<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 for Ecusta Hourly Employees
-----------------------------------------------
(Full title of the plan)
Robert S. Wood, Secretary and Treasurer
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
<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 200,000 $19.875 $3,987,500 $1,208.33
- ------------------------------------------------------------------------
</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 25, 1997, $19.875 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 for
Ecusta Hourly Employees (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, 1996.
(b) The Quarterly Reports of the Company on Form 10-Q for the
quarters ended March 31, 1997 and June 30, 1997.
(c) The Current Reports of the Company on Form 8-K dated January
27, 1997 and January 30, 1997.
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 three 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 25, 1997, there were 120,000,000 authorized shares of Common
Stock of the Company and 42,074,668 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 $20,000,000 for each loss and each policy year and there is a
deductible of $1,500,000 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 for Ecusta Hourly
Employees
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.
5
<PAGE>
Item 9.- UNDERTAKINGS
------------
A. Rule 415 Offering
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in 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
6
<PAGE>
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.
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
September 2, 1997.
P. H. GLATFELTER COMPANY
September 2, 1997 By: /s/ R. P. Newcomer
---------------------
R. P. Newcomer
Senior Vice President and
Chief 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
- --------- ----- ----
/s/ T. C. Norris Chairman, President, September 2, 1997
- ------------------------- Chief Executive
T. C. Norris Officer and Director
/s/ G. H. Glatfelter II Senior Vice President September 2, 1997
- ------------------------- and Director
G. H. Glatfelter II
/s/ R. P. Newcomer Senior Vice President September 2, 1997
- ------------------------- and Chief Financial
R. P. Newcomer Officer
/s/ C. M. Smith Comptroller September 2, 1997
- -------------------------
C. M. Smith
/s/ R. E. Chappell Director September 2, 1997
- -------------------------
R. E. Chappell
/s/ N. DeBenedictis Director September 2, 1997
- -------------------------
N. DeBenedictis
/s/ G. H. Glatfelter Director September 2, 1997
- -------------------------
G. H. Glatfelter
/s/ R. S. Hillas Director September 2, 1997
- -------------------------
R. S. Hillas
/s/ M. A. Johnson II Director September 2, 1997
- -------------------------
M. A. Johnson II
<PAGE>
/s/ R. W. Kelso Director September 2, 1997
- -------------------------
R. W. Kelso
/s/ P. R. Roedel Director September 2, 1997
- -------------------------
P. R. Roedel
/s/ J. M. Sanzo Director September 2, 1997
- -------------------------
J. M. Sanzo
/s/ R. L. Smoot Director September 2, 1997
- -------------------------
R. L. Smoot
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act of 1933,
--------
the trustees (or other persons who administer the employee benefit plan) have
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of Spring Grove, Commonwealth
of Pennsylvania, on September 2, 1997.
P. H. GLATFELTER COMPANY
401(K) SAVINGS PLAN FOR
ECUSTA HOURLY EMPLOYEES
By: /s/ R. P. Newcomer
---------------------------
R. P. Newcomer
Chairman
Employee Benefits Committee
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
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 for Ecusta Hourly
Employees
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)
</TABLE>
<PAGE>
EXHIBIT 4.3
P.H. GLATFELTER COMPANY
401(K) SAVINGS PLAN FOR
ECUSTA HOURLY EMPLOYEES
EFFECTIVE JANUARY 1, 1998
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
"Account"......................................................... 1
"Matching Contribution Account"................................... 1
"Payroll Reduction Account"....................................... 1
"Rollover Account"................................................ 1
"Actual Deferral Percentage"...................................... 1
"Affiliated Company".............................................. 2
"Age"............................................................. 2
"Average Actual Deferral Percentage".............................. 2
"Average Contribution Percentage"................................. 2
"Benefit Commencement Date"....................................... 2
"Board of Directors".............................................. 2
"Break in Service"................................................ 3
"Code"............................................................ 3
"Committee"....................................................... 3
"Company"......................................................... 3
"Compensation".................................................... 3
"Contribution Percentage"......................................... 4
"Covered Employee"................................................ 4
"Effective Date".................................................. 5
"Eligible Employee"............................................... 5
"Employee"........................................................ 5
"Employment Commencement Date".................................... 5
"ERISA"........................................................... 5
"Fund"............................................................ 5
"Highly Compensated Eligible Employee"............................ 5
"Highly Compensated Employee"..................................... 5
"Hour of Service"................................................. 6
"Investment Medium"............................................... 7
"Limitation Year"................................................. 7
"Matching Contributions".......................................... 7
"Normal Retirement Age"........................................... 7
"Normal Retirement Date".......................................... 7
"Participant"..................................................... 7
"Participating Company"........................................... 8
"Payroll Reduction Contributions"................................. 8
"Plan"............................................................ 8
"Plan Year"....................................................... 8
"Qualified Military Service"...................................... 8
"Required Beginning Date"......................................... 8
"Returning Veteran"............................................... 8
"Rollover Contributions".......................................... 8
"Separation from Service"......................................... 8
"Trust Agreement"................................................. 8
"Trustee"......................................................... 8
i
<PAGE>
<TABLE>
PAGE
<S> <C>
"Uniformed Services"......................................................................... 8
"Valuation Date"............................................................................. 9
"Year of Eligibility Service"................................................................ 9
"Year of Service"............................................................................ 9
ARTICLE II
ELIGIBILITY TO PARTICIPATE
2.1 Rights Affected...................................................................... 10
2.2 Year of Eligibility Service.......................................................... 10
2.3 Eligibility to Participate - Payroll Reduction
Contributions........................................................................ 10
2.4 Election to Make Payroll Reduction Contributions..................................... 10
2.5 Participation in Matching Contributions.............................................. 11
2.6 Data................................................................................. 11
ARTICLE III
CONTRIBUTIONS TO THE PLAN
3.1 Payroll Reduction Contributions...................................................... 12
3.2 Change of Percentage Rate............................................................ 12
3.3 Discontinuance of Payroll Reduction Contributions.................................... 13
3.4 Matching Contribution................................................................ 13
3.5 Timing and Deductibility of Contributions............................................ 13
