<PAGE> 1
AS FILED ON JULY 30, 1999 REGISTRATION NO. ___-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
BOWATER INCORPORATED
------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 62-0721803
- ------------------------ ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
55 EAST CAMPERDOWN WAY, P.O. BOX 1028
GREENVILLE, SOUTH CAROLINA 29602
----------------------------------------
(Address of principal executive offices)
BOWATER INCORPORATED SAVINGS PLAN FOR CERTAIN HOURLY EMPLOYEES
--------------------------------------------------------------
(Full title of the Plan)
WENDY C. SHIBA, ESQUIRE
VICE PRESIDENT, SECRETARY AND ASSISTANT GENERAL COUNSEL
BOWATER INCORPORATED
55 EAST CAMPERDOWN WAY, P.O. BOX 1028
GREENVILLE, SOUTH CAROLINA 29602
(864) 271-7733
---------------------------------------------------------
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=================================================================================================================
Title of Securities to Amount to be Proposed Maximum Proposed Maximum Amount of
be Registered Registered Offering Price per Aggregate Offering Registration Fee
Share* Price*
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 100,000 shares $51.156 $5,115,600 $1,422.14
$1.00 par value
=================================================================================================================
</TABLE>
* The offering price for such shares is estimated pursuant to Rule
457(c) and (h) solely for the purpose of calculating the registration fee and is
based upon the average of the high and low prices of the Registrant's Common
Stock as reported on the consolidated reporting system for July 27, 1999.
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.
------------
This Registration Statement shall become effective automatically upon
the date of filing in accordance with Section 8(a) of the Securities Act of
1933, as amended, and 17 C.F.R. ss.230.462.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Pursuant to General Instruction E of the instructions to Form S-8,
Bowater Incorporated (the "Registrant") and the Bowater Incorporated Savings
Plan for Certain Hourly Employees (the "Plan"), formerly named the Bowater
Incorporated Newsprint Division Hourly Employees' Savings Plan, and originally
named the Bowater Southern Hourly Employees Profit Sharing Plan, hereby
incorporate by reference the contents of the previous Registration Statement
filed by the Registrant and the Plan on Form S-8 (Registration No. 33-16277).
The current registration of 100,000 shares of common stock of the Registrant
will increase the number of shares registered for issuance under the Plan to
550,000 shares.
<PAGE> 3
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 with respect to shares of
Common Stock offered under the Bowater Incorporated Savings Plan for Certain
Hourly Employees, and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Greenville, State of South Carolina, as of this 30th day of July, 1999.
BOWATER INCORPORATED
By: /s/ Arnold M. Nemirow
------------------------------
Arnold M. Nemirow
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated, in the City of Greenville, State of South Carolina, as of
this 30th day of July, 1999.
Signature Title
--------- -----
/s/ Arnold M. Nemirow Chairman, President and Chief Executive Officer
- ---------------------------- (principal executive officer)
Arnold M. Nemirow
/s/ David G. Maffucci Senior Vice President and Chief Financial Officer
- ---------------------------- (principal financial officer)
David G. Maffucci
/s/ Michael F. Nocito Vice President and Controller
- ---------------------------- (principal accounting officer)
Michael F. Nocito
* Director
- ----------------------------
Francis J. Aguilar
* Director
- ----------------------------
H. David Aycock
* Director
- ----------------------------
Richard Barth
<PAGE> 4
* Director
- ----------------------------
Kenneth M. Curtis
* Director
- ----------------------------
Charles J. Howard
* Director
- ----------------------------
Arthur R. Sawchuk
* Director
- ----------------------------
John A. Rolls
* Director
- ----------------------------
James L. Pate
* Wendy C. Shiba, by signing her name hereto, does sign this Registration
Statement on behalf of the persons indicated above pursuant to powers of
attorney duly executed by such persons, in the City of Greenville, State of
South Carolina, as of this 30th day of July, 1999.
By: /s/ Wendy C. Shiba
-----------------------------------
Wendy C. Shiba
Attorney-in-Fact
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrator of the Bowater Incorporated Savings Plan for Certain
Hourly Employees has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Greenville,
State of South Carolina, as of this 30th day of July, 1999.
BOWATER INCORPORATED
SAVINGS PLAN FOR CERTAIN HOURLY EMPLOYEES
By: /s/ Aaron B. Whitlock
-----------------------------------
Aaron B. Whitlock
Plan Administrator
S-2
<PAGE> 5
EXHIBITS
Pursuant to General Instruction E of the instructions to Form S-8, the
Registrant and the Plan hereby incorporate by reference the exhibits of the
previous Registration Statement filed by the Registrant and the Plan on Form S-8
(Registration No. 333-00555). The following additional exhibits are filed as
part of this Registration Statement.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
4 Bowater Incorporated Savings Plan for Certain Hourly Employees,
amended and restated effective January 1, 1997.
23 Consent of KPMG Peat Marwick LLP, dated July 28, 1999.
24 Powers of Attorney authorizing the signing of the Registration
Statement and amendments hereto on behalf of the Registrant's
directors.
<PAGE> 1
Exhibit 4
BOWATER INCORPORATED SAVINGS PLAN FOR CERTAIN
HOURLY EMPLOYEES
As Originally Effective July 3, 1984
and
As Amended and Restated Effective
January 1, 1997
<PAGE> 2
BOWATER INCORPORATED SAVINGS PLAN FOR
CERTAIN HOURLY EMPLOYEES
Table of Contents
PREAMBLE.......................................................................1
ARTICLE 1: DEFINITIONS.........................................................2
1.01 ACCOUNTS............................................................2
1.02 ACTIVE PARTICIPANT..................................................2
1.03 AFFILIATED COMPANY..................................................2
1.04 BASIC EMPLOYEE CONTRIBUTION ACCOUNTS
(TAX-DEFERRED)......................................................2
1.05 BENEFICIARY.........................................................2
1.06 BOARD...............................................................3
1.07 CODE................................................................3
1.08 COMMITTEE...........................................................3
1.09 COMPANY.............................................................3
1.10 CURRENT OR ACCUMULATED PROFITS......................................3
1.11 DISABILITY..........................................................3
1.12 EARLY RETIREMENT DATE...............................................3
1.13 EARNINGS............................................................3
1.14 EFFECTIVE DATE......................................................4
1.15 EMPLOYEE............................................................4
1.16 EMPLOYER............................................................4
1.17 EMPLOYMENT..........................................................4
1.18 ENROLLMENT DATE:....................................................4
1.19 ERISA...............................................................5
1.20 FIDUCIARY...........................................................5
1.21 FORFEITURES.........................................................5
1.22 HOUR OF SERVICE.....................................................5
1.23 INITIAL COMPANY CONTRIBUTION ACCOUNT................................5
1.24 INVESTMENT FUNDS....................................................5
1.25 MATCHING CONTRIBUTION ACCOUNT.......................................5
1.26 NORMAL RETIREMENT DATE..............................................5
1.27 PARTICIPANT.........................................................5
1.28 PLAN................................................................5
1.29 PLAN ADMINISTRATOR..................................................5
1.30 PLAN TO PLAN TRANSFER...............................................5
1.31 PLAN YEAR...........................................................6
1.32 POSTPONED RETIREMENT DATE...........................................6
1.33 RETIREMENT..........................................................6
1.34 SEVERANCE FROM SERVICE DATE.........................................6
1.35 SHARE OF COMPANY STOCK..............................................6
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<PAGE> 3
1.36 SPECIFIED HARDSHIP WITHDRAWAL.......................................7
1.37 SPOUSE..............................................................7
1.38 SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT.........7
1.39 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE
CONTRIBUTION ACCOUNT................................................7
1.40 TRUST AGREEMENT.....................................................7
1.41 TRUST FUND..........................................................7
1.42 TRUSTEE.............................................................7
1.43 VALUATION DATE......................................................8
1.44 VESTED VALUE........................................................8
1.45 YEAR OF BREAK IN SERVICE............................................8
1.46 YEARS OF SERVICE....................................................8
ARTICLE 2: ELIGIBILITY AND PARTICIPATION.......................................9
2.01 ELIGIBILITY.........................................................9
2.02 PARTICIPATION.......................................................9
2.03 CESSATION OF ACTIVE PARTICIPATION...................................9
2.04 EFFECT OF REEMPLOYMENT ON PLAN ENTRY OR
REENTRY............................................................10
2.05 PRIOR EMPLOYMENT WITH AN AFFILIATED COMPANY........................10
2.06 EFFECT OF MILITARY LEAVE...........................................10
ARTICLE 3: PARTICIPANT CONTRIBUTIONS..........................................11
3.01 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTIONS..........................11
3.02 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE
CONTRIBUTIONS......................................................11
3.03 NON TAX-DEFERRED EMPLOYEE CONTRIBUTIONS
(SUPPLEMENTAL).....................................................11
3.04 MODE OF PAYMENT....................................................11
3.05 LIMITATION ON CONTRIBUTIONS........................................11
3.06 CHANGE IN AMOUNT OF CONTRIBUTIONS..................................23
3.07 VOLUNTARY SUSPENSION OF PARTICIPANT
CONTRIBUTIONS......................................................23
3.08 PLAN TO PLAN TRANSFER..............................................24
3.09 EMPLOYMENT WITH AFFILIATED COMPANY.................................24
3.10 ROLLOVER CONTRIBUTIONS.............................................25
ii
<PAGE> 4
ARTICLE 4: EMPLOYER CONTRIBUTIONS.............................................26
4.01 MATCHING CONTRIBUTIONS.............................................26
4.02 INITIAL COMPANY CONTRIBUTIONS......................................26
4.03 MODE OF PAYMENT....................................................26
4.04 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER........................26
4.05 STATUTORY LIMITATION ON ADDITIONS..................................27
4.06 COMBINED PLANS LIMITATION..........................................29
4.07 FORFEITURES........................................................29
ARTICLE 5: INVESTMENT OPTIONS.................................................30
5.01 INVESTMENT OF PARTICIPANT AND EMPLOYER CONTRIBUTIONS...............30
5.02 INVESTMENT ELECTIONS BY PARTICIPANTS...............................31
5.03 CHANGES IN CURRENT INVESTMENT ELECTIONS............................31
5.04 TRANSFER OF ACCOUNTS...............................................31
ARTICLE 6: VALUATION OF PARTICIPANTS' ACCOUNTS................................32
6.01 ACCOUNTS...........................................................32
6.02 VALUATION OF ACCOUNTS..............................................32
6.03 AMOUNT OF PARTICIPANT'S ACCOUNTS...................................32
6.04 STATEMENT OF PARTICIPANT ACCOUNTS..................................32
6.05 TIMING OF CREDITS AND DEDUCTIONS...................................33
ARTICLE 7: BENEFITS UPON RETIREMENT, DEATH, DISABILITY,
OR TERMINATION (VESTED VALUE)......................................34
7.01 RETIREMENT.........................................................34
7.02 DEATH..............................................................34
7.03 DISABILITY.........................................................34
7.04 OTHER TERMINATION OF EMPLOYMENT....................................34
7.05 TRANSFER FROM HOURLY TO SALARIED EMPLOYMENT........................35
7.06 ELECTION OF BENEFITS...............................................35
7.07 METHOD OF PAYMENT..................................................36
7.08 PROOF OF DEATH AND RIGHT OF BENEFICIARY............................38
7.09 DIRECT ROLLOVER OF DISTRIBUTION....................................38
ARTICLE 8: WITHDRAWALS AND LOANS..............................................41
8.01 GENERAL CONDITIONS FOR WITHDRAWALS.................................41
8.02 WITHDRAWAL OF INITIAL AND MATCHING COMPANY CONTRIBUTION ACCOUNT....41
8.03 WITHDRAWAL OF SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION
ACCOUNT............................................................41
8.04 SPECIFIED HARDSHIP WITHDRAWAL......................................41
8.05 WITHDRAWAL AFTER AGE 59-1/2........................................42
8.07 WITHDRAWAL OF ROLLOVER ACCOUNT.....................................42
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<PAGE> 5
8.08 LOANS..............................................................42
ARTICLE 9: PLAN ADMINISTRATION................................................45
9.01 FIDUCIARIES........................................................45
9.02 RESPONSIBILITIES OF THE COMPANY....................................45
9.03 SAVINGS PLAN COMMITTEE.............................................45
9.04 OPERATION OF THE COMMITTEE.........................................45
9.05 PLAN ADMINISTRATOR.................................................47
9.06 RELIANCE ON EXPERTS................................................48
9.07 COMMITTEE ACTION...................................................48
9.08 INDIVIDUAL INDEMNIFICATION.........................................48
9.09 EXPENSES...........................................................48
9.10 SERVICE IN VARIOUS CAPACITIES......................................48
9.11 STANDARDS OF CONDUCT...............................................49
9.12 CLAIMS PROCEDURES..................................................49
ARTICLE 10: AMENDMENT AND TERMINATION OF THE PLAN.............................51
10.01 AMENDMENT OF THE PLAN.............................................51
10.02 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS......................51
10.03 TERMINATION, PARTIAL TERMINATION, OR
DISCONTINUANCE OF CONTRIBUTIONS...................................51
10.04 PROCEDURE.........................................................51
ARTICLE 11: CHANGE IN CONTROL.................................................52
11.01 CONTROLLING PROVISIONS............................................52
11.02 FULLY VESTING OF MATCHING CONTRIBUTION ACCOUNT....................52
11.03 DEFINITIONS.......................................................52
11.04 AMENDMENT OF THIS ARTICLE XI......................................53
ARTICLE 12: EXERCISE OF COMPANY STOCKHOLDER'S RIGHTS..........................54
12.01 VOTING RIGHTS.....................................................54
12.02 RIGHTS OTHER THAN VOTING RIGHTS...................................54
ARTICLE 13: GENERAL PROVISIONS................................................55
13.01 NONALIENATION OF BENEFITS.........................................55
13.02 EXCLUSIVE BENEFIT OF PARTICIPANTS AND
BENEFICIARIES.....................................................55
13.03 NO RIGHT TO EMPLOYMENT............................................55
13.04 UNIFORM ADMINISTRATION............................................55
13.05 HEADINGS..........................................................55
13.06 CONSTRUCTION......................................................55
13.07 UNCLAIMED DISTRIBUTIONS...........................................55
13.08 DISTRIBUTIONS TO A LEGAL REPRESENTATIVE...........................56
13.09 EXPENSES..........................................................56
13.10 SOURCE OF PAYMENT.................................................56
iv
<PAGE> 6
BOWATER INCORPORATED SAVINGS PLAN FOR CERTAIN
HOURLY EMPLOYEES
As Originally Effective July 3, 1984
and
As Amended and Restated Effective January 1, 1997
PREAMBLE
Establishment of Plan
The Bowater Incorporated Savings Plan for Certain Hourly Employees was
established effective July 3, 1984, for the benefit of eligible hourly Employees
of the Company, and of such of its subsidiaries as might adopt the Plan. The
Plan was established and is maintained pursuant to collective bargaining
agreements in effect between Bowater Incorporated and the United Paperworkers'
International Union and with its Locals 653, 788, 790 and 1514, the
International Brotherhood of Electrical Workers Union and its Local 175, and the
International Guards Union of America and its Local 100.
