(4) the remaining portion of his Profit Sharing Account, other
than Profit Sharing Contributions or Nonelective Contributions (and income
thereon) counted in the Participant's actual deferral percentage for any year;
(5) his Elective Contributions Account less any earnings credited
after December 31, 1988; and
(6) his Salary Reduction Contributions under this Plan,
less amounts previously withdrawn therefrom, by submitting his request in a form
acceptable to the Committee.
(b) A withdrawal under Subsection (a) of this Section shall be
permitted only if the Committee finds that:
(1) it is made on account of immediate and heavy financial need
for either an "emergency" as defined in Subsection (c) or a "financial
necessity" as defined in Subsection (d) of this Section; and
(2) it is necessary (as defined in Subsection (e) of this
Section) to satisfy such immediate and heavy financial need.
(c) A withdrawal under Subsection (a) will be deemed to be on account
of an immediate and heavy financial need
41
<PAGE>
if the Participant requests such withdrawal on account of an "emergency," which
shall mean the need for funds resulting from:
(1) (A) Unreimbursed medical expenses, or
(B) Income loss due to the inability or decreased ability of
the Participant or his spouse to perform his or her job,
as a result of an accident or illness of the Participant, his spouse or
dependent;
(2) Loss of income due to death of the Participant's spouse;
(3) Catastrophic damage to real or personal property of the
Participant where uninsured damage exceeds $5,000;
(4) Such other circumstances or events in the nature of an
unanticipated emergency as may be prescribed by the Secretary of the Treasury or
his delegate.
(d) A withdrawal under Subsection (a) will be deemed to be on account
of an immediate and heavy financial need if the Participant has been a
Participant for at least five Plan Years, including years of participation in
the Prior Plans and in the Profit Sharing Plan of P.H. Glatfelter Company and
The Glatfelter Pulp Wood Company (Spring Grove Hourly Group) and the Participant
requests such withdrawal on account of a "financial necessity". A "financial
necessity" shall mean the need for funds resulting from the following, except
that his Elective Contributions Account and Salary Reduction Contributions may
be withdrawn only for reasons (1), (2) or (3):
(1) For costs directly related to the purchase (excluding
mortgage payments) of the Participant's principal residence;
(2) To prevent eviction from or the foreclosure on the mortgage
on the Participant's principal residence;
(3) To pay tuition, related educational fees and room and board
expenses for the next 12 months of post-secondary education for the Participant,
his spouse, or dependents (as defined in section 152 of the Code);
(4) To complete major home maintenance or improvements costing
$1,000 or more;
42
<PAGE>
(5) To pay debts of $1,000 or more which are substantially in
excess of the Participant's assets or income;
(6) To pay expenses of $1,000 or more related to divorce and
other legal settlements;
(7) To pay funeral expenses of $1,000 or more for a member of the
Participant's immediate family;
(8) such other circumstances or events as may be prescribed by
the Secretary of the Treasury or his delegate.
(e) (1) A withdrawal under Subsection (a) shall be necessary if the
amount of the withdrawal does not exceed the amount of the Participant's
immediate and heavy financial need that cannot be satisfied from other resources
reasonably available to the Participant. The amount of an immediate and heavy
financial need shall include any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from the
withdrawal. The determination as to whether a withdrawal is necessary shall be
made on the basis of all relevant facts and circumstances, in accordance with
applicable governmental regulations. The withdrawal shall generally be
considered necessary, unless the Committee has actual knowledge to the contrary,
if the Committee relies on the Participant's written representation that the
financial need cannot reasonably be relieved:
(A) through reimbursement or compensation by insurance or
otherwise;
(B) by reasonable liquidation of the Participant's assets
(including those assets of his spouse and minor children that are reasonably
available to the Participant), to the extent such liquidation would not itself
cause an immediate and heavy financial need;
(C) by cessation of Salary Reduction Contributions; or
(D) by:
(i) other withdrawals under this Article or under any
other employee benefit plan in which the Participant has an interest;
(ii) nontaxable loans under Article IX or under any
other employee benefit plan in which the Participant has an interest; or
43
<PAGE>
(iii) loans from commercial sources on reasonable
commercial terms.
(2) Alternatively, a withdrawal under Subsection (a) of his Elective
Contributions Account or his Salary Reduction Contributions shall be deemed to
be necessary if:
(A) the amount of the withdrawal does not exceed the amount
of the Participant's immediate and heavy financial need, including any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the withdrawal;
(B) the Participant has obtained all currently permissible
distributions (other than hardship distributions) and non-taxable loans, if any,
under this and all other plans maintained by the Participating Company and all
Affiliated Companies; and
(C) the Participant agrees in writing to be bound by the
following rules:
(i) If a Participant withdraws any amount from his
Salary Reduction Account pursuant to Subsection (a), or withdraws any elective
deferrals under any other qualified retirement plan maintained by the
Participating Company or any Affiliated Company, which other plan conditions
such withdrawal upon the Participant's being subject to rules similar to those
stated in this Subsection (e)(2), such Participant:
(ii) may not make Salary Reduction Contributions under
this Plan or employee contributions (other than mandatory contributions under a
defined benefit plan) or elective deferrals under any other qualified or non-
qualified plan of deferred compensation (which does not include any health or
welfare plan, including a health or welfare plan that is part of a cafeteria
plan described in section 125 of the Code) maintained by the Participating
Company or an Affiliated Company for a period of 12 months commencing on the
date of his receipt of the withdrawal; and
(iii) in the calendar year next following the calendar
year of such withdrawal, may not make Salary Reduction Contributions or elective
deferrals under any other qualified retirement plan maintained by the
Participating Company or an Affiliated Company in excess of:
a) the dollar amount described in Subsection (b) of
Section 3.1 for such year, minus
44
<PAGE>
b) the total Salary Reduction Contributions under
this Plan and elective deferrals under any other qualified plan made by the
Participant during the calendar year of the withdrawal.