3.6 Fund................................................................................. 13
3.7 Limitation on Payroll Reduction Contributions and Matching
Contributions........................................................................ 14
3.8 Prevention of Violation of Limitation on Payroll Reduction
Contributions and Matching Contributions............................................. 16
3.9 Maximum Allocation................................................................... 21
ARTICLE IV
PARTICIPANTS' ACCOUNTS
4.1 Accounts............................................................................. 23
4.2 Valuation............................................................................ 23
4.3 Apportionment of Gain or Loss........................................................ 23
4.4 Accounting for Allocations........................................................... 23
ARTICLE V
DISTRIBUTION
5.1 General.............................................................................. 24
5.2 Separation from Service.............................................................. 24
5.3 Death................................................................................ 24
5.4 Valuation for Distribution........................................................... 24
5.5 Timing of Distribution............................................................... 24
</TABLE>
ii
<PAGE>
<TABLE>
PAGE
<S> <C> <C>
5.6 Mode of Distribution............................................................... 26
5.7 Beneficiary Designation............................................................ 27
5.8 Recalculation of Life Expectancy................................................... 28
5.9 Direct Rollover of Account to Other Plan........................................... 28
5.10 Other Distributions................................................................ 30
ARTICLE VI
VESTING
6.1 Nonforfeitable Amounts............................................................. 31
6.2 Years of Service for Vesting....................................................... 31
6.3 Breaks in Service and Loss of Service.............................................. 31
6.4 Restoration of Service............................................................. 32
6.5 Forfeitures and Restoration of Forfeited Amounts upon
Reemployment....................................................................... 33
ARTICLE VII
TREATMENT OF RETURNING VETERANS
7.1 Applicability and Effective Date................................................... 35
7.2 Eligibility to Participate......................................................... 35
7.3 No Break in Service................................................................ 35
7.4 Vesting Credit..................................................................... 35
7.5 Restoration of Payroll Reduction................................................... 35
7.6 Determination of Compensation...................................................... 36
7.7 Restoration of Matching Contributions.............................................. 36
7.8 Application of Certain Limitations................................................. 36
7.9 Suspension of Loan Repayments...................................................... 37
7.10 Administrative Rules and Procedures................................................ 37
ARTICLE VIII
ROLLOVER CONTRIBUTIONS AND TRANSFERS
8.1 Rollover Contributions............................................................. 38
Transfers to and from Salaried Group............................................... 39
ARTICLE IX
WITHDRAWALS
9.1 Emergency and Financial Hardship Withdrawals....................................... 41
9.2 Amount and Payment of Withdrawals.................................................. 44
9.3 Withdrawals Not Subject to Replacement............................................. 44
9.4 Pledged Amounts.................................................................... 44
9.5 Investment Medium to be Charged with Withdrawal.................................... 44
</TABLE>
iii
<PAGE>
<TABLE>
PAGE
ARTICLE X
LOANS TO PARTICIPANTS
<S> <C> <C>
10.1 Loan Application............................................................... 45
10.2 Loan Approval.................................................................. 45
10.3 Amount of Loan................................................................. 45
10.4 Terms of Loan.................................................................. 46
10.5 Enforcement.................................................................... 47
10.6 Additional Rules............................................................... 47
ARTICLE XI
ADMINISTRATION
11.1 Committee...................................................................... 48
11.2 Duties and Powers of Committee................................................. 48
11.3 Functioning of Committee....................................................... 49
11.4 Disputes....................................................................... 49
11.5 Indemnification................................................................ 50
ARTICLE XII
THE FUND
12.1 Designation of Trustee......................................................... 51
12.2 Exclusive Benefit.............................................................. 51
12.3 No Interest in Fund............................................................ 51
12.4 Trustee........................................................................ 51
12.5 Investments and Voting of Shares............................................... 51
ARTICLE XIII
AMENDMENT OR TERMINATION OF THE PLAN
13.1 Power of Amendment and Termination............................................. 53
13.2 Merger......................................................................... 53
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 General........................................................................ 54
14.2 Definitions.................................................................... 54
14.3 Minimum Contribution for Non-Key Employees..................................... 57
14.4 Social Security................................................................ 58
14.5 Adjustment to Maximum Benefit Limitation....................................... 58
</TABLE>
iv
<PAGE>
<TABLE>
PAGE
ARTICLE XV
GENERAL PROVISIONS
<S> <C> <C>
15.1 No Employment Rights............................................................... 60
15.2 Governing Law...................................................................... 60
15.3 Severability of Provisions......................................................... 60
15.4 No Interest in Fund................................................................ 60
15.5 Spendthrift Clause................................................................. 60
15.6 Incapacity......................................................................... 60
15.7 Withholding...................................................................... 61
15.8 Missing Persons.................................................................... 61
ARTICLE XVI
RIGHTS OF ALTERNATE PAYEES
16.1 General.......................................................................... 62
16.2 Distribution..................................................................... 62
16.3 Withdrawals...................................................................... 62
16.4 Death Benefits................................................................... 63
16.5 Investment Direction............................................................. 63
</TABLE>
SCHEDULE A
MINIMUM DISTRIBUTION INCIDENTAL BENEFIT TABLE
v
<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.
"Payroll Reduction Account" -- the Account to which are credited a
-------------------------
Participant's Payroll Reduction Contributions, adjustments for withdrawals and
distributions, and the earnings, losses and expenses attributable thereto.
"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.
"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 Payroll 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
<PAGE>
(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, 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.
"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 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 Company or
------------------
its delegate.
2
<PAGE>
"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 XI.
"Company" means the P. H. Glatfelter Company and its successors.