Amendment and Restatement of Plan
Effective January 1, 1989, the Plan was amended and restated to comply
with the Tax Reform Act of 1986 and to make the Plan consistent with the Master
Trust Agreement between Bowater Incorporated and Fidelity Management Trust
Company (dated July 1, 1994) and with administrative practice. Effective January
1, 1997, the Plan is hereby further restated to bring its provisions into
compliance with applicable law, and to further conform the Plan?s language to
administrative practice.
Purpose of Plan
The purpose of the Plan is to provide Employees with an opportunity to
save money for their retirement by contributing to the Plan on both a pre-tax
and an after-tax basis. Employee Contributions will be supplemented by Employer
contributions. All funds contributed will be held in trust, as described
hereinafter, and invested to achieve the objective of the Plan. The Plan and
related trust are intended to meet the requirements of Sections 41, 401(a),
401(k), 409 and 501(a) of the Internal Revenue Code, as amended from time to
time and the provisions of the Employee Retirement Income Security Act of 1974,
as amended from time to time.
<PAGE> 7
ARTICLE 1: DEFINITIONS
The following words and phrases as used in the Plan shall have the
indicated meanings, unless a different meaning is plainly required by the
context. Wherever applicable, masculine pronouns shall include the feminine, and
the singular shall include the plural.
1.01 ACCOUNTS: The separate Accounts maintained for each Participant,
including, but not limited to, a Participant's Basic and Supplemental
Tax-Deferred Employee Contribution Accounts, Supplemental Non Tax-Deferred
Employee Contribution Accounts, Initial Company Contribution Account and
Matching Company Contribution Account, as described under Articles 3 and 4.
1.02 ACTIVE PARTICIPANT: An eligible Employee who has in effect an
election to have the Employer withhold and contribute to the Plan a portion of
his Earnings, or an Employee who has made a Plan to Plan Transfer to the Plan.
1.03 AFFILIATED COMPANY: Any division or company within a family of
controlled corporations with the Company within the meaning of Code Section
1563(a) (determined without regard to Sections 1563(a)(4) and 1563(e)(3)(C)), or
a company that is a member of an affiliated service group to which the Company
belongs, within the meaning of Code Section 414(m). With respect to periods
prior to July 23, 1984, "Affiliated Company" includes any company which would
have been an Affiliated Company prior to the separation under the laws of the
United Kingdom of the Company from Bowater plc.
1.04 BASIC EMPLOYEE CONTRIBUTION ACCOUNTS (TAX-DEFERRED): With respect
to each Participant, the portion of the Trust Fund that is attributable to his
Basic Employee Contributions. Basic Tax-Deferred Employee Contributions made
under Section 3.01 shall be maintained in the Participant's Basic Tax-Deferred
Employee Contribution Account.
1.05 BENEFICIARY: The person, estate or trust designated by a
Participant to receive any benefits payable in the event of his death, provided
that such designation is made in accordance with procedures established by the
Plan Administrator. In the absence of an effective designation, or if the
Participant's Beneficiary does not survive the Participant, the Beneficiary
shall be the first of the following surviving the Participant: the Participant's
(a) widow or widower; (b) child(ren); (c) parent(s); (d) sibling(s); (e)
executor or administrator.
Notwithstanding the foregoing, if a Participant is married on the date
of his death, his Beneficiary shall be his surviving Spouse unless:
(a) the Participant has designated a Beneficiary other than his
Spouse, and
2
<PAGE> 8
(b) the Participant's Spouse has consented in writing to the
Participant's designation of an alternate Beneficiary. The
Spouse's consent must: (i) acknowledge the financial and legal
effect of such election, and (ii) be witnessed by a
representative of the Committee or a notary public. Such
consent requirement may be excused if it is established to the
satisfaction of the Committee that such consent cannot be
obtained because there is no Spouse or because the Spouse
cannot be located.
1.06 BOARD: The Board of Directors of the Company.
1.07 CODE: The Internal Revenue Code of 1986, as amended from time to
time. All references to any Section of the Code shall be deemed to refer not
only to such Section but also to any successor statutory provision to such
Section.
1.08 COMMITTEE: The Savings Plan Committee as appointed and acting in
accordance with Article 9.
1.09 COMPANY: Bowater Incorporated, a Delaware corporation, and its
successors by merger, purchase, or otherwise with respect to its Employees.
1.10 CURRENT OR ACCUMULATED PROFITS: The Employer's net profits
determined in accordance with generally accepted accounting principles before
provision for income taxes and extraordinary items. No Employer contribution
shall be made in any Plan Year where there are not sufficient Current or
Accumulated Profits.
1.11 DISABILITY: The status of being totally and permanently disabled
by reason of physical or mental disability, causing: (a) an Employee to be
incapable of further Employment in the capacity in which he was employed prior
to such physical or mental disability, and (b) the Employee's Employment to be
terminated as a result of such Disability. An Employee will only be considered
to have suffered a Disability for purposes of the Plan if he is considered to be
disabled under the qualified defined benefit plan under which he is eligible.
1.12 EARLY RETIREMENT DATE: The date a Participant?s Employment
terminates for any reason following his attainment of age 50 and completion of
15 or more Years of Service.
1.13 EARNINGS: The total compensation paid by the Employer to the
Employee that is reportable as "wages, tips and other compensation" in Box 1 of
the Employee's Federal Wage and Tax Statement (IRS Form W-2), adjusted as
follows:
3
<PAGE> 9
(i) The amount described above shall be increased by any salary
reduction contributions made on the Employee's behalf under
any plan maintained by the Employer pursuant to Code Section
125 or 401(k); and
(ii) The amount described above shall be decreased by
reimbursements or other expense allowances, cash and noncash
fringe benefits, moving expenses, deferred compensation,
welfare benefits, payments received under the Employer?s
gainsharing program, and stock and stock-related compensation.
Notwithstanding the foregoing, the amount of an Employee's Earnings
taken into account under the Plan for a Plan Year shall not exceed $160,000, as
adjusted for changes in the cost of living as provided under Code Section
415(d).
1.14 EFFECTIVE DATE: January 1, 1997, except as otherwise provided
herein.
1.15 EMPLOYEE: Any individual who is hired to perform duties for an
Employer on an hourly basis, is subject to its control, and receives regular
compensation other than a pension, severance pay, retainer, or fee under
contract who is not eligible to participate in any other savings plan sponsored
by the Company. Notwithstanding the foregoing, the term "Employee" shall not
include: (a) any individual designated by the Company on its records as an
independent contractor, consultant or other service provider to the Company
(even if a court, the Internal Revenue Service or other entity determines that
such individual is a common law employee); (b) any individual designated by the
Company on its records as a leased employee (as defined under Code Section
414(n)) (even if such individual is so determined to be a common law employee);
(c) any seasonal or temporary employees; and (d) any other employee of the
Company whose terms and conditions of employment are governed by a collective
bargaining agreement with respect to which benefits of the type provided to
employees under the Plan were the subject of good faith bargaining, unless such
agreement provides for participation in the Plan.
1.16 EMPLOYER: Bowater Incorporated or any successors by merger,
purchase or otherwise with respect to its Employees, or any Affiliated Company
that elects to participate in the Plan by action of its board of directors,
subject to the approval of the Board.
1.17 EMPLOYMENT: An individual?s service as an Employee of an Employer
on and after the effective date of the Employer's adoption of the Plan.
1.18 ENROLLMENT DATE: The first day of each calendar month. In the case
of any Affiliated Company that becomes an Employer, Enrollment Date shall mean
the effective date of such designation with respect to the Employees of such
Employer.
4
<PAGE> 10
1.19 ERISA: The Employment Retirement Income Security Act of 1974, as
amended from time to time. All references to any Section of ERISA shall be
deemed to refer not only to such Section but also to any successor statutory
provisions to such Section.
1.20 FIDUCIARY: A person or entity exercising discretionary control
over the Plan or its assets, as defined in Section 3(21) of ERISA.
1.21 FORFEITURES: The excess of all amounts held in a Participant's
Accounts, including investment returns, over the Vested Value of his Accounts,
as determined upon the termination of Employment of the Participant and his
completion of one (1) Year of Break in Service.
1.22 HOUR OF SERVICE: Each hour, or part thereof, for which an Employee
is paid or entitled to payment, directly or indirectly, for the performance of
duties for the Employer.
1.23 INITIAL COMPANY CONTRIBUTION ACCOUNT: With respect to each
Participant, the portion of the Trust Fund that is attributable to the
contributions made on his behalf by the Employer under Section 4.02 ("Initial
Company Account (1987)") and the Account containing such contributions made
previously ("Initial Company Contribution Account (1984)").
1.24 INVESTMENT FUNDS: The funds established from time to time at the
direction of the Company, in accordance with Section 5.01.
1.25 MATCHING CONTRIBUTION ACCOUNT: With respect to each Participant,
the portion of the Trust Fund that is attributable to contributions made on his
behalf by the Employer under Section 4.01.
1.26 NORMAL RETIREMENT DATE: The date a Participant's Employment
terminates upon his attainment of age 65.
1.27 PARTICIPANT: An Active Participant, former Active Participant or
Employee who has a positive balance in his Account(s).
1.28 PLAN: The Bowater Incorporated Savings Plan for Certain Hourly
Employees, as set forth herein and amended from time to time.
1.29 PLAN ADMINISTRATOR: The Company and its delegatees, as appointed
in accordance with Article 9 by the Board to administer the Plan.
1.30 PLAN TO PLAN TRANSFER: A direct transfer of an Employee's
Accounts, as made in accordance with Section 3.08.
5
<PAGE> 11
1.31 PLAN YEAR: The calendar year.
1.32 POSTPONED RETIREMENT DATE: The date a Participant's Employment
terminates following his attainment of age 65 and satisfaction of the
requirements for postponed retirement provided under the Pension Plan for
Certain Employees of Bowater Newsprint Division and Bowater Coated Papers and
Pulp Division.
1.33 RETIREMENT: The date on which a Participant terminates his
Employment following his Early Retirement Date, Normal Retirement Date and
Postponed Retirement Date, or if an Employer has its own qualified retirement
plan, early, normal, or postponed retirement with respect to eligible Employees
under such Employer's retirement plan. A Participant will be considered to have
entered Retirement under the Plan if he terminates employment on or after
attaining age 55.
1.34 SEVERANCE FROM SERVICE DATE: The earlier of:
(a) The date on which the Employee quits, retires, is
discharged or dies; and
(b) The first anniversary of the start of a period during
which the Employee remains absent from Employment with or without pay,
for any reason other than those specified in subsection (a) of this
Section 1.34, such as vacation, holiday, sickness, disability, leave of
absence or layoff.
In the case of an Employee who is absent from work for maternity or
paternity reasons beyond the first (1st) anniversary of the first (1st) date of
such absence, the Severance From Service Date shall be the second (2nd)
anniversary of the first (1st) date of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons means an
absence resulting from: (i) the pregnancy of the Employee; (ii) the birth of a
child of the Employee; (iii) a placement of a child with the Employee in
connection with the adoption of such child by the Employee; or (iv) the
Employee's caring for a child for a period beginning immediately following the
child's birth or placement.
In the case of an Employee on a leave of absence described in Section
1.45, the Employee shall not incur a Severance from Service while on such a
leave. However, if such an Employee does not return to Employment within the
period described in Section 1.45, such Employee shall be deemed to have incurred
a Severance from Service in accordance with paragraph (a) of this Section 1.34
on the last day of such leave.
1.35 SHARE OF COMPANY STOCK: A share of common stock of the Company
which has voting power and dividend rights no less favorable than any other
class of common stock issued by such Company.
6
<PAGE> 12
1.36 SPECIFIED HARDSHIP WITHDRAWAL: A withdrawal necessitated by the
financial need of the Participant. A Specified Hardship Withdrawal shall be
allowed only for financial need arising out of expenses incurred or assumed by a
Participant (a) for deductible medical expenses of a Participant or his family
member or dependent not covered by insurance; (b) for the payment of tuition,
related educational fees and room and board expenses for the next twelve (12)
months of post-secondary education for the Participant, his Spouse or his
dependents; (c) relating to the acquisition of a primary residence of a
Participant; or (d) expenses to prevent eviction from, or foreclosure on the
mortgage of the Participant's primary residence.
A Specified Hardship Withdrawal may not exceed the actual expense
(including reasonably anticipated state and federal taxes and penalties payable
with respect to the receipt of the amount withdrawn) incurred by the Participant
due to the circumstances described in (a)-(d) above. A Specified Hardship
Withdrawal shall not be granted unless the Participant?s financial needs cannot
be met through the use of his other reasonably available resources. Such
resources include all distributions or loans (other than Specified Hardship
Withdrawals) under this Plan, the ability to borrow from banks, credit unions or
other legitimate lenders and the disposition of personal assets which can be
readily sold without need for replacement. The Plan Administrator (or his
delegatee) shall determine whether applications for such withdrawal satisfy the
definition for Specified Hardship Withdrawal.
1.37 SPOUSE: The person legally married to the Participant at the time
an action or event relevant for Plan purposes occurs.
1.38 SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT: With
respect to each Participant, the portion of the Trust Fund that is attributable
to Supplemental Non Tax-Deferred Employee Contributions he makes in accordance
with Section 3.03.
1.39 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT: With
respect to each Participant, the portion of the Trust Fund that is attributable
to Supplemental Tax-Deferred Employee Contributions he makes in accordance with
Section 3.02.
1.40 TRUST AGREEMENT: The Master Trust Agreement between the Company
and Fidelity Management Trust Company (and any successors thereto) as amended
from time to time.
1.41 TRUST FUND: The aggregate funds held by the Trustee in accordance
with the Trust Agreement.
1.42 TRUSTEE: Fidelity Management Trust Company and its successors
appointed in accordance with the Trust Agreement.
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<PAGE> 13
1.43 VALUATION DATE: The last business day of each calendar quarter and
any other date specified by the Trustee, on which the Trust Fund is valued in
accordance with Article 6. As to Accounts maintained in any Investment Fund
which is valued daily, each business day may be deemed to be a Valuation Date. A
Valuation Date on which all Investment Funds are valued shall be a
"Comprehensive Valuation Date."
1.44 VESTED VALUE: The nonforfeitable portion of a Participant's
Account(s) as further described in Article 7.
1.45 YEAR OF BREAK IN SERVICE: Any 12 consecutive-month period computed
from an Employee's Severance from Service Date during which he does not complete
one (1) or more Hours of Service. A Year of Break in Service shall occur on the
last day of the first such twelve-month period. Notwithstanding the above, an
Employee shall be deemed to have not incurred a Year of Break in Service if he
is on a leave of absence in excess of 12 months authorized by his Employer and
returns to active Employment prior to the expiration of such leave.
1.46 YEARS OF SERVICE: The aggregate period of an Employee's
Employment, consisting of Years of Service and parts thereof, with each Year of
Service consisting of 12 months and with each month consisting of 30 days. Years
of Service shall be computed beginning on the date the Employee first completes
an Hour of Service upon commencing or recommencing employment and ending on his
next following Severance from Service Date. Years of Service shall include the
period of time between an Employee?s Severance from Service Date and the date he
next completes an Hour of Service, provided that he does not incur a Year of
Break in Service.