8.2 Other Withdrawals.
-----------------
(a) A Participant who was a participant in one of the Prior Plans
immediately before the Effective Date may make withdrawals from his Nonelective
Contributions Account and Elective Contributions Account subject to the
following rules: during his fifth consecutive Plan Year as a Participant and on
or before December 15 thereof, and during each tenth consecutive Plan Year
thereafter, he may elect to withdraw in a single sum either 50% or 100% of the
portion of his Account attributable to (A) Nonelective Contributions which were
pre-1980 elective deferrals, for members of the Spring Grove Salaried Group or
the Corporate Group or a former Participant in the Profit Sharing Plan of P.H.
Glatfelter Company and The Glatfelter Pulp Wood Company (Spring Grove Hourly
Group), and (B) other Nonelective Contributions which have not been counted in
Participant's actual deferral percentage test. For purposes of this paragraph a
Participant's years of participation in the Prior Plans and in the Profit
Sharing Plan of P.H. Glatfelter Company and the Glatfelter Pulp Wood Company
(Spring Grove Hourly Group) shall be taken into account, and years of
participation in the Ecusta Corporation Savings and Investment Plan or the Olin
Thrift Plan shall not be taken into account.
(b) An election authorized under Paragraph (a) shall be filed with the
Committee in a form acceptable to the Committee on or before December 31 of the
Plan Year during which authorized; provided, however, that, if the Participant's
Account exceeds, or has exceeded at the time of any prior distribution, $3,500,
such election may not be made earlier than 90 days prior to the date of
withdrawal and any election so filed shall be irrevocable; except that
distribution may be paid within 30 days following the election if (1) the
Committee informs the Participant that the Participant has the right to a period
of at least 30 days after receiving such notice to consider the decision whether
to elect a distribution and the mode in which he desires such distribution to be
made, and (2) the Participant, after receiving such notice, affirmatively elects
a distribution. If a Participant fails to make a timely election during a Plan
Year in which authorized, all amounts in his Account shall remain in the Fund to
the credit of his Account and subject to withdrawal only as otherwise authorized
by this Article VIII.
8.3 Amount and Payment of Withdrawals. The amount of any withdrawal will
---------------------------------
be determined on the basis of the value of the Participant's Account and the sum
of the Participant's Salary
45
<PAGE>
Reduction Contributions valued as of the Valuation Date coincident with or
immediately preceding the date of the withdrawal. Payment will be made in a
single sum. Any withdrawal requested under this Section shall be paid as soon
as practicable following the Committee's determination that the requested
withdrawal complies with the terms and conditions set forth in this Section.
8.4 Withdrawals Not Subject to Replacement. A Participant may not replace
--------------------------------------
any portion of his Accounts withdrawn under this Plan.
8.5 Pledged Amounts. No amount that has been pledged as security for a
---------------
loan under Article IX may be withdrawn under this Article.
8.6 Investment Medium to be Charged with Withdrawal. Distribution
-----------------------------------------------
will be made out of the Participant's interest in the various Investment Media
in proportion to the Participant's share in such Investment Media.
46
<PAGE>
ARTICLE IX
LOANS TO PARTICIPANTS
---------------------
9.1 Loan Application. Each Participant who is an Employee of a
----------------
Participating Company may apply for a loan from the Plan. All applications
shall be made to the Committee in a form acceptable to the Committee and
according to procedures adopted by the Committee, and the Committee shall rule
upon such applications in a uniform and nondiscriminatory manner in accordance
with the rules and guidelines established in this Article.
9.2 Loan Approval. The Committee shall have the right to reject a loan
-------------
application if the Participant has the present intention to take a personal
leave of absence during the period of loan repayment or on the basis of a
Participant's credit worthiness and financial need or such other factors as
would be considered in a normal commercial setting by an entity in the business
of making loans and as the Committee determines necessary to safeguard the Fund.
9.3 Amount of Loan.
--------------
(a) In no event shall a Participant be permitted to have more than one
loan the purpose of which is to acquire a personal residence and two other loans
outstanding at any time from this Plan. The minimum amount of any loan shall be
$1,000. The Plan may deduct from a Participant's Account a fee for processing a
loan. In no event shall the loan amount exceed fifty percent (50%) of the value
of the vested portion of the Participant's Account determined as of the
Valuation Date immediately preceding the date on which the loan application is
received by the Committee.
(b) The amount of any loan, when added to the amount of a
Participant's outstanding loans under the Plan and all other plans qualified
under section 401(a) of the Code which are sponsored by the Participating
Company or any Affiliated Company shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of:
(A) the Participant's highest outstanding balance of loans
during the one-year period ending on the day before the date on which such loan
is made to the Participant, over
47
<PAGE>
(B) the outstanding balance of loans made to the Participant
on the date such loan is made to the Participant; or
(2) fifty percent (50%) of the value of the Participant's
nonforfeitable Account.
9.4 Terms of Loan.
-------------
(a) The interest rate on loans shall be: (1) determined by the
Committee, (2) at least commensurate with rates charged for similar loans by
entities in the business of making loans, and (3) adjusted from time to time as
circumstances warrant. Security for each loan granted pursuant to this Article
shall be, to the extent necessary, the currently unpledged portion of the
Participant's Rollover Account, next, the vested portion of the Participant's
Matching Contribution Account and Profit Sharing Account, and finally the
Participant's Salary Reduction Account. The loan shall be charged against and
repaid to the Participant's Account in the preceding order. In no event shall
more than fifty percent (50%) of the Participant's vested Account as of the date
the loan is made be used as security for the loan.
