As filed with the Securities and Exchange Commission on August 14, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
------------------------------------
BUCKEYE CELLULOSE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 62-1518973
(State of Incorporation) (I.R.S. Employer Identification No.)
1001 Tillman Street
Memphis, Tennessee 38108
(Address of principal executive offices)
ALPHA CASH OPTION THRIFT PLAN
(Full Title of the Plan)
DAVID B. FERRARO
1001 Tillman Street
Memphis, Tennessee 38108
(901) 320-8100
(Name, address and telephone number of agent for service)
(with copies to:)
LINDA M. CROUCH
Baker, Donelson, Bearman & Caldwell
165 Madison Avenue, 2000 First Tennessee Building
Memphis, Tennessee 38103
CALCULATION OF REGISTRATION FEE
================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price Offering Registration
to be Registered Registered Per Share(1) Price Fee
- ---------------------- ---------------- ------------ --------- ------------
Plan Interests related An Indeterminate N/A N/A $100
to the Alpha Cash Amount of Plan
Option Thrift Plan Interests*
================================================================================
* Pursuant to Rule 416(c) under the Securities Act of 1933, this registration
statement covers an indeterminate amount of plan interests to be offered or sold
pursuant to the Alpha Cash Option Thrift Plan described herein.
<PAGE>
PART II
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents filed with the Securities and Exchange Commission are
incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the year ended June 30,1996.
2. The Registrant's Quarterly Report on Form 10-Q for the quarters ended
September 30, 1996, December 31, 1996 and March 31, 1997.
3. The description of the Registrant's Common Stock contained in its
Registration Statement on Form 8-A, as amended, effective with the Commission on
November 22, 1995.
All documents subsequently filed by the Registrant pursuant to Sections 13(a),
13(c), 14 and 15(d) of the 1934 Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part thereof from the date of
filing of such documents.
Item 4. DESCRIPTION OF SECURITIES
No response is required to this item.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
No response is required to this item.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company is incorporated under the laws of the State of Delaware.
Section 145 of the General Corporation Law of the State of Delaware ("Section
145") provides that a Delaware corporation may indemnify any person who is, or
is threatened to be made, a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of such corporation), by
reason of the fact that such person was an officer, director, employee or agent
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys, fees), judgments, fines and
amount paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided such person acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
corporation's best interests and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was illegal. A
Delaware corporation may indemnify any person who is, or is threatened to be
made, a party to any threatened, pending or completed action or suit by or in
the right of the corporation by reason of the fact that such person was a
director, officer, employee or agent of such corporation, or is or was serving
at the request of such corporation as a director, officer, employee or agent of
another corporation or enterprise. The indemnity may include expenses (including
attorneys' fees) actually and reasonably incurred by such person in connection
with the defense or settlement of such action or suit, provided such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation. Where an officer or director is successful on the
merits or otherwise in the defense of any action referred to above, the
corporation must indemnify him against the expenses which such officer or
director has actually and reasonably incurred.
The Company's Amended and Restated Certificate of Incorporation
provides for the indemnification of directors and officers of the Company to the
fullest extent permitted by Section 145.
- 2 -
<PAGE>
In that regard, the Amended and Restated Certificate of Incorporation
provides that the Company shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director or officer of such corporation, or is or was
serving at the request of such corporation as a director, officer or member of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of such
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Indemnification in
connection with an action or suit by or in the right of such corporation to
procure a judgment in its favor is limited to payment of settlement of such an
action or suit except that no such indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his duty to the
indemnifying corporation unless and only to the extent that the Court of
Chancery of Delaware or the court in which such action or suit was brought shall
determine that, despite the adjudication of liability but in consideration of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the court shall deem proper.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED
No response is required to this item.
- 3 -
<PAGE>
Item 8. EXHIBITS
Exhibit Number Description
5 Opinion and Consent of Baker, Donelson, Bearman & Caldwell
10.1 Alpha Cash Option Thrift Plan, as amended
23.1 Consent of Baker, Donelson, Bearman & Caldwell (contained in Exhibit 5)
23.2 Consent of Ernst & Young
24 Power of Attorney (Included on signature page)
Item 9. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933 (the "1933 Act"), each such posteffective amendment shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for the purposes
of determining any liability under the 1933 Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the 1933 Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
- 4 -
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Memphis, State of Tennessee, on the 12th day of
August 1997.
BUCKEYE CELLULOSE CORPORATION
By: /s/ ROBERT E. CANNON
---------------------------------------
Robert E. Cannon, Chairman of the Board
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Robert E. Cannon and David B. Ferraro and
each of them, with full power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary fully to all intents and purposes as
he might or could do in person thereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitutes or
substitute, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
Name Title Date
---- ----- ----
/s/ ROBERT E. CANNON August 12, 1997
- ---------------------- Chairman of the Board of Directors,
Robert E. Cannon Chief Executive Officer and Director
(Principal Executive Officer)
/s/ DAVID B. FERRARO August 12, 1997
- ---------------------- President, Chief Operating Officer
David B. Ferraro and Director (Principal Financial
Officer)
/s/ DAVID H. WHITCOMB August 12, 1997
- ---------------------- Comptroller (Principal Accounting
David H. Whitcomb Officer)
/s/ R. HOWARD CANNON August 12, 1997
- ---------------------- Director
R. Howard Cannon
/s/ RED CAVANEY August 12, 1997
- ---------------------- Director
Red Cavaney
/s/ HENRY F. FRIGON August 12, 1997
- ---------------------- Director
Henry F. Frigon
/s/ SAMUEL M. MENCOFF August 12, 1997
- ---------------------- Director
Samuel M. Mencoff
/s/ HARRY J. PHILLIPS, SR. August 12, 1997
- -------------------------- Director
Harry J. Phillips, Sr.
- 5 -
EXHIBIT 5
OPINION AND CONSENT OF BAKER, DONELSON, BEARMAN & CALDWELL
A copy of the opinion letter and consent of counsel (Exhibit 23.1)
follows. In lieu of an opinion of counsel concerning compliance with the
requirements of ERISA and Section 401 of the Internal Revenue Code, the Company
undertakes that it has submitted or will submit the plan and any amendments
thereto to the Internal Revenue Service in a timely manner and has made or will
make all changes required by the Internal Revenue Service in order to qualify
the plan.
5-1
<PAGE>
July 31, 1997
Buckeye Cellulose Corporation
1001 Tillman Street
Memphis,Tennessee 38108
RE: Alpha Cash Option Thrift Plan
Gentlemen:
We have acted as securities counsel for Buckeye Cellulose Corporation ,
a Tennessee corporation (the "Company"), in connection with the Company's
Registration Statement on Form S-8 (the "Registration Statement"), pursuant to
the Securities Act of 1933, as amended, relating to the Company's Alpha Cash
Option Thrift Plan (the "Plan"). This opinion is being furnished in response to
Item 601 of Regulation S-K and the instructions to Form S-8.
We are familiar with the proceedings to date with respect to the
proposed offering and have examined such records, documents and matters of law
and satisfied ourselves as to such matters of fact as we have considered
relevant for purposes of this opinion.
On the basis of the foregoing, we are of the opinion that:
1. The Company is a corporation duly organized and existing under the
laws of the State of Delaware.
2. The Plan has been duly and validly authorized and adopted, and the
Plan confers legal interests upon employees participating in the Plan to the
extent and upon the terms and conditions described therein.
The foregoing opinion is limited to the federal laws of the United
States and the laws of the State of Delaware, and we are expressing no opinion
as to the effect of the laws of any other jurisdiction.
In rendering the foregoing opinion, we have relied to the extent we
deem such reliance appropriate as to certain matters on statements,
representations and other information obtained from public officials, officers
of the Company and other sources believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to us in the Prospectus that is a
part of the Registration Statement. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
BAKER, DONELSON, BEARMAN &
CALDWELL, a Professional Corporation
By: Linda M. Crouch
5-2
EXHIBIT 10.1
ALPHA CASH OPTION THRIFT PLAN, AS AMENDED
<PAGE>
ALPHA CELLULOSE CORPORATION
CASH OPTION THRIFT PLAN
(As Restated Effective as set forth in Section 1.4)
<PAGE>
ALPHA CELLULOSE CORPORATION
CASH OPTION THRIFT PLAN
Table of Contents
Section 1.
GENERAL........................................................................1
1.1 Name of Plan...........................................................1
1.2 Purpose................................................................1
1.3 Plan History...........................................................1
1.4 Effective Date.........................................................1
1.5 Company................................................................1
1.6 Participating Company..................................................1
1.7 Predecessor Company....................................................1
1.8 Trustee, Trust Agreement...............................................1
1.9 Construction and Applicable Law........................................2
1.10 Account Balances Accrued Before January 1, 1989........................2
Section 2.
DEFINITIONS....................................................................2
2.1 Active Participant.....................................................2
2.2 Affiliate..............................................................2
2.3 Beneficiary. ..........................................................2
2.5 Break in Service.......................................................2
2.5 Committee..............................................................2
2.6 Company Matching Account...............................................2
2.7 Defined Benefit Plan Account...........................................3
2.8 Disability Retirement..................................................3
2.9 Distribution Year......................................................3
2.10 Early Retirement.......................................................3
2.11 Eligible Compensation..................................................3
2.12 Eligible Employee. ....................................................3
2.13 Employee Deferral Account..............................................4
2.14 Entry Date.............................................................4
2.15 Highly Compensated Participant.........................................4
2.16 Hours of Service.......................................................5
2.17 Key Employee. ........................................................6
2.18 Leave of Absence. ....................................................7
2.19 Military Leave of Absence..............................................7
2.20 Net Income.............................................................8
2.21 Normal Retirement......................................................8
2.22 Normal Retirement Age..................................................8
2.23 Participant............................................................8
2.24 Plan Year..............................................................8
2.25 Required Beginning Date................................................8
2.26 Rollover Contribution Account..........................................8
2.27 Termination of Employment..............................................8
2.28 Top-Heavy: Super Top Heavy.............................................8
2.29 Trustee, Trust Agreement, Trust Fund...................................8
2.30 Valuation Date.........................................................8
<PAGE>
2.31 Vested Balance.........................................................8
2.32 Vesting Service........................................................9
Section 3.
TOP-HEAVY PROVISIONS...........................................................9
3.1 Determination of Top-Heaviness.........................................9
3.2 Determination of Super Top-Heaviness...................................9
3.3 Determination Date.....................................................9
3.4 Valuation Date.........................................................9
3.5 Cumulative Accounts and Cumulative Accrued Benefits....................9
3.6 Aggregation Group.....................................................10
Section 4.
PLAN PARTICIPATION............................................................11
4.1 Commencement of Active Participation..................................11
4.2 Transfers to Eligible Employee Status.................................11
4.3 Duration of Active Participation......................................11
4.4 Rehire After Termination of Employment................................11
4.5 Furnishing Data.......................................................11
4.6 No Guaranty of Employment.............................................11
Section 5.
EMPLOYEE CONTRIBUTIONS........................................................11
5.1 Employee Contributions................................................11
5.2 Method of Making Employee Contributions...............................12
5.3 Transmittal of Contributions..........................................12
5.4 Employee Deferral Accounts............................................12
5.5 Investment of Contributions...........................................12
5.6 Limit on Employee Deferral Contributions..............................12
5.7 Return of Excess Deferrals............................................12
5.8 Actual Deferral Percentage............................................13
5.9 Company Fail-safe Contributions.......................................13
5.10 Rollover Contributions................................................13
5.11 Other Employee Contributions..........................................14
Section 6.
COMPANY MATCHING CONTRIBUTIONS AND FORFEITURES................................14
6.1 Matching Contributions................................................14
6.2 Limitation on Matching Employee Contributions.........................14
6.3 Company Fail-safe Contributions.......................................15
6.4 Timing of Contributions...............................................15
6.5 Makeup Contributions..................................................15
6.6 Allocation Formula....................................................16
6.7 Minimum Allocation for Top-Heavy Years................................16
6.8 Allocation of Forfeitures.............................................16
6.9 Contributions for Omitted Participants................................16
6.10 Company Matching Accounts.............................................16
6.11 Restoration of Forfeitures............................................16
<PAGE>
Section 7.
VALUATION OF ACCOUNTS.........................................................17
7.1 Annual Account Adjustments.............................................17
7.2 Interim Account Adjustments............................................17
7.3 Special Account Adjustments............................................17
7.4 Separate Accounting For Separate Funds.................................18
7.5 Net Gain or Loss in Liquidation Value..................................18
7.6 Certain Segregated Accounts............................................18
7.7 Responsibility to Maintain Account Balances............................18
Section 8.
PLAN BENEFITS AND FORFEITURES.................................................18
8.1 Retirement. Disability and Death Benefits..............................18
8.2 Vested Benefits........................................................18
8.3 Forfeitures............................................................19
Section 9.
DISTRIBUTION OF BENEFITS......................................................20
9.1 Commencement of Benefits to Participants...............................20
9.2 Methods of Distribution................................................21
9.3 Minimum Distributions..................................................21
9.4 Death Benefits.........................................................22
9.6 Acceleration of Payments...............................................24
9.7 Nonalienation of Benefits..............................................24
9.8 Payment of Taxes.......................................................24
9.9 Incompetent Payee......................................................24
9.10 Effect of Reemployment.................................................24
9.11 Notice, Place and Manner of Payment....................................24
9.12 Source of Benefits.....................................................24
Section 10.
PLAN ADMINISTRATION...........................................................25
10.1 The Administrative Committee...........................................25
10.2 Agent for Legal Process................................................26
10.3 Beneficiary Designations...............................................26
10.4 Claims Procedures......................................................27
10.5 Records................................................................27
10.6 Correction of Errors...................................................27
10.7 Evidence...............................................................28
10.8 Bonding................................................................28
10.9 Waiver of Notice.......................................................28
10.10 Funding Policy and Method..............................................28
Section 11.
TRUST FUND....................................................................28
11.1 Composition............................................................28
11.2 Trustee; Trust Agreement...............................................28
11.3 Compensation and Expenses of Trustee...................................28
<PAGE>
11.4 No Diversion...........................................................28
Section 12.
MAXIMUM ADDITIONS TO PARTICIPANT ACCOUNTS.....................................29
12.1 Maximum Limitations on Annual Additions................................29
12.2 Participation in Both a Defined Contribution and Defined Benefit Plan..30
12.3 Definitions............................................................31
12.4 Aggregation Rules......................................................32
12.5 Rules of Construction..................................................32
Section 13.
EMPLOYEE INVESTMENT ELECTIONS.................................................32
13.1 Investment Elections...................................................32
13.2 Changing Investment Elections..........................................32
Section 14.
AMENDMENT. TERMINATION, MERGER................................................32
14.1 Amendment..............................................................32
14.2 Discontinuance of Joint Participation in Plan by a Participating
Company................................................................33
14.3 Reorganizations of Participating Companies.............................33
14.4 Termination............................................................33
14.5 Discontinuance of Contributions........................................33
14.6 Rights Upon Termination, Partial Termination and Discontinuance of
Contributions..........................................................33
14.7 Deferral of Distributions..............................................34
14.8 Merger.................................................................34
Section 15.
DIRECT ROLLOVERS..............................................................34
15.1 Electing a Direct Rollover.............................................34
15.2 Definitions............................................................34
Section 16.
MISCELLANEOUS.................................................................35
16.1 Responsibility of Insurance Companies..................................35
16.2 Limitation of Fiduciary Responsibility and Liability...................35
16.3 Numbers and Genders....................................................35
16.4 Headings...............................................................35
16.5 Severability...........................................................35
Section 17.
LOANS TO PLAN PARTICIPANTS....................................................35
17.1 Loan Procedures........................................................35
17.2 Maximum Loan Amount....................................................35
17.3 Loan Terms.............................................................36
17.4 Loan Security..........................................................36
17.5 Repayment; Events of Default...........................................36
<PAGE>
AMENDMENTS
A-1 Section 2.11 Eligible Compensation
A-2 Section 6.12 Special Company Contribution
<PAGE>
Section 1.
GENERAL
1.1 Name of Plan. The name of the plan hereunder shall be the Alpha
Cellulose Corporation Cash Option Thrift Plan. It is sometimes referred to
herein as the "Plan."
1.2 Purpose. The Plan has been established to provide qualified
employees with a means of sharing in the profits of their respective
Participating Company and to provide them with a source of retirement income in
addition to other sources of retirement income available to them.