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<PAGE> 14
ARTICLE 2: ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY: Each Employee who is an Active Participant in the
Plan on the Effective Date shall continue to be an Active Participant in
accordance with the provisions of the Plan. Subject to Section 2.05, each other
Employee shall be eligible to participate in the Plan as of the Enrollment Date
coinciding with or next following the date he completes one (1) Year of Service;
provided, however, that each Employee who transfers from salaried Employment
with an Employer shall be eligible to make a Plan to Plan Transfer at any time.
2.02 PARTICIPATION: Each Employee shall become a Participant as
follows:
(a) With respect to Initial Company Contributions, an eligible
Employee shall automatically become a Participant as of the date he
first becomes eligible to receive such contribution;
(b) An Employee who satisfies the eligibility requirements of
Section 2.01 shall become an Active Participant the date the Employee
files with the Employer a properly completed enrollment form in
accordance with the requirements and time periods established by the
Plan Administrator. An eligible Employee who does not file an
enrollment form in accordance with the preceding sentence shall become
an Active Participant on the first (1st) succeeding Enrollment Date
after the date the Employee files such enrollment form with the
Employer.
(c) With respect to a Plan to Plan Transfer, an Employee shall
become a Participant the date he makes such Plan to Plan Transfer.
2.03 CESSATION OF ACTIVE PARTICIPATION: An Employee shall cease to be
an Active Participant if:
(a) he voluntarily suspends his contributions to the Plan
pursuant to Section 3.07;
(b) his Employee Contributions to the Plan are mandatorily
suspended pursuant to Article 8;
(c) he incurs a Year of Break in Service; or
(d) there is any change in his Employment status which would
make him ineligible to participate in the Plan, under the terms of
Section 2.01.
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<PAGE> 15
An Employee shall not cease to be a Participant because of subsection (a) or (b)
above, nor as a result of a temporary absence from Employment. The Employee
shall continue to be a Participant until the Vested Value of his Accounts are
distributed in full to him or his Beneficiary.
2.04 EFFECT OF REEMPLOYMENT ON PLAN ENTRY OR REENTRY: If an Employee's
Employment resumes after he incurs a Severance from Service, the Employee may
enter or reenter the Plan pursuant to the following rules:
(a) If the Employee incurred one (1) or more Years of Break in
Service before the Vested Value of his Accounts exceeded zero (0), he
may enter or reenter the Plan on any Enrollment Date after he satisfies
the requirements of Section 2.01;
(b) If the Employee was previously a Participant in the Plan
and either (i) he did not incur one (1) Year of Break in Service, or
(ii) the Vested Value of his Accounts was greater than zero (0) at the
time of his termination of Employment, he may reenter the Plan as of
the date his Employment resumes.
(c) If the Employee did not incur a Year of Break in Service,
had satisfied the eligibility conditions of Section 2.01 but terminated
Employment prior to becoming a Participant, he may become a Participant
in the Plan on the later of: (i) the date his Employment resumes, or
(ii) the Enrollment Date on which he would have become a Participant
had he not incurred the termination of Employment;
(d) Each other Employee shall become a Participant following
the resumption of his Employment as of the date he satisfies the
requirements of Section 2.01.
2.05 PRIOR EMPLOYMENT WITH AN AFFILIATED COMPANY: Each Employee who was
previously employed by an Affiliated Company or who previously performed
services for the Company as a leased employee within the meaning of Section
414(n) of the Code shall have such service taken into account under the Plan,
solely for purposes of determining eligibility to participate in the Plan and
the Vested Value of his Accounts.
2.06 EFFECT OF MILITARY LEAVE. Notwithstanding any provision of the
Plan to the contrary (including Sections 3.05, 4.05 and 4.06), participation,
contributions, benefits and service credit (as defined under Code Section
414(u)) shall be provided under the Plan in accordance with Section 414(u) of
the Code.
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<PAGE> 16
ARTICLE 3: PARTICIPANT CONTRIBUTIONS
3.01 BASIC TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active Participant
may elect to make Basic Tax-Deferred Employee Contributions to the Plan. The
rate of such contributions shall be 1%, 2%, 3%, 4%, 5% or 6% of the
Participant's Earnings.
3.02 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE CONTRIBUTIONS: Each Active
Participant who is making contributions of 6% of his Earnings under Section 3.01
may elect to make Supplemental Tax-Deferred Employee Contributions to the Plan.
The rate of such contributions shall be 1%, 2%, or 3% of the Participant's
Earnings. This provision shall be effective as of the dates and for the Employee
categories indicated below:
(a) July 3, 1996, for Employees connected with the Calhoun
Newsprint operations;
(b) April 1, 1997, for Employees connected with Bowater Lumber;
and
(c) August 1, 1997, for Employees connected with Calhoun Woodlands
operations.
3.03 NON TAX-DEFERRED EMPLOYEE CONTRIBUTIONS (SUPPLEMENTAL): Each
Active Participant may elect to make Supplemental Non Tax-Deferred Employee
Contributions to the Plan. The rate of such contributions shall be 1%, 2%, 3%,
4%, 5%, or 6% of the Participant's Earnings; provided that the total of a
Participant's contributions under Sections 3.01, 3.02 and 3.03 shall not exceed
15% of his Earnings.
3.04 MODE OF PAYMENT: Contributions made under Sections 3.01, 3.02, and
3.03 shall be made by means of deductions from a Participant's Earnings in each
payroll period. All contributions shall be collected by the Employer, credited
to the applicable Accounts, and paid to the Trustee as soon as reasonably
possible, but in no event later than the 15th business day of the month
immediately following the month in which such amounts would otherwise have been
paid to the Participant.
3.05 LIMITATION ON CONTRIBUTIONS: Notwithstanding any other provision
in the Plan (except Section 2.06), the provisions of this Section 3.05 shall
apply to limit Employee and Company Contributions to the Plan.
(a) Definitions: For purposes of this Section 3.05, the following
terms shall have the meanings set forth herein:
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<PAGE> 17
i. "Actual Deferral Percentage" shall be the average of
the ratios ("Actual Deferral Ratios" or "ADRs"),
calculated separately for each Employee in the HCE
group and the Non-HCE group, of:
(A) each Employee's Elective Deferrals and
amounts treated as his Elective Deferrals
actually paid over to the Trust Fund as
contributions on behalf of such Employee for
the Plan Year, to
(B) the Employee's Compensation for the Plan
Year.
An Elective Contribution will be taken into account
in calculating the Actual Deferral Percentage for a
Plan Year only if:
(1) it relates to Compensation that
either would have been received by
the Employee during the Plan Year
(but for the deferral election) or
is attributable to services
performed by the Employee during
the Plan Year and would have been
received by the Employee within 2
1/2 months after the close of the
Plan Year (but for the deferral
election); and
(2) it is allocated to the Employee's
Accounts as of a date within the
relevant Plan Year. For this
purpose, an Elective Contribution
is considered allocated as of the
date the allocation is no longer
contingent on participation in the
Plan or the performance of
services, provided that the
Elective Contribution is actually
paid to the Trust Fund no later
than 12 months after the close of
the Plan Year to which the
contribution relates.
In computing the Actual Deferral Percentage for all
Employees, the Employer may elect to take into
account Qualified Matching Contributions and
Qualified Nonelective Contributions, provided that
the requirements of Treasury Regulation Section
1.401(k)-1(b)(5) are satisfied.
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<PAGE> 18
Notwithstanding any other provision of this Section
3.05, if Elective Contributions are taken into
account for purposes of the Contribution Percentage
Test of subsection (d) for any Plan Year, such
contributions shall not be taken into account under
paragraph (A) of this subsection (a)(i) for such Plan
Year.
ii "Compensation" means compensation as defined under
Code Section 414(s), as determined by the Plan
Administrator.
iii. "Contribution Percentage" shall be the average of the
ratios ("Actual Contribution Ratios" or "ACRs"),
calculated separately for each Employee in each of
the HCE group and Non-HCE group, of:
(A) the sum of the Matching Contributions and
Employee Contributions paid under the Plan
on behalf of such Employee for the Plan
Year, to
(B) Employee's Compensation for the Plan Year.
In computing the Contribution Percentage, the
Employer may elect to take into account Elective
Contributions and Qualified Nonelective Contributions
under the Plan or any other plan of the Employer, to
the extent permitted under applicable Treasury
Regulations.
If Matching Contributions are taken into account for
purposes of the Actual Deferral Percentage Test of
subsection (c) of this Section 3.05 for any Plan
Year, such contributions shall not be taken into
account under paragraph (A) of this subsection
(a)(iii) for such Plan Year.
iv. "Elective Contributions" are contributions by the
Employer to a retirement plan that were subject to an
election under a cash or deferred arrangement
(whether or not a tax-qualified cash or deferred
arrangement). No amount that has become currently
available to an Employee or that is designated or
treated as an after-tax Employee Contribution may be
treated as an Elective Contribution.
v. "Elective Deferrals" means, with respect to any
taxable year, the sum of:
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<PAGE> 19
(A) any Elective Contribution under a
tax-qualified cash or deferred arrangement
(as defined in Code Section 401(k)) to the
extent not includible in a Participant's
gross income for the taxable year under Code
Section 402(e)(3) (determined without regard
to the limits in Code Section 402(g)),
(B) any employer contribution to a simplified
employee pension plan (as defined in Section
408(k)) the extent not includible in a
Participant's gross income for the taxable
year under Code Section 402(h)(1)(B)
(determined without regard to the limits in
Code Section 402(g)),
(C) any employer contribution to purchase an
annuity contract under Code Section 403(b)
made under a salary reduction agreement
(within the meaning of Code Section
3121(a)(5)(D); unless such contribution is
made pursuant to an irrevocable election
made by the Employee at the time he becomes
eligible to participate in the agreement or
is made pursuant to a similar arrangement
involving an irrevocable election specified
in Treasury Regulations, and
(D) any Employee Contribution to a trust
described in Code Section 501(c)(18), to the
extent deductible from the Employees income
for the taxable year under Code Section
501(c)(18) (determined without regard to the
limits in Code Section 402(g)).
vi. "Employee Contributions" means any mandatory or
voluntary contribution to the Plan that is treated at
the time of contribution as an after-tax Employee
Contribution and is allocated to a separate account
to which attributable earnings and losses are
allocated.
vii. "Excess Aggregate Contributions" means, with respect
to any Plan Year, the excess of:
(A) the aggregate amount of the Matching
Contributions and Employee Contributions
actually made on behalf of HCEs for the Plan
Year, including any Qualified Nonelective
Contribution or Elective Deferral taken into
account in computing the
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<PAGE> 20
Contribution Percentage, but excluding
Qualified Matching Contributions treated as
Elective Deferrals under subsection (a)(i)
of this Section 3.05, over
(B) the maximum amount of contributions
described in paragraph (A) above that are
permitted under the limitations of
subsection (d) of this Section 3.05
(determined by reducing the contributions
described in paragraph (A) above made on
behalf of HCES in order of their ACRs,
beginning with the HCE with the highest
ACR).
The amount of Excess Aggregate Contributions for a
Plan Year shall be determined only after first
determining the Excess Contributions that are treated
as Employee Contributions due to Recharacterization
under subsection (e)(ii) of this Section 3.05.
viii. "Excess Contributions" means, with respect to any
Plan Year, the excess of:
(A) the aggregate amount of Elective
Contributions, (including Qualified
Nonelective Contributions and Qualified
Matching Contributions that are treated as
Elective Contributions), actually paid over
to the Trust Fund on behalf of HCEs for such
Plan Year, over
(B) the maximum amount of such contributions
permitted under the limitations of
subsection (c) of this Section 3.05
(determined by reducing the contributions
described in paragraph (A) above made on
behalf of HCES in order of their ADRs,
beginning with the HCE with the highest
ADR).
ix. "Excess Deferral" means the Elective Deferrals of any
individual for any taxable year to the extent the
amount of such deferrals for the taxable year exceeds
the limit in subsection (b) of this Section 3.05, but
excluding amounts described in Section 1105(c)(5) of
the Tax Reform Act of 1986.
x. "Highly Compensated Employee" means an Employee who
performs service during the Determination Year who:
15
<PAGE> 21
(A) is a five percent (5%) owner (as defined in
Code Section 416(i)(1)(A)(iii)) at any time
during the Determination Year or the
Look-Back Year; or
(B) receives compensation in excess of $80,000
(indexed in accordance with Code Section
415(d)) during the Look-Back Year and, if
the Employer so elects, was a member of the
top-paid group during the Look-Back Year.
Special Rules: For purposes of this subsection (x)
only: (a) the "Determination Year" means the Plan
Year for which the identification of HCEs is being
made; (b) the "Look-Back Year" means the 12-month
period immediately preceding the Determination Year
or, if the Employer so elects, the calendar year
ending with or within the Determination Year; (c) the
"top-paid group" means the top 20% of Employees
ranked on the basis of compensation received during
the Plan Year; (d) "compensation" means compensation
within the meaning of Code Section 415(c)(3),
including Elective Deferrals or salary reduction
contributions to a cafeteria plan, cash or deferred
arrangement or tax-sheltered annuity; and (e)
employers required to be aggregated under Code
Sections 414(b), (c), (m) or (o) are treated as a
single employer with the Employer.
xi. "HCE Group" means the group consisting of all Highly
Compensated Employees.
xii. "Matching Contributions" means:
(A) any contribution to the Plan made by the
Employer (including a contribution made at
the Employer's discretion) on behalf of an
Employee on account of an Employee
Contribution made by such Employee,
(B) any contribution to the Plan made by the
Employer (including a contribution made at
the Employer's discretion) on behalf of an
Employee on account of an Elective Deferral
made on an Employee's behalf, and
(C) Any Forfeiture allocated on the basis of
Employee Contributions, Matching
Contributions or Elective Contributions.
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<PAGE> 22
xiii. "Nonelective Contributions" means contributions made
by the Employer (other than Matching Contributions)
with respect to which the Employee may not elect to
receive the contributions in cash or other benefits
instead of being contributed to the Plan.
xiv. "Non-HCE Group" means the group consisting of all
Employees who are not Highly Compensated Employees.
xv. "Qualified Matching Contributions" means Matching
Contributions which satisfy the requirements of
subsection (a)(xvi).
xvi. "Qualified Nonelective Contributions" means any
contribution (other than a Matching Contribution or
Elective Contribution) with respect to which the
Employee may not elect to receive the contribution in
cash instead of being contributed to the Plan, and
only if such contribution is nonforfeitable when made
and distributable only upon the occurrence of one (1)
of the following events:
(A) the Employee's Retirement, death, Disability
or separation from service;
(B) the termination of the Plan without
establishment or maintenance of another
defined contribution plan (other than an
ESOP or SEP) by the Employer;
(C) the Employee's attainment of age 59 1/2;
(D) the sale or other disposition by the
Employer to an unrelated corporation of
substantially all of the assets used in the
trade or business to which the Plan relates,
but only with respect to Employees who
continue employment with the acquiring
corporation which does not maintain the Plan
after the disposition; and
(E) the sale or other disposition by the
Employer of its interest in a subsidiary to
an unrelated entity, but only with respect
to Employees who continue employment with
the subsidiary, the acquiring entity of
which does not maintain the Plan after the
disposition.
