-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DD7jNoZJ+RAOx2WBmaLJjizIqJlrYRP7uTdGr9R6boqvb1B++3VokRQphU0i4+pE aCiLOssbmUC418s3z06Quw== 0000038195-96-000002.txt : 19960103 0000038195-96-000002.hdr.sgml : 19960103 ACCESSION NUMBER: 0000038195-96-000002 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19960102 EFFECTIVENESS DATE: 19960121 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FORT HOWARD CORP CENTRAL INDEX KEY: 0000038195 STANDARD INDUSTRIAL CLASSIFICATION: PAPER MILLS [2621] IRS NUMBER: 391090992 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-00019 FILM NUMBER: 96500254 BUSINESS ADDRESS: STREET 1: 1919 S BROADWAY CITY: GREEN BAY STATE: WI ZIP: 54304 BUSINESS PHONE: 4144358821 FORMER COMPANY: FORMER CONFORMED NAME: FORT HOWARD PAPER CO/DE DATE OF NAME CHANGE: 19870506 FORMER COMPANY: FORMER CONFORMED NAME: MARYLAND CUP CORP/WI DATE OF NAME CHANGE: 19840612 FORMER COMPANY: FORMER CONFORMED NAME: FORT HOWARD PAPER CO DATE OF NAME CHANGE: 19830926 S-8 1 As filed with the Securities and Exchange Commission on January 2, 1996 Registration No. 33- ============================================================================== SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 -------------------- FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------- FORT HOWARD CORPORATION (Exact name of registrant as specified in its charter) Delaware 2676 39-1090992 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization) Classification Code Number) Identification No.)
-------------------- 1919 South Broadway Green Bay, Wisconsin 54304 (414) 435-8821 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) -------------------- FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN (Full title of the Plans) -------------------- JAMES W. NELLEN II Vice President and Secretary Fort Howard Corporation 1919 South Broadway Green Bay, Wisconsin 54304 (414) 435-8821 (Name, address, including zip code, and telephone number, including area code, of agent for service) -------------------- CALCULATION OF REGISTRATION FEE ============================================================================== Proposed Maximum Proposed Maximum Amount of Title of Each Class of Number of Shares Offering Price Per Aggregate Registration Securities to be Registered to be Registered(1) Share(2) Offering Price(2) Fee - ------------------------------------------------------------------------------------------------- Common Stock par value $.01 per Share.................. 350,000 $22.50 $7,875,000 $2,715.52 Plan Interests............... (3) (3) (3) (3) ================================================================================================= (1) Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), this Registration Statement covers, in addition to the number of shares of Common Stock stated above, such additional shares of Common Stock to be offered or issued to prevent dilution as a result of future stock dividends or stock splits. (2) Pursuant to Rule 457(h) under the Securities Act, the proposed maximum offering price per share is based on $22.50 estimated solely for the purpose of calculating the amount of registration fee, and is based on the average of the high and low prices of the Common Stock as reported by Nasdaq on December 27, 1995, a date within five business days prior to the date of filing of this Registration Statement. (3) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as amended, this Registration Statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. These securities have no offering price and therefore, pursuant to Rule 457(h)(2) no separate registration fee is required.
PART I INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS ITEM 1. PLAN INFORMATION.* ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION.* - ----------------------- *The information required by Part I to be contained in the Section 10(a) Prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act and the "Note" to Part I of Form S-8. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents filed with the Securities and Exchange Commission (the "Commission") are incorporated by reference in this Registration Statement: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1994. 2. The Company's Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 1995, June 30, 1995 and September 30, 1995. 3. The description of the Company's Common Stock in the Company's Registration Statement on Form 8-A, filed with the Commission on March 8, 1995, including any amendment or report filed for the purpose of updating such description. 4. Fort Howard Corporation Profit Sharing Retirement Plan Annual Report on Form 11-K for the fiscal year ended December 31, 1994. All documents and other reports subsequently filed by the Company or the Fort Howard Corporation Profit Sharing Retirement Plan (the "Plan") pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to the filing of a post-effective amendment which indicates that all securities offered hereunder have been sold or which deregisters all securities then remaining unsold hereunder, shall be deemed to be incorporated by reference in this Registration Statement and to be part hereof from the date of filing of such documents. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. - 2 - ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Company is a Delaware corporation. Section 145 of the Delaware General Corporation Law provides, in summary, that directors and officers of Delaware corporations are entitled, under certain circumstances, to be indemnified against all expenses and liabilities (including attorney's fees) incurred by them as a result of suits brought against them in their capacity as a director or officer, if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the Corporation, and, with respect to any criminal action or proceeding, if they had no reasonable cause to believe their conduct was unlawful; provided that no indemnification may be made against expenses in respect of any claim, issue or matter as to which they shall have been adjudged to be liable to the Corporation, unless and only to the extent that the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, they are fairly and reasonably entitled to indemnity for such expenses which the court shall deem proper. Any such indemnification may be made by the Corporation only as authorized in each specific case upon a determination by the shareholders or disinterested directors that indemnification is proper because the indemnitee has met the applicable standard of conduct. The Certificate of Incorporation and By-laws of the Company provide for indemnification of its directors and officers to the fullest extent permitted by Delaware law, as the same may be amended from time to time. In addition, the Company maintains directors' and officers' liability insurance. The Company has entered into indemnification agreements ("Agreement") with certain of its directors and officers (the "Indemnitee"). Each Agreement provides that the Company will hold harmless and indemnify the Indemnitee against all liabilities and will advance all expenses (as defined) incurred by reason of the fact that the Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company or for its benefit as a director, officer, employee or agent of another enterprise, but only if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe that his or her conduct was unlawful. The right of indemnification and to receive advancement of expenses pursuant to each Agreement is not exclusive of any other rights to which the Indemnitee may at any time be entitled to under applicable law, the Company's Certificate of Incorporation or By-Laws, any agreement, a vote of shareholders, a resolution of the Company's Board of Directors or otherwise. Each Agreement further provides that, to the extent that the Company maintains a policy or policies providing directors' and officers' liability insurance, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available. The Company is not liable to pay any amounts otherwise indemnifiable under an Agreement to the extent that the Indemnitee has actually received payment under any insurance policy, contract, agreement or otherwise; and, except as provided in the Agreement, an Indemnitee is not entitled to indemnification or advancement of expenses with respect to any proceeding or claim brought or made by such Indemnitee against the Company. - 3 - Each Agreement terminates upon the later to occur of: (i) ten years after the date that the Indemnitee ceases to serve as a director, officer, employee, agent or fiduciary of the Company or of any other enterprise which the Indemnitee served at the request or for the benefit of the Company and (ii) the final termination of all pending proceedings in which the Indemnitee is granted rights of indemnification under such Agreement. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. Exhibit No. Description 4.1 Profit Sharing Retirement Plan, (As Amended and Restated as of January 1, 1985) conformed through the Ninth Amendment. 4.2 Plan Amendment No. 10 dated September 21, 1995. 4.3 Plan Amendment No. 11 dated December 22, 1995. 4.4 Fort Howard Profit Sharing Retirement Master Trust effective January 1, 1996. 4.5 Summary Plan Description. 23 Consent of Arthur Andersen LLP. 24 Powers of Attorney (included as part of signature page. The undersigned Registrant has submitted the Plan and any amendment thereto to the Internal Revenue Service in a timely manner and will make all changes required by the IRS in order to maintain qualification of the Plan. ------------ 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: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental - 4 - change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply if the Registration Statement is on Form S-3 or Form S-8 and the information required to be included in the post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective 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 purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Exchange 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 Securities 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 Commission such indemnification is against public policy as expressed in the Securities 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 - 5 - 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 Securities Act and will be governed by the final adjudication of such issue. - 6 - 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 Green Bay, State of Wisconsin on the 29th day of December, 1995. FORT HOWARD CORPORATION By /s/Donald H. DeMeuse --------------------- Donald H. DeMeuse Chairman of the Board and Chief Executive Officer POWER OF ATTORNEY Each person whose signature appears below constitutes and appoints James W. Nellen II and Kathleen J. Hempel, either of whom may act without the joinder of the other, as his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him, and in his name, place and stead, in any and all capacities to sign any and all amendments (including post-effective amendments) and supplements to this Registration Statement, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as full to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue thereof. 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 dates indicated. Signature Title Date --------- ----- ---- /s/Donald H. DeMeuse Director, Chairman of the Board December 29, 1995 - ---------------------- of Directors and Chief Executive Donald H. DeMeuse Officer (principal executive officer) /s/Kathleen J. Hempel Director, Vice Chairman December 29, 1995 - ---------------------- and Chief Financial Officer Kathleen J. Hempel (principal financial officer) /s/Michael T. Riordan Director, President and Chief December 29, 1995 - ---------------------- Operating Officer Michael T. Riordan /s/Donald Patrick Brennan Director December 29, 1995 - ---------------------- Donald Patrick Brennan - 7 - /s/Frank V. Sica Director December 7, 1995 - ---------------------- Frank V. Sica /s/Robert H. Niehaus Director December 29, 1995 - ---------------------- Robert H. Niehaus /s/David I. Margolis Director December 29, 1995 - ---------------------- David I. Margolis /s/Dudley J. Godfrey, Jr. Director December 29, 1995 - ---------------------- Dudley J. Godfrey, Jr. /s/James L. Burke Director December 6, 1995 - ---------------------- James L. Burke /s/Charles L. Szews Vice President and Controller December 29, 1995 - ---------------------- (principal accounting officer) Charles L. Szews - 8 - Pursuant to the requirements of the Securities Act of 1933, the trustees (or other persons who administer the Plan) have duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Green Bay, State of Wisconsin, on the 29th day of December, 1995. FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN Investment Advisory Board /s/ James W. Nellen II ------------------------------ By: James W. Nellen II Member - 9 - INDEX TO EXHIBITS Exhibit No. Description 4.1 Profit Sharing Retirement Plan, (As Amended and Restated as of January 1, 1985) conformed through the Ninth Amendment. 4.2 Plan Amendment No. 10 dated September 21, 1995. 4.3 Plan Amendment No. 11 dated December 22, 1995. 4.4 Fort Howard Profit Sharing Retirement Master Trust effective January 1, 1996. 4.5 Summary Plan Description. 23 Consent of Arthur Andersen LLP. 24 Powers of Attorney (included as part of signature page. The undersigned Registrant has submitted the Plan and any amendment thereto to the Internal Revenue Service in a timely manner and will make all changes required by the IRS in order to maintain qualification of the Plan. ------------ EX-4.1 2 Exhibit 4.1 ----------- FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN ------------------------------ (As Amended and Restated Effective as of the EFFECTIVE DATE) (Conformed Copy Through the Ninth Amendment) TABLE OF CONTENTS ----------------- ARTICLE PAGE - ------- ---- 1 DEFINITIONS 1 2 INTRODUCTION 8 2.01 PURPOSE 9 2.02 RESTATEMENT DATES 9 2.03 PLAN ADMINISTRATION 9 2.04 TRUSTEE, TRUST 9 2.05 SERVICE OF NOTICES 9 3 ELIGIBILITY AND PARTICIPATION 10 3.01 ELIGIBILITY 10 3.02 NOTICE OF PARTICIPATION 10 3.03 TERMINATION OF EMPLOYMENT 10 3.04 DISABILITY 10 3.05 LAYOFF 11 3.06 MILITARY LEAVE 11 3.07 LEAVE OF ABSENCE 11 3.08 FINALITY OF DETERMINATIONS 11 3.09 LEASED EMPLOYEES 11 4 DEFERRED WAGE CONTRIBUTIONS 12 4.01 AMOUNT OF DEFERRED WAGE CONTRIBUTIONS 12 4.02 ADJUSTMENT OF DEFERRED WAGE CONTRIBUTIONS 12 4.03 VESTING OF DEFERRED WAGE CONTRIBUTIONS 14 4.04 PAYROLL DEDUCTIONS 15 4.05 CHANGE IN DEFERRED WAGE CONTRIBUTION RATE 15 4.06 ALLOCATION OF EARNINGS TO DISTRIBUTIONS OF EXCESS DEFERRALS, EXCESS DEFERRED WAGE CONTRIBUTIONS AND EXCESS AGGREGATE CONTRIBUTIONS 15 4.07 MULTIPLE USE OF ALTERNATIVE LIMITATION 16 5 ROLLOVER CONTRIBUTIONS 16 5.01 ROLLOVER CONTRIBUTIONS 16 5.02 ROLLOVER CONTRIBUTORS 16 6 COMPANY CONTRIBUTIONS 17 6.01 AMOUNT OF COMPANY CONTRIBUTIONS 17 6.02 PAYMENTS TO TRUST 17 6.03 VERIFICATION OF COMPANY CONTRIBUTIONS 17 6.04 ADJUSTMENT OF COMPANY CONTRIBUTIONS 17 6.05 ACTUAL CONTRIBUTION PERCENTAGE TEST 17 7 ACCOUNTING 18 7.01 ACCOUNTS UNDER THE PLAN 18 7.02 ACCOUNTING PROCEDURES 19 7.03 ALLOCATION OF COMPANY CONTRIBUTIONS AND FORFEITURES 19 7.04 LIMITATIONS ON ADDITIONS TO PARTICIPANTS' ACCOUNTS 20 7.05 INVESTMENT OF CONTRIBUTIONS 20 7.06 INVESTMENT MANAGER 21 (i) 8 VESTING OF ACCOUNTS 21 8.01 VESTING VALUATION 21 8.02 VESTING UPON RETIREMENT OR DEATH 21 8.03 VESTING UPON RESIGNATION/DISMISSAL 22 8.04 REEMPLOYMENT AFTER INCURRING A BREAK IN SERVICE/RECREDITING OF YEARS OF SERVICE 22 8.05 PARTICIPANTS INCURRING BREAK IN SERVICE PRIOR TO JANUARY 1, 1985 22 8.06 REEMPLOYMENT AFTER RESIGNATION/DISMISSAL AND INCURRING A BREAK IN SERVICE 22 8.07 CONDITIONS FOR REPAYMENT OF PRIOR DISTRIBUTION UPON REEMPLOYMENT 23 8.08 DETERMINATION OF ACCOUNT OF REEMPLOYED PARTICIPANT WHO HAS NOT INCURRED A BREAK IN SERVICE 24 8.09 VESTING OF A PARTICIPANT UPON TRANSFER OF EMPLOYMENT 24 [8.10] STATEMENT OF ACCOUNT 25 9 DISTRIBUTION OF ACCOUNTS 25 9.01 MANNER OF DISTRIBUTION AND FURTHER ADJUSTMENTS 25 9.02 INSERVICE WITHDRAWALS 27 [9.03] REPAYMENTS OF INSERVICE WITHDRAWALS 30 [9.04] DESIGNATION OF BENEFICIARY 31 9.05 MISSING PARTICIPANTS OR BENEFICIARIES 31 9.06 DISTRIBUTION IN COMPANY SECURITIES 32 9.07 ALTERNATE PAYEE DUE TO INCAPACITY 32 9.08 COMMENCEMENT OF DISTRIBUTIONS 32 9.09 DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS 32 10 MISCELLANEOUS 33 10.01 INFORMATION TO BE FURNISHED BY PARTICIPANTS 33 10.02 INTERESTS NOT TRANSFERABLE 34 10.03 ABSENCE OF GUARANTY 34 10.04 EMPLOYMENT RIGHTS 34 10.05 GENDER AND NUMBER 34 10.06 REVIEW OF BENEFIT DETERMINATIONS 34 10.07 ERISA 35 10.08 UNIFORM ADMINISTRATION 35 10.09 AMENDMENT OR DISCONTINUANCE 36 10.10 PLAN MERGER OR CONSOLIDATION 36 10.11 TRUST AGREEMENT 36 10.12 WISCONSIN LAW TO GOVERN 36 10.13 STOCK RIGHTS OF PARTICIPANTS 37 10.14 NO INTEREST IN COMPANY 38 11 TOP HEAVY RESTRICTIONS 38 11.01 DEFINITIONS 38 11.02 TOP HEAVY DEFINED 39 11.03 VESTING PROCEDURES 40 11.04 MINIMUM BENEFITS FOR NON-KEY EMPLOYEES 41 11.05 MAXIMUM ANNUAL COMPENSATION 42 11.06 FORMULA FOR DETERMINING COMPANY CONTRIBUTIONS 42 11.07 SECTION 416 OF THE CODE AND ITS REGULATIONS 42 11.08 NO DUPLICATION OF BENEFITS 43 (ii) 12 INVESTMENT ADVISORY BOARD 43 12.01 MEMBERSHIP 43 12.02 GENERAL POWERS, RIGHTS AND DUTIES 43 12.03 MANNER OF ACTION 44 12.04 INTERESTED MEMBER 44 12.05 RESIGNATION OR REMOVAL OF MEMBERS 45 12.06 EXPENSES 45 12.07 INFORMATION REQUIRED 45 12.08 UNIFORM RULES 45 12.09 REVIEW OF BENEFIT DETERMINATIONS 46 12.10 FINAL DECISION 46 EXHIBIT A -- FORMULA FOR DETERMINING COMPANY CONTRIBUTIONS UNDER FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN A-1 (iii) FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN ------------------------------ January 1, 1985 Restatement WHEREAS, the Fort Howard Corporation Profit Sharing Retirement Plan was amended and restated effective January 1, 1984, for the benefit of eligible employees of Fort Howard Corporation; and WHEREAS, it is deemed desirable to amend and restate said Plan in its entirety; NOW, THEREFORE, effective as of January 1, 1985 but with respect only to employees who retire, die or otherwise terminate their employment on or after said date, said Profit Sharing Retirement Plan hereby is amended and restated in its entirety in the respects hereinafter set forth. The rights and obligations of employees who have retired, died or otherwise terminated their employment prior to January 1, 1985, shall be governed by the terms of the Plan as in effect on the date of their retirement, death or termination of employment except as otherwise provided herein. Article DEFINITIONS ----------- The following terms, when used and capitalized herein, are defined as follows and limited to that meaning only: 1.01 "ACCOUNTING DATE" means any ANNUAL ACCOUNTING DATE or MONTHLY ACCOUNTING DATE. 1.02 "ACCOUNT" means a COMPANY CONTRIBUTION ACCOUNT, PRIOR PARTICIPANT ACCOUNT, if any, DEFERRED WAGE ACCOUNT, if any, and any other account which the TRUSTEE maintains in the name of each PARTICIPANT. 1.03 "ANNUAL ACCOUNTING DATE" means any December 31. 1.04 "ANNUAL BASE PAY" means the total compensation paid to a PARTICIPANT for services rendered to the COMPANY during a calendar year, including overtime, holiday pay, sick days, salary continuation, and vacation pay, but excluding goodwill and discretionary bonuses, short term disability benefits, suggestion awards, sales awards, sales incentive compensation, amounts deducted from compensation and contributed by the PARTICIPANT to any nonqualified supplemental Retirement Plan and all other special or unusual compensation of any kind. The amount of ANNUAL BASE PAY shall be determined prior to any reduction for DEFERRED WAGE CONTRIBUTIONS. In addition, ANNUAL BASE PAY means, for a PARTICIPANT who was in the employ of a RELATED CORPORATION, the total compensation paid by such RELATED CORPORATION as if it were determined under the definition set forth - 1 - above. For PLAN YEARS beginning on and after January 1, 1994, a PARTICIPANT'S ANNUAL BASE PAY shall not exceed the $150,000 limitation described in Section 401(a)(17) of the CODE, as that limitation is adjusted from time to time by the Secretary of Treasury to reflect cost of living increases. In determining the ANNUAL BASE PAY of a PARTICIPANT, the rules of Section 414(q)(6) shall apply, except that in applying such rules, the term "family" shall include only the spouse of the PARTICIPANT and any lineal descendants of the PARTICIPANT who have not attained age 19 before the close of the year. 1.05 "BENEFICIARY" means the person(s) or entity(ies) to whom a deceased PARTICIPANT's benefits are payable, provided, however, in the case of a deceased PARTICIPANT who was married at the time of his death, BENEFICIARY shall mean the spouse of such deceased PARTICIPANT unless such spouse consented in writing to another person(s) or to other entity(ies) as BENEFICIARY. Such a consent will be effective only if it acknowledges the specific BENEFICIARY and the effect of the BENEFICIARY DESIGNATION, is witnessed by a PLAN representative or a notary public, and may not be changed without further spousal consent (unless the consent expressly permits subsequent BENEFICIARY designations without spousal consent). 1.06 "BREAK IN SERVICE" means an interruption in or cessation of employment with the COMPANY by an EMPLOYEE during any calendar year in which such EMPLOYEE has completed not more than Five Hundred (500) HOURS OF SERVICE. In determining whether or not a BREAK IN SERVICE has occurred or the number of one-year BREAKS IN SERVICE, an EMPLOYEE who has established that he was absent due to an UNPAID LEAVE FOR MATERNITY OR CHILD REARING shall not be deemed to have incurred a BREAK IN SERVICE in the first PLAN YEAR in which he would have otherwise incurred a BREAK IN SERVICE if he would have been credited with at least Five Hundred (500) HOURS OF SERVICE under Section 1.23(iii)(Hours of Service) had he been an EMPLOYEE for such period. 1.07 "CODE" means the Internal Revenue Code of 1986, as amended. [1.09] "COMPANY" means Fort Howard Corporation, and whenever the context so permits, any subsidiary, affiliate corporation or division of Fort Howard Corporation which is participating in the Plan pursuant to a resolution of Fort Howard Corporation's Board of Directors and, when appropriate, of the Board of Directors of such subsidiary or affiliate corporation. 1.10 "COMPANY CONTRIBUTION" means any contribution made by the COMPANY to the TRUST (other than DEFERRED WAGE CONTRIBUTIONS) on behalf of each PARTICIPANT in an amount determined according to the FORMULA. COMPANY CONTRIBUTIONS shall also include additional amounts, if any, contributed by the COMPANY to the TRUST out of its current or accumulated earnings as the Board of Directors of the COMPANY may determine by resolution adopted before the ANNUAL ACCOUNTING DATE. - 2 - Such COMPANY CONTRIBUTIONS may, in the discretion of the COMPANY, be made in cash or in COMPANY securities valued at their fair market value on the ACCOUNTING DATE coincident with or immediately preceding the date upon which such COMPANY CONTRIBUTIONS are payable to the TRUST. 