-------
"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 (d) of this definition, his regular earnings
for hours worked as a Covered Employee and, if applicable, his service bonus
payable on a uniform basis with respect to eligible employees with the same
length of service (including Payroll Deduction Contributions and deferrals under
a plan described in section 125 of the Code with respect to such regular
earnings or service bonus). Compensation shall exclude all other types of
earnings, which include, but are not limited to, premium earnings for hours
worked by the Participant, including earnings resulting from shift
differentials, bonuses other than service bonuses described in the foregoing
sentence, holiday pay, vacation pay, sickness and accident pay, and all other
fringe benefits.
(b) For all other purposes, subject to the limitations set forth
in subsection (d) of this definition, the Employee's compensation shall consist
of 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) plus:
(1) Payroll Reduction Contributions and other elective
deferrals under any other plan described in section 401(k) of the Code
maintained by a Participating Company or Affiliated Company, and
(2) Amounts excluded from gross income under a plan
described in section 125 of the Code.
(c) For purposes of the definitions of Actual Deferral Percentage and
Contribution Percentage in this Article
3
<PAGE>
(except as otherwise provided in such definitions), the Committee may elect not
to include the amounts in paragraphs (b)(1) and (2) of this definition.
(d) 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 (d) shall not
apply for purposes of Section 3.9 and Section 14.2(c).
"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
(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 Payroll 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 (a) an hourly Employee of the Company in its
----------------
Ecusta Division represented for purposes of collective bargaining by the United
Paperworkers International Union AFL-CIO and its Affiliated Local 1971, and (b)
any other hourly Employee of the Company's Ecusta Division at its Pisgah Forest
Mill. An Employee who is such solely by reason of being a leased employee shall
not be a Covered Employee. A Covered Employee shall not include any individual
classified by a Participating Company as an independent contractor, regardless
of
4
<PAGE>
whether he is subsequently determined to be an employee for employment tax or
other purposes.
"Effective Date" means January 1, 1998, the effective date of this
--------------
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.
(a) "Collectively Bargained Eligible Employee" means an Eligible
Employee who is represented for collective bargaining purposes by the United
Paperworkers International Union AFL-CIO, and its Affiliated Local 1971.
(b) "Non-Collectively Bargained Eligible Employee" means an
Eligible Employee who is not represented for collective bargaining purposes by a
labor union.
"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 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 an Employee who:
---------------------------
(a) is a five-percent owner, as defined in section 416(i) of the Code
either for the current Plan Year or the immediately preceding Plan Year; or
5
<PAGE>
(b) (1) received more than $80,000 (as indexed) in Compensation
from a Participating Company or an Affiliated Company in the immediately
preceding Plan Year, and (2), if so elected by the Participating Company, was
among the top 20% of Employees of all Participating Companies and Affiliated
Companies ranked by Compensation (excluding Employees described in section
414(q)(5) of the Code to the extent (A) permitted under the Code and regulations
thereunder and (B) elected by the Committee, for the purposes of identifying the
number of Employees in the top 20%).
"Hour of Service" means, for any Employee, a credit awarded with
---------------
respect to:
(a) except as provided in (b) or (c),
(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:
6
<PAGE>
<TABLE>
<CAPTION>
Basis Upon Which Records Credit Granted to Individual
Are Maintained For Period
------------------------ ----------------------------
<S> <C>
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
</TABLE>
(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.
(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.
7
<PAGE>
"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 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.
"Payroll Reduction Contributions" means, for any Participant,
-------------------------------
contributions on his behalf as provided in Section 3.1(a).
"Plan" means the P.H. Glatfelter Company 401(k) Savings Plan for
----
Ecusta Hourly Employees, as set forth herein.
"Plan Year" means the calendar year.
---------
"Qualified Military Service" means any service (either voluntary or
--------------------------
involuntary) by an individual in the Uniformed Services if such individual is
entitled to reemployment rights with a Participating Company with respect to
such service.
"Required Beginning Date" means (a) for any Participant who is a 5-
-----------------------
percent owner (within the meaning of section 416 of the Code) of a Participating
Company at any time during the five-Plan-Year period ending in the calendar year
in which he attains Age 70 1/2, or thereafter, April 1 of the calendar year next
following the calendar year in which he attains Age 70 1/2, and (b) for each
other Participant, April 1 of the calendar year following the calendar year in
which the last to occur of the Participant's Separation from Service or his
attainment of Age 70 1/2 takes place.
"Returning Veteran" means a former Employee who, on or after December
-----------------
12, 1994, returns from Qualified Military Service to employment by a
Participating Company within the period of time during which his reemployment
rights are protected by law.
"Rollover Contributions" means, for any Participant, his rollover
----------------------
contributions as provided in Section 8.1.
"Separation from Service" means, for any Employee, his death,
-----------------------
retirement, resignation, discharge or any absence that causes him to cease to be
an Employee.
8
<PAGE>
"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.
"Uniformed Services" means the Armed Forces, the Army National Guard
------------------
and Air National Guard (when engaged in active duty for training, inactive duty
training, or full-time National Guard duty), the commissioned corps of the
Public Health Service, and any other category of persons designated by the
President of the United States in time of war or emergency.
"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.
9
<PAGE>
ARTICLE II
ELIGIBILITY TO PARTICIPATE
--------------------------
2.1 Rights Affected. Any Employee or former Employee who is not a
---------------
Covered Employee on or after January 1, 1998 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.
2.3 Eligibility to Participate - Payroll Reduction Contributions.
------------------------------------------------------------
(a) Each Covered Employee as of the Effective Date who was
eligible to participate in the Plan 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
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 Employee as of the date on which he first again
completes an Hour of Service as a Covered Employee.
2.4 Election to Make Payroll Reduction Contributions. Each Eligible
------------------------------------------------
Employee may elect to make Payroll Reduction Contributions by making an election
in a form acceptable to the
10
<PAGE>
Committee. Such notice shall authorize the Participating Company to reduce such
Eligible Employee's regular Compensation by an amount determined in accordance
with Section 3.1 and to make Payroll Reduction Contributions on such Eligible
Employee's behalf in the amount of such reduction. An election with respect to
a Participant's regular Compensation shall be effective as soon as
administratively practicable following receipt of his election by the Committee.