1.3 Plan History. The Plan was initially adopted effective January 1,
1983. Prior to January 1, 1983, the Par ticipating Companies maintained the
Alpha Cellulose Corporation and Associated Companies Retirement Plan, which was
terminated effective January 1, 1983. Upon its termination, for each electing
participant the lump sum cash amount actuarially equivalent to the benefit
accrued under the Retirement Plan for the participant was transferred to this
Plan in the name of that participant, such lump sum amounts being the initial
corpus of this Plan. Effective January 1, 1984, the Plan was amended to comply
with the Tax Equity and Fiscal Responsibility Act of 1982, the Tax Reform Act of
1984 and the Retirement Equity Act of 1984. Effective on the dates set forth in
Section 1.4, the Plan was amended and restated to comply with the Tax Reform Act
of 1986, the Omnibus Budget Reconciliation Acts of 1986 and 1987, the Technical
and Miscellaneous Revenue Act of 1988 and the Omnibus Budget Reconciliation Act
of 1989.
1.4 Effective Date. The initial effective date of the Plan is January
1, 1983. Except as set forth herein, the effective date of the restated Plan is
January 1, 1989. Section 12 is effective January 1, 1987. Sections 9.3 and 9.4
are effective January 1, 1985.
1.5 Company. The "Company" is Alpha Cellulose Corporation, a North
Carolina corporation.
1.6 Participating Company. The Company is a "Participating Company" in
the Plan. With the consent of the Company, by action of its board of directors,
any other corporation may also become a Participating Company in the Plan
effective as of a date specified by it in its adoption of the Plan. Also with
such consent, any such corporation may modify the provisions of the Plan as they
shall be applicable to its employees. The term "Participating Company" shall
also mean any corporation that succeeds to the business of a Participating
Company through merger, consolidation, acquisition of all or substantially all
of its assets, or any other means, and which elects before or within a
reasonable time after such succession, by action of its board of directors, to
continue the Plan; provided, however, that in the case of such succesession with
respect to any Participating Company other than the Company, the successor
corporation shall be a Participating Company only if consent thereto is granted
by the company, by action of its board of directors.
1.7 Predecessor Company. Any corporation, partnership, firm or
individual, a substantial part of the assets and employees of which are
succeeded to, is a "Predecessor Company" if named in this Section. However, any
such corporation, partnership, firm or individual may be named as a Predecessor
Company only if all of its employees who became employees of the successor and
the qualified employees hereunder are treated uniformly and the use of service
with it does not produce discrimination in favor of officers, shareholders or
highly compensated employees. To be considered a Predecessor Company, the assets
and employees of a corporation, partnership, firm or individual must be
succeeded by a Participating Company, by an Affiliate, or by another Predecessor
Company. Each of the following is a Predecessor Company for the period prior to
the date indicated and subject to such other conditions and limitations, if any,
specified with respect thereto:
None.
Any other employer shall be a Predecessor Company if so required by regulations
prescribed by the Secretary of the Treasury or his delegate pursuant to Section
414(a) of the Internal Revenue Code.
1.8 Trustee, Trust Agreement. The assets of the Plan shall be held in
trust pursuant to the Trust Agreement entered into between the Trustee and the
Company.
- 1 -
<PAGE>
1.9 Construction and Applicable Law. The Plan is intended to meet the
requirements for tax qualification under the Internal Revenue Code. The Plan is
also intended to be in full compliance with applicable requirements of the
Employee Retirement Income Security Act. The Plan shall be administered and
construed consistent with said intent. It shall also be construed and
administered according to the laws of the State of North Carolina to the extent
that such laws are not preempted by the laws of the United States. All
references herein to the "Internal Revenue Code" or "Code" are to the Internal
Revenue Code of 1986; as from time to time amended, together with any
regulations, interpretations or decisions thereunder. All references herein to
the "Employee Retirement Income Security Act" are to the Employee Retirement
Income Security Act of 1974, as from time to time amended, together with any
regulations, interpretations or decisions thereunder.
1.10 Account Balances Accrued Before January 1, 1989. Notwithstanding
any provisions of the Plan to the contrary, the account balances, if any, of a
Participant that accrued prior to January 1, 1989 shall be determined as of
December 31, 1988 in accordance with the provisions of the Plan in effect on
that date. No provisions of the restated Plan shall be construed to cause an
adjustment to be made in the amount of any such account balance so determined as
of December 31, 1988.
Section 2.
DEFINITIONS
2.1 Active Participant. An "Active Participant" means an employee
described as such in Section 4.1.
2.2 Affiliate. An "Affiliate" means any trade or business entity
(whether corporation, partnership, sole proprietorship or otherwise) affiliated
with a Participating Company under any one or more of the following
circumstances:
(a) Both entities are corporations which are members of a controlled
group of corporations within the meaning of Section 1563(a) of the Internal
Revenue Code determined without regard to Section 1563(a)(4) and (e)(3)(C) of
the Internal Revenue Code.
(b) Both entities are under common control ("Common Control") for
purposes of the Employee Retirement Income Security Act as determined under
regulations prescribed by the Secretary of the Treasury or his delegate pursuant
to Sections 414(b) and 414(c) of the Internal Revenue Code.
(c) Both entities are members of an affiliated service group within
the meaning of Section 414(m) of the Internal Revenue Code or otherwise
aggregated under Section 414(o) of the Internal Revenue Code.
Notwithstanding the foregoing paragraphs, in determining common control for
purposes of Section 12, the phrase "more than 50 percent" shall be substituted
for the phrase "at least 80 percent" each place it appears in Section 1563(a)(1)
of the Internal Revenue Code, and a comparable substitution shall be made in
regulations referred to in paragraph (b) above.
2.3 Beneficiary. A Participant's "Beneficiary" means such person or
entities described in Section 10.3.
2.4 Break in Service. A "Break in Service" means, with respect to any
employee, any Plan Year in which the employee has not more than five hundred
(500) Hours of Service. Breaks in Service shall only be recognized on the last
day of a Plan Year. No person shall incur a Break in Service for any Plan Year
upon the last day of which he is an employee of a Participating Company or an
Affiliate.
2.5 Committee. The "Committee" shall mean the Administrative Committee
described in Section 10.1.
2.6 Company Matching Account. A Participant's "Company Matching
Account" means such account as defined in Section 6.10 of the Plan.
- 2 -
<PAGE>
2.7 Defined Benefit Plan Account. A Participant's "Defined Benefit
Plan Account" shall mean the Participant's account maintained under this Plan,
which is attributable to the Participant's prior participation in the Alpha
Cellulose Corporation and Associated Companies Retirement Plan.
2.8 Disability Retirement. Disability Retirement means a Termination
of Employment of a Participant by reason of permanent disability occurring
before he is eligible for Normal Retirement. For all purposes of this Plan,
"permanent disability" means a physical condition resulting from bodily injury,
disease or disorder (whether or not occupational) which renders him incapable of
engaging in or performing the principal duties of his customary employment.
Whenever there is a dispute as to whether an employee has terminated employment
by reason of permanent disability, the Committee shall select a physician to
examine the employee for the purpose of making this determination. The
physician's determination shall be conclusive and binding upon the Committee and
the employee. Determinations as to whether retirement is by reason of permanent
disability shall be made under rules and policies uniformly applied to all
employees similarly situated.
2.9 Distribution Year. "Distribution Year" means each calendar year in
which a Participant is required to receive a minimum distribution from the Plan.
A Participant's first Distribution Year is the calendar year in which the
Participant attains age seventy and one-half (70-1/2).
2.10 Early Retirement. "Early Retirement" means any Termination of
Employment of a Participant (except termination by death) occurring (i) after
the Participant has attained age fifty-five (55) and completed fifteen (15)
years of Vesting Service and (ii) before he is eligible for Disability
Retirement or Normal Retirement.
2.11 Eligible Compensation. The "Eligible Compensation" of an employee
for any period means the aggregate amount determined by each Participating
Company to be the total amount of compensation paid to or made available to the
employee by such Participating Company during such period which is includable as
wages under Section 3401 of the Code and other payments for which the
Participating Company is required to furnish a written statement under Sections
6041 and 6051 of the Code, subject to the following paragraphs:
(a) Eligible Compensation shall include bonuses, commissions and
overtime pay.
(b) Eligible Compensation shall not include allowances or
reimbursements for expenses.
(c) Eligible Compensation shall not include payments or contributions
to or for the benefit of an employee under this or any other tax-qualified or
other deferred compensation, pension, insurance or other employee benefit plan
or the value of any fringe benefit (whether cash or noncash), provided that
Eligible Compensation shall include contributions made by Active Participants
under the Plan and amounts otherwise excluded under Sections 125, 402(e)(3) and
402(h)(1)(B) of the Code.
(d) Eligible Compensation shall not include compensation earned by an
employee while he was not an Active Participant.
(e) For Plan Years commencing prior to January 1, 1994, Eligible
Compensation for any employee shall not be taken into account under the Plan in
excess of $200,000, such amount to be adjusted annually as determined by the
Secretary of the Treasury. For Plan Years commencing on or after January l,
1994, Eligible Compensation shall not be taken into account under the Plan in
excess of $150,000, adjusted as provided in Section 401(a)(17) and regulations
issued thereunder. In applying the foregoing, any individuals who are the spouse
or lineal descendants (under age 19) of any five percent owner of a
Participating Company (as defined in Section 416(i)(1) of the Internal Revenue
Code) or of a highly compensated Participant (as defined in Section 414(q) of
the Internal Revenue Code) who is one of the ten (10) Highly Compensated
Participants paid the greatest amount of compensation during the relevant Plan
Year shall not be considered a separate Participant, and any compensation paid
to such individual shall be treated as if paid to such five percent owner or
highly compensated Participant.
2.12 Eligible Employee. An "Eligible Employee" is a common-law
employee of a Participating Company subject to the following paragraphs. "Leased
employees" within the meaning of Section 414(n) of the Code shall not be
Eligible Employees, but shall be treated as such for purposes of testing
compliance with Section 410(b) of the Code.
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(a) An employee shall not be an Eligible Employee if such employee's
wages are subject to a collective bargaining agreement between a Participating
Company and a collective bargaining unit or other labor organization or
bargaining coalition representing a group of employees of a Participating
Company, which, as a result of good faith bargaining between the Participating
Company and such unit regarding retirement benefits, does not provide for such
employee's inclusion in the Plan.
(b) No partner, sole proprietor or other person whose employment with
a Participating Company is considered to be as a self-employed individual for
purposes of determining the tax on self-employment income under the Internal
Revenue Code shall be qualified to participate in the Plan.
(c) An employee shall be deemed to be an Eligible Employee during a
period of absence from service which does not result from a Termination of
Employment, provided he is an Eligible Employee at the commencement of such
period of absence.
2.13 Employee Deferral Account. A Participant's "Employee Deferral
Account" means such account as defined in Section 4.5 of the Plan.
2.14 Entry Date. "Entry Date" means the January 1 and the July 1 of
each Plan Year.
2.15 Highly Compensated Participant. Means any employee of the Company
who during the current or preceding Plan Year:
(a) was at any time a more than five percent owner of the Company; or
(b) received yearly compensation from the Company in excess of $75,000
(as adjusted for the calendar year in which the Plan Year begins in accordance
with applicable government rules); or
(c) received yearly compensation from the Company in excess of $50,000
(as adjusted for the calendar year in which the Plan Year begins in accordance
with applicable government rules) and was one of the highest paid 20 percent of
employees of the Company for such year; or
(d) received yearly compensation in excess of 50% of the amount in
effect under Section 415(b)(1)(A) of the Code (as adjusted for the calendar year
in which the Plan Year begins in accordance with applicable government rules)
from the Company and was at any time an officer of the Company during such year
(not more than the highest paid 50 officers shall be considered).
If a Participant described in subparagraph (b), (c) or (d) during the
current Plan Year was not described in subparagraph (b), (c) or (d) during the
preceding Plan Year, such Participant shall not be a Highly Compensated
Participant unless the Participant is one of the highest paid 100 employees of
the Company during the current Plan Year. In addition, for any Plan Year
following reemployment after a termination of employment, an employee shall be
treated as a Highly Compensated Participant if, either at the time he originally
terminated employment or at any time after attaining age 55, he was a Highly
Compensated Participant.
For purposes of this Section, "compensation" shall have the same
meaning as under Section 2.11 but shall include all reimbursements or other
expense allowances, cash and noncash fringe benefits, moving expenses, deferred
compensation and other welfare benefits otherwise excluded under Section 2.11.
The compensation of a spouse and lineal descendants or ascendants ("family
member") of an employee who is a more than five percent owner of the Company or
who is among the ten most highly compensated employees shall be aggregated with
the Compensation of such employee (and such family members shall not be
considered separate individuals) for purposes of determining which employees are
Highly Compensated Participants.
The determination of who is a Highly Compensated Participant shall be
made in accordance with Code Section 414(q) and regulations thereunder (which
are hereby incorporated herein and which shall supersede any inconsistent
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provisions contained herein), including the use of any transition rules and/or
available alternatives (including the calendar year election), as determined by
the Company.
2.16 Hours of Service. "Hours of Service" shall be determined in
accordance with the following paragraphs and shall be aggregated for payments
and service with respect to Participating Companies (both before and after a
Participating Company becomes such), Predecessor Companies and Affiliates.
(a) An Hour of Service means each hour for which an employee is
directly paid or indirectly paid (for example, from a trust fund or insurer) by
an employer, or entitled to payment by an employer, including any such hours
accrued after an employee's Termination of Employment. Notwithstanding the
preceding sentence:
(1) No more than 501 Hours of Service shall be credited for any
single continuous period during which an employee performs no duties;
(2) No Hours of Service shall be credited for payments made or
due to an employee under a plan maintained solely for the purpose of
complying with applicable workmen's compensation, or unemployment
compensation or disability insurance laws; and
(3) Hours of Service shall not be credited for payments which
solely reimburse an employee for medical or medically related expenses
incurred by the employee.
Hours of Service credited for the performance of duties shall be
credited to the computation period in which such duties are performed.
Hours of Service not credited for the performance of duties shall be
credited to the computation period or periods in which the period
during which no duties are performed occurs, beginning with the first
unit of time (such as a day or week) to which the payment relates.
However, if the period during which no duties are performed extends
beyond one computation period and the payment is not calculated on the
basis of time, such Hours of Service shall be allocated between the
first two computation periods on a reasonable basis consistently
applied.
(b) An Hour of Service shall also mean each hour for which back pay,
irrespective of mitigation of damages, is either awarded or agreed to by an
employer, provided that Hours of Service credited under the preceding paragraph
shall not be credited under this paragraph. Hours credited under this paragraph
shall be credited for the period to which the award or agreement pertains.
(c) An Hour of Service shall also mean each hour during which an
employee is on a Leave of Absence. Hours credited under this paragraph shall be
credited for the period during which such employee was on a Leave of Absence.
(d) Hours of Service credited for any period during which an employee
performs duties shall be determined from the employer's records of hours worked.
Alternatively, Hours of Service may be determined on the basis of equivalency
periods of employment in accordance with any of the following subparagraphs:
(1) One day shall be the equivalent of ten (10) Hours of Service;
(2) One week shall be the equivalent of forty-five (45) Hours of
Service;
(3) One semimonthly payroll period shall be the equivalent of
ninety-five (95) Hours of Service;
(4) One month shall be the equivalent of 190 Hours of Service.
For purposes of applying the foregoing subparagraphs, if one Hour of
Service must be credited under the preceding paragraphs (a) through
(c) during an applicable equivalency period, Hours of Service shall be
credited for the entire equivalency period. If an equivalency period
spans two (2) computation periods, the equivalent Hours of Service
shall be allocated pro rata between such computation periods.
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(e) Hours of Service credited to an employee for any period during
which he does not perform duties shall be determined as follows:
(1) For payments which are calculated on the basis of units of
time or for periods during which an employee is on a Leave of Absence,
Hours of Service shall be credited based upon the equivalency periods
set forth in the preceding paragraph.
(2) For payments which are not calculated on the basis of units
of time, Hours of Service shall be calculated by dividing the amount
of the payment by the employee's most recent hourly rate of
compensation before the period during which no duties were performed.
For an employee paid on the basis of a fixed rate for a specified
period of time other than an hour, his hourly rate shall be deemed his
most recent rate of compensation for a specified period of time
divided by the number of hours regularly scheduled for the performance
of duties during that period, or, for an employee without a regular
working schedule, a number of hours based on a forty (40) hour
workweek or eight (8) hour workday.
However, the number of Hours of Service credited under this paragraph
for any period shall not exceed the number of hours regularly
scheduled for the performance of duties by the employee during that
period.
(f) Notwithstanding paragraphs (d) and (e) above, in the case of an
employee whose compensation is not determined on the basis of a fixed rate for
specified periods of time, Hours of Service for any computation period shall be
determined as four-thirds (4/3) of the quotient of the employee's earnings for
such period divided by the lowest minimum wage established from time to time
under Section 6(a)(1) of the Fair Labor Standards Act of 1938, as amended. In
addition to the Hours of Service so arrived at, appropriate Hours of Service
shall also be credited as called for by paragraph (c) above.
