<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/COATED PAPERS AND PULP DIVISION
HOURLY EMPLOYEES' SAVINGS PLAN
----------------------------------------------------
(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>
- -------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price per Aggregate Offering Amount of
to be Registered Registered Share* Price* Registration Fee
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 700,000 shares $51.156 $35,809,200 $9,954.96
$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/Coated
Papers and Pulp Division Hourly Employees' Savings Plan (the "Plan"), formerly
named the Bowater Incorporated/Carolina Division Hourly Employees' Savings Plan,
hereby incorporate by reference the contents of the previous Registration
Statements filed by the Registrant and the Plan on Forms S-8 (Registration Nos.
333-02989 and 333-41475). The current registration of 700,000 shares of common
stock of the Registrant will increase the number of shares registered for
issuance under the Plan to 2,300,000 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/Coated Papers and Pulp
Division Hourly Employees' Savings Plan, 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.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/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
</TABLE>
<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 named 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/Coated Papers and Pulp
Division Hourly Employees' Savings Plan 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/COATED PAPERS AND PULP
DIVISION HOURLY EMPLOYEES' SAVINGS PLAN
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 Statements filed by the Registrant and the Plan on Forms
S-8 (Registration No. 333-02989 and 333-41475). The following additional
exhibits are filed as part of this Registration Statement.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
4 Bowater Incorporated/Coated Papers and Pulp Division
Hourly Employees' Savings Plan, 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/COATED PAPERS AND PULP DIVISION
HOURLY EMPLOYEES' SAVINGS PLAN
As Originally Effective January 1, 1985
and
As Amended and Restated Effective
January 1, 1997
(Incorporating Amendments made through December 31, 1997)
<PAGE> 2
BOWATER INCORPORATED/COATED PAPERS AND PULP DIVISION
HOURLY EMPLOYEES' SAVINGS PLAN
Table of Contents
<TABLE>
<S> <C>
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 AND NON 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 GAINSHARING CONTRIBUTION...............................................................5
1.23 HOUR OF SERVICE........................................................................5
1.24 INITIAL COMPANY CONTRIBUTION ACCOUNT...................................................5
1.25 INVESTMENT FUNDS.......................................................................5
1.26 MATCHING CONTRIBUTION ACCOUNT..........................................................5
1.27 NORMAL RETIREMENT DATE.................................................................5
1.28 PARTICIPANT............................................................................5
1.29 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION....................................5
1.30 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION ACCOUNT............................6
1.31 PLAN...................................................................................6
1.32 PLAN ADMINISTRATOR.....................................................................6
1.33 PLAN TO PLAN TRANSFER..................................................................6
</TABLE>
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<TABLE>
<S> <C>
1.34 PLAN YEAR..............................................................................6
1.35 POSTPONED RETIREMENT DATE..............................................................6
1.36 RETIREMENT.............................................................................6
1.37 SEVERANCE FROM SERVICE DATE............................................................6
1.38 SHARE OF COMPANY STOCK.................................................................7
1.39 SPECIFIED HARDSHIP WITHDRAWAL..........................................................7
1.40 SPOUSE.................................................................................7
1.41 SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT............................7
1.42 SUPPLEMENTAL TAX-DEFERRED EMPLOYEE
CONTRIBUTION ACCOUNT...................................................................8
1.43 TRUST AGREEMENT........................................................................8
1.44 TRUST FUND.............................................................................8
1.45 TRUSTEE................................................................................8
1.46 VALUATION DATE.........................................................................8
1.47 VESTED VALUE...........................................................................8
1.48 YEAR OF BREAK IN SERVICE...............................................................8
1.49 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
(BASIC AND SUPPLEMENTAL)..............................................................11