Such election shall remain effective until changed in accordance with Section
3.2, or until the payroll period in which the Participant ceases to be an
Eligible Employee.
2.5 Participation in Matching Contributions. An Eligible Employee
---------------------------------------
shall share in Matching Contributions under Section 3.4 for any payroll period
if Payroll Reduction Contributions are made on his behalf from his regular
Compensation in such payroll period and he is an Employee on the last day of
such payroll period or if, during such payroll period, he retires after
attaining Age 55 or dies. For the purposes of this Section, a Participant shall
be deemed to have met the requirements that he be an Employee on the last day of
a payroll period if, on such date, he is absent on leave that is protected under
the Family and Medical Leave Act of 1993.
2.6 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.
11
<PAGE>
ARTICLE III
CONTRIBUTIONS TO THE PLAN
-------------------------
3.1 Payroll Reduction Contributions.
-------------------------------
(a) When an Eligible Employee files an election under Section 2.4
to have Payroll Reduction Contributions made on his behalf, he shall elect the
percentage by which his Compensation shall be reduced on account of such Payroll
Reduction Contributions. Subject to Section 3.7, 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 Payroll Reduction Account provided that such
contributions may be prospectively limited as provided in Section 3.7.
(b) Payroll 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 $9,500 (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
Payroll 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 3.7 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
under Subsection (a) of Section 3.1 to any percentage permitted by such
Subsection, and such percentage shall remain in effect until so changed, or
until the payroll period in which the Participant ceases to be Eligible
Employee. 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 practicable following receipt of the change by the Committee.
12
<PAGE>
3.3 Discontinuance of Payroll Reduction Contributions. A Participant
-------------------------------------------------
may discontinue his Payroll Reduction Contributions at any time. Such
discontinuance shall become effective as soon as administratively practical. A
Participant who discontinues his Payroll Reduction Contributions may resume his
Payroll Reduction Contributions by making a new election in accordance with
Section 3.2.
3.4 Matching Contribution.
---------------------
(a) Subject to Sections 3.7 and 3.9, each Participating Company
shall contribute to the Fund for each payroll period an amount equal to fifty
percent (50%) of all Participants' Payroll Reduction Contributions for each
payroll period not in excess of six percent (6%) of each Eligible Employee's
regular Compensation, provided that such contributions may be prospectively
limited as provided in Section 3.8 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 Payroll Reduction
Contributions for the payroll period not in excess of six percent (6%) of each
Eligible Employee's regular Compensation for the payroll period.
3.5 Timing and Deductibility of Contributions. 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 Payroll
Reduction Contributions or Rollover Contributions will be remitted to the
Trustee as soon as practicable, but no later than the fifteenth (15th) business
day of the month following the month in which such contributions were received
or withheld from the Participant's Compensation.
3.6 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
13
<PAGE>
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.
3.7 Limitation on Payroll 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 the immediately preceding Plan Year for all other
Eligible Employees; or
(2) the lesser of:
(A) two hundred percent (200%) of the Average Actual
Deferral Percentage for the immediately preceding Plan Year for all other
Eligible Employees; or
(B) two percent (2%) plus the Average Actual Deferral
Percentage for the immediately preceding Plan Year for all other Eligible
Employees.
The test described above shall be applied separately to (i) Eligible Employees
who are Collectively Bargained Eligible Employees and (ii) Eligible Employees
who are Non-Collectively Bargained Eligible Employees.
(b) For any Plan Year, the Average Contribution Percentage for
the Highly Compensated Eligible Employees who are Non-Collectively Bargained
Eligible Employees shall not exceed the greater of:
(1) one hundred twenty-five (125%) of the Average
Contribution Percentage for the immediately preceding Plan Year for all other
Eligible Employees who are Non-Collectively Bargained Eligible Employees; or
14
<PAGE>
(2) the lesser of:
(A) two hundred percent (200%) of the Average
Contribution Percentage for the immediately preceding Plan Year for all other
Eligible Employees who are Non-Collectively Bargained Eligible Employees; or
(B) two percent (2%) plus the Average Contribution
Percentage for the immediately preceding Plan Year for all other Eligible
Employees who are Non-Collectively Bargained 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 who are Non-Collectively Bargained 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 the immediately preceding Plan Year for all other Eligible
Employees who are Non-Collectively Bargained Eligible Employees; plus
(B) the lesser of:
(i) two hundred percent (200%) of the lesser of the
Average Actual Deferral Percentage or the Average Contribution Percentage for
the immediately preceding Plan Year for all other Eligible Employees who are
Non-Collectively Bargained Eligible Employees; or
(ii) two percent (2%) plus the lesser of the Average
Actual Deferral Percentage or the Average Contribution Percentage for the
immediately preceding Plan Year for all other Eligible Employees who are Non-
Collectively Bargained 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 the immediately preceding Plan Year for all other Eligible Employees who are
Non-Collectively Bargained Eligible Employees; plus
(B) the lesser of:
(i) two hundred percent (200%) of the greater of the
Average Actual Deferral Percentage or the
15
<PAGE>
Average Contribution Percentage for the immediately preceding Plan Year for all
other Eligible Employees who are Non-Collectively Bargained Eligible Employees;
or
(ii) two percent (2%) plus the greater of the
Average Actual Deferral Percentage or the Average Contribution Percentage for
the immediately preceding Plan Year for all other Eligible Employees who are
Non-Collectively Bargained Eligible Employees.
(d) Solely with respect to the Plan Year beginning January 1,
1998, for purposes of subsections (a), (b) and (c), the "Average Actual Deferral
Percentage for the immediately preceding Plan Year" and the "Average
Contribution Percentage for the immediately preceding Plan Year",
(1) Shall be deemed to equal three percent (3%); or
alternatively,
(2) At the election of a Participating Company, shall be
calculated based on the Plan Year beginning January 1, 1998.