Paragraphs (B), (D) and (E) above apply only if the
Employer, as the transferor corporation, continues to
maintain the Plan for its remaining Employees.
Nonelective Contributions which may be
17
<PAGE> 23
treated as Matching Contributions must satisfy these
requirements without regard to whether they are
actually taken into account as Matching
Contributions.
(b) Individual Limitation: The amount of Elective Deferrals that a
Participant may make in any taxable year shall be limited to
$9,500 (as adjusted annually for changes in cost of living
pursuant to Code Section 402(g)).
To the extent a Participant has made Elective Deferrals to the
Plan in excess of the amount set forth above, such Excess
Deferrals shall be distributed to him no later than April 15
following the end of the taxable year during which such
Elective Deferrals are made. If a Participant makes Elective
Deferrals to this Plan and to any other plan or arrangement in
a single taxable year, he may allocate the amount of any
Excess Deferrals for such taxable year among all such plans.
No later than March 1 following the close of the taxable year
during which the Excess Deferrals are made, the Participant
shall notify the Plan Administrator in writing of the amount
of the Excess Deferrals to be allocated to this Plan. Such
amount (including income thereon) shall then be distributed to
the Participant no later than the next following April 15th.
(c) Before-Tax Contribution Limitation ("Actual Deferral
Percentage Test"): The Actual Deferral Percentage for the HCE
group for a Plan Year shall bear a relationship to the Actual
Deferral Percentage for the non-HCE group that meets either of
the following tests:
i. The Actual Deferral Percentage for the HCE group for
a Plan Year shall not be more than the Actual
Deferral Percentage for the non-HCE group for the
preceding Plan Year, multiplied by 1.25; or
ii. The excess of the Actual Deferral Percentage for the
HCE group for the Plan Year over that of non-HCE
group for the preceding Plan Year is not more than 2
percentage points, and the Actual Deferral Percentage
for the HCE group for the Plan Year is not more than
the Actual Deferral Percentage for the non-HCE group
for the preceding Plan Year, multiplied by 2.
For purposes of applying this subsection (c), all Elective
Contributions that are made under two (2) or more plans that
are aggregated for purposes of Code Sections 401(a)(4) or
410(b) (other than Code Section 410(b)(2)(A)(ii)) are to be
treated as made under a single plan. If two (2) or more plans
are permissively aggregated for purposes of Code Section
401(k), the aggregated plans must also satisfy Code Sections
401(a)(4) and 410(b) as though they were a single plan.
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<PAGE> 24
The Actual Deferral Percentage taken into account for any
Highly Compensated Employee who is a Participant in two (2) or
more cash or deferred arrangements maintained by the Employer
or Affiliated Company shall be the sum of the Elective
Deferrals for that Employee under each 401(k) plan of the
Employer or Affiliated Company, divided by the Participant's
Compensation from the Employer and
Affiliated Company.
Except to the extent provided under regulations or rules of
the Secretary of the Treasury, Excess Contributions
distributed to Participants who are Highly Compensated
Employees in accordance with subsection (b) above shall be
treated as Employee Contributions for purposes of this
subsection (c).
If, in order to satisfy the Actual Deferral Percentage Test of
this subsection (c), Excess Contributions must be distributed
to Highly Compensated Employees, the total amount of Excess
Contributions to be distributed for the Plan Year shall be
determined by first determining the amount by which the Excess
Contributions made on behalf of the Highly Compensated
Employees must be reduced in order to satisfy the Actual
Deferral Percentage Test. The total dollar amount of Excess
Contributions determined under this paragraph shall then be
allocated and distributed in accordance with subsection (e) of
this Section 3.05.
(d) Company and Supplemental Contribution Limitation
("Contribution Percentage Test"): The Contribution Percentage
for the HCE group for a Plan Year shall not exceed the greater
of:
i. 125% of the Contribution Percentage for the non-HCE
group for the preceding Plan Year; or
ii. the lesser of 200% of the Contribution Percentage for
the non-HCE group for the preceding Plan Year, or the
Contribution Percentage for the non-HCE group for the
preceding Plan Year, plus two (2) percentage points.
If two (2) or more plans of the Employer to which Matching
Contributions, Employee Contributions or Elective Deferrals
are made are treated as a single plan for purposes of Code
Section 410(b), such plans shall be treated as a single plan
for purposes of this subsection (d). The Contribution
Percentage taken into account for any Highly Compensated
Employee who is a Participant in two (2) or more plans of the
Employer or an Affiliated Company to which Matching
Contributions or Employee Contributions are made shall be the
sum of the Matching Contributions
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<PAGE> 25
and Employee Contributions made for the HCE under each such
plan, divided by his or her Compensation from the Employer and
Affiliated Company.
Any Employee who is eligible to make an Employee Contribution
(or, if the Employer takes Elective Contributions into
account, Elective Contributions) or to receive a Matching
Contribution shall be considered an eligible Employee. In
addition, if an Employee Contribution is required as a
condition of participation in the Plan, any Employee who would
be a Participant in the Plan if such Employee made such a
contribution shall be treated as an eligible Employee on
behalf of whom no Employer contributions are made.
The Employer may elect to take into account Elective
Contributions and/or Qualified Nonelective Contributions
allocated to a Participant's Accounts under the Plan or any
other plan it sponsors if the conditions described in Section
1.401(m)-1(b)(5) of the Treasury Regulations are satisfied.
If, in order to satisfy the Contribution Percentage Test of
this subsection (d), Excess Aggregate Contributions must be
distributed to Highly Compensated Employees, the total amount
of Excess Aggregate Contributions to be distributed for the
Plan Year shall be determined by first determining the amount
by which the Excess Aggregate Contributions made on behalf of
the Highly Compensated Employees must be reduced in order to
satisfy the Contribution Percentage Test. The total dollar
amount of Excess Aggregate Contributions determined under this
paragraph shall then be allocated and distributed in
accordance with subsection (e) of this Section 3.05.
Notwithstanding the foregoing, Employees who are members of a
collective bargaining unit shall not be included in applying
the provisions of this subsection (d).
(e) The Plan shall be treated as satisfying the requirements of
subsections (c) and (d) above for any Plan Year if, before the
close of the following Plan Year:
i. the amount of a Participant's Excess Contributions
and Excess Aggregate Contributions for such Plan Year
is distributed to the Participant; or
ii. in the case of Excess Contributions, the Participant
elects to treat such Excess Contributions as
distributed and
20
<PAGE> 26
recontributed by the Participant to the Plan as a Non
Tax-Deferred Employee Contribution
("Recharacterized"), to the extent allowed under
applicable Treasury Regulations; or
iii. in the case of Excess Aggregate Contributions, such
contributions are forfeited to the extent they are
forfeitable.
The Plan Administrator shall determine which of methods (i),
(ii), or (iii) above shall be utilized; provided, however,
that such determination shall be made on a consistent and
non-discriminatory basis.
The amount of Excess Contributions returned to Highly
Compensated Employees shall be determined by first returning
the Elective Deferrals made by the Highly Compensated Employee
who made the highest amount of Elective Deferrals during the
Plan Year, to the extent necessary to either satisfy the
Actual Deferral Percentage Test or cause such dollar amount to
equal the amount of Elective Deferrals made by the Highly
Compensated Employee with the next highest dollar amount of
Elective Deferrals. This process is repeated until the Actual
Deferral Percentage Test is satisfied. Excess Aggregate
Contributions shall be returned to Highly Compensated
Employees in the same manner, starting with the Highly
Compensated Employee on whose behalf the highest dollar amount
of Employee and Matching Contributions were made, until the
Contribution Percentage Test is satisfied.
The amount of Excess Contributions to be distributed or
Recharacterized shall be reduced by Excess Deferrals
previously distributed for the taxable year ending in the same
Plan Year. Excess Deferrals to be distributed to Participants
for a taxable year will be reduced by any Excess Contributions
that have previously been distributed or Recharacterized for
the Plan Year beginning in the same taxable year.
Excess Aggregate Contributions shall be distributed or
forfeited by a Highly Compensated Employee in proportion to
the portions of such Excess Aggregate Contributions that are
attributable to him.
If Matching Contributions have been made by the Employer on
account of Excess Contributions distributed or
Recharacterized, such Matching Contributions and income
allocable thereto shall be forfeited and applied to reduce
Employer contributions in subsequent Plan Years.
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<PAGE> 27
Excess Contributions must be corrected by the close
of the Plan Year following the Plan Year for which
they were made. Excess Contributions that are
Recharacterized will remain subject to the
nonforfeitability requirements and distribution
limitations that apply to Elective Contributions.
(f) The distribution of Excess Contributions and/or Excess
Aggregate Contributions will include the income allocable
thereto. The income allocable to Excess Contributions and/or
Excess Aggregate Contributions includes income for the Plan
Year for which the Excess Contributions and/or Excess
Aggregate Contributions were made.
i. Income allocable to an Employee's Excess
Contributions shall be determined by multiplying the
income for the Plan Year allocable to all Elective
Contributions and amounts treated as Elective
Contributions (for purposes of this paragraph only,
the "Effective Elective Contributions") for the Plan
Year by a fraction:
A. the numerator of which is the Employee's
Excess Contributions for the Plan Year; and
B. the denominator of which is the sum of: (1)
the Employee's total Account balance
attributable to Effective Elective
Contributions as of the beginning of the
Plan Year; plus (2) the Employee's Effective
Elective Contributions for the Plan Year.
ii. Income allocable to an Employee's Excess Aggregate
Contributions shall be determined by multiplying the
income allocable to all Matching Contributions,
Employee Contributions and any Qualified Nonelective
Contributions or Elective Deferral for the Plan Year
that are taken into account in computing the
Contribution Percentage, excluding Qualified Matching
Contributions treated as Elective Contributions
(together, for purposes of this paragraph only, the
"Effective Matching/Employee Contributions") by a
fraction:
A. the numerator of which is the Employee's
Excess Aggregate Contributions for the Plan
Year; and
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B. the denominator of which is the sum of (1)
the Employee's total Account balance
attributable to Effective Matching/Employee
Contributions as of the beginning of the
Plan Year; plus (2) the Employee's Effective
Matching/ Employee Contributions for the
Plan Year.
(g) In addition to the limitations described in subsections (b),
(c) and (d) above, if:
i. the Actual Deferral Percentage for the HCE group
exceeds the limits described under subsection (c)(i);
and
ii. the Contribution Percentage for the HCE group exceeds
the limits described under subsection (d)(i); and
iii. the sum of Actual Deferral Percentage and the
Contribution Percentage exceeds the limit described
in Treasury Regulation ss.1.401(m)-2 (b) (3),
the Employer will reduce the Actual Deferral Percentage of the
Highly Compensated Employees in the manner described in
Treasury Regulation ss.1.401(k)-1(f) (2), as provided in
Treasury Regulation ss.1.401(m)-2 (c) (3).
3.06 CHANGE IN AMOUNT OF CONTRIBUTIONS: Subject to the provisions of
Section 3.05, a Participant may change the rate of his Basic Tax-Deferred
Employee Contributions, Supplemental Tax-Deferred Employee Contributions and/or
Non Tax-Deferred Employee Contributions as of any Enrollment Date by submitting
such notice to the Employer as is required by the Plan Administrator. The Plan
Administrator shall establish the time period in which such notice must be
submitted.
3.07 VOLUNTARY SUSPENSION OF PARTICIPANT CONTRIBUTIONS: A Participant
may suspend his Basic Tax-Deferred Employee Contributions, Supplemental
Tax-Deferred Contributions and/or Supplemental Non Tax-Deferred Contributions as
of the last day of any month by giving such notice to the Employer as is
required by the Plan Administrator. The Plan Administrator shall establish the
time period in which such notice must be submitted. A suspension of Basic
Tax-Deferred Employee Contributions will automatically cause a suspension of the
Employee's Supplemental Tax-Deferred Contributions and Non Tax-Deferred
Contributions. The Participant may resume making contributions as of any
Enrollment Date after the effective date of the suspension by giving such notice
to the Employer as is required by the Plan Administrator.
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3.08 PLAN TO PLAN TRANSFER: An Employee who previously participated in
one of the following retirement plans may elect to transfer the vested balance
of his account under such plan to this Plan: the Bowater Incorporated Salaried
Employees' Savings Plan, the Bowater Incorporated/Coated Papers and Pulp
Division Hourly Employees' Savings Plan, the Great Northern Paper, Inc. Hourly
401(k) Savings Plan or such other tax-qualified retirement plan as may be
approved by the Plan Administrator. The Employee shall continue to accrue
service under such other plan(s) on account of his employment with the Employer,
and any unvested amounts held under such plan(s) shall vest and become eligible
for a Plan to Plan Transfer to this Plan in accordance with the vesting schedule
of such other plan(s). Transfers under this Section 3.08 shall be subject to the
applicable restrictions of Article 8 but shall not be subject to the limitations
of Sections 3.05, 4.05, or 4.06; nor shall amounts transferred under this
Section 3.08 be included in the calculation of the Participant's rate of Basic
or Supplemental Contributions (Tax-Deferred or Non Tax-Deferred) pursuant to
Sections 3.01 through 3.03.
The amounts transferred shall be treated as follows:
(a) The portion attributable to pre-tax contributions pursuant to
Code Section 401(k) shall be credited to the Employee's
Supplemental Tax-Deferred Employee Contribution Account;
(b) The portion attributable to after-tax contributions pursuant
to Code Section 401(a) shall be credited to the Employee's
Supplemental Non Tax-Deferred Employee Contribution Account;
(c) The portion attributable to matching contributions made by the
Company or Affiliated Company pursuant to Code Section 401(a)
shall be credited to the Employee's Company Contribution
Account.
The Plan Administrator shall require the Employee to furnish a written
statement containing such information as may be necessary to establish that the
transfer does not contain amounts from sources other than provided above and
that the transfer otherwise meets the requirements of applicable law.
3.09 EMPLOYMENT WITH AFFILIATED COMPANY: A Participant may not
contribute to the Plan while he is employed by an Affiliated Company which is
not an Employer, except to the extent that he continues to receive Earnings from
an Employer. A Participant's prior and concurrent service with an Affiliated
Company which is not an Employer, or as a leased employee (within the meaning of
Code Section 414(n)) for the Company or an Affiliated Company, shall be counted
as Years of Service under the Plan to the extent such credit would be given
under Section 2.05 if such Affiliated Company had been an Employer. For purposes
of this Section 3.09, the fact that the Participant has made no contributions
under the Plan shall be disregarded.
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<PAGE> 30
3.10 ROLLOVER CONTRIBUTIONS: An Employee may request that the Plan
Administrator direct the Trustee to accept any of the following amounts from or
on behalf of the Employee and place them in a Rollover Contribution Account
established on his behalf:
(a) amounts transferred to this Plan directly from another trust
or annuity contract maintained as part of a plan qualified
under Code Section 401(a);
(b) lump sum distributions received by the Employee from another
qualified plan which are eligible for tax-free rollover
treatment and which are transferred by the Employee to this
Plan within 60 days following his receipt thereof;
(c) amounts transferred to the Plan from a conduit individual
retirement account (as defined in Code Section 408) consisting
solely of assets and the income thereon which were previously
distributed to the Employee from another tax-qualified
retirement plan as part of a qualifying rollover distribution
(as defined in Code Section 402(a)(5)) to the individual
retirement account within 60 days of their receipt; provided
that such assets are transferred directly to the Plan from the
conduit individual retirement account or are transferred to
the Plan within 60 days of their distribution to the Employee
from the conduit individual retirement account.