(g) Hours of Service will be credited in accordance with Department of
Labor Regulations Section 2530.200(b).
The Company shall determine which method or methods shall be used to
determine Hours of Service. Different methods may be used to determine Hours of
Service for separate classifications of employees provided such classifications
are reasonable and are consistently applied. Hours of Service may be rounded up
at the end of any computation period or more frequently. A Participating Company
may use any records to determine Hours of Service which it considers an accurate
reflection of the facts.
2.17 Key Employee. A "Key Employee" means any employee or former
employee who, at any time during the Plan Year or the four preceding Plan Years,
is:
(a) An officer of his employer (if the employer is incorporated) who
has annual compensation greater than fifty percent (50%) of the amount described
in Section 415(b)(1)(A) of the Internal Revenue Code. However, the maximum
number of officers to be treated as Key Employees where a Participating Company
is under Common Control with one or more Affiliates shall be limited as follows:
Maximum Officers Treated as
Number of Employees Key Employees
------------------- ---------------------------
0-29 3
30-499 10% of employees
500 or greater 50
For purposes of this table, the Key Employees shall be those
officers who had the highest annual compensation for such five
(5) year period.
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(b) One of the ten (10) employees having annual compensation in excess
of the amount described in Section 415(c)(1)(A) of the Code owning the largest
interests in the employer. For this purpose, if two (2) employees have the same
interest in the employer, the employee having greater annual compensation from
the employer shall be treated as having a larger interest.
(c) A five percent (5%) owner of the employer. As to any corporation,
a five percent (5%) owner means any person who owns more than five percent (5%)
of the value of the outstanding stock of the corporation or more than five
percent (5%) of the total combined voting power of all stock of the corporation.
As to any employer which is not a corporation, a five percent (5%) owner means
any person who owns more than five percent (5%) of the capital or profits of the
employer.
(d) A one percent (1%) owner of the employer having annual
compensation from the employer of more than S150,000. For this purpose, a one
percent (1%) owner means any person described in the preceding paragraph
substituting "one percent (1%)" for "five percent (5%)" at each place where it
appears. Annual compensation for purposes of this paragraph shall include
compensation from all Participating Companies who are under Common Control.
(e) For purposes of this Section--
(1) All employers who are under Common Control with a
Participating Company shall be deemed a single employer for purposes
of paragraphs (a) and (b) above.
(2) Ownership for purposes of paragraphs (b) and (c) shall be
determined both directly and under the constructive ownership rules of
section 318 of the Internal Revenue Code. However, subparagraph (C) of
section 318(a)(2) of said Code shall be applied by substituting "five
percent (5%)" for "fifty percent (50%)"; similar principles set forth
in regulations prescribed by the Secretary of the Treasury shall apply
as to employers which are not corporations.
(3) A self-employed individual shall be treated as an employee
and such individual's earned income shall be treated as compensation.
(4) The terms "employee" and "Key Employee" shall mean and
include the beneficiaries of such persons.
(5) The term "compensation" means compensation as determined for
purposes of Section 12.1 but, as to any self-employed person, shall
exclude amounts contributed to any plan of deferred compensation.
2.18 Leave of Absence. A "Leave of Absence" means an absence from the
performance of duties for a Participating Company or an Affiliate which is:
(a) Incurred by an employee who is on any absence from the performance
of duties recognized by the employer, within its absolute discretion, as not
resulting from a Termination of Employment; or
(b) Incurred by an employee who leaves his employment to enter the
Armed Forces of the United States and who returns to service with a
Participating Company within the period during which he has reemployment rights
under federal law.
If a Leave of Absence becomes a Termination of Employment because the
employee fails to promptly return to employment with the employer, the employee
shall not be deemed to have been on a Leave of Absence for purposes of
determining his Vesting Service. The preceding sentence shall not apply,
however, to a Leave of Absence which ends with the employee's death, or on or
after the first day upon which he would otherwise be eligible for Disability
Retirement, Early Retirement or Normal Retirement.
2.19 Military Leave of Absence. A "Military Leave of Absence" means an
absence from the performance of duties for an employer which is incurred by an
employee who leaves his employment to enter the Armed Forces of the United
States and who returns to service with a Participating Company, Predecessor
Company or Affiliate within the period
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during which he has reemployment rights under federal law. If an employee does
not so return to service within the time permitted by the preceding sentence, he
shall not be deemed to have been on a Military Leave of Absence.
2.20 Net Income. The "Net Income" of a Participating Company means the
Net Income of that Company determined from the Company's books in accordance
with generally accepted accounting principles, but before any deduction for
state and federal net income taxes, surtaxes and excess profit taxes and before
any deduction for contributions made to this Plan.
2.21 Normal Retirement. "Normal Retirement" means a Termination of
Employment of a Participant (except termination by death) occurring on or after
the date upon which the Participant attains Normal Retirement Age.
2.22 Normal Retirement Age. "Normal Retirement Age" means age
sixty-five (65).
2.23 Participant. A "Participant" is a person who is an Active
Participant or for whom an account balance is maintained under the Plan.
2.24 Plan Year. The "Plan Year" is the twelve (12) consecutive month
period commencing each January 1 and is the year on which records of the Plan
are kept.
2.25 Required Beginning Date. A Participant's 'Required Beginning
Date" is the April 1 following the calendar year in which the Participant
attained age seventy and one-half (70-1/2).
2.26 Rollover Contribution Account. A Participant's "Rollover
Contribution Account" means such account as defined in Section 5.10 of the Plan.
2.27 Termination of Employment. The "Termination of Employment" of an
employee for purposes of the Plan shall be deemed to occur upon his resignation,
discharge, retirement, death, failure to return to work when duly called from a
Leave of Absence or Military Leave of Absence, or upon the happening of any
other event or circumstance which, under the policy of the employer as in effect
from time to time, results in the termination of the employer-employee
relationship. A transfer between Participating Companies shall not constitute a
Termination of Employment.
2.28 Top-Heavy: Super Top Heavy. The definitions of "Top-Heavy" and
"Super Top-Heavy" Plans are contained in Section
2.29 Trustee, Trust Agreement, Trust Fund. The terms "Trustee," "Trust
Agreement" and "Trust Fund" mean such terms as defined in Section 11 of the
Plan.
2.30 Valuation Date. The "Valuation Date" means the date as of which
the Trust Fund and accounts are valued as provided by the Plan. Each of the
following is a Valuation Date:
(a) The last day of each Plan Year.
(b) The last day of each quarter of each Plan Year.
(c) The last day of the month in which a Participating Company
discontinues its joint participation in the Plan.
(d) The last day of the month in which the Plan is terminated as to
one or more Participating Companies.
(e) Any date declared by the board of directors of the Company to be a
Valuation Date as if such date were the last day of the Plan Year.
2.31 Vested Balance. The "Vested Balance" of a Participant's Company
Matching Account means that percentage of such account which is nonforfeitable
pursuant to the provisions of Section 8.2. The "Nonvested Balance" of such
account shall mean that percentage which is forfeitable pursuant to the
provisions of Section 8.3.
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2.32 Vesting Service. An employee's "Vesting Service" shall be
determined in accordance with the following paragraphs:
(a) Vesting Service prior to January 1, 1976 means an employee's
elapsed time during his most recent period of continuous service as an employee
of a Participating Company, Predecessor Company or Affiliate prior to and
continuous with January 1, 1976, rounded up to the nearest whole year.
(b) Vesting Service shall accrue at the rate of one (l) year of
Vesting Service for each Plan Year in which an employee completes 1000 or more
Hours of Service. Partial years of Vesting Service shall not be recognized.
Section 3.
TOP-HEAVY PROVISIONS
3.1 Determination of Top-Heaviness. The Plan shall be considered a
Top-Heavy Plan for any Plan Year for which it is described by any of the
following paragraphs:
(a) The Plan shall be a Top-Heavy Plan for any Plan Year during which,
as of the Determination Date, the Cumulative Accounts of Key Employees under the
Plan exceed sixty percent (60%) of the Cumulative Accounts of all employees
under the Plan. However, notwithstanding the foregoing, the Plan shall not be a
Top-Heavy Plan if it is part of an Aggregation Group which is not a Top-Heavy
Group.
(b) The Plan shall be a Top-Heavy Plan for any Plan Year during which,
as of the Determination Date, it is a member of a Top-Heavy Group. For this
purpose, the Plan shall be considered a member of a Top-Heavy Group if it is a
member of an Aggregation Group for which the sum of the Cumulative Accrued
Benefits and the Cumulative Accounts of employees who are Key Employees exceeds
sixty percent (60%) of the same sum determined for all employees.
(c) The Plan is a Super Top-Heavy Plan.
If the Plan becomes a Top-Heavy Plan for any Plan Year, unless and until the
board of directors of the Company determines otherwise, the Plan shall be deemed
a Top-Heavy Plan for all future Plan Years. Any such determination by the board
of directors that the Plan is not Top-Heavy shall be applicable for the Plan
Year during which made and for all future Plan Years until the Plan again
becomes a Top-Heavy Plan.
3.2 Determination of Super Top-Heaviness. The Plan shall be a Super
Top-Heavy Plan and an Aggregation Group of which the Plan is a member shall be a
Super Top-Heavy Group if it would be a Top-Heavy Plan or Top-Heavy Group under
the preceding Section if "ninety percent (90%)" were substituted for "sixty
percent (60%)" in that Section.
3.3 Determination Date. The "Determination Date" with respect to any
Plan Year means:
(a) In the case of any Plan Year except the first Plan Year of any
plan, the last day of the preceding Plan Year.
(b) In the case of the first Plan Year of any plan, the last day of
such Plan Year.
3.4 Valuation Date. For purposes of this Section, "Valuation Date"
means the date used to compute the required minimum employer contribution to the
plan for a Plan Year, regardless of whether such a computation is actually made
in such Plan Year.
3.5 Cumulative Accounts and Cumulative Accrued Benefits. The
Cumulative Accounts and Cumulative Accrued Benefits for any employee shall be
determined as follows:
(a) "Cumulative Accounts" shall mean the sum of the employee accounts
under a defined contribution plan (for an unaggregated plan) or under all
defined contribution plans included in an Aggregation Group (for aggregated
plans) determined as of the most recent Valuation Date within the 12-month
period ending on the Determination Date plus any
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<PAGE>
contributions due after such Valuation Date but on or before the Determination
Date. For the first plan year of any plan, an employee's cumulative account
shall include contributions allocated as of any date within the plan year.
(b) "Cumulative Accrued Benefits" means the sum of the present value
of an employee's accrued benefits under a defined benefit plan (for an
unaggregated plan) or under all defined benefit plans included in an Aggregation
Group (for aggregated plans), determined as of the most recent Valuation Date
within any 12-month period ending on the Determination Date as if the employee
voluntarily terminated service as of such Valuation Date. The present value of
the accrued benefits will be determined in accordance with section 416 of the
Internal Revenue Code and regulations issued thereunder, using the actuarial
assumptions set forth in such defined benefit plan.
(c) Accounts and benefits shall include all amounts attributable to
both employer and employee contributions excluding amounts attributable to
voluntary deductible employee contributions.
(d) The Cumulative Accounts and Cumulative Accrued Benefits for any
employee who has received compensation (other than benefits from the Plan)
during the five (5) year period ending on the Determination Date from any
employer maintaining the Plan shall be increased by the aggregate distributions
made with respect to the Participant during such five (5) year period, including
distributions made from any terminated plan which, if it had not been
terminated, would have been required to be included in an Aggregation Group.
(e) Rollovers and direct plan-to-plan transfers shall be treated as
follows:
(1) If the transfer is initiated by the employee and made from a
plan maintained by the employer to a plan maintained by an employer
who is not an Affiliate of the Company, the transferring plan shall
count the amount transferred under the rules set forth in the
preceding paragraph (d).
(2) If the transfer is initiated by the employee and made from a
plan maintained by an employer who is not an Affiliate of the Company
to a plan maintained by the employer, the receiving plan shall count
the amount transferred if accepted before January 1, 1984, but
otherwise not.
(3) If the transfer is not initiated by the employee or is made
between plans maintained by the employer, the transferring plan shall
not count the amount transferred and the receiving plan shall count
the amount transferred.
(f) If an employee is not a Key Employee as to any plan for a Plan
Year but was a Key Employee as to that plan for a prior Plan Year, the
Cumulative Accounts and Cumulative Accrued Benefits of the employee shall not be
taken into account.
(g) As to Key Employees, the present value of accrued benefits shall
be counted only once in determining Top- Heaviness in any Plan Year.
(h) If the Beneficiary of a Key Employee is also a Key Employee by
reason of being an employee and an officer or owner of the employer, the present
value of the Beneficiary's inherited Plan benefit and the present value of the
Beneficiary's accrued benefit as an employee shall be aggregated in determining
the employee's Cumulative Accounts and Cumulative Accrued Benefits.
3.6 Aggregation Group. An "Aggregation Group" means all plans
maintained by an employer in which a Key Employee is a participant in the Plan
Year containing the Determination Date or any of the four (4) preceding Plan
Years. An Aggregation Group shall also include each other plan of the employer
which enables any plan in which a Key Employee participates to meet the
requirements of Section 401(a)(4) or Section 410 of the Internal Revenue Code.
Collectively bargained plans will be included if those plans include any Key
Employee. In addition, the Company may elect to treat any other plan maintained
by an employer as being a member of an Aggregation Group if such group would
continue to satisfy the requirements of Section 401(a)(4) and section 410 of the
Internal Revenue Code with such plan being taken into account.
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3.7 Related Employers. All employers under Common Control shall be
deemed a single employer for purposes of this Section 3.
3.8 Self-Employed Persons. For purposes of this Section 3, a
self-employed individual shall be treated as an employee and such individual's
earned income shall be treated as compensation.
3.9 Beneficiaries. For purposes of this Section 3, the terms
"employee" and "Key Employee" shall mean and include the beneficiaries of such
persons.
Section 4.
PLAN PARTICIPATION
4.1 Commencement of Active Participation. After June 30, 1984, an
Eligible Employee of a Participating Company shall become an Active Participant
on the earliest Entry Date on or after the date the Plan becomes effective with
respect to such employee's Participating Company and on or after which a period
of at least six (6) months has elapsed since the employee first completed one
(1) Hour of Service.
4.2 Transfers to Eligible Employee Status. If an employee of a
Participating Company or Affiliate is transferred to a position in which he
becomes an Eligible Employee, if not disqualified, he shall become an Active
Participant on the date of such transfer or, if later, the Entry Date on or
after which a period of at least six (6) months has elapsed since the employee
first completed one (1) Hour of Service. If an employee becomes an Active
Participant on the date of such transfer, then he shall be deemed to have been
an Active Participant on the first day of the Plan Year in which the transfer
occurred on which he would have been an Active Participant had he not been
disqualified on such date.
4.3 Duration of Active Participation. An employee shall cease to be an
Active Participant on the earlier of the date he incurs a Termination of
Employment or ceases to be an Eligible Employee.
4.4 Rehire After Termination of Employment. If a terminated employee
is reemployed by a Participating Company, Predecessor Company or Affiliate, the
employee's service prior to his Termination of Employment shall be recognized
for all purposes of the Plan. Such an employee shall commence participation in
the Plan on the later of the date of such reemployment or the Entry Date next
following the date on which such employee satisfies the eligibility requirements
of Section 4.1.
4.5 Furnishing Data. At the request of the Committee, each Participant
shall furnish such information reasonably available to the Participant as the
Committee may consider necessary or advisable for the administration of the
Plan, including, but not limited to, vital statistics and employment data.
4.6 No Guaranty of Employment. Participation in the Plan does not
constitute a guaranty or contract of employment with any Participating Company.
Such participation shall in no way interfere with any rights the Participating
Company would have in the absence of such participation to determine the
duration of the employee's employment with the Participating Company or any
other terms or conditions of the employee's employment.
Section 5.
EMPLOYEE CONTRIBUTIONS
5.1 Employee Contributions. Notwithstanding any other provisions of
this Plan, an Active Participant shall be entitled to contribute to the Trust
Fund any whole percentage of his Eligible Compensation from a minimum of two
percent (2%) of Eligible Compensation up to a maximum of fifteen percent (15%)
of such individual's Eligible Compensation for that Plan Year. Contributions by
Active Participants are voluntary and are not required of any Active
Participant.
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5.2 Method of Making Employee Contributions.