1.11 "COMPANY CONTRIBUTION ACCOUNT" means the account maintained for each PARTICIPANT by the TRUSTEE to reflect the PARTICIPANT'S share of COMPANY CONTRIBUTIONS and FORFEITURES, and the INVESTMENT EARNINGS attributable to such items. 1.12 "DEFERRED WAGE ACCOUNT" means the account maintained for each PARTICIPANT by the TRUSTEE to reflect the DEFERRED WAGE CONTRIBUTIONS made on behalf of such PARTICIPANT, and the INVESTMENT EARNINGS attributable to such contributions. 1.13 "DEFERRED WAGE CONTRIBUTION" means the amount which a PARTICIPANT may elect to have the COMPANY contribute to the TRUST after January 1, 1984, on his behalf from such PARTICIPANT'S ANNUAL BASE PAY for the purposes set forth in the PLAN. It is intended that DEFERRED WAGE CONTRIBUTIONS shall constitute "employer contributions" for purposes of Section 401(k) of the CODE. 1.14 "DISABILITY" means a disability incurred by an EMPLOYEE which results in an authorized absence by such EMPLOYEE from work. 1.15 "DISTRIBUTION ACCOUNT" means the account established by the TRUSTEE for the purpose of maintaining and subsequently distributing the ACCOUNTS of a PARTICIPANT, including the INVESTMENT EARNINGS attributable to such ACCOUNTS, upon the termination for any reason of such PARTICIPANT'S employment with the COMPANY. 1.16 "DISTRIBUTION DATE" means the date upon which ACCOUNT balances are distributed to a PARTICIPANT, or in the event of the death of such PARTICIPANT, to the BENEFICIARY of such PARTICIPANT. 1.17 "EFFECTIVE DATE" means January 1, 1985. 1.18 "EMPLOYEE" means any employee of the COMPANY who is eligible to become a PARTICIPANT under the Plan; provided, however, any person who is a member of a collective bargaining unit on whose behalf retirement benefits were the subject of good faith bargaining, shall not be an EMPLOYEE. 1.19 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. - 3 - 1.20 "ESOP" means the Fort Howard Corporation Employee Stock Ownership Plan and Trust. 1.21 "FORFEITURE" means that portion of a PARTICIPANT'S COMPANY CONTRIBUTION ACCOUNT which is not distributable to such PARTICIPANT upon RESIGNATION/DISMISSAL in accordance with Section 8.03 (Vesting Upon Resignation/Dismissal). 1.22 "FORMULA" means the formula set forth in Exhibit A, attached hereto and incorporated herein by this reference, according to which COMPANY CONTRIBUTIONS are calculated. 1.23 "HOURS OF SERVICE" as of January 1, 1978, and thereafter, means (a) each hour for which an EMPLOYEE is directly or indirectly paid or entitled to payment by the COMPANY for the performance of duties; (b) each hour for which an EMPLOYEE is directly or indirectly paid or entitled to payment by the COMPANY although no duties are performed; and (c) each hour for which back pay, irrespective of mitigation of damages, is either awarded or agreed to by the COMPANY with respect to such EMPLOYEE; provided however, that: (i) an EMPLOYEE who is not paid by the hour shall be credited with Ten (10) HOURS OF SERVICE for each day for which he would, if hourly-paid, be credited with an HOUR OF SERVICE pursuant to the foregoing; (ii) an EMPLOYEE who is paid by the hour shall be credited with the number of regularly scheduled working hours (or Eight (8) HOURS OF SERVICE per day to a maximum Forty (40) HOURS OF SERVICE per week if he has no regular work schedule) included in a period of time during which no duties are performed and for which he is paid or entitled to payment, by the COMPANY; and (iii) subject to Sections 3.04, 3.05, 3.06 and 3.07, an EMPLOYEE shall also be credited with the number of regularly scheduled working hours to a maximum of Eight (8) HOURS OF SERVICE for each day (to a maximum Forty (40) HOURS OF SERVICE per week) that he is absent because of DISABILITY, LAYOFF, LEAVE OF ABSENCE, or MILITARY LEAVE, and is not otherwise credited with HOURS OF SERVICE. 1.24 "INCREMENT" means an amount (either positive or negative) determined as of a current ACCOUNTING DATE by subtracting (1) the fair market value as of the ACCOUNTING DATE immediately preceding the current ACCOUNTING DATE of an investment fund within the TRUST FUND excluding any COMPANY CONTRIBUTIONS, DEFERRED WAGE CONTRIBUTIONS, PRIOR PARTICIPANT CONTRIBUTIONS or ROLLOVER CONTRIBUTIONS which have not yet been allocated to the PARTICIPANTS' ACCOUNTS as of such date; from (2) the fair market value as of the current ACCOUNTING DATE of the same investment fund within the TRUST FUND excluding any COMPANY CONTRIBUTIONS, DEFERRED WAGE CONTRIBUTIONS, PRIOR PARTICIPANT CONTRIBUTIONS or ROLLOVER CONTRIBUTIONS which have not yet been allocated as of such current ACCOUNTING DATE. - 4 - 1.25 "INVESTMENT ADVISORY BOARD" means an investment advisory board appointed by the Chief Executive Officer of the COMPANY consisting of such number of persons as determined by the Chief Executive Officer of the COMPANY, which shall function as the PLAN ADMINISTRATOR. 1.26 INVESTMENT EARNINGS" means the income, losses, appreciation and depreciation attributable to ACCOUNTS. 1.27 "INVESTMENT EARNINGS PERCENTAGE" means, as of an ACCOUNTING DATE, determined separately for each investment fund within the TRUST FUND, the percentage obtained by dividing (1) the INCREMENT determined as of such ACCOUNTING DATE by (2) the fair market value of such investment fund excluding any COMPANY CONTRIBUTIONS, DEFERRED WAGE CONTRIBUTIONS, PRIOR PARTICIPANT CONTRIBUTIONS and ROLLOVER CONTRIBUTIONS which were not allocated to the PARTICIPANTS' ACCOUNTS as of the ACCOUNTING DATE immediately preceding the ACCOUNTING DATE used to determine the INCREMENT in the numerator. 1.28 "LAYOFF" means an authorized period during which an EMPLOYEE is laid off from his job with the COMPANY for a period not exceeding Two (2) Years on account of a reduction in work force. 1.28A "LEASED EMPLOYEE" means any person who is not an EMPLOYEE of the COMPANY, but who has provided services to the COMPANY of a type which have historically (within the business field of the COMPANY) been provided by EMPLOYEES, on a substantially full-time basis for a period of at least one year, pursuant to an agreement between the COMPANY and a leasing organization. 1.29 "LEAVE OF ABSENCE" mans a period of absence from employment granted by the COMPANY under conditions which are not treated by the COMPANY as a termination of employment. 1.30 "MILITARY LEAVE" means an authorized leave required by law or granted by the COMPANY to an EMPLOYEE for the purpose of entering any one or more of the United States Army, United States Navy, United States Air Force, United States Coast Guard, United States Marine Corps, United States Public Health Service or any governmental service designated by the COMPANY. 1.31 "MONTHLY ACCOUNTING DATE" means the last day of each month which is not an ANNUAL ACCOUNTING DATE. 1.32 "PARTICIPANT" means each EMPLOYEE who is presently participating in the PLAN and each former employee and BENEFICIARY for whom an ACCOUNT is maintained. - 5 - [1.33] "PLAN" means the Fort Howard Corporation Profit Sharing Retirement Plan. 1.34 "PLAN ADMINISTRATOR" means the "administrator" of the PLAN, for purposes of Section 3(16)(A) of ERISA. 1.35 "PLAN YEAR" means a calendar year beginning January 1 and ending December 31. 1.36 "PRIOR PARTICIPANT CONTRIBUTION" means any contribution made by a PARTICIPANT to the PLAN prior to the January 1, 1984, other than ROLLOVER CONTRIBUTIONS. 1.37 "PRIOR PARTICIPANT ACCOUNT" means the account maintained for each PARTICIPANT by the TRUSTEE to reflect the PRIOR PARTICIPANT CONTRIBUTIONS, if any, and the INVESTMENT EARNINGS attributable to such contributions. 1.38 "QUALIFIED DOMESTIC RELATIONS ORDER" means a judgment, decree or order (including approval of a property settlement agreement) which: (a) relates to the provision of child support, alimony payments, or marital property rights to a spouse (former spouse), child, or other dependent of a PARTICIPANT (hereinafter known as "alternate payee"); and (b) is made pursuant to a State domestic relations law (including a community property law); and (c) creates or recognizes the existence of an alternate payee's right to, or assigns to an alternate payee the right to receive all or a portion of the benefits payable to a PARTICIPANT under the PLAN; and (d) clearly specifies the name and last known mailing address (if any) of the PARTICIPANT and the name and mailing address of each alternate payee covered by the judgment, decree or order (including approval of a property settlement agreement); and (e) clearly specifies the amount or percentage of the PARTICIPANT'S benefits to be paid by the PLAN to each such alternate payee, or the manner in which such amount or percentage is to be determined; and (f) clearly specifies the number of payments or period to which such order applies; and (g) clearly specifies that it applies to the PLAN; and (h) does not require the PLAN to provide any type or form of benefit, or any option, not otherwise available under the PLAN; and - 6 - (i) does not require the PLAN to provide increased benefits (determined on the basis of actuarial value); and (j) does not require the PLAN to pay benefits to an alternate payee which are required to be paid to another alternate payee under another QUALIFIED DOMESTIC RELATIONS ORDER. 1.39 "RELATED CORPORATION" means each corporation, other than the COMPANY, which is a member of the controlled group of corporations of which the COMPANY is a member as determined under Section 1563(a) of the CODE, without regard to Section 1563(a)(4) and Section 1563(e)(3)(C) of the CODE. 1.40 "RESIGNATION/DISMISSAL" means resignation or dismissal from employment with the COMPANY other than by reason of RETIREMENT or death. 1.41 "RETIREMENT" means termination of employment with the COMPANY by reason of (a) attainment of age 55 or older; or (b) a determination by the COMPANY of a disability retirement. 1.42 "ROLLOVER CONTRIBUTION" means a transfer (including a direct transfer or direct rollover) to the PLAN within Sixty (60) days after receipt by the EMPLOYEE of (a) an eligible rollover distribution described in Section 402(c)(4) of the CODE, or (b) a rollover contribution described in Section 408(d)(3) of the CODE, and any investment earnings on such sums. 1.43 "SERVICE UNIT" means a unit which is credited to a PARTICIPANT for the purpose of determining the portion of COMPANY CONTRIBUTIONS allocable to such PARTICIPANT'S COMPANY CONTRIBUTION ACCOUNT each year under Section 7.03 (Allocation of Company Contributions and Forfeitures). For the purpose of the above-mentioned Section 7.03, each PARTICIPANT who was in the employ of the COMPANY on December 31, 1975 shall be credited with the number of SERVICE UNITS to which he is entitled under the terms of the PLAN as in effect on December 31, 1975, plus one additional unit for such calendar year in which he has a YEAR OF SERVICE after such date. Each PARTICIPANT hired on or after January 1, 1976, shall be entitled to one SERVICE UNIT for each calendar year in which he has a YEAR OF SERVICE after January 1, 1976. 1.44 "TRUST" means the Fort Howard Profit Sharing Retirement Master Trust. 1.45 "TRUST FUND" means the trust fund consisting of all property of any kind held by the TRUSTEE under the PLAN as of any date. - 7 - 1.46 "TRUSTEE" means the trustee of the PLAN which shall manage, hold, invest and distribute funds contributed under the PLAN pursuant to the terms of the TRUST. 1.47 "UNPAID LEAVE FOR MATERNITY OR CHILD REARING" means a period of time following a termination of employment in the event that such termination of employment was due to one or more of the following reasons: (a) pregnancy of the EMPLOYEE (b) birth of a child of the EMPLOYEE (c) placement of a child in the home of the EMPLOYEE in connection with the adoption of such child or (d) for the purpose of caring for a child for a period beginning immediately following the birth or placement of such child. An UNPAID LEAVE FOR MATERNITY OR CHILD REARING must be evidenced by information reasonably required by the INVESTMENT ADVISORY BOARD to establish that the reason for the absence was for one of the reasons stated above. 1.48 "VESTING VALUATION DATE" means the date upon which a PARTICIPANT'S employment with the COMPANY terminates for any reason, which shall be the date of the first to occur of the following: (a) RESIGNATION/DISMISSAL; (b) RETIREMENT; (c) death. The VESTING VALUATION DATE shall be the date upon which YEARS OF SERVICE are determined for purposes of vesting and distribution of such PARTICIPANT'S ACCOUNTS. 1.49 "YEAR OF SERVICE" means with respect to an EMPLOYEE each full year of employment with the COMPANY prior to December 31, 1975 where such EMPLOYEE received credit under the terms of the PLAN as in effect on December 31, 1975. Effective January 1, 1976, a YEAR OF SERVICE means with respect to an EMPLOYEE each calendar year during which such EMPLOYEE completes One Thousand (1,000) HOURS OF SERVICE. In addition, a YEAR OF SERVICE shall be credited with respect to an EMPLOYEE, for each PLAN YEAR during which he completed One Thousand (1,000) hours of service with a RELATED CORPORATION or the COMPANY. For purposes of the preceding sentence, "hours of service" shall be credited as if they were HOURS OF SERVICE performed for the COMPANY. Article 2 INTRODUCTION ------------ - 8 - 2.01 PURPOSE The PLAN is maintained by the COMPANY to enable its EMPLOYEES to share in the COMPANY'S profits and to provide a means whereby EMPLOYEES can defer the receipt of otherwise current compensation and accumulate funds without current taxation to provide for their future security. The PLAN is intended to be a qualified profit sharing plan under Section 401(a) and a qualified cash or deferred arrangement under Section 401(k) of the CODE. 2.02 RESTATEMENT DATES The PLAN was established as of January 1, 1951. The PLAN was amended and restated to comply with ERISA, effective January 1, 1976. The PLAN has since been amended from time to time either by restatement or amendment and is hereby further amended and restated, effective as of the January 1, 1985. 2.03 PLAN ADMINISTRATION The INVESTMENT ADVISORY BOARD shall be responsible for carrying out those duties and responsibilities imposed upon (a) the PLAN ADMINISTRATOR by ERISA; and (b) the INVESTMENT ADVISORY BOARD by the PLAN and the TRUST. The INVESTMENT ADVISORY BOARD shall have the discretionary authority to determine all questions arising under the PLAN, including the power to determine the rights or eligibility of EMPLOYEES or PARTICIPANTS and any other persons, and the amounts of their benefits under the PLAN, and to remedy ambiguities, inconsistencies or omissions. The INVESTMENT ADVISORY BOARD from time to time may adopt such rules and regulations as may be necessary or desirable for the proper and efficient administration of the PLAN and as are consistent with the terms of the PLAN. The COMPANY may, in writing signed by its Chief Executive Officer, delegate specific powers or duties relating to the operation of the PLAN to such persons as such Chief Executive Officer may deem appropriate, except any powers or duties which are reserved to the Board of Directors of the COMPANY by the terms of the PLAN or the TRUST. 2.04 TRUSTEE, TRUST Funds contributed to the PLAN shall be managed, held, invested and distributed by the TRUSTEE, or by an investment manager(s), in accordance with the TRUST, which shall implement the PLAN. 2.05 SERVICE OF NOTICES Any notice or document required to be given to or filed with the INVESTMENT ADVISORY BOARD shall be deemed properly given or filed if delivered or mailed by registered mail, postage prepaid, to the INVESTMENT ADVISORY BOARD, in care of the COMPANY. - 9 - Article 3 ELIGIBILITY AND PARTICIPATION ----------------------------- 3.01 ELIGIBILITY Each EMPLOYEE who was a PARTICIPANT on December 31, 1984, shall remain a PARTICIPANT. Each EMPLOYEE who was not a PARTICIPANT on December 31, 1984, shall become a PARTICIPANT on the first to occur of the following: (a) any June 30 or December 31 which next follows the first anniversary of his date of hire if he has completed One Thousand (1,000) HOURS OF SERVICE during the Twelve (12) month period ending on the first anniversary of his date of hire; or (b) any December 31 which next follows the first anniversary of his date of hire if he completes a YEAR OF SERVICE during the calendar year ending on such December 31. 3.02 NOTICE OF PARTICIPATION The INVESTMENT ADVISORY BOARD shall notify each EMPLOYEE of the date on which he shall become a PARTICIPANT, as early as practicable prior to such date. 3.03 TERMINATION OF EMPLOYMENT If the employment of an EMPLOYEE who is a PARTICIPANT is terminated for any reason, such EMPLOYEE shall thereupon cease to be a PARTICIPANT except to the extent of any ACCOUNTS to which he may be entitled because of his prior participation in the PLAN. If such PARTICIPANT is subsequently reemployed by the COMPANY, he shall again enter the PLAN as of the date of his reemployment and may begin making DEFERRED WAGE CONTRIBUTIONS in accordance with Section 4.01 (Amount of Deferred Wage Contributions). 3.04 DISABILITY DISABILITY of an EMPLOYEE (whether or not he is a PARTICIPANT) shall not interrupt continuity of service or participation for purposes of the PLAN. Such EMPLOYEE shall be credited with HOURS OF SERVICE for any period during which he is absent because of such DISABILITY. - 10 - 3.05 LAYOFF LAYOFF of an EMPLOYEE (whether or not he is a PARTICIPANT) shall not interrupt continuity of service or participation for purposes of the PLAN. Such EMPLOYEE shall be credited with HOURS OF SERVICE for such LAYOFF. If such EMPLOYEE on LAYOFF is not called back to work by the COMPANY within two years after such LAYOFF began, he shall cease to receive credit for HOURS OF SERVICE after such two-year period. 3.06 MILITARY LEAVE MILITARY LEAVE by an EMPLOYEE (whether or not he is a PARTICIPANT) shall not interrupt continuity of service or participation for purposes of the PLAN. Such EMPLOYEE shall be credited with HOURS OF SERVICE for any such period of MILITARY LEAVE. 3.07 LEAVE OF ABSENCE A LEAVE OF ABSENCE shall not interrupt continuity of service or participation for purposes of the PLAN; provided, however, that an EMPLOYEE (whether or not he is a PARTICIPANT) shall not receive credit for HOURS OF SERVICE for any portion of a LEAVE OF ABSENCE which exceeds one year. 3.08 FINALITY OF DETERMINATIONS All determinations with respect to the crediting of YEARS OF SERVICE under the PLAN shall be made on the basis of the records of the COMPANY or a RELATED CORPORATION, and all determinations so made shall be final and conclusive upon EMPLOYEES, former EMPLOYEES, and all other persons claiming a benefit interest under the PLAN. Notwithstanding anything to the contrary contained in the PLAN, there shall be no duplication of YEARS OF SERVICE credited to an EMPLOYEE, for any one period of his employment with the COMPANY or a RELATED CORPORATION. 3.09 LEASED EMPLOYEES A LEASED EMPLOYEE shall not be eligible to participate in the PLAN. If a LEASED EMPLOYEE subsequently becomes an EMPLOYEE of the COMPANY, the period during which a LEASED EMPLOYEE performs services for the COMPANY shall be taken into account for purposes of Sections 3.01 and 8.01 of the Plan; unless (i) such LEASED EMPLOYEE is a participant in a money purchase pension plan maintained by the leasing organization which provides a non-integrated employer contribution rate of at least 10 percent of compensation, immediate participation for all employees and full and immediate vesting, and (ii) LEASED EMPLOYEES do not constitute more than 20 percent of the COMPANY's nonhighly compensated workforce. - 11 - Article 4 DEFERRED WAGE CONTRIBUTIONS --------------------------- 4.01 AMOUNT OF DEFERRED WAGE CONTRIBUTIONS Each PARTICIPANT who is an EMPLOYEE may, as of the EFFECTIVE DATE, elect to have the COMPANY make DEFERRED WAGE CONTRIBUTIONS on his behalf by filing a written election form with the INVESTMENT ADVISORY BOARD by such date as the INVESTMENT ADVISORY BOARD shall determine, specifying in such election the amount, which shall be not less than One percent (1%) nor more than Eight percent (8%) of his ANNUAL BASE PAY, of DEFERRED WAGE CONTRIBUTIONS which the PARTICIPANT desires to have subtracted from his current compensation from the COMPANY and contributed to the TRUSTEE on his behalf. Any PARTICIPANT who is absent because of DISABILITY, is on LEAVE OF ABSENCE, LAYOFF, or MILITARY LEAVE or whose employment terminates and is subsequently reinstated, may make such election provided by this Section by filing a written election form with the INVESTMENT ADVISORY BOARD by such date as the INVESTMENT ADVISORY BOARD shall determine. Any other EMPLOYEE may make such election by filing a written election form with the INVESTMENT ADVISORY BOARD by such date as the INVESTMENT ADVISORY BOARD shall determine. The maximum amount which any PARTICIPANT shall defer in any one PLAN YEAR is $7,000. This dollar maximum amount shall increase pursuant to the cost of living allowance as prescribed by the Secretary of the Treasury. In the event that a PARTICIPANT defers more than the dollar maximum specified above ("excess deferrals"), he shall receive the excess deferrals in cash. The INVESTMENT ADVISORY BOARD shall direct the TRUSTEE to distribute to the PARTICIPANT, prior to the April 15 following the end of the PLAN YEAR in which the excess deferrals occurred, the PARTICIPANT's excess deferrals (along with any income attributable thereto as determined under Section 4.06, if any). 