Any amounts transferred into the Plan under this Section 3.10 shall be
by check. No securities may be transferred. The Employee shall make application
to the Plan Administrator in writing, submitting whatever information is deemed
necessary and sufficient by the Plan Administrator to establish compliance with
the requirements of this Section 3.10. Amounts accepted by the Plan
Administrator shall be placed in a Rollover Contribution Account established for
the Employee and shall become part of the Trust Fund. The Employee shall have a
fully vested and nonforfeitable right to amounts held in his Rollover
Contribution Account at any time. The Employee shall be able to direct the
investment of his Rollover Contribution Account in accordance with the
provisions of Article 5.
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<PAGE> 31
ARTICLE 4: EMPLOYER CONTRIBUTIONS
4.01 MATCHING CONTRIBUTIONS: With respect to each Active Participant in
its employ, the Employer shall make a Matching Contribution to the Plan from its
Current or Accumulated Profits equal to 40% of such Participant's Basic Employee
Contributions. Contributions by the Employer shall be paid to the Trustee
promptly and credited to each Participant's Matching Contribution Account.
4.02 INITIAL COMPANY CONTRIBUTIONS: With respect to each individual who
was employed by Bowater Southern Company on June 12, 1987, and each individual
who was employed by Hiawassee Land Company as of July 14, 1987, the Employer
made an Initial Company Contribution to the Plan from its Current or Accumulated
Profits an amount sufficient to purchase forty (40) Shares of Company Stock.
Such contributions were made as of September 1, 1987. Such contributions were
paid to the Trustee promptly and credited to each Participant's Initial Company
Contribution Account. There shall be no Initial Company Contributions for
individuals who first become Employees after June 12, 1987 or for individuals
who first became Employees of Hiawassee Land Company after July 14, 1987.
4.03 MODE OF PAYMENT: Employer contributions made under Sections 4.01
shall be made in cash. Employer contributions under Section 4.02 shall be made
in cash or in Shares of Company Stock.
4.04 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER: The following
contributions may be returned to an Employer as follows:
(a) Any contribution made by an Employer under a mistake of fact
may be returned to the Employer within one (1) year of the
contribution;
(b) Any contribution which is disallowed as a deduction under Code
Section 404 may be returned to an Employer within one (1) year
of its disallowance;
(c) Any contribution made by an Employer that is conditioned on
the initial qualification of the Plan under Code Sections
401(a), 401(k) and 401(m), may be returned if a timely
determination letter request is filed with the Internal
Revenue Service and the Plan receives an adverse
determination.
The amount which may be returned to an Employer shall not exceed the
amount of the Employer's contribution, reduced by any investment losses
attributable to the contribution. No contribution or portion thereof will be
returned to an Employer if the return of such amount would cause the value of a
Participant's Accounts to be less than their value had the contribution not been
made.
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<PAGE> 32
4.05 STATUTORY LIMITATION ON ADDITIONS: (a) Notwithstanding any other
provisions of the Plan except Section 2.06, "the annual additions" to a
Participant's Accounts shall not exceed the lesser of:
i. the Maximum Permissible Dollar Amount (as defined
below); and
ii. 25% of the Participant's Total Compensation (as
defined below) for the Plan Year.
(b) For purposes of Sections 4.05 and 4.06, the following
definitions shall apply:
i. "Annual additions" shall mean the sum of:
(A) Employer contributions and Forfeitures
allocated to a Participant's Accounts under
Sections 4.01 and 4.02; and
(B) Employee Contributions allocated to the
Participant's Accounts under Sections 3.01,
3.02 and 3.03; and
ii. The "Initial Maximum Permissible Dollar Amount" shall
mean $30,000, and the "Initial Maximum Permissible
Benefit" shall mean $90,000. The limitations shall be
adjusted automatically as the limits set forth in
Code Sections 415(c)(l)(A) and 415(b)(1)(A) are
adjusted for the cost of living in accordance with
Code Section 415(d).
iii. "Total Compensation" shall mean, (A) for Plan Years
beginning before December 31, 1997, the amount
reported on the Participant's Form W-2 as "wages" for
the taxable year that coincides with the Plan Year;
and (B) for Plan Years beginning on or after January
1, 1998, all pay that is reported in Box 1 of
Internal Revenue Service Form W-2, plus amounts
excluded from income under Code Section 125 and the
Participant's Elective Contributions.
(c) The limitations of this Section 4.05 with respect to any
Participant who at any time has been a participant in any other defined
contribution plan maintained by the Company or an Affiliated Company shall apply
as if the total contributions made under all such defined contribution plans
were made to this Plan.
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<PAGE> 33
(d) If the limitations of this Section 4.05 would be exceeded
in any Plan Year, the Plan Administrator shall take the following action in any
order as required and to the extent necessary to prevent the limitations from
being exceeded.
i. discontinue or reduce a Participant's Basic and/or
Supplemental Employee Tax-Deferred Contributions for
the Plan Year;
ii. discontinue or reduce the Participant's Supplemental
Non Tax-Deferred Employee Contributions for the Plan
Year;
iii. instruct the Trustee to return all or a portion of
the Participant's Supplemental Tax-Deferred or Non
Tax-Deferred Employee Contributions made during the
Plan Year;
iv. instruct the Trustee to return all or a portion of
the Participant's Basic Tax-Deferred Employee
Contributions made during the Plan Year;
v. instruct the Employer to reduce or eliminate its
Matching Contributions to the Participant's Account
for the remainder of the Plan Year;
vi. instruct the Trustee to return to the Employer all or
a portion of any Matching Contributions allocated to
a Participant's Account for the Plan Year; or
vii. apply any amounts in excess of the limitations of
this Section 4.05 ("Excess Amounts") to reduce
Matching Contributions allocated to a Participant's
Account for the next Plan Year (and succeeding Plan
Years, as necessary), provided that the Participant
is covered by the Plan as of the end of the Plan
Year. If the Participant is not covered by the Plan
as of the end of the Plan Year, then such Excess
Amounts shall be held unallocated in a suspense
account for the Plan Year and reallocated in the next
Plan Year to the Accounts of all of the remaining
Participants. Such reallocation may not result in the
limitations of this Section 4.05 being exceeded for
any Participant for the Plan Year. Any Excess Amounts
not allocated to Participants' Accounts from a
suspense account shall be used to reduce Matching
Contributions allocated to the Accounts of all of
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<PAGE> 34
the Participants remaining in the Plan in subsequent
Plan Years, as necessary to reduce the balance of the
suspense account to zero.
Actions taken under this Section 4.05 shall not be considered a
suspension of Participant Contributions, as provided in Section 3.07.
Notwithstanding the foregoing, the provisions of this Section 4.05
shall be interpreted in a manner consistent with the provisions of Code Section
415, which are incorporated herein by reference.
4.06 COMBINED PLANS LIMITATION: For Plan Years beginning before January
1, 2000, if a Participant is also a participant in any defined benefit pension
plan maintained by the Employer, the benefits provided under this Plan shall be
limited so that the sum of the Participant's "defined benefit fraction" and the
"defined contribution fraction" shall not exceed 1.0 for any Plan Year.
(a) The term "defined contribution fraction" shall mean a
fraction, the numerator of which is the sum of annual additions made to the
Participant's Accounts for all Plan Years as of the end of the Plan Year and the
denominator of which is the lesser of 125% of: (i) the Maximum Permissible
Dollar Amount for the Plan Year and all prior Years of Service and (ii) 140% of
25% of the Participant's Total Compensation for that Plan Year and all prior
Years of Service.
(b) The term "defined benefit fraction" shall mean a fraction,
the numerator of which is the projected annual benefit for the Participant under
all qualified retirement plans of the Employer, and the denominator of which is
the lesser of: (i) 125% of the Maximum Permissible Benefit under the retirement
plans for the Plan Year, and (ii) 140% of the Participant's average Total
Compensation for the three (3) highest paid years. Such fraction shall be
determined as of the end of the Plan Year.
(c) The Participant's projected annual benefit shall be
determined under such retirement plans assuming that his earnings continue to
his Normal Retirement Date at the same level as they are at the end of the Plan
Year and that his service continues to accrue to his Normal Retirement Date
without a Year of Break in Service. The terms "earnings," "service," "normal
retirement date," and "break in service" shall have the same meaning as defined
in such retirement plans.
4.07 FORFEITURES: The amount of any Forfeitures under Section 7.04
shall be applied to reduce future Employer contributions under the Plan as soon
as practicable after the event giving rise to the Forfeiture shall have
occurred. In the event that the amount of Forfeitures exceeds the amount of
Employer contributions, Forfeitures shall be kept in a suspense account until
such Forfeitures, increased by the Earnings thereon and reduced by the losses
thereon, if any, are applied pursuant to this Section 4.07.
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<PAGE> 35
ARTICLE 5: INVESTMENT OPTIONS
5.01 INVESTMENT OF PARTICIPANT AND EMPLOYER CONTRIBUTIONS: Participant
and Employer contributions shall be invested by the Trustee, either as required
by the Plan or as directed by a Participant in one (1) or more of the Investment
Funds, which shall include the following:
(a) THE COMPANY STOCK FUND: A fund which invests primarily in
Shares of Company Stock. A small percentage of the Company
Stock Fund shall be invested in money market instruments to
facilitate daily cash transactions. Accounts in this fund
shall segregate, separately account for and respectively
consist of Shares of Company Stock allocable to (i) Initial
Company Contributions, and (ii) Employee Contributions
(whether Basic or Supplemental, Tax-Deferred or Non
Tax-Deferred). All Employee Contributions initially invested
directly in this fund pursuant to Section 5.02 shall be
treated as if invested at 95% of market value, with the
Employer making the necessary contributions to make a total
investment at 100% of fair market value.
Any cash dividends received by the Trustee with respect to
Shares of Company Stock held by the Plan shall be invested in
additional Shares of Company Stock. Shares of Company Stock
purchased from cash dividends, plus any other Shares of
Company Stock received as a result of a stock split or a stock
dividend, shall be allocated to a Participant's Company Stock
Fund Accounts in proportion to the respective Shares of
Company Stock credited to such Accounts as of the appropriate
record date.
(b) ADDITIONAL INVESTMENT FUNDS: Trustee, at the direction of the
Company or its designee, shall establish one (1) or more
additional Investment Funds as shall be deemed appropriate,
including Investment Funds deemed appropriate for satisfying
the requirements of ERISA Section 404(c) and regulations
thereunder.
(c) TEMPORARY INVESTMENT: The Trustee may temporarily invest all
or any part of the Investment Funds in short and medium term
securities, including but not limited to commercial paper,
notes of finance companies and obligations of the U.S.
Government or any instrumentality or agency thereof. The Board
or its designee may from time to time specify additional
temporary investment vehicles or may direct the Trustee in the
temporary investment of the Trust Fund. The Trustee may invest
all or part of any Investment Fund directly in the securities
and obligations authorized for the respective Investment Fund
or through the
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<PAGE> 36
medium of any common, collective or commingled trust fund
which is invested principally in securities and obligations
authorized for the respective Investment Fund.
The Plan Administrator may authorize changes in the Investment
Funds as it, in its discretion, deems necessary and
appropriate.
5.02 INVESTMENT ELECTIONS BY PARTICIPANTS: Each Participant must elect
to have all Participant and Employer contributions (other than contributions
made under Sections 4.02) invested in one (1) or more of the available
Investment Funds in whole number percentages of his contributions, provided that
the sum of such percentages equals 100%. Investment elections shall be made by
written, telephonic or other electronic means established by and directed to the
Plan Administrator. Basic, Supplemental Tax-Deferred and Non Tax-Deferred
Employee Contribution Accounts, Initial Company Contribution Account, Matching
Company Contribution Account and, if applicable, Rollover Contribution Account
shall be established for the Participant in each Investment Fund in which such
contributions are invested on his behalf. Contributions and earnings thereon as
to which no current, valid investment election has been made shall be invested
by the Trustee, in its discretion; provided, however, that if the Trustee does
not agree to undertake such investment responsibility, such contributions and
earnings shall be temporarily invested in one (1) or more of the investment
vehicles authorized in subsection (c) of Section 5.01 until a valid investment
direction is obtained.
5.03 CHANGES IN CURRENT INVESTMENT ELECTIONS: A Participant may change
his investment election with respect to his Accounts. Changes in investment
elections shall be made by written, telephonic or other electronic means
established by the Plan Administrator and must be expressed as revised whole
number percentages of amounts held in his Accounts, totaling 100%.
5.04 TRANSFER OF ACCOUNTS: A Participant may elect to transfer all or
part of his Account in any Investment Fund to another Investment Fund, except
his Payroll-Based Employee Stock Ownership Contribution Account. Transfer shall
be made by written, telephonic or other electronic means established by the Plan
Administrator and shall be expressed as a dollar amount or percentage of a
Participant's Account(s). Transfers shall be effective as soon thereafter as
practicable (which, with respect to Funds which are valued daily and accessible
by telephone or other electronic investment direction, may be the same day as
directions are transmitted, if received before 4:00 P.M. local time, or the next
business day thereafter).
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ARTICLE 6: VALUATION OF PARTICIPANTS' ACCOUNTS
6.01 ACCOUNTS: Each Participant shall have established for him separate
Accounts reflecting all amounts contributed to the Plan on his behalf and the
investment earnings and losses thereon.
6.02 VALUATION OF ACCOUNTS: As of each Valuation Date, each
Participant's Account shall be adjusted separately to reflect any appreciation
or depreciation in the fair market value of each Investment Fund in which it is
held. The fair market value of each Investment Fund shall be determined by the
Trustee and communicated to the Plan Administrator in writing and shall
represent the fair market value of all securities or other property held in the
Investment Fund, plus cash and accrued earnings, less accrued expenses and
proper charges against the Fund as of the Valuation Date. The Trustee's
determination of the fair market value of the Investment Funds shall be final
and conclusive for all purposes of the Plan. A Participant's Accounts shall be
adjusted in proportion to the balance in each Participant's Account on the
preceding Valuation Date, less distributions.
6.03 AMOUNT OF PARTICIPANT'S ACCOUNTS: The amount of a Participant's
Accounts for purposes of distribution shall be determined as follows:
(a) the value of the Participant's Accounts as of the most recent
Valuation Date, plus
(b) the Participant and Employer contributions made to the
Participant's Accounts since the most recent Valuation Date,
minus
(c) the amount of any distribution made since the most recent
Valuation Date.
Notwithstanding the foregoing, the Plan Administrator may in its
discretion use the value of the Participant's Accounts as of a special Valuation
Date to determine the proper amount to be distributed. The Plan Administrator
may delay any distribution under the Plan until the special Valuation Date.
6.04 STATEMENT OF PARTICIPANT ACCOUNTS: Each Participant shall receive
a quarterly statement showing the value of his Accounts as of the most recent
Valuation Date.