(a) Contributions by Active Participants shall be made to the Trust
Fund only by means of payroll deductions. Payroll deductions shall be authorized
in writing on such forms as the Committee may prescribe for this purpose. In
this regard the Committee may, from time to time, adopt nondiscriminatory
policies or rules governing the manner in which such forms may be filed and when
any such filing shall become effective, all so. that the Plan may be
conveniently administered. Active Participants may enroll to make contributions
by filing an enrollment form with the Committee. The enrollment form must
specify the percentage of Eligible Compensation the Active Participant wishes to
contribute to the Plan and how such contributions are to be invested. Once
filed, an enrollment form will become effective as soon as administratively
feasible and will remain effective until discontinued as described below or
until the individual is no longer an Active Participant.
(b) An Active Participant may discontinue contributions at any time by
filing a discontinuance form with the Committee prior to the affected payroll
period. An Active Participant who discontinues contributions may not enroll
again until the following Entry Date.
5.3 Transmittal of Contributions. Contributions by Active Participants
which are deducted by the Participating Company from the Eligible Compensation
of such Active Participants shall be transmitted to the Trustee for deposit into
the Trust Fund and investment within such time as provided by law and the Plan
5.4 Employee Deferral Accounts. A separate Employee Deferral Account
shall be maintained for each Active Participant who has made contributions to
the Trust Fund under Section 5.1. The amount thereof and the increase or
decrease in the value of such account shall be separately reflected in such
account. The balance of such account shall be nonforfeitable at all times and
shall be payable in accordance with the provisions of Sections 8 and 9, subject
to the restrictions on distributions contained in Section 401(k)(10) of the
Internal Revenue Code.
5.5 Investment of Contributions. Each Active Participant shall direct
the Trustee as to the investment of such Participant's Employee Deferral Account
in accordance with Section 13.
5.6 Limit on Employee Deferral Contributions. No Active Participant
shall be Permitted to make contributions to the Trust Fund pursuant to Section
5.1 or contributions to any other plan or arrangement maintained by any
Participating Company under sections 401(k), 408(k) or 403(b) of the Internal
Revenue Code for any taxable year which, in the aggregate, exceed the dollar
limitation contained in Section 402(g) of the Internal Revenue Code in effect at
the beginning of such taxable year.
5.7 Return of Excess Deferrals.
(a) Excess Deferrals, adjusted for any income or loss attributable
thereto, may be distributed to the Participants to whose Employee Deferral
Accounts such amounts were allocated for a calendar year. Any such distributions
must be made no later than the fifteenth day of April following the calendar
year in which such Excess Deferrals were made. In order to receive a
distribution of Excess Deferrals, a Participant must submit a written claim to
the Committee no later than the first day of March following the calendar year
in which such Excess Deferrals were made, specifying the amount of the
Participant's Excess Deferrals and accompanied by proof satisfactory to the
Committee that if such amount is not distributed, such amount, when added to
amounts deferred under other plans or arrangements described in Sections 401(k),
408(k) or 403(b) of the Internal Revenue Code, will exceed the limit imposed on
the Participant by Section 402(g) of the Internal Revenue Code.
(b) "Excess Deferrals" means the amount of contributions made to the
Plan by an Active Participant pursuant to Section 5.1 which, together with
amounts contributed to other plans or arrangements under sections 401(k), 408(k)
or 403(b) of the Internal Revenue Code of 1986, exceeds the limit imposed on
such Active Participant by section 402(g) of the Internal Revenue Code of 1986.
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(c) Income allocable to excess deferrals with respect to any
Participant shall be calculated under any reasonable method as determined by the
Committee, provided that such method is used by the Plan for allocating income
to Participants' Employee Deferral Accounts, and is used consistently for all
Participants and for all corrective distributions under the Plan for the Plan
Year. If the distribution of excess deferrals occurs during the calendar year in
which the Participant made the excess deferral, the income allocable to excess
deferrals will be based on the allocable gain or loss from the first day of the
calendar year to the date of the corrective distribution.
5.8 Actual Deferral Percentage. For each Plan Year, the actual
deferral percentage for Highly Compensated Participants shall not exceed the
maximum allowable percentage.
(a) For purposes of this Section, the maximum allowable percentage is
the greater of:
(1) The actual deferral percentage for all Participants other
than Highly Compensated Participants multiplied by one and one-fourth
(1.25); or
(2) The actual deferral percentage for all Participants other
than Highly Compensated Participants multiplied by two (2); provided,
however, that the actual deferral percentage for Highly Compensated
Participants may not exceed the actual deferral percentage for all
other Participants by more than two (2) percentage points.
(b) The "actual deferral percentage" for any group of Participants for
any Plan Year is the average of the ratios, calculated separately for each
Participant in the group, of the amount of contributions made to the Trust Fund
by each such Participant pursuant to Section 5.1 for the Plan Year to the
Participant's Eligible Compensation for the Plan Year. For purposes of
determining the actual deferral percentage of a Participant who is a 5% owner of
a Participating Company or one of the ten most highly paid Highly Compensated
Participants, the contributions made pursuant to Section 5.1 and the Eligible
Compensation of such Participant shall include all contributions made pursuant
to Section 5.1 and Eligible Compensation for the Plan Year of Family Members (as
defined in Section 414(q)(6) of the Code). Family Members with respect to such
Highly Compensated Participants shall be disregarded as separate employees in
determining the actual deferral percentage for all Participants.
For purposes of calculating the actual deferral percentage with
respect to a Participant who is a Highly Compensated Participant, all
cash or deferred arrangements of the Company under which such
Participant is eligible to participate (other than those which may not
be aggregated) shall be treated as a single arrangement.
(c) In applying the foregoing, the provisions of Section 401(k)(3) of
the Code and Treasury Regulation 1.401(k)-l(b) are hereby incorporated by
reference and shall supersede any provisions to the contrary.
5.9 Company Fail-safe Contributions. For each Plan Year in which the
actual deferral percentage for Highly Compensated Participants exceeds the
maximum allowable percentage specified in Section 5.8, each Participating
Company shall make a special contribution on behalf of non-Highly Compensated
Participants in an amount sufficient to satisfy one of the tests set forth in
Section 5.8. Such contribution shall be made without regard to the Net Income of
the Participating Company, shall be fully vested, and shall be allocated to the
Employee Deferral Accounts of each non-Highly Compensated Participant in
proportion to the amounts of Participating Company contributions contributed to
the Plan for such Plan Year for such individuals pursuant to Section 5.1.
5.10 Rollover Contributions. Any Eligible Employee may from time to
time contribute to the Trust Fund a rollover contribution, subject to the
following paragraphs:
(a) Prior to making a rollover contribution, an employee must file a
written request to do so with the Committee. The Committee, in its sole
discretion, shall determine whether or not the proposed contribution constitutes
a rollover contribution. Any written request filed pursuant to this paragraph
shall set forth the amount of the proposed rollover contribution, the nature of
the property contained in the rollover contribution and a statement,
satisfactory to the Committee, that such contribution constitutes a rollover
contribution within the meaning of Section 402(c) of the Internal Revenue Code.
As a condition of accepting a rollover contribution, the Committee may require
that the amount to be contributed be accompanied by the following to the extent
applicable:
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<PAGE>
(1) A copy of the most recent determination letter issued by the
Internal Revenue Service covering the trust or annuity contract from
which the property to be contributed to the Trust Fund has been
distributed.
(2) A statement from the trustee or insurance company of said
prior trust or annuity contract certifying that the amount it
distributed to the employee proposing to make the rollover
contribution constitutes an eligible rollover distribution within the
meaning of Section 402(c) of the Internal Revenue Code, including a
statement indicating what portion, if any, of such amount represents
contributions by the employee.
(3) In the case of a distribution from a tax-qualified individual
retirement account or annuity, a statement from the prior trustee,
custodian or insurance company certifying that the amount distributed
was attributable to no source other than a tax-qualified retirement
plan or annuity.
(4) A statement from the prior trustee or insurance company of
said prior trust or annuity contract certifying the date upon which
the amount to be contributed to the Trust Fund was distributed to the
person making such contribution.
(5) Any other documentation or information which the Committee
deems necessary.
(b) A rollover contribution made by an employee shall be credited to a
separate "Rollover Contribution Account" in the name of such employee as of the
date of its receipt by the Trustee. The amount thereof and the increase or
decrease in the liquidation value of the Trust Fund attributable thereto shall
be separately reflected in such account.
(c) The balance of a Participant's Rollover Contribution Account shall
be nonforfeitable for all purposes of the Plan. Upon Termination of Employment,
the balance of an employee's Rollover Contribution Account shall be distributed
to such employee or his Beneficiary, as the case may be, pursuant to the
provisions of the Plan.
5.11 Other Employee Contributions. Other than the contributions
described in Sections 5.1 and 5.10, employee contributions to the Plan are
neither required nor permit
Section 6.
COMPANY MATCHING CONTRIBUTIONS AND FORFEITURES
6.1 Matching Contributions. Subject to the remaining provisions of
this Section, for each Plan Year each Participating Company shall contribute to
the Trust Fund on behalf of its Active Participants an amount equal to the
contributions made to the Trust Fund for such Plan Year by means of payroll
deduction by such Active Participant. Unless otherwise specifically directed by
its board of directors, the contribution of a Participating Company for a fiscal
year shall not exceed the maximum amount deductible by it for such fiscal year
for federal income tax purposes and shall not be made unless made from Net
Income or Accumulated Net Income. In no event shall the amount contributed to
the Trust Fund by the Participating Companies on behalf of any Active
Participant for any Plan Year exceed five percent (5%) of such employee's
Eligible Compensation for that Plan Year.
6.2 Limitation on Matching Employee Contributions. For each Plan Year,
the contribution percentage for Highly Compensated Participants shall not exceed
the maximum allowable percentage.
(a) For purposes of this Section, the maximum allowable percentage is
the greater of:
(1) The contribution percentage for all Participants other than
Highly Compensated Participants multiplied by one and one-fourth
(1.25); or
(2) The contribution percentage for all Participants other than
Highly Compensated Participants multiplied by two (2), provided that
the contribution percentage for Highly Compensated Participants does
not exceed the contribution percentage for all other Participants by
more than two (2) percentage points.
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<PAGE>
(b) The "contribution percentage" for any group of Participants for
any Plan Year is the average of the ratios, calculated separately for each
Participant in the group, of the sum of the Matching Contributions made pursuant
to Section 6.1 for the Plan Year to such Participant's Eligible Compensation for
the Plan Year. For purposes of determining the contribution percentage of a
Participant who is a 5% owner of any Participating Company or one of the ten
most highly paid Highly Compensated Participants, the Matching Contributions and
Eligible Compensation of such Participant shall include all Matching
Contributions and Eligible Compensation for the Plan Year of Family Members (as
defined in Section 414(q)(6) of the Code). Family Members with respect to Highly
Compensated Participants shall be disregarded as separate employees in
determining the contribution percentage for all Participants .
(c) In applying the foregoing, the provisions of Section 401(m) of the
Code and Treasury Regulations 1.401(m)-l(b) are hereby incorporated by reference
and shall supersede any provisions to the contrary. In addition, the provisions
of Section 401(m)(9) of the Code and Treasury Regulations 1.401(m)-2 are also
hereby incorporated by reference and shall supersede any provisions to the
contrary.
6.3 Company Fail-safe Contributions. For each Plan Year in which the
contribution percentage for Highly Compensated Participants exceeds the maximum
allowable percentage specified in Section 6.2, each Participating Company shall
make a special contribution on behalf of non-Highly Compensated Participants in
an amount sufficient to satisfy one of the tests set forth in Section 6.2. Such
contribution shall be made without regard to the Net Income of the Participating
Company, shall be fully vested and shall be allocated to the Employee Deferral
Accounts of each non-Highly Compensated Participant in proportion to the amounts
of Participating Company contributions contributed to the Plan for such Plan
Year for such individuals pursuant to Section 5.1.
6.4 Timing of Contributions. Each Participating Company shall make its
contributions, if any, for a fiscal year to the Trustee not later than the time,
including extensions thereof, prescribed by law for filing the federal income
tax return of the Company for such fiscal year. For purposes of the Plan,
however, contributions shall be deemed to have been made as of the last day of
the fiscal year of the Company which ends prior to or on the last day of the
Plan Year. The Trustee shall be under no duty, express or implied, either to
determine the amount of or to enforce the collection of any contribution to the
Trust Fund by the Company.
6.5 Makeup Contributions. If any Participating Company is prevented
from making all or any part of the contribution otherwise required under the
Plan for any Plan Year due to inadequate Net Income or accumulated Net Income,
then so much of such contribution that such Participating Company is so
prevented from making shall be made by the other Participating Companies in
accordance with the following paragraphs:
(a) If a consolidated federal income tax return is filed by the
Participating Companies for the Plan Year for which the Participating Company is
so prevented from making all or any part of its contributions, so much of the
contribution that such Participating Company is prevented from making shall be
made by the Participating Companies in such proportions as the Company may
determine by action of its board of directors. In no event shall a Participating
Company make a contribution to the Trust Fund in excess of such Participating
Company's Net Income or accumulated Net Income.
(b) If a consolidated federal income tax return is not filed by the
Participating Companies for such Plan Year, each Participating Company not so
prevented from making its contributions shall make a supplemental contribution
in an amount equal to the portion of its total Net Income and accumulated Net
Income, after deducting an amount equal to its contribution which would have
been made without regard to this Section, which the total contributions that one
or more Participating Companies were so prevented from making bear to the
aggregate Net Income and accumulated Net Income of all Participating Companies
(not prevented from so contributing) remaining after deducting amounts equal to
all contributions which would have been made by such Participating Companies
without regard to this paragraph.
(c) The provisions of this Section shall apply only to a group of
Participating Companies under the Plan which constitutes an "affiliated group"
within the meaning of Section 1504(a) of the Internal Revenue Code.
For purposes of the Plan, contributions from Participating Companies in
accordance with this Section on behalf of a Participating Company prevented from
making all or any part of its contribution shall, after receipt by the Trustee,
be considered as having been made by the Participating Company prevented from
making its contribution.
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<PAGE>
6.6 Allocation Formula. For each Plan Year, the contributions of each
Participating Company to the Trust Fund shall be allocated to the Company
Matching Accounts of those persons on whose behalf such contributions were made.
Any contributions made pursuant to Sections 5.9 or 6.3 shall be allocated in
accordance with such sections.
6.7 Minimum Allocation for Top-Heavy Years. Notwithstanding the
preceding Sections, for any Plan Year in which the Plan is a Top-Heavy Plan, the
sum of the employer contributions and forfeitures for a Participant who is not a
Key Employee for such Plan Year and who has not incurred a Termination of
Employment by the end of such Plan Year (regardless of whether such Participant
has completed 1,000 Hours of Service during such Plan Year and regardless of the
amount of Eligible Compensation received by such Participant during the Plan
Year) shall not be less than the lesser of:
(a) Three percent (3%) of compensation (such compensation to be
determined in accordance with Section 12 of the Plan); or
(b) If the largest contribution made for Key Employees is less than
three percent (3%), then the highest percentage of such compensation at which
contributions are made (or required) for Key Employees for the plan year. For
this purpose, the contribution made for Key Employees is equal to the ratio of
the sum of the contributions and forfeitures made for such Key Employees divided
by the compensation not in excess of $200,000 (as adjusted according to Section
2.10(e)) for such Key Employees. For purposes of this paragraph, all plans
required to be included in an Aggregation Group shall be considered a single
plan. This paragraph shall not apply to any plan required to be included in an
Aggregation Group if such plan enables a defined benefit plan required to be
included in such group to meet the requirements of sections 401(a)(4) or 410 of
the Internal Revenue Code.
If a Participant who is not a Key Employee is included in both this Plan and a
Top-Heavy defined benefit plan maintained by the Participant's employer, then
the provisions of this Section shall not apply if such defined benefit plan
provides at least the minimum benefits required by section 416 of the Internal
Revenue Code for such plans. For purposes of this Section, any employer
contributions attributable to any salary reduction or similar arrangement shall
be taken into account. The requirements of this Section shall be met without
taking into account contributions or benefits under Chapter 2, Chapter 21, Title
II of the Social Security Act or any other federal or state law.
6.8 Allocation of Forfeitures. Effective January 1, 1990, forfeitures
declared for a Plan Year attributable to a Participating Company shall be
allocated to the Company Matching Accounts of the Active Participants in the
proportion that the Eligible Compensation of each such person for the Plan Year
from the person's Participating Company bears to the aggregate of the Eligible
Compensation of all such persons for the Plan Year from the respective
Participating Company.