(b) Each loan shall be evidenced by the Participant's execution of a
personal installment note on such form as shall be supplied by the Committee.
Each such note shall specify that, to the extent repayment is not required
sooner by the terms of Subsection (d) of this Section, repayment shall be
included in installments not to exceed 60 months from the date on which the loan
is distributed; however, if the purpose of the loan is to acquire any dwelling
unit which is to be used within a reasonable period of time as the principal
residence of the Participant, the period of repayment may be as long as, but
shall not exceed, 180 months. All loans from the Plan shall be non-renewable.
Each note shall also specify the interest rate as determined by the Committee at
the time the loan is approved.
(c) All loans shall be repaid in approximately equal installments (not
less frequently than quarterly) through payroll deductions or in such other
manner as the Committee may determine. A Participant may repay the outstanding
balance of any loan in one lump sum at any time by notifying the Committee of
his intent to do so and by forwarding to the Committee payment in full of the
then outstanding balance, plus interest accrued to the date of payment. The
amount of principal and interest repaid by a Participant shall be credited to a
Participant's Account as each repayment is made.
(d) If, and only if:
48
<PAGE>
(1) the Participant dies;
(2) the Participant has a Separation from Service or otherwise
ceases to be a Covered Employee;
(3) the Compensation of a Participant who is an Employee is
discontinued or decreased below the amount necessary to amortize the loan and
such status continues for more than one year;
(4) the loan is not repaid by the time the note matures including
any extensions pursuant to Subsection (d);
(5) the Participant attempts to revoke any payroll deduction
authorization for repayment of the loan without the consent of the Committee;
(6) the Participant fails to pay any installment of the loan when
due and the Committee elects to treat such failure as default;
(7) any other event occurs which the Committee, in its sole
discretion, believes may jeopardize the repayment of the loan;
before a loan is repaid in full, the unpaid balance thereof, with interest due
thereon, shall become immediately due and payable. The Participant (or his
beneficiary, in the event of the Participant's death) may satisfy the loan by
paying the outstanding balance of the loan within such time as may be specified
in the note. If the loan and interest are not repaid within the time specified,
the Committee shall satisfy the indebtedness from the amount of the
Participant's vested interest in his Account as provided in Section 9.5 before
making any payments otherwise due hereunder to the Participant or his
beneficiary.
9.5 Enforcement. The Committee shall give written notice to the
-----------
Participant (or his beneficiary in the event of the Participant's death) of an
event of default described in Subsection (d) of Section 9.4. If the loan and
interest are not paid within the time period specified in the notice, the
Participant's Account shall be used to reduce the Participant's indebtedness at
such time as the Participant is entitled to a distribution under Article V or a
withdrawal under Article VIII from such Accounts. Such action shall not operate
as a waiver of the rights of the Company, the Committee, the Trustee, or the
Plan under applicable law.
9.6 Additional Rules. The Committee may establish additional rules
----------------
relating to Participant loans under the Plan,
49
<PAGE>
which rules shall be applied on a uniform and non-discriminatory basis.
50
<PAGE>
ARTICLE X
ADMINISTRATION
--------------
10.1 Committee. The Committee shall be the named fiduciary which shall
---------
control and manage the operation of the Plan and shall administer the Plan. The
members of the Committee shall be appointed by the Board of Directors. The
Committee members may, but need not, be Employees, and they shall serve at the
pleasure of the Company. The Committee shall be entitled to reimbursement of
expenses, but those members of the Committee who are also Employees of a
Participating Company shall receive no compensation for their service on the
Committee. Any reimbursement of expenses of the Committee members shall be paid
directly by the Company.
10.2 Duties and Powers of Committee. In addition to the duties and
------------------------------
powers described elsewhere hereunder, the Committee shall have the following
specific duties and powers:
(a) to retain such consultants, accountants and attorneys as may be
deemed necessary or desirable to render statements, reports, and advice with
respect to the Plan and to assist the Committee in complying with all applicable
rules and regulations affecting the Plan; any consultants, accountants and
attorneys may be the same as those retained by the Company;
(b) to decide appeals under this Article;
(c) to enact uniform and nondiscriminatory rules and regulations to
carry out the provisions of the Plan;
(d) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan;
(e) to construe and interpret and supply omissions with respect to the
provisions of the Plan;
(f) to determine whether any domestic relations order received by the
Plan is a qualified domestic relations order as provided in section 414(p) of
the Code;
(g) to evaluate administrative procedures; and
(h) to delegate such duties and powers as the Committee shall
determine from time to time to any person or persons. To the extent of any such
delegation, the delegate shall have the duties, powers, authority and discretion
of the Committee.
51
<PAGE>
Any decisions and determinations made by the Committee pursuant to its duties
and powers described in the Plan shall be conclusive and binding upon all
parties. The Committee shall have sole discretion in carrying out its
responsibilities. The expenses incurred by the Committee in connection with the
operation of the Plan, including, but not limited to, the expenses incurred by
reason of the engagement of professional assistants and consultants, shall be
expenses of the Plan and shall be payable from the Fund at the direction of the
Committee or may be paid by the Committee and reimbursed by the Plan. Expenses
payable by the Plan and chargeable to a Participant's Account may be charged to
the individual Account. The Participating Companies shall have the option, but
not the obligation, to pay any such expenses, in whole or in part, and, by so
doing, to relieve the Fund from the obligation of bearing such expenses. Payment
of any such expenses by a Participating Company on one occasion shall not bind
that Participating Company to pay any similar expenses on any subsequent
occasion.