(e) Notwithstanding subsections (a), (b) and (c) of this
section, a Participating Company may elect that the limits of such subsections
be revised by deleting the phrase "for the immediately preceding Plan Year"
whenever it appears therein. Once made, such an election may not be revoked
except as permitted by law.
(f) 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 410(b) of the Code, the limitations in
Subsections (a) through (e) of this Section shall be applied by treating the
Plan and such other plan(s) as a single plan.
(g) 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.
3.8 Prevention of Violation of Limitation on Payroll Reduction
----------------------------------------------------------
Contributions and Matching Contributions. The Committee shall monitor the level
- ----------------------------------------
of Participants' Payroll 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 3.7.
To the extent practicable, the Committee may prospectively limit (i)
16
<PAGE>
some or all of the Highly Compensated Eligible Employees' Payroll 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 3.7 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 3.7 and/or (iii) some or all of the Highly Compensated
Eligible Employees' Payroll Reduction Contributions and Matching Contributions
to the extent necessary to satisfy subsection (c) of Section 3.7. If the
Committee determines after the end of the Plan Year that the limits of Section
3.7 may be or have been exceeded, it shall take the appropriate following action
for such Plan Year:
(a) (1) The Payroll Reduction Contributions for Highly
Compensated Eligible Employees shall be reduced in accordance with Paragraph (2)
of this Subsection (a).
(2) (A) The aggregate amount that must be distributed to
Highly Compensated Eligible Employees shall be determined as follows:
(i) The Committee shall calculate the amount
by which the Payroll Reduction Contributions of each Highly Compensated Eligible
Employee would have to be reduced in order to obtain the highest Average Actual
Deferral Percentage that would permit one of the tests in Subsection 3.7(a) to
be satisfied.
(ii) The amount described in Clause (2)(A)(i)
shall be determined in order of Actual Deferral Percentages, beginning with the
Highly Compensated Eligible Employee whose Actual Deferral Percentage is the
highest.
(B) The aggregate amount determined under
Subparagraph (A) shall be allocated among the Highly Compensated Eligible
Employees as follows:
(i) The Payroll Reduction Contributions for the
Highly Compensated Eligible Employee(s) with the highest dollar amount of
Payroll Reduction Contributions shall be reduced until either (I) the total
reduction(s) equal the required aggregate reduction determined under
Subparagraph (A), or (II) the reduced amount of Payroll Reduction Contributions
for the affected Highly Compensated Eligible Employee(s) equals those of the
Highly Compensated Eligible Employee(s) with the next highest dollar amount of
Payroll Reduction Contributions. If necessary, this process shall be repeated
until the aggregate dollar amount of reductions equals
17
<PAGE>
the required aggregate reduction determined under Subparagraph (A).
(ii) The amount of Payroll Reduction Contributions
to be reduced for any Highly Compensated Eligible Employee shall be decreased by
any amounts previously distributed to him under Section 3.1 for the year.
(C) Not later than the end of the Plan Year
following the close of the Plan Year for which the Payroll Reduction
Contributions were made, the amount of the required reduction to any Highly
Compensated Eligible Employee's Payroll Reduction Contributions, at the
Committee's direction 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 plan for the year.
(3) 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 Matching Contribution under Section 3.4 which contribution
shall be allocated pro-rata based on Payroll 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 3.7. 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 IX
prior to the Participant's attainment of Age 59-1/2.
(b) (1) The Matching Contributions for the Highly
Compensated Eligible Employees shall be reduced in accordance with Paragraph (2)
of this subsection (b).
(2) (A) The aggregate amount of Matching
Contributions that must be distributed to Highly Compensated Eligible Employees
shall be determined as follows:
(i) The Committee shall calculate the
amount by which the Matching Contributions for each Highly Compensated Eligible
Employee would have to be reduced in order to obtain the highest Average
Contribution Percentage that would permit one of the tests in Subsection 3.7(b)
to be satisfied.
18
<PAGE>
(ii) The amount described in Clause (2)(A)(i)
shall be determined in order of Actual Contribution Percentages, beginning with
the Highly Compensated Eligible Employee whose Actual Contribution Percentage is
the highest.
(B) The aggregate amount determined under Subparagraph
(A) shall be allocated among the Highly Compensated Eligible Employees as
follows. The Matching Contributions for the Highly Compensated Eligible
Employee(s) with the highest dollar amount of Matching Contributions shall be
reduced until either (i) the total reduction(s) equal the required aggregate
reduction determined under Subparagraph (A), or (ii) the reduced amount of
Matching Contributions for the affected Highly Compensated Eligible Employee(s)
equals those of the Highly Compensated Eligible Employee(s) with the next
highest dollar amount of Matching Contributions. If necessary, this process
shall be repeated until the aggregate dollar amount of reductions equals the
required aggregate reduction determined under Subparagraph (A).
(C) Not later than the end of the Plan Year following
the close of the Plan Year for which such contributions were made, the amount of
the required reduction to any Highly Compensated Eligible Employee's Matching
Contributions 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.
(3) 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 Matching Contribution under Section 3.4, which contribution
shall be allocated pro rata based on Payroll Reduction Contributions among the
Matching Contribution Accounts of only those Eligible Employees who are not
Highly Compensated Eligible Employees is an amount necessary to satisfy at least
one of the tests in Subsection (b) of Section 3.7. Matching Contributions made
pursuant to this Paragraph (b)(2) shall be accounted for separately, shall be
100%
19
<PAGE>
nonforfeitable and shall not be eligible for withdrawal under Article IX prior
to the Participant's attainment of Age 59-1/2.
