<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 SALARIED 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 1,000,000 shares $51.156 $51,156,000 $14,221.37
$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 Salaried
Employees' Savings Plan (the "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. 333-00555 and 333-41471). The current
registration of 1,000,000 shares of common stock of the Registrant will increase
the number of shares registered for issuance under the Plan to 3,900,000 shares.
2
<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 Salaried 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 name hereto, does sign this Registration
Statement on behalf of the persons indicated above pursuant to powers of
attorney duly executed by such persons, in the City of Greenville, State of
South Carolina, as of this 30th day of July, 1999.
By: /s/ Wendy C. Shiba
--------------------------------
Wendy C. Shiba
Attorney-in-Fact
THE PLAN. Pursuant to the requirements of the Securities Act of 1933,
the Plan Administrator of the Bowater Incorporated Salaried 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
SALARIED 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 Nos. 333-00555 and 333-41471). The following additional
exhibits are filed as part of this Registration Statement.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
4 Bowater Incorporated Salaried 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
SALARIED EMPLOYEES' SAVINGS PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1997)
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
INTRODUCTION......................................................................................................1
A. Establishment of Plan...........................................................................1
B. Restatement of Plan.............................................................................1
C. Objective of Plan...............................................................................1
ARTICLE I - DEFINITIONS...........................................................................................2
1.01 Accounts........................................................................................2
1.02 Acquisition Loan................................................................................2
1.03 Active Participant..............................................................................2
1.04 Additional Matching Contributions...............................................................2
1.05 Affiliated Company..............................................................................2
1.06 Basic Post-Tax Contribution Account.............................................................2
1.07 Basic Pre-Tax Contribution Account..............................................................2
1.08 Beneficiary.....................................................................................2
1.09 Board...........................................................................................3
1.10 Code............................................................................................3
1.11 Company.........................................................................................3
1.12 Company Stock...................................................................................3
1.13 Current or Accumulated Profits..................................................................3
1.14 Disability......................................................................................3
1.15 Earnings........................................................................................4
1.16 Effective Date..................................................................................4
1.17 Employee........................................................................................4
1.18 Employer........................................................................................4
1.19 Employer Contributions..........................................................................4
1.20 Employer Contribution Account...................................................................4
1.21 Employment......................................................................................4
1.22 Enrollment Date.................................................................................4
1.23 ERISA...........................................................................................4
1.24 ESOP Account....................................................................................4
1.25 ESOP Contributions..............................................................................5
1.26 Fiduciary.......................................................................................5
1.27 Financed Shares.................................................................................5
1.28 FlexPlan Contributions..........................................................................5
1.29 Forfeitures.....................................................................................5
1.30 Full-Time Employee..............................................................................5
1.31 Gainsharing Contributions.......................................................................5
1.32 Hour of Service.................................................................................5
1.33 Investment Funds................................................................................6
1.34 Matching Contributions..........................................................................6
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
1.35 Maternity or Paternity Reasons..................................................................6
1.36 Part-Time Employee..............................................................................7
1.37 Participant.....................................................................................7
1.38 PAYSOP Account..................................................................................7
1.39 PAYSOP Contributions............................................................................7
1.40 Plan............................................................................................7
1.41 Plan Administrator..............................................................................7
1.42 Plan Year.......................................................................................7
1.43 Retirement......................................................................................7
1.44 Severance from Service Date.....................................................................7
1.45 Spouse..........................................................................................7
1.46 Supplemental Post-Tax Contribution Account......................................................7
1.47 Supplemental Pre-Tax Contribution Account.......................................................8
1.48 Trustee.........................................................................................8
1.49 Trust Fund......................................................................................8
1.50 Unallocated Company Stock Account...............................................................8
1.51 Uniformed Service Leave.........................................................................8
1.52 USERRA..........................................................................................8
1.53 Valuation Date..................................................................................9
1.54 Year of Break in Service........................................................................9
1.55 Years of Service................................................................................9
ARTICLE II - ELIGIBILITY AND PARTICIPATION.......................................................................11
2.01 Eligibility....................................................................................11
2.02 Participation..................................................................................12
2.03 Cessation of Participation.....................................................................13
2.04 Effect of Reemployment on Plan Entry or Reentry................................................13
2.05 Prior Employment with Affiliated Company.......................................................13
ARTICLE III - PARTICIPANT CONTRIBUTIONS..........................................................................14
3.01 Basic Post-Tax Contributions...................................................................14
3.02 Basic Pre-Tax Contributions....................................................................14
3.03 Supplemental Post-Tax Contributions............................................................15
3.04 Supplemental Pre-Tax Contributions.............................................................15
3.05 Contribution Limit and Payment.................................................................15
3.06 Change in Amount of Contribution...............................................................16
3.07 Voluntary Suspension of Participant Contributions..............................................16
3.08 Employment with Affiliated Company.............................................................16
3.09 Plan to Plan Transfer..........................................................................17
3.10 Rollover Contributions.........................................................................17
3.11 Contributions Upon Return From Military Leave..................................................18
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
ARTICLE IV - EMPLOYER CONTRIBUTIONS..............................................................................19
4.01 Matching Contributions.........................................................................19
4.02 Additional Matching Contributions..............................................................20
4.03 Mode of Payment................................................................................21
4.04 Forfeitures....................................................................................21
4.05 Return of Certain Contributions to Employer....................................................21
4.06 Statutory Limitation on Additions..............................................................22
4.07 Combined Plans Limitation......................................................................24
ARTICLE V - INVESTMENT OPTIONS...................................................................................24
5.01 Investment of Participant and Employer Contributions...........................................24
5.02 Investment Elections by Participants...........................................................25
5.03 Changes in Current Investment Elections........................................................26
5.04 Transfers of Accounts..........................................................................26
ARTICLE VI - VALUATION OF PARTICIPANTS' ACCOUNTS.................................................................27
6.01 Accounts.......................................................................................27
6.02 Valuation of Accounts..........................................................................27
6.03 Statement of Participant Accounts..............................................................28
6.04 Timing of Credits and Deductions...............................................................28
ARTICLE VII - PLAN BENEFITS......................................................................................29
7.01 Retirement.....................................................................................29
7.02 Death..........................................................................................29
7.03 Disability.....................................................................................29
7.04 Other Termination of Employment................................................................29
7.05 Transfer of Employment.........................................................................29
7.06 Payment of Benefits............................................................................30
7.07 Method of Payment..............................................................................31
7.08 Proof of Death and Right of Beneficiary........................................................33
7.09 Special Distribution and Payment Requirements..................................................33
7.10 Put Option.....................................................................................34
7.11 Direct Rollover of Distribution................................................................35
ARTICLE VIII - WITHDRAWALS DURING EMPLOYMENT.....................................................................37
8.01 General Conditions for Withdrawals.............................................................37
8.02 Withdrawal of Employee Contribution Accounts...................................................37
8.03 Hardship Withdrawals...........................................................................38
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
8.04 Withdrawal After Age 59-1/2....................................................................40
8.05 PAYSOP Accounts................................................................................40
ARTICLE IX - ADMINISTRATION......................................................................................40
9.01 Fiduciaries....................................................................................40
9.02 Responsibilities of the Company................................................................41
9.03 Responsibilities of the Trustee................................................................41
9.04 Responsibilities of the Plan Administrator.....................................................41
9.05 Delegation of Duties...........................................................................42
9.06 Committee Action...............................................................................43
9.07 Individual Indemnification.....................................................................43
9.08 Plan Expenses..................................................................................43
ARTICLE X - GENERAL PROVISIONS...................................................................................44
10.01 Inalienability of Benefits.....................................................................44
10.02 No Right to Employment.........................................................................44
10.03 Uniform Administration.........................................................................44
10.04 Headings.......................................................................................45
10.05 Construction...................................................................................45
10.06 Unclaimed Distributions........................................................................45
10.07 Distributions to a Legal Representative........................................................45
10.08 Source of Payment..............................................................................45
10.09 Plan Subject to IRS Approval...................................................................45
ARTICLE XI - SPECIAL PROVISIONS..................................................................................45
11.01 Amendments to the Plan.........................................................................45
11.02 Merger, Consolidation or Transfer of Assets....................................................46
11.03 Termination of the Plan........................................................................46
11.04 Withdrawal of an Employer......................................................................46
11.05 Procedure......................................................................................46
ARTICLE XII - CLAIMS PROCEDURE...................................................................................47
12.01 Claims Procedure...............................................................................47
12.02 Claim Review...................................................................................47
12.03 Exhaustion of Claims Procedure.................................................................48
</TABLE>
iv
<PAGE> 6
<TABLE>
<S> <C>
ARTICLE XIII - TOP-HEAVY PROVISIONS..............................................................................48
13.01 General........................................................................................48
13.02 Definitions....................................................................................48
13.03 Minimum Contribution...........................................................................50
ARTICLE XIV - EXERCISE OF SHAREHOLDER'S RIGHTS...................................................................50
14.01 Voting Shares of Company Stock.................................................................50
14.02 Rights Other than Voting Rights................................................................51
14.03 Public Offers..................................................................................51
ARTICLE XV - SPECIAL LIMITATIONS ON CONTRIBUTIONS................................................................53
15.01 Definitions....................................................................................53
15.02 Determination and Treatment of Excess Deferrals................................................59
15.03 Computation of Actual Deferral Percentage......................................................59
15.04 Limitation on Actual Contribution Percentage...................................................60
15.05 Excess Contributions and Excess Aggregate Contributions........................................61
15.06 Correction of Multiple Use of Alternative Limitation...........................................63
ARTICLE XVI - ESOP INVESTMENTS AND ACQUISITION LOANS.............................................................63
16.01 Investment of Certain Employer Contributions...................................................63
16.02 Valuation of Shares of Company Stock...........................................................63
16.03 Acquisition Loans..............................................................................64
16.04 Dividends Used in Repayment of Acquisition Loan................................................64
16.05 Unallocated Company Stock Account..............................................................64
16.06 Release of Shares of Company Stock.............................................................65
16.07 Allocation of Proceeds of Sale or Other Disposition............................................66
ARTICLE XVII - LOAN TO PARTICIPANTS..............................................................................66
17.01 Eligibility....................................................................................66
17.02 Amount of Loan.................................................................................66
17.03 Terms and Conditions...........................................................................67
ARTICLE XVIII - CHANGE IN CONTROL PROVISIONS.....................................................................68
18.01 General........................................................................................68
18.02 Full Vesting...................................................................................68
18.03 Definitions....................................................................................68
18.04 Allocations....................................................................................70
18.05 Amendment......................................................................................71
</TABLE>
v
<PAGE> 7
BOWATER INCORPORATED
SALARIED EMPLOYEES' SAVINGS PLAN
INTRODUCTION
A. ESTABLISHMENT OF PLAN
The Bowater Incorporated Salaried Employees' Savings Plan (the "Plan")
was established effective December 31, 1973 for the benefit of eligible
salaried employees of Bowater Incorporated (the "Company") and its subsidiaries
that adopt the Plan. The Plan was amended and restated, effective January 1,
1984, to provide for payroll-based employee stock ownership contributions, to
provide for employee contributions on a before-tax basis, to incorporate
amendments previously made to the Plan, to make certain additional technical
changes and to provide for voluntary investments in Company stock.
The Plan was amended January 1, 1985 to comply with applicable
provisions of the Tax Equity and Fiscal Responsibility Act of 1982, the Tax
Reform Act of 1984 and the Retirement Equity Act of 1984, as well as to reflect
certain changes in the administration of the Plan and certain technical
changes. Effective May 1, 1989 the Plan was amended to include both an employee
stock ownership plan ("ESOP"), as defined in Section 4975(e)(7) of the Internal
Revenue Code of 1986, as amended (the "Code"), and a defined contribution
savings plan (in the nature of a profit-sharing plan) with a cash or deferred
arrangement under Section 401(k) of the Code. Effective January 1, 1989, the
Plan was amended and restated to bring its provisions into conformance with the
Tax Reform Act of 1986, to accommodate certain provisions of the July 1, 1994
Master Trust Agreement between the Company and Fidelity Management Trust
Company and to make other administrative changes.
B. RESTATEMENT OF PLAN
Effective January 1, 1997, the Plan is amended and restated to bring
its provisions into conformance with the Small Business Job Protection Act of
1996 and the Taxpayer Relief Act of 1997 and to make further administrative
changes.
C. OBJECTIVE OF PLAN
The objective of the Plan is to enhance the existing benefit programs
of the Company with respect to eligible employees and to encourage such
employees to further their own financial independence. The Plan is designed to
provide a systematic method of savings through regular contributions by
eligible employees. 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
the trust forming a part thereof are intended to meet the requirements of
Sections 401(a), 401(k), 409 and 501(a) of the Code, and the provisions of the
Employee Retirement Income Security Act of 1974, as amended.
<PAGE> 8
ARTICLE I
DEFINITIONS
The following words and phrases shall have the meanings set forth
herein for purposes of the Plan and any subsequent amendment, unless a
different meaning is plainly required by the context. Where applicable, the
masculine pronoun shall include the feminine pronoun, and the singular shall
include the plural.
1.01 ACCOUNTS. The separate accounts maintained for each
Participant in each Investment Fund in which the Participant has a balance,
including the Basic Post-Tax Contribution Account, the Supplemental Post-Tax
Contribution Account, the Basic Pre-Tax Contribution Account, the Supplemental
Pre-Tax Contribution Account, the Employer Contribution Account, the ESOP
Account and the PAYSOP Account, as determined under Articles III and IV.
1.02 ACQUISITION LOAN. A loan or other extension of credit made or
guaranteed by a "disqualified person" (as defined in Section 4975(e)(2) of the
Code) used by the Trustee to finance the acquisition of shares of Company Stock
under Section 16.03.
1.03 ACTIVE PARTICIPANT. An eligible Employee who has on file with
the Employer an election to withhold part of his Earnings as a periodic
contribution to the Plan and who is currently having Earnings withheld.
1.04 ADDITIONAL MATCHING CONTRIBUTIONS. Contributions made on a
Participant's behalf by an Employer under Section 4.02.
1.05 AFFILIATED COMPANY. Any company or organization required to be
aggregated with the Company as a single employer under Sections 414(b), (c),
(m) or (o) of the Code.
1.06 BASIC POST-TAX CONTRIBUTION ACCOUNT. The value of that portion
of the Trust Fund which is attributable to a Participant's Basic Post-Tax
Contributions under Section 3.01.
1.07 BASIC PRE-TAX CONTRIBUTION ACCOUNT. The value of that portion
of the Trust Fund which is attributable to a Participant's Basic Pre-Tax
Contributions under Section 3.02.
1.08 BENEFICIARY.
(a) The person, estate or trust last designated by a Participant
by written notice filed with the Plan Administrator to receive any benefits
payable in the event of the Participant's death. In the absence of an effective
designation, or if no designated Beneficiary survives the Participant, the
Beneficiary shall be the first of the following classes of surviving
beneficiaries in successive preference: the Participant's (i) widow or widower;
(ii) children; (iii) parents; (iv) siblings; and (v) executor or administrator.
2
<PAGE> 9
(b) Notwithstanding paragraph (a), if a Participant is married on
the date of his death, his Beneficiary shall be his surviving Spouse unless:
(i) The Participant has designated a Beneficiary other
than his Spouse, and
(ii) The Participant's Spouse has consented in writing to
such other Beneficiary designation and the Spouse's
consent acknowledges the effect of such election and
is witnessed by a representative of the Plan
Administrator or a notary public, or it is
established to the satisfaction of the Plan
Administrator that such consent cannot be obtained
because there is no Spouse or because the Spouse
cannot be located.
1.09 BOARD. The Board of Directors of the Company.
1.10 CODE. The Internal Revenue Code of 1986, as amended. All
references to any section of the Code shall also refer to any successor
statutory provision to such section.
1.11 COMPANY. Bowater Incorporated or any successor by merger,
acquisition or otherwise with respect to its Employees. Whenever any power,
right, privilege, duty or responsibility is reserved to the Company under the
terms of the Plan, it may be exercised by the Board or by any individual,
committee or entity to whom the Board has expressly delegated the authority to
act in accordance with any procedure for delegation it has established.
1.12 COMPANY STOCK. Common stock of the Company which is either
tradeable on an established securities market or which has voting power and
dividend rights no less favorable than any other class of common stock issued
by the Company; provided that when used to describe shares to be acquired
pursuant to an Acquisition Loan or to be allocated to a Participant's ESOP
Account, such term shall mean stock described in Section 4975(e)(8) of the
Code.
1.13 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 net profits. If the current or accumulated net profits of any
Employer are not sufficient to permit the required Employer Contributions, then
the amount of the Employer Contribution which such Employer is not permitted to
make may be contributed by any other Employer to the extent of the current or
accumulated net profits of such Employer that remain after contribution of the
Employer Contributions required on behalf of Participants employed by such
other Employer. No reimbursement shall be required as a result of such
contribution.
1.14 DISABILITY. The status of being totally and permanently
disabled, as determined by the Plan Administrator in its sole discretion, based
on satisfactory evidence furnished to the Plan Administrator by a licensed
physician.
3
<PAGE> 10
1.15 EARNINGS. The total basic compensation paid to an Employee by
the Employer, excluding overtime pay, commissions, bonuses and any other extra
remuneration, but including severance pay received in periodic installments as
approved by the Plan Administrator in a uniform and nondiscriminatory manner,
and including any contribution to the Plan under Sections 3.02 and 3.04 and any
compensation excluded from taxable income under Section 125 of the Code. In
addition to other applicable limitations which may be set forth in the Plan and
notwithstanding any other contrary provision of the Plan, compensation taken
into account under the Plan shall not exceed $150,000, adjusted for changes in
the cost of living as provided in Section 415(d) of the Code.
1.16 EFFECTIVE DATE. For the Company, January 1, 1997 or such later
date as is set forth herein for a specific provision. For each other Employer,
January 1, 1997 or such later date as such Employer adopts the Plan.
1.17 EMPLOYEE. Any individual who is hired to perform duties for
the Employer on a salaried basis either as a Full-Time Employee or a Part-Time
Employee.
1.18 EMPLOYER. Bowater Incorporated or any successor by merger,
acquisition or otherwise with respect to its Employees, or any Affiliated
Company which the Board shall designate as an Employer for purposes of this
Plan, upon such terms and conditions as said board shall determine, and with
the approval of the board of directors of such Affiliated Company.
1.19 EMPLOYER CONTRIBUTIONS. Matching Contributions and Additional
Matching Contributions made under Sections 4.01 and 4.02.
1.20 EMPLOYER CONTRIBUTION ACCOUNT. The value of that portion of
the Trust Fund which is attributable to Employer Contributions.
1.21 EMPLOYMENT. The service as an Employee with the Employer and
any Affiliated Company.
1.22 ENROLLMENT DATE. The Effective Date and thereafter the first
day of each month. In the case of any Affiliated Company which is designated as
an Employer, Enrollment Date shall also mean the effective date of such
designation and thereafter the first day of each month.
1.23 ERISA. The Employee Retirement Income Security Act of 1974, as
amended. All references to any section of ERISA shall also refer to any
successor statutory provisions to such section.
1.24 ESOP ACCOUNT. The Account established within the Company Stock
Fund as an employee stock ownership plan as defined in Section 4975(e)(7) of
the Code ("ESOP"), which are used exclusively to receive allocations of ESOP
Contributions. A Participant's ESOP Account shall include a sub-account
reflecting all payroll-based employee stock ownership
4
<PAGE> 11
("PAYSOP") contributions made by an Employer for a Participant for Plan Years
beginning before January 1, 1987.
1.25 ESOP CONTRIBUTIONS. Matching Contributions that match
Participants' Basic Contributions and Employer Contributions under Section 4.02
that are designated by the Employer as allocated to a Participant's ESOP
Account.
1.26 FIDUCIARY. A person, committee or entity which exercises
discretionary control over the Plan or its assets, as defined in Section 3(21)
of ERISA, and such persons identified in Section 9.01.
1.27 FINANCED SHARES. Shares of Company Stock acquired with an
Acquisition Loan.