10.3 Functioning of Committee. The Committee and those persons or
------------------------
entities to whom the Committee has delegated responsibilities shall keep
accurate records and minutes of meetings, interpretations, and decisions. The
Committee shall act by majority vote of the members, and such action shall be
evidenced by a written document.
10.4 Disputes.
--------
(a) If the Committee denies, in whole or in part, a claim for benefits
by a Participant or his beneficiary, the Committee shall furnish notice of the
denial to the claimant, setting forth:
(1) the specific reasons for the denial;
(2) specific reference to the pertinent Plan provisions on which
the denial is based;
(3) a description of any additional information necessary for the
claimant to perfect the claim and an explanation of why such information is
necessary; and
(4) appropriate information as to the steps to be taken if the
claimant wishes to submit his claim for review.
Such notice shall be forwarded to the claimant within 90 days of the Committee's
receipt of the claim; provided, however, that in special circumstances the
Committee may extend the response period for up to an additional 90 days, in
which event it shall
52
<PAGE>
notify the claimant in writing of the extension, and shall specify the reason or
reasons for the extension.
(b) Within 60 days of receipt of a notice of claim denial, a claimant
or his duly authorized representative may petition the Committee in writing for
a full and fair review of the denial. The claimant or his duly authorized
representative shall have the opportunity to review pertinent documents and to
submit issues and comments in writing to the Committee. The Committee shall
review the denial and shall communicate its decision and the reasons therefor to
the claimant in writing within 60 days of receipt of the petition; provided,
however, that in special circumstances the Committee may extend the response
period for up to an additional 60 days, in which event it shall notify the
claimant in writing prior to the commencement of the extension. The appeals
procedure set forth in this Subsection (b) shall be the exclusive means for
contesting a decision denying benefits under the Plan.
10.5 Indemnification. Each member of the Committee, and any other
---------------
person who is an Employee or director of a Participating Company or an
Affiliated Company shall be indemnified and held harmless by the Company against
and with respect to all damages, losses, obligations, liabilities, liens,
deficiencies, costs and expenses, including without limitation, reasonable
attorney's fees and other costs incident to any suit, action, investigation,
claim or proceedings to which he may be a party by reason of his performance of
administrative functions and duties under the Plan, except in relation to
matters as to which he shall be held liable for an act of willful misconduct in
the performance of his duties. The foregoing right to indemnification shall be
in addition to such other rights as the Committee member or other person may
enjoy as a matter of law or by reason of insurance coverage of any kind. Rights
granted hereunder shall be in addition to and not in lieu of any rights to
indemnification to which the Committee member or other person may be entitled
pursuant to the by-laws of the Participating Company.
53
<PAGE>
ARTICLE XI
THE FUND
--------
11.1 Designation of Trustee. The Company, by appropriate resolution of
----------------------
its Board of Directors, if any, shall name and designate a Trustee and shall
enter into a Trust Agreement. The Company shall have the power, by appropriate
resolution of its Board of Directors, to amend the Trust Agreement, remove the
Trustee, and designate a successor Trustee, as provided in the Trust Agreement.
All of the assets of the Plan shall be held by the Trustee for use in accordance
with the Plan.
11.2 Exclusive Benefit. Prior to the satisfaction of all liabilities
-----------------
under the Plan in the event of termination of the Plan, no part of the corpus or
income of the Fund shall be used for or diverted to purposes other than for the
exclusive benefit of Participants and their beneficiaries except as expressly
provided in this Plan and in the Trust Agreement.
11.3 No Interest in Fund. No person shall have any interest in or right
-------------------
to any part of the assets or income of the Fund, except to the extent expressly
provided in this Plan and in the Trust Agreement.
11.4 Trustee. The Trustee shall be the named fiduciary with respect to
-------
management and control of Plan assets held by it and, except as provided in
Section 11.5, shall have exclusive and sole responsibility for the custody and
investment thereof in accordance with the Trust Agreement.
11.5 Investments and Voting of Shares.
--------------------------------
(a) Except as provided in Subsection (e) of this Section, the Trustee
shall invest Salary Reduction Contributions, Rollover Contributions, and Profit
Sharing Contributions paid to it and income thereon in such Investment Media,
including shares of stock of the Company, as each Participant may select in
accordance with this Section. The Trustee shall invest Matching Contributions
and income thereon in common stock of the Company, except that a Participant may
make an investment election with respect to the portion of his Matching
Contribution Account that has been held under the Plan for at least twelve
months, and the Trustee shall invest the Matching Contribution Account in
accordance with such election. Such investments acquired in the manner
prescribed by the Plan shall be held by or for the Trustee.
54
<PAGE>
(b) Except as provided in Subsections (a) and (e) of this Section, a
Participant shall select one or more of the Investment Media in which his
Accounts shall be invested, and the percentage thereof that shall be invested in
each Investment Medium selected. Except as otherwise provided in Subsection
(a), if a Participant fails to make an election pursuant to this Section,
amounts allocated to his Account shall be invested in the most conservative of
the Investment Media as determined by the Committee. A Participant may amend
such selection by giving prior notice to the Trustee, in a form acceptable to
the Trustee and according to procedures determined by the Committee. Such
amendments will be subject to the other requirements of this Section.
(c) The Trustee shall vote shares of stock of the Company pursuant to
instructions from Participants, for which purpose the Trustee shall aggregate
fractional shares and vote them in proportion to instructions from Participants
with respect to whole shares. Shares for which no instructions are received
shall not be voted.