6.9 Contributions for Omitted Participants. If, for any Plan Year,
after the Participating Company contributions made to the Trust Fund for that
year have been allocated (including forfeitures declared for that Plan Year), it
should appear that, through oversight or a mistake of fact or law, a person who
should have been entitled to share in such contributions and forfeitures
received no allocation or received an allocation which was less than he should
have received, the Company, at its election, and in lieu of reallocating such
contributions and forfeitures, may direct the Participating Companies to make a
special contribution in an amount equal to the amount that would have been
allocated to such person's Company Matching Account had such error not been
made.
6.10 Company Matching Accounts. A separate Company Matching Account
shall be maintained for each Participant. The amount thereof and the increase or
decrease in the liquidation value of the Trust Fund attributable thereto shall
be separately reflected in such account.
6.11 Restoration of Forfeitures. Notwithstanding the provisions of
Section 6.1, a Participating Company may contribute all or a portion of the
amount necessary to restore the Nonvested Balance of a Participant's Company
Matching Account in the event such Nonvested Balance has been forfeited in
accordance with Section 8.3(a).
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<PAGE>
Section 7.
VALUATION OF ACCOUNTS
7.1 Annual Account Adjustments. As of the last day of each Plan Year,
the account balances forming a part of the Trust Fund shall be adjusted pursuant
to the following paragraphs:
(a) Subject to paragraphs (b), (c) and (d) below, the net gain or loss
in the liquidation value of the Trust Fund for the Plan Year shall be allocated
pro rata to the accounts forming a part of the Trust Fund as of the last day of
the Plan Year.
(b) Each contribution made to an Employee Deferral Account during the
Plan Year and each contribution made to a Rollover Contribution Account during
the Plan Year shall share in the net gain or loss in the liquidation value of
the Trust Fund as measured from the date such contribution was received by the
Trustee through the last day of the Plan Year.
(c) If a partial distribution was made from an account during the Plan
Year, the remaining balance of the account, as determined pursuant to the
provisions of Section 7.2, shall share in the net gain or loss in the
liquidation value of the Trust Fund as measured from the Valuation Date
applicable to such distribution through the last day of the Plan Year. However,
if a Participant had a Termination of Employment and the entire Vested Balance
of his Company Matching Account was distributed to him within the Plan Year and
within one (1) year after such Termination of Employment, the remaining balance
thereof shall, unless and until declared a forfeiture, thereafter not be
considered a part of such account but shall be considered a fixed liability of
the Trust Fund until after the last day of the Plan Year in which it is restored
to the Participant.
(d) After making the foregoing adjustments, each Company Matching
Account shall be adjusted pursuant to the provisions of Section 6 to reflect the
allocations thereto, if any, attributable to the Participating Company
contributions to the Trust Fund for the Plan Year.
7.2 Interim Account Adjustments. Whenever the Plan calls for an
account to be valued as of a Valuation Date other than the last day of the Plan
Year, such account shall be valued pursuant to the following paragraphs:
(a) Subject to paragraphs (b), (c) and (d) below, the account shall be
adjusted upwards or downwards, as appropriate, to reflect the net gain or loss
in the liquidation value of the Trust Fund as measured from the last day of the
preceding Plan Year through the appropriate Valuation Date.
(b) If the account is an Employee Deferral Account to which a
contribution was made during the Plan Year prior to the appropriate Valuation
Date or if the account is a Rollover Contribution Account to which a
contribution was made during the Plan Year prior to the appropriate Valuation
Date, such contribution shall share in the net gain or loss in the liquidation
value of the Trust Fund as measured from the date such contribution was received
by the Trustee through the appropriate Valuation Date.
(c) If a partial distribution was made from the account during the
Plan Year prior to the appropriate Valuation Date, the remaining balance of the
account, as determined pursuant to this Section, shall share in the net gain or
loss in the liquidation value of the Trust Fund as measured from the Valuation
Date applicable to such distribution through the appropriate Valuation Date.
(d) If the account is to receive an allocation from the Participating
Company contributions to the Trust Fund for the Plan Year in which the
appropriate Valuation Date falls, the value of the account shall be determined
pursuant to the preceding paragraphs without regard to the amount of such
allocation. After the Participating Company contributions for the Plan Year have
been made and allocated, the account shall be increased by the amount of such
allocation.
7.3 Special Account Adjustments. If, in the judgment of the Committee,
it appears at any time that an adjustment of accounts pursuant to the preceding
Sections would result in an unreasonable inequity to any Plan Participant
because of unusual market conditions or because of disproportionately large
contributions or distributions, the Committee shall cause
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all accounts to be adjusted at such date or dates as the Committee may determine
necessary to eliminate such unreasonable inequity as if such date or dates were
the last day of the Plan Year.
7.4 Separate Accounting For Separate Funds. The Trust Fund is divided
into certain funds in accordance with Section 13. Accordingly, the provisions of
this Section 7 shall be applied separately to each such fund as if each were the
Trust Fund.
7.5 Net Gain or Loss in Liquidation Value. The net gain or loss in the
liquidation value of the Trust Fund during any period is the amount of the net
income, loss, appreciation or depreciation of the Trust Fund for that period.
Such net gain or loss in the- liquidation value of the Trust Fund shall be
exclusive of contributions to or distributions from the Trust Fund and of
amounts considered as fixed liabilities of the Trust Fund. The determination of
net income or loss shall include, in addition to income actually received,
accrued interest on bonds and dividends of record where the record date is on or
before the appropriate Valuation Date. The net appreciation or depreciation in
the liquidation value of the Trust Fund shall be determined based on the
Trustee's judgment of the fair market value of each of the assets of the Trust
Fund.
7.6 Certain Segregated Accounts. Account balances which are part of
the Trust Fund but which are segregated pursuant to the provisions of Section 8
shall not share in the net gain or loss in the liquidation value of the Trust
Fund pursuant to the preceding provisions of this Section 7. For valuation
purposes, each such segregated account shall be valued according to the terms of
the savings account funding such account.
7.7 Responsibility to Maintain Account Balances. The responsibility to
maintain account balances pursuant to the provisions of this Section 7 shall be
discharged by the Company or the Trustee if so directed by the Committee.
Separate accounts for each Participant's accrued benefits under the Plan shall
be maintained, showing the manner in which entries made to each such account
have been determined. Within sixty (60) days following the close of each Plan
Year, the Committee shall make arrangements with the Company for the delivery to
each Participant of a statement showing, as of the close of the Plan Year, each
Participant's credited balance to each of his accounts.
Section 8.
PLAN BENEFITS AND FORFEITURES
8.1 Retirement, Disability and Death Benefits. Upon Termination of
Employment by reason of Normal Retirement, Early Retirement, Disability
Retirement or death, a Participant or his Beneficiary, as the case may be, shall
be entitled to the entire balance of each of his accounts pursuant to the
provisions of the Plan. Such balances shall be determined as of the Valuation
Date next succeeding the Participant's Termination of Employment and distributed
at the time and in the form described in Section 9.
8.2 Vested Benefits. Upon Termination of Employment prior to Normal
Retirement, Early Retirement or Disability Retirement (for a reason other than
death), a Participant shall be entitled to the Vested Balance of his Company
Matching Account, and the entire balance of his Rollover Contribution Account,
Defined Benefit Plan Account and Employee Deferral Account. Such balances shall
be determined as of the Valuation Date next succeeding the Participant's
Termination of Employment and distributed at the time and in the form described
in Section 9. The following paragraphs shall also be applicable:
(a) The "Vested Balance" of any Participant's Company Matching Account
shall be a percentage of that account based upon the Participant's years of
Vesting Service as set forth in the following schedule:
Years of Vesting Service Percentage
------------------------ ----------
Fewer than 3 0%
3 20%
4 40%
5 60%
6 80%
7 or more 100%
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(b) Notwithstanding the preceding paragraph, the "Vested Balance" of a
Participant's Company Matching Account for any Participant who has completed at
least one (1) Hour of Service during a Plan Year in which the Plan is a
Top-Heavy Plan shall be a percentage of that account, based on his years of
Vesting Service, as set forth in the following schedule:
Years of Vesting Service Percentage
------------------------ ----------
Fewer than 2 0%
2 20%
3 40%
4 60%
5 80%
6 or more 100%
If the Plan ceases to be a Top-Heavy Plan, the Vested Percentage of
any Participant shall not be reduced for that portion of the Participant's
Company Matching Account which accrued before or while the Plan was a Top-Heavy
Plan.
(c) For purposes of applying the foregoing vesting schedule all years
of Vesting Service shall be taken into account.
(d) Notwithstanding the foregoing paragraphs, an Active Participant's
Vested Balance shall be one hundred percent (100%) upon his attainment of Normal
Retirement Age.
(e) No amendment to the Plan changing the Plan's vesting schedule
shall reduce the Vested Balance provided by such schedule determined for each
Participant as of the day preceding the adoption or the effective date of such
amendment, whichever is later.
(f) If an amendment to the Plan changes the foregoing vesting
schedule, each Active Participant having not less than three (3) years of
Vesting Service shall be entitled to have his Vested Balance for his future
service under the Plan computed without regard to such amendment. Any such
election will not be effective unless made after the amendment is adopted but
prior to sixty (60) days after the later of (i) the date the amendment was
adopted, (ii) the effective date of the amendment, or (iii) the date the
employee was given written notice of the amendment. Such election shall be made
in writing by filing with the Committee, within said period, such form as the
Committee may prescribe for this purpose. For purposes of this paragraph, an
employee shall be considered to have completed three (3) years of Vesting
Service if he has completed three (3) such years prior to the expiration of the
election period described above.
8.3 Forfeitures.
(a) After a Participant's Termination of Employment, the Nonvested
Balance of his Company Matching Account shall be declared a forfeiture on the
last day of the Plan Year in which the sixth (6th) consecutive Break in Service
occurred. If the Participant is reemployed by a Participating Company prior to
incurring six (6) consecutive Breaks in Service, the following paragraphs shall
apply:
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<PAGE>
(1) If the Participant did not receive a distribution from his
Company Matching Account after his Termination of Employment, upon
reemployment his Company Matching Account shall be restored (but shall
remain subject to all of the provisions of the preceding Section).
(2) If the Participant received a distribution from his Company
Matching Account, the amount of such liability referred to above
(unadjusted for any gain or loss) shall be restored to the Participant
if and when the conditions set forth in the following subparagraphs
are satisfied:
(A) The Participant is reemployed by a Participating Company
or Affiliate; and
(B) The Participant repays the amount distributed to him at
Termination of Employment on or before the earlier of five (5)
years after the date on which the Participant is so reemployed,
or the last day of the Plan Year in which occurs the
Participant's sixth (6th) consecutive Break in Service.
If such liability is not restored, it shall be declared a
forfeiture on the last day of the earliest Plan Year in which
occurs such person's death or his sixth (6th) consecutive Break
in Service. The balance of a Participant's Employee Deferral
Account, Rollover Account and Defined Benefit Account shall be
nonforfeitable for all purposes of the Plan.
(b) Any restoration made pursuant to this Section may be made from
Participating Company contributions, income or gain to the Trust Fund or
forfeitures, as determined by the Company.
Section 9.
DISTRIBUTION OF BENEFITS
9.1 Commencement of Benefits to Participants. Benefits payable under
the Plan shall commence in accordance with the following paragraphs:
(a) Benefits payable upon Normal Retirement, Early Retirement or
Disability Retirement shall commence as soon as practicable after a
Participant's Termination of Employment.
(b) Subject to the provisions of this Section, benefits payable upon a
Termination of Employment not described in the preceding paragraph of this
Section may be distributed at any time after such Termination of Employment but
not later than the earliest date upon which the Participant would otherwise be
eligible for Disability Retirement, Early Retirement or Normal Retirement, or
(if earlier) at his death, as the Participant requests. If the payment of such
benefits is to be deferred for any reason, the Committee may direct the Trustee
to segregate the amount of the account balances due such Participant in an
interest bearing savings account at a bank or savings and loan institution or
other similar investment.
(c) No lump sum distribution may be made from a Participant's Company
Matching Account, unless the Participant voluntarily elects in writing to
receive such distribution, if the vested balance of such account is in excess of
$3,500 (or such greater amount as may be permitted by regulations issued by the
Secretary of the Treasury or his delegate). If the vested balance of such
account is $3,500 or less, the Company shall make a lump sum distribution to the
Participant notwithstanding the Participant's election to the contrary. The
foregoing shall apply to all distributions under the Plan including, without
limitation, distributions under Section 9.3.
(d) Notwithstanding the preceding paragraphs, unless a Participant
elects otherwise the distribution of benefits to a Participant under the Plan
shall commence not later than sixty (60) days after the Plan Year in which
occurs the later of the following events:
(1) The date of the Participant's Normal Retirement.
(2) The Participant's Termination of Employment.
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(3) The Participant's attainment of age sixty-five (65).
(4) The tenth (10th) anniversary of the date upon which the
Participant's participation in the Plan commenced.
However, if the amount of the payment to be made to the
Participant cannot be determined by the later of said dates, a payment
retroactive to such date may be made no later than sixty (60) days
after the earliest date upon which the amount of such payment can be
ascertained .
(e) Notwithstanding any provisions of the Plan to the contrary, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order" even if the affected
Participant has not reached the "earliest retirement age" under the Plan.
"Alternate payee, and "qualified domestic relations order" and "earliest
retirement age" shall have the meanings set forth in Section 414(p) of the
Internal Revenue Code.
(f) If a distribution is one to which Sections 401(a)(11) and 417 of
the Internal Revenue Code do not apply, such distribution may commence less than
thirty (30) days after the notice required under Section 1.411(a)-ll(c) of the
Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the Participant that
the Participant has a right to a period of at least thirty (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
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
9.2 Methods of Distribution. Upon or following a Participant's
Termination of Employment, the Participant shall file a written request with the
Committee as to the method by which the Participant's account balances shall be
distributed. Subject to Section 9.1(c), such request shall be approved provided
it is in compliance with the terms of this Plan and all applicable laws. Account
balances to be distributed pursuant to this Section 9 shall be paid by either
one lump sum payment or by monthly, quarterly, semiannual or annual
installments, or by any combination of these alternatives as requested by the
Participant. If payments are to be made in a form other than a lump sum amount,
any of the methods or combination thereof described in the following paragraphs
may be utilized to provide for such payments:
(a) Such account balances may be left as part of the general assets of
the Trust Fund. The amount to be distributed annually shall be determined by
multiplying the aggregate balance of the Participant's accounts as of the last
day of the Plan Year preceding the Plan Year in which such payments are to
commence and in each succeeding year by a fraction, the numerator of which is
one (1) and the denominator of which is the number of years remaining for such
payments to be made.
(b) Such account balances may be deposited in an interest-bearing
savings account with a bank or savings and loan institution. If such an account
is opened, the Trustee shall arrange for deferred distributions under the method
described in the preceding paragraph or by applying actuarial principles and
assumed interest rates in order to provide substantially equal installment
payments.
(c) Such account balances may be used to purchase a single premium
nontransferable immediate or deferred annuity contract, other than any form of a
life annuity, from a life insurance company. Any such contract shall be
purchased in the name of and distributed to such Participant or his Beneficiary,
as the case may be, and shall thereafter not be carried as part of the assets of
the Trust Fund.
9.3 Minimum Distributions. Notwithstanding any other provisions of
this Plan, the distribution of a Participant's account balances shall be subject
to the following limitations:
(a) Distributions to any Participant shall commence by no later than
the Participant's Required Beginning Date even if the Participant has not then
incurred a Termination of Employment unless otherwise permitted by Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act of 1982 (as in effect
before its repeal by the Tax Reform Act of 1984).
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<PAGE>
(b) The minimum distribution required for a Participant's First
Distribution Year must be made on or before the Participant's Required Beginning
Date. The minimum distribution for subsequent Distribution Years, including the
minimum distribution for the Distribution Year in which the Participant's
Required Beginning Date occurs, must be made on or before December 31 of that
Distribution Year.
(c) The minimum amount required to be distributed each Distribution
Year shall not be less than the value of the Participant's account balances
determined as of the Valuation Date immediately preceding the applicable
Distribution Year divided by the "applicable life expectancy." The "applicable
life expectancy" is the life expectancy of the Participant or the joint and last
survivor life expectancy of the Participant and the Participant's Beneficiary
(in the First Distribution Year), whichever is applicable, minus the number of
years elapsed since the First Distribution Year. Notwithstanding the foregoing,
the life expectancy of the Participant and/or the Participant's Beneficiary (if
the Beneficiary is the Participant's spouse) may be recalculated annually if the
Participant and/or Beneficiary so elect. Any such election to recalculate must
be made prior to the date of the first required distribution under this Section
9.3, must apply to all subsequent years and must be irrevocable. Such
recalculated life expectancy shall then be the "applicable life expectancy." If
a Participant and Beneficiary fail to elect to recalculate, the applicable life
expectancies will not be recalculated. All life expectancies shall be calculated
under regulations promulgated by the Secretary of the Treasury.