4.02 ADJUSTMENT OF DEFERRED WAGE CONTRIBUTIONS (a) For any PLAN YEAR the actual deferral percentage for the highly compensated employees as defined in paragraph (b) shall not exceed the greater of (i) or (ii) as follows: (i) The actual deferral percentage for the eligible employees who are not highly compensated employees as defined in paragraph (b) of this Section, times 1.25, or (ii) The actual deferral percentage for the eligible employees who are not highly compensated employees as defined in paragraph (b) of this Section, times 2.0; provided, however, that the actual deferral percentage for the highly compensated employees as defined in paragraph (b) of this Section may not exceed the actual deferral percentage for the eligible employees who are not highly compensated as defined in paragraph (b) of this Section, by more than two percentage points. - 12 - The actual deferral percentage for a specified group of employees for a PLAN YEAR shall be the average of the ratios (calculated separately for each employee in such group) of: (A) The amount of DEFERRED WAGE CONTRIBUTIONS actually paid to the PLAN on behalf of each such employee for such PLAN YEAR, to (B) The employee's compensation for such PLAN YEAR. An employee's compensation shall be the total amount of compensation paid to said employee by the COMPANY determined in accordance with Internal Revenue Code Reg. Sec. 1.415(2)(d)(1) and (2) (hereafter "COMPENSATION"). The INVESTMENT ADVISORY BOARD shall determine, from time to time, from the elections of DEFERRED WAGE CONTRIBUTIONS then on file with the INVESTMENT ADVISORY BOARD, whether the foregoing limitations will be satisfied and, to the extent necessary to ensure compliance with such limitations, may reduce, on a pro rata basis, the applicable percentages of ANNUAL BASE PAY to be withheld for the highly compensated employees for the next quarter or pay period. If at the end of any PLAN YEAR, because of the foregoing limitations, a portion of the DEFERRED WAGE CONTRIBUTIONS withheld from a PARTICIPANT's current compensation cannot be credited to his DEFERRED WAGE ACCOUNT ("excess deferred wage contributions"), such contributions shall be treated as additional earnings of the PARTICIPANT and, if already contributed to the TRUSTEE, shall be returned to the PARTICIPANT (along with any income attributable thereto as determined under Section 4.06, if any) within two and one-half months after the end of that PLAN YEAR. If adjustments are necessary to comply with the actual deferral percentage tests, excess deferred wage contributions of highly compensated employees shall be reduced in the order of their average deferral percentages, beginning with the highest percentage. (b) The term "highly compensated employees" shall mean all eligible employees who are: (i) 5% or more stockholders (or is considered as owning 5% or more of the stock within the meaning of Section 318 of the CODE) of the COMPANY or a RELATED CORPORATION during the PLAN YEAR; or (ii) EMPLOYEES of the COMPANY or a RELATED CORPORATION whose COMPENSATION is in excess of $75,000 (or such greater amount as may be determined by the Commissioner of Internal Revenue); or (iii) EMPLOYEES of the COMPANY or a RELATED CORPORATION whose COMPENSATION is in excess of $50,000 (or such greater amount as may be determined by the Commissioner of Internal Revenue) and is included in a group consisting of the top 20% of the eligible employees when ranked on the basis of COMPENSATION paid during such year; or - 13 - (iv) Officers of the COMPANY or RELATED CORPORATION at any time and received COMPENSATION greater than 50% of the amount in effect under Section 415(b)(1)(A) of the CODE; provided, however, that no more than 50 of said officers shall be considered in this category. In the case of the PLAN YEAR for which the determination of "highly compensated employees" is being determined, an eligible employee not described in subparagraphs (ii), (iii), and (iv) of paragraph (b) herein for the preceding PLAN YEAR (without regard to this paragraph) shall not be treated as described in said subparagraphs (ii), (iii), and (iv) unless such eligible employee is a member of the group consisting of the 100 employees paid the greatest COMPENSATION during the PLAN YEAR that such determination is being made. The term "highly compensated employees" shall also include any highly compensated former employee who separated from service (or was deemed to have separated) prior to the determination year, performs no services for the COMPANY or a RELATED CORPORATION during the determination year and was a highly compensated employee for either the separation year or any determination year ending on or after the employee's 55th birthday. (c) For purposes of Sections 4.02(a) and 6.05, the following family aggregation rules shall apply: (i) Family members (i.e., the employee's spouse, lineal descendants and ascendants, and the spouses of such lineal descendants and ascendants) of a PARTICIPANT who is a five percent owner or one of the 10 highly compensated employees paid the greatest total compensation with respect to any PLAN YEAR, shall not be treated as separate PARTICIPANTS and a single actual deferral percentage under Section 402(a) and a single actual contribution percentage under Section 6.05 shall be determined for the family members and the highly compensated employee ("family group"). The family group shall be treated as a single highly compensated employee having an actual deferral percentage and an actual contribution percentage based on the combined COMPENSATION and applicable DEFERRED WAGE CONTRIBUTIONS or COMPANY CONTRIBUTIONS of all members of the family group. (ii) If a family group has excess DEFERRED WAGE CONTRIBUTIONS or COMPANY CONTRIBUTIONS, the excess amount resulting from the required reduction described in (i) above shall be allocated among all members of the family group in proportion to their respective contributions. 4.03 VESTING OF DEFERRED WAGE CONTRIBUTIONS Any and all amounts in the DEFERRED WAGE CONTRIBUTION ACCOUNT of a PARTICIPANT shall be One Hundred Percent (100%) vested and non-forfeitable at all times. - 14 - 4.04 PAYROLL DEDUCTIONS Any DEFERRED WAGE CONTRIBUTIONS made on behalf of a PARTICIPANT shall be deducted from his ANNUAL BASE PAY at the time of payment of the same by the COMPANY and shall be paid to the TRUSTEE as soon as reasonably practicable thereafter. If a PARTICIPANT'S employment with the COMPANY is terminated for any reason, any portion of such contributions not yet paid to the TRUSTEE shall be paid to the TRUSTEE by the COMPANY, whereupon the TRUSTEE shall pay such portion to such PARTICIPANT in accordance with Article 9 (Distribution of Accounts). 4.05 CHANGE IN DEFERRED WAGE CONTRIBUTION RATE A PARTICIPANT who is an EMPLOYEE may, by written election filed with the INVESTMENT ADVISORY BOARD in accordance with such procedures as it shall determine: (a) make an initial election to have DEFERRED WAGE CONTRIBUTIONS made on his behalf; (b) elect to change the amount of his DEFERRED WAGE CONTRIBUTIONS within the limits specified in Sections 4.01 (Amount of Deferred Wage Contributions) and 4.02 (Adjustment of Deferred Wage Contributions); (c) elect to stop DEFERRED WAGE CONTRIBUTIONS; or (d) having stopped DEFERRED WAGE CONTRIBUTIONS in accordance with this Section 4.05, again elect to have such contributions made on his behalf within the election percentage limitations specified in the above-mentioned Section 4.01 and the general limitations of the above-mentioned Section 4.02. Any of the above-specified elections shall be effective as of the first pay period for which compensation is received in the month next following the date an election is approved by the INVESTMENT ADVISORY BOARD. 4.06 ALLOCATION OF EARNINGS TO DISTRIBUTIONS OF EXCESS DEFERRALS, EXCESS DEFERRED WAGE CONTRIBUTIONS AND EXCESS AGGREGATE CONTRIBUTIONS The earnings allocable to distributions of excess deferrals, excess deferred wage contributions and excess aggregate contributions required under Sections 4.01, 4.02 and 6.05 shall be determined by multiplying the earnings attributable to the PARTICIPANT's DEFERRED WAGE CONTRIBUTIONS for the PLAN YEAR or to the COMPANY CONTRIBUTIONS allocated under Section 7.03(a) of the PLAN, as the case may be, by a fraction, the numerator of which is the applicable excess amount, and the denominator of which is the balance in the PARTICIPANT's applicable ACCOUNT or ACCOUNTS on the last day of such year reduced by gains (or increased by losses) attributable to such ACCOUNT or ACCOUNTS during that year. The earnings attributable to such excess deferrals, excess deferred wage contributions and excess aggregate contributions determined in accordance with the preceding sentence shall be increased to reflect the earnings to the date of - 15 - distribution by an amount equal to ten percent of the earnings determined in accordance with the preceding sentence multiplied by the number of calendar months that have elapsed since the end of the applicable year. For purposes of the foregoing, a distribution occurring on or before the fifteenth day of the month will be treated as having been made on the last day of the preceding month, and a distribution occurring after such fifteenth day will be treated as having been made on the first day of the next subsequent month. 4.07 MULTIPLE USE OF ALTERNATIVE LIMITATION In accordance with Treasury Regulation Section 1.401(m)-2 and Revenue Procedure 89-65, multiple use of the alternative limitation which occurs as a result of testing under the limitations described in Sections 4.02 and 6.05 will be corrected in the manner described in Treasury Regulation Section 1.401(m)-1(e). The term "alternative limitation" as used above means the alternative methods of compliance with Sections 401(k) and 401(m) of the Internal Revenue Code contained in Sections 401(k)(3)(A) (ii)(II) and 401(m)(2)(A)(ii) thereof, respectively. Article 5 ROLLOVER CONTRIBUTIONS ---------------------- 5.01 ROLLOVER CONTRIBUTIONS Each PARTICIPANT, and each other EMPLOYEE who would be eligible to participate but for his failure to satisfy the service requirement of Section 3.01 (Eligibility), may apply in writing to the INVESTMENT ADVISORY BOARD on the form provided for that purpose to make a ROLLOVER CONTRIBUTION to the PLAN. Upon approval by the INVESTMENT ADVISORY BOARD, the ROLLOVER CONTRIBUTION shall be deposited in the TRUST FUND and credited to such PARTICIPANT'S PRIOR PARTICIPANT ACCOUNT and maintained by the TRUSTEE as a subaccount of such PRIOR PARTICIPANT ACCOUNT. 5.02 ROLLOVER CONTRIBUTORS An EMPLOYEE who makes a ROLLOVER CONTRIBUTION to the PLAN as provided in Section 5.01 above before becoming a PARTICIPANT pursuant to the above-said Section 3.01 shall be deemed to be a PARTICIPANT as of the date of such ROLLOVER CONTRIBUTION solely for the purpose of maintaining such EMPLOYEE'S PRIOR PARTICIPANT ACCOUNT. Such EMPLOYEE shall not receive an allocation of COMPANY CONTRIBUTIONS or FORFEITURES or be entitled to elect to have DEFERRED WAGE CONTRIBUTIONS made on his behalf or have any other interest under this PLAN until he satisfies the requirements of the above-said Section 3.01. - 16 - Article 6 COMPANY CONTRIBUTIONS --------------------- 6.01 AMOUNT OF COMPANY CONTRIBUTIONS The COMPANY shall contribute to the TRUST on behalf of each PARTICIPANT an amount determined according to the FORMULA, and, in addition to the amount, if any, determined by application of the FORMULA, the COMPANY, at its option, may contribute to the TRUST such additional and discretionary amounts as the Board of Directors of the COMPANY shall determine by resolution. 6.02 PAYMENTS TO TRUST COMPANY CONTRIBUTIONS shall be paid to the TRUST without interest. 6.03 VERIFICATION OF COMPANY CONTRIBUTIONS The certificate of a certified public accountant selected by the COMPANY as to the correctness of any amount or calculation of COMPANY CONTRIBUTIONS under the FORMULA or any resolution of the COMPANY'S Board of Directors pertaining thereto shall be conclusive on all persons. 6.04 ADJUSTMENT OF COMPANY CONTRIBUTIONS COMPANY CONTRIBUTIONS made on behalf of any PARTICIPANT may, in the discretion of the INVESTMENT ADVISORY BOARD, be retroactively or prospectively adjusted to bring the PLAN into compliance with (a) the participation and discrimination standards contained in Section 401(k) of the CODE, and (b) the "top-heavy plan" provisions of Section 416(g) of the CODE. 6.05 ACTUAL CONTRIBUTION PERCENTAGE TEST (a) For any PLAN YEAR the actual contribution percentage for the highly compensated employees as defined in Section 4.02(b) shall not exceed the greater of (i) or (ii) as follows: (i) The actual contribution percentage for the eligible employees who are not highly compensated employees as defined in Section 4.02(b), times 1.25, or (ii) The actual contribution percentage for the eligible employees who are not highly compensated employees as defined in Section 4.02(b), times 2.0; provided, however, that the actual contribution percentage for the highly compensated employees as defined in Section 4.02(b) may not exceed the actual contribution percentage for the eligible employees who are not - 17 - highly compensated as defined in Section 4.02(b) by more than two percentage points. (b) The actual contribution percentage for a specified group of employees for a PLAN YEAR shall be the average of the ratios (calculated separately for each employee in such group) of: (i) The amount of COMPANY CONTRIBUTIONS allocated to the COMPANY CONTRIBUTION ACCOUNT of each such employee under Section 7.03(a) of the PLAN for such PLAN YEAR, to (ii) The employee's compensation for such PLAN YEAR. An employee's compensation shall be the total amount of compensation paid to said employee by the COMPANY determined in accordance with Internal Revenue Code Reg. Sec. 1.415(2)(d)(1) and (2). (c) If adjustments are necessary to comply with the actual contribution percentage tests described above, excess COMPANY CONTRIBUTIONS of highly compensated employees shall be reduced in the order of their average contribution percentages, beginning with the highest percentage. Any COMPANY CONTRIBUTION allocated under Section 7.03(a) of the PLAN which cannot be credited to a PARTICIPANT's COMPANY CONTRIBUTION ACCOUNT because of the limitations described above or which is attributable to the portion, if any, of a PARTICIPANT's excess DEFERRED WAGE CONTRIBUTIONS determined in accordance with Section 4.01 or 4.02 ("excess aggregate contributions") shall not be credited to the PARTICIPANT's COMPANY CONTRIBUTION ACCOUNT but instead shall be distributed to the PARTICIPANT, along with the earnings applicable thereto, within two and one-half months after the close of the PLAN YEAR for which the amounts are in excess. Article 7 ACCOUNTING ---------- 7.01 ACCOUNTS UNDER THE PLAN For periods beginning on or after the EFFECTIVE DATE, the TRUSTEE shall maintain (a) a COMPANY CONTRIBUTION ACCOUNT in the name of each PARTICIPANT, (b) a PRIOR PARTICIPANT ACCOUNT in the name of each PARTICIPANT who made PRIOR PARTICIPANT CONTRIBUTIONS to the PLAN prior to January 1, 1984, and each EMPLOYEE who has received INVESTMENT ADVISORY BOARD approval to make a ROLLOVER CONTRIBUTION to the PLAN, and (c) a DEFERRED WAGE ACCOUNT in the name of each PARTICIPANT who elects to have DEFERRED WAGE CONTRIBUTIONS made on his behalf. The TRUSTEE also may maintain such other accounts in the names of EMPLOYEES or PARTICIPANTS, or otherwise, as the TRUSTEE considers necessary or desirable. - 18 - 7.02 ACCOUNTING PROCEDURES As of each MONTHLY ACCOUNTING DATE and ANNUAL ACCOUNTING DATE, the INVESTMENT ADVISORY BOARD shall direct the TRUSTEE and/or investment manager(s) to implement such accounting procedures with respect to each of the ACCOUNTS under the PLAN as are necessary to administer the PLAN in a uniform and nondiscriminatory manner consistent with ERISA or other applicable laws. The TRUSTEE shall adjust the ACCOUNTS of each PARTICIPANT (and the account which holds unallocated FORFEITURES) on an ACCOUNTING DATE as follows: (a) First, reduce a DISTRIBUTION ACCOUNT as outlined in Section 9.01 (Manner of Distribution and Further Adjustments) by an amount equal to all payments and distributions made from such DISTRIBUTION ACCOUNT to the extent that such DISTRIBUTION ACCOUNT has not already been reduced to reflect such payment and distributions or reduce a DEFERRED WAGE ACCOUNT or a PRIOR PARTICIPANT ACCOUNT by any inservice withdrawal as outlined in Section 9.02 (Inservice Withdrawals) to the extent that such ACCOUNTS(S) has not been reduced to reflect such distribution; (b) Second, increase or decrease each ACCOUNT (including the account which holds unallocated FORFEITURES) within each investment fund within the TRUST FUND by an amount equal to the product of (i) the applicable INVESTMENT EARNINGS PERCENTAGE and (ii) the balance of such ACCOUNT as of the preceding ACCOUNTING DATE minus any distributions made since the last ACCOUNTING DATE as described in subparagraph (a) of this Section 7.02; (c) Third, allocate and credit to PARTICIPANTS' COMPANY CONTRIBUTION ACCOUNTS any COMPANY CONTRIBUTION and FORFEITURES that are to be credited in accordance with Section 7.03 (Allocation of Company Contribution and Forfeitures) which have been made to the TRUST FUND and not previously allocated; and (d) Fourth, credit to the PARTICIPANTS' DEFERRED WAGE ACCOUNTS any DEFERRED WAGE CONTRIBUTIONS or to the PARTICIPANTS' PRIOR PARTICIPANT ACCOUNT any ROLLOVER CONTRIBUTIONS which have not been previously credited on the last preceding ACCOUNTING DATE. 7.03 ALLOCATION OF COMPANY CONTRIBUTIONS AND FORFEITURES Subject to the limitations of Section 7.04 (Limitations on Additions to Participants' Accounts), as of each ANNUAL ACCOUNTING DATE, the COMPANY CONTRIBUTION for the year ending on such date shall be allocated and credited to the COMPANY CONTRIBUTION ACCOUNTS of PARTICIPANTS employed by the Company during such year as follows: (a) Fifty percent (50%) of the COMPANY CONTRIBUTIONS shall be allocated to the COMPANY CONTRIBUTION ACCOUNTS of such PARTICIPANTS, pro rata, according to the DEFERRED WAGE CONTRIBUTIONS made on behalf of each of them during such year; - 19 - (b) Twenty-five percent (25%) of the COMPANY CONTRIBUTIONS shall be allocated to the COMPANY CONTRIBUTION ACCOUNTS of such PARTICIPANTS, pro rata, according to the ANNUAL BASE PAY of each of them during such year; and (c) Twenty-five percent (25%) of the COMPANY CONTRIBUTIONS shall be allocated to the COMPANY CONTRIBUTION ACCOUNTS of such PARTICIPANTS, pro rata, according to the number of SERVICE UNITS allocated to each of them for such year. However, no such allocations shall be made on behalf of PARTICIPANTS whose VESTING VALUATION DATES occur during such year because of RESIGNATION/DISMISSAL. All FORFEITURES of prior PARTICIPANTS which have not been recredited in accordance with either Section 8.06 (Reemployment After Resignation/Dismissal and Incurring a Break in Service), or Section 8.08 (Determination of Account of Reemployed Participant Who Has Not Incurred a Break in Service), including the INVESTMENT EARNINGS thereon, shall be allocated and credited as of each ANNUAL ACCOUNTING DATE to the COMPANY CONTRIBUTION ACCOUNTS of PARTICIPANTS who were employed by the COMPANY during such year according to the formula set forth in this Section 7.03 for the allocation of COMPANY CONTRIBUTIONS. 7.04 LIMITATIONS ON ADDITIONS TO PARTICIPANTS' ACCOUNTS The total amount of COMPANY CONTRIBUTIONS, FORFEITURES, and DEFERRED WAGE CONTRIBUTIONS that may be credited in any calendar year to the accounts of a PARTICIPANT hereunder shall not exceed the lesser of (a) $30,000 (as adjusted for cost-of-living increases pursuant to Section 415 of the CODE); or (b) Twenty-five percent (25%) of such PARTICIPANT'S total compensation from the COMPANY for such year (as stated on such PARTICIPANT'S Wage and Tax Statement [Form W-2]). Any COMPANY CONTRIBUTIONS or FORFEITURES which cannot be credited to a PARTICIPANT'S COMPANY CONTRIBUTION ACCOUNT because of the limitations set forth above shall be allocated among the remaining PARTICIPANTS in accordance with Section 7.03 (Allocation of Company Contributions and Forfeitures). 7.05 INVESTMENT OF CONTRIBUTIONS Contributions made to the PLAN by or on behalf of a PARTICIPANT shall be invested in such investment fund or funds, or any of them, and in such amounts as determined by the INVESTMENT ADVISORY BOARD in its sole discretion. The INVESTMENT ADVISORY BOARD may also permit the PARTICIPANT to direct the manner in which the PARTICIPANT'S ACCOUNT balances are to be invested in part or in whole in accordance with such uniform and nondiscriminatory rules and procedures as the INVESTMENT ADVISORY BOARD may adopt for such purposes. - 20 - 7.06 INVESTMENT MANAGER The INVESTMENT ADVISORY BOARD may appoint one or more investment managers to have the unlimited or limited authority and power to manage, acquire or dispose of the assets in any investment fund. Each investment manager shall be registered as an investment adviser under the Investment Advisers Act of 1940, a bank as defined in that Act, or an insurance company qualified to perform such services under the laws of more than one state, and shall acknowledge in writing to be a fiduciary with respect to the PLAN and the TRUST. Article 8 VESTING OF ACCOUNTS ------------------- 8.01 VESTING VALUATION Amounts in the DEFERRED WAGE ACCOUNT and PRIOR PARTICIPANT ACCOUNT of a PARTICIPANT are fully vested and not subject to forfeiture. Amounts in the COMPANY CONTRIBUTION ACCOUNT of a PARTICIPANT who is an EMPLOYEE shall vest as follows: Years of Service Percentage Vested Less than 3 0% 3 20% 4 40% 5 60% 6 80% 7 100% With respect to any EMPLOYEE who was a PARTICIPANT in the PLAN on or before December 31, 1988, the vested portion of such PARTICIPANT'S COMPANY CONTRIBUTION ACCOUNT shall not be less than the vested portion of such ACCOUNT as determined in accordance with the vesting schedule provided by this Section and in effect on December 31, 1988. Distribution of amounts so vested shall be accomplished in accordance with Article 9 (Distribution of Accounts). The vesting percentage of a PARTICIPANT whose COMPANY CONTRIBUTION ACCOUNT is not fully vested on the date of his termination of employment with the COMPANY for any reason shall be determined on the VESTING VALUATION DATE. 8.02 VESTING UPON RETIREMENT OR DEATH If a PARTICIPANT'S employment with the COMPANY is terminated because of RETIREMENT or death, his COMPANY CONTRIBUTION ACCOUNT shall become nonforfeitable as of his VESTING VALUATION DATE. - 21 - The amount of such PARTICIPANT'S COMPANY CONTRIBUTION ACCOUNT, DEFERRED WAGE ACCOUNT and PRIOR PARTICIPANT ACCOUNT shall be determined as of the ACCOUNTING DATE immediately preceding his distribution date in accordance with Section 9.01 (Manner of Distribution and Further Adjustments). 8.03 VESTING UPON RESIGNATION/DISMISSAL If a PARTICIPANT'S employment with the COMPANY is terminated because of RESIGNATION/DISMISSAL, his DEFERRED WAGE ACCOUNT and PRIOR PARTICIPANT ACCOUNT balances are fully vested and not subject to forfeiture and his COMPANY CONTRIBUTION ACCOUNT, shall become vested in accordance with Paragraph 8.01 herein. The amount of such ACCOUNTS shall be determined as of the ACCOUNTING DATE immediately preceding his DISTRIBUTION DATE in accordance with Section 9.01 (Manner of Distribution and Further Adjustments). 8.04 REEMPLOYMENT AFTER INCURRING A BREAK IN SERVICE/RECREDITING OF YEARS OF SERVICE YEARS OF SERVICE in respect of a PARTICIPANT whose employment with the COMPANY terminated after December 31, 1975, and who is reemployed by the COMPANY after incurring a BREAK IN SERVICE, shall not include YEARS OF SERVICE credited prior to such BREAK IN SERVICE until such PARTICIPANT is credited with a YEAR OF SERVICE following his reemployment. Additionally, an EMPLOYEE whose service was terminated on or prior to December 31, 1975, and who is subsequently reemployed by the COMPANY shall not be recredited with YEARS OF SERVICE prior to such termination. 