(d) The amounts contributed by all Participants to each Investment
Medium shall be commingled for investment purposes.
(e) The Trustee may hold assets of the Fund and make distributions
therefrom in the form of cash without liability for interest, if for
administrative purposes it becomes necessary or practical to do so.
55
<PAGE>
ARTICLE XII
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
12.1 Power of Amendment and Termination.
----------------------------------
(a) It is the intention of each Participating Company that this Plan
will be permanent. However, each Participating Company reserves the right to
terminate its participation in this Plan at any time by or pursuant to action of
its board of directors or other governing body. Furthermore, the Company
reserves the power to amend or terminate the Plan at any time by or pursuant to
action of the Board of Directors.
(b) Each amendment to the Plan shall be binding on each Participating
Company if such Participating Company, by or pursuant to action by its board of
directors or other governing body, (1) consents to such amendment at any time;
or (2) fails to object thereto within thirty days after receiving notice
thereof.
(c) Any amendment or termination of the Plan shall become effective as
of the date designated by the Board of Directors or its delegate. Except as
expressly provided elsewhere in the Plan, prior to the satisfaction of all
liabilities with respect to the benefits provided under this Plan, no amendment
or termination shall cause any part of the monies contributed hereunder to
revert to the Participating Companies or to be diverted to any purpose other
than for the exclusive benefit of Participants and their beneficiaries. Upon
termination or partial termination of the Plan, or upon complete discontinuance
of contributions, the rights of all affected persons to benefits accrued to the
date of such termination shall be nonforfeitable. Upon termination of the plan
without establishment or maintenance of another defined contribution plan (other
than an employee stock ownership plan as defined in section 4975(e)(7) of the
Code or a simplified employee pension plan as defined in section 408(k) of the
Code), Accounts shall be distributed in accordance with applicable law.
12.2 Merger. The Plan shall not be merged with or consolidated
------
with, nor shall its assets be transferred to, any other qualified retirement
plan unless each Participant would receive a benefit after such merger,
consolidation, or transfer (assuming the Plan then terminated) which is of
actuarial value equal to or greater than the benefit he would have received from
his Account if the Plan had been terminated on the day before such merger,
consolidation, or transfer.
56
<PAGE>
ARTICLE XIII
TOP-HEAVY PROVISIONS
--------------------
13.1 General. The following provisions shall apply automatically to the
-------
Plan and shall supersede any contrary provisions for each Plan Year in which the
Plan is a Top-Heavy Plan (as defined below). It is intended that this Article
shall be construed in accordance with the provisions of section 416 of the Code.
13.2 Definitions. The following definitions shall supplement those set
-----------
forth in Article I of the Plan:
(a) "Aggregation Group" means this plan and each other qualified
-----------------
retirement plan (including a frozen plan or a plan which has been terminated
during the 60-month period ending on the Determination Date) of a Participating
Company or an Affiliated Company:
(1) in which a Key Employee is a participant; or
(2) which enables any plan in which a Key Employee participates
to meet the requirements of sections 401(a)(4) or 410 of the Code; or
(3) without the inclusion of which, the plans in the Aggregation
Group would be Top-Heavy Plans, but, with the inclusion of which, the plans in
the Aggregation Group are not Top-Heavy Plans and, taken together, meet the
requirements of sections 401(a)(4) and 410 of the Code.
(b) "Determination Date" means, for any Plan Year, the last day of the
------------------
preceding Plan Year, except that for the first Plan Year it means the last day
thereof.
(c) "Key Employee" means, with respect to any Plan Year:
------------
(1) any Employee or former Employee who at any time during the
60-month period ending on the Determination Date was:
(A) an officer of a Participating Company having
Compensation for a Plan Year during such period greater than fifty percent (50%)
of the amount in effect under section 415(b)(1)(A) of the Code for the calendar
year in which such Plan Year ends; provided, that no more than 50 Employees (or,
if less, the greater of three Employees or ten percent (10%)
57
<PAGE>
of the greatest number of Employees employed by all Participating Companies and
all Affiliated Companies during such 60-month period, but excluding employees
described in section 414(q)(8) of the Code) shall be treated as officers; or
(B) one of the 10 Employees having Compensation greater than
the amount described in section 415(c)(1)(A) of the Code and owning (or are
considered as owning, within the meaning of section 318 of the Code) the largest
interests in any Participating Company or Affiliated Company, provided that such
interest exceeds one-half of one percent (0.5%) of the total share ownership of
the Participating Company or Affiliated Company, the total number of individuals
described in this Subparagraph (B) being limited to 10 for the entire 60-month
period; or
(C) a five-percent (5%) owner of a Participating Company; or
(D) a one-percent (1%) owner of a Participating Company
having Compensation in excess of $150,000; or
(2) a beneficiary of an individual described in Paragraph (1) of
this Subsection.
For purposes of this Subsection, Compensation shall include elective deferrals
under sections 125, 402(a)(8), 402(h) and 403(b) of the Code. Determinations
under this Subsection shall be made in accordance with section 416(i) of the
Code.