(d) If the Participant's account balance is distributed in the form of
an annuity purchased from an insurance company, distributions thereunder shall
be made in accordance with requirements of Section 401(a)(9) of the Code and
regulations issued thereunder.
(e) All distributions required to be made under this Section shall be
determined and made in accordance with the proposed regulations promulgated
under Section 401(a)(9) of the Code, including Section 1.401(a)(9)-2, which are
hereby incorporated by reference and shall supersede any contrary provisions
herein.
(f) The Participant's account balances shall be paid over a period
which does not exceed--
(1) The lifetimes of the Participant and his Beneficiary; or
(2) A term certain equal to the life expectancy of the
Participant or the life expectancy of the Participant and the
Participant's Beneficiary;
determined by the Committee in accordance with regulations prescribed
by the Secretary of the Treasury. For this purpose, the life
expectancy of the Participant and the Participant's Beneficiary (if
the Participant's spouse is the Beneficiary) shall be annually
redetermined by the Committee.
9.4 Death Benefits. The following paragraphs shall govern the
distribution of benefits following a Participant's death:
(a) In the event of the death of a Participant before the distribution
of the Participant's account balances has commenced, such account balances shall
be distributed as follows:
(1) If the Participant's Beneficiary is the Participant's
surviving spouse, distributions shall be made in substantially equal
monthly installments over a term certain not exceeding the life
expectancy of the surviving spouse.
(2) If the Participant's Beneficiary is not the Participant's
surviving spouse, distributions shall be made in substantially equal
monthly installments over a period of sixty (60) months following the
Participant's death. No such payment shall be less than incidental.
However, at the written request of the Beneficiary, the Participant's
account balances shall be paid in one lump sum or in installments over
any lesser period of time. For purposes of this Section, life
expectancies and payment amounts shall be determined in accordance
with regulations prescribed by the Secretary of the Treasury.
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<PAGE>
(b) The distribution of account balances under this Section shall
commence or be made, as the case may be, on the first day of the month following
the month in which the Participant's death occurs, if administratively feasible;
otherwise, distribution may be delayed until it is administratively feasible, in
which event payments retroactive to the first day of the month following the
Participant's death shall be made. Notwithstanding the foregoing, if the
Beneficiary is the Participant's spouse, distributions will not be required to
begin until the later of the December 31 following the year in which the
Participant died and the December 31 of the year in which the Participant would
have attained age seventy and one-half (70-1/2).
(c) In the event of the death of a Participant after distributions
from the Plan to the Participant have commenced but prior to a complete
distribution of his account balances, the undistributed balances shall be
distributed to his Beneficiary pursuant to the method of payment which was in
effect for the Participant.
9.5 Hardship Distributions.
(a) Upon the written application of any Participant, the Committee
shall direct the Trustee to make a hardship distribution to such Active
Participant from such Active Participant's Employee Deferral Account even though
the Active Participant has not incurred a Termination of Employment if the
Committee determines that such distribution would constitute a "hardship
distribution" as defined herein. The amount of such distribution shall not
exceed the lesser of (i) the balance of the Active Participant's Employee
Deferral Account determined as of the immediately preceding Valuation Date; or
(ii) the total amount of contributions made by the Active Participant to his
Employee Deferral Account pursuant to Section 5.1 (without taking into account
any earnings on such contributions).
(b) A "hardship distribution" is a distribution necessary to satisfy
the immediate and heavy financial needs (as defined herein) of the Active
Participant. No hardship distribution shall exceed the amount required to meet
the immediate and heavy financial need created by the hardship and not
reasonably available to the Active Participant from other resources of the
Active Participant.
(c) "Immediate and heavy financial needs" shall mean only the
following: (i) medical expenses described in Section 213(d) of the Internal
Revenue Code incurred by the Active Participant, the Active Participant's spouse
or any of the Active Participant's dependents (as defined in Section 152 of the
Internal Revenue Code); (ii) purchase (excluding mortgage payments) of a
principal residence for the Active Participant; (iii) payment of tuition for the
next twelve (12) months of post-secondary education for the Active Participant,
the Active Participant's spouse, children or dependents; (iv) the need to
prevent the eviction of the Active Participant from the Active Participant's
principal residence or foreclosure on the mortgage of such residence; and (v)
any other events deemed by the Commissioner of the Internal Revenue Service on a
general basis to constitute immediate and heavy financial need.
(d) No hardship distribution shall be made if the Active Participant
has not obtained all distributions, other than hardship distributions, and all
nontaxable loans available under all plans maintained by the Participating
Company employing the Participant.
(e) The Active Participant may not contribute to the Plan for a period
of twelve (12) months following the date the Active Participant receives a
hardship distribution. The maximum amount the Active Participant may contribute
to the Plan for the calendar year following the calendar year in which such
Active Participant received a hardship distribution is the excess of the
applicable limit under Section 5.6 of the Plan over such Active Participant's
contributions for the calendar year in which such Active Participant received a
hardship distribution.
(f) A distribution may be treated as necessary to satisfy a financial
need if the Committee relies upon the Active Participant's representation that
the need cannot be relieved: (i) through reimbursement or compensation by
insurance or otherwise; (ii) by reasonable liquidation of the Active
Participant's assets, to the extent such liquidation would not itself cause an
immediate and heavy financial need; (iii) by cessation of employee contributions
under Section 5.1 of the Plan; (iv) by other distributions or loans from any
other qualified retirement plan; or (v) by borrowing from commercial sources on
reasonable commercial terms.
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<PAGE>
(g) The determination of whether a hardship distribution shall be made
shall be made by the Committee in accordance with applicable Treasury
regulations and rules and policies uniformly applied to all Active Participants
similarly situated but shall otherwise be within the absolute discretion of the
Company and shall not be subject to review.
9.6 Acceleration of Payments. To the extent allowed by law, the
Committee may direct that the installment payments being made to any Participant
or Beneficiary be accelerated and that part or all of the unpaid balance of such
payments be immediately-distributed to such Participant or Beneficiary as a lump
sum amount.
9.7 Nonalienation of Benefits. The account balances payable under this
Plan shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, either voluntary or involuntary, prior to actually being
received by the person entitled to the benefit under the terms of the Plan; and
any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge or otherwise dispose of any right to benefits payable hereunder shall be
void. The Trust Fund shall not in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder. This provision shall apply to the creation, assignment or
recognition of a right to any benefit payable to a Participant pursuant to a
domestic relations order other than a "qualified domestic relations order"
within the meaning of Section 414(p) of the Internal Revenue Code. The Company
shall establish reasonable procedures to determine if an order qualifies as a
"qualified domestic relations order" for this purpose.
9.8 Payment of Taxes. The Committee, as a condition of directing the
payment of any account balance, may require the Participant or his Beneficiary,
as the case may be, to furnish it with proof of payment, or such reasonable
indemnity therefor as the Trustee may specify, of all income, inheritance,
estate, transfer, legacy and/or succession taxes, and all other taxes of any
different type or kind that may be imposed under or by virtue of any law upon
the payment, transfer, descent or distribution of said benefit and for the
payment of which either the Trustee, the company or the Trust Fund, in the
judgment of the Company, may be directly or indirectly liable. In lieu of the
foregoing, the Committee may deduct, withhold and transmit to the proper tax
authorities any said tax which may be permitted or required to be deducted and
withheld, and the balance of the account in such case shall be correspondingly
reduced.
9.9 Incompetent Payee. If any Participant or Beneficiary entitled to
receive benefits hereunder is a minor or is, in the judgment of the Company
based upon a physician's examination, unable to take care of his affairs because
of mental condition, illness or accident, any payment due such person may
(unless prior claim therefor shall have been made by a qualified guardian or
other legal representative) be paid for the benefit of such Participant to his
spouse, child, parent, brother or sister, or other person who in the opinion of
the Company has incurred expense for, or is maintaining, or has custody of such
Participant. The Company shall not be required to see to the proper application
of any such payment made to any person pursuant to the provisions of this
Section, and any such payment so made shall be a complete discharge of the
liability of the Trust Fund, the Trustee and the Company therefor.
9.10 Effect of Reemployment. If a Participant is reemployed by a
Participating Company after distribution of his account balances has commenced
but before the entire amount of his account balances has been distributed,
further distribution shall be suspended and the undistributed balances shall
continue to be held in the Trust Fund and continue to share in the earnings or
losses thereof) until his subsequent Termination of Employment.
9.11 Notice, Place and Manner of Payment. Any payments due hereunder
shall be made on demand at such office as the Trustee may maintain; provided,
however, that any person from time to time entitled to such payments may by
notice in writing to the Trustee specify a post office address to which such
payment shall be remitted.
9.12 Source of Benefits. All benefits to which persons shall become
entitled hereunder shall be provided only out of the Trust Fund. No benefits are
provided under the Plan except those expressly described herein.
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<PAGE>
Section 10.
PLAN ADMINISTRATION
10.1 The Administrative Committee. The Plan shall be administered by
an Administrative Committee (the "Committee") pursuant to the following
paragraphs:
(a) The Committee shall consist of such member or members who shall be
appointed by and serve at the pleasure of the board of directors of the Company.
Upon the death, resignation, removal or inability to serve of any Committee
member, the board of directors of the Company may, but need not, name his
successor. Any member of the Committee may resign at any time by delivering
written notice of such resignation to a member of the board of directors of the
Company. The board of directors of the Company shall have the right at any time,
with or without cause or notice, to remove any member of the Committee.
(b) Members of the Committee shall not be entitled to compensation for
performing their duties as Committee members, but shall be entitled to
reimbursement for any expenses reasonably incurred in connection with the
administration of the Plan which are not otherwise paid by the Company.
(c) The Committee shall be the Plan administrator and shall control
and manage the operation and administration of the Plan, including the
following:
(1) The Committee shall from time to time certify in writing to
the Trustee the names of retired, terminated or deceased Participants,
the payment method selected with respect to any account balances
payable to such persons and the date such payments shall commence and
terminate, all in accordance with the Plan. Any such notice from the
Committee shall be deemed adequate by the Trustee if signed by any
member of the Committee or the Committee's duly authorized agent.
(2) The Committee shall file such reports with governmental
authorities as may be required by law and which are not filed by the
Trustee.
(3) The Committee may adopt and promulgate such rules and
regulations, not inconsistent with the terms and provisions hereof,
for the administration of the Plan as it deems necessary. From time to
time, the Committee may amend or supplement any such rules or
regulations. The Committee shall have complete discretion to decide
any questions of eligibility, participation, benefit payments and any
other questions of interpretation relating to the Plan.
(4) The Committee shall review claims for benefits in accordance
with the Plan's claims procedures.
(5) The Committee shall prescribe procedures to be followed and
forms to be used in electing any alternatives available under the Plan
and to apply for benefits under the Plan.
(6) The Committee shall prepare and distribute, in such manner as
the Committee determines appropriate, information explaining the Plan.
(7) The Committee shall receive from each Participating Company
and from Participants such information as shall be necessary for the
proper administration of the Plan. The Committee shall be entitled to
rely on any such information so received.
(8) The Committee shall have no power to add to, subtract from or
modify any of the terms of the Plan, or to change or add to any
benefits provided by the Plan, or to waive or fail to apply any
requirements of eligibility for benefits under the Plan.
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<PAGE>
(d) A majority of the members of the Committee shall constitute a
quorum. The approval of such a quorum, expressed from time to time by a vote at
a meeting, or in writing without a meeting, shall constitute the action of the
Committee and shall be valid and effective for all purposes of this Plan. The
acts and determinations of the Committee made in good faith within the powers
conferred upon it by this Plan shall be valid and final and conclusive (subject
only to change pursuant to the provisions of this Plan) for all purposes of the
Plan.
(e) Discretionary actions of the Committee shall be made in a manner
which does not discriminate in favor of shareholders, officers or highly
compensated employees. In the event the Committee is to exercise any
discretionary authority with respect to a Participant who is a member of the
Committee, such discretionary authority shall be exercised solely and
exclusively by those members of the Committee other than such Participant. If
the Participant is the sole member of the Committee, such discretionary
authority shall be exercised solely and exclusively by the board of directors of
the Company.
(f) By unanimous vote, members of the Committee may allocate specific
responsibilities among themselves. Also by unanimous vote, the Committee may
delegate to persons other than members of the Committee some or all of its
discretionary authority to control and manage the operation and administration
of the Plan. However, the Committee may not delegate its power to review claims
under the Plan's claims procedures.
(g) The Committee may appoint such advisors, agents and
representatives as it shall deem advisable and may also employ such clerical,
legal and medical counsel as it deems necessary. Any action taken by a properly
authorized agent of the Committee shall be deemed taken by the Committee.
(h) The Participating Companies shall indemnify (in such proportions
as the Company shall determine) and hold harmless each Committee member and any
person to whom authority has been delegated under ( f ) above against all
liabilities, losses, costs and expenses, including reasonable attorneys' fees,
incurred or suffered by any such member in connection with his management or
administration, at any time, of this Plan; provided, however, that such
indemnity shall not extend to the willful misconduct or gross negligence of any
such person.
10.2 Agent for Legal Process. The president of the Company shall be
the agent for service of legal process with respect to any matter concerning the
Plan.
10.3 Beneficiary Designations. At any time and from time to time, each
Participant having an entitlement to benefits under the Plan which will continue
after his death shall have an unrestricted right to designate one or more
"Beneficiaries" or contingent Beneficiaries to whom payment of any account
balances described in--this Plan to which such Participant was entitled shall be
paid in the event of the Participant's death. Each such designation shall be
evidenced by a written instrument in a form acceptable to the Company, signed by
the Participant and filed with the Company. A Participant may designate
different Beneficiaries at any time by filing a new beneficiary designation with
the Company. The last effective designation filed with the Company shall
supersede all prior designations. No beneficiary designation filed after ten
(10) days following the death of a Participant shall be valid. The following
paragraphs shall also be applicable:
(a) Notwithstanding any other provisions of this Plan, a Participant's
benefits shall be distributed in full, on the death of the Participant, to the
Participant's surviving spouse unless:
(1) The Participant has no surviving spouse; or
(2) The surviving spouse has consented in writing to the
designation of another Beneficiary or other form of payment or has
expressly consented to the future designation of Beneficiaries by the
Participant without the requirement of further consent by the
surviving spouse, such consent acknowledged the effect of such
election and such consent was witnessed by a notary public.
(b) If there is no surviving spouse and the Participant has not
designated another Beneficiary, or such designation is invalid or no designated
Beneficiary survives the Participant, the following parties in the order named
shall be deemed to be such Beneficiary:
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(1) The Participant's surviving children (in equal shares) and
the descendants then living of any deceased children, by right of
representation.
(2) The executor or administrator of the Participant's estate.
(c) A Participant's Beneficiary may also designate primary and
contingent Beneficiaries in the manner described above.
(d) Whenever rights of a Participant are stated or limited by the
Plan, his Beneficiaries shall be limited thereby.
(e) If the Plan is or should become the transferee of a defined
contribution plan subject to the funding standards of section 412 of the
Internal Revenue Code or the transferee of a defined benefit plan, the Plan
shall be amended to meet the requirements of section 401(a)(11) and section 417
of said Code.
10.4 Claims Procedures. Claims made for benefits under the Plan shall
be processed in accordance with the following paragraphs:
(a) Claims for benefits shall be made in writing to the Committee.
(b) If a claim made for benefits under the Plan by a Participant,
Beneficiary, surviving spouse or contingent annuitant ("Claimant") is not
approved in its entirety, the Claimant shall be so notified in writing by the
Committee or its duly authorized agent within ninety (90) days. Notice wholly or
partially denying a claim shall be written in a manner calculated to be
understood by the Claimant and contain: (i) the specific reason or reasons for
the denial, (ii) specific reference to the pertinent 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 such material or information is necessary, and (iv) an explanation of the
review procedure set forth in the following paragraphs.
(c) A Claimant whose claim for benefits hereunder has been wholly or
partially denied, or his duly authorized representative, may request a review of
such denial by . the Committee. A request for review shall be made in writing to
the Committee within ninety (90) days after receipt by the Claimant of written
notification of denial of such claim and may contain issues and comments with
respect to the claim. A Claimant who submits a request for review shall be
entitled to access to documents pertinent to his claim.
(d) Upon receipt of a request for review of a denial of a claim, the
Committee shall, within sixty (60) days, review in detail the nature and
foundations of the claim, including any issues and comments submitted by the
Claimant or his duly authorized representative and the reasons for the prior
denial of the claim. After a full and fair review, the Committee shall render
its decision in writing to the Claimant. The decision on review shall include
the specific reasons for the decision, be written in a manner calculated to be
understood by the Claimant, and shall include specific references to the
pertinent Plan provisions on which the decision is based.