1.28 FLEXPLAN CONTRIBUTIONS. A contribution consisting of an amount
contributed on behalf of an Eligible Employee under an Employer-sponsored plan
meeting the requirements of Code Section 125 that the Eligible Employee elects
to contribute to the Plan in accordance with Section 3.02(c).
1.29 FORFEITURES. The nonvested portion of a Participant's Account
upon distribution of the Account.
1.30 FULL-TIME EMPLOYEE. An Employee who is designated as being
employed on a full-time basis on the Employer's payroll records.
1.31 GAINSHARING CONTRIBUTIONS. A contribution consisting of an
amount that would otherwise be paid to an Eligible Employee under an
Employer-sponsored gainsharing plan or program that an Eligible Employee elects
to contribute to the Plan in accordance with Section 3.2(b).
1.32 HOUR OF SERVICE.
(a) For Plan Years beginning before January 1, 1997, Hours of
Service shall be equal to the hours of service credited under the provisions of
the Plan in effect on December 31, 1996.
(b) Effective January 1, 1997, while an individual is a Full-Time
Employee, "Hour of Service" shall mean each hour for which an Employee is paid
or entitled to payment for the performance of duties for the Employer.
(c) Effective January 1, 1997, while an individual is a Part-Time
Employee, "Hour of Service" shall mean:
(i) Each hour for which an Employee is paid or entitled
to payment for the performance of duties for the
Employer during the applicable period.
5
<PAGE> 12
(ii) Each hour for which an Employee is paid or entitled
to payment on account of a period of time during
which no duties are performed (irrespective of
whether the Employee's Employment has terminated)
due to vacation, holiday, illness, incapacity
(including disability or pregnancy), layoff, jury
duty, Uniformed Service Leave (whether or not paid
or entitled to payment) or authorized leave of
absence. No more than 501 Hours of Service will be
credited under this subsection (ii) for any single
continuous period (whether or not such period occurs
during a single computation period).
(iii) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed
to by the Employer.
The same Hours of Service shall not be credited both under (i) or (ii), as the
case may be, and under (iii) above.
(d) In determining the Hours of Service credited to a Part-Time
Employee who is employed by the Employer on other than an hourly-rated basis,
such Employee shall be credited with ten Hours of Service per day for each day
the Employee would, if hourly-rated, be credited with Hours of Service pursuant
to paragraph (c)(i) above.
(e) In the case of a payment which is made or due on account of a
period during which a Part-Time Employee performs no duties and which results
in the crediting of Hours of Service under either (c)(ii) or (c)(iii) above, to
the extent that such award or agreement is made with respect to such a period
described in (c)(ii) above, the number of Hours of Service to be credited shall
be determined in accordance with Department of Labor Regulation ss.
2530.200b-2, which is incorporated herein by reference.
(f) Nothing in this section shall be construed as denying an
Employee credit for an Hour of Service if credit is required under applicable
federal law.
1.33 INVESTMENT FUNDS. The investment funds described under Section
5.01 to which contributions are allocated and into which Participants may
direct contributions or accounts to be invested, pursuant to Article V.
1.34 MATCHING CONTRIBUTIONS. Employer Contributions which match (in
the percentage specified in Section 4.01) a Participant's Basic Post-Tax
Contributions or Basic Pre-Tax Contributions.
1.35 MATERNITY OR PATERNITY REASONS. With respect to any Employee:
(a) the Employee's pregnancy; (b) the birth of the Employee's child; (c) the
placement of a child with the Employee in connection with the adoption of such
child by the Employee; or (d) the need to care for such child for a period
beginning immediately following such birth or placement.
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1.36 PART-TIME EMPLOYEE. An Employee who is designated as being
employed on a part-time basis on the Employer's payroll records.
1.37 PARTICIPANT. An Active Participant or former Active
Participant who still has contributions credited to his Accounts.
1.38 PAYSOP ACCOUNT. The Account established on behalf of a
Participant attributable to a Participant's PAYSOP Contributions.
1.39 PAYSOP CONTRIBUTIONS. Payroll-based employee stock ownership
contributions made by an Employer for a Participant for Plan Years beginning
before January 1, 1987.
1.40 PLAN. The Bowater Incorporated Salaried Employees' Savings
Plan, as set forth herein, and as it may be amended from time to time.
1.41 PLAN ADMINISTRATOR. The Company or the individual or committee
appointed by the Board to administer the Plan.
1.42 PLAN YEAR. The calendar year.
1.43 RETIREMENT. Termination of employment after having attained
age 50 and ten Years of Service under the Plan.
1.44 SEVERANCE FROM SERVICE DATE. The date on which the Full-Time
Employee quits, retires, is discharged or dies; or the first anniversary of the
first date of a period in which the Full-Time Employee remains absent from
Employment with or without pay, for any other reason, 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 anniversary of the first date of such absence, the Severance from Service
Date shall be the second anniversary of the first date of such absence.
In the case of an Employee who is absent from active employment on a
Uniformed Service Leave, his Severance from Service Date shall be the date the
Employee ceased active employment if and only if the Employee either fails to
return to employment with the Employer or if his level of absence is otherwise
deemed to have not been a Uniformed Service Leave. In all other cases, an
Employee's Severance from Service Date shall not be deemed to occur in
connection with his taking of Uniformed Service Leave.
1.45 SPOUSE. The person legally married to the Participant at the
time an action or event relevant for Plan purposes occurs.
1.46 SUPPLEMENTAL POST-TAX CONTRIBUTION ACCOUNT. The value of that
portion of the Trust Fund which is attributable to a Participant's Supplemental
Post-Tax Contributions under Section 3.03.
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1.47 SUPPLEMENTAL PRE-TAX CONTRIBUTION ACCOUNT. The value of that
portion of the Trust Fund which is attributable to a Participant's Supplemental
Pre-Tax Contributions under Section 3.04.
1.48 TRUSTEE. Fidelity Management Trust Company, as Trustee under
the Master Trust Agreement between Bowater Incorporated and Fidelity Management
Trust Company, dated as of July 1, 1994, and, to the extent not succeeded
thereby, Wachovia Bank and Trust Company as Trustee under the Bowater
Incorporated Master Trust Agreement, as amended and restated as of May 1, 1989,
and their respective successors.
1.49 TRUST FUND. The aggregate funds held by the Trustees under the
Plan pursuant to the trust agreements between the Company and the Trustees.
1.50 UNALLOCATED COMPANY STOCK ACCOUNT. The Account established for
Financed Shares pursuant to Section 16.05, which shares have not yet been
released from such Account for purposes of allocation to Participants'
Accounts.
1.51 UNIFORMED SERVICE LEAVE. An approved leave of absence taken in
order to perform uniformed service, duty or training within the meaning of
USERRA. Such Uniformed Service Leave shall continue from the Participant's date
of entry into the uniformed service until the earliest of the following:
(i) the expiration of the period following the date of
his discharge from uniformed service during which he
is required to apply for reemployment with the
Employer under USERRA;
(ii) the date of his return to employment by the Employer;
(iii) the date on which he takes employment with an
employer other than his prior Employer or an
Affiliated Employer (if any); or
(iv) the date of his death.
Notwithstanding the foregoing and for all purposes under the Plan,
Uniformed Service Leave shall include only those periods during which an
Employee is protected under USERRA. If an employee takes a leave of absence to
perform uniformed service and fails to return to employment with the Employer
prior to the expiration of his reemployment rights under USERRA, the entire
period of his leave of absence shall be deemed to not qualify as a Uniformed
Service Leave.
1.52 USERRA. USERRA means the Uniformed Services Employment and
Reemployment Rights Act of 1994, as amended, or any successor statute, and the
rulings and regulations promulgated thereunder.
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1.53 VALUATION DATE. The last business day of each month (and any
other date specified by the Trustee), on which the Trust Fund is valued in
accordance with Article VI. As to Accounts maintained in any Investment Fund
which is valued daily, each business day may be deemed to be a Valuation Date.
1.54 YEAR OF BREAK IN SERVICE.
(a) For Plan Years beginning before January 1, 1997, Years of
Break in Service shall be determined under the Plan in effect on December 31,
1996.
(b) Effective January 1, 1997, while an individual is a Full-Time
Employee, "Year of Break in Service" shall mean any 12-month period, computed
from the Employee's Severance from Service Date, during which the Employee does
not complete one or more Hours of Service. A Year of Break in Service shall
occur on the last day of the first such 12-month period, and additional Years
of Break in Service shall occur for each succeeding 12-month period, or
allocable part thereof computed in months and days (with an aggregate of 30
days constituting a month), during which the Employee does not complete one or
more Hours of Service.
(c) Effective, January 1, 1997, while an individual is a Part-Time
Employee, "Year of Break in Service" shall mean a Plan Year in which the
Part-Time Employee fails to complete 501 or more Hours of Service. Solely for
purposes of determining whether a Year of Break in Service for participation
and vesting purposes has occurred, a Part-Time Employee who is absent from
Employment for Maternity or Paternity Reasons shall be credited with the Hours
of Service which he would have earned but for such absence or, in any case in
which such hours cannot be determined, eight Hours of Service per day of such
absence. The Hours of Service credited under this paragraph shall be credited
in the computation period in which the absence begins, if necessary to prevent
a Year of Break in Service in that period, or, in all other cases, in the
following computation period.
1.55 YEARS OF SERVICE.
(a) For Employment before January 1, 1997, Years of Service shall
be equal to the years of service credited under the Plan then in effect.
(b) For Employment beginning on or after January 1, 1997:
(i) While an individual is a Full-Time Employee, "Years
of Service" shall mean the Employee's aggregate
period of Employment consisting of Years of Service
and parts thereof, with each Year of Service
consisting of 12 months and with each month thereof
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
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Date. Years of Service shall include the period of
time between a Full-Time Employee's Severance from
Service Date and the date the individual next
completes an Hour of Service, provided that such
Hour of Service is completed within 12 months of the
date the individual last completed an Hour of
Service. An Employee's period of Uniformed Service
Leave shall be credited as Years of Service,
provided the Employee resumes employment with the
Employer within the period during which the
Employee's reemployment rights are protected under
USERRA.
(ii) While an individual is a Part-Time Employee:
(A) Year of Service for participation shall
mean the 12-month period commencing on the
date the Part-Time Employee first completes
an Hour of Service, provided that he is
credited with not less than 1,000 Hours of
Service during such 12-month period. If the
Part-Time Employee fails to complete 1,000
or more Hours of Service within such 12
month period, Year of Service shall mean
the first Plan Year (beginning with the
Plan Year that includes the first
anniversary of the date the Employee first
completed an Hour of Service) during which
a Part-Time Employee is credited with 1,000
or more Hours of Service.
(B) Year of Service for purposes of determining
the vested portion of a Participant's
Account shall mean a Plan Year during which
a Part-Time Employee completes 1,000 or
more Hours of Service.
(C) An Employee's period of Uniformed Service
Leave shall be credited as Years of
Service, provided the Employee resumes
employment with the Employer within the
period during which the Employee's
reemployment rights are protected under
USERRA.
(c) For purposes of determining whether an Employee who transfers
between Full-Time Employment and Part-Time Employment during a Plan Year has
earned a Year of Service for such Plan Year, the following rules shall apply:
(i) In the case of a Full-Time Employee who transfers to
Employment as a Part-Time Employee, the Employee
shall receive credit as of the date of transfer for
Years of Service as computed under Section
1.55(b)(i), and shall be credited with ten Hours of
Service for each day he worked in such Plan Year as
a Full-Time Employee and with the Hours of Service
described under Section 1.32(c) for the portion of
the Plan Year the Employee worked as a Part-Time
Employee.
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(ii) In the case of a Part-Time Employee who transfers to
Employment as a Full-Time Employee, the Employee
shall receive credit as of the beginning of the Plan
Year for Years of Service as computed under Section
1.55(b)(ii), and shall receive credit towards a Year
of Service equal to the greater of the credit
towards a Year of Service he would receive under
Section 1.55(b)(i) for the entire Plan Year and the
credit towards a Year of Service he would receive
under Section 1.32(c) for the portion of the Plan
Year he worked as a Part-Time Employee.
(iii) Notwithstanding any provision of this subsection (c)
to the contrary, the Plan shall comply with Treasury
Regulation ss.1.410(a)-(7)(f) in crediting Years of
Service for Employees who transfer between Full-Time
Employment and Part-Time Employment during a Plan
Year.
(d) The following rules shall apply for purposes of determining
the Years of Service credited to a Participant whose Employment terminates and
subsequently recommences.
(i) If the Participant either:
(A) terminates Employment after he is fully
vested in his Account; or
(B) terminates and recommences Employment after
incurring at least one but less than five
consecutive Years of Break in Service,
then his Years of Service shall include those Years
of Service he earned before the termination of his
Employment, provided that he satisfies the
applicable eligibility requirements of Section 2.01
following his reemployment.
(ii) If the Participant terminates his Employment before
he is fully vested in his Accounts and he is
reemployed after incurring five or more consecutive
Years of Break in Service, his Years of Service
shall not include periods before the termination of
his Employment.
ARTICLE II
ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY.
(a) An Employee who is an Active Participant as of December 31,
1996 shall continue to be an Active Participant as of January 1, 1997, provided
the Participant continues to meet the requirements of Section 2.02 and has not
ceased Active Participation under Section 2.03.
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(b) Subject to paragraph (c) and Sections 2.04 and 2.05, each
other Employee shall be eligible to become a Participant on any Enrollment Date
following (i) his Employment commencement date, if he is a Full-Time Employee;
or (ii) his completion of a Year of Service if he is a Part-Time Employee;
provided that he does not participate in any other non-governmental
tax-qualified defined contribution plan to which the Employer makes
contributions on his behalf and he is not a member of a collective bargaining
unit for which qualified plan benefits have been the subject of good faith
bargaining with the Employer pursuant to a currently effective collective
bargaining agreement, unless such agreement provides for participation
hereunder.
(c) Notwithstanding paragraph (b), to be eligible, an Employee
must be subject to the direction and control of an Employer and receive from
the Employer a regular stated compensation, including a pay arrangement or paid
leave of absence, unless contractually agreed otherwise, but excluding a
pension, retainer or fee under contract. An Employee shall be eligible to
participate only if the Employee (i) is paid salary, wages or other
compensation by the Employer for a period of time, (ii) is considered by the
Employer to be a common law employee at the time of the payment of such amounts
and (iii) have his or her salary, wages or other compensation treated by the
Employer at the time of payment as subject to statutorily required payroll tax
withholding. For this purpose, statutorily required "backup withholding" shall
not be considered payroll tax withholding.
All other individuals (Employees or otherwise) shall be ineligible to
participate in the Plan, even if determined under any federal or state law,
ruling or regulation to be (or to have been) common law or statutory employees
of the Employer for the period of time in question. In addition, individuals
(Employees or otherwise) who perform services as leased employees within the
meaning of Section 414(n) of the Code are ineligible to participate.
Notwithstanding any provision of the Plan to the contrary, an Employee
who transfers to employment with the Company from employment with Avenor
America Inc. shall be ineligible to participate in the Plan.
(d) Each Employee transferred from hourly status shall be eligible
to make a plan to plan transfer under the provisions of Section 3.09 at any
time.
2.02 PARTICIPATION. An eligible Employee shall become an Active
Participant as of any applicable Enrollment Date if on or before such date and
within the time period prescribed by the Plan Administrator the Employee files
with the Employer an enrollment form prescribed by the Plan Administrator on
which he designates the rate of his Participant contributions, designates a
Beneficiary, authorizes the Employer to make payroll deductions and makes
investment elections as provided under the Plan. An eligible Employee who does
not file an enrollment form in accordance with the preceding sentence shall
become an Active Participant on the first succeeding Enrollment Date after the
date the Employee files such enrollment form with the Employer. With respect to
the plan to plan transfers under Section 3.09, an Employee shall automatically
become a Participant at the time of such transfer.
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2.03 CESSATION OF PARTICIPATION.
(a) An Employee shall cease to be an Active Participant in the
event of the following:
(i) upon the voluntary suspension of his contributions
under Section 3.07;
(ii) upon the mandatory suspension of his contributions
under Article VIII;
(iii) upon a Year of Break in Service by the Employee; or
(iv) upon any change in his status as an Employee that
would make him ineligible to become or remain a
Participant under Section 2.01, including a transfer
to hourly status or to an Affiliated Company that is
not an Employer.
(b) Participation (but not Active Participation) shall continue
until a Participant's Accounts are distributed in full to him or his
Beneficiary or until forfeited.
2.04 EFFECT OF REEMPLOYMENT ON PLAN ENTRY OR REENTRY. This section
shall apply to Employees who terminate Employment and are subsequently
reemployed by the Employer.
(a) An Employee who is a Participant and who terminates his
Employment and is reemployed before he incurs a Year of Break in Service (based
on his status as a Full-Time or Part-Time Employee as of his termination of
Employment) shall be eligible to participate in the Plan as of the date of his
reemployment, provided that the Employee actively participated in the Plan
before his termination of Employment. If the Employee satisfied the eligibility
conditions of Section 2.01 but terminated his Employment before becoming a
Participant, he may become a Participant in the Plan on the later of: (i) the
date of his reemployment or (ii) the Enrollment Date on which he would have
become a Participant had he not terminated his Employment.
(b) If a Participant terminates his Employment and either: (i) is
fully vested in his Accounts; or (ii) is reemployed after incurring at least
one but less than five consecutive Years of Break in Service, he may
participate in the Plan as of the date he satisfies the applicable eligibility
requirements of Section 2.01 following the date of his reemployment.
(c) If a Participant terminates his Employment before being fully
vested in his Accounts and he is reemployed after incurring five or more
consecutive Years of Breaks in Service, he shall be treated as a new Employee
for purposes of eligibility to participate in the Plan upon his reemployment.
2.05 PRIOR EMPLOYMENT WITH AFFILIATED COMPANY. Any person who
becomes an Employee and who was previously employed by an Affiliated Company,
or who previously performed services as a leased employee within the meaning of
Section 414(n) of the Code (if
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the Company was the recipient of such services) shall have such service taken
into account, credited solely for purposes of determining eligibility to
participate and vesting under the Plan.
ARTICLE III
PARTICIPANT CONTRIBUTIONS
3.01 BASIC POST-TAX CONTRIBUTIONS. Each Active Participant may
elect to make Basic Post-Tax Contributions to the Plan in whole percentages of
the Participant's Earnings, up to a maximum (including elected contributions
under Section 3.02(a)) of six percent.
3.02 BASIC PRE-TAX CONTRIBUTIONS. Subject to the rules set forth in
this Section 3.02, Section 4.06 and 4.07, an Eligible Employee who has
satisfied the participation requirement set forth in Section 2.02 may elect to
make the types of Basic Pre-Tax Contributions described in subsections (a), (b)
and (c) below:
(a) Percentage Contributions. Each Active Participant may elect
to make Basic Pre-Tax Contributions to the Plan in whole
percentages of the Participant's Earnings, up to a maximum
(including elected contributions under Section 3.01) of six
percent.
(b) Gainsharing Contributions. In addition to any percentage
contributions made under Sections 3.01, 3.02(a), 3.03 or
3.04, effective January 1, 1998, an Eligible Employee may
elect to contribute all but not less than all of any amount
that would otherwise be paid to him under an
Employer-sponsored gainsharing plan or program as a
Gainsharing Contribution to the Plan, subject to the annual
limitations specified in Sections 4.06 and 4.07. Any such
election shall be made at least two weeks prior to the date
upon which such amounts would otherwise be paid and, once
submitted, shall be irrevocable. Gainsharing Contributions
under this Section 3.02(b) shall be credited to the
Employee's Supplemental Pre-Tax Contribution Account.
Notwithstanding the foregoing, to the extent that an
Eligible Employee has made the maximum amount of Pre-Tax
Contributions permitted under Code Section 402(g) for a Plan
Year, any Gainsharing Contributions elected to be contributed
by the Eligible Employee to the Plan for such Plan Year shall
be treated as Post-Tax Contributions.