(d) "Key Employee Ratio" means, for any Determination Date, the ratio
------------------
of the amount described in Paragraph (1) of this Subsection to the amount
described in Paragraph (2) of this Subsection, after deducting from each such
amount any portion thereof described in Paragraph (3) of this Subsection, where:
(1) the amount described in this Paragraph is the sum of:
(A) the present value of all accrued benefits of Key
Employees under all qualified defined benefit plans included in the Aggregation
Group;
(B) the balances in all of the accounts of Key Employees
under all qualified defined contribution plans included in the Aggregation
Group; and
(C) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any Key
58
<PAGE>
Employee during the period of five Plan Years ending on the Determination Date,
except any benefit paid on account of death to the extent it exceeds the accrued
benefits or account balances immediately prior to death;
(2) the amount described in this Paragraph is the sum of:
(A) the present value of all accrued benefits of all
participants under all qualified defined benefit plans included in the
Aggregation Group;
(B) the balances in all of the accounts of all participants
under all qualified defined contribution plans included in the Aggregation
Group; and
(C) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any participant during the period of five
Plan Years ending on the Determination Date; and
(3) the amount described in this Paragraph is the sum of:
(A) all rollover contributions (or fund to fund transfers)
to the Plan by an Employee after December 31, 1983 from a plan sponsored by an
employer which is not a Participating Company or an Affiliated Company;
(B) any amount that is included in Paragraphs (1) and (2) of
this Subsection for a person who is a Non-Key Employee as to the Plan Year of
reference but who was a Key Employee as to any earlier Plan Year; and
(C) for Plan Years beginning after December 31, 1984, any
amount that is included in Paragraphs (1) and (2) of this Subsection for a
person who has not performed any services for any Participating Company during
the five-year period ending on the Determination Date.
The present value of accrued benefits under any defined benefit plan shall be
determined under the method used for accrual purposes for all plans maintained
by all Participating Companies and Affiliated Companies if a single method is
used by all such plans, or, otherwise, the slowest accrual method permitted
under section 411(b)(1)(C) of the Code.
59
<PAGE>
(e) "Non-Key Employee" means, for any Plan Year:
----------------
(1) an Employee or former Employee who is not a Key Employee with
respect to such Plan Year; or
(2) a beneficiary of an individual described in Paragraph (1) of
this Subsection.
(f) "Super Top-Heavy Plan" means, for any Plan Year, each plan in the
--------------------
Aggregation Group for such Plan Year if, as of the applicable Determination
Date, the Key Employee Ratio exceeds ninety percent (90%).
(g) "Top-Heavy Compensation" means, for any Participant for any Plan
----------------------
Year, the average of his annual Compensation over the period of five consecutive
Plan Years (or, if shorter, the longest period of consecutive Plan Years during
which the Participant was in the employ of any Participating Company) yielding
the highest average, disregarding:
(1) Compensation for Plan Years ending prior to January 1, 1984;
and
(2) Compensation for Plan Years after the close of the last Plan
Year in which the Plan was a Top-Heavy Plan.
(h) "Top-Heavy Plan" means, for any Plan Year, each plan in the
--------------
Aggregation Group for such Plan Year if, as of the applicable Determination
Date, the Key Employee Ratio exceeds sixty percent (60%).
(i) "Year of Top-Heavy Service" means, for any Participant, a Plan
-------------------------
Year in which he completes 1,000 or more Hours of Service, excluding:
(1) Plan Years commencing prior to January 1, 1984; and
(2) Plan Years in which the Plan is not a Top-Heavy Plan.
13.3 Minimum Contribution for Non-Key Employees.
------------------------------------------
(a) In each Plan Year in which the Plan is a Top-Heavy Plan, each
Eligible Employee who is a Non-Key Employee (except an Eligible Employee who is
a Non-Key Employee as to the Plan Year of reference but who was a Key Employee
as to any earlier Plan Year) and who is an Employee on the last day of such Plan
Year will receive a total minimum Participating Company or Affiliated Company
contribution (including forfeitures) under all
60
<PAGE>
plans described in Paragraphs (a)(1) and (a)(2) of Section 13.2 of not less than
three percent (3%) of the Eligible Employee's Compensation for the Plan Year.
Elective deferrals and employer matching contributions to such plans shall not
be used to meet the minimum contribution requirements of this Subsection.
(b) The percentage set forth in Subsection (a) shall be reduced to the
percentage at which contributions, including forfeitures, are made (or are
required to be made) for a Plan Year for the Key Employee for whom such
percentage is the highest for that Plan Year. This percentage shall be
determined for each Key Employee by dividing the contribution for such Key
Employee by his Compensation for the Plan Year. All defined contribution plans
required to be included in an Aggregation Group shall be treated as one plan for
the purpose of this Section; however, this Section shall not apply to any plan
which is required to be included in the Aggregation Group if such plan enables a
defined benefit plan in the group to meet the requirements of section 401(a)(4)
or section 410 of the Code.
(c) If a Non-Key Employee described in Subsection (a) participates in
both a defined benefit plan and a defined contribution plan described in
Paragraphs (a)(1) and (a)(2) of Section 13.2, the Participating Company is not
required to provide such Employee with both the minimum benefit under the
defined benefit plan and the minimum contribution. In such event, the Non-Key
Employee shall not receive the minimum contribution described in this Section if
he has the minimum benefit required by section 416 of the Code under the defined
benefit Top-Heavy Plan.
13.4 Social Security. The Plan, for each Plan Year in which it is a Top-
---------------
Heavy Plan, must meet the requirements of this Article without regard to any
Social Security or similar contributions or benefits.
13.5 Adjustment to Maximum Benefit Limitation.
----------------------------------------
(a) For each Plan Year in which the Plan is (1) a Super Top-Heavy Plan
or (2) a Top-Heavy Plan and the Board of Directors does not make the election to
amend the Plan to provide the minimum contribution described in Subsection (c),
the 1.25 factor in the defined benefit and defined contribution fractions
described in section 415(e) of the Code shall be reduced to 1.0. The adjustment
described in this Subsection shall not apply to a Participant during any period
in which the Participant earns no additional accrued benefit under any defined
benefit plan and has no employer contributions, forfeitures, or voluntary
nondeductible contributions allocated to his accounts under any defined
contribution plan.