(e) In reviewing claims for benefits and the denial of claims, the
Committee shall have complete discretion to interpret the terms of the Plan and
decide all questions of eligibility for and entitlement to benefits.
10.5 Records. The Committee and each other person performing any
functions in the operation or administration of the Plan or the management or
control of the assets of the Plan shall keep such records as may be necessary or
appropriate in the discharge of their respective functions hereunder, including
records required by the Employee Retirement Income Security Act or any other
applicable law. Records shall be retained as long as necessary for the proper
administration of the Plan and at least for any period required by said Act or
other applicable law.
10.6 Correction of Errors. It is recognized that in the operation and
administration of the Plan certain mathematical and accounting errors may be
made or mistakes may arise by reason of factual errors in information supplied
to the Trustee or the Committee. Each such party shall have power to cause such
equitable adjustments to be made to
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<PAGE>
correct such errors as they, in their discretion, consider appropriate. Such
adjustments shall be final and binding on all persons.
10.7 Evidence. Evidence required of anyone under this Plan may be by
certificate, affidavit, document or other instrument which the person acting in
reliance thereon considers to be pertinent and reliable and to be signed, made
or presented by the proper party.
10.8 Bonding. Plan personnel shall be bonded to the extent required by
the Employee Retirement Income Security Act. Premiums for such bonding may, in
the sole discretion of the Company, be paid in whole or in part from the Trust
Fund. Such premiums may also be paid in whole or in part by the Company. The
Company may provide by agreement with any person that the premium for required
bonding shall be paid by such person.
10.9 Waiver of Notice. Any notice required hereunder may be waived by
the person entitled thereto.
10.10 Funding Policy and Method. The investment committee described in
the Trust Agreement shall convene at a meeting duly called for such purpose and
establish a funding policy and method consistent with the objectives of the Plan
and the requirements of law. The investment committee shall meet at least
annually to review such funding policy and method. In establishing and reviewing
such funding policy and method, the investment committee shall endeavor to
determine the Plan's short-term and long-term objectives and financial needs,
taking into account the need for liquidity to pay benefits and the need for
investment growth. All actions taken pursuant to this Section shall be recorded
in the minutes of the meeting of the investment committee and shall be
communicated to the Trustee, the Committee and to any third party or parties
issuing investment directions to the Trustee.
Section 11.
TRUST FUND
11.1 Composition. All sums of money and all securities and other
property received by the Trustee for purposes of the Plan, together with all
investments made therewith, the proceeds thereof and all earnings and
accumulations thereon, and the part from time to time remaining, shall
constitute the "Trust Fund." The Company may cause the Trust Fund to be divided
into any number of parts for investment purposes or any other purposes necessary
or advisable for the proper administration of the Plan. The Trust Fund shall be
segregated from the assets of all Participating Companies.
11.2 Trustee; Trust Agreement. The assets of the Trust Fund shall be
held in trust by a "Trustee" pursuant to the Trust Agreement described in
Section 1.8. The selection and appointment of the Trustee of the Trust Fund
shall be made by the Company, by action of its board of directors. The Company,
by action of its board of directors, shall have the right at any time to remove
a Trustee and appoint a successor thereto, subject only to the terms of the
Trust Agreement. The Company, by action of its board of directors, shall have
the right to determine the form and substance of the Trust Agreement, subject
only to the requirement that it shall not be inconsistent with the provisions of
the Plan.
11.3 Compensation and Expenses of Trustee. The Trustee shall be
entitled to receive such reasonable compensation for its services as may be
provided for by the Trust Agreement. The Trustee shall also be entitled to
reimbursement for all reasonable and necessary costs, expenses and disbursements
incurred by it in the performance of its services. Such compensation and
reimbursements shall be paid from the Trust Fund if not paid by the
Participating Companies.
11.4 No Diversion. The Trust Fund shall be maintained for the
exclusive purpose of providing benefits to Participants under the Plan and their
Beneficiaries and defraying reasonable expenses of administering the Plan. Such
expenses may include premiums for the bonding of Plan officials required by the
Employee Retirement Income Security Act and the payment of legal fees. No part
of the corpus or income of the Trust Fund may be used for, or diverted to,
purposes other than for the exclusive benefit of Plan Participants or their
Beneficiaries. Notwithstanding the foregoing, the following paragraphs shall
apply:
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(a) The restatement of the Plan by the Company is contingent upon
obtaining approval of the Internal Revenue Service of the Plan. In the event
that the Internal Revenue Service fails to approve the Plan, the Trustee shall
promptly proceed to return all contributions made by the Participating Companies
with respect to Plan Years after the effective date of the restated Plan. In no
event shall the amounts described in the preceding sentence be returned later
than one (1) year after the date of the final denial of qualification of the
Plan, including the final resolution of any appeals before the Internal Revenue
Service or the courts.
(b) If a contribution is made by a Participating Company by reason of
mistake in fact, then such contribution shall be returned to such Participating
Company within one (1) year after the payment was made.
(c) All contributions by Participating Companies are expressly
conditioned on their deductibility and, to the extent that a deduction is
disallowed, such contribution shall be returned to such Participating Company
within one (1) year after the disallowance thereof.
(d) In the case of a termination of the Plan, any residual assets
attributable to a Participating Company's employees which are held in suspense
pursuant to Section 12.1(f) shall be returned to such Participating Company.
Section 12.
MAXIMUM ADDITIONS TO PARTICIPANT ACCOUNTS
12.1 Maximum Limitations on Annual Additions. Notwithstanding any
provisions of the Plan to the contrary, the annual additions to any
Participant's accounts shall be limited in accordance with the following
paragraphs.
(a) The annual additions made to a Participant's accounts in a defined
contribution plan for any limitation year may not exceed the lesser of:
(1) The greater of:
(A) The defined benefit dollar limitation set forth in
section 415(b)(1) of the Internal Revenue Code as in effect for the
limitation year multiplied by twenty-five percent (25%); or
(B) Thirty Thousand Dollars ($30,000); or
(2) Twenty-five percent (25%) of the Participant's compensation.
(b) For purposes of this Section, the term "annual additions n means
the sum, credited to a Participant' 8 account for any limitation year, of:
(1) Company contributions;
(2) Participant contributions(other than rollover contributions);
and
(3) Forfeitures.
(c) Employer contributions may be deemed credited to a Participant's
account for a particular limitation year if made no later than thirty (30) days
after the end of the period described in Section 404(a)(6) of the Internal
Revenue Code applicable to the taxable year with or within which the particular
limitation year ends. Employee contributions, both voluntary and/or mandatory,
may be deemed credited to a Participant's account for a particular limitation
year if made to the Plan no later than thirty (30) days after the close of that
limitation year.
(d) If, as a result of the allocation of forfeitures a reasonable
error in estimating a Participant's annual compensation or such other facts and
circumstances which the Commissioner of the Internal Revenue Service finds
justify the use of the rules set forth in this subsection, it is determined that
the annual additions to a Participant's accounts for any
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limitation year will be in excess of the limitations contained herein, such
annual additions shall be reduced to the extent necessary to bring them within
the limitation contained in paragraph (a) in the following order:
(1) Any voluntary contributions by a Participant which are
included in such annual additions shall be returned to the
Participant.
(2) The Participant's allocations of employer contributions and
forfeitures for the limitation year shall be reduced as follows:
(A) First, the Participant's accounts shall be reduced by
any forfeitures made to the Participant's accounts for such
limitation year. If there were forfeitures from more than one
plan, the Participant's accounts shall be reduced first by the
forfeitures from the plan which provided the greatest amount of
forfeitures to the Participant's account.
(B) Then, the Participant's accounts shall be reduced by any
allocations of employer contributions for such limitation year.
If employer contributions were allocated to the Participant's
accounts from more than one plan, the Participant's accounts
shall be reduced first by the employer contributions from the
plan into which the greatest amount of contributions were made on
the Participant's behalf.
(e) If and to the extent that the amount of any Participant's
allocation of forfeitures or employer contributions is reduced in accordance
with the provisions of paragraph (d), the amount of such reductions shall,
subject to the limitations of paragraph (a), be allocated among the remaining
Participants as if such amounts were an additional contribution by the employer.
(f) If the amounts described in paragraph (e) cannot be allocated to
Participant accounts because of the limitations described in paragraph (a), such
amounts shall be maintained in a suspense account subject to the following
subparagraphs:
(1) No Participating Company contributions shall be made at any
time when their allocation would be precluded by paragraph (a) of this
Section.
(2) Investment gains and losses and other income shall not be
allocated to the suspense account.
(3) Amounts in the suspense account shall be allocated to the
accounts of the persons entitled to share therein, within the
limitations of paragraph (a), as of the last day of each Plan Year
until the suspense account is exhausted.
(4) If the Plan is terminated before the suspense account is
exhausted, such suspense account will be returned to the appropriate
Participating Company.
12.2 Participation in Both a Defined Contribution and Defined Benefit
Plan. Notwithstanding any other provisions of this Plan, in any case in which an
individual has at any time participated in a defined benefit plan maintained by
a Participating Company or an Affiliate and also has at any time participated in
a defined contribution plan maintained by a Participating Company or an
Affiliate, the sum of the defined benefit plan fraction and the defined
contribution plan fraction with respect to that Participant for any limitation
year may not exceed 1.0.
(a) The "defined benefit plan fraction" applicable to any Participant
for any limitation year is a fraction:
(1) The numerator of which is the protected annual benefit of the
Participant (determined as of the close of the limitation year); and
(2) The denominator of which is the lesser of:
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(A) The product of 1.25 multiplied by $90,000 (adjusted for
cost-of-living increases pursuant to Section 12.3 below); or
(B) The product of 1.4 multiplied by 100% of the
Participant's average compensation of his high three (3) years of
service.
If the Participant has participated in more than one defined
benefit plan maintained by an employer, the numerator of the
defined benefit plan fraction is the sum of the projected annual
benefits under all of the defined benefit plans.
(b) A Participant's "projected annual benefit" is equal to the annual
benefit to which the Participant in a defined benefit plan would be entitled
under the terms of the plan based upon the following assumptions:
(1) The Participant will continue employment until reaching
normal retirement age as determined under the terms of the plan (or
current age if that is later).
(2) The Participant's compensation for the limitation year under
consideration will remain the same until the date the Participant
attains such age.
(3) All other relevant factors used to determine benefits under
the plan for the limitation year under consideration will remain
constant for all future limitation years.
(c) The "defined contribution plan fraction" applicable to a
Participant for any limitation year is a fraction:
(1) The numerator of which is the sum of the annual additions to
the Participant's account as of the close of the limitation year and
for all prior limitation years; and
(2) The denominator of which is the lesser of:
(A) The product of 1.25 multiplied by the dollar limitation
in effect under Section 12.1(a)(1) for the limitation year; or
(B) The product of 1.4 multiplied by the amount which may be
taken into account under Section l2.l(a)(2) with respect to such
Participant for the limitation year.
(d) For any Plan Year for which the Plan is a Super Top-Heavy Plan,
the dollar limitations in the defined benefit and defined contribution plan
fractions described in this Section shall be multiplied by 1.0 rather than 1.25
and "$41,500" shall be substituted for "$51,875" for purposes of this Section.
However, if the application of this provision would cause any Participant to
exceed the limitations described in this Section, then the application of the
provisions of this Section shall be suspended as to such Participant until such
time as the Participant no longer exceeds limitations as modified by this
paragraph. During the period of such suspension, there shall be no employer
contributions, forfeitures or voluntary nondeductible contributions allocated to
such Participant's accounts under this Plan or any other defined benefit plan of
the employer and there shall be no accruals for such Participant under any
defined benefit plan of the employer.
12.3 Definitions. The following definitions shall apply for purposes
of this Section 12:
(a) The "limitation year" shall be the Plan Year unless and until the
Company elects a different twelve (12) month period by adoption of a written
resolution. A written resolution specifying a limitation year that is adopted
after the first such resolution shall be considered to be a change of the
limitation year and shall be made pursuant to Section 415 of the Internal
Revenue Code.
(b) For purposes of this Section, " compensation " includes a
Participant's wages, salaries, fees for professional services and other amounts
received for personal services actually rendered in the course of employment
with the Company (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
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tips and bonuses). The term "compensation" shall not include those items
referred to in Treasury Regulation 1.4152(d)(2). Compensation in a limitation
year shall be the compensation actually paid or made available to a Participant
within a limitation year.
12.4 Aggregation Rules. All qualified defined benefit plans (whether
or not terminated) ever maintained by a Participating Company will be treated as
one defined benefit plan. All qualified defined contribution plans (whether or
not terminated) ever maintained by a Participating Company will be treated as
one defined contribution plan.
12.5 Rules of Construction. The purpose of this Section 12 is to
prevent the Plan from becoming inadvertently disqualified under Section 415 of
the Internal Revenue Code. Accordingly, the provisions of this Section shall be
deemed to incorporate such provisions of said Section and the Treasury
Regulations issued thereunder as may prevent any such disqualification and such
Code Section and Regulations shall supersede any provisions to the contrary
contained herein. Furthermore, if there is an ambiguity or other uncertainty
contained in the terms of this Section, it shall be construed in a manner
consistent with the purpose of keeping the Plan a tax qualified plan.
Section 13.
EMPLOYEE INVESTMENT ELECTIONS
13.1 Investment Elections. Each Active Participant who has elected to
make contributions to the Plan shall make an investment election as to how the
Participant's account balances are to be invested as among the investments
offered by the Committee. The Committee shall determine the investment funds to
be maintained or made available by the Trustee from time to time for such
investments. Such funds shall include, without limitation, a principal
appreciation fund, a diversified fund and a money market type fund. No Active
Participant shall be permitted to make contributions to the Trust Fund unless
and until he has made such an investment election. Each employee who has not
elected to make contributions to the Plan or who is not eligible to make such
contributions, but for whom the Plan maintains a Rollover Contribution Account
or a Defined Benefit Plan Account, shall also be required to make an election as
to how such account balance or balances are to be invested as among the
available funds. All investment elections shall be made on such forms as may be
prescribed by the Committee for this purpose.
13.2 Changing Investment Elections. A Participant may change his
investment election from any one to the investment options described in the
preceding Section to any other option described in that Section. Any such change
shall be made by written notice to the Committee. The Committee shall, from time
to time, adopt nondiscriminatory policies or rules governing the manner in which
such investment election changes may be filed and when any such filing shall
become effective, all so that the Plan may be conveniently administered. Any
change in a Participant's investment election shall apply to the Participant's
existing account balances and to any future additions to these account balances.
Section 14.
AMENDMENT. TERMINATION, MERGER
14.1 Amendment. Subject to the nondiversion provisions of Section 11,
the Company, by action of its board of directors, may amend the Plan at any time
and from time to time with respect to all Participating Companies. No amendment
of the Plan shall have the effect of changing the rights, duties and liabilities
of the Trustee without its written consent. No amendment shall divest a
Participant or Beneficiary of benefits accrued prior to the amendment. The
Company agrees that promptly upon adoption of any amendment to the Plan it will
furnish a copy of the amendment together with a certificate evidencing its due
adoption, as follows:
(a) To the Trustee then acting.
(b) To each other Participating Company. The amendment shall not be
effective as to a Participating Company and its employees if, within thirty (30)
days of receipt of the certificate, such Participating Company so notifies the
Company and the Trustee in writing. Such notification shall result in a
discontinuance of its joint participation in the Plan with the results described
in Section 13.2.
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No amendment necessary to comply with any applicable law, regulation
or order of the Internal Revenue Code or the Employee Retirement Income Security
Act or any other provision of law shall be considered prejudicial to the rights
of any employee or his Beneficiaries.
14.2 Discontinuance of Joint Participation in Plan by a Participating
Company. A Participating Company, by action of its board of directors and on
appropriate written notice to the Company and the Trustee, may discontinue its
joint participation in the Plan with the other Participating Companies. The
Company shall cause a determination to be made of the aggregate of the account
balances of the Trust Fund held on account of employees of the withdrawing
company and their Beneficiaries, including the fixed liabilities attributable to
Non-Vested Balances of terminated employees which are pending potential
forfeiture, as of such Valuation Date as shall be determined by the Company. The
Company shall direct the Trustee to transfer assets representing such aggregate
balance to a separate fund for the plan of the withdrawing company; provided,
however, that such transfer shall be made only if and when the Company in its
sole judgment is satisfied that the transfer can be made in full compliance with
the requirements of the Employee Retirement Income Security Act. Such
withdrawing company may thereafter exercise, in respect of such separate trust
fund, all the rights and powers reserved to the Company with respect to the
Trust Fund. The plan of the withdrawing company shall, until amended by the
withdrawing company, continue with the same terms as the Plan herein, except
that with respect to the separate plan of the withdrawing company the words
"Participating Company," "Participating Companies" and "Company" shall
thereafter be considered to refer only to the withdrawing company. Any
discontinuance of participation by a Participating Company shall be effected in
such manner that each Participant or Beneficiary would (if the Plan and the plan
of the withdrawing company then terminated) receive a benefit immediately after
such discontinuance of participation which is equal to the benefit he would have
been entitled to receive immediately before such discontinuance of participation
(if the Plan had then terminated).