(c) FlexPlan Contributions. In addition to any percentage
contributions made under Sections 3.01, 3.02(a), 3.03 or
3.04, effective January 1, 1998, the following provisions
shall apply, subject to the annual limitations specified in
Sections 4.06 and 4.07:
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(1) An Eligible Employee may elect to contribute any
portion of any amount that is contributed on his
behalf to an Employer-sponsored plan meeting the
requirements of Code Section 125 to this Plan.
(2) FlexPlan Contributions made under this subsection
(c) will be made by payroll withholding with respect
to the first full payroll period for which the
election is effective and shall be credited to the
Employee's Supplemental Pre-Tax Contributions
Account as soon as practicable thereafter. Elections
under this subsection (c) shall be made annually no
later than the fifteenth day of December preceding
the Plan Year for which they are effective; provided
that Employees first enrolling in a Code Section 125
plan on any date other than January 1 of a calendar
year (such Employee's "effective date") may make an
election pertaining to FlexPlan Contributions for
the period commencing on their effective date and
ending on the following December 31 by delivering
the appropriate Election Form to the Plan
Administrator on or before the fifteenth day of the
month preceding that effective date. Elections made
under this subsection (c) shall be irrevocable.
Notwithstanding the foregoing, to the extent that an Eligible
Employee has made the maximum amount of Before-Tax
Contributions permitted under Code Section 402(g) for a Plan
Year, any FlexPlan Contributions elected to be contributed by
the Eligible Employee to the Plan for such Plan Year shall be
treated as Post-Tax Contributions.
3.03 SUPPLEMENTAL POST-TAX CONTRIBUTIONS. Each Active Participant
who is making Basic Post-Tax Contributions of six percent of Earnings under
Section 3.01 may elect to make Supplemental Post-Tax Contributions to the Plan
in whole percentages of the Participant's Earnings, up to a maximum (including
elected contributions under Section 3.01) of 10% of the Participant's Earnings.
3.04 SUPPLEMENTAL PRE-TAX CONTRIBUTIONS. Each Active Participant
who is making Basic Pre-Tax Contributions of six percent of Earnings under
Section 3.02(a) may elect to make additional Supplemental Pre-Tax Contributions
to the Plan of up to three percent (in whole percentages) of the Participant's
Earnings.
3.05 CONTRIBUTION LIMIT AND PAYMENT. Notwithstanding the foregoing,
contributions for an Employee made under Sections 3.01, 3.02, 3.03 and 3.04
shall be limited to 16 percent of a Participant's Earnings. Such contributions
shall be made by means of payroll deductions for each payroll period, effective
with the first full payroll period which ends after the date on which the
Employee becomes an Active Participant. Contributions shall be accrued by the
Employer from a Participant's Earnings at the rate designated by the
Participant, credited to the applicable Accounts by the end of such payroll
period, and paid to the Trustee promptly and,
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in any event, no later than the 15th business day after the end of the month in
which such payroll deduction is made.
3.06 CHANGE IN AMOUNT OF CONTRIBUTION. Subject to the provisions of
Article XV, a Participant may elect to change the rate of his Basic and
Supplemental Post-Tax Contributions and Pre-Tax Contributions by giving prior
written notice to the Employer on a form prescribed by the Plan Administrator
within the time period prescribed by the Plan Administrator. Changes will be
effective with the first full payroll period which begins in the month
following the expiration of the time period prescribed by the Plan
Administrator for the submission of a Participant's notice of election to
change his Contributions.
Unless otherwise directed by the Participant, if the Participant's
total contribution rate is in excess of six percent of his Earnings, any such
change will first be applied to adjust the amount of his Supplemental Post-Tax
Contributions and/or Supplemental Pre-Tax Contributions, and then, if
necessary, to adjust the amount of his Basic Post-Tax Contributions and/or
Basic Pre-Tax Contributions. If the Participant's total contribution rate is
less than six percent of his Earnings, any such change will first be applied to
adjust the amount of his Basic Post-Tax Contributions and/or Basic Pre-Tax
Contributions, and then, if necessary, to provide for Supplemental Post-Tax
Contributions and/or Supplemental Pre-Tax Contributions.
3.07 VOLUNTARY SUSPENSION OF PARTICIPANT CONTRIBUTIONS.
(a) A Participant may suspend his Basic or Supplemental Post-Tax
Contributions as of the first day of any month by giving prior written notice
to the Employer within the time period prescribed by the Plan Administrator. A
suspension of any Basic Post-Tax Contributions will automatically suspend all
Supplemental Post-Tax Contributions.
(b) A Participant may suspend his Basic Pre-Tax or Supplemental
Pre-Tax Contributions as of the first day of any month by giving prior written
notice to the Employer within the time period prescribed by the Plan
Administrator. A suspension of any Basic Pre-Tax Contributions will
automatically suspend all Supplemental Pre-Tax Contributions.
(c) A Participant may resume his Contributions as of the first day
of any month after the date the suspension commenced by giving prior written
notice to the Employer within the time period prescribed by the Plan
Administrator. Written notice of suspension or resumption of Contributions
shall be on a form provided by the Plan Administrator for such purpose.
3.08 EMPLOYMENT WITH AFFILIATED COMPANY. A Participant may not
contribute to the Plan while he is solely employed by an Affiliated Company
that is not an Employer. A Participant who receives Earnings from an Employer
and compensation from an Affiliated Company may elect to contribute to the
Plan, by means of payroll deductions for each payroll period, as if his
Earnings from the Employer included his basic compensation from the Affiliated
Company. A Participant's prior and concurrent service with an Affiliated
Company which is not an Employer shall be counted for Years of Service as if
such Affiliated Company had been
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<PAGE> 23
an Employer. For this purpose, the fact that the Participant has made no
contributions under the Plan shall be disregarded.
3.09 PLAN TO PLAN TRANSFER.
(a) Balances may be transferred into the Plan, without the consent
of the Plan Administrator, if the amount is transferred from a qualified
defined contribution retirement plan maintained by the Employer, and with the
Plan Administrator's consent if the transfer is from any other tax-qualified
plan. Transferred balances (other than portions attributable to employer or
employee contributions made in the year of transfer) shall not be subject to
the limitations of Section 4.06 or 4.07, nor included in the calculation of the
Participant's rate of Basic or Supplemental Contributions hereunder; however,
such amounts shall be subject to the applicable restrictions of Article VIII.
(b) The balance transferred shall be treated as follows:
(i) The portion attributable to pre-tax contributions
pursuant to Section 401(k) of the Code shall be
credited to the Employee's Supplemental Pre-Tax
Contribution Account;
(ii) The portion attributable to after-tax contributions
pursuant to Section 401(a) of the Code shall be
credited to the Employee's Supplemental Post-Tax
Contribution Account;
(iii) The portion attributable to Employer matching
contributions pursuant to Section 401(m) of the Code
shall be credited to the Employee's Employer
Contribution Account;
(iv) The portion attributable to contributions allocated
pursuant to Section 409 of the Code shall be
credited to the Employee's ESOP Account.
(c) The Plan Administrator shall require that the Employee furnish
a written statement containing such information as may be necessary to
establish that the transfer is consistent with the provisions of this Plan and
otherwise meets the requirements of law.
3.10 ROLLOVER CONTRIBUTIONS.
(a) An Employee, whether or not a Participant, may request the
Plan Administrator to 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 for the Employee:
(i) amounts transferred to this Plan directly from
another trust or annuity contract maintained as part
of a plan qualified under Section 401(a) of the
Code;
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(ii) amounts which (A) constitute or form a part of a
qualifying rollover distribution within the meaning
of Section 402(a)(5) of the Code which have been
received by the Employee from another trust or
annuity contract maintained as part of a plan
qualified under Section 401(a) of the Code (other
than one forming part of a plan under which the
Employee was one described in Section 401(c)(1) of
the Code at the time the contributions were made on
his behalf), (B) are eligible for tax-free rollover
treatment, and (C) are transferred to this Plan by
the Employee within 60 days following his receipt;
or
(iii) amounts which have been deposited and held in a
conduit Individual Retirement Account (as defined in
Section 408 of the Code) consisting solely of assets
and the income thereon which were (A) previously
distributed to the Employee from another trust or
annuity contract maintained as part of a plan
qualified under Section 401(a) of the Code (other
than one forming part of a plan under which the
Employee was described in Section 401(c)(1) of the
Code at the time the contributions were made on his
behalf) as part of a qualifying rollover
distribution as defined in Section 402(a)(5) of the
Code and which were deposited in the Individual
Retirement Account within 60 days of their receipt,
and (B) are transferred directly to this Plan from
the conduit Individual Retirement Account or are
transferred to this Plan within 60 days of their
distribution to the Employee from the conduit
Individual Retirement Account.
(b) Any amounts transferred into this Plan under this section
shall be by check or wire transfer. No securities shall be contributed. 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.
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. Any amounts in the Employee's Rollover Contribution Account shall
be fully vested at all times. The Employee shall be able to direct the
investment of this Account in accordance with the provisions of Article V. An
Employee's Rollover Contribution Account shall be subject to the same terms and
conditions as are applicable to a Supplemental Pre-Tax Contribution Account.
3.11 CONTRIBUTIONS UPON RETURN FROM MILITARY LEAVE. A Participant
returning to employment with the Employer from a period of Uniformed Service
Leave shall be entitled to enter into one or more Compensation reduction
agreements, pursuant to which the Participant may make up the Basic
Contributions and Supplemental Contributions (excluding interest and earnings
on such contributions) the Participant would have been entitled to make had the
Participant worked for the Employer and entered into such Compensation
reduction agreements during the period of Uniformed Service Leave. To the
extent of such make-up contributions allocated to the Participant's Basic
Pre-Tax and Basic Post-Tax Accounts, the Company shall make Matching
Contributions in accordance with Section 4.01 on behalf of the Participant for
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such period of Uniformed Service Leave. Notwithstanding the foregoing, all
contributions made by a Participant and the Company under this Section 3.11
shall be subject to the provisions of this Article III and be determined in
accordance with and subject to the limitations of USERRA.
ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.01 MATCHING CONTRIBUTIONS.
(a) With respect to each Active Participant in its employ, Each
Employer shall make Employer Contributions from its Current or Accumulated
Profits, if any. For each Participant, such Matching Contributions shall be in
an amount equal to 60 percent of the Participant's Basic Post-Tax Contributions
and/or Basic Pre-Tax Contributions accrued for a Plan Year. Notwithstanding the
foregoing, if an Employer has no Current and Accumulated Profits for a Plan
Year, but makes contributions to the Plan that shall be used to pay principal
and/or interest on an Acquisition Loan for such Plan Year, such contributions
shall be treated as Matching Contributions to the extent of the amount
contributed. Matching Contributions by each Employer with respect to Active
Participants shall be:
(i) paid to the Trustee in the form specified in Section
4.03; and
(ii) allocated to the "appropriate account" of the
Participant as promptly as possible, but no later
than as of the end of the Plan Year in which the
payroll period (to which such contribution relates)
ends.
(b) Matching Contributions may be used to pay principal and/or
interest on an Acquisition Loan. Shares released from the Unallocated Company
Stock Account on account of payment of such principal and/or interest shall be
allocable to the ESOP Accounts of the Participants on whose behalf such
Matching Contributions were made. To the extent that such shares released would
cause the 60 percent limitation to be exceeded, such excess shares shall be
held unallocated until the end of the Plan Year and then allocated as
Additional Matching Contributions pursuant to Section 4.02.
(c) The "appropriate" account for purposes of paragraph (a) is the
Participant's Employer Contribution Account to the extent, if any, that such
contributions are not applied to the payment of principal or interest on an
Acquisition Loan and are not designated by the Employer as ESOP contributions.
Otherwise, the "appropriate" account for such contributions is the
Participant's ESOP Account. Notwithstanding the foregoing, a Participant who is
a Part-Time Employee shall not be eligible to receive any Employer
Contributions made under this Section 4.01 for any Plan Year in which he fails
to complete 1,000 or more Hours of Service.
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4.02 ADDITIONAL MATCHING CONTRIBUTIONS.
(a) The Employer shall make Additional Matching Contributions from
its Current or Accumulated Profits if the Employer satisfies certain
preestablished financial targets. The following paragraphs will govern such
contributions:
(i) Before the end of the first calendar quarter of each
Plan Year each Employer shall establish performance
targets for purposes of this Section 4.02(a) and the
amount of Additional Matching Contributions to be
made upon the achievement of such targets. The
Employer shall make Additional Matching
Contributions in the appropriate amount with respect
to each quarter in which the Employer satisfies the
applicable performance target. Such contributions
shall be made in proportion to Basic Post-Tax
Contributions and/or Basic Pre-Tax Contributions for
each Employee of the Employer who, as of the end of
the quarter, was an Active Participant or who was an
Active Participant during the Plan Year but whose
Active Participation is then currently suspended
under Article VIII.
(ii) Except to the extent that such Additional Matching
Contributions are designated by the Employer as
contributions to be allocated to the ESOP Account of
the Employees, such contributions shall be allocated
to the Employer Contribution Account of its
Employees.
(iii) If Additional Matching Contributions are designated
by the Employer as contributions to be allocated to
the ESOP Account of the Employees, and as of the
date for any allocation, the shares released from
the Unallocated Company Stock Account during the
Plan Year upon payment of principal and/or interest
on an Acquisition Loan, less any such shares
previously allocated to Participants during such
Plan Year as Matching Contributions
under Section 4.01 or Additional Matching
Contributions under this Section 4.02, are greater
than the Additional Employer Contribution, any
shares remaining after such allocation shall be
carried forward and allocated in subsequent quarters
as Matching Contributions, Additional Matching
Contributions, or both; provided that as of the end
of the last calendar quarter of each Plan Year all
such shares shall be allocated in the proportions
described above.
(b) Notwithstanding the foregoing, the Company shall not make
Employer Contributions on behalf of Participants who are Part-Time Employees in
any Plan Year in which the Employee fails to complete 1,000 or more Hours of
Service.
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4.03 MODE OF PAYMENT.
(a) Matching Contributions under Section 4.01 may be made either
in cash or in shares of Company Stock. Additional Matching Contributions under
Section 4.02 may be made either in cash or in shares of Company Stock.
Contributions designated as ESOP Contributions shall be available to the
Trustee for (i) allocation to Participants' ESOP Accounts, (ii) acquisition of
shares of Company Stock or (iii) payment of principal and interest on
Acquisition Loans, as may be appropriate under the circumstances and as
permitted or required by the terms of the Plan and any applicable loan
documentation.
(b) Whenever Contributions under Section 4.01 or 4.02 are
permitted to be made in shares of Company Stock, the number of shares of
Company Stock so contributed shall be determined by reference to the price of
shares of Company Stock on the New York Stock Exchange for the applicable
trading day. For purposes of shares of Company Stock contributed under Section
4.01, the "applicable trading day" shall be the trading day immediately
preceding the last day of the month in which the payroll period (with respect
to which such shares of Company Stock are to be transferred to the Trust Fund)
ends. For purposes of shares of Company Stock contributed under Section 4.02,
the "applicable trading day" shall be the trading day immediately preceding the
Valuation Date selected for this purpose by the Plan Administrator in
conformity with any other applicable provisions of the Plan.
4.04 FORFEITURES. The amount of any Forfeitures under Section 7.04
and 8.02 shall be applied to reduce future Employer contributions under the
Plan as soon as practicable after the event giving rise to the Forfeiture has
occurred.
4.05 RETURN OF CERTAIN CONTRIBUTIONS TO EMPLOYER.
(a) The following Employer contributions may be returned to an
Employer:
(i) any contribution made by an Employer under a mistake
of fact may be returned to the Employer within one
year of date of the payment;
(ii) any contribution which is disallowed as a deduction
under Section 404 of the Code may be returned to an
Employer within one year after the date of the
disallowance.
(b) The amount which may be returned to an Employer shall not
exceed the amount of the Employer's contribution reduced by any losses
attributable to the contribution between the date of contribution and the
Valuation Date immediately preceding the date of withdrawal. No contribution or
portion of a contribution will be returned to an Employer if the return of such
amount would cause the value of an Employer Contribution Account to be less
than what its value would have been had the contribution not been made.
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<PAGE> 28
4.06 STATUTORY LIMITATION ON ADDITIONS.
(a) Notwithstanding any other provisions of the Plan, for each
Plan Year the Annual Addition to a Participant's Accounts shall not exceed the
lesser of the Maximum Permissible Dollar Amount or 25% of the Employee's
Compensation for the Plan Year.
(b) For the purposes of applying the limits of this Section 4.06,
the following conditions and definitions shall apply:
(i) "Annual Additions" shall mean the sum of:
(A) Employer Contributions and Forfeitures
allocated to the Participant's Accounts
under Sections 4.01, 4.02 and 4.04 and
Employer contributions to permit
investments in Company Stock as described
in Section 5.01(a); and
(B) Basic and Supplemental Post-Tax
Contributions and Pre-Tax Contributions
allocated to the Participant's Accounts
under Sections 3.01, 3.02, 3.03 and 3.04.
Notwithstanding the foregoing, if during any Plan
Year no more than one-third of the contributions
under Sections 4.01 and 4.02 as are designated as
ESOP Contributions which are deductible under
section 404(a)(9) of the Code are allocated to the
ESOP Accounts of Highly Compensated Employees during
the Plan Year, then any ESOP contributions which are
applied by the Trustees to pay interest on an
Acquisition Loan, and any Financed Shares which are
allocated as Forfeitures shall not be included in
computing Annual Additions.
(ii) "Compensation" shall mean the total compensation
paid to the Employee by the Employer during the Plan
Year 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).
For Plan Years after January 1, 1998, "Compensation"
shall mean the total compensation paid to the
Employee by the Employer during the Plan Year 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), increased by
any salary reduction contributions made on the
Employee's behalf under any plan maintained by the
Employer pursuant to Section 125 or 401(k) of the
Code.
(iii) "Maximum Permissible Dollar Amount" shall be
$30,000, as adjusted automatically in accordance
with regulations issued by the Secretary of the
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<PAGE> 29
Treasury (as the corresponding limitation in Section
415(c)(1)(A) of the Code is adjusted for the cost of
living in accordance with Section 415(d) of the
Code).
(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 amount payable under all such defined contribution plans
in which the Participant has been a participant were payable from one 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 at such times as required and to the extent necessary to prevent the
limitations from being exceeded.
(i) Discontinue or reduce the Supplemental Post-Tax
Employee and/or Supplemental Pre-Tax Contributions;
(ii) Discontinue or reduce the Basic Post-Tax Employee
and/or Basic Pre-Tax Contributions for the remainder
of the Plan Year;
(iii) Instruct the Trustee to return all or a portion of
the Employee's Supplemental Contributions made
during the Plan Year;
(iv) Instruct the Trustee to return all or a portion of
the Employee's Supplemental Pre-Tax Contributions
made during the Plan Year;
(v) Instruct the Employer to reduce or eliminate its
Employer Contributions to the Participant's Accounts
for the remainder of the Plan Year;
(vi) Instruct the Trustee to return to the Employer all
or a portion of the Employer Contributions made to
the Participant's Accounts for the Plan Year; and
(vii) Apply any amounts in excess of such limitations
("excess amounts") for a Participant to reduce
Employer Contributions for the next Plan Year (and
succeeding Plan Years, as necessary) for that
Participant, if that Participant is covered by the
Plan as of the end of the Plan Year. If that
Participant is not covered by the Plan as of the end
of the Plan Year, the Plan Administrator shall
instruct the Trustee to hold such excess amounts
unallocated in a suspense account for the Plan Year
and allocate and reallocate such amounts in the next
Plan Year to all of the remaining Participants in
the Plan. Such allocation or reallocation shall not
result in the limitations of this Section 4.07 being
exceeded for any Participant for the Plan Year. For
purposes of this subsection, excess amounts may not
be distributed to Participants or former
Participants.
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The above actions shall not be considered a suspension of Participant
Contributions as provided in Section 3.07.
(e) Any excess amounts not allocated to Participants in paragraph
(d) shall be used to reduce Employer Contributions for the next Plan Year (and
succeeding Plan Years, as necessary) for all of the Participants in the Plan.