8.05 PARTICIPANTS INCURRING BREAK IN SERVICE PRIOR TO JANUARY 1, 1985 A former PARTICIPANT who is reemployed by the COMPANY who had incurred a one year BREAK IN SERVICE prior to January 1, 1985, will have permanently forfeited any FORFEITURES which arose due to a previous RESIGNATION/DISMISSAL. 8.06 REEMPLOYMENT AFTER RESIGNATION/DISMISSAL AND INCURRING A BREAK IN SERVICE (a) A former PARTICIPANT who did not incur a one year BREAK IN SERVICE and is reemployed by the COMPANY, shall have credited to his COMPANY CONTRIBUTION ACCOUNT, an amount equal to such PARTICIPANT'S FORFEITURE, if any, at the time of such prior RESIGNATION/DISMISSAL. Such amount shall be subtracted from the balance of FORFEITURES in the PLAN on the ACCOUNTING DATE next following such PARTICIPANT'S reemployment and credited to his COMPANY CONTRIBUTION ACCOUNT. Upon a subsequent RESIGNATION/DISMISSAL, such PARTICIPANT shall receive the amount which represents the vested portion of his COMPANY CONTRIBUTION based upon the provisions of Section 8.08 (Determination of Account of Reemployed Participant Who Has - 22 - Not Incurred a One-Year Break In Service). Such former PARTICIPANT shall not be required to make a repayment but may do so if he so elects. (b) In the event a former PARTICIPANT who has received a distribution of his vested COMPANY CONTRIBUTION ACCOUNT or his DEFERRED WAGE ACCOUNT due to his RESIGNATION/DISMISSAL (which RESIGNATION/ DISMISSAL occurred on or after January 1, 1985, or during calendar year 1984 such that there was no BREAK IN SERVICE on January 1, 1985) is reemployed by the COMPANY before he has incurred five (5) consecutive one-year BREAKS IN SERVICE, his COMPANY CONTRIBUTION ACCOUNT shall be credited with the amount he forfeited, if any, at the time of his prior RESIGNATION/DISMISSAL if and only if he repays the amount of the distribution he received on account of such prior RESIGNATION/DISMISSAL as set forth in Section 8.07 (Conditions for Repayment of Prior Distribution Upon Reemployment). In the event such former PARTICIPANT makes a repayment of his prior distribution or he has not received a distribution, the amount of such PARTICIPANT'S FORFEITURE, if any, at the time of his prior RESIGNATION/DISMISSAL shall be restored to his COMPANY CONTRIBUTION ACCOUNT, and the PARTICIPANT'S YEARS OF SERVICE shall include YEARS OF SERVICE completed before the BREAKS IN SERVICE. Amounts so restored shall be subtracted from the balance of FORFEITURES in the PLAN as of the ACCOUNTING DATE next following the repayment. (c) A former PARTICIPANT who terminated his employment after January 1, 1985, who has incurred five or more consecutive one-year BREAKS IN SERVICE and who is reemployed by the COMPANY shall have permanently forfeited the amount, if any, of such PARTICIPANT'S FORFEITURE which arose because of his previous RESIGNATION/ DISMISSAL, and the PARTICIPANT'S YEARS OF SERVICE shall not include YEARS OF SERVICE completed before the BREAKS IN SERVICE. This paragraph (c) shall also apply to a former PARTICIPANT who (1) terminated after January 1, 1985, (2) has incurred less than five consecutive one-year BREAKS IN SERVICE, (3) is reemployed by the COMPANY and (4) has not made a repayment of his prior distribution under the provisions set forth in Section 8.07 (Conditions for Repayment of Prior Distribution Upon Reemployment). (d) In the event a former PARTICIPANT is reemployed by the COMPANY and he has not yet received any part of his COMPANY CONTRIBUTION ACCOUNT or his DEFERRED WAGE ACCOUNT, he shall be recredited with his COMPANY CONTRIBUTION ACCOUNT and his DEFERRED WAGE ACCOUNT shall not be distributed to him until his subsequent termination of employment. 8.07 CONDITIONS FOR REPAYMENT OF PRIOR DISTRIBUTION UPON REEMPLOYMENT A former PARTICIPANT who is reemployed by the COMPANY prior to incurring five or more consecutive one-year BREAKS IN SERVICE may make a repayment to the PLAN in an amount equal to the entire distribution he received on account of his prior termination of employment. Such repayment will be credited to his PRIOR - 23 - PARTICIPANT ACCOUNT as a ROLLOVER CONTRIBUTION or a PRIOR PARTICIPANT CONTRIBUTION, whichever is applicable. Upon a subsequent termination of employment, in order to determine the total vested amount of the COMPANY CONTRIBUTION ACCOUNT, the amount of the repayment which was previously distributed to him from his COMPANY CONTRIBUTION ACCOUNT and the INVESTMENT EARNINGS from the date of repayment shall be considered as part of his COMPANY CONTRIBUTION ACCOUNT. In order to determine the amount payable from the COMPANY CONTRIBUTION ACCOUNT at the subsequent termination of employment, the amount of the repayment and its INVESTMENT EARNINGS shall be subtracted from the vested amount determined above. The amount of the repayment, including INVESTMENT EARNINGS, shall always be 100% vested and nonforfeitable. Such repayment must be made before the earlier of five years after the first date on which the PARTICIPANT is subsequently reemployed by the COMPANY or the date the PARTICIPANT has incurred five one- year BREAKS IN SERVICE. If such repayment is not made by such time, the PARTICIPANT shall have permanently forfeited his right to the FORFEITURE due to his previous RESIGNATION/DISMISSAL. 8.08 DETERMINATION OF ACCOUNT OF REEMPLOYED PARTICIPANT WHO HAS NOT INCURRED A BREAK IN SERVICE In the case of a partially vested PARTICIPANT whose employment with the COMPANY terminated, but is reemployed by the COMPANY prior to incurring a one-year BREAK IN SERVICE and such PARTICIPANT has received a distribution of his ACCOUNT and such PARTICIPANT has not made a repayment of such distribution, upon such PARTICIPANT'S subsequent termination of employment for any reason, the then vested portion of such PARTICIPANT'S COMPANY CONTRIBUTION ACCOUNT which would be distributable shall be determined as follows: (a) Add the amount of any distribution from his COMPANY CONTRIBUTION ACCOUNT made to such PARTICIPANT as a result of his prior termination of employment and not repaid to the then current balance in his COMPANY CONTRIBUTION ACCOUNT; (b) Multiply such sum by the applicable "non-forfeitable fraction" as determined under Section 8.02 (Vesting Upon Retirement or Death) or Section 8.03 (Vesting Upon Resignation/Dismissal); and (c) Subtract the amount of the prior distributions from his COMPANY CONTRIBUTION ACCOUNT made to such PARTICIPANT under the PLAN from such product. 8.09 VESTING OF A PARTICIPANT UPON TRANSFER OF EMPLOYMENT Any person who transfers from employment with the COMPANY as an EMPLOYEE directly to other employment with the COMPANY or a RELATED CORPORATION in a capacity other than as an EMPLOYEE shall be deemed by such transfer not to lose his YEARS OF SERVICE for any purpose. In addition, he shall not be deemed to retire, or otherwise incur a VESTING VALUATION DATE until such time as he is no longer in the employment of the COMPANY or a RELATED CORPORATION. At such time he - 24 - shall be entitled to a distribution of his Account, if any, as provided in Article 9 (Distribution of Accounts). Notwithstanding any other provisions of the PLAN, during the period such person is not an EMPLOYEE, he shall not share in the allocation of the COMPANY CONTRIBUTION and FORFEITURE as set forth in Section 7.03 (Allocation of Company Contribution and Forfeitures). For the purposes of determining such person's vesting percentage under Article 8 (Vesting of Accounts) YEARS OF SERVICE with the COMPANY and/or RELATED CORPORATION shall be determined as set forth in Section 1.49 (Year of Service). [8.10] STATEMENT OF ACCOUNT As soon as practicable after December 31 of each year each PARTICIPANT shall be furnished with a statement reflecting the condition of his ACCOUNTS as of such date. Article 9 DISTRIBUTION OF ACCOUNTS ------------------------ 9.01 MANNER OF DISTRIBUTION AND FURTHER ADJUSTMENTS Subject to the conditions set forth below and the provisions of Section 9.02 (Inservice Withdrawals), on a PARTICIPANT's VESTING VALUATION DATE, any amounts to which he is entitled hereunder shall be distributable to him, or to his BENEFICIARY if he is deceased. Distribution can be made in either of the following ways, as the PARTICIPANT determines: (a) In a lump sum representing the full amount distributable at the time of such distribution; or (b) In a series of installments, annually or more frequently, over a period not to exceed the life expectancy of the PARTICIPANT or the life expectancy of the PARTICIPANT and his designated BENEFICIARY, determined as of such PARTICIPANT's DISTRIBUTION DATE; provided that, if such BENEFICIARY is not the PARTICIPANT's spouse and is more than 10 years younger than the PARTICIPANT, the installments shall be paid over a period not exceeding the joint life expectancy of the PARTICIPANT and a BENEFICIARY 10 years younger than the PARTICIPANT. The life expectancy of a PARTICIPANT, his spouse or his designated BENEFICIARY shall be determined by use of the expected return multiples contained in the regulations under Section 72 of the CODE. If a PARTICIPANT so elects, the life expectancy of the PARTICIPANT and his spouse shall be recalculated annually. In the absence of such an election, life expectancies shall not be recalculated. Pursuant to such uniform and nondiscriminatory rules and procedures as the INVESTMENT ADVISORY BOARD may adopt, a PARTICIPANT who has elected installment payments may modify the installment period or the frequency of payments, provided that all installment - 25 - distributions under the PLAN must comply with the requirements of Section 401(a)(9) of the CODE. Payments shall commence as promptly as is reasonably convenient after a PARTICIPANT's VESTING VALUATION DATE, and, unless the PARTICIPANT otherwise requests, in no event later than the Sixtieth (60th) day after the close of the calendar year in which the VESTING VALUATION DATE occurs; provided, however, that if the amount distributable cannot be ascertained, payment may be made no later than Sixty (60) days after the earliest date on which the amount distributable to the PARTICIPANT can be ascertained. As soon as the amount distributable to such PARTICIPANT or his BENEFICIARY can reasonably be determined, then a separate DISTRIBUTION ACCOUNT shall be established in respect of such distribution in an amount determined under Sections 8.02 (Vesting Upon Retirement or Death) or 8.03 (Vesting Upon Resignation/ Dismissal). The assets reflected in such DISTRIBUTION ACCOUNT shall be increased or decreased as set forth in Section 7.02 (Accounting Procedures); provided, however, that in no event shall the amount distributed exceed the balance in such DISTRIBUTION ACCOUNT immediately before such distribution and after such increase or decrease is made in respect of the prior ACCOUNTING DATE. In the event that an installment form of distribution is effective, payments from each such DISTRIBUTION ACCOUNT will be made to the extent practicable, pro rata from the various investment funds in which the DISTRIBUTION ACCOUNT is invested, or as the INVESTMENT ADVISORY BOARD may permit the PARTICIPANT to direct in accordance with such uniform and nondiscriminatory rules and procedures as the INVESTMENT ADVISORY BOARD may adopt for such purpose. If a PARTICIPANT dies after his required commencement date (as defined in Section 9.08), the remaining portion of his benefits must be distributed over a period not exceeding the period over which payments were being made to the PARTICIPANT. If a PARTICIPANT dies before his required commencement date, his benefits must be distributed over a period not exceeding the greatest of: (i) five years from the death of the PARTICIPANT; (ii) in the case of payments to a designated BENEFICIARY other than the PARTICIPANT's spouse, the life expectancy of such BENEFICIARY, provided payments begin within one year of the PARTICIPANT's death; or (iii) in the case of payments to the PARTICIPANT's spouse, the life expectancy of such spouse, provided payments begin by the date the PARTICIPANT would have attained age 70-1/2. A PARTICIPANT may select, in accordance with such rules as the INVESTMENT ADVISORY BOARD may establish, the method of distributing his benefits to him; a PARTICIPANT, if he so desires, may direct how his benefits are to be paid to his BENEFICIARY; and the INVESTMENT ADVISORY BOARD shall select the method of distributing the PARTICIPANT's benefits to his BENEFICIARY if the PARTICIPANT has not filed a direction with the INVESTMENT ADVISORY BOARD. All distributions under the PLAN shall comply with the requirements of Section 401(a)(9) of the CODE and the regulations thereunder. If a PARTICIPANT's vested ACCOUNT balances exceed $3,500, distributions may not be made to the PARTICIPANT before age 65 without his consent. - 26 - 9.02 INSERVICE WITHDRAWALS While it is the primary purpose of the PLAN to accumulate funds for use of PARTICIPANTS when they retire, it is recognized that under some circumstances it may be in the best interests of a PARTICIPANT to permit a withdrawal by him while he continues in the active employment of the COMPANY. Accordingly, the INVESTMENT ADVISORY BOARD may permit a PARTICIPANT to make an inservice withdrawal from his PRIOR PARTICIPANT ACCOUNT and, in hardship situations, the INVESTMENT ADVISORY BOARD may permit a PARTICIPANT to make an inservice withdrawal from his DEFERRED WAGE ACCOUNT. A. Withdrawals from PRIOR PARTICIPANT ACCOUNT The PARTICIPANT may make inservice withdrawals from his PRIOR PARTICIPANT ACCOUNT from time to time only in such amounts as, in the INVESTMENT ADVISORY BOARD's opinion, shall be reasonably necessary in accordance with such procedures as the INVESTMENT ADVISORY BOARD shall determine, but in no event shall the cumulative amount of all such inservice withdrawals made by a PARTICIPANT exceed the lesser of (a) the amount of his total PRIOR PARTICIPANT CONTRIBUTIONS thereto, or (b) the balance of his PRIOR PARTICIPANT ACCOUNT as of the ACCOUNTING DATE immediately preceding such inservice withdrawal. Payments of amounts withdrawn by a PARTICIPANT shall be made, to the extent practicable, pro rata from the investment funds in which the PARTICIPANT'S ACCOUNT is invested, or as the INVESTMENT ADVISORY BOARD may permit the PARTICIPANT to direct in accordance with such uniform and nondiscriminatory rules and procedures as the INVESTMENT ADVISORY BOARD may adopt for such purpose. For purposes of this section, withdrawals shall be limited to the following purposes: 1) Medical expenses of the PARTICIPANT, his spouse, or his children or dependents; 2) Payment on an existing real estate mortgage on the PARTICIPANT'S principal residence; 3) Repairs on the PARTICIPANT'S residence; 4) Post high school educational expenses of the PARTICIPANT, his spouse, or his children or dependents; or 5) Purchase of a new principal residence by the PARTICIPANT. The PLAN requires minimum withdrawal amounts for each category. A minimum withdrawal of Five Hundred and 00/100 Dollars ($500.00) is required for medical and educational expenses. A minimum withdrawal of One Thousand and 00/100 Dollars ($1,000.00) is required for payment of real estate mortgages, repairs to a residence, or the purchase price of a new residence; however, the minimum withdrawal provision is - 27 - waived for a PARTICIPANT who seeks a hardship withdrawal to purchase his first residence. The PLAN requires a PARTICIPANT to verify the amount of the hardship by providing the INVESTMENT ADVISORY BOARD with the following information: 1) Medical Expenses -- Attach the explanation of the benefits statement received from the applicable Fort Howard medical plan and the benefits statement of any other insurance company which may be involved. 2) Payment on an Existing Real Estate Mortgage on Present Residence -- Attach a letter addressed to the PARTICIPANT from the present mortgage holder and signed by an officer of said mortgage holder, if applicable, detailing the following: a) Current mortgage balance; b) Address of residence; c) Year residence was purchased; d) Present monthly mortgage payments; and e) Monthly payments after reduction of mortgage, if applicable. 3) Major Repairs on Present Home a) Attach a contractor's estimate showing date, PARTICIPANT'S name and address, description of work, itemized costs of materials and labor, and contractor's signature; or b) If the PARTICIPANT is doing the work himself, he must attach a supplier's estimate showing the date, PARTICIPANT'S name and address, and an itemized cost of materials and the supplier's signature. 4) Educational Expenses a) Name and relationship to PARTICIPANT of person seeking post high school education; b) A letter from the school, on school letterhead, indicating that such person has been accepted for enrollment, estimated cost of room and board, and tuition by semester, quarter, or other applicable payment period; and c) The date this person is expected to begin school. 5) Purchase of New Residence a) Submit a copy of the offer to purchase signed by both seller and PARTICIPANT, which shall include: - 28 - i) Address of new home to be purchased; ii) Amount to be paid for new residence; iii) Amount of downpayment and estimated closing costs; and iv) Amount of mortgage. Note that iii) and iv) above will usually have to be provided by the mortgage lender on company letterhead and signed by an officer of the mortgage lender. b) Statement by the PARTICIPANT that the purchase of this residence will constitute his principal residence and also a statement as to whether or not the residence is a single residence or a duplex. In addition, the INVESTMENT ADVISORY BOARD may require the PARTICIPANT to furnish paid receipts or other information which would verify that the withdrawal was used for the purpose stated by the PARTICIPANT. B. Withdrawals from DEFERRED WAGE ACCOUNT The PARTICIPANT may make inservice hardship withdrawals from his DEFERRED WAGE ACCOUNT from time to time only in such amounts as, in the INVESTMENT ADVISORY BOARD's opinion, shall be reasonably necessary in accordance with such procedures as the INVESTMENT ADVISORY BOARD shall determine, but in no event shall the cumulative amount of such inservice hardship withdrawals made by a PARTICIPANT exceed the lesser of (a) the amount of his total DEFERRED WAGE ACCOUNT CONTRIBUTIONS thereto or (b) the balance of his DEFERRED WAGE ACCOUNT as of the accounting date immediately preceding such inservice hardship withdrawal. A hardship distribution will not be allowed unless the PARTICIPANT can demonstrate a financial hardship and the distribution is necessary to satisfy such financial hardship. For purposes of this subsection, "financial hardship" shall be limited to the following: 1) Medical expenses, described in Internal Revenue Code Section 213(d), incurred by the PARTICIPANT, his spouse, or his children or dependents; 2) Purchase of a new principal residence by the PARTICIPANT (excluding mortgage payments); 3) Payment of tuition for the next semester or quarter of post-secondary education for the PARTICIPANT, his spouse, or his children or dependents; or - 29 - 4) The need to prevent the eviction of the PARTICIPANT from his principal residence or foreclosure on the mortgage of the PARTICIPANT'S principal residence. A distribution will be treated as necessary to satisfy a financial hardship of a PARTICIPANT if all of the following requirements are satisfied: 1) The distribution is not in excess of the amount of the immediate and heavy financial need of the PARTICIPANT; 2) The PARTICIPANT has obtained all distributions, other than inservice hardship withdrawals, and all nontaxable loans currently available under all plans maintained by the COMPANY; 3) The PARTICIPANT'S DEFERRED WAGE CONTRIBUTIONS shall be suspended for 12 months after receipt of the withdrawal; and 4) The PARTICIPANT may not make DEFERRED WAGE CONTRIBUTIONS for the PARTICIPANT'S taxable year immediately following the taxable year of the inservice hardship withdrawal in excess of the applicable limit under Section 402(g) of the CODE for such next taxable year less the amount of such PARTICIPANT's DEFERRED WAGE CONTRIBUTIONS for the taxable year of the inservice hardship withdrawal. The amount treated as necessary to satisfy a PARTICIPANT'S financial hardship under this subsection shall include any amounts necessary to pay any federal, state or local income taxes or penalties reasonably anticipated as a result of the hardship distribution. The PLAN requires a minimum withdrawal amount for each hardship category. A minimum withdrawal of Five Hundred and 00/100 Dollars ($500.00) is required for medical or educational hardship. A minimum withdrawal of One Thousand and 00/100 Dollars ($1,000.00) is required for the purpose of an EMPLOYEE'S purchase of a new principal residence, for preventing an EMPLOYEE'S eviction from his principal residence, or for preventing foreclosure of the mortgage on an EMPLOYEE'S principal residence. Payments of amounts withdrawn by a PARTICIPANT shall be made, to the extent practicable, pro rata from the investment funds in which the PARTICIPANT'S ACCOUNT is invested or as the INVESTMENT ADVISORY BOARD may permit the PARTICIPANT to direct in accordance with such uniform and nondiscriminatory rules and procedures as the INVESTMENT ADVISORY BOARD may adopt for such a purpose. [9.03] REPAYMENTS OF INSERVICE WITHDRAWALS An amount withdrawn by a PARTICIPANT may be partially or entirely restored to his PRIOR PARTICIPANT ACCOUNT as of any ACCOUNTING DATE. Amounts so restored thereafter shall be treated as contributions by - 30 - him, except that they shall not be considered such for purposes of Section 7.03 (Allocation of Company Contributions and Forfeitures) or the contribution limitations imposed by Section 415 of the CODE. [9.04] DESIGNATION OF BENEFICIARY Each living PARTICIPANT, from time to time, may name a person(s) or entity(ies) (who may be named contingently or successively) to whom his ACCOUNT balances are to be paid in the case of his death before he receives all of his benefits. If a PARTICIPANT designates someone other than (or in addition to) his spouse as his primary BENEFICIARY, his spouse must consent in writing to the designation. Each designation shall revoke all prior designations by the same PARTICIPANT in writing with the INVESTMENT ADVISORY BOARD during his lifetime. If a deceased PARTICIPANT has failed to name a BENEFICIARY in the manner provided above, or if the BENEFICIARY named by a deceased PARTICIPANT dies before him or before complete distribution of the PARTICIPANT'S ACCOUNT balances, the INVESTMENT ADVISORY BOARD shall direct the TRUSTEE to distribute such PARTICIPANT'S ACCOUNT BALANCES to the first surviving class of the following successive preference beneficiaries: (a) Widow or widower; (b) Surviving children; (c) Surviving parents; (d) Surviving brothers and sisters; and (e) Executors or administrators. 