3.04 GAINSHARING CONTRIBUTIONS.............................................................11
3.05 MODE OF PAYMENT.......................................................................11
3.06 LIMITATION ON CONTRIBUTIONS...........................................................12
3.07 CHANGE IN AMOUNT OF CONTRIBUTIONS.....................................................23
3.08 VOLUNTARY SUSPENSION OF PARTICIPANT
CONTRIBUTIONS.........................................................................23
3.09 PLAN TO PLAN TRANSFER.................................................................23
3.10 EMPLOYMENT WITH AFFILIATED COMPANY....................................................24
3.11 ROLLOVER CONTRIBUTIONS................................................................24
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE 4: EMPLOYER CONTRIBUTIONS......................................................................26
4.01 MATCHING CONTRIBUTIONS................................................................26
4.02 INITIAL COMPANY CONTRIBUTIONS.........................................................26
4.03 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTIONS..................................26
4.04 MODE OF PAYMENT.......................................................................27
4.05 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER...........................................28
4.06 STATUTORY LIMITATION ON ADDITIONS.....................................................28
4.07 COMBINED PLANS LIMITATION.............................................................30
ARTICLE 5: INVESTMENT OPTIONS..........................................................................32
5.01 INVESTMENT OF PARTICIPANT AND EMPLOYER CONTRIBUTIONS..................................32
5.02 INVESTMENT ELECTIONS BY PARTICIPANTS..................................................33
5.03 CHANGES IN CURRENT INVESTMENT ELECTIONS...............................................33
5.04 TRANSFER OF ACCOUNTS..................................................................33
ARTICLE 6: VALUATION OF PARTICIPANTS' ACCOUNTS.........................................................34
6.01 ACCOUNTS..............................................................................34
6.02 VALUATION OF ACCOUNTS.................................................................34
6.03 AMOUNT OF PARTICIPANT'S ACCOUNTS......................................................34
6.04 STATEMENT OF PARTICIPANT ACCOUNTS.....................................................34
6.05 TIMING OF CREDITS AND DEDUCTIONS......................................................34
ARTICLE 7: BENEFITS UPON RETIREMENT, DEATH, DISABILITY,
OR TERMINATION (VESTED VALUE)...............................................................36
7.01 RETIREMENT............................................................................36
7.02 DEATH.................................................................................36
7.03 DISABILITY............................................................................36
7.04 OTHER TERMINATION OF EMPLOYMENT.......................................................36
7.05 TRANSFER FROM HOURLY TO SALARIED EMPLOYMENT...........................................37
7.06 ELECTION OF BENEFITS..................................................................37
7.07 METHOD OF PAYMENT.....................................................................38
7.08 PROOF OF DEATH AND RIGHT OF BENEFICIARY...............................................40
7.09 DIRECT ROLLOVER OF DISTRIBUTION.......................................................40
ARTICLE 8: WITHDRAWALS AND LOANS.......................................................................43
8.01 GENERAL CONDITIONS FOR WITHDRAWALS....................................................43
8.02 WITHDRAWAL OF INITIAL AND MATCHING COMPANY CONTRIBUTION ACCOUNTS......................43
8.03 WITHDRAWAL OF BASIC NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT AND
SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT...........................44
8.04 SPECIFIED HARDSHIP WITHDRAWAL.........................................................44
8.05 WITHDRAWAL AFTER AGE 59-1/2...........................................................45
8.07 WITHDRAWAL OF ROLLOVER ACCOUNT........................................................45
</TABLE>
iii
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<TABLE>
<S> <C>
8.08 LOANS.................................................................................45
ARTICLE 9: PLAN ADMINISTRATION.........................................................................48
9.01 FIDUCIARIES..............................................................................48
9.02 RESPONSIBILITIES OF THE COMPANY..........................................................48
9.03 SAVINGS PLAN COMMITTEE...................................................................48
9.04 OPERATION OF THE COMMITTEE...............................................................48
9.05 PLAN ADMINISTRATOR.......................................................................50
9.06 RELIANCE ON EXPERTS......................................................................51
9.07 COMMITTEE ACTION.........................................................................51