Notwithstanding the foregoing, the provisions of Section 415 of the Code are
hereby incorporated by reference.
4.07 COMBINED PLANS LIMITATION. Solely for Plan Years beginning
before January 1, 2000, in any case in which a Participant in the Plan is also
a participant in any defined benefit plan maintained by the Employer, the
allocations set forth in this Plan shall be additionally limited so that the
sum of the "defined benefit fraction" and the "defined contribution fraction"
would not exceed 1.0 for any Plan Year.
The term "defined contribution fraction" for a Plan Year shall mean a
fraction, the numerator of which is the sum of Annual Additions to the
Participant's Accounts for all Plan Years as of the end of the Plan Year and
the denominator of which is the lesser of 125% of the Maximum Permissible
Dollar Amount for the Plan Year and all prior Years of Service or 140% of 25%
of the Participant's Total Compensation for that year and all prior Years of
Service.
The term "defined benefit fraction" for a Plan Year 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 125% of the Maximum Permissible Dollar
Amount under the Retirement Plans for the Plan Year or 140% of the
Participant's average compensation for the three highest paid years. Such
fraction shall be determined as of the end of the Plan Year.
The Participant's projected annual benefit shall be determined under
such retirement plans assuming that his earnings continue to normal retirement
date at the same level as at the end of the Plan Year and assuming that his
service continues to accrue to his normal retirement date without a break in
service prior to his normal retirement date. The terms "earnings," "service,"
"normal retirement date" and "break in service" shall mean the same as defined
in such retirement plan.
ARTICLE V
INVESTMENT OPTIONS
5.01 INVESTMENT OF PARTICIPANT AND EMPLOYER CONTRIBUTIONS.
Participant and Employer Contributions shall be invested by the Trustee either
as directed by the provisions of the Plan or as directed by the Participant
(or, where applicable, the Participant's Beneficiary or an Alternate Payee
designated pursuant to a Qualified Domestic Relations Order) in one or more
Investment Funds, which shall include the following:
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<PAGE> 31
(a) Company Stock Fund. This Fund invests primarily in shares of
Company Stock. However, a small percentage of the Fund is invested in money
market instruments to facilitate daily cash transactions. Cash dividends
received on shares of Company Stock held by this Fund will be automatically
reinvested in the Fund. Accounts in this Fund shall segregate, separately
account for and respectively consist of shares of Company Stock attributable to
(1) PAYSOP Contributions allocated to the Fund before January 1, 1987, (2)
Non-ESOP Employer Contributions, (3) Employee Contributions, (4) ESOP Employer
Contributions, and (5) the Unallocated Company Stock account. The portions of
this Fund consisting of Accounts numbered (1), (4) and (5) constitute an ESOP
within the meaning of Section 4975(e)(7) of the Code. All Employee
contributions under Sections 3.01, 3.02, 3.03 and 3.04 invested directly in
this Fund under Section 5.02 shall be used to purchase shares of Company Stock
at 95% of fair market value, with the Employer making the necessary
contributions to effect allocations at full fair market value.
(b) Additional Investment Funds. There shall be established by the
Trustee at the direction of the Board or its designee such additional
Investment Funds as shall be deemed necessary or appropriate to meet the three
investment alternative requirements prescribed by Section 401(a)(28)(B)(ii)(II)
of the Code and any applicable regulations promulgated thereunder.
Additionally, there may be established by the Trustee at the direction of the
Board or its designee such further additional Investment Funds as shall be
deemed appropriate, including Investment Funds appropriate for purposes of
meeting the requirements of Section 404(c) of ERISA and the regulations
thereunder.
(c) Temporary Investment. Pending investment and reinvestment, the
Trustee may invest temporarily all or any part of the Investment Funds and such
other Investment Funds as may be established by the Trustee at the direction of
the Board or its designee pursuant to the provisions of the Plan in short and
medium term securities including but not limited to commercial paper, notes of
finance companies or in obligations of the U.S. Government or any
instrumentality or agency thereof. The Board or its designee may from time to
time specify additional or different investment vehicles for the temporary
investment of funds by the Trustee, or may direct the Trustee in the temporary
investment of funds. The Trustee may invest all or any 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.
5.02 INVESTMENT ELECTIONS BY PARTICIPANTS.
(a) Each Participant must elect by Appropriate Notice (as
hereinafter defined) to have all Employee Contributions and Employer
Contributions (other than contributions of shares of Company Stock under
Sections 4.01 and 4.02) invested in any one or more of the available Investment
Funds, with the investment in each Fund being a whole number percentage of such
contributions and the sum of such percentages equal to 100 percent.
"Appropriate Notice" means for this purpose written, telephonic or other
electronic communication directed to the Plan
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<PAGE> 32
Administrator (as specified by the Plan Administrator in rules or procedures
uniformly applicable to all similarly situated Participants).
(b) A Basic Post-Tax Contribution Account, a Basic Pre-Tax
Contribution Account, a Supplemental Post-Tax Contribution Account, a
Supplemental Pre-Tax Contribution Account, a Rollover Contribution Account and
a Employer Contribution Account shall be established for the Participant in
each of the available Investment Funds in which contributions are invested on
his behalf. In addition, an ESOP Account shall be established in the Company
Stock Fund for each Participant on whose behalf contributions of shares of
Company Stock under Sections 4.01 and 4.02 are allocated. All contributions of
shares of Company Stock made pursuant to Sections 4.01 and 4.02 (provided such
Contributions are not applied to the payment of principal or interest on an
Acquisition Loan) unless designated by the Employer when made as an ESOP
Contribution shall be invested in the Company Stock Fund and allocated to a
Employer Contribution Account established for the Participant therein.
(c) All contributions of shares of Company Stock made pursuant to
Sections 4.01 and 4.02 designated by the Employer when made as ESOP
Contributions or applied to the payment of principal or interest on an
Acquisition Loan, shall be invested in the Company Stock Fund and allocated to
an ESOP Account established for the Participants therein. Contributions and
earnings thereon as to which no current, valid investment direction exists may
be invested as the Trustee, in its discretion, shall deem appropriate; provided
that in the event no trustee has agreed to undertake such investment
responsibility, such contributions and earnings shall be invested by the Plan
Administrator until a valid investment direction is obtained and shall not be
governed by an Appropriate Notice filed by any Participant.
5.03 CHANGES IN CURRENT INVESTMENT ELECTIONS. A Participant may
change his investment election at any time by giving prior Appropriate Notice.
Changes in investment elections must be expressed as revised whole number
percentages of contributions, totaling 100 percent.
5.04 TRANSFERS OF ACCOUNTS.
(a) Except as otherwise provided in this Section 5.04, a
Participant may elect to transfer all or part (specified as a whole number
percentage of the existing balance) of his Account in any Investment Fund to
another Investment Fund by giving prior Appropriate Notice. Such transfer shall
be effective as soon thereafter as practicable.
(b) No transfers pursuant to this Section 5.04 shall be permitted
with respect to the Participant's ESOP Account in the Company Stock Fund or so
much of his Employer Contribution Account in the Company Stock Fund as is
attributable to Matching Contributions allocable to payroll periods ending
after January 1, 1988 or allocable to Additional Matching Contributions made
after December 1, 1986, until the earliest of the following:
(i) the Participant attains age 55;
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<PAGE> 33
(ii) the Participant terminates Employment on account of
Retirement; or
(iii) the amount to be transferred has been allocated to
the Participant's Employer Contribution Account in
the Company Stock Fund or the Participant's ESOP
Account, as appropriate, for a period of at least
two years.
(c) Notwithstanding the foregoing, as determined by the Plan
Administrator on a uniform and nondiscriminatory basis, no transfer may be made
under this Section 5.04 if the effect of such transfer would cause that portion
of the Company Stock Fund that meets the requirements as an ESOP under Section
4975 of the Code to fail to meet such requirements.
(d) The Plan Administrator may authorize changes in investment
options on dates other than a scheduled or regular Valuation Date as special
conditions may warrant. The Plan Administrator may establish rules and
procedures as the circumstances require to allow such changes in investment
options, including a special valuation of Participants' Accounts.
ARTICLE VI
VALUATION OF PARTICIPANTS' ACCOUNTS
6.01 ACCOUNTS. Each Participant shall have established for him
separate accounts which shall reflect all amounts contributed by the
Participant and by the Employer on his behalf and the investment earnings and
losses thereon.
6.02 VALUATION OF ACCOUNTS.
(a) As of each Valuation Date, the Accounts of each Participant
shall be adjusted separately for each Fund to reflect any appreciation or
depreciation in the fair market value of the Funds and income earned by the
Funds. The fair market value of the Funds shall be determined by the Trustee
and communicated to the Plan Administrator in writing as of such Valuation Date
as the Plan Administrator shall determine. It shall represent the fair market
value of all securities or other property held for the respective Investment
Funds, plus cash and accrued earnings, less accrued expenses and proper charges
against the Funds as of the Valuation Date. The Company Stock Fund shall be
represented by shares of Company Stock plus the value of any fractional share
which shall be held in cash or may be unitized and expressed as a cash value,
as the Plan Administrator and Trustee shall agree. The Trustee's determination
of value shall be final and conclusive for all purposes of this Plan. A
Participant's Accounts shall be adjusted in proportion to the balance in each
Participant's Account on the last Valuation Date, less distributions.
(b) When determining the value of Participant's Accounts, any
deposits due which have not been deposited to the Fund on behalf of the
Participant shall be added to his Accounts. Similarly, adjustment of Accounts
for appreciation or depreciation of the Fund shall be deemed
27
<PAGE> 34
to have been made as of the Valuation Date to which the adjustment relates,
notwithstanding the fact that they are actually made as of a later date.
(c) Cash dividends received by the Trustee with respect to shares
of Company Stock held by the Plan (other than such shares held in an ESOP
Account and Financed Shares held in the Unallocated Company Stock Account)
shall be invested in additional shares of Company Stock, subject to the
Trustee's authority to hold a reasonable portion of the assets of the Company
Stock Fund in cash and cash equivalent investments. Any 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 the
appropriate Investment Fund Account in proportion to the respective shares of
Company Stock credited to such Account balances as of the appropriate record
date. Cash dividends received by the Trustee on shares of Company Stock held in
ESOP Accounts of Participants and on Financed Shares held in the Unallocated
Company Stock Account shall (unless the Plan Administrator directs the Trustee
to allocate dividends paid on shares held in ESOP Accounts pursuant to the
preceding provisions of this paragraph) be applied by the Trustee to the
payment of principal and interest on one or more outstanding Acquisition Loans;
provided that with respect to such application of dividends,
(i) dividends on Financed Shares shall be applied only
to the payment of principal and interest on the
Acquisition Loan, the proceeds of which were used to
acquire such Financed Shares;
(ii) if at any time more than one Acquisition Loan is
outstanding, dividends on shares of Company Stock
held in ESOP Accounts of Participants shall be
applied to the payment of principal and interest on
the Acquisition Loan, the proceeds of which were
used to acquire such shares of Company Stock, so
long as there remains any unpaid balance due on such
loan; and
(iii) dividends on shares of Company Stock held in ESOP
Accounts of Participants shall be so applied only to
the extent that such application releases from the
Unallocated Company Stock Account sufficient shares
of Company Stock for immediate allocation to the
respective ESOP Accounts of Participants to
compensate for such application of dividends.
6.03 STATEMENT OF PARTICIPANT ACCOUNTS. As soon as practicable
after the completion of a calendar quarter, an individual statement will be
issued to each Participant showing the value of his Accounts.
6.04 TIMING OF CREDITS AND DEDUCTIONS. The credits to or deductions
from a Participant's Account shall be deemed to have been made on the date to
which they relate, although they may actually be determined at another date.
Notwithstanding the foregoing, if Investment Funds which are valued daily
renders it feasible, transactions will be effected by the Fund manager on the
date money or investment directions are received prior to 4:00 P.M. local
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<PAGE> 35
time, or otherwise on the next business day. The Accounts of Participants will
be debited or credited, as appropriate, no later than the date on which
transactions are effected.
ARTICLE VII
PLAN BENEFITS
7.01 RETIREMENT. Upon Retirement, the vested portion of a
Participant's Account shall be paid to him in full in accordance with Sections
7.06 and 7.07.
7.02 DEATH. Upon the death of a Participant, the vested portion of
the Participant's Account, to the extent not yet distributed, shall be paid to
his Beneficiary in accordance with Sections 7.06, 7.07 and 7.08, as applicable.
7.03 DISABILITY. Upon the termination of Employment of a
Participant by Disability before Retirement, the vested portion of the
Participant's Account shall be paid to him or his Beneficiary in accordance
with Sections 7.06, 7.07 or 10.07, as applicable.
7.04 OTHER TERMINATION OF EMPLOYMENT.
(a) Upon termination of Employment of a Participant other than by
Retirement, death or Disability, and other than by transfer to an Affiliated
Company which is not an Employer, the vested portion of his Account shall be
paid to him in accordance with Sections 7.06 and 7.07; provided that
installment payments pursuant to Section 7.06(a)(i) may not be elected by a
terminated Participant before attainment of age 59-1/2.
(b) A Participant who has completed less than three Years of
Service as of such termination of Employment shall forfeit his entire Employer
Contribution Account; provided however, that the Forfeiture shall be reinstated
if he is reemployed by an Employer and if he repays the full amount of his
Basic Post-Tax Contribution Account and/or Basic Post-Tax Employee Pre-Tax
Contribution Account at any time before he has five Years of Break in Service.
The vested portion of a terminated Participant's Account shall be paid to the
Participant in accordance with Sections 7.06 and 7.07. If a Participant has no
vested interest in his Employer Contribution Account, he shall be deemed to
have been paid his benefits (which shall be deemed to have a value of zero) as
of the last day of the Plan Year in which his Employment terminated.
7.05 TRANSFER OF EMPLOYMENT. If a Participant transfers to an
employment status with the Employer or an Affiliated Company such that he no
longer meets the definition of Employee, he shall be given the following
options:
(i) To elect a plan to plan transfer of the vested
portion of his Accounts to a qualified defined
contribution plan (other than an ESOP) maintained by
such Employer or Affiliated Company as of any
Valuation Date (on which
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<PAGE> 36
all Accounts are valued), if the Trustee of such
plan is authorized to receive such transfer.
(ii) To defer such transfer or the receipt of any such
distribution until a later date. His Accounts will
remain in the Plan until Retirement, death,
Disability or termination of Employment or, except
for PAYSOP contributions held in a Participant's
ESOP Account, until eligible for withdrawal under
Article VIII.
A Participant will receive credit for Years of Service for his period of
employment with the Employer or Affiliated Company.
7.06 PAYMENT OF BENEFITS. Subject to the provisions of Section
7.07, a Participant's Account shall be paid as described herein.
(a) On or before a Participant's Retirement, elected benefit
commencement date or required beginning date (as defined in Section 7.07(d)),
the Participant shall notify the Plan Administrator of his election to receive
payment of his Account upon termination of Employment in accordance with one or
more of the following methods:
(i) by a lump sum payment in cash or, with respect to
the Company Stock Fund, upon the request of the
Participant, in kind, plus the cash equivalent of
the fair market value of any fractional share of
Company Common Stock; or
(ii) in annual installments over a period not to exceed
ten years, provided such period does not exceed the
greater of the life expectancy of the Participant or
the joint life expectancy of the Participant and his
Beneficiary. The amount of each installment will be
determined by dividing the Participant's vested
account balance by the number of annual installments
which remain to be made at the time a particular
installment is to be paid.
(b) If the Participant's Account balance at the time of any
distribution exceeds $3,500 ($5,000, effective January 1, 1998), then neither
that distribution nor any subsequent distribution shall be made to the
Participant at any time before he attains age 70-1/2 without his or her consent
(which age 70-1/2 distributions shall be made in accordance with Section
7.07(d)). No such consent shall be valid unless the Participant receives a
general description of the material features and an explanation of the value of
the form of benefit available under the Plan. In addition, the Participant must
be informed of his right to defer receipt of the payment or distribution. The
Plan Administrator shall deliver such written notice to the Participant during
a period beginning no less than 30 days and no more than 90 days before the
Participant's date of commencement of benefits. The written consent of the
Participant to the payment or distribution shall not be made before the
Participant receives the notice and shall not be made more than 90 days before
his or her date of commencement of benefits. Notwithstanding the
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<PAGE> 37
foregoing, a distribution may commence less than 30 days after the notice
required under Section 1.411(a)-11(c) of the Treasury Regulations is given,
provided that (i) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after receiving the
notice to consider the decision of whether or not to elect a distribution (and,
if applicable, a particular distribution option), and (ii) the Participant,
after receiving the notice, affirmatively elects a distribution.
(c) A Participant may change his election of benefits by filing a
new election at any time prior to his benefit commencement date. A Participant
who has previously elected to receive benefits under paragraph (a)(ii) may
subsequently apply to the Plan Administrator (by written, telephonic or other
electronic means established by the Plan Administrator) for a lump sum
distribution in cash. Under such a distribution the Plan Administrator may
permit the Participant to withdraw the total vested portion of the
Participant's Accounts, determined as of the Valuation Date next preceding the
date on which the Plan Administrator approves the withdrawal or the Valuation
Date next following the Participant's application for withdrawal, whichever
Valuation Date is later; such amount shall not include the amount of any
installments paid to the Participants since the preceding Valuation Date. Any
residual amounts will be paid to the Participant following the next Valuation
Date.
(d) A Participant may elect that the ESOP Account be paid in kind,
equal to the full shares of Company Stock plus the cash equivalent of the fair
market values of any fractional shares of Company Stock. The Trustee, in the
case of a fractional share, shall be deemed to have purchased such fractional
share from the Participant concerned at a price equal to the cash payment to be
made to the Participant. Cash for the purchase of fractional shares may be
taken from dividend receipts or other cash in the Trust Fund.
(e) Notwithstanding the foregoing, a Participant whose Account
balance does not exceed $3,500 ($5,000, effective January 1, 1998) at the time
of his termination of Employment with the Employer shall receive his Account in
a single sum cash payment as soon as administratively practicable after his
termination of Employment.
7.07 METHOD OF PAYMENT.
(a) Benefits shall be paid or made available under the Plan upon
the direction of the Plan Administrator as soon as practicable after
termination of Employment occurs and (except as provided in Section 7.09) shall
be distributable thereafter at the written request of the Participant (or,
where applicable, his Beneficiary or alternate payee). Unless the Participant
elects otherwise, distribution of 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 anniversary of the year in which the
Participant commenced participation in the Plan; or
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(iii) The Participant's termination of Employment with the
Employer or an Affiliated Company.
(b) If upon the death of an Employee his Account is being
distributed in accordance with Section 7.06(a)(ii), the remaining portion will
be distributed at least as rapidly as under the method being used as of the
date of his death.
(c) If distributions have not begun upon the death of a
Participant, and if no election is made by the Beneficiary under Section 7.08
following the Participant's death, the entire interest of the Participant will
be distributed in accordance with Section 7.06(a)(i) at the end of the calendar
year containing the fifth anniversary of the Participant's death.
(d) Notwithstanding any other provision of the Plan (including
Section 7.09), (i) the Employee's Account will be distributed to such
Participant not later than his required beginning date, or (ii) the first
installment to be distributed under Section 7.06(a)(ii) will begin not later
than the required beginning date, in accordance with regulations prescribed by
the Secretary of the Treasury. For this purpose, 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 before January 1,
1999, 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. In the event of the
death of a Participant who has begun to receive benefits in annual installments
under Section 7.06(a)(ii), his Beneficiary will receive the undistributed value
of his Accounts in annual installments on the same basis as the Participant had
elected. Alternatively, his Beneficiary may receive the undistributed value of
his Accounts in a lump sum payment by informing the Plan Administrator of his
election within 90 days of the Participant's death. The Beneficiary of a
deceased Participant other than noted above shall elect to receive the
undistributed value of his Accounts under one of the methods in Section 7.06 by
an election communicated to the Plan Administrator within 180 days of the
Participant's death, except that the maximum period in Section 7.06(a)(ii)
shall be five years. If the Beneficiary does not elect a distribution within
180 days, the Plan Administrator will distribute the Account in accordance with
Section 7.07(c).