14.3 Reorganizations of Participating Companies. In the event two or
more Participating Companies shall be consolidated or merged or in the event one
or more Participating Companies shall acquire the assets of another
Participating Company, the Plan shall be deemed to have continued without
termination and without a complete discontinuance of contributions as to all the
Participating Companies involved in such reorganization and their employees,
except that employees whose Termination of Employment shall occur at the time of
and because of such reorganization shall be entitled to benefits as in the case
of a termination of the Plan. In such event, in administering the Plan, the
corporation resulting from the consolidation, the surviving corporation in the
merger, or the employer acquiring the assets, shall be considered as a
continuation of all of the Participating Companies involved in the
reorganization.
14.4 Termination. The Plan may be terminated by action of all of the
Participating Companies jointly participating therein at the time by action of
their respective boards of directors. An employer which has discontinued its
joint participation in the Plan with the other Participating Companies shall
also have the right to terminate its separate plan which resulted from such
discontinuance at any time by action of its board of directors. Any such
voluntary termination of the Plan, or separate plan, shall be made in compliance
with all applicable provisions of law.
14.5 Discontinuance of Contributions. Whenever a Participating Company
determines that it is impossible to or not advisable to make further
contributions as provided in the Plan, the board of directors of such
Participating Company may, without liquidating the Trust Fund, adopt an
appropriate resolution permanently discontinuing all further contributions to
the Plan by such Participating Company. A certified copy of such resolution
shall be delivered to the Company and the Trustee. Thereafter, the Company and
the Trustee shall continue to administer all provisions of the Plan which are
necessary and remain in force, other than provisions relating to contributions
by such Participating Company. However, the Trust Fund shall remain in existence
with respect to such Participating Company and all provisions of the Trust
Agreement shall remain in full force and effect as to such Participating
Company.
14.6 Rights Upon Termination, Partial Termination and Discontinuance
of Contributions. Notwithstanding any other provisions of this Plan, the Vested
Balance of the Company Matching Account of each Participant shall become one
hundred percent (100%) upon the happening of any of the following events:
(a) In the event of a termination of the Plan as to a Participating
Company or all of the Participating Companies, either as provided in Section
14.4 or by operation of law.
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(b) A partial termination of the Plan as to a Participating Company or
all of the Participating Companies whether pursuant to the provisions of Section
14.4 or by operation of law.
(c) A complete discontinuance of contributions to the Plan by a
Participating Company whether pursuant to the provisions of Section 14.5 or by
operation of law.
The provisions of this Section shall be applicable to the Participants and their
Beneficiaries with respect to whom the above contingencies occur.
14.7 Deferral of Distributions. In the event of a complete or partial
termination of the Plan with respect to a Participating Company, the Committee
or the Trustee may defer any distribution of benefit payments to Participants
and Beneficiaries with respect to which such termination applies until after the
following have occurred:
(a) Receipt of a final determination from the Treasury Department or
any court of competent jurisdiction regarding the effect of such termination on
the qualified status of the Plan under Section 401(a) of the Internal Revenue
Code
(b) Appropriate adjustments of the Trust Fund to reflect taxes, costs
and expenses, if any, incident to such termination.
14.8 Merger, Consolidation or Transfer of Plan Assets. In the case of
any merger or consolidation of the Plan with any other plan, or in the case of
the transfer of assets or liabilities of the Plan to any other plan, provision
shall be made so that each Participant and Beneficiary would (if such other 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 immediately before the merger, consolidation or transfer (if
the Plan had then terminated).
Section 15.
DIRECT ROLLOVERS
15.1 Electing a Direct Rollover. This Section applies to distributions
made on or after January 1, 1993. Notwithstanding any provision of the plan to
the contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner prescribed by
the plan administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee in a
direct rollover.
15.2 Definitions.
(a) Eligible Rollover Distribution. An eligible rollover distribution
is any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code; and the portion of any
distribution that is not includable in gross income (determined without regard
to the exclusion for net unrealized appreciation with respect to employer
securities).
(b) Eligible Retirement Plan. An eligible retirement plan is an
individual retirement account described in Section 408(a) of the Code, an
individual retirement annuity described in Section 408(b) of the Code, an
annuity plan described in Section 403(a) of the Code, or a qualified trust
described in Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible rollover distribution
to the surviving spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(c) Distributee. A distributee includes an employee or former
employee. In addition, the employee's or former employee's surviving spouse and
the employee's or former employee's spouse or former spouse who is the alternate
payee
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under a qualified domestic relations order, as defined in Section 414(p) of the
Code, are distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover. A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
Section 16.
MISCELLANEOUS
16.1 Responsibility of Insurance Companies. No insurance company
issuing contracts upon the application of the Trustee or the board of directors
of the Company shall be deemed to be a party to the Plan nor shall it be
responsible for its validity. The issuing insurance company shall not be
required to look into the terms of the Plan nor be responsible to see that any
action of the Company is authorized by its terms. No issuing insurance company
shall be obligated to see to the distribution or further application of any
monies paid by it pursuant to any direction of the Company.
16.2 Limitation of Fiduciary Responsibility and Liability. The duties
of each fiduciary named in this Plan shall be limited to those duties
specifically set forth herein. No officer, director or employee of any
Participating Company who is not designated as a fiduciary shall have any
discretionary authority or control respecting the management of the Plan or any
discretionary authority or control respecting the management or disposition of
the assets of the Plan. Except as otherwise provided by law, no fiduciary shall
be responsible for the performance of duties not assigned to him as provided
herein or for the acts or omissions of any other fiduciary.
16.3 Numbers and Genders. All words used herein in the singular number
shall extend to and include the plural. All words used in the plural number
shall extend to and include the singular. All words used in any gender shall
extend to and include all genders.
16.4 Headings. Headings at the beginning of Sections hereof are for
convenience of reference, shall not be considered a part of the text of the
Plan, and shall not influence its construction.
16.5 Severability. In case any provision of this Plan shall be held
illegal or invalid for any reason, said illegality or invalidity shall not
affect the remaining parts of this Plan which shall then be construed and
enforced as if such illegal or invalid provision had never been inserted herein.
Section 17.
LOANS TO PLAN PARTICIPANTS
17.1 Loan Procedures. Effective April 1, 1995, upon the written
application of a Participant who has not terminated employment with the Company
filed with the Committee, the Committee, in its absolute discretion, may direct
the Trustee to make a loan or loans to the Participant from the assets of the
Trust Fund. The Trustee shall be under no obligation to make loans to
Participants except as otherwise provided by this Section. However, loans made
under this Section shall be available to all Participants on a reasonably
equivalent basis and shall not be made available to Highly Compensated
Participants, officers or shareholders as a percentage of their account balances
maintained under the Plan greater than the percentage of the account balances
maintained under the Plan made available to other Participants. All loans made
pursuant to this Section shall be considered an investment solely of the account
of the Participant receiving the loan. The Committee shall adopt such rules and
procedures (which are hereby incorporated herein) as may be necessary to
implement the loan provisions under this Section.
17.2 Maximum Loan Amount. The maximum amount of any loan or loans made
to a Participant from this Plan at the time such loan is made shall be the
lesser of:
(a) Fifty percent (50%) of the Participant's aggregate vested account
balances maintained under the Plan: or
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(b) Fifty Thousand Dollars ($50,000) reduced by the excess of the
highest outstanding loan balance during the preceding one-year period over the
outstanding balance on the day the loan is made.
17.3 Loan Terms. All loans made pursuant to this Section shall be
evidenced by a promissory note in a form specified by the Committee. Such note
shall require that interest be charged at the prime rate in effect at the
Chemical Bank, New York, at the time the loan application is filed by the
Participant, plus 1%. The maximum term of any such loan shall be determined by
the Committee but in no event shall exceed five (5) years. However, this term
limitation shall not apply to any loan used to acquire any dwelling unit which
within a reasonable time is to be used (determined at the time the loan is made)
as the principal residence of the Participant.
17.4 Loan Security. All loans made pursuant to this Section shall be
secured by a prior and paramount security interest in 50% of the Participant's
aggregate vested account balances maintained under the Plan.
17.5 Repayment; Events of Default. All loans shall be amortized over a
period not exceeding 60 months (except for loans used to acquire a principal
residence which may be amortized over a longer period) and repaid through
Participant payroll deductions; however, some or all of the outstanding loan
balance may be prepaid by the Participant at any time during the period of the
loan. Repayments of the loan amount shall be credited directly to such
Participant's accounts in a manner consistent with the Participant's current
investment. Upon a Participant's Termination of Employment, any outstanding loan
balance shall be distributed to such Participant at the same time as, and as
part of, such Participant's vested interest in his Accounts, in accordance with
the provisions of Section 9 and applicable law.
A default with respect to each and every loan made to a Participant
shall occur--
(a) If the Participant becomes insolvent or bankrupt.
(b) If the Participant fails to execute any security agreement
requested by the Trustee or the Committee.
(c) If any payment is not made when due.
In the event of any such default, the entire outstanding principal and
interest due under the note and any similar notes issued by the Participant
shall become immediately due and payable. Any outstanding loan to a Participant
shall, if not paid upon default, be liquidated out of the vested interest of the
Participant's accounts to the extent allowable under applicable federal law.
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AMENDMENT TO THE
ALPHA CELLULOSE CORPORATION
CASH OPTION THRIFT PLAN
WHEREAS, Alpha Cellulose Corporation ("Alpha") has previously adopted
the Alpha Cellulose Corporation Cash Option Thrift Plan (the "Plan") for the
benefit of eligible employees and their beneficiaries, reserving the right
therein to amend the Plan; and
WHEREAS, Alpha has determined it to be appropriate to amend the Plan
to exclude prospectively from active participation certain employees who will be
eligible to participate in the Buckeye Retirement Savings Plan (the "Buckeye
Plan");
NOW, THEREFORE, the Plan is hereby amended as follows:
1.
Section 2.11 of the Plan is amended by adding at the end of the
existing provision, the following new subsection:
"(d) Notwithstanding the foregoing or any other provision of the
Plan, on and after the date, if any, as of which an otherwise
Eligible Employee becomes eligible to participate in the Buckeye
Retirement Plus Savings Plan, a tax-qualified retirement plan
sponsored by Buckeye Cellulose Corporation, such individual shall
cease to be an Active Participant in the Plan as contemplated by
Section 4.3, shall no longer be eligible to contribute additional
amounts to his account in this Plan nor to have any Company
contributions made to his account in the Plan, except to the
extent, if any, required by law to maintain the tax-qualified
status of this Plan."
IN WITNESS WHEREOF, Alpha has caused this Amendment to be signed by
its duly authorized representative, the 26th day of June 1997.
ALPHA CELLULOSE CORPORATION
By: /s/ DAVID B. FERRARO
------------------------------
Title: President
TRUSTEE'S ACKNOWLEDGMENT AND ACCEPTANCE
CAPITAL GUARDIAN TRUST COMPANY
By: /s/ HERMAN MARTINEZ
------------------------------
Title: Assistant Vice President
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<PAGE>
AMENDMENT TO THE
ALPHA CELLULOSE CORPORATION
CASH OPTION THRIFT PLAN
WHEREAS, Alpha Cellulose Corporation ("Alpha") has previously adopted
the Alpha Cellulose Corporation Cash Option Thrift Plan ("Plan") for the benefit
of eligible employees and their beneficiaries, reserving the right therein to
amend the Plan; and
WHEREAS, Alpha has determined it to be prudent and appropriate to
amend the Plan for the purposes of permitting investment in common stock of
Buckeye Cellulose Corporation, permitting in-kind distributions of such stock
and permitting certain discretionary contributions by Alpha;
NOW, THEREFORE, the Plan is hereby amended as follows:
1.
Section 6 of the Plan is hereby amended by adding, as a new Subsection 6.12
thereto, the following:
"6.12 Special Company Contribution. Notwithstanding any other
provision of the Plan, the Company may, for any Plan Year, make a
Special Company Contribution as of any day within such Plan Year. Any
such contribution shall be allocated to an eligible Participant's
Special Contribution Account, which shall be fully vested at all
times. Contributions to any such Account may be made by the Company in
cash or in the form of qualifying employer securities. In the absence
of a specific direction by the Company to the contrary, any such cash
contribution shall be applied to purchase and allocate shares of
qualifying employer securities. The allocation of any such Special
Company Contribution shall be in an equal dollar amount and/or an
equal number of shares of qualifying employer securities to the
account of each Participant who is an active employee of the Company
on the date as of which such Contribution is made. Fractional shares
may be allocated, but only whole shares may be distributed if and to
the extent otherwise permitted in accordance with Section 15.3 of the
Plan. A Participant's Special Contribution Account shall not be
subject to participant-directed investment decisions. Any investment
experience adjustment to the value of any Special Contribution Account
shall, to the extent such Account is based upon an allocation of
qualifying employer securities, be based solely upon the fair market
value of such securities and the dividends, if any, paid thereon.
Dividends, if any, shall be reinvested in qualifying employer
securities to the extent reasonably practicable, in the absence of
specific directions by the Company to the contrary. The Company may,
in its sole and absolute discretion, determine to make any Special
Company Contribution only on behalf of any eligible Participant who is
not a Highly Compensated Participant on the date as of which the
contribution is allocated."
2.
Section 15 of the Plan is hereby amended by adding, as a new Subsection 15.3
thereto, the following;
"15.3 Medium of Payment. Except as otherwise expressly provided in this
Section, all benefit payments and all direct rollovers from the Plan
shall be effected through the issuance of a check drawn against the
Trust. Notwithstanding the prior sentence, on an after the date as of
which a Participant's benefit under the Plan is invested in qualifying
employer securities within the contemplation of Title I of ERISA, an
individual who receives a lump sum distribution from the Plan may elect
to receive all or part of such distribution in whole shares of such
securities. No such distribution of qualifying employer securities
shall be permitted (i) in excess of the total number of whole shares
allocable to the relevant account, (ii) in the case of any distribution
other than a lump sum distribution of the entire vested amount
distributable from the account, (iii) in the event of any direct
rollover of such portion of the distributable benefit, or (iv) to any
alternate payee under a qualified domestic relations order, except to
the extent provided in such order. No distribution of any fractional
share(s) shall be made."
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<PAGE>
3.
Section 16 of the Plan is hereby amended by adding, as a new Subsection 16.6
thereto, the following:
"16.6 Investments In Qualifying Employer Securities. Notwithstanding
any other provision of the Plan, on and after the date of adoption
hereof, in the event either (i) the Committee establishes or has
established a participant- directed investment option for purposes of
Section 13 which includes securities which constitute qualifying
employer securities within the contemplation of Title I of ERISA,
and/or (ii) Company contributions are made or have been made to the
Plan in the form of such qualifying employer securities, and/or (iii)
Company contributions are made or have been made to the Plan for the
purpose of acquiring and allocating such qualifying employer
securities, the Committee and the Trustee are specifically authorized
to permit the investment of up to one hundred percent (100%) of the
Plan assets in such securities."
4.
The provisions of this Amendment shall be effective as soon as is
administratively practicable and legally permissible after the date hereof;
provided, however, that item 1 of this Amendment shall be effective as of March
31, 1997.
IN WITNESS WHEREOF, Alpha has caused this Amendment to be signed by
its duly authorized representatives this 26th day of June, 1997.
ALPHA CELLULOSE CORPORATION
By: /s/ DAVID B. FERRARO
---------------------------
Title: President
TRUSTEE'S ACKNOWLEDGMENT AND ACCEPTANCE
CAPITAL GUARDIAN TRUST COMPANY
By: /s/ HERMAN MARTINEZ
----------------------------
Title: Assistant Vice President
A-3
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG
Consent of Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Alpha Cash Option Thrift Plan of our report dated
August 8, 1996, except for Note 16, as to which the date is September 1, 1996,
with respect to the consolidated financial statements of Buckeye Cellulose
Corporation included in the Annual Report(Form 10-K) for the year ended June 30,
1996.
ERNST & YOUNG LLP
Memphis, Tennessee
August 7, 1997