9.08 INDIVIDUAL INDEMNIFICATION...............................................................51
9.09 EXPENSES.................................................................................51
9.10 SERVICE IN VARIOUS CAPACITIES............................................................51
9.11 STANDARDS OF CONDUCT.....................................................................52
9.12 CLAIMS PROCEDURES........................................................................52
ARTICLE 10: AMENDMENT AND TERMINATION OF THE PLAN......................................................54
10.01 AMENDMENT OF THE PLAN...................................................................54
10.02 MERGER, CONSOLIDATION, OR TRANSFER OF ASSETS............................................54
10.03 TERMINATION, PARTIAL TERMINATION, OR
DISCONTINUANCE OF CONTRIBUTIONS.......................................................54
10.04 PROCEDURE...............................................................................54
ARTICLE 11: CHANGE IN CONTROL..........................................................................55
11.01 CONTROLLING PROVISIONS................................................................55
11.02 FULLY VESTING OF MATCHING CONTRIBUTION ACCOUNT........................................55
11.03 DEFINITIONS...........................................................................55
11.04 AMENDMENT OF THIS ARTICLE XI..........................................................56
ARTICLE 12: EXERCISE OF COMPANY STOCKHOLDER'S RIGHTS...................................................57
12.01 VOTING RIGHTS...........................................................................57
12.02 RIGHTS OTHER THAN VOTING RIGHTS.........................................................57
ARTICLE 13: GENERAL PROVISIONS.........................................................................58
13.01 NONALIENATION OF BENEFITS...............................................................58
13.02 EXCLUSIVE BENEFIT OF PARTICIPANTS AND
BENEFICIARIES.........................................................................58
13.03 NO RIGHT TO EMPLOYMENT..................................................................58
13.04 UNIFORM ADMINISTRATION..................................................................58
13.05 HEADINGS................................................................................58
13.06 CONSTRUCTION............................................................................58
13.07 UNCLAIMED DISTRIBUTIONS.................................................................58
13.08 DISTRIBUTIONS TO A LEGAL REPRESENTATIVE.................................................59
13.09 EXPENSES................................................................................59
</TABLE>
iv
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<TABLE>
<S> <C>
13.10 SOURCE OF PAYMENT.......................................................................59
</TABLE>
v
<PAGE> 7
BOWATER INCORPORATED/COATED PAPERS AND PULP DIVISION
HOURLY EMPLOYEES' SAVINGS PLAN
As Originally Effective January 1, 1985
and
As Amended and Restated Effective January 1, 1997
(Incorporating Amendments made through December 31, 1997)
PREAMBLE
Establishment of Plan
The Bowater Incorporated/Coated Papers and Pulp Division Hourly
Employees' Savings Plan was established effective January 1, 1985 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/Coated Papers and Pulp Division and the United Paperworkers'
International Union and with its Locals 925 and 1924.
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 comply
with applicable law, to allow participants to take loans from their Accounts 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.
1
<PAGE> 8
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, Basic and Supplemental Non
Tax-Deferred Employee Contribution Accounts, Initial Company Contribution
Account, Payroll-Based Employee Stock Ownership 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 AND NON
TAX-DEFERRED): With respect to each Participant, the portion of the Trust Fund
that is attributable to his Basic Employee Contributions. Basic Tax-Deferred
Contributions made under Section 3.01 shall be maintained in the Participant's
Basic Tax-Deferred Employee Contribution Account. Basic Non Tax-Deferred
Contributions made under Section 3.03 shall be maintained in the Participant's
Basic Non 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:
2
<PAGE> 9
(a) the Participant has designated a Beneficiary other
than his Spouse, and
(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 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 1954, 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 must suffer from a
Disability continuously for six (6) months and receive disability payments under
the federal Social Security Act in order to be eligible to receive benefits
under Section 7.03. The Committee, in its sole discretion, shall determine
whether an Employee suffers from a Disability, based on such evidence and
recommendations as it determines to be necessary or appropriate.
1.12 EARLY RETIREMENT DATE: The date a Participant's Employment
terminates for any reason following his attainment of age 55 and completion of
15 or more Years of Service.