9.05 MISSING PARTICIPANTS OR BENEFICIARIES Each PARTICIPANT and each BENEFICIARY of a deceased PARTICIPANT shall file with the INVESTMENT ADVISORY BOARD from time to time in writing his post office address and each change of post office address, and any communication, statement, or notice addressed to a PARTICIPANT or BENEFICIARY at his last post office address filed with the INVESTMENT ADVISORY BOARD, or if no such address was filed with the INVESTMENT ADVISORY BOARD then at his last post office address as shown on the COMPANY'S records, shall be binding on the PARTICIPANT or his BENEFICIARY for all purposes of the PLAN. Neither the TRUSTEE nor the INVESTMENT ADVISORY BOARD shall be obliged to search for or ascertain the whereabouts of any PARTICIPANT or any BENEFICIARY. If the INVESTMENT ADVISORY BOARD notifies any PARTICIPANT or BENEFICIARY of a deceased PARTICIPANT that he is eligible for a distribution and also notifies him of the provisions of this Section, and the PARTICIPANT or his BENEFICIARY fails to claim his benefits or make his whereabouts known to the INVESTMENT ADVISORY BOARD within three years thereafter, the benefits of such PARTICIPANT or BENEFICIARY shall be reallocated to the accounts of other PARTICIPANTS in the manner set forth in Section 7.03 (Allocation of Company Contributions and Forfeitures) - 31 - as an additional COMPANY CONTRIBUTION. Any amounts so reallocated shall be deducted from the current COMPANY CONTRIBUTION and again become payable to such PARTICIPANT or BENEFICIARY upon filing of a written claim for benefits under the PLAN with the INVESTMENT ADVISORY BOARD and upon furnishing evidence of entitlement to such benefits as the INVESTMENT ADVISORY BOARD may require. 9.06 DISTRIBUTION IN COMPANY SECURITIES A PARTICIPANT may decide, in accordance with such rules as the INVESTMENT ADVISORY BOARD may establish, whether his distributions shall be made entirely or partially in securities of the COMPANY, valued at their fair market value on the ACCOUNTING DATE immediately preceding the DISTRIBUTION DATE. 9.07 ALTERNATE PAYEE DUE TO INCAPACITY When a PARTICIPANT or the BENEFICIARY of a deceased PARTICIPANT is (a) adjudged legally incompetent by a court of law, (b) a minor, or (c) in the INVESTMENT ADVISORY BOARD's opinion is in any way incapacitated so as to be unable to manage his financial affairs, the INVESTMENT ADVISORY BOARD may direct the TRUSTEE to make payments or distributions to the PARTICIPANT'S or BENEFICIARY'S legal representatives or to a relative or friend of the PARTICIPANT or BENEFICIARY for his benefit, or the INVESTMENT ADVISORY BOARD may have the TRUSTEE apply the payment or distribution for the benefit of the PARTICIPANT or BENEFICIARY in any manner that the INVESTMENT ADVISORY BOARD determines. 9.08 COMMENCEMENT OF DISTRIBUTIONS A PARTICIPANT who attains age 70-1/2 on or after January 1, 1988, must commence receipt of his retirement benefit no later than April 1 of the PLAN YEAR following the PLAN YEAR in which such PARTICIPANT attains age 70-1/2 (his "required commencement date"), regardless of whether he has terminated his employment with the COMPANY or a RELATED CORPORATION. Notwithstanding the preceding sentence, an active PARTICIPANT who owns (or is considered as owning within the meaning of Section 318 of the CODE) 5% or more of the stock of the COMPANY or a RELATED CORPORATION must commence to receive his retirement benefit no later than April 1 of the PLAN YEAR following the PLAN YEAR in which such active PARTICIPANT attains age 70-1/2 (his "required commencement date"), regardless of whether he has terminated his employment with the COMPANY or RELATED CORPORATION. 9.09 DIRECT TRANSFER OF ELIGIBLE ROLLOVER DISTRIBUTIONS Notwithstanding any provision of the PLAN to the contrary, a "distributee" under the PLAN (as defined below) who receives an "eligible rollover distribution" (as defined below) under Section 9.01 may elect, at the time and in the manner prescribed by the - 32 - INVESTMENT ADVISORY BOARD, to have any portion of the distribution paid directly to an "eligible retirement plan" (as defined below) designated by the distributee in a direct rollover. 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 the following: (a) 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; (b) Any distribution to the extent such distribution is required under CODE Section 401(a)(9); and (c) The portion of any distribution that is not includible in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). An eligible retirement plan is an individual retirement account described in CODE Section 408(a), an individual retirement annuity described in CODE Section 408(d), an annuity plan described in CODE Section 403(a), or a qualified trust described in CODE Section 401(a), that accepts the distributee's eligible rollover distribution. However, in the case of an eligible rollover distribution to the surviving spouse of a PARTICIPANT, an eligible retirement plan is an individual retirement account or individual retirement annuity. For purposes of the PLAN, a PARTICIPANT'S surviving spouse and the PARTICIPANT'S spouse or former spouse who is an alternate payee under a qualified domestic relations order, as defined in CODE Section 414(p), are distributees with regard to their respective interests. Article 10 MISCELLANEOUS ------------- 10.01 INFORMATION TO BE FURNISHED BY PARTICIPANTS PARTICIPANTS shall furnish to the TRUSTEE and the INVESTMENT ADVISORY BOARD such evidence, data or information as the TRUSTEE and the INVESTMENT ADVISORY BOARD respectively consider necessary or desirable for the purpose of administering the PLAN. The benefits provided under the PLAN for each such PARTICIPANT are upon the condition that he will furnish full, true and complete evidence, data and information required by the TRUSTEE and the INVESTMENT ADVISORY BOARD. - 33 - 10.02 INTERESTS NOT TRANSFERABLE The interests of PARTICIPANTS under the PLAN are not in any way subject to their debts or other obligations and may not be voluntarily or involuntarily sold, transferred or assigned except as may be set forth in a QUALIFIED DOMESTIC RELATIONS ORDER received by the INVESTMENT ADVISORY BOARD. In the case of receipt of a domestic relations order by the INVESTMENT ADVISORY BOARD, the PARTICIPANT and the alternate payee (as defined in Section 1.38 (Qualified Domestic Relations Order)) shall be notified within a reasonable period of time of the receipt of such order and its procedures for determining whether such order is a QUALIFIED DOMESTIC RELATIONS ORDER. Notwithstanding any other provisions of the PLAN, benefits payable to an alternate payee under the terms of a domestic relations order determined to be a QUALIFIED DOMESTIC RELATIONS ORDER shall be paid immediately in a lump sum unless the terms of the QUALIFIED DOMESTIC RELATIONS ORDER provide for another method or time of distribution, in which case distribution of the alternate payee's benefits shall be made in accordance with the terms of the QUALIFIED DOMESTIC RELATIONS ORDER. 10.03 ABSENCE OF GUARANTY Neither the TRUSTEE, the INVESTMENT ADVISORY BOARD, nor the COMPANY in any way guarantees the TRUST FUND from loss or depreciation. The COMPANY does not guarantee the payment of any money which may be or become due to any person under the PLAN, and the liability of the TRUSTEE, the INVESTMENT ADVISORY BOARD and the COMPANY to make any payment under the PLAN shall be limited to amounts held in ACCOUNTS of the PLAN. 10.04 EMPLOYMENT RIGHTS Participation in the PLAN shall not give any EMPLOYEE the right to be retained in the service of the COMPANY, nor any right or claim to any benefit under the PLAN unless such right or claim has specifically accrued under the terms of the PLAN. 10.05 GENDER AND NUMBER For the purposes of the PLAN and the TRUST, words in the masculine gender shall include the feminine and neuter genders, the plural shall include the singular and the singular shall include the plural. 10.06 REVIEW OF BENEFIT DETERMINATIONS The provisions of this Section 10.06 shall control with respect to the resolution of claims for benefits under the PLAN. Whenever the INVESTMENT ADVISORY BOARD decides for whatever reason to deny, whether in whole or in part, a claim for benefits filed by any person (hereinafter referred to as the "Claimant"), the INVESTMENT ADVISORY BOARD shall transmit a written notice of its decision to - 34 - the Claimant within 90 days, which notice shall be written in a manner calculated to be understood by the Claimant and shall contain a statement of the specific reasons for the denial of the claim and a statement advising the Claimant that, within 60 days of the date on which he receives such notice, he may obtain review of the decision of the INVESTMENT ADVISORY BOARD in accordance with the procedures hereinafter set forth. Within such 60-day period, the Claimant or his authorized representative may request that the claim denial be reviewed by filing with the INVESTMENT ADVISORY BOARD a written request therefore, which request shall contain the following information: (a) the date on which the Claimant's request filed with the INVESTMENT ADVISORY BOARD; provided, however, that the date on which the Claimant's request for review was in fact filed with the INVESTMENT ADVISORY BOARD shall control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph (a); (b) the specific portions of the denial of his claim which the Claimant requests the INVESTMENT ADVISORY BOARD to review; (c) a statement by the Claimant setting forth the basis upon which he believes the INVESTMENT ADVISORY BOARD should reverse its previous denial of his claim for benefits and accept his claim as made; and (d) any written material (offered as exhibits) which the Claimant desires the INVESTMENT ADVISORY BOARD to examine in its consideration of his position as stated pursuant to paragraph (c) of this Section 10.06. Within 60 days of the date determined pursuant to paragraph (a) of this Section 10.06, the INVESTMENT ADVISORY BOARD shall conduct a full and fair review of its decision denying the Claimant's claim for benefits. Within 60 days of the date of such hearing, the INVESTMENT ADVISORY BOARD shall render its written decision on review, written in a manner calculated to be understood by the Claimant, specifying the reasons and PLAN provisions upon which its decision was based. 10.07 ERISA The PLAN shall be implemented and administered in accordance with ERISA and any and all other applicable laws. 10.08 UNIFORM ADMINISTRATION The PLAN, and any and all rules relating thereto, shall be implemented and administered in a uniform and non-discriminatory manner. - 35 - 10.09 AMENDMENT OR DISCONTINUANCE While the COMPANY expects to continue the PLAN, it must necessarily reserve and has reserved the right to amend or discontinue the PLAN at any time, provided that no amendment shall result in the return or repayment to the COMPANY of any part of the TRUST FUND or the income therefrom, or result in the distribution of the TRUST FUND for the benefit of anyone other than PARTICIPANTS and former PARTICIPANTS and other persons entitled to benefits under the PLAN, except as provided in Section 10.14. PARTICIPANTS shall be notified of such amendment or discontinuance within a reasonable time. Upon partial or complete termination of the PLAN or upon permanent discontinuance of COMPANY CONTRIBUTIONS under the PLAN, each affected PARTICIPANT'S account balances shall be fully vested in him and shall be distributed to him by any one or both of the methods specified in Article 9 (Distribution of Accounts). 10.10 PLAN MERGER OR CONSOLIDATION In the event of any merger or consolidation of the PLAN with, or transfer of assets or liabilities to, any other plan, each PARTICIPANT in the PLAN must be entitled, if the other plan is then terminated, to receive a benefit immediately after the merger, consolidation or transfer which is equal to or greater than the benefit the PARTICIPANT would have been entitled to receive immediately before the merger, consolidation or transfer if the PLAN had then terminated. 10.11 TRUST AGREEMENT Attention is directed to the fact that the TRUST implements the PLAN. A copy of the TRUST is on file at the office of the Secretary of the COMPANY where it may be examined by any PARTICIPANT if he so desires. The provisions of and benefits under the PLAN are subject to the terms of the TRUST. 10.12 WISCONSIN LAW TO GOVERN This PLAN shall be construed and regulated and its validity and effect and the rights hereunder of all parties interested shall at all times be determined, and this PLAN shall be administered in accordance with the laws of the State of Wisconsin, subject, however, to applicable provisions of ERISA, and the CODE, as the same may, from time to time, be amended. Notwithstanding anything to the contrary, in the event of a conflict between the TRUST and the PLAN regarding the applicability of state law, the provisions of this PLAN shall govern. In case any provision of this PLAN and/or TRUST shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts of the PLAN and/or TRUST, but the PLAN and/or TRUST shall be construed and enforced as if said illegal and invalid provisions had never been inserted herein. - 36 - 10.13 STOCK RIGHTS OF PARTICIPANTS (a) Voting Rights. For purposes of this Section, COMPANY Securities means any voting stock issued by the COMPANY. Each PARTICIPANT (or, in the event of his death, his BENEFICIARY) shall have the right to direct the TRUSTEE as to the manner in which his proportionate share of COMPANY Securities held in the TRUST FUND are to be voted on each matter brought before an annual or special stockholders' meeting of the COMPANY. Before each such meeting of stockholders, the INVESTMENT ADVISORY BOARD shall cause to be furnished to each PARTICIPANT (or BENEFICIARY) a copy of the proxy solicitation material, together with a form requesting confidential directions on how such PARTICIPANT'S proportionate share of COMPANY Securities held in the TRUST FUND shall be voted on each such matter. Upon timely receipt of such directions, the TRUSTEE shall on each such matter vote as directed a number of shares (including fractional shares) of COMPANY Securities representing the PARTICIPANT'S proportionate share of COMPANY Securities held in the TRUST FUND. The instructions received by the TRUSTEE from PARTICIPANTS shall be held by the TRUSTEE in confidence and shall not be divulged or released to any person, including officers or employees of the COMPANY or any RELATED CORPORATION. The TRUSTEE shall vote shares with respect to which it has not received direction in the same proportion as shares with respect to which it has received PARTICIPANTS' (or BENEFICIARIES') directions. (b) Rights on Tender or Exchange Offer. Each PARTICIPANT (or, in the event of his death, his BENEFICIARY) for purposes of this Section 10.13(b) is hereby designated a "named fiduciary" within the meaning of Section 403(a)(1) of ERISA and shall have the right, to the extent of his proportionate share of COMPANY Securities held in the TRUST FUND, to direct the TRUSTEE in writing as to the manner in which to respond to a tender or exchange offer with respect to shares of COMPANY Securities. The INVESTMENT ADVISORY BOARD shall use its best efforts to timely distribute or cause to be distributed to each PARTICIPANT (or BENEFICIARY) such information as will be distributed to stockholders of the COMPANY in connection with any such tender or exchange offer. Upon timely receipt of such instructions, the TRUSTEE shall respond as instructed with respect to a number of shares of COMPANY Securities representing such PARTICIPANT'S proportionate share of COMPANY Securities held in the TRUST FUND. The instructions received by the TRUSTEE from PARTICIPANTS shall be held by the TRUSTEE in confidence and shall not be divulged or released to any person, including officers or employees of the COMPANY or any RELATED CORPORATION. If the TRUSTEE shall not receive timely instruction from a PARTICIPANT (or BENEFICIARY) as to the manner in which to respond to such a tender or exchange offer, the TRUSTEE shall not tender or exchange any shares of COMPANY Securities with respect to which such PARTICIPANT has the right of direction. - 37 - 10.14 NO INTEREST IN COMPANY The COMPANY shall have no right, title or interest in the TRUST FUND, nor shall any part of the TRUST FUND revert or be repaid to the COMPANY, directly or indirectly, unless: (a) a contribution is made by the COMPANY by mistake of fact and such contribution is returned to the COMPANY within one year after payment to the TRUSTEE; or (b) a contribution conditioned on the deductibility thereof is disallowed as an expense for federal income tax purposes and such contribution (to the extent disallowed) is returned to the COMPANY within one year after the disallowance of the deduction. The amount of any contribution that may be returned to the COMPANY pursuant to subparagraph (a) or (b) above must be reduced by any portion thereof previously distributed from the TRUST FUND and by any losses of the TRUST FUND allocable thereto, and in no event may the return of such contribution cause any PARTICIPANT's ACCOUNTS to be less than the amount of such ACCOUNTS had the contribution not been made under the PLAN. Article 11 TOP HEAVY RESTRICTIONS ---------------------- 11.01 DEFINITIONS For purposes only of this Article 11 (Top Heavy Restrictions), the following definitions shall apply in addition to those set forth in Article 1 (Definitions). In case of a conflict, the definitions in this Section 11.01 (Definitions) shall supersede Article 1 (Definitions). (a) "REQUIRED AGGREGATION GROUP" means (i) each qualified retirement plan sponsored by the COMPANY or any RELATED CORPORATION in which a KEY EMPLOYEE is a participant and (ii) each other qualified retirement plan which enables any plan described in subparagraph (i) to meet the requirements of the CODE as they apply to coverage, participation and non- discrimination requirements as set forth in Sections 401(a)(4) and 410 of the CODE. (b) "PERMISSIVE AGGREGATION GROUP" means a group of plans consisting of any qualified retirement plan sponsored by the COMPANY or any RELATED CORPORATION not required to be part of the REQUIRED AGGREGATION GROUP plus any plans which are in the REQUIRED AGGREGATION GROUP provided that when taken collectively the plans continue to meet the requirements of the CODE as they apply to coverage, participation and non- discrimination requirements as set forth in Sections 401(a)(4) and 410 of the CODE. - 38 - (c) "KEY EMPLOYEE" means any employee of the COMPANY or any RELATED CORPORATION who is participating in a retirement plan sponsored by the COMPANY or any RELATED CORPORATION as of the DETERMINATION DATE who at any time during the PLAN YEAR or any four (4) preceding PLAN YEARS is (was) (i) an officer of the COMPANY or any RELATED CORPORATION having an annual compensation from the COMPANY or a RELATED CORPORATION greater than fifty percent (50%) of the amount in effect under Section 415(b)(1)(A) of the CODE for any such PLAN YEAR, (ii) one of the ten (10) EMPLOYEES having an annual compensation from the COMPANY or a RELATED CORPORATION greater than the limitation in effect under Section 415(c)(1)(A) of the CODE and owning (or is considered as owning within the meaning of Section 318 of the CODE) the largest interests in the COMPANY or any RELATED CORPORATION, (iii) a 5% stockholder (or is considered as owning 5% or more of the stock within the meaning of Section 318 of the CODE) of the COMPANY or any RELATED CORPORATION, or (iv) a 1% stockholder (or is considered as owning 1% or more of the stock within the meaning of Section 318 of the CODE) of the COMPANY or any RELATED CORPORATION and having an annual compensation paid by the COMPANY or any RELATED CORPORATION in excess of $150,000. For purposes of (i) above, no more than fifty (50) EMPLOYEES (or, if lesser, the greater of 3 EMPLOYEES or ten percent (10%) of the EMPLOYEES) shall be treated as officers. (d) "NON-KEY EMPLOYEE" means any employee of the COMPANY or any RELATED CORPORATION who is not a KEY EMPLOYEE. (e) "DETERMINATION DATE" means each December 31, beginning with December 31, 1983. (f) "EMPLOYEE" means any employee of the COMPANY or any RELATED CORPORATION who is a KEY EMPLOYEE or a NON-KEY EMPLOYEE. (g) "VALUATION DATE" means each December 31, beginning with December 31, 1983. (h) "AGGREGATION GROUP" means either a REQUIRED AGGREGATION GROUP and/or a PERMISSIVE AGGREGATION GROUP. 