The Plan Administrator may require and rely upon such proof of death
and such evidence of the right of any Beneficiary to receive benefits of a
deceased Participant as the Plan Administrator may deem proper, and its
determination of death and of the right of such Beneficiary to receive payments
shall be conclusive.
7.09 SPECIAL DISTRIBUTION AND PAYMENT REQUIREMENTS. This Section
7.09 shall not eliminate any form or time of distribution available under this
Plan on May 1, 1989.
(a) Subject to Section 7.06(b) and notwithstanding any other
provision of this Plan, a Participant may elect to have the portion of his
Account attributable to shares of Company Stock acquired by the Plan after
December 31, 1986 distributed as follows:
(i) If the Participant separates from service by reason
of the attainment of normal retirement age under the
Plan, death, or disability, the distribution of such
portion of the Participant's Account balance will
begin not later than one year after the close of the
Plan Year in which such event occurs, unless the
Participant otherwise elects a distribution under
the provisions of the Plan other than this Section
7.09.
(ii) If the Participant separates from service for any
reason other than those enumerated in subparagraph
(i) above and is not reemployed by an Employer at
the end of the fifth Plan Year following the Plan
Year of such separation from service, distribution
of such portion of the Participant's Account balance
will begin not later than one year after the close
of the fifth Plan Year following the Plan Year in
which the Participant separated from service, unless
the Participant otherwise elects a distribution
under the provisions of this Plan other than this
Section 7.09.
(iii) If the Participant separates from service for a
reason other than those described in subparagraph
(i) above, and is employed by the Employer as of the
last day of the fifth Plan Year following the Plan
Year of such
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separation from service, distribution to the
Participant before any subsequent separation from
service shall be in accordance with the provisions
of the Plan other than this Section 7.09.
(b) For purposes of this Section 7.09 only, at times when such
Company Stock is not then publicly traded on an established securities market,
shares of Company Stock shall not include any such shares acquired with the
proceeds of an Acquisition Loan until the close of the Plan Year in which such
loan is repaid in full.
(c) Distributions required under this Section 7.09 shall be made
in substantially equal annual payments over a period of five years unless the
Participant otherwise elects under the provisions of this Plan other than this
Section 7.09. In no event shall such distribution period exceed the period
permitted under Section 401(a)(9) of the Code.
(d) The portion of a Participant's Account balance attributable to
shares of Company Stock which were acquired by the Plan after December 31, 1986
shall be determined by multiplying the number of shares of Company Stock held
in the Participant's Accounts by a fraction, the numerator of which is the
number of such shares acquired by the Plan after December 31, 1986 and
allocated to the Participant's Accounts (not to exceed the number of shares of
Company Stock held by the Plan on the date of distribution), and the
denominator of which is the total number of shares of Company Stock held by the
Plan at the date of the distribution.
7.10 PUT OPTION.
(a) Any Participant who receives shares of Company Stock under
this Article VII (and persons who received shares from such a Participant by
reason of the Participant's death or incompetency) shall have the right to
require the Company to purchase the shares of Company Stock for its current
fair market value (the "put option"). The put option shall only apply if, when
the shares of Company Stock are distributed or within fifteen (15) months
thereafter, the stock is not publicly traded on an established securities
market or are (or become) subject to a restriction under federal or state
securities laws or regulations or an agreement affecting the shares of Company
Stock that would make the shares of Company Stock not as freely tradable as a
security not subject to such restrictions.
(b) The put option shall be exercisable by written notice to the
Plan Administrator during the 15 month period after the shares of Company Stock
are distributed by the Plan; provided that if the put option first becomes
exercisable after the distribution of such shares by the Plan, the put option
shall remain exercisable after the end of such 15-month period for the number
of days (if any) by which the number of days between (i) the date on which the
shares of Company Stock cease to be so traded (or tradable) and (ii) the date
on which the Employer notifies the Participant in writing that such shares have
ceased to be so traded (or tradable) exceeds ten. If the put option is
exercised, the Trustee may, in the Trustee's sole discretion, assume the
Company's rights and obligations with respect to purchasing the shares of
Company
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Stock. The Company, or the Trustee if applicable, may elect to pay for the
shares of Company Stock in equal periodic installments (not less frequent than
annually) over a period not longer than five years from the date the put option
is exercised, with interest at a reasonable rate, all such terms to be set
forth in a promissory note delivered to the seller with usual business terms as
to acceleration upon any uncured default. With the seller's consent, the
installment period may be extended to the earlier of ten years from the
exercise of the put option or the date on which the Acquisition Loans related
to the shares of Company Stock have been satisfied, if longer than five years,
provided the purchaser furnishes adequate security in addition to the
purchaser's promissory note.
(c) Nothing contained herein shall be deemed to obligate the
Company to register any shares of Company Stock under any federal or state
securities law or to create a public market to facilitate transferability of
the shares of Company Stock. The put option herein described may only be
exercised by a person described in the first sentence of this section and may
not be transferred either separately or together with any shares of Company
Stock to any other person. The put option shall continue in effect to the
extent provided herein in the event that the Plan ceases to have a qualified
employee stock ownership plan feature.
7.11 DIRECT ROLLOVER OF DISTRIBUTION. Any "Eligible Rollover
Distribution" under this Article may, at the Participant's election, and
subject to such uniform and nondiscriminatory conditions as the Plan
Administrator may require, be transferred to an "Eligible Retirement Plan,"
subject to the provisions of Section 402 of the Code and the regulations
thereunder and as hereinafter provided.
(a) The Plan Administrator shall notify any "Distributee" entitled
to receive an "Eligible Rollover Distribution" no less than thirty nor more
than ninety days before the starting date of any payment (or at such other time
as is permitted by law) of his right to elect a "Direct Rollover" to an
"Eligible Retirement Plan" pursuant to the provisions of this section.
(b) To elect a Direct Rollover, the Distributee must request in
writing to the Plan Administrator that all or a specified portion of the
Eligible Rollover Distribution be transferred directly to one or more "Eligible
Retirement Plans." If a distribution will be made on behalf of the Distributee
in more than one year, the notice specified in paragraph (a) must be given to
the Distributee in each year in which there is an Eligible Rollover
Distribution, and the Distributee must file a new election with the Plan
Administrator if he wishes to have the Eligible Rollover Distribution
transferred directly to an Eligible Retirement Plan.
(c) The Distributee shall not be entitled to elect a Direct
Rollover pursuant to this section, unless he has obtained any applicable
Spousal Consent that would otherwise be required to obtain a distribution in
the amount of the Eligible Rollover Distribution.
(d) For purposes of this section, the following definitions shall
apply:
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(i) A "Direct Rollover" is a payment by the Plan to the
"Eligible Retirement Plan" specified by the
Distributee;
(ii) A "Distributee" includes Participants, a
Participant's surviving spouse and a Participant's
spouse or former spouse who is the 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) An "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) An "Eligible Rollover Distribution" is any
distribution from this Plan of all or any portion of
the balance to the credit of the Distributee, except
for distributions (or portions thereof) which are:
(1) Part of a series of substantially equal
periodic payments (not less frequently than
annually) made over the life of the
Participant (or the joint lives of the
Participant and the Participant's
designated beneficiary), the life
expectancy of the Participant (or the joint
life and last survivor expectancy of the
Participant and the Participant's
designated beneficiary), or a specified
period of ten years or more;
(2) Required under Code Section 401(a)(9)
(relating to the minimum distribution
requirements); or
(3) The portion of any distribution that is not
includible 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 VIII
WITHDRAWALS DURING EMPLOYMENT
8.01 GENERAL CONDITIONS FOR WITHDRAWALS.
(a) A Participant's rights to his Basic Post-Tax Contribution,
Basic Pre-Tax Contribution, Supplemental Post-Tax Contribution, Supplemental
Pre-Tax Contribution, Rollover Contribution Account and PAYSOP Accounts shall
be nonforfeitable at all times.
(b) Any distribution under this section may, at the Participant's
election, and subject to such uniform and nondiscriminatory conditions as the
Plan Administrator may require, be transferred to an individual retirement
account or another tax-qualified plan, subject to the provisions of Section 402
of the Code and the regulations thereunder, and in accordance with the
procedures described in Sections 7.06 and 7.11 of this Plan.
(c) Subject to the conditions set forth herein, upon written
notice to the Employer in the manner prescribed by the Plan Administrator for
such purpose, a Participant may make withdrawals of all or a portion of the
vested portion of his Accounts (excluding the PAYSOP Account). No withdrawals
may be made under this Article VIII from a Participant's Basic Pre-Tax
Contributions Account or his Supplemental Pre-Tax Contributions Account, except
under Sections 8.03 and 8.04.
(d) All amounts withdrawn will be paid in cash. In the case of a
partial withdrawal under this Article by a Participant having an interest in
more than one Investment Fund, the amount withdrawn shall be taken pro rata
from all Investment Funds in which the Participant maintains Accounts and from
which withdrawal is permissible in the same proportion as the value of the
Participant's interest in each such Investment Fund bears to the total value of
his Accounts.
8.02 WITHDRAWAL OF EMPLOYEE CONTRIBUTION ACCOUNTS.
(a) A Participant who has less than three years of vesting service
may elect to withdraw all or any part of the value of his Basic Post-Tax
Contribution Account, Rollover Contribution Account and Supplemental Post-Tax
Contribution Account, determined as of the next Valuation Date. Upon such
withdrawal, the Participant shall forfeit the full amount of his Employer
Contribution Account attributable to the amount withdrawn from such
Participant's Basic and Post-Tax Contribution Accounts. However, such
Forfeiture shall be reinstated if the Participant repays the full dollar amount
of the prior withdrawal within two years after the withdrawal, or prior to the
time that the Participant has a Year of Break in Service, whichever occurs
first.
(b) A Participant who has at least three years of vesting service
may withdraw all or any part of his Basic Post-Tax Contribution Account,
Rollover Contribution Account, Supplemental Post-Tax Contribution Account and
Employer Contribution Account, determined
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as of the next Valuation Date. The amounts available for withdrawal at any
given time shall exclude Employer Contributions made during the two years
immediately preceding withdrawal. These amounts may not be distributed to the
Participant until his termination of Employment or until such funds have been
in the Plan for at least two years, whichever occurs first. A Participant who
has made a withdrawal under this paragraph (b) shall not forfeit any part of
his Employer Contribution Account.
8.03 HARDSHIP WITHDRAWALS.
(a) A Participant who incurs a "financial hardship" may request a
withdrawal from his Basic Pre-Tax Contribution Account and his Supplemental
Pre-Tax Contribution Account, determined as of the Valuation Date preceding the
date of the request. Hardship withdrawals shall be made in accordance with this
Section 8.03 and shall be limited to the amount of Basic and Supplemental
Pre-Tax Contributions (and earnings on those amounts credited before January 1,
1989) then credited to the Participant's Account.
(b) For purposes of this Section, "financial hardship" means an
immediate and heavy financial need occurring in the Participant's personal
affairs that cannot reasonably be satisfied from other resources available to
the Participant. Any such hardship shall be determined by the Plan
Administrator (or its delegate) from appropriate evidence furnished by the
Participant and in accordance with applicable regulations under Section 401(k)
of the Code. Unless the Plan Administrator decides, from time to time, to
determine financial need on the basis of all relevant facts and circumstances,
a Participant's financial need shall be deemed sufficiently immediate and heavy
to justify a hardship withdrawal under this Section only with respect to:
(i) Unreimbursed medical expenses described in Section
213(d) of the Code incurred by the Participant, his
spouse or dependents (as defined in Section 152 of
the Code) or an amount necessary for these persons
to obtain medical care described in Section 213(d)
of the Code;
(ii) Costs directly related to the purchase of a
principal residence for the Participant (excluding
mortgage payments);
(iii) Payment of tuition and related fees for the next 12
months of post-secondary education for the
Participant, his spouse, children or dependents;
(iv) Payments necessary to prevent eviction of the
Participant from his principal residence or
foreclosure on the mortgage of his principal
residence; or
(v) Other events provided for in rulings, notices or
other documents published by the Commissioner of
Internal Revenue. The amount of an immediate and
heavy financial need may include amounts necessary
to pay any
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federal, state, or local income taxes or penalties
reasonably anticipated to result from the
distribution.
(c) A Participant must demonstrate to the satisfaction of the Plan
Administrator (or delegate) that the withdrawal is necessary to satisfy his
financial need and that the amount requested does not exceed the amount needed
to relieve his financial need, considering also the extent to which the need
may be satisfied from other resources reasonably available to the Participant,
including assets of his spouse and minor children to the extent reasonably
available to him. The Plan Administrator may elect to make an independent
determination, based upon all facts and circumstances, as to whether the amount
of the withdrawal is necessary to satisfy the Participant's financial need. If
the Plan Administrator so elects, then for purposes of determining the
sufficiency of the Participant's other available resources, the Plan
Administrator may reasonably rely (unless the Plan Administrator has actual
knowledge to the contrary) on the Participant's written representation to the
effect that the financial need cannot be relieved:
(i) through reimbursement or compensation by insurance
or otherwise;
(ii) by reasonable liquidation of the Participant's
assets to a degree that would not itself cause
immediate and heavy financial need;
(iii) by cessation of elective or Participant
contributions under the Plan; or
(iv) by other distributions or loans from plans
maintained by any present or former employer of the
Participant, or by borrowing from commercial sources
on reasonable commercial terms.
(d) If the Plan Administrator elects not to make the independent
facts and circumstances determination provided under paragraph (c), the amount
of a Participant's requested withdrawal shall be deemed necessary to satisfy
his financial need if the following requirements are met:
(i) the Participant first has obtained, or
simultaneously with the withdrawal will obtain, all
nonhardship distributions and all nontaxable loans
currently available under all qualified plans
maintained by the Employer;
(ii) the Participant's right to make elective and
employee contributions to this Plan and
contributions to all other plans maintained by the
Employer (except contributions to welfare benefit
plans and mandatory employee contributions to
defined benefit plans) shall be suspended for the 12
consecutive months following his receipt of the
hardship withdrawal; and
(iii) the maximum amount of elective contributions (taking
into account all qualified plans of the Employer) to
be made on behalf of the Participant for his taxable
year following the taxable year in which he receives
the
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hardship withdrawal shall not exceed (A) the $9,500
(indexed) limit under Section 402(g) of the Code,
reduced by (B) his elective contributions for the
taxable year in which he received the hardship
withdrawal.
Hardship withdrawals that are subject to the preceding sentence shall not be
allowed unless the other plans referred to in points (i) through (iii) of that
sentence contain substantially similar provisions.
8.04 WITHDRAWAL AFTER AGE 59-1/2. A Participant who has attained
age 59-1/2 may make a withdrawal under the provisions of Section 8.03 without
satisfying the conditions of that Section for a Hardship. Upon such a
withdrawal, the Participant shall not incur a mandatory suspension.
8.05 PAYSOP ACCOUNTS. A Participant may not withdraw any amounts
from this Account while employed.
ARTICLE IX
ADMINISTRATION
9.01 FIDUCIARIES.
(a) The following parties are Fiduciaries of the Plan: (i) the
Company, (ii) the Trustee and (iii) any committee or individual appointed by
the Company as Plan Administrator or to whom discretionary administrative
authority or responsibility with respect to the Plan has been delegated by the
Company. The Plan Administrator shall be the "named fiduciary" for all purposes
under ERISA. If a Plan Administrator has not been appointed, or ceases for any
reason to serve, the Company shall function as the Administrator until a Plan
Administrator (or successor, as appropriate) is appointed.
(b) The responsibilities of each Fiduciary may be specified by the
Company. If no such delegation is made by the Company, the Fiduciaries may
allocate responsibilities among themselves in writing and notify the Company
that they have done so, specifying in such notification the responsibilities of
each Fiduciary. If the Fiduciaries provide a copy of such notification to the
Trustee, the Trustee shall thereafter (until such time as the Company or the
Fiduciaries deliver to the Trustee a written revocation of such allocation)
accept and be justified in relying upon any documents executed by the
appropriate Fiduciary pursuant to the allocation of responsibilities disclosed
in such notification.
(c) Each Fiduciary shall have only those specific powers, duties,
responsibilities and obligations as are assigned to such Fiduciary under the
Plan, delegated to the Fiduciary by action of the Company or allocated to the
Fiduciary by written allocation among the Fiduciaries pursuant to paragraph
(b), above.
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9.02 RESPONSIBILITIES OF THE COMPANY. The Company shall have the
following powers and duties with respect to the Plan:
(i) to appoint the members of any committee created to
exercise any responsibility with respect to the
Plan;
(ii) to terminate the Plan in whole or in part pursuant
to the procedures provided hereunder;
(iii) to delegate any of the fiduciary responsibilities
under the Plan to any individual, committee, or
entity it may designate; provided however, that any
delegation of a fiduciary duty that has already been
assigned by the provisions of the Plan, by previous
action of the Board, or by written allocation among
the Fiduciaries, shall be effected by delivery in
writing to the Fiduciaries to and from whom such
responsibility is being reassigned;
(iv) to designate any individual, committee, or entity to
whom fiduciary responsibilities are delegated as an
additional Fiduciary or named fiduciary of the Plan;
and
(v) to exercise any other powers or responsibilities not
specifically allocated to another fiduciary.
9.03 RESPONSIBILITIES OF THE TRUSTEE. The Trustee shall have the
powers and duties allocated to it in the trust agreement. The Trustee shall
have no other responsibilities with respect to the Plan, except to the extent
such responsibilities are delegated or assigned by the Company or its delegate
to, and accepted by the Trustee.
9.04 RESPONSIBILITIES OF THE PLAN ADMINISTRATOR.
(a) The Plan Administrator shall be responsible for and shall
discharge all duties and obligations imposed on a Plan Administrator by ERISA
and the Code. The Plan Administrator shall prepare, publish, file and furnish
Plan reporting and disclosure reports, statements and descriptions in the
manner and at the times required by law. The Plan Administrator may employ
counsel and/or consultants to render advice with regard to any responsibility
of the Plan Administrator under the Plan and may employ necessary clerical
help. Any individual or committee designated as the Plan Administrator shall
report to (or as directed by) the Board in order that the Plan Administrator's
performance of his duties may be periodically reviewed.
(b) In addition to the foregoing, the Plan Administrator shall
have the following discretionary powers and duties with respect to the Plan:
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<PAGE> 48
(i) To establish and enforce such rules, regulations and
procedures as the Plan Administrator shall deem
necessary or proper for the efficient administration
of the Plan;
(ii) To interpret the terms of the Plan, the Plan
Administrator's interpretation thereof in good faith
to be final and conclusive;
(iii) To decide all questions of fact concerning the Plan
and the eligibility of any Employee to participate
in the Plan;
(iv) To compute the amount of benefits which shall be
payable to any Participant, retired Participant or
Beneficiary in accordance with the provisions of the
Plan, and to determine the person or persons to whom
such benefits shall be paid;
(v) To advise the Trustee in writing with respect to all
benefits which become payable under the terms of the
Plan and to direct the Trustee to pay such benefits
from the Trust Fund;
(vi) To submit annually to the Board or its designee a
report showing in reasonable summary the financial
condition of the Plan and Trust Fund, a summary of
the operations of the Plan for the past year, and
any further information which the Board or its
designee may require;
(vii) To maintain all such books of account, records and
other data as shall be necessary for proper
administration of and necessary actuarial valuations
for the Plan and to meet the reporting and
disclosure requirements of ERISA; and
(viii) To appoint and delegate to persons or committees
such of the Plan Administrator's duties as it may,
subject to this Article IX and the requirements of
ERISA, determine. Any such allocation or delegation
shall be periodically reviewed by the Board or its
designee.
9.05 DELEGATION OF DUTIES. Any committee established by the Company
or at its direction or by its designee may appoint subcommittees and determine
their powers and the Company and its designees and their designees may allocate
among themselves or may delegate to another person or persons such of the
fiduciary duties as they may in their sole discretion determine. Any such
allocation or delegation shall be periodically reviewed by the Board.