3
<PAGE> 10
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:
(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 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. 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/Coated Papers and Pulp Division, 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> 11
1.19 ERISA: The Employment Retirement Income Security Act of 1974, as
amended from time to time. All references to any Section of the Act 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 distribution of such Vested Values to the Participant or
his Beneficiary.
1.22 GAINSHARING CONTRIBUTION: A contribution consisting of an amount
that would otherwise be paid to an Eligible Employee under a Company-sponsored
gainsharing plan or program that an Eligible Employee elects to contribute to
the Plan in accordance with Section 3.04. Such amounts shall be allocated first,
to the extent possible, to the Participant's Gainsharing Tax-Deferred Employee
Contribution Account, and then to the Participant's Gainsharing Non Tax-Deferred
Employee Contribution Account.
1.23 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.
1.24 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.
1.25 INVESTMENT FUNDS: The funds established from time to time at the
direction of the Company, in accordance with Section 5.01.
1.26 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.
1.27 NORMAL RETIREMENT DATE: The date a Participant's Employment
terminates upon his attainment of age 65.
1.28 PARTICIPANT: An Active Participant, former Active Participant or
Employee who has a positive balance in his Account(s).
1.29 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION: With respect
to each Participant, the portion of the Trust Fund that is
5
<PAGE> 12
attributable to Payroll-Based Employee Stock Ownership Contributions made on his
behalf under Section 4.03.
1.30 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTION ACCOUNT: With
respect to each Participant, the portion of the Trust Fund that is attributable
to Payroll-Based Employee Stock Ownership Contributions made on his behalf under
Section 4.03.
1.31 PLAN: The Bowater Incorporated/Coated Papers and Pulp Division
Hourly Employees' Savings Plan, as set forth herein and amended from time to
time.
1.32 PLAN ADMINISTRATOR: The Company and its delegatees, as appointed
in accordance with Article 9 by the Board to administer the Plan.
1.33 PLAN TO PLAN TRANSFER: A direct transfer of an Employee's
Accounts, as made in accordance with Section 3.09.
1.34 PLAN YEAR: The calendar year.
1.35 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.
1.36 RETIREMENT: The date on which a Participant terminates his
Employment following the last to occur of 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.
1.37 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 1.37, 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
6
<PAGE> 13
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
1.47, 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 1.48, such Employee shall be deemed to have incurred
a Severance from Service in accordance with paragraph (a) of this Section 1.37.
1.38 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.
1.39 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 on, 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 (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.
1.40 SPOUSE: The person legally married to the Participant at the time
an action or event relevant for Plan purposes occurs.
1.41 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.
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<PAGE> 14
1.42 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.
1.43 TRUST AGREEMENT: The Master Trust Agreement between the Company
and Fidelity Management Trust Company (and any successors thereto) as amended
from time to time.
1.44 TRUST FUND: The aggregate funds held by the Trustee in accordance
with the Trust Agreement.
1.45 TRUSTEE: Fidelity Management Trust Company and its successors
appointed in accordance with the Trust Agreement.
1.46 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."
1.47 VESTED VALUE: The nonforfeitable portion of a Participant's
Account(s) as further described in Article 7.
1.48 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.
1.49 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> 15
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. 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 ninety (90) days 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 Payroll-Based Employee
Stock Ownership 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 3.08;
(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> 16
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 3.06, 4.06 and 4.07), 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> 17
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.
3.03 NON TAX-DEFERRED EMPLOYEE CONTRIBUTIONS (BASIC AND SUPPLEMENTAL):
Each Active Participant may elect to make Basic 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 Participant's
total of Basic Tax-Deferred Employee Contributions and Basic Non Tax-Deferred
Employee Contributions shall not exceed 6% of his Earnings. Each Active
Participant who is making Basic (Tax-Deferred or Non Tax-Deferred) Employee
Contributions of 6% of Earnings may make Supplemental Non Tax-Deferred Employee
Contributions to the Plan (which may be made in addition to Supplemental
Tax-Deferred Employee Contributions). The rate of such contributions shall be
1%, 2%, 3%, 4%, 5%, or 6% of 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 GAINSHARING CONTRIBUTIONS: Each Active Participant may elect to
contribute all but not less than all of any amount that would otherwise be paid
to him under a Company-sponsored gainsharing plan or program as a Gainsharing
Contribution to the Plan. Any such election must be made prior to the date and
in accordance with procedures established by the Plan Administrator. The
Participant may revoke his election to make a Gainsharing Contribution in
accordance with procedures established by the Plan Administrator. Gainsharing
Contributions shall be made on a tax-deferred basis and will be credited to the
Participant's Gainsharing Tax-Deferred Employee Contribution Account to the
extent permissible under applicable Code limits or, if necessary, to the
Participant's Gainsharing Non Tax-Deferred Employee Contribution Account.