11.02 TOP HEAVY DEFINED This PLAN will be deemed "top-heavy" and notwithstanding any other provisions of this PLAN, this Article 11 (Top Heavy Restrictions) shall apply as of the beginning of the PLAN YEAR following the DETERMINATION DATE if as of the DETERMINATION DATE this PLAN is a plan in the REQUIRED AGGREGATION GROUP and the sum of (a) and (b) below exceeds 60 percent of a similar sum determined for all EMPLOYEES of the AGGREGATION GROUP. (a) the aggregate present value based upon the immediately preceding VALUATION DATE (using the applicable actuarial assumptions used in the valuation of the applicable plan) of the benefits payable to all KEY EMPLOYEES under all the defined benefit plans of the AGGREGATION GROUP as if all KEY - 39 - EMPLOYEES terminated their employment on the DETERMINATION DATE; and (b) the aggregate account balances, as of the most recent valuation, of all KEY EMPLOYEES (excluding any balances attributable to rollover contributions made after December 31, 1983, from another qualified retirement plan of another employer) who are participants in any defined contribution plan of the AGGREGATION GROUP. (c) In making the determinations, the following rules shall apply: (i) Such sum shall be increased by the aggregate distributions, if any, made to any former or current EMPLOYEE during the 5-year period ending on the DETERMINATION DATE, including distributions under a terminated plan which, if it had not been terminated, would have been included in the REQUIRED AGGREGATION GROUP. (ii) The present value determined in (a) or the account balance determined in (b) of this Section 11.02 (Top Heavy Defined) for a current or former employee who was previously a KEY EMPLOYEE but who is no longer a KEY EMPLOYEE, shall be disregarded. (iii) The present value determined in (a) or the account balance determined in (b) of this Section 11.02 (Top Heavy Defined) for a beneficiary of a former EMPLOYEE shall be considered the present value or account balance of the former EMPLOYEE. (iv) On and after January 1, 1985, the present value determined in (a) or account balance determined in (b) of this Section 11.02 (Top Heavy Defined) on behalf of a former EMPLOYEE shall not be taken into account if such former EMPLOYEE had not performed any services for the COMPANY or a RELATED CORPORATION at any time during the 5 year period ending on the DETERMINATION DATE. (v) The actuarial assumptions used for measuring accrued benefits under all defined benefit plans in the REQUIRED AGGREGATION GROUP shall be identical. (vi) The present value determined in (a) or the account balance determined in (b) of this Section 11.02 for a current or former EMPLOYEE who is not a KEY EMPLOYEE shall be determined under the method that is used for all plans of the COMPANY and RELATED CORPORATIONS, or if there is no such method, as if such benefits accrued no more rapidly than the slowest accrual rate permitted under Section 411(b)(1)(C) of the CODE. 11.03 VESTING PROCEDURES (a) In the event this PLAN is determined "top-heavy", only for the PLAN YEAR during which this Article 11 (Top Heavy - 40 - Restrictions) applies, the vesting provisions of this Section 11.03 (Vesting Provisions) shall apply and Section 8.03 (Vesting Upon Resignation/Dismissal) shall be inapplicable. (b) A PARTICIPANT (i) who completes an HOUR OF SERVICE in a PLAN YEAR during which the PLAN is deemed to be "top-heavy", and (ii) who has at least two (2) YEARS OF SERVICE, and (iii) whose employment terminates for any reason other than death and (iv) who is not 100% vested due to RETIREMENT or death as specified in Section 8.02 (Vesting Upon Retirement or Death) shall be vested as of his VESTING VALUATION DATE based upon the table in paragraph (e) below. (c) The vested percentage of the COMPANY CONTRIBUTION ACCOUNT of a PARTICIPANT whose employment with the COMPANY terminates within a PLAN YEAR during which the PLAN IS "top heavy" shall be based upon the table below and the YEARS OF SERVICE as of such PARTICIPANT'S VESTING VALUATION DATE. Percent of COMPANY YEARS OF SERVICE CONTRIBUTION ACCOUNT as of a VESTING as of a VESTING VALUATION DATE VALUATION DATE ---------------- -------------------- 2 20 3 40 4 60 5 80 6 or more 100 (d) In any succeeding PLAN YEAR during which this PLAN is not "top heavy", any active PARTICIPANT who has three or more YEARS OF SERVICE as of the last day of the PLAN YEAR during which the PLAN is "top-heavy" will be permitted to make an election whether his COMPANY CONTRIBUTION ACCOUNT will continue to vest on the table set forth in paragraph (c) above or the basis set forth in Section 8.03 (Vesting Upon Resignation/Dismissal) of the PLAN. (e) any succeeding PLAN YEAR during which this PLAN is not "top- heavy," the dollar amount of the vested percentage of the COMPANY CONTRIBUTION ACCOUNT of any PARTICIPANT shall not be less than the dollar amount of the vested percentage of the COMPANY CONTRIBUTION ACCOUNT (including the INCREMENT) of such PARTICIPANT as of the day immediately preceding the beginning of the first PLAN YEAR in which the PLAN is not "top-heavy." 11.04 MINIMUM BENEFITS FOR NON-KEY EMPLOYEES (a) In the event this PLAN is determined "top-heavy," a NON-KEY EMPLOYEE who is an active PARTICIPANT of this PLAN as of the end of the PLAN YEAR of the December 31 of a PLAN YEAR in which the PLAN is "top-heavy" shall be entitled to a minimum allocation of the COMPANY CONTRIBUTION in lieu of the allocation of the COMPANY CONTRIBUTION set forth in Section 7.03 (Allocation of Company Contributions and Forfeitures) (if - 41 - such allocation results in a lesser amount) of three percent (3%) of the PARTICIPANT'S total cash compensation from the COMPANY (as stated on such PARTICIPANT'S Wage and Tax Statement (Form W-2)). (b) For the PLAN YEAR beginning January 1, 1984, if the allocation for each KEY EMPLOYEE under Section 7.03 (Allocation of Company Contribution and Forfeitures), when combined with the DEFERRED WAGE CONTRIBUTIONS of such KEY EMPLOYEE does not exceed three percent (3%) of the lesser of $200,000 or the PARTICIPANT'S total cash compensation from the COMPANY (as stated on such PARTICIPANT'S Wage and Tax Statement (Form W-2)) for the year in which the PLAN is determined to be "top- heavy," then the minimum benefit outlined in paragraph (a) of this Section 11.04 (Minimum Benefits for Non-Key Employees) shall be the highest percentage determined for a KEY EMPLOYEE based upon this paragraph (b). (c) For any PLAN YEAR beginning on or after January 1, 1985, the alternative minimum outlined in paragraph (b) above shall be determined based upon the allocation under Section 7.03 (Allocation of Company Contribution and Forfeitures) when compared to the lesser of $200,000 or the PARTICIPANT's total cash compensation from the COMPANY (as stated on such PARTICIPANT's Wage and Tax Statement (Form W-2)) for the year. 11.05 MAXIMUM ANNUAL COMPENSATION In the event the PLAN is determined to be "top-heavy," the maximum annual compensation taken into account, if any, to determine benefits under the PLAN shall be $200,000 (as adjusted for cost of living increases in the same manner as the dollar amount contained in Section 415(c)(1)(A) of the CODE). This section shall only apply during any PLAN YEAR in which the PLAN is "top-heavy." 11.06 FORMULA FOR DETERMINING COMPANY CONTRIBUTIONS In the event this PLAN is determined "top heavy," Exhibit A (Formula for Determining Contributions under Fort Howard [Paper Company] Profit Sharing Retirement Plan) shall be superseded to the extent to permit Section 11.04 (Minimum Benefits for Non-Key Employees) to be effective, provided, however, the COMPANY shall not be required to contribute more than the amount deductible as an expense for purposes of federal taxes on income. 11.07 SECTION 416 OF THE CODE AND ITS REGULATIONS In the event that any or all of the Sections 11.01 (Definitions), 11.02 (Top Heavy Defined), 11.03 (Vesting Provisions), 11.04 (Minimum Benefits for Non-Key Employees) and 11.05 (Maximum Annual Compensation) do not fully comply with Section 416 of the CODE and the regulations issued thereunder, Section 416 of the CODE and its regulations shall supersede and replace the Section of the PLAN which is not in full compliance. - 42 - 11.08 NO DUPLICATION OF BENEFITS If the COMPANY maintains more than one qualified retirement plan, the minimum contribution otherwise required by Section 11.04 (Minimum Benefit for Non-Key Employees) may be reduced in accordance with regulations of the Secretary of the Treasury to prevent inappropriate duplication of minimum contributions or benefits. Article 12 INVESTMENT ADVISORY BOARD ------------------------- 12.01 MEMBERSHIP An INVESTMENT ADVISORY BOARD consisting of such number of persons (who may but need not be employees of the COMPANY) as determined by the Chief Executive Officer of the COMPANY shall be appointed by the Chief Executive Officer of the COMPANY. The Secretary of the COMPANY shall certify to the TRUSTEE from time to time the appointment to (and termination of) office of each member of the INVESTMENT ADVISORY BOARD and the person who is selected as secretary of the INVESTMENT ADVISORY BOARD. 12.02 GENERAL POWERS, RIGHTS AND DUTIES Except as otherwise specifically provided and in addition to the powers, rights and duties specifically given to the INVESTMENT ADVISORY BOARD elsewhere in the PLAN and the TRUST, the INVESTMENT ADVISORY BOARD shall have the following discretionary powers, rights and duties: (a) To select a secretary, if it believes it advisable, who may but need not be a member of the INVESTMENT ADVISORY BOARD. (b) To determine all questions arising under the PLAN, including the power to determine the rights or eligibility of EMPLOYEES or PARTICIPANTS and any other persons, and the amounts of their benefits under the PLAN, and to remedy ambiguities, inconsistencies or omissions. (c) To adopt such rules of procedure and regulations as in its opinion may be necessary for the proper and efficient administration of the PLAN as are consistent with the PLAN and TRUST. (d) To enforce the PLAN in accordance with the terms of the PLAN and the TRUST and the rules and regulations adopted by the INVESTMENT ADVISORY BOARD as above. (e) To direct the TRUSTEE as respects payments or distributions from the TRUST FUND in accordance with the provisions of the PLAN. - 43 - (f) To furnish the COMPANY with such information as may be required by it for tax or other purposes in connection with the PLAN. (g) To employ agents, attorneys, accountants, actuaries or other persons (who also may be employed by the COMPANY) and to allocate or delegate to them such powers, rights and duties as the INVESTMENT ADVISORY BOARD may consider necessary or advisable to properly carry out administration of the PLAN, provided that such allocation or delegation and the acceptance thereof by such agents, attorneys, accountants, actuaries or other persons, shall be in writing. 12.03 MANNER OF ACTION During a period in which two or more members of the INVESTMENT ADVISORY BOARD are acting, the following provisions apply where the context admits: (a) A member of the INVESTMENT ADVISORY BOARD by writing may delegate any or all of his rights, powers, duties and discretions to any other member, with the consent of the latter. (b) The members of the INVESTMENT ADVISORY BOARD may act by meeting or by writing signed without meeting, and may sign any document by signing one document or concurrent documents. (c) An action or a decision (which may be taken without a meeting) of a majority of the members of the INVESTMENT ADVISORY BOARD as to a matter shall be as effective as if taken or made by all members of the INVESTMENT ADVISORY BOARD. (d) If, because of the number qualified to act, there is an even division of opinion among the members of the INVESTMENT ADVISORY BOARD as to a matter, a disinterested party selected by the INVESTMENT ADVISORY BOARD shall decide the matter and his decision shall control. (e) Except as otherwise provided by law, no member of the INVESTMENT ADVISORY BOARD shall be liable or responsible for an act or omission of the other members of the INVESTMENT ADVISORY BOARD in which the former has not concurred. (f) The certificate of the secretary of the INVESTMENT ADVISORY BOARD or of a majority of the members of the INVESTMENT ADVISORY BOARD that the INVESTMENT ADVISORY BOARD has taken or authorized any action shall be conclusive in favor of any person relying on the certificate. 12.04 INTERESTED MEMBER If a member of the INVESTMENT ADVISORY BOARD also is a PARTICIPANT in the PLAN, he may not decide or determine any matter or question concerning distributions of any kind to be made to him or the nature or mode of settlement of his benefits unless such decision or - 44 - determination could be made by him under the PLAN if he were not serving on the INVESTMENT ADVISORY BOARD. 12.05 RESIGNATION OR REMOVAL OF MEMBERS A member of the INVESTMENT ADVISORY BOARD may be removed by the Chief Executive Officer of the COMPANY at any time. A member of the INVESTMENT ADVISORY BOARD may resign at any time. The Chief Executive Officer of the COMPANY may fill any vacancy in the membership of the INVESTMENT ADVISORY BOARD. The Chief Executive Officer of the COMPANY shall give prompt written notice thereof to the other members of the INVESTMENT ADVISORY BOARD. Until any such vacancy is filled, the remaining members may exercise all of the powers, rights and duties conferred on the INVESTMENT ADVISORY BOARD. 12.06 EXPENSES All costs, charges and expenses reasonably incurred by the INVESTMENT ADVISORY BOARD will be paid from the Trust Fund or by the COMPANY, as directed by the Investment Advisory Board. No compensation will be paid to a member of the INVESTMENT ADVISORY BOARD as such. 12.07 INFORMATION REQUIRED Each person entitled to benefits under the PLAN must file with the INVESTMENT ADVISORY BOARD from time to time in writing such person's post office address and each change of post office address. Any communication, statement or notice addressed to any person at the last post office address filed with the INVESTMENT ADVISORY BOARD will be binding upon such person for all purposes of the PLAN. Each person entitled to benefits under the PLAN also shall furnish the INVESTMENT ADVISORY BOARD with such documents, evidence, data or information as the INVESTMENT ADVISORY BOARD considers necessary or desirable for the purpose of administering the PLAN. The COMPANY shall furnish the INVESTMENT ADVISORY BOARD with such data and information as the INVESTMENT ADVISORY BOARD may deem necessary or desirable in order to administer the PLAN. The records of the COMPANY as to an EMPLOYEE'S or PARTICIPANT'S period of employment, HOURS OF SERVICE, RESIGNATION/DISMISSAL and the reason therefore, LEAVE OF ABSENCE, reemployment and ANNUAL BASE PAY will be conclusive on all persons unless determined to the INVESTMENT ADVISORY BOARD'S satisfaction to be incorrect. 12.08 UNIFORM RULES The INVESTMENT ADVISORY BOARD shall administer the PLAN on a reasonable and nondiscriminatory basis and shall apply uniform rules to all persons similarly situated. - 45 - 12.09 REVIEW OF BENEFIT DETERMINATIONS The INVESTMENT ADVISORY BOARD will provide notice in writing to any PARTICIPANT or BENEFICIARY whose claim for benefits under the PLAN is denied and the INVESTMENT ADVISORY BOARD shall afford such PARTICIPANT or BENEFICIARY a full and fair review of its decision if so requested. 12.10 FINAL DECISION Subject to applicable law, any interpretation of the provisions of the PLAN and any decisions on any matter within the discretion of the INVESTMENT ADVISORY BOARD made by the INVESTMENT ADVISORY BOARD in good faith shall be binding on all persons. A misstatement or other mistake of fact shall be corrected when it becomes known and the INVESTMENT ADVISORY BOARD shall make such adjustment on account thereof as it considers equitable and practicable. - 46 - EXHIBIT A --------- FORMULA FOR DETERMINING COMPANY CONTRIBUTIONS UNDER FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN ------------------------------------------------------ 1. Subject to the conditions and limitations set forth below, beginning with the calendar year ending December 31, 1988, each year the COMPANY shall contribute to the TRUSTEE an amount equal to ten percent (10%) of its adjusted profits (as defined below) for such year, subject always to the following limitations: (a) The COMPANY CONTRIBUTION in accordance with the above FORMULA shall in no event exceed an amount equal to ten percent (10%) of the ANNUAL BASE PAY of PARTICIPANTS in the PLAN during such year. (b) The COMPANY CONTRIBUTION in accordance with the above FORMULA shall in no event reduce its net profits (as defined below) to less than an amount equal to six percent (6%) of the COMPANY'S net worth (as defined below) as of the beginning of such year. (c) If, in any year, beginning with the year 1951, the COMPANY incurs a loss (as defined below), or its net profits are less than an amount equal to six percent (6%) of the COMPANY's net worth as of the beginning of such year, the amount of any such loss plus the amount of any such deficiency in net profits shall be carried forward and charged to net profits in the next succeeding year or years, and the COMPANY shall not make any COMPANY CONTRIBUTION in accordance with this FORMULA in any succeeding year unless and until its net profits in such year exceed the sum of: (i) six percent (6%) of the COMPANY'S net worth as at the beginning of that year, plus (ii) the total of such accumulated losses and deficiencies in net profits carried forward from the preceding year or years and not charged to subsequent net profits as above. Notwithstanding the amount of the contribution, if any, determined by application of the foregoing provisions of this paragraph, the Company may pay to the TRUSTEE under the PLAN for any year such amount or amounts as the Board of Directors of the Company may determine by resolution. The resolution shall designate the plan year on account of which the contribution is made. Such resolution, whether adopted before or after the close of the Company's fiscal year, shall specify the amount of the contribution or a definite basis or formula by which the amount can be determined within a reasonable time after the close of such year. 2. The term "adjusted profits" or "loss" as used above for any year mean net income or net loss for such year determined according to recognized accounting principles and practices except as follows: - A-1 - (a) Gains or losses on the sale or other disposition of capital assets (such as land, buildings, machinery, etc.) or securities (including treasury stock) held for investment purposes shall be disregarded. (b) The net proceeds from life insurance in excess of cash surrender value recorded on the COMPANY'S books, and gains from fires, condemnations, or other involuntary conversions shall be disregarded. (c) Reasonable reserves for renegotiation liability, as determined by the COMPANY in accordance with recognized accounting principles and practices, and reasonable reserves of a type or character allowed or allowable as deductions for federal income tax purposes shall be charged to such net income or increase the amount of any net loss, but reserves for other contingencies shall be disregarded. (d) No deduction or allowance on account of federal or state income and excess profits taxes shall be made. (e) No account shall be taken of the COMPANY CONTRIBUTION under the PLAN for that year. (f) Any liability for renegotiation in excess of amounts charged to prior net income shall be charged to net income or increase the amount of any net loss, and any credit balance in any reserve for renegotiation shall be added to net income or reduce the amount of any net loss in the year when final determination of the liability is made. (g) Unless otherwise specifically provided for under (a) through (f) above, any amount or amounts representing adjustments to income which are charged directly to the surplus account during that year shall be deducted from net income or increase the amount of any net loss as otherwise determined for that year. 3. The term "net profits" for any year as used above means adjusted profits, as defined above, plus the amount of any refund received in that year on account of overassessment of federal or state income and excess profits taxes applicable to years subsequent to 1950, less the sum of the following: (a) any federal or state income and excess profits taxes accrued for such year; (b) any COMPANY CONTRIBUTIONS to the TRUSTEE for such year; and (c) any deficiency paid in that year on account of federal or state income and excess profits taxes for any year subsequent to 1950. - A-2 - 4. The term "net worth" as of any date means the sum of: (a) The par or stated value of all issued and outstanding stock of the COMPANY (excluding treasury stock); (b) paid-in or capital surplus, excluding surplus arising from revaluation of assets; (c) earned surplus and undivided profits; and (d) reserves for contingencies (other than reserves for bad debts, depreciation, renegotiation, discounts, self-insurance, replacement of inventories, and similar items of a specific nature); all as determined in accordance with recognized accounting principles and practices. - A-3 - EX-4.2 3 Exhibit 4.2 ----------- AMENDMENT NO. 10 TO THE FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN ------------------------------ WHEREAS, Section 10.09 of the Fort Howard Corporation Profit Sharing Retirement Plan, as amended and restated effective as of January 1, 1985 (the "Plan"), provides that the Plan may be amended by Fort Howard Corporation (the "Company") in accordance with the terms of such Section; and WHEREAS, the Company desires to amend the Plan; NOW, THEREFORE, Section 10.09 of the Plan is hereby amended, effective as of the date below, by adding the following paragraph at the end of that Section: "The INVESTMENT ADVISORY BOARD shall have the power to amend the PLAN and/or the TRUST; provided that, notwithstanding the foregoing, the INVESTMENT ADVISORY BOARD shall not have the power to adopt any PLAN or TRUST amendment, or take any other action, that would result in: (a) a substantial increase in the cost of funding or administering the PLAN, unless the INVESTMENT ADVISORY BOARD reasonably believes that such amendment or action is necessary to maintain compliance of the PLAN or TRUST with ERISA, or any other applicable law, or to maintain the PLAN's or TRUST's qualification under, or compliance with, provisions of the CODE, as from time to time in effect; (b) Disqualification, termination or partial termination of the PLAN or loss of tax-exempt status of the TRUST; (c) The appointment or removal of the TRUSTEE or PLAN ADMINISTRATOR; (d) A change in the structure, or a material change in the powers, duties or responsibilities, of the INVESTMENT ADVISORY BOARD, or a change in the indemnification of any fiduciary of the PLAN or TRUST; or (e) A change in the power, duties or responsibilities of the Board of Directors of the COMPANY under the PLAN; - 2 - unless such amendment or action is approved or ratified by the Board of Directors of the COMPANY." Executed this 21st day of September, 1995. FORT HOWARD CORPORATION By: /s/Donald H. DeMeuse -------------------------------- Title: Chairman and Chief Executive Officer EX-4.3 4 Exhibit 4.3 ----------- AMENDMENT NO. 11 TO THE FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN ------------------------------ WHEREAS, Section 10.09 of the Fort Howard Corporation Profit Sharing Retirement Plan, as amended and restated effective January 1, 1985 (the "Plan"), provides that the Plan may be amended by the Fort Howard Corporation Profit Sharing Retirement Plan Investment Advisory Board (the "Board") in accordance with the terms of such Section; and WHEREAS, the Board desires to amend the Plan; NOW, THEREFORE, the Plan is hereby amended as follows: 1. Section 1.18 of the Plan is hereby amended, effective January 1, 1996, by adding the following sentences at the end of that section: The term EMPLOYEE shall also include any other person who is not an EMPLOYEE as defined in the preceding sentence, but who is a citizen of the United States, and who was employed by the COMPANY and transfers to employment on a salaried basis outside the United States with a foreign affiliate (as defined in Code Section 3121(l)(8)); provided the requirements of Code Section 406 are satisfied with respect to that individual. An EMPLOYEE described in the preceding sentence will be entitled to contribute to the PLAN under Article 4, will be entitled to share in COMPANY contributions under Article 6, and the employer of such an EMPLOYEE will be treated as the COMPANY for purposes of Section 1.09 of the PLAN. 2. Section 4.01 of the Plan is hereby amended, effective April 1, 1996, by deleting the words "Eight percent (8%)" from the first sentence of that section and replacing them with the words "Ten percent (10%)". 3. Section 9.02 of the Plan is hereby amended, effective September 1, 1995, by adding the following subparagraph to that section, immediately following subparagraph 9.02A.5: 6) Funeral expenses of the PARTICIPANT'S spouse, parents, children or dependents. 