(c) (1) If the test in Subsection (c) of Section 3.7 is not
satisfied, then the Payroll Reduction Contributions and/or the Matching
Contributions for Highly Compensated Eligible Employees shall be reduced in
accordance with Paragraph (2) below, 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 this Section 3.8, whichever
is appropriate. A reduction to Payroll Reduction Contributions shall be charged
against the appropriate Highly Compensated Eligible Employees' Payroll Reduction
Accounts. A reduction to Matching Contributions 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 Payroll Reduction Contributions pursuant to Subparagraph
(a)(1)(C) 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 Payroll Reduction Contributions up
to 6% of Compensation for the Plan Year, the Matching Contributions in excess of
fifty percent (50%) of his Payroll 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 (f) of Section 3.7, the Committee shall coordinate
corrective actions under the Plan and such other plan for the year.
20
<PAGE>
3.9 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 3.9.
(a) Notwithstanding anything in this Plan to the contrary, in
no event shall the sum of:
(1) any Matching Contributions, Payroll 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 3.8 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 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.
(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
Payroll Reduction Contributions that may be made with respect to
21
<PAGE>
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 Payroll Reduction
Contributions and/or Matching Contributions, if any, until such amount has been
exhausted, and shall take the following appropriate steps to correct such
violation:
(1) Excess Payroll 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 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, are made on his behalf for such Plan Year; and
(B) When the Participant ceases to be a Covered
Employee, his excess Matching 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.
(c) If, in any Limitation Year beginning before January 1,
2000, a Participant is a participant in one or more defined benefit plans
sponsored by a Participating Company or a 50% Affiliated Company, the annual
additions of the Participant under the Plan shall not be reduced unless the
annual benefit under the defined benefit plan(s) is not reduced to the extent
necessary to meet the combined plan limits of Section 415(e) of the Code.
22
<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 12.5. 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.
23
<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 IX (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 10.4(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:
24
<PAGE>
(1) Except as provided in paragraph (2), if the
Participant's nonforfeitable interest in his Account is $5,000 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, $5,000, 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 the Benefit Commencement Date of a Participant who has a Required
Beginning Date be later than such 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.
25
<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 $5,000, and
has never exceeded $5,000 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) Benefits payable under Section 5.3 upon the death
of a Participant shall be distributed in a single sum payment.
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 X and the beneficiary fails to repay
the loan in accordance with Section 10.4(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.
26
<PAGE>
(d) Except as provided in this Article, a Participant 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 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.
(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;
27
<PAGE>
(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.
(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,
28
<PAGE>
(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
(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
29
<PAGE>
(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.
(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.
30
<PAGE>
ARTICLE VI
VESTING
-------
6.1 Nonforfeitable Amounts.
----------------------
(a) A Participant shall have a 100% nonforfeitable interest at all
times in his Payroll Reduction and Rollover Accounts.
(b) (1) A Participant shall have a nonforfeitable interest in his
Matching Contribution 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
The Participant's nonforfeitable interest increases on December 31 of each
calendar year in which he has a Year of Service. After five Years of Service,
the Participant is 100% vested in his Matching Contribution Account.
(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
(including calendar years before the Effective Date) during which he is credited
with 1,000 or more Hours of Service.
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.
31
<PAGE>
(c) If an Employee is absent for one or more of the following reasons,
then, to the extent he is not otherwise 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) leave of absence for any other reason that is protected
under the Family and Medical Leave Act of 1993;
(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 of 1993 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.
32
<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 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 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 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 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
33
<PAGE>
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 Matching
Contribution Account under any circumstances.
34
<PAGE>
ARTICLE VII
TREATMENT OF RETURNING VETERANS
-------------------------------
7.1 Applicability and Effective Date. The rights of any Returning
--------------------------------
Veteran who resumes employment with a Participating Company on or after December
12, 1994 shall be modified as set forth in this Article.
7.2 Eligibility to Participate. For purposes of Section 2.3,
--------------------------
(a) A Returning Veteran who was an Eligible Employee immediately prior
to his Qualified Military Service shall be deemed to have remained an Eligible
Employee throughout his Qualified Military Service.
(b) A Returning Veteran who would have become an Eligible Employee
during the period of his Qualified Military Service, but for the resulting
absence from employment, shall be deemed to have become an Eligible Employee as
of the date he would have become an Eligible Employee if he had not entered into
Qualified Military Service.
(c) Notwithstanding the foregoing, a Returning Veteran shall not be
deemed to be eligible to participate in this Plan earlier than the Effective
Date.
7.3 No Break in Service. A Returning Veteran shall be deemed not to
-------------------
have any Break in Service on account of his Qualified Military Service.
7.4 Vesting Credit. A Returning Veteran's Years of Service shall be
--------------
determined under Section 6.2, except that with respect to any period of
Qualified Military Service, he shall be credited with the Hours of Service with
which he would have been credited had he remained an Employee.
7.5 Restoration of Payroll Reduction.
--------------------------------
(a) Each Returning Veteran who, during his period of Qualified
Military Service, would have been eligible to make Payroll Reduction
Contributions shall be permitted to contribute an amount equal to the Payroll
Reduction Contributions that he could have made during such absence from
employment. Such "make-up" contributions shall be made during the period that
begins with his reemployment by the Participating Company and ends with
(1) the expiration of a period of five years, or
35
<PAGE>
(2) if shorter, a period of three times the period of
Qualified Military Service.
(b) Any make-up contributions described in Subsection (a) hereof shall
be in addition to those Payroll Reduction Contributions that the Participant may
elect to make pursuant to Section 3.1.
7.6 Determination of Compensation. For purposes of determining the
-----------------------------
amount of any make-up contributions under Section 7.5, and for applying the
limits of Section 3.7, a Participant's Compensation during any period of
Qualified Military Service shall be deemed to equal either:
(a) the Compensation he would have received but for such Qualified
Military Service, based on the rate of pay he would have received from a
Participating Company; or
(b) if the amount described in (a) above is not reasonably certain,
his average Compensation from a Participating Company during the 12-month period
immediately preceding the Qualified Military Service (or, if shorter, the period
of employment immediately preceding the Qualified Military Service). Such
amount shall be adjusted as necessary to reflect the length of the Participant's
Qualified Military Service.