3.05 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. Contributions made under Section 3.04 shall be collected by the
Employer when otherwise due to be paid to the Participant. 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.
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<PAGE> 18
3.06 LIMITATION ON CONTRIBUTIONS: Notwithstanding any other provision
in the Plan (except Section 2.06), the provisions of this Section 3.06 shall
apply to limit Employee and Company Contributions to the Plan.
(a) Definitions: For purposes of this Section 3.06, the following terms
shall have the meanings set forth herein:
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.
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<PAGE> 19
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.
Notwithstanding any other provision of this
Section 3.06, 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 3.06 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
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<PAGE> 20
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:
(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 Employee's 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:
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<PAGE> 21
(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
Contribution Percentage, but
excluding Qualified Matching
Contributions treated as Elective
Deferrals under subsection (a)(i) of
this Section 3.06, over
(B) the maximum amount of contributions
described in paragraph (A) above
that are permitted under the
limitations of subsection (d) of
this Section 3.06 (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
3.06.
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 3.06 (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
3.06, but excluding amounts described in
Section 1105(c)(5) of the Tax Reform Act of
1986.
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<PAGE> 22
x. "Highly Compensated Employee" means an
Employee who performs service during the
Determination Year who:
(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
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<PAGE> 23
(C) Any Forfeiture allocated on the basis of
Employee Contributions, Matching
Contributions or Elective Contributions.
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.
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<PAGE> 24
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 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),
18
<PAGE> 25
the aggregated plans must also satisfy Code Sections 401(a)(4)
and 410(b) as though they were a single plan.
The Actual Deferral Percentage 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 3.06.
(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
19
<PAGE> 26
made shall be the sum of the Matching Contributions 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 3.06.
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
recontributed by the Participant to the Plan
as a Non Tax-Deferred Employee Contribution
("Recharacterized"), to the extent allowed
under applicable Treasury regulations; or
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<PAGE> 27
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.
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
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<PAGE> 28
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
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
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<PAGE> 29
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).
3.07 CHANGE IN AMOUNT OF CONTRIBUTIONS: Subject to the provisions of
Section 3.06, 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.
3.08 VOLUNTARY SUSPENSION OF PARTICIPANT CONTRIBUTIONS: A Participant
may suspend his Basic Tax-Deferred Contributions, Supplemental Tax-Deferred
Contributions and/or 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 Contributions
will automatically cause a suspension of the Employee's Supplemental
Tax-Deferred Contributions. A Participant may not suspend his contributions for
less than six (6) months. The Participant may resume making contributions as of
any Enrollment Date occurring six (6) months after the effective date of the
suspension by giving such notice to the Employer as is required by the Plan
Administrator.
3.09 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/Newsprint Division US Hourly
Employed Savings Plan, the
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<PAGE> 30
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 3.09 shall be subject to the applicable restrictions of Article 8
but shall not be subject to the limitations of
Sections 3.06, 4.06, or 4.07; nor shall amounts transferred under this Section
3.09 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 3.05.
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.
3.10 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 3.10, the fact that the Participant has made no contributions
under the Plan shall be disregarded.