The Company, the Plan Administrator and their respective designees,
agents, officers and employees and any committee(s) established by the Company
or at its direction or by its designee, shall be entitled to rely upon all
certificates and reports made by the accountant or consultant and upon all
opinions given by legal counsel; the Company, the Plan Administrator,
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and their respective designees, agents, officers and employees and any
committee(s) established by the Company or at its direction or by its designee,
shall be fully protected in respect of any action taken or suffered by them in
good faith and acting as prudent men would act in like circumstances in
reliance upon such certificate, report or the advice or opinion of such
accountant, consultant or counsel and all action so taken or suffered shall be
conclusive upon each of them and upon all Participants, retired Participants,
surviving Spouses, Beneficiaries and contingent annuitants.
9.06 COMMITTEE ACTION. Unless otherwise directed by or at the
direction of the Company, a majority of the members of any committee(s)
established by or at the direction of the Company or by its designee shall
constitute a quorum. Decisions with a quorum present shall be by majority vote.
The action of a majority expressed in writing without a meeting shall
constitute the action of a committee and shall have the same effect as if
assented to by every member.
9.07 INDIVIDUAL INDEMNIFICATION. To the extent permissible under
ERISA, the Company shall indemnify each member of each Employer's board of
directors, each member of any committee(s) established by or at the direction
of the Company or its designee, and the Plan Administrator or any of their
delegatees against costs, expenses and liabilities, including attorney's fees,
incurred in connection with any action, suit or proceeding instituted against
them or any one of them because of any act of omission or commission performed
by them or any one of them as a director, committee member or Administrator, or
designee or delegatee thereof, as the case may be, while acting in good faith
and exercising his judgment for the best interest of the Plan.
Promptly after receipt by an indemnified party under this section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the Company, notify the Company
of the commencement thereof, and the omission so to notify the Company will
relieve it from the liability hereunder, but not from any other liability which
it may have to such person. The Company shall be entitled to participate at its
own expense in the defense or to assume the defense of any action brought
against any party indemnified hereunder.
In the event the Company elects to assume the defense of any such
suit, such defense shall be conducted by counsel chosen by it and reasonably
satisfactory to the indemnified party, and the indemnified party shall bear the
fees and expenses of any additional counsel retained by him.
9.08 PLAN EXPENSES.
(a) Any direct expenses reasonably incurred by any individual or
member of any committee in the performance of the duties of the Plan
Administrator shall be paid by the Company. Such reasonable expenses include
the Company's securing insurance to protect such
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individuals from personal liability resulting from their actions taken in a
fiduciary capacity with respect to this Plan.
(b) All other reasonable expenses incurred in connection with the
administration of the Plan, including (without limitation) the compensation of
the Trustee, administrative expenses, any investment management charges and
proper charges and disbursements of the Trustee and compensation and other
expenses and charges of any counsel, accountant, specialist or other person who
shall be retained by the Company in connection with the administration of the
Plan shall be paid from the Trust Fund to the extent permitted by law, and if
not, then paid by the Company.
ARTICLE X
GENERAL PROVISIONS
10.01 INALIENABILITY OF BENEFITS.
(a) Except as provided in paragraph (b), no Plan benefit shall be
subject to anticipation, alienation, sale, transfer, assignment, pledge,
garnishment or encumbrance of any kind, and any attempt to do so shall be void,
except that, effective January 1, 1998, such prohibition shall not apply to the
offset of any Participant's Account against any amount the Participant is
required to pay on account of a breach of fiduciary duty to, or a criminal act
taken against, the Plan, to the extent permitted under Section 401(a)(13) of
the Code.
(b) The prohibitions of paragraph (a) shall not apply to
distributions under a "qualified domestic relations order," as defined in
Section 414(p) of the Code. The Plan Administrator shall establish written
procedures as it deems appropriate to determine the qualified status of
domestic relations orders and shall administer such qualified domestic
relations orders as set forth in such orders, subject to the terms of this Plan
and Section 414(p) of the Code. Distributions shall be permitted to an
alternate payee under a qualified domestic relations order before the
Participant attains "earliest retirement age" under the Plan, as set forth in
Section 414(p) of the Code.
10.02 NO RIGHT TO EMPLOYMENT. Nothing herein contained nor any
action taken under the provisions hereof shall be construed as giving any
Employee the right to be retained in the employ of the Employer or as
interfering with the rights of the Employer to discharge an Employee at any
time.
10.03 UNIFORM ADMINISTRATION. Whenever in the administration of the
Plan any action is required by the Plan Administrator, such action 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.
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10.04 HEADINGS. The headings of the sections of this Plan are for
convenience of reference and in the case of any conflict the text of the Plan,
rather than such headings, shall control.
10.05 CONSTRUCTION. The Plan shall be construed, regulated and
administered in accordance with the laws of the State of Delaware, except to
the extent that such laws are superseded by federal law. The Plan and the trust
shall be construed so as to qualify under Sections 401(a), 401(k) and 501(a) of
the Code.
10.06 UNCLAIMED DISTRIBUTIONS. If within five years after any Plan
benefit becomes payable to a Participant or Beneficiary such person cannot be
located, provided due care has been exercised in attempting to locate such
person, the benefit shall be treated as a Forfeiture under Section 4.04;
provided that such benefit shall be restored (with earnings thereon) if such
Participant or Beneficiary thereafter makes a proper claim for distribution.
10.07 DISTRIBUTIONS TO A LEGAL REPRESENTATIVE. If the Plan
Administrator determines that a person entitled to a benefit is a minor or is
incapable of caring for his or her affairs, the Plan Administrator may direct
that any benefits payable to such person shall be paid to the person's duly
appointed legal representative, or if none, then to the person's spouse, child
or legal representative of such spouse or child. Any payments made hereunder
shall be a complete discharge of the Plan's liabilities therefor.
10.08 SOURCE OF PAYMENT. Benefits under the Plan shall be payable
only out of the Trust Fund. The Employers shall have no obligation,
responsibility or liability to make any direct payment of benefits under the
Plan. Except as otherwise provided by law, neither the Plan Administrator, the
Employers nor the Trustee guarantees the Trust Fund against any loss or
depreciation or guarantees the payment of any benefit hereunder.
10.09 PLAN SUBJECT TO IRS APPROVAL. The adoption of the Plan (and
trust incident hereto), as it applies to any Employer, is expressly subject to
the condition that it be qualified by the Internal Revenue Service as meeting
the requirements of the Code and regulations issued thereunder with respect to
qualified plans.
ARTICLE XI
SPECIAL PROVISIONS
11.01 AMENDMENTS TO THE PLAN. The Company reserves the right at any
time and from time to time, and retroactively if deemed necessary or
appropriate to conform with governmental regulations or other policies, to
modify or amend in whole or in part any or all of the provisions of the Plan;
provided that no such modification or amendment shall make it possible for any
part of the funds of the Plan to be used for, or diverted to, purposes other
than for the exclusive benefit of Participants or their Beneficiaries; and
provided further, that no such amendment shall increase the duties of the
Trustee without its consent in writing. Except as may be required to
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conform with any state or federal law, no such amendment shall adversely affect
the rights of any Participant or Beneficiary with respect to contributions made
on his behalf prior to the date of such amendment.
11.02 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS. The Plan shall
not merge or consolidate with, or transfer its assets or liabilities to any
other plan, unless each Participant would, if the surviving plan then
terminated, receive a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit he would have been
entitled to receive if the Plan had terminated immediately before the merger,
consolidation or transfer. Any such merger, consolidation or transfer shall be
accomplished in accordance with applicable regulations of the Internal Revenue
Service.
11.03 TERMINATION OF THE PLAN. The Plan is purely voluntary on the
part of the Company and each other Employer, and the Company reserves the right
to terminate or completely discontinue contributions under the Plan, and
terminate the trust agreement and the Trust Fund hereunder. Upon a complete or
partial termination of the Plan, or a complete discontinuance of contributions
hereunder, the value of the Account of each Participant affected by such
termination or discontinuance shall be fully vested, and payment of benefits
shall be made to such Participants or their Beneficiaries either upon such
termination or upon the termination of Employment of the respective
Participants, at the discretion of the Plan Administrator, in accordance with
Section 7.06. In the case of a complete termination or a complete
discontinuance of contributions to the Plan, any Forfeitures not previously
applied in accordance with Section 4.04 shall be credited ratably to the
Accounts of all Participants in proportion to the amounts of Employer
Contributions credited to their respective Employer Contribution Account during
the current calendar year, or the prior calendar year if no Employer
Contributions have been made during the current calendar year.
11.04 WITHDRAWAL OF AN EMPLOYER. Subject to the requirements of
ERISA and the Code, any one or more of the Employers (other than the Company)
may terminate its participation in and withdraw from the Plan by giving six
months' advance notice in writing to the Company of its or their intention to
withdraw, unless a shorter notice shall be agreed to by the Board. Upon such
withdrawal, the Company shall certify to the Trustee the equitable shares of
such withdrawing Employers in the trust Fund and the Trustee shall thereupon
set aside such securities and/or property to such legal representatives as may
be designated by such withdrawing Employer. The withdrawal of an Employer from
the Plan shall not constitute a termination of the Plan as thereafter in effect
for any other Employer that has not withdrawn.
11.05 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 the Board's designee to whom such authority 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 XII
CLAIMS PROCEDURE
12.01 CLAIMS PROCEDURE. Any person (a "Claimant") who believes he or
she is entitled to receive a benefit under the Plan, including one greater than
that initially determined by the Plan Administrator, may file a claim in
writing with the Plan Administrator. The Plan Administrator shall either allow
or deny the claim in writing within ninety (90) days of the receipt of a claim;
provided that under special circumstances (as determined by the Plan
Administrator) the Plan Administrator may extend this period for an additional
ninety (90) days by providing written notice of the extension to the Claimant
within the original 90-day period. A denial of a claim shall be written in a
manner calculated to be understood by the Claimant and shall include:
(i) the specific reason or reasons for the denial;
(ii) specific references to Plan provisions on which the
denial is based;
(iii) a description of any additional material or
information necessary for the Claimant to perfect
the claim and an explanation of why the material or
information is necessary; and
(iv) an explanation of the Plan's claim review procedure.
Notwithstanding the foregoing, if the Plan Administrator does not timely
respond to a claim in writing within the 90-day period (as extended, if
applicable), the claim shall be deemed denied for all purposes under the Plan.
12.02 CLAIM REVIEW.
(a) If a claim is denied (or deemed denied), the Claimant or his
or her duly authorized representative may, within sixty (60) days after receipt
of denial of his claim, (i) submit a written request for review of the denied
claim by the Company's Pension Administration Committee ("PAC"); (ii) review
pertinent Plan documents; and (iii) submit issues and comments in writing to
the PAC.
(b) Upon receipt of a timely request for review, PAC may hold a
hearing, or, in its discretion, appoint one or more of its members to hear the
Claimant's request and inquire into the merits of the matter. PAC (or such
member) shall meet promptly with the Claimant and/or his duly authorized
representative and hear such arguments and/or examine such documents as the
Claimant or his representative shall present.
(c) The PAC shall either allow or deny the claim upon review in
writing within sixty (60) days of the receipt of the request for review;
provided that under special circumstances (such as the need to hold a hearing)
the PAC may extend this period for an additional sixty (60)
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days by providing written notice of the extension to the Claimant within the
original 60-day period. A denial of a claim shall be written in a manner
calculated to be understood by the Claimant and shall include the information
described in Section 12.01(i) through (iii). However, if the PAC does not
timely respond to the request for review in writing, the request (and
underlying claim) shall be deemed denied for all purposes under the Plan.
12.03 EXHAUSTION OF CLAIMS PROCEDURE. Claimants may not seek
benefits under the Plan in judicial or administrative proceedings without first
complying with the procedures in this Article XII. The decisions made under
this Article XII are final and binding on Participants and any other party.
ARTICLE XIII
TOP-HEAVY PROVISIONS
13.01 GENERAL. If the Plan is or becomes top-heavy in any Plan Year,
the provisions of this Article XIII shall supersede any conflicting provisions
in the Plan.
13.02 DEFINITIONS.
(a) Determination Date. For any Plan Year after the first Plan
Year, the last day of the preceding Plan Year. For the first Plan Year of the
Plan, the last day of that Year.
(b) Earnings. For purposes of this Article XIII, Earnings means
"compensation" within the meaning of Section 415(c)(3) of the Code.
(c) Key Employee. Any Employee or former employee (and Beneficiary
of such employee) who, at any time during the termination period, was a Key
Employee in accordance with Section 416(i)(1) of the Code and regulations
thereunder.
(d) Permissive Aggregation Group. The Required Aggregation Group
of plans plus any other plan of the Employer which, when considered as a group
with the Required Aggregation Group, would continue to satisfy the requirements
of Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group. Each (i) qualified plan of the
Employer in which at least one Key Employee participates, plus (ii) any other
qualified plan of the Employer which enables a plan described in (i) to meet
the requirements of Sections 401(a)(4) and 410 of the Code.
(f) Top-Heavy Plan. The Plan shall be top-heavy if any of the
following conditions exist:
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(i) If the Top-Heavy Ratio for this Plan exceeds 60
percent and the Plan is not part of any Required
Aggregation Group or Permissive Aggregation Group of
plans;
(ii) If this Plan is a part of a Required Aggregation
Group of plans (but not part of a Permissive
Aggregation Group) and the Top-Heavy Ratio for the
group of plans exceeds 60 percent; or
(iii) If this Plan is a part of a Required Aggregation
Group of plans and part of a Permissive Aggregation
Group and the Top-Heavy Ratio for the group of plans
exceeds 60 percent.
(g) Top-Heavy Ratio.
(i) If the Employer maintains one or more defined
benefit plans and has not maintained any defined
contribution plans (including any simplified
employee pension plan), which, during the five-year
period ending on the Determination Date, has or has
had account balances, the Top-Heavy Ratio for this
group alone or for the Required or Permissive
Aggregation Group, as applicable, is a fraction. The
numerator is the sum of the present values of
accrued benefits of all Key Employees as of the
Determination Date, and the denominator of which is
the sum of the present values of all accrued
benefits, determined in accordance with Section 416
of the Code and the regulations thereunder. Both the
numerator and the denominator include any part of
any accrued benefits distributed in the five-year
period ending on the Determination Date.
(ii) If the Employer maintains one or more defined
benefit plans and maintains or has maintained one or
more defined contribution plans (including any
simplified employee pension plan), which, during the
five-year period ending on the Determination Date,
has or has had any account balances, the Top-Heavy
Ratio for any Required or Permissive Aggregation
Group, as applicable, is a fraction. The numerator
is the sum of the present values of accrued benefits
under the aggregate defined benefit plan or plans
for all Key Employees, determined in accordance with
(i) above, plus the sum of account balances under
the aggregate defined contribution plan or plans of
all Key Employees as of the Determination Date. The
denominator is the sum of the present values of all
accrued benefits under the aggregate defined benefit
plan or plans for all Participants and the sum of
the account balances under the aggregate defined
contribution plan or plans for all Participants, all
determined in accordance with Section 416 of the
Code and the regulations thereunder. Both the
numerator and the denominator include any part of
any accrued benefits or account balances distributed
in the five-year period ending on the Determination
Date.
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(iii) For purposes of (i) and (ii) above, the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
Valuation Date that falls within or ends with the
12-month period ending on the Determination Date,
except as provided in Section 416 of the Code and
the regulations thereunder for the first and second
plan years for a defined benefit plan. The account
balances and accrued benefits will be disregarded
for a Participant: (1) who is not a Key Employee but
who was a Key Employee in a prior year, or (2) who
has not received any compensation from any Employer
maintaining the Plan at any time during the
five-year period ending on the Determination Date.
The calculation of the Top-Heavy Ratio, and the
extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Section 416 of the Code and the
regulations thereunder. Deductible employee
contributions will not be taken into account for
computing the Top-Heavy Ratio. When aggregating
plans, the values of account balances and accrued
benefits will be calculated with reference to the
Determination Dates that fall within the same
calendar year.
13.03 MINIMUM CONTRIBUTION. For any Plan Year in which this Plan is
top-heavy, provided the top-heavy ratio is less than 90%, each Employee who is
eligible to participate under Section 2.01, and who is not eligible for
participation under any defined benefit plan maintained by his Employer shall
have a contribution of five percent of Earnings credited to his Accounts. Such
contribution will be made with respect to any such Employee irrespective of
whether such Employee has performed or will perform 1,000 Hours of Service (or
the equivalent) for such Plan Year or has made any contributions to this Plan
with respect to such Plan Year. This contribution shall include amounts
contributed under Sections 3.02 and 3.04 and Article 4. For any Plan Year in
which the top-heavy ratio for this Plan is 90% or more, such minimum
contribution shall be three percent of Earnings, and (solely for Plan Years
beginning before January 1, 2000) the 125% factor in Section 4.07 shall be
reduced to 100%.
ARTICLE XIV
EXERCISE OF SHAREHOLDER'S RIGHTS
14.01 VOTING SHARES OF COMPANY STOCK.
(a) All shares of Company Stock held in the Trust Fund shall be
voted by the Trustee only in accordance with instructions from the Participants
or Beneficiaries, as set forth in this Section 14.01. For purposes of the
actions taken under this Section 14.01, Participants and Beneficiaries shall be
considered to be named fiduciaries within the meaning of (and to the extent
permitted under) Section 402(a) of ERISA. Each Participant or Beneficiary shall
be entitled to give voting instructions with respect to (i) the shares of
Company Stock allocated to his Account, and (ii) a pro rata portion of the
shares of Company Stock held in an Unallocated Company Stock Account, in the
proportion that the shares of Company Stock allocated to his Account bear
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to the total shares of Company Stock allocated to all Accounts. In the event
that a Participant or Beneficiary fails to direct the Trustee as to the
exercise of such voting rights, the Trustee shall vote such shares of Company
Stock in the same proportion as the Trustee is required to vote shares of
Company Stock for which instructions have been received, so that the same
percentage of voting rights with respect to such shares of Company Stock will
be exercised for or against any proposal or nominee submitted to shareholders
as are exercised with respect to shares of Company Stock for which instructions
have been received. With respect to each occasion for the exercise of such
voting rights, the Trustee, through the Plan Administrator, will notify each
Participant or Beneficiary within a reasonable time (not less than 30 days)
before such rights are to be exercised. Such notification will include all the
information distributed to the Trustee regarding the exercise of such rights.
(b) Not less than five business days before the date on which such
voting rights are to be exercised, each Participant or Beneficiary exercising
such rights shall inform the Trustee, in the form and manner prescribed by the
Plan Administrator, with respect to the manner in which such voting rights are
to be exercised. To the extent possible, the Trustee shall vote the combined
fractional shares of Company Stock allocated to the Accounts of Participants
and Beneficiaries to reflect the directions of the Participants to whom such
fractional shares of Company Stock are allocated.
(c) Neither the Board, the Trustee, the Plan Administrator nor any
designee of the Board may make any recommendation to the Participants or
Beneficiaries regarding the manner of exercising any voting rights, including
whether or not such rights should be exercised.
14.02 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 his interest in the shares of Company Stock allocated
to his Accounts.
14.03 PUBLIC OFFERS.
(a) Notwithstanding any provision of the Plan to the contrary, in
the event of a "tender offer" within the meaning ascribed to that term pursuant
to Section 14(d) of the Securities Exchange Act of 1934, for shares of Company
Stock by any person (other than the Company or any affiliate thereof), the
Trustee, through the Plan Administrator, shall promptly provide a copy of the
offer, and any other material or information concerning such offer, to each
Participant or Beneficiary (as appropriate). For purposes of the actions taken
under this Section 14.03, Participants and Beneficiaries shall be considered to
be "named fiduciaries" within the meaning of (and to the extent permitted
under) Section 402(a)(2) of ERISA.