61
<PAGE>
(b) In the case of any Top-Heavy Plan to which section 415(e)(6) of
the Code applies, "$41,500" shall be substituted for "$51,875" in the
calculation of the numerator of the transition fraction.
(c) If, in any Plan Year in which the Plan is a Top-Heavy Plan but not
a Super Top-Heavy Plan, the Aggregation Group also includes a defined benefit
plan, the Board of Directors may elect to use a factor of 1.25 in computing the
denominator of the defined benefit and defined contribution fractions described
in section 415(e)(3) of the Code. In the event of such election, the minimum
contribution described in Section 13.3(a) for each Non-Key Employee who is not
covered under a defined benefit plan shall be increased to four percent (4%),
and the minimum Company contribution described in Section 13.3(c) for each Non-
Key Employee who is covered under a defined benefit plan (but who does not have
a minimum benefit under the defined benefit plan equal to the lesser of (1)
three percent (3%) of his Top-Heavy Compensation multiplied by his Years of Top-
Heavy Service or (2) thirty-percent (30%) of his Top-Heavy Compensation) shall
be increased to seven and one-half percent (7-1/2%).
62
<PAGE>
ARTICLE XIV
GENERAL PROVISIONS
------------------
14.1 No Employment Rights. Neither the action of the Company in
--------------------
establishing the Plan, nor of any Participating Company in adopting the Plan,
nor any provisions of the Plan, nor any action taken by the Company, any
Participating Company or the Committee shall be construed as giving to any
Employee the right to be retained in the employ of the Company or any
Participating Company, or any right to payment except to the extent of the
benefits provided in the Plan to be paid from the Fund.
14.2 Governing Law. Except to the extent superseded by ERISA, all
-------------
questions pertaining to the validity, construction, and operation of the Plan
shall be determined in accordance with the laws of the Commonwealth of
Pennsylvania.
14.3 Severability of Provisions. If any provision of this Plan is
--------------------------
determined to be void by any court of competent jurisdiction, the Plan shall
continue to operate and, for the purposes of the jurisdiction of that court
only, shall be deemed not to include the provisions determined to be void.
14.4 No Interest in Fund. No person shall have any interest in, or right
-------------------
to, any part of the principal or income of the Fund, except as and to the extent
expressly provided in this Plan and in the Trust Agreement.
14.5 Spendthrift Clause. No benefit payable at any time under this Plan
------------------
and no interest or expectancy herein shall be anticipated, assigned, or
alienated by any Participant or beneficiary, or subject to attachment,
garnishment, levy, execution, or other legal or equitable process, except for
(1) a Federal tax levy made pursuant to section 6331 of the Code and (2) any
benefit payable pursuant to a qualified domestic relations order. Any attempt
to alienate or assign a benefit hereunder, whether currently or hereafter
payable, shall be void.
14.6 Incapacity. If the Committee deems any Participant who is entitled
----------
to receive payments hereunder incapable of receiving or disbursing the same by
reason of Age, illness, infirmity, or incapacity of any kind, the Committee may
direct the Trustee to apply such payments directly for the comfort, support, and
maintenance of such Participant, or to pay the same to any responsible person
caring for the Participant who is determined by the Committee to be qualified to
receive and disburse such payments for the Participant's benefit; and the
receipt of such person shall be a complete acquittance for the payment of the
benefit. Payments pursuant to this Section shall
63
<PAGE>
be complete discharge to the extent thereof of any and all liability of the
Participating Companies, the Committee, the Trustee, and the Fund.
14.7 Withholding. The Committee and the Trustee shall have the right to
-----------
withhold any and all state, local, and Federal taxes which may be withheld in
accordance with applicable law.
14.8 Missing Persons. Neither the Trustee nor any Participating Company
---------------
shall be obliged to search for or ascertain the whereabouts of any individual
entitled to benefits under the Plan. Any individual entitled to benefits under
the Plan who does not file a timely claim for his benefits will be allowed to
file a claim at any later date, and payment of his benefits will commence after
that later date, except that, in the event the Participating Company is
satisfied that a Participant has no spouse or that a Participant's spouse cannot
be located (as described in Section 5.7, and the Participant is in fact married
or the spouse is later located, whichever is applicable, such spouse shall not
be deemed an individual entitled to benefits under the Plan.
64
<PAGE>
ARTICLE XVI
RIGHTS OF ALTERNATE PAYEES
--------------------------
15.1 General. Except as otherwise provided in this Article, an Alternate
-------
Payee shall have no rights to a Participant's benefit and shall have no rights
under this Plan other than those rights specifically granted to the Alternate
Payee pursuant to a Qualified Domestic Relations Order. Notwithstanding the
foregoing, an Alternate Payee shall have the right to appeal the denial of a
claim for any benefits awarded to the Alternate Payee pursuant to a Qualified
Domestic Relations Order, as provided in Section 10.4. Any interest of an
Alternate Payee in the Account of a Participant, other than an interest payable
solely upon the Participant's death pursuant to a Qualified Domestic Relations
Order which provides that the Alternate Payee shall be treated as the
Participant's surviving spouse, shall be separately accounted for by the Trustee
in the name and for the benefit of the Alternate Payee.
15.2 Distribution.
------------
(a) Notwithstanding anything in this Plan to the contrary, a Qualified
Domestic Relations Order may provide that any benefits of a Participant payable
to an Alternate Payee shall be distributed immediately or at any other time
specified in the order. If the order does not specify the time at which
benefits shall be payable to the Alternate Payee, the benefits shall be
distributed to the Alternate Payee immediately.