7.7 Restoration of Matching Contributions. If a Returning Veteran
-------------------------------------
contributes "make-up" Payroll Reduction Contributions pursuant to Section 7.5,
the Participating Company shall contribute on his behalf the related Matching
Contributions that it would have made under Sections 2.5 and 3.4 if such Payroll
Reduction Contributions had been made in the year to which they relate. Such
Matching Contributions shall not include the earnings that would have accrued on
such amount or any forfeitures that would have been allocated to his Account
during the period of Qualified Military Service.
7.8 Application of Certain Limitations.
----------------------------------
(a) For purposes of applying the limitations of Section 3.8, any make-
up contributions described in Section 7.5, and any related Matching
Contributions described in Section 7.7, shall be treated as contributions for
the Limitation Year to which they relate, rather than the Limitation Year in
which they are actually made.
(b) For purposes of applying the limitations of Subsection 3.1, any
such make-up contributions described in Section 7.5 shall be treated as
contributions for the calendar year to which they relate, rather than the
calendar year in which they are actually made.
36
<PAGE>
(c) For purposes of applying the limitations of Section 3.8 and
Article XIV, any make-up contributions described in Section 7.5 and related
Matching Contributions described in Section 7.7 shall be disregarded, both for
the Plan Year to which the contributions relate, and for the Plan Year in which
they are actually made.
7.9 Suspension of Loan Repayments. Notwithstanding any provisions of
-----------------------------
Article X to the contrary, if a Participant receives a loan from the Plan and
enters into Qualified Military Service during the term of the loan, a decrease
in Compensation or failure to make required loan repayments during such
Qualified Military Service shall not result in a default under Section 10.4.
7.10 Administrative Rules and Procedures. The Committee shall
-----------------------------------
establish such rules and procedures as it deems necessary or desirable to
implement the provisions of this Article, provided that they are not in
violation of the Uniformed Services Employment and Reemployment Rights Act of
1994, any regulations thereunder, or any other applicable law.
37
<PAGE>
ARTICLE VIII
ROLLOVER CONTRIBUTIONS AND TRANSFERS
------------------------------------
8.1 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
38
<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.
8.2 Transfers to and from Salaried Group.
------------------------------------
(a) A former Participant in this Plan who becomes a participant in
the P.H. Glatfelter 401(k) Savings Plan (the "Salaried Plan") shall have his
Accounts under this Plan transferred to the Salaried Plan, and held in the
analogous account or accounts under the terms of the Salaried Plan, as soon as
practicable following his participation in that plan. After such transfer, the
Employee shall have no further rights under this Plan.
(b) In the event that the Account of a Participant with an
outstanding loan or loans is transferred to the Salaried Plan in accordance with
Subsection (a) of this Section 8.2, the Participant's outstanding loan or loans
shall be transferred to the Salaried Plan secured by his account established
pursuant to such plan, and, notwithstanding any other provision of any
promissory note, security agreement or any other document executed by the
Participant and/or the Participant's spouse in connection with such loan, such
loan or loans shall be repaid to such account and otherwise be subject to and
administered in accordance with the terms and conditions of the Salaried Plan.
(c) In the case of a former participant in the Salaried Plan who
becomes a Participant in this Plan, this Plan shall accept the transfer of the
individual's account or accounts under the Salaried Plan, which shall be held in
the analogous Account or Accounts under the term of this Plan. The percentage
of compensation, if any, elected by the individual as a Salary Reduction
Contribution under the Salaried Plan in effect at the time he becomes a
Participant under this Plan shall be applicable to his Payroll Reduction
Contributions under Section 3.1 until changed by the Participant in accordance
with Sections 3.2 or 3.3 The Committee shall devise procedures for the separate
accounting of amounts so transferred to the extent required to preserve the
rights of the individual with respect to amounts accumulated under the terms of
the Salaried Plan. If the individual had an outstanding loan or loans under the
Salaried Plan at the time of the above-described transfer, such loan or loans
shall be transferred to and secured by his Account under this Plan, and shall,
notwithstanding the provision of any promissory note, security agreement or any
other document executed by the individual and/or the individual's spouse in
connection with such loan, such loan or loans shall be repaid to the
individual's
39
<PAGE>
Account under this Plan and otherwise be subject to and administered in
accordance with the terms and conditions of this Plan.
(d) An Employee who had satisfied the requirements for participation
in the Salaried Plan by completing a year of Eligibility Service under the terms
of that plan, and who transfers to employment as a Covered Employee shall be
eligible to participate in this Plan as of the [first day of the calendar month
coincident with or next following the] date as of which he becomes a Covered
Employee.
40
<PAGE>
ARTICLE IX
WITHDRAWALS
-----------
9.1 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 Matching Contribution Account, other than Matching
Contributions (and income thereon) counted in the Participant's Actual Deferral
Percentage for any Plan Year; and
(3) his Payroll 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 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 a member of the Participant's immediate family to perform his job as
a result of an accident or illness;
(2) Catastrophic damage to real or personal property of the
Participant where uninsured damage exceeds $5,000;
41
<PAGE>
(3) Such other circumstances or events in the nature of an
unanticipated emergency as may be prescribed by the United States Secretary of
the Treasury or its 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, 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:
(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) such other circumstances or events as may be prescribed
by the United States 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),
42
<PAGE>
to the extent such liquidation would not itself cause an immediate and heavy
financial need;
(C) by cessation of Payroll 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
(iii) loans from commercial sources on reasonable
commercial terms.
(2) Alternatively, a withdrawal under Subsection (a) of his
Payroll 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
Payroll 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 Payroll 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
43
<PAGE>
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 Payroll 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
b) the total Payroll Reduction
Contributions under this Plan and elective deferrals under any other qualified
plan made by the Participant during the calendar year of the withdrawal.
9.2 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 Payroll 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.