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<PAGE> 38
6.05 TIMING OF CREDITS AND DEDUCTIONS: Adjustments of a Participant's
Accounts shall be deemed to have been made on the date to which they relate,
even if they are determined at another date. Notwithstanding the foregoing,
transactions with respect to Investment Funds that are valued daily will be
effected on the date money or investment directions are received from a
Participant prior to 4:00 P.M. local time, otherwise on the next business day.
The Participants' Accounts will be debited or credited, as appropriate, no later
than the date on which transactions are effected.
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ARTICLE 7: BENEFITS UPON RETIREMENT, DEATH, DISABILITY, OR
TERMINATION (VESTED VALUE)
7.01 RETIREMENT: Upon a Participant's Retirement, the Vested Value of
his Accounts shall equal the total value of his Accounts. The Vested Value of
the Participant's Accounts shall be paid to him in accordance with Sections 7.06
or 7.07 (or, if applicable, Section 13.07).
7.02 DEATH: Upon the death of a Participant, the Vested Value of his
Accounts shall equal the total value of his Accounts, to the extent not yet
distributed. The Vested Value of the Participant's Accounts shall be paid to his
Beneficiary in accordance with Sections 7.06 and 7.07 (or, if applicable,
Section 13.07).
7.03 DISABILITY: If a Participant's Employment terminates as a result
of his Disability before his Retirement, the Vested Value of his Accounts shall
equal the value of his Accounts. The Vested Value of the Participant's Accounts
shall be paid to him in accordance with Sections 7.06 and 7.07 (or, if
applicable, Section 13.07).
7.04 OTHER TERMINATION OF EMPLOYMENT: Upon the termination of a
Participant's Employment other than by Retirement, death or Disability, and
other than by transfer to an Affiliated Company which is not an Employer, the
Vested Value of his Accounts shall equal the balance credited to his:
(a) Basic and Supplemental Tax-Deferred Employee Contribution
Accounts;
(b) Supplemental Non Tax-Deferred Employee Contribution Accounts;
(c) Initial Company Contribution Account and Matching Company
Contribution Account, if the Participant has at least three
(3) Years of Service; and
(d) Rollover Contribution Account.
Upon such termination of Employment and the completion of a one (1)
Year of Break in Service, the Participant shall forfeit the portion of his
Initial Company Contribution and/or Matching Contribution Accounts that is not
included in his Vested Value; provided, however, that amounts so forfeited shall
be reinstated to the Participant's Accounts if he is reemployed by an Employer
at any time before he incurs five (5) Years of Break in Service, and if he then
repays the entire amount of his Basic Employee Contribution Account previously
distributed to him, if any.
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<PAGE> 40
The Vested Value of such Participant's Accounts shall be paid to the
Participant in a single sum under Sections 7.06(a) and/or 7.06(c), or, if the
Participant attains age 59 1/2 before or upon the commencement of benefit
payments, in installments under Section 7.06(b). All distributions shall be
subject to the requirements of Section 7.07.
For purposes of this Section 7.04, a Participant who transfers to
employment with an Affiliated Company that is not an Employer and subsequently
terminates his employment with such Affiliated Company shall be deemed to have
terminated his Employment as of the date his employment with such Affiliated
Company terminates, unless he transfers without intervening employment to
employment with an Employer or other Affiliated Company.
7.05 TRANSFER FROM HOURLY TO SALARIED EMPLOYMENT: If a Participant
transfers to salaried employment status with an Employer, he may:
(a) elect a Plan to Plan Transfer of the Vested Value of his
Accounts to the Bowater Incorporated Salaried Employees'
Savings Plan as of any Valuation Date, provided that the
trustee of such plan is authorized to receive such transfer;
or
(b) defer such Plan to Plan Transfer or the receipt of any
distribution from the Plan until a later date. His Accounts
will remain in the Plan until his Retirement, death,
Disability or termination of employment with the Employer or
Affiliated Company, or, until he is eligible to make a
withdrawal under Article 8.
If a Participant transfers to salaried employment status with an
Affiliated Company which is not an Employer, the disposition of his Accounts
shall be governed by Section 7.04. A Participant will receive credit for Years
of Service for his period of Employment with the Employer or Affiliated Company.
7.06 ELECTION OF BENEFITS: Each Participant shall elect the form in
which distributions due to him hereunder shall be paid or made available. The
Participant shall submit his written election to the Plan Administrator not more
than ninety (90) and not less than thirty (30) days before such distribution;
provided that the Participant may waive the 30 day restriction of this sentence.
The Participant shall elect to receive the distribution in one (1) or more of
the following methods:
(a) By a lump sum payment in cash.
(b) In annual installments over a period not to exceed ten (10)
years, provided such period does not exceed the greater of:
(i) the life expectancy of the Participant, and (ii) the joint
life expectancy of the Participant and his Beneficiary. The
amount of each installment will be determined by dividing the
Participant's Vested
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<PAGE> 41
Value by the number of annual installments which remain to be
made at the time an installment is to be paid. Notwithstanding
the foregoing, this method of payment is not available for a
Participant described in Section 7.04 who has not attained age
59 1/2 before or upon commencement of his distribution.
(c) In kind, equal to the full Shares of Company Stock plus the
cash equivalent of the fair market value of any fractional
Shares of Company Stock in the Company Stock Fund, together
with a lump sum cash payment representing the Participant's
interest in the other Investment Funds. In the case of
fractional shares, the Trustee shall be deemed to have
purchased such fractional share from the Participant at a
price equal to the cash payment made to the Participant. Cash
for the purchase of fractional shares may be taken from
dividend receipts or other cash held in the Trust.
A Participant may change his election of benefits by filing a new
election form at any time prior to his date of distribution. If no election is
made, distribution shall be in a lump sum payment of cash.
A Participant who has previously elected to receive benefits under
subsection (b) above may request that any remaining Vested Value of his Account
be paid to him in a lump sum distribution in cash, such Vested Value to be
determined as of the Comprehensive Valuation Date next preceding the date on
which the Plan Administrator approves the request or next following the
Participant's request, whichever is later. Such amounts shall not include the
amount of any installments paid to the Participant since the preceding
Comprehensive Valuation Date.
Notwithstanding the foregoing or any election made by a Participant, if
a Participant's Employment, and employment with all Affiliated Companies,
terminates for any reason, and the Vested Value of the Participant's Account
equals, and at the time of all previous distributions equaled, $3,500 (effective
January 1, 1998, $5,000) or less, the Plan Administrator shall direct that the
Vested Value of the Account be distributed to the Participant (or his
Beneficiary) in the form of a lump sum cash payment. The Plan Administrator may
direct such distribution without obtaining the Participant's (or, if applicable,
his Spouse's) consent.
7.07 METHOD OF PAYMENT: Benefits shall be paid or made available upon
the direction of the Plan Administrator, as soon as practicable following a
Participant's Retirement, death, Disability or other termination of Employment;
provided that no distribution may be made to a Participant without his consent
unless the Vested Value of his Account equals, and at the time of all previous
distributions equaled, $3,500 (effective January 1, 1998, $5,000).
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(a) Unless a Participant elects otherwise, the distribution of his
benefits will begin no later than 60 days after the end of the
Plan Year in which the latest of the following events occurs:
i. the Participant's attainment of age 65;
ii. the tenth (10th) anniversary of the year in which the
Participant commenced participation in the Plan; or
iii. the Participant's termination of Employment with the
Employer and any employment with all Affiliated
Companies.
(b) If a Participant receiving distributions under Section
7.06(b)(ii) dies before his entire interest has been
distributed, the remaining portion of his Accounts will be
distributed to his Beneficiary at least as rapidly as it was
being distributed as of the date of his death.
(c) If distributions have not begun upon the death of a
Participant, if no election has been made by the Beneficiary
pursuant to Section 7.08, the entire interest of the
Participant will be distributed in accordance with Section
7.06(a) at the end of the calendar year containing the fifth
(5th) anniversary of the Participant's death.
(d) The distributions of the Vested Value of a Participant's
Accounts will commence not later than the "required beginning
date." For purposes of this Section 7.07, the term "required
beginning date" means:
i. for Plan Years beginning prior to January 1, 1997,
April 1 of the calendar year following the calendar
year in which the Employee attains age 70 1/2;
ii. for Plan Years beginning on or after January 1, 1997:
A. for a Participant who is not a five percent
(5%) owner (as defined under Code Section
416), April 1 of the calendar year following
the year in which occurs the later of the
Participant's: (A) termination of Employment
with the Employer and all Affiliated
Companies, and (B) attainment of age 70 1/2;
and
B. for a Participant who is a five percent (5%)
owner, April 1 of the calendar year
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following the calendar year in which the
Employee attains age 70 1/2 , or such other
date as may be prescribed by applicable law
or regulations.
Notwithstanding the foregoing, if a Participant who is not a
five percent (5%) owner attained age 70 1/2 on or after
January 1, 1996, and is still employed by the Employer or an
Affiliated Company on April 1 of the calendar year following
the year in which he or she attained age 70 1/2 , such
Participant may elect to commence the distribution of the
Vested Value of his or her Accounts effective as of April 1 of
the calendar year following the calendar year in which he or
she attained age 70 1/2 or to delay the commencement of
distributions until the termination of his or her Employment.
7.08 PROOF OF DEATH AND RIGHT OF BENEFICIARY: If a Participant who has
begun to receive benefits in annual installments under Section 7.06(b) dies
before the total Vested Value of his Accounts has been distributed, his
Beneficiary will receive the undistributed Vested Value of his Accounts in
annual installments on the same basis as the Participant had elected. The
Beneficiary may elect to receive the remaining Vested Value of the Participant's
Accounts in a lump sum cash payment by filing a written election with the Plan
Administrator on a form provided for such purpose within 90 days of the
Participant's death. If a Participant who elects to receive benefits under
Section 7.06(a) or (c) dies, his Beneficiary may elect to receive the
undistributed value of the Participant's Accounts under one (1) of the methods
described in Section 7.06 by filing a written election with the Plan
Administrator within 180 days of the Participant's death, except that the
maximum period in which installment payments may be made under Section 7.06(b)
shall be five (5) years. If the Beneficiary does not elect a distribution within
180 days, the Plan Administration will distribute the remaining Vested Value of
the Participant's Account in accordance with Section 7.07(c).
The Plan Administrator may require and rely upon such proof of a
Participant's death and evidence of the right of any Beneficiary to receive
benefits as it deems proper, and its determination shall be conclusive. A
Beneficiary who does not elect to receive benefits in the form of a lump sum
payment shall designate a Beneficiary on a form provided by the Plan
Administrator.
7.09 DIRECT ROLLOVER OF DISTRIBUTION: A Participant may elect to have
an "Eligible Rollover Distribution" transferred to an "Eligible Retirement
Plan", subject to such uniform and nondiscriminatory requirements as the Plan
Administrator shall establish and the requirements of Code Section 402.
(a) The Plan Administrator shall advise any "Distributee" entitled
to receive an Eligible Rollover Distribution no less than 30
nor more than 90 days before the starting date of the payment
(or at such other time as is required by law) of his right to
elect a "Direct
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<PAGE> 44
Rollover" of the payment to an Eligible Retirement Plan
pursuant to the provisions of this Section. The Distributee
must submit a written request to the Plan Administrator that
all or part of the Eligible Rollover Distribution be
transferred directly to one (1) or more Eligible Retirement
Plans. If a distribution will be made on behalf of the
Distributee in more than one (1) Plan Year, the notice
described in this subsection (a) must be provided to the
Distributee in each Plan Year in which he receives an Eligible
Rollover Distribution, and the Distributee must file a new
election with the Plan Administrator if he wishes to have all
or part of the Eligible Rollover Distribution transferred
directly to an Eligible Retirement Plan.
(b) For purposes of this Section 7.09, the following definitions
shall apply:
i. "Direct Rollover" is a payment by the Plan to an
Eligible Retirement Plan specified by the
Distributee;
ii. "Distributee" includes a Participant, a Participant's
surviving Spouse and an alternate payee under a
qualified domestic relations order, as defined in
Code Section 414(p), but only with regard to the
interest of such individual under the Plan;
iii. "Eligible Retirement Plan" is a retirement plan which
meets the requirements of Code Section 401(a), an
annuity described in Code Section 403(a), an
individual retirement account described in Code
Section 408(a), or an individual retirement annuity
(other than an endowment contract) described in Code
Section 408(b), the terms of which permit the
acceptance of a Direct Rollover of the Distributee's
Eligible Rollover Distribution. However, in the case
of an Eligible Rollover Distribution to the surviving
Spouse of a Participant, an Eligible Retirement Plan
is an individual retirement account or an individual
retirement annuity. The Plan Administrator may
establish reasonable procedures for ascertaining that
the Eligible Retirement Plan meets the preceding
requirements.
iv. "Eligible Rollover Distribution" is any distribution
from this Plan of all or any portion of the Account
balance to the credit of the Distributee, except for
distributions (or portions thereof) which are:
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<PAGE> 45
(A) part of a series of substantially equal
periodic payments made (not less frequently
than annually) over the life of the
Participant (or the joint lives of the
Participant and the Participant's designated
Beneficiary), the life expectancy of the
Participant (or the joint life and last
survivor expectancy of the Participant and
the Participant's designated Beneficiary),
or a specified period of ten (10) years or
more;
(B) required under Code Section 401(a)(9)
(relating to the minimum distribution
requirements); or
(C) the portion of any distribution that is not
includable in gross income (determined
without regard to the exclusion for net
unrealized appreciation in employer
securities described in Code Section
402(e)(4)).
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ARTICLE 8: WITHDRAWALS AND LOANS
8.01 GENERAL CONDITIONS FOR WITHDRAWALS: Subject to this Article 8, a
Participant may withdraw the Vested Value of his Accounts, provided, however,
that no withdrawals may be made under this Article 8 from a Participant's Basic
Tax-Deferred Employee Contribution Account, or Supplemental Tax-Deferred
Employee Contribution Account except pursuant to the provisions of Sections 8.04
and 8.05 hereof. A Participant shall request a withdrawal in accordance with
procedures established by the Plan Administrator therefor.
All amounts withdrawn shall be paid in cash. In the case of a
withdrawal of less than the full Vested Value of a Participant's Accounts, the
amount withdrawn from each Investment Fund in which an Account is maintained for
a Participant shall be taken, pro rata, from each such Fund from which
withdrawal is permissible in the same proportion as the value of the
Participant's interest in each such Fund bears to the total value of his
Accounts.
A Participant may elect to have a withdrawal made under this Section
8.01 transferred directly to an individual retirement account or another
tax-qualified plan, subject to the provisions of Code Section 402 of the Code
and regulations thereunder and in accordance with the procedures described in
Section 7.09 of the Plan.
8.02 WITHDRAWAL OF INITIAL AND MATCHING COMPANY CONTRIBUTION ACCOUNTS:
A Participant may withdraw all or a portion of the Vested Value of his Initial
Company Contribution Account and/or Matching Company Contribution Account,
excluding any contributions made to such Accounts within the two (2) years
preceding the withdrawal, determined as of the Valuation Date next preceding the
date the withdrawal is made. Amounts not withdrawn may not be distributed to the
Participant until his termination of Employment or until such amounts have been
in the Plan for at least two (2) years, whichever occurs first.