(b) If a Qualified Domestic Relations Order does not provide the form
of distribution of benefits payable to an Alternate Payee, the Alternate Payee
shall have the right to elect distribution in any form provided under Article V,
except that benefits to be paid in installments may not be paid over a period
exceeding the life expectancy of the Alternate Payee, determined as of the date
of the first distribution.
(c) If the Qualified Domestic Relations Order does not specify the
Investment Media from which amounts shall be paid to an Alternate Payee, such
amounts shall be distributed from the Investment Media in which such Accounts
are invested on a pro rata basis.
15.3 Withdrawals. Unless a Qualified Domestic Relations Order provides
-----------
to the contrary, an Alternate Payee shall not be permitted to make any
withdrawals under Article VIII.
65
<PAGE>
15.4 Death Benefits. Unless a Qualified Domestic Relations Order
--------------
provides to the contrary, an Alternate Payee shall have the right to designate a
beneficiary, in the same manner as provided in Section 5.7 with respect to a
Participant (except that no spousal consent shall be required), who shall
receive benefits payable to the Alternate Payee which have not been distributed
at the time of the Alternate Payee's death. If the Alternate Payee does not
designate a beneficiary, or if the beneficiary predeceases the Alternate Payee,
benefits payable to the Alternate Payee which have not been distributed shall be
paid to the Alternate Payee's estate.
15.5 Investment Direction. Unless a Qualified Domestic Relations Order
--------------------
provides to the contrary, an Alternate Payee shall have the right to direct the
investment of any portion of a Participant's Accounts payable to the Alternate
Payee under such order in the same manner as provided in Article XI with respect
to a Participant, which amounts shall be separately accounted for by the Trustee
in the Alternate Payee's name.
Executed this ____ day of _________________, 1995.
P. H. GLATFELTER COMPANY
By:___________________________
Attest:________________________
Secretary
66
<PAGE>
SCHEDULE A
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE
Age of Participant
in calendar year
preceding Required
Beginning Date Maximum Years Remaining
------------------ -----------------------
70...................................26.2
71...................................25.3
72...................................24.4
73...................................23.5
74...................................22.7
75...................................21.8
76...................................20.9
77...................................20.1
78...................................19.2
79...................................18.4
80...................................17.6
81...................................16.8
82...................................16.0
83...................................15.3
84...................................14.5
85...................................13.8
86...................................13.1
87...................................12.4
88...................................11.8
89...................................11.1
90...................................10.5
91................................... 9.9
92................................... 9.4
93................................... 8.8
94................................... 8.3
95................................... 7.8
96................................... 7.3
97................................... 6.9
98................................... 6.5
99................................... 6.1
100................................... 5.7
101................................... 5.3
102................................... 5.0
103................................... 4.7
104................................... 4.4
105................................... 4.1
106................................... 3.8
107................................... 3.6
108................................... 3.4
109................................... 3.2
110................................... 2.8
111................................... 2.6
112................................... 2.4
113................................... 2.2
114................................... 2.0
115 and older......................... 1.8
67
<PAGE>
EXHIBIT 5
September 1, 1995
P. H. Glatfelter Company
228 S. Main Street
Spring Grove, PA 17362
RE: P. H. GLATFELTER COMPANY 401(k) SAVINGS PLAN
REGISTRATION STATEMENT ON FORM S-8
--------------------------------------------
Gentlemen:
We have acted as counsel to P. H. Glatfelter Company (the "Company")
in connection with the registration under the Securities Act of 1933, as
amended, of interests in the P. H. Glatfelter Company 401(k) Savings Plan (the
"Plan"), and 2,115,470 shares of common stock of the Company, par value $.01 per
share (the "Shares"), issuable thereunder.
In rendering our opinion, we have reviewed the Plan and such
certificates, documents, corporate records and other instruments as in our
judgement are necessary or appropriate to enable us to render the opinion
expressed below. In giving this opinion, we are assuming the authenticity of
all instruments presented to us as originals, the conformity with the originals
of all instruments presented to us as copies and the genuineness of all
signatures.
Based upon the foregoing, we are of the opinion that the Shares, when
issued in accordance with the terms of the Plan, will be legally issued, fully
paid and non-assessable.
We consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
Ballard Spahr
Andrews & Ingersoll
<PAGE>
EXHIBIT (15)
LETTER IN LIEU OF CONSENT REGARDING REVIEW REPORT OF UNAUDITED FINANCIAL
INFORMATION
P.H. Glatfelter Company:
We have made a review, in accordance with standards established by the American
Institute of Certified Public Accountants, of the unaudited condensed
consolidated financial statements of P.H. Glatfelter Company and subsidiaries
for the periods ended March 31, 1995 and 1994, and June 30, 1995 and 1994, as
indicated in our reports dated April 17, 1995 and July 18, 1995; because we did
not perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which were included in your
Quarterly Report on Form 10-Q for the quarters ended March 31, 1995 and June 30,
1995 are being used in this Registration Statement on Form S-8.
We also are aware that the aforementioned report, pursuant to Rule 436(c) under
the Securities Act of 1933, is not considered a part of the Registration
Statement prepared or certified by an accountant or a report prepared or
certified by an accountant within the meaning of Sections 7 and 11 of that Act.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Philadelphia, Pennsylvania
August 28, 1995
<PAGE>
EXHIBIT (23.1)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
P.H. Glatfelter Company on Form S-8 of our reports dated February 10, 1995,
appearing in and incorporated by reference in the Annual Report on Form 10-K of
P.H. Glatfelter Company and subsidiaries for the year ended December 31, 1994.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Philadelphia, Pennsylvania
August 28, 1995