3.11 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:
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<PAGE> 31
(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 3.11 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 3.11. 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> 32
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 50% of such Participant's Basic Employee
Contributions (Tax-Deferred and/or Non Tax-Deferred). 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 Employee who
was employed by the Employer on June 23, 1986, the Employer made an Initial
Company Contribution to the Plan from its Current or Accumulated Profits an
amount sufficient to purchase fifty (50) Shares of Company Stock. Such
Contributions were made as of the first (1st) business day of the quarter after
the Employee was first eligible for participation under Section 2.01. 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 23,
1986.
4.03 PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP CONTRIBUTIONS: For each
calendar year, the Employer shall contribute to the Trust Fund out of Current or
Accumulated Profits an amount equal to a percentage of the aggregate
compensation paid to Employees who are or would have been eligible to
participate in the Plan during the Plan Year or as of the subsequent January 1,
and who have not terminated their employment as of the end of such Plan Year.
For purposes of this Section 4.03, compensation means amounts reported as
"wages" on Form W-2 for each Employee described in the preceding sentence. The
percentage of compensation equal to contributions made under this Section 4.03
shall be determined in accordance with the following table, less the amount of
any reduction in such credit for a prior Plan Year due to a final determination
of such credit which is not taken into account in any deduction under Section
404(i)(h)(2) of the Code (or to the maximum extent permitted by law):
Calendar Percentage
Year Aggregate Compensation
-----------------------------------------------------------------------
1985 0.50
1986 0.50
1987 0.50
1988 or thereafter 0.00
Contributions made under this Section 4.03 shall be allocated to the
Payroll-Based Employee Stock Ownership Account of each eligible Employee in an
amount, calculated to the nearest thousandth of a Share of Company Stock which
is in the same proportion to the total number of Shares of Company Stock to be
allocated to Employees for the Plan
26
<PAGE> 33
Year as the Employee's W-2 compensation bears to the total compensation paid to
all eligible Employees, excluding compensation in excess of $100,000 paid to a
single Employee.
Upon the completion of three (3) or more Years of Service by an
Employee for whom a Payroll-Based Employee Stock Ownership Contribution Account
has been established, the Vested Value of such Account shall equal its balance.
If an Employee for whom such an Account was established was an Employee on
January 1, 1990, the Vested Value of such Account shall equal its balance.
4.04 MODE OF PAYMENT: Employer contributions made under Sections 4.01
and 4.02 shall be made in cash.
Employer contributions made under Section 4.03 may be paid in Shares of
Company Stock, cash or both. The amount contributed in Shares of Company Stock
shall be determined by averaging the closing prices of such Shares of Company
Stock reported on the New York Stock Exchange consolidated tape for the 20
consecutive trading days immediately preceding the date of the transfer of such
Shares of Company Stock to the Trust Fund and multiplying the average value so
determined by the number of Shares of Company Stock transferred. Such
contributions will be made within thirty (30) days following the due date,
including extensions, for filing the Employer's Federal income tax return for
the taxable year which coincides with such Plan Year.
Promptly upon receipt of any cash contribution pursuant to Section
4.03, the Trustee shall apply such contribution to the purchase, in one or more
transactions, of the maximum number of whole Shares of Company Stock obtainable
at the then prevailing prices, including brokerage commissions and other
reasonable expenses incurred in connection with such purchases. Such purchase
shall be made as directed by the Committee in one of the following ways: (i)
privately, from the Company or from another person; (ii) publicly, on any
securities exchange where Shares of Company Stock are traded; or (iii) pursuant
to Section 7.06(c). Purchases shall be on such terms as to price, delivery and
otherwise as the Trustee may determine to be in the best interest of the
Participants. No purchase of Shares of Company Stock shall be made from the
Company at a price in excess of the fair market value of such Shares on the date
of purchase, which shall be the highest sales prices of the Shares as reported
in The Wall Street Journal report of NYSE-Composite Transactions, on the
investment date as of which such purchase is made (or the next preceding day on
which such Shares are traded on the New York Stock Exchange, if the Shares are
not traded on the New York Stock Exchange on the investment date). After receipt
of any cash contributions made under Section 4.03, the Trustee shall use the
cash to acquire Shares of Company Stock no later than the 30th day following
receipt of the contribution, having due regard for any applicable requirement of
law.