9.3 Withdrawals Not Subject to Replacement. A Participant may not
--------------------------------------
replace any portion of his Accounts withdrawn under this Plan.
9.4 Pledged Amounts. No amount that has been pledged as security for
---------------
a loan under Article IX may be withdrawn under this Article.
9.5 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.
44
<PAGE>
ARTICLE X
LOANS TO PARTICIPANTS
---------------------
10.1 Loan Application. Each Participant who is an Eligible 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.
10.2 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.
10.3 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
45
<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.
10.4 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 finally the Participant's Payroll Reduction
Account. The loan shall be charged against 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:
(1) the Participant dies;
46
<PAGE>
(2) the Participant has a Separation from Service;
(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.
10.5 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.
10.6 Additional Rules. The Committee may establish additional rules
----------------
relating to Participant loans under the Plan, which rules shall be applied on a
uniform and non-discriminatory basis.
47
<PAGE>
ARTICLE XI
ADMINISTRATION
--------------
11.1 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.
11.2 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.
48
<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.
11.3 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.
11.4 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
49
<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.
11.5 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.
50
<PAGE>
ARTICLE XII
THE FUND
--------
12.1 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.
12.2 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.
12.3 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.
12.4 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.
12.5 Investments and Voting of Shares.
--------------------------------
(a) Except as provided in Subsection (e) of this Section, the
Trustee shall invest Payroll Reduction Contributions and Rollover 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.
(b) Except as provided in Subsections (a) and (e) of this
Section, a Participant shall select one or more of the
51
<PAGE>
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.
52
<PAGE>
ARTICLE XIII
AMENDMENT OR TERMINATION OF THE PLAN
------------------------------------
13.1 Power of Amendment and Termination.
----------------------------------
(a) It is the intention of the Company that this Plan will be
permanent. However, the 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.
13.2 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 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.
53
<PAGE>
ARTICLE XIV
TOP-HEAVY PROVISIONS
--------------------
14.1 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.
14.2 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%)
54
<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 and Compensation shall include Compensation received from an Affiliated
Company.
(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
55
<PAGE>
(C) the amounts distributed from all plans in such
Aggregation Group to or on behalf of any Key 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) 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.
56
<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 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 Plan
Years in which the Plan is not a Top-Heavy Plan.
14.3 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 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
57
<PAGE>
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.
14.4 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.
14.5 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.
(b) If, in any Plan Year in which the Plan is a Top-Heavy Plan
but not a Super Top-Heavy Plan, the Aggregation Group 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
58
<PAGE>
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%).
59
<PAGE>
ARTICLE XV
GENERAL PROVISIONS
------------------
15.1 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.
15.2 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.
15.3 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.
15.4 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.
15.5 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.
15.6 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
60
<PAGE>
be complete discharge to the extent thereof of any and all liability of the
Participating Companies, the Committee, the Trustee, and the Fund.
15.7 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.
15.8 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.
61
<PAGE>
ARTICLE XVI
RIGHTS OF ALTERNATE PAYEES
--------------------------
16.1 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 11.4. 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.
16.2 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.
16.3 Withdrawals. Unless a Qualified Domestic Relations Order
-----------
provides to the contrary, an Alternate Payee shall not be permitted to make any
withdrawals under Article IX.
62
<PAGE>
16.4 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.
16.5 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 XII
with respect to a Participant, which amounts shall be separately accounted for
by the Trustee in the Alternate Payee's name.
Executed this 29th day of August, 1997.
P. H. GLATFELTER COMPANY
By:/s/ R. P. Newcomer
---------------------
Attest:/s/ R. S. Wood
-----------------
Secretary
63
<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
64
<PAGE>
EXHIBIT 5
September 2, 1997
P. H. Glatfelter Company
228 S. Main Street
Spring Grove, PA 17362
RE: P. H. GLATFELTER COMPANY 401(K)
SAVINGS PLAN FOR ECUSTA HOURLY EMPLOYEES
REGISTRATION STATEMENT ON FORM S-8
----------------------------------------
Ladies and 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 (the "Interests") in the P. H. Glatfelter Company 401(k)
Savings Plan for Ecusta Hourly Employees (the "Plan") and 200,000 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 (i) the Interests
created pursuant to the Plan will be legal and binding obligations of the
Company and (ii) 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,
/s/ Ballard Spahr Andrews & Ingersoll
<PAGE>
EXHIBIT (15)
LETTER IN LIEU OF CONSENT REGARDING REVIEW REPORT OF UNAUDITED INTERIM FINANCIAL
INFORMATION
P.H. Glatfelter Company:
We have reviewed, in accordance with standards established by the American
Institute of Certified Public Accountants, the unaudited condensed consolidated
financial statements of P.H. Glatfelter Company and subsidiaries for the periods
ended March 31, 1997 and 1996, and June 30, 1997 and 1996, as indicated in our
reports dated April 14, 1997 and July 16, 1997, respectively; because we did not
perform an audit, we expressed no opinion on that information.
We are aware that our reports referred to above, which are included in your
Quarterly Report on Form 10-Q for the quarters ended March 31, 1997 and June 30,
1997 are incorporated by reference in this Registration Statement on Form S-8.
We are also aware that the aforementioned reports, pursuant to Rule 436(c) under
the Securities Act of 1993, are 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
Philadelphia, Pennsylvania
September 2, 1997
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
P. H. Glatfelter Company
We consent to the incorporation by reference in this Registration Statement of
P. H. Glatfelter Company on Form S-8 of our report dated February 24, 1997 on
the consolidated financial statements of P. H. Glatfelter Company and
subsidiaries appearing in the Annual Report on Form 10-K for the year ended
December 31, 1996.
/s/ Deloitte & Touche LLP
Philadelphia, Pennsylvania
September 2, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF COUNSEL
The consent of Ballard Spahr Andrews & Ingersoll is contained in its
opinion filed as Exhibit 5 to the Registration Statement.