A Participant may not receive more than one (1) withdrawal under this
Section 8.02 during any single Plan Year.
8.03 WITHDRAWAL OF SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION
ACCOUNT: A Participant may withdraw all or a portion of the Vested Value of his
Supplemental Non Tax-Deferred Employee Contribution Account, determined as of
the Valuation Date preceding the date the request for a withdrawal is made. A
Participant may not receive more than one (1) withdrawal under this subsection
(b) during a single Plan Year.
8.04 SPECIFIED HARDSHIP WITHDRAWAL: The Plan Administrator (or his
delegatee) may permit a Participant to make a Specified Hardship Withdrawal of
all or a portion of his Basic and Supplemental Tax-Deferred Employee
Contributions, excluding investment earnings thereon.
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<PAGE> 47
The value of the Participant's Accounts for purposes of this Section
8.04 shall be determined as of the Valuation Date next preceding the date on
which the Plan Administrator (or his delegatee) approves the Specified Hardship
Withdrawal or the Valuation Date next following the Plan Administrator's receipt
of the Participant's application for a Specified Hardship Withdrawal, whichever
is later. The value shall include Basic and Supplemental Tax-Deferred Employee
Contributions made since the applicable Valuation Date and shall not include the
amount of any withdrawals made by the Participant since the Valuation Date.
A Participant who has made a withdrawal under this Section 8.04 shall
be subject to a mandatory suspension of all Employee Contributions for 12 months
following the date the Specified Hardship Withdrawal is made. In addition, the
Participant's Tax-Deferred Contributions for the Plan Year following the
Withdrawal shall not exceed the limit on Elective Deferrals described under
Section 3.05, reduced by the amount of Tax-Deferred Contributions made by the
Participant in the Plan Year in which he makes the Specified Hardship
Withdrawal.
8.05 WITHDRAWAL AFTER AGE 59 1/2: A Participant who has attained age 59
1/2 may make a withdrawal of all or a portion of his Basic and Supplemental
Tax-Deferred Employee Contributions, including investment earnings thereon. The
value of the Participant's Accounts for this purpose shall be determined under
the provisions of Section 8.04. Upon such a withdrawal, the Participant shall
not incur a mandatory suspension of his contributions to the Plan.
8.06 WITHDRAWAL OF ROLLOVER ACCOUNT: A Participant who has made a
Rollover Contribution under Section 3.11 may withdraw the total value of his
Rollover Account at any time.
8.07 LOANS: A Participant may request a loan from the Vested Value of
any of his Accounts. The Participant's loan request may be made orally or by
electronic means, provided that the request is confirmed in writing to the
Participant prior to implementation, except as otherwise required by law. The
Trustee shall establish rules relating to loan requests which shall be uniformly
applied to all similarly situated Participants.
(a) A Participant shall not be permitted to have more than one (1)
outstanding loan at any time.
(b) The Company (or the Trustee) may charge a reasonable fee for
processing and maintaining loans. Any such fees shall either
(i) be paid in advance by the Participant and shall not be
charged against the loan amount or (ii) be charged against the
Participant's Account.
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<PAGE> 48
(c) The minimum principal amount of any loan shall be $1,000. The
maximum principal amount of any loan shall be the lesser of:
(i) fifty percent (50%) of the Vested Value of the
Participant's Accounts as would be available for withdrawal
under Sections 8.02, 8.03 and 8.06, determined as of the last
business day of the week preceding disbursement of the loan;
and (ii) $50,000 reduced by the Participant's highest
outstanding loan balance during the one (1) year period ending
on the day before the date on which the loan is disbursed.
Loans shall be deemed to have been made on a pro rata basis
from each of a Participant's Accounts.
(d) The term of the loan may not exceed 60 (in the case of a loan
taken to acquire the Participant's principal residence, 180)
months. In the case of a loan whose term exceeds 60 months,
the Trustee shall obtain the Plan Administrator's approval of
the loan before approving a Participant's request therefor.
The loan must be repaid in substantially level amounts, with
payments due not less than quarterly. Repayment shall be made
through automatic payroll deductions beginning in the first
(1st) pay period following the Participant's receipt of the
loan. The loan may not be renewed or extended beyond its
original maturity date. Loans may be prepaid in full without
penalty at any time before the loan's maturity date. Partial
prepayments will not be accepted.
(e) The interest rate of the loan shall be set at the time the
loan request is approved and shall equal the prime lending
rate for corporate debt, as published in the Wall Street
Journal, plus one percent (1%).
(f) The loan shall be secured by 50% of the balance of the
Participant's Accounts from which loans are available, to the
extent of the principal amount of the loan plus accrued
interest. The Company may request such other collateral for
the loan as it deems necessary and prudent in order to protect
the Plan from risk of loss of principal or income if a default
were to occur. All loans shall be bona fide and evidenced by a
note containing such additional terms and conditions,
consistent with this Section 8.07, as the Plan Administrator
shall require.
(g) If the balance of a Participant's Accounts becomes
distributable (other than amounts distributed under Sections
8.02 through 8.06) while the Participant has an outstanding
loan balance, amounts otherwise distributable shall be reduced
by the outstanding amount of unpaid principal and interest due
on the loan.
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(h) Notwithstanding any provision of this Section 8.07 to the
contrary, loan repayments will be suspended under the Plan as
permitted under Code Section 414(u).
(i) If a Participant terminates Employment with an outstanding
loan balance, the entire outstanding balance of the loan shall
be considered in default and immediately due and payable. If
amounts due remain delinquent for beyond the close of the
calendar quarter following the calendar quarter in which the
loan amounts become due, such outstanding balance shall be
reported to the Participant as a distribution from the Plan
for the year in which such following calendar quarter ended,
and charged against the Participant's Accounts at the earliest
date amounts are distributable to the Participant under the
terms of the Plan.
(j) At all times during which a Participant has an outstanding
loan balance, the Participant shall be obligated to inform the
Plan Administrator of any declaration of the Participant's
personal bankruptcy, as issued by a court of competent
jurisdiction. The entire outstanding balance of the loan shall
be considered in default and immediately due and payable as of
the effective date of such declaration. The Plan Administrator
shall thereafter seek from the Participant a reaffirmation of
the loan, or take whatever other steps it deems necessary to
protect the Plan's interest in collecting amounts due, to the
extent permitted under applicable federal and state bankruptcy
laws not preempted by ERISA.
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ARTICLE 9: PLAN ADMINISTRATION
9.01 FIDUCIARIES: (a) The Company, the Trustee, the Plan Administrator,
members of the Committee and persons to whom they delegate discretionary
authority or control over the Plan shall be Fiduciaries.
(b) Each Fiduciary's responsibility shall be specified in the
Plan or by the Company and accepted by each Fiduciary. The Fiduciaries may
allocate unassigned responsibilities among themselves. The Trustee may
thereafter rely upon any actions taken consistent with the allocation, until
such allocation is revoked.
9.02 RESPONSIBILITIES OF THE COMPANY: The Company shall have the
following powers and duties with respect to the Plan;
(a) to appoint any individual or Committee to whom fiduciary
responsibilities have been assigned under the Plan;
(b) to delegate any fiduciary responsibilities under the Plan
to any individuals, committees or entity it may designate; and
(c) to exercise any other powers or responsibilities not
specifically allocated to another fiduciary.
9.03 SAVINGS PLAN COMMITTEE: The Pension Administration Committee of
the Company (the "PAC") (or such other designee of the Company) shall appoint a
Committee consisting of not less than five (5) persons, two (2) of whom shall be
Employees elected or appointed by the Union locals to serve on the Committee.
Each member of the Committee shall serve for a one (1) year term which may be
continuously renewed, in the sole discretion of the PAC. A Committee member may
resign at any time during his appointment, provided that he submits written
notice to the PAC no later than forty-five (45) days prior to the effective date
of such resignation. The PAC shall have the discretion to fill vacancies on the
Committee, except to the extent that the prior Committee member had been
appointed by a Union local, in which case the appropriate Union local shall
appoint a member of the Union to fill the vacancy. The PAC may waive the
forty-five (45) day notice requirement in its sole discretion. A Committee
member may be removed by the PAC during his term if he fails to perform the
duties of his office in an efficient manner. Committee members shall serve
without compensation.
9.04 OPERATION OF THE COMMITTEE: (a) Powers and Duties: The Committee
shall have the following powers and duties:
(i) to construe and interpret the Plan, in its discretion;
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<PAGE> 51
(ii) to determine any question of fact under the Plan,
including questions relating to eligibility,
Earnings, service and the entitlement to and amount
of benefits;
(iii) to establish such rules and procedures as it deems
necessary for the efficient completion of its
assigned duties;
(iv) to establish a funding policy, as described under
paragraph (c), below;
(v) to appoint one or more Investment Managers to have
discretionary control over Plan assets, as described
under paragraph (d) below; and
(vi) to employ or retain actuaries, accountants, legal
counsel and other experts as it deems necessary for
the proper administration of the Plan.
(b) Composition and Voting: The Committee shall select a
chairperson from its members to oversee the Committee's operation. The Committee
may also establish subcommittees thereof, as it deems necessary.
A majority of the Committee shall constitute a quorum. Actions of the
Committee shall be taken by a majority vote of a quorum, or, in the absence of a
meeting, by written action signed by a majority of the Committee. All decisions
made by majority vote of the Committee shall be final and binding on all
parties.
(c) Funding Policy: The Committee shall formulate a funding
policy based upon the Plan's short and long term financial needs. Once the
funding policy has been established for a Plan Year, the Committee shall provide
a copy thereof to the Trustee, who shall follow the policy in its management of
the Trust Fund. In addition, the Committee shall periodically report to the
Board regarding the funding policy. The provisions of this paragraph (c) shall
not apply to that portion of the Trust Fund consisting of assets subject to the
investment directions of Participants, nor during periods in which all assets in
the Trust Fund are invested pursuant to either provisions of the Plan or
Participant directions.
(d) Investment Managers: The Committee may appoint one or more
"Investment Managers" to manage, acquire and dispose of all or any part of the
assets of the Trust Fund. Each Investment Manager shall execute a written
agreement detailing its responsibilities, specifying the Plan assets under its
management and acknowledging its fiduciary status with respect to the Plan. The
Investment Manager shall not have physical custody or control of any assets of
the Plan, which shall be held by the Trustee. An Investment Manager must be
either: (i) a corporation or partnership registered as an investment adviser
under the Investment Advisers Act of 1940; (ii) a bank, as defined in
46
<PAGE> 52
that Act; or (iii) an insurance company qualified to manage, acquire or dispose
of any asset of an employee benefit pension plan under the laws of more than one
state. The provisions of this paragraph (d) shall not apply to that portion of
the Trust Fund consisting of assets subject to the investment directions of
Participants, nor during periods in which all assets in the Trust Fund are
invested pursuant to either provisions of the Plan or Participant directions.
(e) The powers, duties, and responsibilities of the Committee
may be changed by the PAC or the Company only upon written consent of the
Committee.
9.05 PLAN ADMINISTRATOR: The Company shall serve as the "Plan
Administrator," who shall be responsible for all duties and obligations imposed
on a plan administrator by ERISA and the Code (to the extent such
responsibilities are not otherwise delegated under the Plan to the Committee).
The Company may designate one (1) or more persons to carry out the duties
delegated to the Plan Administrator under the Plan. Such designee(s) may also
serve as member(s) of the Committee.
(a) Powers and Duties. The Plan Administrator shall have the
following powers and duties with respect to the Plan:
(i) to comply with all applicable reporting and
disclosure requirements of ERISA;
(ii) to sign any registration statements required to be
filed with the Securities Exchange Commission;
(iii) to sign any applications for determination of the
tax-qualified status of the Plan, as filed with the
Internal Revenue Service;
(iv) to maintain such records as are necessary for the
proper and efficient administration of the Plan;
(v) to develop such procedures as it deems necessary for
carrying out any other duties delegated to the Plan
Administrator under the terms of the Plan;
(vi) to employ or retain any accountant, attorney,
consultant or other expert as it deems necessary for
the proper and efficient administration of the Plan;
and
(vii) to report to the Committee upon its request so that
the Committee may review the Plan Administrator's
performance.
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9.06 RELIANCE ON EXPERTS: A Fiduciary and its delegatees shall be
entitled to rely upon all certificates, opinions and reports made by experts
employed to provide services with respect to the Plan. The Fiduciary shall be
fully protected with respect to any action taken in good faith reliance on such
opinions or reports, provided that a prudent person acting in like circumstances
would have taken the same action. Determinations and actions made by a Fiduciary
in reliance on the report or opinion of a duly-appointed expert or counsel shall
be final and binding on all parties.
9.07 COMMITTEE ACTION: Unless otherwise directed by the Company, a
majority of the members of any committee(s) established under the Plan shall
constitute a quorum. Decisions with a quorum present shall be made by majority
vote. In the absence of a meeting, a committee may act by written action signed
by a majority of its members. All decisions made by majority vote of a committee
shall have the same effect as if agreed upon by every member.
9.08 INDIVIDUAL INDEMNIFICATION: To the extent permissible under ERISA,
the Company shall indemnify each Fiduciary and its delegatee against costs,
expenses and liabilities, including attorney's fees, incurred in connection with
any action, or proceeding arising out of any act or omission taken or made in
good faith in his capacity as a Fiduciary (or delegatee thereof, as applicable).
Upon receiving notice of the commencement of any action, any Fiduciary
or its delegatees entitled to indemnification under this Section 9.08 shall
notify the Company of the commencement of the action. Failure to so notify the
Company will relieve the Company from any liability hereunder. The Company shall
be entitled to, at its own expense, participate in or assume the defense of any
action brought against any party indemnified hereunder. In the event the Company
assumes the defense of any such suit, the Company shall choose counsel
reasonably satisfactory to the indemnified party to conduct such defense, and
the indemnified party shall bear the expense of retaining any additional
counsel.
9.09 EXPENSES: Any expenses reasonably incurred by a Fiduciary in the
performance of his duties shall be paid by the Company. Such reasonable expenses
include the cost of obtaining personal liability insurance covering actions
taken by the Fiduciary on behalf of or with respect to this Plan. All reasonable
expenses incurred in connection with the administration of the Plan, including
the compensation paid to the Trustee, Investment Managers and any counsel,
accountant or other expert retained by a Fiduciary in connection with the
administration of the Plan shall be paid: (a) from the Trust Fund to the extent
permissible under ERISA and the Code, and (b) by the Company, to the extent not
payable under (a).
9.10 SERVICE IN VARIOUS CAPACITIES: Any person may serve in more than
one Fiduciary capacity with respect to the Plan, including service as member of
the Committee, the PAC, the Plan Administrator or Trustee.
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<PAGE> 54
9.11 STANDARDS OF CONDUCT: Fiduciaries shall discharge their duties and
responsibilities in accordance with the standards of care and prudence required
under ERISA. Absent gross negligence or willful misconduct, persons acting for
or on behalf of the Plan (including but not limited to, the Company, the
Committee, the PAC, the Board, the Plan Administrator and the Trustee) shall not
be subject to civil liability under any provision of state, county or local law
pertaining to the conduct of fiduciaries and trustees or the permissibility of
their investments.