(b) Each Participant or Beneficiary (as appropriate) shall be
entitled to give the Trustee instructions with respect to the tender of all,
but not less than all, shares of Company Stock allocated to his Account. Upon
receipt of instructions from a Participant or Beneficiary (as appropriate) to
so tender, the Trustee shall tender all such shares of Company Stock to the
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tender offeror. In the event that a Participant or Beneficiary fails to direct
the Trustee as to whether to tender or to not tender shares of Company Stock,
the Trustee shall tender all or a part of such shares of Company Stock, the
tendered shares to be in the same proportion to the total number of shares of
Company Stock held in the Account of such non-directing Participant or
Beneficiary as the number of shares of Company Stock as to which the Trustee is
required to tender shares of Company Stock bears to the total number of shares
of Company Stock held in the Accounts of Participants and Beneficiaries as to
which instructions have been received. The Trustee shall also tender a pro rata
portion of the shares of Company Stock held in any Unallocated Company Stock
Account, the shares tendered to be in the same proportion that the number of
shares of Company Stock the Trustee is directed to tender from the Accounts of
Participants and Beneficiaries who direct the Trustee to tender or not to
tender such shares bears to the total number of shares of Company Stock
allocated to all Accounts of the Participants and Beneficiaries who so direct
the Trustee.
(c) The solicitation and implementation of instructions from
Participants (and Beneficiaries) pursuant to this Section 14.03 shall, to the
best of the abilities of the Trustee, be carried out in such a manner as will,
for a reasonable time, preserve the "confidentiality" of the instructions given
by any particular Participant or Beneficiary within the meaning and intent of
that term as used in Section 203(a)(2) of the General Corporation Law of the
State of Delaware. In the event that instructions cannot otherwise be returned
to the Trustee in a timely fashion, the Company shall use its best efforts to
collect and tabulate such instructions in a manner that will assure a
confidential and timely tender by the Trustee.
(d) The proceeds received by the Trustee as a result of having
tendered shares of Company Stock shall be applied under the Plan as directed by
the Plan Administrator, in accordance with the following precepts. The Accounts
of Participants and Beneficiaries who directed the Trustee not to tender the
shares of Company Stock allocated to their respective Accounts shall continue
to be invested in shares of Company Stock, subject to any other investment
direction the Participant (or Beneficiary) may be entitled to give. The
Accounts of Participants and Beneficiaries who directed the Trustee to tender
the shares of Company Stock allocated to their respective Accounts shall
receive the proceeds of such tender allocable to the tendered shares of Company
Stock from such Account, which shall be invested at the direction of the Board
or its designee, as hereinafter provided subject to any other investment
direction the Participant (or Beneficiary) may be entitled to give. There shall
be allocated to the Accounts of Participants and Beneficiaries who gave no
directions to the Trustee with respect to the tender of shares of Company
Stock, proceeds of the tender allocable to the shares of Company Stock (if any)
tendered from their respective Accounts, and the shares of Company Stock and
such proceeds shall be invested in the same manner provided for in the
preceding two sentences. Any cash so received may be invested in short-term
investments, pending the Trustee's receipt of directions from the Board or its
designee.
(e) The Trustee shall give advance notice of at least one full
business day to the Company before taking any action in response to such an
offer other than the actions described above. The Trustee shall be entitled to
reasonable compensation and reimbursement for its out-
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of-pocket expenses for any extraordinary services attributable to the duties
and responsibilities described in this section.
ARTICLE XV
SPECIAL LIMITATIONS ON CONTRIBUTIONS
15.01 DEFINITIONS. For purposes of this Article XV, the following
terms shall have the meaning set forth hereafter:
(a) "Actual Deferral Percentage," for the Highly Compensated
Employee group and the non-Highly Compensated Employee group of all Employees
eligible to participate in the Plan shall be the average of the actual deferral
ratios ("Actual Deferral Ratios"), calculated separately for each Employee in
each respective group, of:
(i) the amount of the Employee's Elective Deferrals and
amounts treated as his or her Elective Deferrals for
a Plan Year actually paid over to the Trust Fund as
contributions on behalf of such Employee for such
Plan Year, to
(ii) Employee's compensation (within the meaning of Code
section 414(s)) for such Plan Year.
In the case of an eligible Employee who makes no Elective Contributions, the
Actual Deferral Ratio that is to be included in determining the Actual Deferral
Percentage is zero.
Only the Actual Deferral Ratios of eligible Employees will be taken
into account in calculating the Actual Deferral Percentage. For this purpose,
an eligible employee is any Employee who is directly or indirectly eligible to
make a cash or deferred election under the Plan for all or a portion of a Plan
Year, and includes: an Employee who would be a Plan Participant but for the
failure to make required contributions; an Employee whose eligibility to make
Elective Contributions has been suspended because of an election (other than
certain one-time elections) not to participate, a distribution or a loan; and
an Employee who cannot defer because of the Code section 415 limits on annual
additions described in Section 4.06.
An Elective Contribution will be taken into account in calculating the
Actual Deferral Percentage for a Plan Year only if:
(i) it relates to compensation that either would have
been received by the Employee in the Plan Year (but
for the deferral election) or is attributable to
services performed by the Employee in 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
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(ii) it is allocated to the Employee as of a date within
that Plan Year. For this purpose, an Elective
Contribution is considered allocated as of a date
within a Plan Year if the allocation is not
contingent on participation or performance of
services after such date and the Elective
Contribution is actually paid to the Trust Fund no
later than 12 months after the Plan Year to which
the contribution relates.
The Employer may elect to take into account in computing the Actual
Deferral Percentage for all Employees Qualified Matching Contributions (other
than Matching Contributions which have been allocated to an ESOP Account) and
Qualified Nonelective Contributions, if the requirements of section
1.40(k)-1(b)(5) of the Treasury Regulations under the Code are satisfied.
If Elective Deferrals are taken into account for purposes of the
Actual Contribution Percentage Test of paragraph (b) for any Plan Year, such
contributions shall not be taken into account under this paragraph (a) for such
year.
(b) "Actual Contribution Percentage" for the Highly Compensated
Employee and non-Highly Compensated Employee groups for a Plan Year shall be
the average of actual contribution ratios ("Actual Contribution Ratios")
calculated separately for each Employee in each respective group, of:
(i) the sum of the Matching Contributions, Employee
Contributions and Employer contributions to permit
investments in Company Stock as described in Section
5.01(a) paid under the Plan on behalf of such
Employee for a Plan Year, to
(ii) Employee's compensation (within the meaning of Code
section 414(s)) for such Plan Year.
As and to the extent permitted under Treasury Regulations, the
Employer may elect to take into account (in computing the Actual Contribution
Percentage) Elective Contributions and Qualified Nonelective Contributions
under the Plan or any other plan of the Employer if the conditions of section
1.401(m)-1(b)(5) of the Treasury Regulations under the Code are satisfied.
If Matching Contributions are taken into account for purposes of the
Actual Deferral Percentage Test of paragraph (a) for any Plan Year, such
contributions shall not be taken into account under this paragraph (b) for such
year.
(c) "Elective Contributions" are Employer contributions made to a
plan that were subject to an election under a cash or deferred arrangement
(whether or not a qualified cash or deferred arrangement). No amount that has
become currently available to an Employee or that is designated or treated, at
the time of deferral or contribution, as an after-tax Employee Contribution may
be treated as an Elective Contribution.
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(d) "Elective Deferrals" means, with respect to any taxable year,
the sum of:
(i) any Employer contribution under a qualified cash of
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 of Code Section 402(g)),
(ii) any Employer contribution to the extent not
includible in gross income for the taxable year
under Code Section 402(h)(1)(B) (determined without
regard to the limits of Code Section 402(g)),
(iii) any Employer contribution to purchase an annuity
contract under Section 403(b) under a salary
reduction agreement (within the meaning of Code
Section 3121(a)(5)(D)); unless such contribution is
made under a one-time irrevocable election made by
the Employee at the time of initial eligibility to
participate in the agreement or is made pursuant to
a similar arrangement involving a one-time
irrevocable election specified in the Treasury
Regulations under the Code, and
(iv) any Employee contribution designated as deductible
under a trust described in Code section 501(c)(18)
to the extent deductible from the individual's
income for the taxable year on account of Code
Section 501(c)(18) (determined without regard to the
limits of Code Section 402(g)).
(e) "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.
(f) "Excess Aggregate Contributions" means, with respect to any
Plan Year, the excess of:
(i) The aggregate amount of the Matching Contributions
and Employee Contributions (and including any
Qualified Nonelective Contribution or Elective
Deferral taken into account in computing the
Contribution Percentage, but excluding Qualified
Matching Contributions treated as Elective
Contributions under paragraph (a) of this Section
15.01) actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(ii) the maximum amount of such contributions permitted
under the limitations of paragraph (a) of Section
15.04 (determined by reducing contributions
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made on behalf of Highly Compensated Employees in
order of their Actual Contribution Ratios beginning
with the highest of such ratios).
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 Section
15.05.
The amount of excess Aggregate Contributions for a Highly Compensated
Employee under a plan subject to the requirements of section 401(m) will be
determined in the following manner. First, the Actual Contribution Ratio of the
Highly Compensated Employee with the highest Actual Contribution Ratio is
reduced to the extent necessary to satisfy the Contribution Percentage Test or
cause such ratio to equal the Actual Contribution Ratio of the Highly
Compensated Employee with the next highest ratio. Second, this process is
repeated until the Contribution Percentage Test is satisfied. The amount of
Excess Aggregate Contributions for a Highly Compensated Employee is then equal
to the total of Employee, Matching and other Contributions taken into account
for the Contribution Percentage Test minus the product of the Employee's
contribution ratio as determined above and the Employee's compensation.
In the case of a Highly Compensated Employee whose Actual Contribution
Ratio is determined under the family aggregation rules, the determination of
the amount of Excess Aggregate Contributions shall be made as follows: the
Actual Contribution Ratio is reduced in accordance with the "leveling" methods
described in the preceding paragraph and the Excess Aggregate Contributions are
allocated to the Highly Compensated Employee to whom the contributions of each
family member have been attributed.
(g) "Excess Contributions" means, with respect to any Plan Year,
the excess of:
(i) 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 Highly Compensated Employees
for such Plan Year, over
(ii) the maximum amount of such contributions permitted
under the limitations of paragraph (a) of Section
15.03 (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of
the Actual Deferral Ratios beginning with the
highest of such ratios).
The amount of Excess Contributions for a Highly Compensated Employee
will be determined in the following manner. First, the Actual Deferral Ratio of
the Highly Compensated Employee with the highest Actual Deferral Ratio is
reduced to the extent necessary to satisfy the Actual Deferral Percentage Test
or cause such ratio to equal the Actual Deferral Ratio of the Highly
Compensated Employee with the next highest ratio. Second, the process is
repeated until the Actual Deferral Percentage Test is satisfied. The amount of
Excess Contributions for a Highly Compensated Employee is equal to the total of
Elective and other
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contributions taken into account for the Actual Deferral Percentage Test minus
the product of the Employee's reduced deferral ratio as determined above and
the Employee's compensation.
(h) "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 Section 15.02, but excluding amounts
described in section 1105(c)(5) of the Tax Reform Act of 1986.
(i) Highly Compensated Employee. Highly Compensated Employee means
an Employee who performed services during the determination year for the
Employer and who:
(i) is a five percent owner (as defined in Code Section
416(i)(1)(A)(iii)) at any time during the
determination year or the look-back year; or
(ii) received compensation in excess of $80,000 (indexed
in accordance with Code Section 415(d)) for the
look-back year, and if the Employer so elects, was a
member of the top-paid group during the look-back
year.
For purposes of this definition: (a) the "determination year" is the Plan Year
for which the identification of Highly Compensated Employees is being made; (b)
the "look-back year" is the preceding Plan Year, (c) the "top-paid group" means
the top 20 percent of Employees ranked on the basis of compensation received
during the year; and (d) "compensation" is compensation within the meaning of
Section 4.06.
Notwithstanding the foregoing, the determination of which Employees
are Highly Compensated Employees shall at all times be subject to the rules of
Code Section 414(q). A former Employee shall be treated as a Highly Compensated
Employee if he was a Highly Compensated Employee upon separation or was a
Highly Compensated Employee at any time after attaining age 55.
(j) "Matching Contribution" means:
(i) any Employer contribution (including a contribution
made at the Employer's discretion) made to the Plan
on behalf of an Employee on account of the Employee
Contribution made by such Employee,
(ii) any Employer contribution (including a contribution
made at the Employer's discretion) made to the Plan
on behalf of an Employee on account of the
Employee's Elective Contribution, and
(iii) any Forfeiture allocated on the basis of Employee
Contributions, Matching Contributions or Elective
Contributions.
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(k) "Nonelective Contributions" means Employer Contributions
(other than Matching Contributions) with respect to which the Employee may not
elect to have the contributions paid to the Employee in cash or other benefits
instead of being contributed to the Plan.
(l) "Qualified Matching Contributions" means Matching
Contributions which satisfy the requirements of subparagraph (ii) of the
definition of Qualified Nonelective Contributions.
(m) "Qualified Nonelective Contributions" means any Employer
contribution (other than a Matching Contribution or Elective Contribution) with
respect to which:
(i) the Employee may not elect to receive the
contribution paid to the Employee in cash instead of
being contributed to the Plan, and
(ii) only if such contributions are nonforfeitable when
made and distributable only under the following
circumstances:
(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);
(C) The Employee's attainment of age 59 1/2 or
the Employee's hardship;
(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. Clauses (B) and (D) of this
subparagraph (ii) apply only if the
Employer, as the transferor corporation,
continues to maintain the Plan. 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.
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15.02 DETERMINATION AND TREATMENT OF EXCESS DEFERRALS.
(a) The amount of Elective Deferrals for a Participant for his
taxable year shall be limited to $9,500 ($10,000, effective 1998) or such other
applicable amount pursuant to the provisions of Sections 402(g) of the Code.
Any Excess Deferral shall be distributed to the Participant in accordance with
paragraph (b).
(b) To the extent the Participant has made Elective Deferrals to
the Plan in excess of the amount set forth in subsection (a), such Excess
deferrals shall be distributed to him no later than the 15th day of April
following the end of the taxable year during which such Elective Deferrals are
made. If, for a taxable year, a Participant makes Elective Deferrals to this
Plan and to any other plan or arrangement, he may allocate the amount of any
Excess Deferrals for such taxable year among such plans. No later than the
first day of March 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 allocated to this Plan. Such
amount shall then be distributed (including income thereon) to the Participant
no later than the following April 15th.
15.03 COMPUTATION OF ACTUAL DEFERRAL PERCENTAGE.
(a) The Actual Deferral Percentage for all Highly Compensated
Employees for the Plan Year shall not exceed the greater of:
(i) 125% of the Actual Deferral Percentage for all
non-Highly Compensated Employees for the preceding
Plan Year, or
(ii) The lesser of (i) two times the Actual Deferral
Percentage for all non-Highly Compensated Employees
for the preceding Plan Year or (ii) the Actual
Deferral Percentage for all non-Highly Compensated
Employees for the preceding Plan Year plus two
percentage points.
The Actual Deferral Percentage for non-Highly Compensated Employees shall be
determined on the basis of the preceding Plan Year, unless the Company elects
to make such determinations on the basis of the current Plan Year. Any such
election shall be irrevocable with respect to all Plan Years, except as
otherwise permitted by the Secretary of the Treasury by issued determination,
ruling or regulation.
(b) For purposes of applying the provisions of this Section, all
Elective Contributions that are made under two or more plans that are
aggregated for purposes of Code Section 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
or more plans are permissively aggregated for purposes of Code Section 401(k),
the aggregated plans must also satisfy Code Sections 401(1)(4) and 410(b) as
though they were a single plan.
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(c) For purposes of applying the provisions of subsection (a)
hereof, the Actual Deferral Percentage taken into account for any Highly
Compensated Employee who is a Participant in two or more cash or deferred
arrangements of the Employer shall be the sum of the Actual Deferral
Percentages for such Highly Compensated Employee under each of such
arrangements divided by the Participant's Compensation from the Employer and
the Affiliated Companies.
(d) Except to the extent provided in regulations or rules provided
by the Secretary of the Treasury, notwithstanding the distribution of any
portion of an Excess Deferral under Section 15.02 hereof, such portion shall
for purposes of applying this Section 15.03 be treated as an Employer
Contribution.
15.04 LIMITATION ON ACTUAL CONTRIBUTION PERCENTAGE.
(a) The Actual Contribution Percentage for all Highly Compensated
Employees for the Plan Year shall not exceed the greater of:
(1) 125% of the Actual Contribution Percentage for all
non-Highly Compensated Employees for the preceding
Plan Year, or
(2) The lesser of (i) two times the Actual Contribution
Percentage for all non-Highly Compensated Employees
for the preceding Plan Year or (ii) the Actual
Contribution Percentage for all non-Highly
Compensated Employees for the preceding Plan Year
plus two percentage points.
The Actual Contribution Percentage for non-Highly Compensated Employees shall
be determined on the basis of the preceding Plan Year, unless the Company
elects to make such determinations on the basis of the current Plan Year. Any
such election shall be irrevocable with respect to all Plan Years, except as
otherwise permitted by the Secretary of the Treasury by issued determination,
ruling or regulation.
(b) If two or more plans of the Employer to which Matching
Contributions, Employee Contributions or Elective Deferrals are made are
treated as one plan for purposes of Section 410(b) of the Code, such plans
shall be treated as one plan, and if a Highly Compensated Employee participates
in two or more plans of the Employer to which such contributions are made, all
such contributions shall be aggregated.
(c) 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 a contribution shall be treated as an
eligible employee on behalf of whom no Employer Contributions are made.
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(d) For purposes of computing the Contribution Percentages, the
Employer may elect to take into account Elective Deferrals and/or Qualified
Nonelective Contributions allocated to a Participant's Account 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.
15.05 EXCESS CONTRIBUTIONS AND EXCESS AGGREGATE CONTRIBUTIONS.
(a) The Plan shall be treated as satisfying the requirements of
Sections 15.03(a) and 15.04(a) for any Plan Year if, before the close of the
following Plan Year:
(i) the amount of the Excess Contributions and Excess
Aggregate Contributions for such Plan Year (and any
income allocable thereto) is distributed to the
Participant in accordance with paragraph (c);
(ii) in the case of Excess Contributions, to the extent
provided by regulation issued by the Secretary of
the Treasury, an Employee elects to recharacterize
such Excess Deferral as distributed and
recontributed by the Employee to the Plan as a
Non-Pre-Tax Contribution, or
(iii) in the case of Excess Aggregate Contributions, to
the extent such Contributions are forfeitable, are
forfeited.
(b) The amount of Excess Contributions to be distributed or
recharacterized (as described above) shall be reduced by Excess Deferrals
previously distributed for the taxable year ending in the same Plan Year and
Excess Deferrals to be distributed for a taxable year will be reduced by Excess
Contributions previously distributed or recharacterized for the Plan Year
beginning in such taxable year.
(c) Excess Contributions and Excess Aggregate Contributions shall
be distributed in accordance with the following procedure:
(i) The dollar amount of Excess Contributions for each
affected Highly Compensated Employee shall be
calculated as described in Section 15.01(g);
(ii) The total dollar amount of all Excess Contributions
for all affected Highly Compensated Eligible shall
be determined.
(iii) The Pre-Tax Contributions (Basic and Supplemental)
of the Highly Compensated Employee with the highest
dollar amount of Pre-Tax Contributions for the Plan
Year shall be reduced by the amount required to
cause that Highly Compensated Employee's Pre-Tax
Contributions to equal the dollar amount of Pre-Tax
Contributions of the Highly Compensated Employee
with the next highest dollar amount of Pre-Tax
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Contributions. This amount is then distributed to
the Highly Compensated Employee with the highest
dollar amount. However, if a lesser reduction, when
added to the total dollar amount already distributed
under this step, would equal the total Excess
Contributions, the lesser reduction amount shall be
distributed.
(iv) If the total dollar amount distributed is less than
the total Excess Contributions for the Plan Year for
all affected Highly Compensated Employees, step
(iii) is repeated until the total dollar amount
distributed equals the total Excess Contributions
for the Plan Year.
(v) Parallel steps taken in subsections (i) through (iv)
for Excess Contributions shall be taken to
distribute any Excess Aggregate Contributions
determined in accordance with Section 15.01(f) under
the Plan for a Plan Year.