4. In all other respects, the Plan is hereby ratified and approved. Executed this 22nd day of December, 1995. FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN INVESTMENT ADVISORY BOARD By: /s/R. Michael Lempke --------------------------- Member of the Board EX-4.4 5 Exhibit 4.4 ----------- FORT HOWARD PROFIT SHARING RETIREMENT MASTER TRUST (Effective January 1, 1996) TABLE OF CONTENTS ----------------- ARTICLE I 3 Title-Purpose-Policy-Effect 3 Name 3 Definitions 3 Purpose 7 Fiduciary Responsibility Effect 8 Domestic Trust 8 Trustee Not Responsible for Enforcing Contributions or for Sufficiency 8 ARTICLE II 9 Valuation and Records 9 Valuations 9 Participant Records and Accounts 9 ARTICLE III 10 Administration of Plans 10 Payment of Benefits 10 Reliance on Investment Advisory Board 10 Trustee Not Responsible for Plan Administration 10 ARTICLE IV 11 Relating to the Investment Advisory Board 11 The Investment Advisory Board 11 Investment Advisory Board's General Powers, Rights and Duties 12 Manner of Action of Investment Advisory Board 14 Resignation or Removal of Investment Advisory Board 15 ARTICLE V 15 Investment of Trust Assets 15 Asset Managers 15 Investment Powers 17 Custodians 18 ARTICLE VI 20 Investment Funds Within the Trust Fund 20 Investment Funds 20 Commingling 21 ARTICLE VII 22 Responsibility for Directed Funds 22 Responsibility for Selection of Agents 22 Trustee Not Responsible for Investments in Directed Funds 23 Investment Vehicles 23 Reliance on Asset Manager 24 Merger of Funds 25 Notification of Named Fiduciary in Event of Breach 25 Certain Duties 26 Duty to Enforce Claims 26 Restrictions on Transfer 26 ARTICLE VIII 27 Powers of Asset Managers and Trustee 27 General Powers 27 Additional Powers of Trustee 30 Limitation of Powers 35 ARTICLE IX 36 Records and Accounts of Trustee 36 Records 36 Annual Account 36 Periodic Account 36 Account Stated 37 Judicial Accountings 37 Necessary Parties 37 Retention of Records 37 ARTICLE X 38 Compensation, Taxes and Expenses 38 Compensation and Expenses 38 Taxes 39 Allocation 39 Agents, Attorneys, Accountants, Etc. 40 ARTICLE XI 41 Resignation or Removal of Trustee 41 Resignation or Removal 41 Designation of a Successor 41 Duties of Resigning or Removed Trustee and of Successor Trustee 41 Reserve for Expenses 42 ARTICLE XII 43 Amendment or Termination 43 Amendment 43 Termination 43 Trustee's Authority to Survive Termination 43 Approvals 43 ARTICLE XIII 44 Authorities 44 Corporation 44 Form of Communications 44 Continuation of Authority 45 No Obligation to Act on Unsatisfactory Notice 45 ARTICLE XIV 45 General Provisions 45 Governing Law 45 Entire Agreement 45 Mistake 46 Reliance on Experts 46 Notices 46 Plan Documents 47 No Waiver; Reservation of Rights 47 Descriptive Headings 47 Spendthrift Provision 47 Waiver of Notice 48 Gender and Number 48 Counterparts 48 Severability 48 Scope of this Agreement 48 No Reversion in Companies 48 ARTICLE XV 49 Liabilities 49 Liabilities Mutually Exclusive 49 Limitation of Liability 49 Indemnification 50 ARTICLE XVI 52 Plans and Agreement 52 Adoption of Agreement by Subsidiaries and Affiliates 52 Segregation from Further Participation 53 Segregation of Assets Allocable to Specific Employees 54 ARTICLE XVII 55 Merger or Consolidation 55 Merger or Consolidation of Trustee 55 Merger or Consolidation of Corporation 55 Merger or Consolidation of Plan 56 Exhibit A 59 Appendix A - Investment Funds 60 Agreement and Declaration of Trust (hereinafter referred to as "Agreement") made as of the first day of January, 1996, by and between FORT HOWARD CORPORATION, a Delaware corporation, and BANKERS TRUST COMPANY, a New York banking corporation, W I T N E S S E T H: WHEREAS, Fort Howard Corporation and certain of its subsidiaries and affiliates (hereinafter referred to singularly as a "Company" and collectively as the "Companies") have adopted employee benefit plans and may in the future adopt additional employee benefit plans meeting the requirements of Section 401(a) of the Internal Revenue Code of 1986, as amended, and validly existing regulations thereunder (hereinafter referred to in their entirety as the "Code"), for the benefit of the employees therein described; and WHEREAS, Fort Howard Corporation and Bankers Trust Company (hereinafter referred to as the "Trustee") wish to establish a master trust, pursuant to which assets will be held to provide for the funding of and payment of benefits under such plans; and WHEREAS, Fort Howard Corporation wishes to provide for the diversification of management of the assets of the master trust by providing for the appointment of various investment managers to manage separate portions of such assets; and WHEREAS, the Companies adopting this Agreement and the Trustee wish both to amend and restate the trust agreement known as the Fort Howard Profit Sharing Retirement Trust between Fort Howard Corporation and Mellon Bank, N.A. (hereinafter referred to as the "Prior Trust Agreement") so that this Agreement shall be deemed to supersede such Prior Trust Agreement and also to adopt this Agreement and the master trust created hereby as the trust agreement and trust for those plans referred to in Exhibit A (in each case with separate accounting for the interests of each plan having assets in the master trust, as more completely described herein); NOW, THEREFORE, IT IS AGREED, that this Agreement shall be the superseding trust agreement to the Prior Trust Agreement adopted by Fort Howard Corporation, and further, that this Agreement and master trust shall also be the trust agreement and trust for those plans referred to in Exhibit A to this Agreement and such additional employee benefit plans as may be designated by the Corporation or authorized pursuant to Section 16.1 hereof with the prior written consent of Bankers (such plans are hereinafter referred to individually as the "Plan" and collectively as the "Plans"), provided that this Agreement shall be adopted only with respect to employee benefit plans meeting the requirements of Section 401(a) of the Code. IT IS FURTHER AGREED as follows: ARTICLE I Title-Purpose-Policy-Effect --------------------------- 1.1. Name. The master trust established hereunder shall be known as the Fort Howard Profit Sharing Retirement Master Trust and is sometimes hereinafter referred to as the "Trust." 1.2. Definitions. Where used in this Agreement, unless the context otherwise requires or unless otherwise expressly provided: (a) "Account Party" shall mean the Person designated by the Corporation to represent the Corporation for this purpose, the Named Fiduciary and any Person to whom the Trustee shall be instructed by the Named Fiduciary to deliver its annual or other periodic account under Section 9.2 or Section 9.3, except, that with respect to any filings, notices, reports or accountings required to be given under the General Trust, "Account Party" shall be limited to that officer designated herein to represent the Corporation. (b) "Accounting Period" shall mean either the twelve consecutive month period coincident with the calendar year or the shorter period in any year in which the Trustee accepts appointment as Trustee hereunder or ceases to act as Trustee for any reason. (c) "Agreement" shall mean all of the provisions of this instrument and of all other written instruments amendatory hereof. (d) "Asset Manager" shall mean the Trustee (other than for purposes of Article VII), Named Fiduciary or Investment Manager, individually or collectively as the context shall require, with respect to those assets held in any Investment Fund established hereunder over which it exercises, or to the extent it is authorized to exercise, discretionary investment authority or control. (e) "Bank business day" shall mean a day on which the Trustee is open for business. (f) "Bankers" shall mean Bankers Trust Company. (g) "Board of Directors" shall mean the board of directors of the Corporation. (h) "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and Regulations issued thereunder. (i) "Corporation" shall mean Fort Howard Corporation or any successor thereto. (j) "Directed Fund" shall mean any Investment Fund, or part thereof, subject to the discretionary management and control of the Named Fiduciary or any Investment Manager, other than the Trustee. (k) "Discretionary Fund" shall mean any Investment Fund, or part thereof, subject to the discretionary management and control of the Trustee. (l) "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. (m) "General Trust" shall mean the BT Pyramid Trust created by Bankers Trust Company under Declaration of Trust effective June 30, 1991, as heretofore or hereafter amended. (n) "Investment Advisory Board" shall mean the entity described in Article IV hereof. The Investment Advisory Board is the entity responsible for benefit administration under the Plans. (o) "Insurance Contract" shall mean any contract or policy (including any annuity contract) of any kind issued by an insurance company, whether or not providing for the allocation of amounts received by the insurance company thereunder solely to the general account or solely to one or more separate accounts (including separate accounts maintained for the collective investment of qualified retirement plans), or a combination thereof, and whether or not any such allocation may be made in the discretion of the insurance company. (p) "Investment Fund" shall mean each pool of assets established for investment purposes pursuant to Section 6.1 of the Trust. The term shall also include for all purposes hereof any sub-fund or account into which an Investment Fund shall be divided from time to time at the direction of the Named Fiduciary. (q) "Investment Manager" shall mean a bank, insurance company or investment advisor satisfying the requirements of Section 3(38) of ERISA. (r) "Investment Vehicle" shall mean any common, collective or commingled trust (other than the General Trust or an Investment Fund), investment company, corporation functioning as an investment intermediary, Insurance Contract, partnership, joint venture or other entity or arrangement to which, or pursuant to which, assets of an Investment Fund within the Trust may be transferred or in which the Trust has an interest, beneficial or otherwise (whether or not the underlying assets thereof are deemed to constitute "plan assets" for any purpose under ERISA). (s) "Named Fiduciary" shall mean the Person or its designee, who, within the meaning of Section 402(a), 402(c)(3) or 403(a)(1) of ERISA, has the authority to perform the separate functions allocated to that "Named Fiduciary" under this Agreement. Unless otherwise specifically provided to the contrary, the Named Fiduciary shall mean the investment Advisory Board appointed pursuant to the Plans. (t) "Plan" or "Plans" shall mean those employee benefit plans referred to in Exhibit A. (u) "Person" shall mean a natural person, trust, estate, corporation of any kind or purpose, mutual company, joint-stock company, unincorporated organization, association, partnership, joint venture, employee organization, committee, board participant, beneficiary, trustee, partner, or venturer acting in an individual, fiduciary or representative capacity, as the context may require. (v) "Section" shall mean any Section of this Agreement. (w) "Trust Fund" shall mean all cash and other property contributed, paid or delivered to the Trustee hereunder, all investments made therewith and proceeds thereof and all earnings and profits thereon, less payments, transfers or other distributions which, at the time of reference, shall have been made by the Trustee, as authorized herein. The Trust Fund shall include each Investment Fund and all evidences of ownership, interest or participation in an Investment Vehicle, but shall not, solely by reason of the Trust Fund's investment therein, be deemed to include any assets of such Investment Vehicle. (x) "Trustee" shall mean Bankers Trust Company, as Trustee of the Trust. (y) "Valuation Date" shall mean the last day of each month until April 1, 1996, and thereafter shall mean each Bank business day. 1.3. Purpose. The Trust is established to fund the benefits payable to participants and their beneficiaries under the Plans. 1.4. Fiduciary Responsibility. The Trustee, the Investment Advisory Board, any Asset Manager appointed hereunder, and any other fiduciary under the Plans or Trust shall discharge their respective duties thereunder solely in the interest of participants and their beneficiaries, for the exclusive purpose of providing their benefits and defraying reasonable expenses of Plan and Trust administration, with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent man acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims. No provision in the Plans or Trust is intended to relieve a fiduciary from any duty or obligation imposed by applicable law. 1.5. Effect. All Persons at any time interested in the Plans shall be bound by the provisions of this Agreement and, in the event of any conflict between this Agreement and the provisions of the Plans or any instrument or agreement forming part of the Plans other than this Agreement, the provisions of this Agreement shall control. 1.6. Domestic Trust. The Trust shall at all times be maintained as a domestic trust in the United States. 1.7. Trustee Not Responsible for Enforcing Contributions or for Sufficiency. The Trustee shall have no responsibility for enforcing payment of any contribution to the Plans, for the timing or amount thereof, or for the adequacy of the Trust Fund or the funding standards adopted for the Plans to meet or discharge any pension or other liabilities of the Plans. ARTICLE II Valuation and Records --------------------- 2.1. Valuations. The Trustee shall determine the value of the assets of the Trust Fund and each Investment Fund as of each Valuation Date. Except in the case of an Investment Fund in which amortized cost is the valuation method designated, assets will be valued at their market values at the close of business on the Valuation Date, or, in the absence of readily ascertainable market values, at such values as the Trustee shall determine in accordance with methods consistently followed and uniformly applied. Anything in this Agreement to the contrary notwithstanding, with respect to assets constituting part of a Directed Fund, the Trustee may rely for all purposes of this Agreement on the latest valuation and transaction information submitted to it by the Person responsible for the investment of such assets even if such information predates the Valuation Date. The Named Fiduciary will cause such Person to provide the Trustee with all information needed by the Trustee to discharge its obligations to value such assets and to account under this Agreement. 2.2. Participant Records and Accounts. A description of the separate records and accounts to be maintained by the Trustee with respect to each participant in the Plans will be described in a separate recordkeeping agreement. ARTICLE III Administration of Plans ----------------------- 3.1. Payment of Benefits. On the direction of the Investment Advisory Board, the Trustee shall pay moneys out of the Plans directly to or for the benefit of participants in the Plans and their beneficiaries, or to an insurance company to provide for the payment of such benefits by the purchase of an Insurance Contract, or to a paying or disbursing agent (which may be the Investment Advisory Board). Any assets disbursed or paid over by the Trustee pursuant to this Section 3.1 shall no longer be part of the Trust Fund. 3.2. Reliance on Investment Advisory Board. Any directions pursuant to Section 3.1 may, but need not, specify the application to be made of moneys so ordered. The Trustee shall charge such transfer against the Plans as the Investment Advisory Board shall direct. The Trustee shall have no duty to make any independent inquiry as to whether a payee or distributee is entitled thereto or as to whether any such payment or distribution is proper, and the Trustee shall not be liable for a payment or distribution made as directed by the Investment Advisory Board. The Trustee shall notify the Investment Advisory Board if a payment or distribution is returned to the Trustee. 3.3. Trustee Not Responsible for Plan Administration. The Trustee shall not be held responsible for the form, terms or payment provisions of any Insurance Contract which it is directed to purchase to provide for the payment of benefits under the Plans, for performing any functions under any such Insurance Contract which it may be directed to purchase and/or hold as contract holder thereunder (other than the execution of any documents incidental thereto and transfer or receipt of funds thereunder), or for any other matter affecting the administration of the Plans, by the Corporation or the Investment Advisory Board or any other Person to whom such responsibility is allocated or delegated pursuant to the terms of the Plans. ARTICLE IV Relating to the Investment Advisory Board ----------------------------------------- 4.1. The Investment Advisory Board. The Chairman of the Board of the Corporation shall appoint an Investment Advisory Board, which shall have the powers, rights, duties and responsibilities described in Section 4.2 and elsewhere in this Agreement; it being intended that the Investment Advisory Board shall have the responsibility as to the investment and allocation of the assets of this Trust Fund and any assets relating to the Plans. The Secretary or Assistant Secretary of the Corporation shall certify to the Trustee each appointment, resignation or removal of an Investment Advisory Board member and the persons who are selected as chairman and secretary, respectively, of the Investment Advisory Board. The Trustee may rely on the latest such certificate received without further inquiry or verification. The Trustee also may rely on an instrument signed by any member of the Investment Advisory Board or any individual authorized to act on behalf of the Investment Advisory Board as to any action or non-action by the Investment Advisory Board. 4.2. Investment Advisory Board's General Powers, Rights and Duties. The Investment Advisory Board shall have the following powers, rights and duties in connection with the investment of the Trust Fund in addition to those vested in it elsewhere in this Agreement: (a) To direct the Trustee from time to time to establish one or more Investment Funds. At their discretion, and subject to the direction of Plan participants to the extent provided under such Plans to specify the investment of account balances, the Investment Advisory Board may direct the Trustee to transfer assets from one Investment Fund to another Investment Fund. The Investment Advisory Board may also direct the Trustee to transfer assets held by the Trustee to a Custodian (as defined in Section 5.3 hereof) of an Investment Fund and, if assets of an Investment Fund are to be invested in an Insurance Contract, may direct the Trustee to apply for such contract and to transfer assets to such contract. The Investment Advisory Board may, in its discretion, direct the Trustee to combine two or more Investment Funds for the purpose of accounting for Plan assets. (b) To direct the Trustee from time to time to effect withdrawals from the Investment Funds and to distribute the proceeds. (c) To appoint or remove Asset Managers pursuant to Section 5.1 and, at its discretion, to direct the Trustee to employ professional investment advisors (any such advisor may be the bank acting as Trustee) for the purpose of evaluation of the investment performance of any Investment Fund or Funds on such terms and conditions as shall be specified by the Investment Advisory Board. (d) To direct the investment of one or more Investment Funds upon notification to the Trustee that such investment shall be the responsibility of the Investment Advisory Board and the Trustee shall thereafter take direction for the investment of such Investment Fund(s) from the Investment Advisory Board. (e) To direct the Trustee to borrow amounts in accordance with subparagraph 8.2(c) of this Agreement, and to direct the mortgage or pledge of all or any part of the Trust Fund in connection with any such borrowing, and to direct such other acts as specifically set forth in Section 8.2. (f) To determine, as Named Fiduciary, the diversification policy (if required) of the Trust Fund, to monitor adherence by the Asset Managers to such policy, and to advise the Asset Managers with respect to limitations on employer or other securities or property contained in the Plans or imposed on the Plans by applicable law or by it. 4.3. Manner of Action of Investment Advisory Board. During a period in which two or more Investment Advisory Board members are acting, the following provisions shall apply where the context admits: (a) An Investment Advisory Board member, in writing, may delegate any or all of his rights, powers, duties and discretions to any other member, with the consent of the latter. (b) The Investment Advisory Board members may act by meeting or by writing signed without a meeting, and may sign any document by signing one document or concurrent documents. (c) An action or a decision of a majority of the members of the Investment Advisory Board as to a matter shall be effective as if taken or made by all members of the Investment Advisory Board. (d) If, because of the number qualified to act, there is an even division of opinion among the Investment Advisory Board members as to a matter, a party selected by the Chairman of the Board of the Corporation shall decide the matter and such party's decision shall control. (e) Subject to applicable law, no member of the Investment Advisory Board shall be liable or responsible for an act or omission of the other Investment Advisory Board members in which the former has not concurred, and the certificate of the chairman or secretary of the Investment Advisory Board that the Investment Advisory Board has taken or authorized any action shall be conclusive in favor of any person relying on such certificate. 