9.12 CLAIMS PROCEDURES: (a) Initial Claim: Claims for benefits under
the Plan shall be submitted in writing to the Committee. Written notice of the
Committee's decision with respect to the claim shall be furnished to the
claimant within thirty (30) days after the claim is filed, unless special
circumstances require an extension of the decision period for up to an
additional ninety (90) days. The claimant will receive written notice of the
need for an extension within the initial thirty (30) day period.
(b) Written Notice of Denied Claim: The claimant shall receive
written notice of a claim denial. Such notice shall: (i) set forth the specific
reason or reasons for the denial, (ii) be written in a manner calculated to be
understood by the recipient, (iii) refer to the specific Plan provisions on
which the denial is based; (iv) describe any additional information necessary
for the claimant to perfect the claims; and (v) include a description of the
Plan's appeal procedures.
(c) Review of Claim Denial: Following receipt of a claim
denial, the claimant or his duly authorized representative may submit a written
application for review of such denial to the Plan Administrator. The claimant or
his duly authorized representative must submit an application for review within
the ninety (90) day period following receipt of the claim denial. During such
ninety (90) day period, the claimant and his representative may submit issues
and comments with respect to the claim denial and review pertinent Plan
documents at the Plan Administrator's office.
(d) Hearing: Upon receipt of a timely request for review of a
claim denial, the Committee may hold a hearing, or, in its discretion, appoint
one or more of its members to hear the claimant's appeal. Such member(s) shall
meet promptly with the claimant and/or his duly authorized representative and
hear such arguments and examine such documents as the claimant or his
representative shall present. The member(s) shall then report the results of the
hearing to the Committee.
(e) Written Decision of Committee: A decision of the Committee
on review of a claim denial shall be made in writing and shall: (i) include
specific reasons for the decision; (ii) be written in a manner calculated to be
understood by the claimant; and (iii) refer to specific Plan provisions on which
the decision is based. The claimant shall be notified in writing of the decision
within the sixty (60) day period following his submission of the written request
for review, unless special circumstances require an
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extension of time for reviewing the appeal for up to an additional sixty (60)
days. The claimant shall be notified of the need for an extension of time in
writing prior to the expiration of the initial sixty (60) day period.
(f) Effect of Review: The decision of the Committee on review
of a claim denial shall be final and binding on all parties.
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ARTICLE 10: AMENDMENT AND TERMINATION OF THE PLAN
10.01 AMENDMENT OF THE PLAN: Subject to agreement with the Unions and
its locals, the Board or its designee reserves the right to amend the Plan in
whole or in part, at any time and from time to time, retroactively or
prospectively; provided that no such amendment shall make it possible for any
part of the funds of the Plan to be used for or diverted to purposes other than
the exclusive benefit of Participants or their Beneficiaries, except to the
extent provided under Section 4.04; and provided further, that no such amendment
shall increase the duties of the Trustee without its consent thereto in writing.
Except as may be required to conform with government regulations, no such
amendment shall result in a reduction in the amount of benefits a Participant or
Beneficiary was entitled to receive immediately prior to the effective date of
such amendment.
10.02 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS: The Plan shall not
merge or consolidate with, or transfer its assets or liabilities to any other
plan or entity unless each Participant would receive a benefit immediately after
the merger, consolidation, or transfer which is equal to or greater than the
benefit he would have been entitled to receive if the Plan had terminated
immediately before the merger, consolidation or transfer.
10.03 TERMINATION, PARTIAL TERMINATION, OR DISCONTINUANCE OF
CONTRIBUTIONS: The Company intends to continue the Plan indefinitely. However,
to the extent permissible under applicable collective bargaining agreements, the
Company reserves the right to terminate the Plan or discontinue contributions
thereto, in whole or in part, at any time. Upon a complete or partial
termination of the Plan or discontinuance of contributions hereunder, the value
of the Accounts of each Participant affected by such termination or
discontinuance shall be fully vested, and payment of benefits shall be made to
such Participants and their Beneficiaries in the same manner as upon the
termination of Employment under Section 7.06, subject to the limitations of Code
Section 401(k)(10). In the case of a complete termination or discontinuance of
contributions to the Plan, any Forfeitures not previously applied in accordance
with Section 4.03 shall be credited on a pro rata basis to all Participants'
Accounts in proportion to the amount of Employer contributions credited to their
respective Matching Contribution Accounts during the current calendar year (or
the prior calendar year, if no Matching Contributions have been made during the
current calendar year).
10.04 PROCEDURE: The termination, partial termination or amendment of
this Plan may be effected by the adoption of a resolution by the Board to that
effect, or by the execution of an instrument amending or terminating the Plan by
a designee of the Board, to whom such authority to so act has been given by
resolution of the Board. The authorization of the Board may be general and need
not be given in contemplation of or with reference to specific terms of
amendment or termination.
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ARTICLE 11: CHANGE IN CONTROL
11.01 CONTROLLING PROVISIONS: In the event of a Change in Control, as
hereinafter defined, the provisions of this Article 11 shall supersede any
conflicting provisions in the Plan.
11.02 FULLY VESTING OF MATCHING CONTRIBUTION ACCOUNT: Notwithstanding
any portion of the Plan to the contrary, upon a Change in Control, the Matching
Contribution Account of Participants in the Plan who are Employees of the
Employer as of the date of Change in Control shall become 100% vested.
11.03 DEFINITIONS: For purposes of this Article 11, the following terms
shall have the indicating meanings:
(a) Acquiring Person: Any Person who is or becomes a "beneficial
owner" (as defined in Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) of securities of
the Company representing twenty percent (20%) or more of the
combined voting power of the Company's then outstanding voting
securities, unless such Person has filed Schedule 13G and all
required amendments thereto with respect to its holdings and
continues to hold such securities for investment in a manner
qualifying such Person to utilize Schedule 13G for reporting
of ownership.
(b) Affiliate and Associate: Such terms shall have the respective
meanings ascribed to them under Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on
the date hereof.
(c) Change in Control: A Change in Control shall be deemed to have
occurred if the following events occur:
(i) any Person is or becomes an Acquiring Person;
(ii) less than two-thirds (2/3) of the total membership of
the Board shall be Continuing Directors; or
(iii) the shareholders of the Company shall approve a
merger or consolidation of the Company or a plan of
complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or
substantially all of the Company's assets.
52
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(d) Continuing Directors: Any member of the Board who was a member
of the Board prior to the date hereof, and any successor of a
Continuing Director while such successor is a member of the
Board who is not an Acquiring Person or an Affiliate or
Associate of an Acquiring Person or of any such Affiliate or
Associate and is recommended or elected to succeed the
Continuing Director by a majority of the Continuing Directors.
(e) Person: Any individual, corporation, partnership, group,
association or other "person" as such term is used in Section
13(d) and 14(d) of the Exchange Act.
11.04 AMENDMENT OF THIS ARTICLE 11: This Article 11 of the Plan shall
not be amended upon or following a Change in Control in any manner that might
have the effect of reducing the Participants' Accounts under the Plan. Nothing
in this Section 11.04 shall be construed to prohibit, prior to a Change in
Control, any amendment to the Plan, including to this Article 11, or any
termination of the Plan pursuant to its terms.
53
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ARTICLE 12: EXERCISE OF COMPANY STOCKHOLDERS' RIGHTS
12.01 VOTING RIGHTS: Each Participant shall be entitled to direct the
Trustee as to the manner in which Company stock allocated to his Accounts is to
be voted. The Trustee, through the Plan Administrator, shall notify Participants
of each occasion for the exercise of their voting rights within a reasonable
time prior to the date such rights are to be exercised but not less than thirty
(30) days prior to such date. The notification shall include all information
distributed to shareholders regarding the exercise of such rights. Not less than
five (5) business days prior to the date on which voting rights are to be
exercised, each Participant wishing to exercise such rights shall inform the
Trustee, in the form and manner prescribed by the Plan Administrator, as to the
manner in which such voting rights are to be exercised. If a Participant does
not direct the Trustee in whole or in part with respect to the exercise of his
voting rights attributable to Company stock allocated to his Account(s), the
Trustee shall not exercise such voting rights. To the extent possible, the
Trustee shall vote the combined fractional shares of Company stock allocated to
Participants' Accounts to reflect the directions of the Participants to whom
such fractional shares of Company stock are allocated.
Neither the Trustees nor the Plan Administrator nor the Committee may
make any recommendation regarding the manner in which Participants' voting
rights are to be exercised, including whether or not such rights should be
exercised.
12.02 RIGHTS OTHER THAN VOTING RIGHTS: Each Participant shall be
entitled to direct the Trustee, in the form and manner prescribed by the Plan
Administrator, with respect to the exercise of rights, other than voting rights,
attributable to Company stock allocated to his Account(s).
54
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ARTICLE 13: GENERAL PROVISIONS
13.01 NONALIENATION OF BENEFITS: Except as required under a "qualified
domestic relations order" (as defined under Code Section 414(p)) or in
accordance with Section 206(d)(4) of ERISA, no benefit under the Plan shall be
subject to any manner of anticipation, alienation, sale, transfer, assignment,
pledge, garnishment or encumbrance, and any attempt to do so shall be void. The
Plan Administrator shall comply with any court order determined to be a
"qualified domestic relations order", and it shall adopt procedures for making
such determination. Notwithstanding the preceding sentence, the amount and form
of benefits provided by the Plan shall not be altered by the terms of a
qualified domestic relations order.
13.02 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES: Plan assets
shall be held in the Trust Fund for the exclusive benefit of Participants and
Beneficiaries of the Plan (except, however, contributions which may be returned
to the Employer under Section 4.05).
13.03 NO RIGHT TO EMPLOYMENT: Nothing contained in the Plan shall be
construed as giving any Employee the right to be retained in the employ of the
Company or as interfering with the Company's rights to discharge an Employee at
any time.
13.04 UNIFORM ADMINISTRATION: All actions taken by the Plan
Administrator shall be uniform in nature as applied to all persons similarly
situated, and no such action shall be taken which will discriminate in favor of
highly compensated Participants or Participants whose principal duties consist
of supervising the work of others.
13.05 HEADINGS: The headings of the sections of this Plan are for
convenience of reference, and in the case of any conflict between the headings
and the text of the Plan, the text of the Plan shall control.
13.06 CONSTRUCTION: To the extent not preempted by ERISA or other
federal law, the laws of the State of Delaware shall control the Plan. The Plan
and the Trust shall be construed so as to qualify under Code Sections 401(a),
401(k), and 501(a), as applicable.
13.07 UNCLAIMED DISTRIBUTIONS: If any distribution due to a Participant
or Beneficiary is not claimed within the five (5) year period following the date
it becomes payable, the distribution shall be treated as a Forfeiture, held in a
suspense account and applied to reduce Employer contributions under the Plan in
future Plan Years, in the manner described in Section 4.06(d)(viii); provided,
however, that the Employer shall restore amounts forfeited if and when the
Participant or Beneficiary entitled to receive the distribution makes a claim
for such amounts. The Employer shall use due care in attempting to distribute
all benefits payable under the Plan.
55
<PAGE> 61
13.08 DISTRIBUTIONS TO A LEGAL REPRESENTATIVE: If the Plan
Administrator finds that a person entitled to a benefit is unable to care for
his affairs because he is a minor or because of mental or physical incapacity,
the Plan Administrator may direct that any benefits due shall be paid to the
Participant's Spouse, child or legal representative of such person, unless a
claim for such benefits is made by his duly appointed legal representative. Any
payments so made under the direction of the Plan Administrator shall represent a
complete discharge of the Plan's liabilities therefor.
13.09 EXPENSES: The Plan (from Participants' accounts) shall pay all
costs and expenses incurred in administering the Plan, to the extent permissible
under ERISA and the Code. The Company shall pay any expenses not paid from the
Plan. Direct charges and expenses arising out of the purchase or sale of
securities or other assets and taxes levied on or measured by such transactions
may be charged against the Accounts of the Participants in the Investment
Fund(s) for which the transaction took place.
13.10 SOURCE OF PAYMENT: Benefits under the Plan shall be payable only
out of the Trust Fund. The Company shall have no obligation, responsibility or
liability to make any direct payment of benefits under the Plan.
* * * *
IN WITNESS WHEREOF, BOWATER INCORPORATED has caused this document to be
executed by its duly authorized officers effective as of the dates stated herein
and signed on the date shown below.
BOWATER INCORPORATED
By /s/ Richard F. Frisch
-----------------------------------
Name: Richard F. Frisch
---------------------------------
Title: Vice President - Human Resources
--------------------------------
Date Signed: August 11, 1998
-------------------------
56
<PAGE> 1
Exhibit 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Bowater Incorporated
We consent to the use of our report dated February 12, 1999 on the financial
statements of Bowater Incorporated (the "Company") for the three-year period
ended December 31, 1998, incorporated herein by reference, which report appears
in the December 31, 1998 annual report on Form 10-K of Bowater Incorporated, and
to our report dated June 4, 1999 on the financial statements of the Bowater
Incorporated Savings Plan for Certain Hourly Employees (the "Plan") for the two
years ended December 31, 1998, incorporated herein by reference, which report
appears in the December 31, 1998 annual report on Form 11-K of the Plan.
Greenville, South Carolina
July 28, 1999 KPMG Peat Marwick, LLP
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
We, the undersigned directors of Bowater Incorporated, hereby severally
appoint Wendy C. Shiba, Anthony H. Barash and David G. Maffucci, each of them
singly, our true and lawful attorneys, with the full power of substitution, to
sign for us and in our names with respect to the Registration Statements on Form
S-8 pertaining to (i) the Bowater Incorporated Salaried Employees' Savings Plan,
(ii) the Bowater Incorporated/Coated Papers and Pulp Division Hourly Employees'
Savings Plan and (iii) the Bowater Incorporated Savings Plan for Certain Hourly
Employees, and any and all amendments to the Registration Statements, and
generally to do all such things in our names and on our behalf in our capacities
as directors to enable Bowater Incorporated to comply with the provisions of the
Securities Act of 1993, as amended, and all requirements of the Securities and
Exchange Commission, and all requirements of any other applicable law or
regulation, hereby ratifying and confirming our signatures as they may be signed
by our attorney to the Registration Statements and any and all amendments
thereto, including post-effective amendments.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Francis J. Aguilar Director July 28, 1999
- --------------------------------
Francis J. Aguilar
/s/ H. David Aycock Director July 28, 1999
- --------------------------------
H. David Aycock
/s/ Richard Barth Director July 28, 1999
- --------------------------------
Richard Barth
/s/ Kenneth M. Curtis Director July 28, 1999
- --------------------------------
Kenneth M. Curtis
/s/ Charles J. Howard Director July 28, 1999
- --------------------------------
Charles J. Howard
/s/ Arthur R. Sawchuk Director July 28, 1999
- --------------------------------
Arthur R. Sawchuk
<PAGE> 2
/s/ John A. Rolls Director July 28, 1999
- --------------------------------
John A. Rolls
/s/ James L. Pate Director July 28, 1999
- --------------------------------
James L. Pate