27
<PAGE> 34
The cash balance of any contribution received pursuant to Section 4.03
which remains after the maximum number of whole Shares of Company Stock shall
have been purchased pursuant to this Section 4.04, shall be held by the Trustee
for future investment (unless such balance forms part of a cash reserve
described under Section 6.02).
4.05 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.
4.06 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 4.06 and 4.07, 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, 4.02 and 4.03; and
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<PAGE> 35
(B) Employee Contributions allocated to
the Participant's Accounts under
Sections 3.01, 3.02, 3.03 and 3.04;
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.
(c) The limitations of this Section 4.06 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.
(d) If the limitations of this Section 4.06 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 a Participant's Gainsharing
Contributions for the Plan Year;
iii. discontinue or reduce the Participant's
Basic and/or Supplemental Non Tax-Deferred
Employee Contributions for the Plan Year;
iv. instruct the Trustee to return all or a
portion of the Participant's Supplemental
Tax-Deferred, Gainsharing Contributions or
Non Tax-Deferred Employee Contributions made
during the Plan Year;
29
<PAGE> 36
v. instruct the Trustee to return all or a
portion of the Participant's Basic
Tax-Deferred Employee Contributions made
during the Plan Year;
vi. instruct the Employer to reduce or eliminate
its Matching Contributions to Participants'
Accounts for the remainder of the Plan Year;
vii. instruct the Trustee to return to the
Employer all or a portion of any Matching
Contributions allocated to Participants'
Accounts for the Plan Year; or
viii. apply any amounts in excess of the
limitations of this Section 4.06 ("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
4.06 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 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 4.06 shall not be considered a
suspension of Participant Contributions, as provided in Section 3.08.
Notwithstanding the foregoing, the provisions of this Section 4.06
shall be interpreted in a manner consistent with the provisions of Code Section
415, which are incorporated herein by reference.
4.07 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
30
<PAGE> 37
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.
31
<PAGE> 38
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)
Payroll-Based Employee Stock Ownership Contributions,
(ii) Initial Company Contributions, and (iii)
Employee Contributions (whether Basic or
Supplemental, Tax-Deferred or Non Tax-Deferred).
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 medium of any common, collective
or commingled trust fund which is invested
principally in securities and obligations authorized
for the respective Investment Fund.
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<PAGE> 39
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 and 4.03) 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 and Gainsharing 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 (other than contributions
made under Section 4.03). 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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<PAGE> 40
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 (other than his Payroll-Based Employee Stock Ownership
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.
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 are valued daily will be effected
on the date
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<PAGE> 41
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 VALUED)
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) Basic and Supplemental Non Tax-Deferred Employee
Contribution Accounts;
(c) Gainsharing Tax-Deferred and Non Tax-Deferred
Employee Contribution Accounts;
(d) Initial Company Contribution Account and Matching
Company Contribution Account, if the Participant has
at least three (3) Years of Service; and
(e) Payroll-Based Employee Stock Ownership Contribution
Account.
Upon such termination of Employment 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 Tax-Deferred
Employee Contribution Account previously distributed to him, if any.
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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, except for his Payroll-Based Employee Stock
Ownership Account (if any), 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: On or before a Participant's Retirement, he
shall elect the form in which benefits due to him upon his Retirement be paid or
made available. The Participant shall submit his written election to the Plan
Administrator. The Participant shall elect to receive benefits 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 Value by the number of annual
installments which remain to be made at the time an
installment is to be paid.
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(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 benefit commencement date.
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
the present value of the Vested Value of a Participant's Account equals $3,500
(effective for Plan Years beginning on or after January 1, 1998, $5,000) or
less, the Plan Administrator may direct that the Vested Value of the Account be
distributed to the Participant (or his Beneficiary) in the form of a lump sum
upon the termination of his employment for any reason. 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.
(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 or Affiliated Company.
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(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 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.
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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 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
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Rollover Distribution transferred directly to an
Eligible Retirement Plan.