(d) 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. Income allocable to an Employee's
Excess Contributions shall be determined by multiplying the income for the Plan
Year allocable to Elective Contributions and amounts treated as Elective
Contributions (for purposes of this paragraph only, the "Effective Elective
Contributions") by a fraction, the numerator of which is the Employee's Excess
Contributions for the Plan Year and the denominator of which is the sum of (i)
the Employee's total account balance attributable to Effective Elective
Contributions as of the beginning of the Plan Year; plus (ii) the Employee's
Effective Elective Contributions for the Plan Year. Income allocable to an
Employee's Excess Aggregate Contributions shall be determined by multiplying
the income for the Plan Year allocable to Matching Contributions and Employee
Contributions and any qualified Nonelective Contributions or Elective Deferral
taken into account in computing the Contribution Percentage, but excluding
Qualified Matching Contributions treated as Elective Contributions (together,
for purposes of this paragraph only, the "Effective Matching/Employee
Contributions") by a fraction, the numerator of which who is the Employee's
Excess Aggregate Contributions for the Plan Year and the denominator of which
who is the sum of (i) the Employee's total account balance attributable to
Effective Matching/Employee Contributions as of the beginning of the Plan Year;
plus (ii) the Employee's Effective Matching/Employee Contributions for the Plan
Year.
(e) If Excess Contributions distributed or recharacterized (under
paragraph (a)) are contributions in respect of which Matching Contributions
have been made by the Employer, such Matching Contributions and income
allocable thereto shall be forfeited and applied to reduce Employer
contributions in the Plan Years following the Plan Year in which such forfeited
Matching Contributions were made.
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(f) Excess Contributions must be corrected by the close of the
Plan Year following the Plan Year for which they were made.
(g) Recharacterized Excess Contributions will remain subject to
the nonforfeitability requirements and distribution limitations that apply to
elective contributions.
15.06 CORRECTION OF MULTIPLE USE OF ALTERNATIVE LIMITATION. In
addition to the foregoing limitations, if the Actual Deferral Percentage for
Highly Compensated Employees exceeds 15.03(a)(i), the Actual Contribution
Percentage for Highly Compensated Employees exceeds 15.04(a)(i) and the sum of
those two percentages exceeds the limit described in section 1.401(m)-2(b)(3)
of the Regulations, the Employer will reduce the actual deferral percentage of
the Highly Compensated Employees in the manner described in Treasury Regulation
Section 1.401(k)-1(f)(2) as provided in Treasury Regulation Section
1.401(m)-2(c)(3).
ARTICLE XVI
ESOP INVESTMENTS AND ACQUISITION LOANS
16.01 INVESTMENT OF CERTAIN EMPLOYER CONTRIBUTIONS.
(a) The Trustee will maintain that portion of the Company Stock
Fund consisting of Participants' ESOP Accounts, and that portion of the Company
Stock Fund consisting of Participants' PAYSOP Accounts and that portion of the
Company Stock Fund consisting of Unallocated Company Stock Accounts, as an
employer stock ownership plan as defined in Section 4975(e)(7) of the Code (the
"ESOP") and will invest all cash contributions made pursuant to Section 4.01
and such, if any, of the contributions made under Section 4.02 and designated
by the Employer when made as ESOP Contributions, together with cash dividends
thereon and any other form of cash income primarily in shares of Company Stock
in accordance with the investment objectives and guidelines promulgated
pursuant to Article IX of the Plan.
(b) The Trustee shall retain in the ESOP all shares of Company
Stock contributed to it for distribution or transfer as provided herein. The
Trustee is authorized to invest in and hold up to 100% of the ESOP in shares of
Company Stock. The Trustee may retain some part of the ESOP in other forms of
investment, or in cash, and may sell shares of Company Stock as the Trustee
determines, to meet administrative requirements of the Plan. The Trustee may
purchase shares of Company Stock from or sell shares of Company Stock to the
Company or from or to any other source, and such shares of Company Stock may be
outstanding, newly issued, or Treasury securities.
16.02 VALUATION OF SHARES OF COMPANY STOCK.
(a) On any Valuation Date on which it is necessary or desirable to
value shares of Company Stock, all shares of Company Stock shall be valued at
their fair market value. All valuations of shares of Company Stock must be made
in good faith and based on all relevant
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factors for determining their fair market value. So long as the shares of
Company Stock are listed and traded on the New York Stock Exchange (or other
national stock exchange), the determination of fair market value shall be made
by reference to the price of shares of Company Stock on such exchange (and,
unless otherwise required by law or other applicable provision, shall be based
on the closing price on such exchange on the preceding trading day). If the
Common Stock ceases to be listed on a national exchange, a determination of
fair market value independently arrived at by a person who customarily makes
such appraisals and who is independent of any party to a transaction involving
this Plan shall be deemed a good faith determination of value whenever the
transaction does not involve a "disqualified person" as such term is defined in
Code Section 4975(e)(2).
(b) For purposes of a transaction between the Plan and a
"disqualified person," the valuation must be determined as of the date of the
transaction.
16.03 ACQUISITION LOANS.
(a) The Board or its designee may direct the Trustee to incur
Acquisition Loans from time to time to finance the acquisition of Financed
Shares for the Plan or to repay a prior Acquisition Loan. Acquisition Loans may
be made from persons determined to be "disqualified persons" within the meaning
of Section 4975(e)(2) of the Code or guaranteed by such "disqualified persons"
provided such loan or loans satisfy all of the requirements of an exempt loan
described in Section 4975(d)(3) of the Code and Section 408(b)(3) of ERISA, and
any regulations issued thereunder.
(b) Repayments of principal and interest on any Acquisition Loan
shall be made by the Trustee (as directed by the Plan Administrator) (i) only
from Employer Contributions, (ii) from earnings attributable to such Employer
Contributions, (iii) from Financed Shares (whether pledged to secure such loan
or not) remaining in the Unallocated Company Stock Account or the proceeds of a
sale or other disposition thereof, (iv) from loan proceeds not yet applied to
the purchase of shares of Common Stock (and any earnings attributable thereto),
and (v) (as provided in Section 16.04) from any cash dividends received by the
trust on Financed Shares. The Employer shall contribute to the Plan in any Plan
Year in which there exists an outstanding balance on an Acquisition Loan, an
amount sufficient to pay the principal and interest payments thereon which come
due during such Plan Year.
16.04 DIVIDENDS USED IN REPAYMENT OF ACQUISITION LOAN. The Plan
Administrator may in its discretion direct the Trustee to use any cash
dividends paid on Financed Shares (and, subject to the provisions of Section
6.02 of the Plan, dividends paid on shares of Company Stock held in ESOP
Accounts of Participants) to pay any currently maturing obligation under an
Acquisition Loan.
16.05 UNALLOCATED COMPANY STOCK ACCOUNT. All Financed Shares shall
be added to and maintained in an Unallocated Company Stock Account whether or
not they are encumbered under the terms of the Acquisition Loan. A separate
Unallocated Company Stock Account shall
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be maintained for each Acquisition Loan. The Unallocated Company Stock Account
shall be deemed an asset of this Plan.
16.06 RELEASE OF SHARES OF COMPANY STOCK.
(a) As of the Valuation Date (i) at the end of each month for
Matching Contributions made under Section 4.01 and (ii) at the end of each
calendar quarter for Additional Matching Contributions, if any, made under
Section 4.02(a), Financed Shares will be withdrawn from the Unallocated Company
Stock Account and allocated to Participants' Accounts in accordance with the
provisions of Sections 4.01, 4.02 and 4.04. For each month or Plan Year, as
applicable (a "Release Period") the number of Financed Shares withdrawn from
the Unallocated Company Stock Account shall be released as follows:
(i) If the Acquisition Loan provides for payments of
principal and interest at a cumulative rate that is
not less rapid at any time than level annual
payments of such amounts for ten years, and
(ii) Interest included in any payment is disregarded (in
determining the portion of such payment constituting
principal) only to the extent that it would be
determined to be interest under standard loan
amortization tables,
then the number of shares released from the Unallocated Company Stock Account
shall bear the same ratio to the number of shares attributable to the
Acquisition Loan that are then in the Unallocated Company Stock Account (prior
to the release) as (1) the principal payments on the Acquisition Loan in the
Release Period ending with such Valuation Date bear to (2) the Release Period's
principal payments described in (1), plus the total remaining principal
payments required (or projected to be required on the basis of the interest
rate on the Acquisition Loan in effect at the end of the Release Period) to
satisfy the Acquisition Loan.
If the Acquisition Loan does not meet the requirements of the
preceding sentence, or if, at any time, by reason of a renewal, extension or
refinancing, the sum of the expired duration of the Acquisition Loan, the
renewal period, the extension period and the duration of a new Acquisition Loan
exceeds 10 years, then the number of shares released shall be determined in
accordance with Paragraph (c) of this Section 16.06.
(b) Unless Section 16.06(a) applies, the number of shares released
from the Unallocated Company Stock Account shall bear the same ratio to the
number of shares attributable to the Acquisition Loan that are then in the
Unallocated Company Stock Account (prior to the release) as (i) the principal
and interest payments made on the Acquisition Loan in the Release Period ending
with such Valuation Date bear to (ii) the Release Period's payments described
in (i), plus the total remaining principal and interest payments required (or
projected to be required on the basis of the interest rate on the Acquisition
Loan in effect at the end of such Release Period) to satisfy the Acquisition
Loan.
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(c) For purposes of this Section, each Acquisition Loan, the
purchase of shares of Company Stock in connection with it, and any stock
dividends on such shares of Company Stock shall be considered separately.
16.07 ALLOCATION OF PROCEEDS OF SALE OR OTHER DISPOSITION.
(a) If in connection with a Change in Control of the Company (as
defined in Section 18.03) the Trustee sells or otherwise disposes of Financed
Shares held in the Unallocated Company Stock Account a transaction which
results in the Trustee's receipt of cash or consideration other than shares of
Company Stock (or securities which are for all Plan purposes substituted for
shares of Company Stock), the proceeds of such sale or other disposition shall
be used first to pay so much of the unpaid principal (and interest due thereon)
of the Acquisition Loan pursuant to which such Financed Shares were acquired as
shall be necessary to obtain the release from the Unallocated Company Stock
Account of each such shares sold by the Trustee.
(b) If the proceeds per share of Company Stock received by the
Trustee under paragraph (a) exceed the amount required to be paid to obtain the
release of one share of Company Stock from the Unallocated Company Stock
Account, the amount of such excess per share (the "Excess Proceeds") shall
(whether obtained or retained by the Trustee in the form of cash, released
Financed Shares or other property), to the greatest extent permissible by law,
be deemed to be Plan income, which shall be allocable to the Accounts of those
Participants in the Plan for whom one or more Accounts are maintained pursuant
to the Plan at the time of the Change in Control and who, as of the date the
Change in Control occurs, have Earnings for the Plan Year in which such
allocation is made ("Eligible Participants").
Such allocation shall be made as of the Valuation Date next following
the date of the Change in Control of the Company. The allocation of Excess
Proceeds to the Account of each Eligible Participant shall be made pro rata on
the basis of each Eligible Participant's Earnings for that portion of the Plan
Year in which such allocation is made compared to the total Earnings of all
Eligible Participants for the same portion of the Plan Year.
ARTICLE XVII
LOAN TO PARTICIPANTS
17.01 ELIGIBILITY. Any Participant may apply for a loan from the
Plan in lieu of a withdrawal. To obtain a loan, a Participant must submit an
application for approval pursuant to such written, telephonic or other
electronic communication as may be prescribed by the Plan Administrator. A
Participant may have only one Plan loan outstanding at any time.
17.02 AMOUNT OF LOAN. A Participant may borrow from his Accounts
(other than Accounts from which transfer is restricted under Section 5.04),
provided that the loan:
(i) must be at least $1,000 and
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(ii) shall not exceed the lesser of (1) $50,000, reduced
by the excess of the highest outstanding balance of
loans from the Plan during the one-year period
ending on the day before the date the loan is made
over the outstanding balance of the loans from the
Plan on the date the loan is made, or (2) 50% of the
Participant's vested Accounts under the Plan.
17.03 TERMS AND CONDITIONS. In addition to such rules and
regulations as the Plan Administrator may adopt, all loans shall comply with
the following terms and conditions:
(a) The Participant shall execute a promissory note and assign to
the Plan his rights to his Accounts to the extent necessary to pay off the loan
in the event of default.
(b) The term for repaying the loan shall be at least 12 months but
not more than five years; provided that a loan used to acquire any dwelling
unit which, within a reasonable time, is to be used (determined at the time the
loans is made) as a principal residence of the Participant shall provide for
periodic repayment over a reasonable period of time that may not exceed 15
years.
(c) Loan disbursements shall be made from the Participant's
Investment Funds in proportion to his vested balance in the Investment Funds
(omitting that portion of the Company Stock Fund excluded under the provisions
of Section 17.02). A loan shall be considered to be an investment of the
Participant's interest in the Plan which has been directed by the Participant,
and the evidence of debt shall be held as an asset for the borrowing
Participant. Repayments of principal and interest shall be invested in
accordance with the Participant's then-current investment election.
(d) The loan shall bear interest at a reasonable rate as
determined by the Plan Administrator. The Plan Administrator shall not
discriminate among Participants in the matter of interest rates, but loans
granted at different times may have different interest rates if, in the opinion
of the Plan Administrator, the difference in rates is justified by economic
conditions.
(e) A Participant shall repay his loan:
(i) by payroll deductions that will amortize the loan in
level payments over its term, or
(ii) in full, at any time, by a single sum cash payment
(which may be obtained through a withdrawal from the
Plan used in whole or in part for such repayment).
If a Participant is absent from work with less than full compensation,
payroll deductions will continue as long as his pay is sufficient to cover the
amounts due under the terms of the loan. If the Participant's compensation is
insufficient to cover the regular payments due, the
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Participant shall make arrangements with the Plan Administrator for repaying
principal and interest on the loan, including suspension of the loan for a
period of up to 12 months.
(f) A Participant will be deemed to have defaulted on his loan
upon the earlier of:
(i) separation from service due to retirement, death,
total and permanent disability, layoff or any other
reason; or
(ii) failure to make a loan repayment when due (including
any applicable grace period permitted by law and
applied by the Plan Administrator on a uniform and
nondiscriminatory basis).
(g) Upon default, the Plan Administrator may taken any action
permitted by law and consistent with the provisions of the Plan and its
continued qualification to collect the balance due on the loan (or see to the
application of collateral to the payment thereof). No amount shall be
distributed to a Participant in default on an outstanding loan until the loan
is repaid in full. If the amount of any such distribution is insufficient to
repay the loan, the Participant or his Beneficiary shall be liable for repaying
any amount still outstanding.
(h) Nothing in this Article XVII shall preclude the Plan
Administrator from declaring a moratorium on the approval of loans or from
amending this Article XVII, subject to applicable regulations issued by the
Internal Revenue Service.
ARTICLE XVIII
CHANGE IN CONTROL PROVISIONS
18.01 GENERAL. In the event of a Change in Control, as hereinafter
defined, the provisions of this Article XVIII shall supersede any conflicting
provisions in the Plan.
18.02 FULL VESTING. Anything in this Plan to the contrary
notwithstanding, upon and following a Change in Control the Employer
Contribution Account (both ESOP and non-ESOP) of Participants in the Plan who
are Employees of the Employer as of the date of Change in Control shall be 100%
vested.
18.03 DEFINITIONS. The following definitions apply for purposes of
this Article XVIII:
(a) A "Change in Control" shall be deemed to have occurred upon:
(i) The date that any Person is or becomes an Acquiring
Person.
(ii) The date that the Company's shareholders approve a
merger, consolidation or reorganization of the
Company with another corporation or other Person,
unless, immediately following such merger,
consolidation or
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reorganization (A) at least 50% of the combined
voting power of the outstanding securities of the
resulting entity would be held in the aggregate by
the shareholders of the Company as of such record
date for such approval (provided that securities
held by any individual or entity that is an
Acquiring Person, or who would be an Acquiring
Person if 5% were substituted for 20% in the
definition of such term, shall not be counted as
securities held by the shareholders of the Company,
but shall be counted as outstanding securities for
purposes of this determination), or (B) at least 50%
of the Board of Directors or similar body of the
resulting entity are Continuing Directors.
(iii) The date the Company sells or otherwise transfers
all or substantially all of its assets to another
corporation or other Person, unless, immediately
after such sale or transfer, (A) at least 50% of the
combined voting power of the then outstanding
securities of the resulting entity immediately
following such transaction is held in the aggregate
by Company's shareholders as determined immediately
prior to such transaction (provided that securities
held by any individual or entity that is an
Acquiring Person, or who would be an Acquiring
Person if 5% were substituted for 20% in the
definition of such term, shall not be counted as
securities held by the shareholders of the Company,
but shall be counted as outstanding securities for
purposes of this determination), or (B) at least 50%
of the Board of Directors or similar body of the
resulting entity are Continuing Directors.
(iv) The date on which less than two-thirds (2/3) of the
total membership of the Board consists of Continuing
Directors.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934.
(c) "Acquiring Person" means the Beneficial Owner, directly or
indirectly, of Common Stock representing 20% or more of the common voting power
of the Company's then outstanding securities, not including (except as provided
in clause (i) of the next sentence) securities of such Beneficial Owner
acquired pursuant to an agreement allowing the acquisition of up to and
including 50% of such voting power approved by two-thirds of the members of the
Board who are Board members before the Person becomes a Beneficial Owner,
directly or indirectly, of Common Stock representing 5% or more of the combined
voting power of the Company's then outstanding securities. Notwithstanding the
foregoing, (i) securities acquired pursuant to an agreement described in the
preceding sentence will be included in determining whether a Beneficial Owner
acquires 5% or more of such voting power other than pursuant to such an
agreement so approved and (ii) a Person shall not be an Acquiring Person if
such Person
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is eligible to and files a Schedule 13G with respect to such Person's status as
a Beneficial Owner of all Common Stock of the Company of which the Person is a
Beneficial Owner.
(d) A "Beneficial Owner" of Common Stock means (A) a Person who
beneficially owns such Common Stock, directly or indirectly, or (B) a Person
who has the right to acquire such Common Stock (whether such right is
exercisable immediately or only with the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing) or upon the
exercise of conversion rights, exchange rights, warrants, options or otherwise.
(e) "Continuing Directors" means any member of the Board who (A)
was a member of the Board prior to the date of the event that would constitute
a Change in Control, and any successor of a Continuing Director while such
successor is a member of the Board, (B) is not an Acquiring Person or an
Affiliate or Associate of an Acquiring Person, and (C) is recommended or
elected to succeed the Continuing Director by a majority of the Continuing
Directors.
(f) "Person" means any individual, firm, corporation, partnership,
trust or other entity.
18.04 ALLOCATIONS. Notwithstanding Section 4.02, in the event of a
Change in Control, allocations of Company Stock required to be allocated to
Participants' Accounts by reason the release of the shares from the Unallocated
Company Stock Account upon payment of principal and/or interest on an
Acquisition Loan pursuant to Section 4.02 shall be made only to the Accounts of
Participants who were participating in the Plan prior to the date of the Change
in Control, and shall not be made in individuals who begin participation in the
Plan after the date of the Change in Control.
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18.05 AMENDMENT. This Article XVIII 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 vested portion of Participants' Accounts under the Plan.
Nothing in this Section 18.04 shall be construed to prohibit, prior to a Change
in Control, any amendment to the Plan, including this Article XVIII, or any
termination of the Plan pursuant to its terms.
* * *
IN WITNESS WHEREOF, BOWATER INCORPORATED has caused this document
to be executed by its duly authorized officers and its corporate seal to be
affixed hereto this 14th day of September, 1998.
BOWATER INCORPORATED
By: /s/ Richard F. Frisch
-----------------------------------
Name: Richard F. Frisch
---------------------------------
Title: Vice President - Human Resources
--------------------------------
Date Signed: September 14, 1998
-------------------------
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<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 Salaried 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