If the Distributee is married, he shall not be
entitled to elect a Direct Rollover pursuant to this
Section 7.09 without the consent of his Spouse if the
Spouse's consent would otherwise be required to
obtain a distribution in the amount of the Eligible
Rollover Distribution.
(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:
(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
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(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 receiving a withdrawal under this Section 8.02 may not
make Non Tax-Deferred Employee Contributions (Basic or Supplemental) for a
period of six (6) months following the withdrawal. The Participant may resume
making Non Tax-Deferred Employee Contributions on any Enrollment Date following
the expiration of the six (6) month suspension period by giving prior written
notice to the Employer within such time period as the Plan Administrator shall
prescribe. The Participant shall not be required to suspend his Tax-Deferred
Employee Contributions following the withdrawal.
A Participant may not receive more than one (1) withdrawal under this
Section 8.02 during any single Plan Year.
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<PAGE> 50
8.03 WITHDRAWAL OF BASIC NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT
AND SUPPLEMENTAL NON TAX-DEFERRED EMPLOYEE CONTRIBUTION ACCOUNT:
(a) A Participant may withdraw all or a portion of the
Vested Value of his Basic Non Tax-Deferred Employee
Contribution Account, determined as of the Valuation
Date next preceding the date the request for a
withdrawal is made. A Participant may not receive
more than one (1) withdrawal under this subsection
(a) during a single Plan Year.
A Participant receiving a withdrawal under this
Section 8.03 may not make Non Tax-Deferred Employee
Contributions (Basic or Supplemental) for a period of
six (6) months following the withdrawal. The
Participant shall not be required to suspend his
Tax-Deferred Employee Contributions following the
withdrawal. The Participant may resume making Non
Tax-Deferred Employee Contributions on any Enrollment
Date following the expiration of the six (6) month
suspension period by giving prior written notice to
the Employer within such time period as the Plan
Administrator shall prescribe.
(b) A Participant may withdraw all or a portion of the
Vested Value of his Supplemental Non Tax-Deferred and
Gainsharing Non Tax-Deferred Employee Contribution
Accounts, determined as of the Valuation Date
preceding the date the request for a withdrawal is
made. No suspension of contributions shall be imposed
on a Participant who makes a withdrawal under this
subsection (b). 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, Supplemental and Gainsharing Tax-Deferred
Employee Contributions, excluding investment earnings thereon.
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, Supplemental and Gainsharing
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.
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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 3.06, 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 under the provisions of Section 8.04 without
satisfying the conditions for a Specified Hardship Withdrawal. Upon such a
withdrawal, the Participant shall not incur a mandatory suspension of his
Contributions to the Plan.
8.06 WITHDRAWALS OF PAYROLL-BASED EMPLOYEE STOCK OWNERSHIP
CONTRIBUTIONS: A Participant may withdraw any amounts attributable to the Vested
Value of his Payroll-Based Employee Stock Ownership Contributions at any time.
8.07 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.
8.08 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.
(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. Loans shall be deemed to
have been made on a pro rata basis from each of a
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<PAGE> 52
Participant's Accounts. The Participant's maximum
loan amount shall be 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.
(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 should
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
8.08, 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 8.07) 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.
(h) Notwithstanding any provision of this Section 8.08 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
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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 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 necessary 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 Savings Plan 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) shall appoint a Savings Plan
Committee (the "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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(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 that Act;
or (iii) an insurance company qualified to manage, acquire or dispose of any
asset
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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) sign any registration statements required to
be filed with the Securities Exchange
Commission;
(iii) 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 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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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 extension of time for
reviewing the appeal for up to an additional sixty (60) days. The claimant shall
be
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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.
53
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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 XI 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 XI, 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.
(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
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<PAGE> 62
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 XI: This Article XI 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 XI, or any
termination of the Plan pursuant to its terms.
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<PAGE> 63
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).
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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 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.
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<PAGE> 65
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: March 19, 1998
---------------------------
59
<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/Coated Papers and Pulp Division Hourly Employees' Savings Plan (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