4.4. Resignation or Removal of Investment Advisory Board. A member of the Investment Advisory Board may be removed by the Chairman of the Board of the Corporation (or Company) at any time by written notice to him, and the other members of the Investment Advisory Board. A member of the Investment Advisory Board may resign at any time by giving prior written notice to the Chairman of the Board of the Corporation and the other members of the Investment Advisory Board. The Chairman of the Board of the Corporation may fill any vacancy in the membership of the Investment Advisory Board. The Chairman of the Board of the Corporation shall give prompt written notice thereof to the successor Investment Advisory Board member. The Secretary or Assistant Secretary of the Corporation shall give prompt written notice to the Trustee of such removal or resignation. Until any such vacancy is filled, the remaining members may exercise all of the powers, rights and duties conferred on the Investment Advisory Board. ARTICLE V Investment of Trust Assets -------------------------- 5.1. Asset Managers. The Investment Advisory Board, as the Named Fiduciary, at its sole discretion, may appoint a professional investment manager as Asset Manager of all or any portion of any Investment Fund established pursuant to the direction of the Investment Advisory Board. More than one Asset Manager may be appointed for any single Investment Fund. Appointment of an Asset Manager shall be made by written notice to the Asset Manager and the Trustee, which notice shall specify that portion of the assets of the Trust Fund subject to investment direction by that Asset Manager. An Asset Manager so appointed pursuant to this paragraph shall be a registered investment adviser under the Investment Advisers Act of 1940, or a bank defined in said Act, or a legal reserve life insurance company qualified to manage, acquire or dispose of assets of the Trust Fund under the laws of more than one state, and shall acknowledge in writing to the Investment Advisory Board and the Trustee that it accepts such appointment and is a fiduciary (as defined in Section 3(21) of ERISA) with respect to this Trust Fund and the related Plans insofar as the management and control of investments of the Investment Fund and Plans are concerned. The Investment Advisory Board shall promptly notify the Trustee in writing of such appointment and thereafter the Trustee shall be subject to the direction of the Asset Manager as respects the investment, retention or sale of the assets of the applicable Investment Fund, including the receipt and delivery of assets purchased or sold by the Asset Manager. The Trustee may assume that such appointment continues in effect until it receives written notice to the contrary from the Investment Advisory Board or such Asset Manager. An Asset Manager may resign at any time upon prior written notice to the Investment Advisory Board and the Trustee. The Investment Advisory Board may remove an Asset Manager at any time by prior written notice to the Asset Manager and the Trustee. Subject to applicable law, it is intended that an Asset Manager shall have full responsibility with respect to the assets of the Investment Fund for which it has the power of investment direction and that the Asset Manager shall have the powers, rights and duties set forth in Section 8.1, and that the Trustee shall have no obligation as to the investment of such assets as long as they are subject to investment direction by that Asset Manager. Notwithstanding the foregoing, with the prior approval of an Asset Manager, the Trustee shall have the power, right and duty to invest cash balances held by it from time to time as a part of an Investment Fund in short-term cash equivalents having ready marketability, including, but not limited to, United States treasury bills, commercial paper, certificates of deposits and similar types of securities, and including investment in any appropriate common, commingled or collective short-term investment fund maintained by Bankers as trustee, and the Trustee also shall have the power, right and duty to sell such short-term investments as may be necessary to carry out the instructions of the Asset Manager or the Investment Advisory Board regarding that Investment Fund. 5.2. Investment Powers. Anything herein notwithstanding, the Trust Fund shall be invested in such Investment Funds as the Investment Advisory Board shall direct the Trustee in writing to establish. The Investment Advisory Board shall direct the Trustee with respect to the allocation of assets among the Investment Funds and shall adopt the investment policy to be followed in investing the Investment Funds. Pending directions from the Investment Advisory Board with respect to the allocation of contributions among the Investment Funds, the Trustee shall hold the contributions for each Plan in an account invested in short-term investments which may include investment in its collective short-term investment fund. Cash held for a Plan or in an Investment Fund pending investment or distribution shall be invested in short-term investments which may include the collective short-term investment fund of Bankers. 5.3. Custodians. If the Investment Advisory Board appoints a national banking association or bank incorporated under state law (other than the Trustee) as Asset Manager of any Investment Fund (the "Fund"), then, notwithstanding any other provisions of this Agreement, the Investment Advisory Board may, with the consent of the Trustee, also designate such bank to be employed by the Trustee as "Custodian" of the assets from time to time forming a part of that Fund, in which event the following shall apply: (a) The Trustee shall enter into an agreement with the bank so named employing it as agent of the Trustee and Custodian of that Fund and delegating to the Custodian the same powers, rights and duties otherwise reserved to the Trustee under this Agreement in regard to the retention and administration of that Fund, it being intended that, except as provided to the contrary in this Section, the conditions and limitations of this Agreement otherwise applicable to the Trustee shall be applicable to the Custodian, but only with respect to that Fund, and the Custodian shall have responsibility for the holding and safekeeping of the assets of that Fund, in addition to its duties as Asset Manager, and shall maintain the records and accounts, and shall submit to the appropriate party or parties the periodic reports, otherwise required of the Trustee as to that Fund. (b) The provisions of such agreement shall include the right reserved to the Custodian to resign as such at any time by giving prior written notice to the Investment Advisory Board and the Trustee and the right reserved to the Trustee to terminate the employment of the Custodian at any time by giving prior written notice to the Custodian and the Investment Advisory Board. (c) The Custodian shall be entitled to reasonable compensation for its duties as such as may be agreed upon from time to time between the Custodian and the Investment Advisory Board, which compensation may be included in and paid pursuant to the Custodian's compensation arrangement with the Investment Advisory Board for services rendered by it as Asset Manager. (d) The Trustee shall promptly transfer to the Custodian the assets of that Fund and, until its employment as Custodian ends and all assets held by it as to that Fund have been returned to the possession of the Trustee, the Custodian shall hold and be responsible for the retention and administration of the assets of that Fund as agent of the Trustee. If the Investment Advisory Board designates a legal reserve life insurance company as Asset Manager of any Investment Fund pursuant to Section 5.1, then, notwithstanding any other provisions of this Agreement, the Investment Advisory Board shall direct the Trustee to execute an Insurance Contract with the insurance company providing for the investment of the assets of that Investment Fund by the insurance company and for purposes of this Agreement the insurance company shall be deemed to be the Custodian of the assets which are transferred from time to time to the insurance company as a part of the Investment Fund. ARTICLE VI Investment Funds Within the Trust Fund -------------------------------------- 6.1. Investment Funds. Concurrent with the establishment of this Trust, and from time to time thereafter, the Investment Advisory Board shall direct the Trustee to establish and maintain one or more Investment Funds for the purpose of investing the deposits of the Plans. As of the date hereof, the Trust Fund shall be held and invested in the Investment Funds listed and described in Appendix A attached hereto. The investment of the assets of each Investment Fund or part thereof that is a Discretionary Fund shall be the responsibility of the Trustee unless otherwise directed by the Investment Advisory Board as provided in Section 4.2; the investment of the assets of each Investment Fund or part thereof that is a Directed Fund shall be the responsibility of the Asset Manager appointed pursuant to Section 5.1. Investment of the assets of an Investment Fund shall be made pursuant to investment guidelines promulgated by the Investment Advisory Board for that Investment Fund, which guidelines shall be furnished in writing by the Investment Advisory Board to the Trustee and the Asset Manager appointed for that Investment Fund. The investment guidelines for any Investment Fund may be modified by the Investment Advisory Board from time to time but such revised guidelines shall be promptly furnished in writing to the Trustee and the Asset Manager, if any, for that Investment Fund. The Trustee shall have no authority or obligation to invest or reinvest cash balances of any Directed Fund in the General Trust or otherwise pursuant to this Agreement unless and until it receives appropriate directions from the Asset Manager. The Trustee also shall have no responsibility with respect to the formulation of any funding policy or any investment or diversification policies embodied therein. Any investment limitation affecting employer securities shall not be applicable to the extent any Investment Fund is invested in units of the General Trust. 6.2. Commingling. The Trustee may commingle the assets attributable to the Plans for which contributions are made under this Agreement if this Agreement is applicable to more than one Plan, and may commingle the Trust Fund with funds of other trusts of similar nature created by the Companies for the exclusive benefit of their employees. The Trustee shall maintain such records as are necessary in order to maintain a separation of the Trust Fund from the funds of the other trusts maintained by the Companies and to separate the assets attributable to each of the Plans for which contributions are made under this Agreement. The Companies shall be responsible for causing sufficient records to be maintained to ensure that benefits and liabilities payable with respect to each Plan shall be paid from the assets allocable to each such Plan. Should separation be required, either of the Trust Fund from other trusts maintained by the Companies or of any Plan for which contributions are made under this Agreement from the Trust Fund, the Trustee shall make such separation in accordance with generally accepted accounting principles and, where applicable, upon the certification of an enrolled actuary. ARTICLE VII Responsibility for Directed Funds --------------------------------- 7.1. Responsibility for Selection of Agents. All transactions of any kind or nature in or from a Directed Fund shall be made upon such terms and conditions and from or through such brokers, dealers and principals and other agents as the Asset Manager shall direct. No such transactions shall be executed through the facilities of the Trustee except where the Trustee shall make available its facilities solely for the purpose of temporary investment of cash reserves of a Directed Fund. However, nothing in the preceding sentence shall confer any authority upon the Trustee to invest the cash balances of any Directed Fund unless and until it receives directions from the Asset Manager. 7.2. Trustee Not Responsible for Investments in Directed Funds. The Trustee shall be under no duty or obligation to review or to question any direction of any Asset Manager, or to review securities or any other property held in any Directed Fund with respect to prudence or proper diversification or compliance with any limitation on the Asset Manager's authority under this Agreement or the terms of the Plans, any agreement entered into between the Corporation or the Investment Advisory Board and the Asset Manager or imposed by applicable law, or to make any suggestions or recommendation to the Corporation, the Investment Advisory Board or the Asset Manager with respect to the retention or investment of any assets of any Directed Fund, and shall have no authority to take any action or to refrain from taking any action with respect to any asset of a Directed Fund unless and until it is directed to do so by the Asset Manager. 7.3. Investment Vehicles. Any Investment Vehicle, or interest therein, acquired by or transferred to the Trustee upon the directions of the Asset Manager shall be allocated to a designated Directed Fund, and the Trustee's duties and responsibilities under this Agreement shall not be increased or otherwise affected thereby. The Trustee shall be responsible solely for the safekeeping of the physical evidence, if any, of the Trust's ownership of or interest or participation in such Investment Vehicle. 7.4. Reliance on Asset Manager. The Trustee shall be required under this Agreement to execute documents, to settle transactions, to take action on behalf of or in the name of the Trust and to make and receive payments on the direction of an Asset Manager. Any direction of an Asset Manager shall constitute a representation to the Trustee (i) that any agreement, deed, assignment or other document which the Trustee is requested or required to execute to effectuate a transaction has been reviewed by the Asset Manager, (ii) that such instrument or document is in proper form for execution by the Trustee, and (iii) that, where appropriate, insurance protecting the Trust against loss or liability has been or will be maintained in the name of or for the benefit of the Trustee. The Trustee shall have no duty to make any independent inquiry or investigation as to any direction before acting upon such direction. In addition, the Trustee shall not be liable for the default of any Person with respect to any Investment Vehicle or any investment in a Directed Fund or for the form, genuineness, validity, sufficiency or effect of any document executed by, delivered to or held by it for any Directed Fund on account of such investment, or if, for any reason (other than the negligence or willful misconduct of the Trustee) any rights of the Trust therein shall lapse or shall become unenforceable or worthless. 7.5. Merger of Funds. The Trustee shall not have any discretionary responsibility or authority to manage or control any asset held in a Directed Fund upon the resignation or removal of an Asset Manager unless and until it has been notified in writing by the Named Fiduciary that the Asset Manager's authority has terminated and that such Directed Fund's assets are to be integrated with the Discretionary Fund. Such notice shall not be deemed effective until two bank business days after it has been received by the Trustee. The Trustee shall not be liable for any losses to the Trust Fund resulting from the disposition of any investment made by the Asset Manager or for the retention of any illiquid or unmarketable investment or any investment which is not widely publicly traded or for the holding of any other investment acquired by the Asset Manager if the Trustee is unable to dispose of such investment because of any restrictions imposed by the Securities Act of 1933 or other Federal or state law, or if an orderly liquidation of such investment is impractical under prevailing conditions, or for failure to comply with any investment limitations imposed pursuant to Section 6.1, or for any other violation of the terms of this Agreement, the Plans or applicable law as a result of the addition of Directed Fund assets to the Discretionary Fund. 7.6. Notification of Named Fiduciary in Event of Breach. If the Trustee has knowledge of a breach committed by an Asset Manager, it shall notify the Investment Advisory Board thereof, and, to the extent permitted by applicable law, the Investment Advisory Board and the Asset Manager shall thereafter assume full responsibility to all Persons interested in the Plan to remedy such breach. 7.7. Certain Duties. The parties hereto acknowledge that while the Trustee will perform certain duties (such as custodial, reporting, recording, valuation and bookkeeping functions) with respect to Directed Funds, such duties will not involve the exercise of any discretionary authority to manage or control the assets of the Directed Funds and will be the responsibility of officers or other employees of the Trustee who are unfamiliar with and have no responsibility for investment management. 7.8. Duty to Enforce Claims. The Trustee shall have no duty to commence or maintain any action, suit or legal proceeding on behalf of the Trust on account of or growing out of an investment made in or for a Directed Fund unless the Trustee has been directed to do so by the Asset Manager or the Investment Advisory Board and unless the Trustee is either in possession of funds sufficient for such purpose or has been indemnified to its satisfaction for counsel fees, costs and other expenses and liabilities to which it, in it sole judgment, may be subjected by beginning or maintaining such action, suit or legal proceeding. 7.9. Restrictions on Transfer. Nothing herein shall be deemed to empower any Asset Manager to direct the Trustee to transfer any asset of a Directed Fund to itself except for purposes enumerated in paragraphs (j), (l) or (m) of Section 8.1. ARTICLE VIII Powers of Asset Managers and Trustee ------------------------------------ 8.1. General Powers. Without limiting the powers and discretions conferred upon the Trustee or the Asset Managers by the other provisions of this Agreement, the Asset Managers and the Trustee shall have the following powers, rights and duties with respect to the assets of the Investment Fund subject to their management and control, and, upon the directions of an Asset Manager of a Directed Fund, the Trustee shall make, execute, acknowledge and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessary or appropriate to enable the Asset Managers to carry out such powers: (a) to manage, sell, contract to sell, grant options to purchase, convey, exchange, transfer, abandon, improve, repair, insure, lease for any term (even though commencing in the future or extending beyond the term of the trust) and otherwise deal with all property, real or personal, in such manner, for such considerations, and on such terms and conditions as the Trustee or Asset Manager, as the case may be, shall decide, and no person dealing with the Trustee or Asset Manager shall be bound to see to the application of the purchase money or to inquire into the validity, expediency or propriety of any such sale or other disposition; (b) to temporarily retain in cash so much of the Trust Fund as it deems advisable; (c) to invest in any shares of stock, bonds, mortgages, notes, or other property of any kind, real or personal, and, with the consent of the Investment Advisory Board, to purchase or sell, write or issue, puts, calls or other options, covered or uncovered, to enter into financial futures contracts, forward placement contracts and standby contracts, and in connection therewith, to deposit, hold (or direct Bankers, as Trustee or in its individual capacity, to deposit or hold) or pledge assets of the Trust Fund; (d) to purchase part interests in real property or in mortgages on real property, wherever such real property may be situated; (e) to lease to others for any term without regard to the duration of the Trust any real property or part interest in real property; (f) to delegate to a manager or the holder or holders of a majority interest in any real property or mortgage on real property or in any oil, mineral or gas properties, the management and operation of any part interest in such property or properties (including the authority to sell such part interests or otherwise carry out the decisions of such manager or the holder or holders of such majority interest); (g) to vote upon any stocks, bond, or other securities (but subject to the suspension of any voting rights as a result of any broker loan or similar agreement); to give general or special proxies or powers of attorney with or without power of substitution; to exercise any conversion privileges, subscription rights or other options and to make any payments incidental thereto; to consent to or otherwise participate in corporate reorganizations or other changes affecting corporate securities and to delegate discretionary powers and to pay any assessments or charges in connection therewith; and generally to exercise any of the powers of an owner with respect to stocks, bonds, securities or other property; (h) to organize corporations under the laws of any state for the purpose of acquiring or holding title to property (or, in the case of a Directed Fund, to direct the Trustee to organize such corporations or to appoint an ancillary trustee acceptable to the Trustee for such purpose); (i) to invest in a fund consisting of securities issued by corporations and selected and retained solely because of their inclusion in, and in accordance with, one or more commonly used indices of such securities, with the objective of providing investment results for the fund which approximate the overall performance of such designated index; (j) to enter into any partnership, as a general or limited partner, or joint venture; (k) to purchase units or certificates issued by an investment company or pooled trust or comparable entity; (l) to transfer money or other property to an insurance company issuing an Insurance Contract; (m) as authorized by the Investment Advisory Board, to transfer assets of a Discretionary or Directed Fund to a common, collective or commingled trust fund exempt from tax under the Code, to be held and invested subject to all of the terms and conditions thereof, and such trust shall be deemed adopted as part of the Trust and the Plans to the extent that assets of the Trust are invested therein; provided, however, that any transfer from a Directed Fund to the General Trust may be made only with the prior approval of the Trustee and shall be invested only in one or more short-term investment funds or other special purpose funds established from time to time thereunder; and (n) to be reimbursed for the expenses incurred in exercising any of the foregoing powers and to pay the reasonable expenses incurred by any agent, manager or trustee appointed pursuant hereto. 8.2. Additional Powers of Trustee. In addition, the Trustee is hereby authorized: (a) to register any securities held in the Trust Fund in its own name or in the name of a nominee and to hold any securities in bearer form, and to combine certificates representing such securities with certificates of the same issue held by the Trustee in other fiduciary or representative capacities or as agent for customers, or to deposit or to arrange for the deposit of such securities in any qualified central depository even though, when so deposited, such securities may be merged and held in bulk in the name of the nominee of such depository with other securities deposited therein by other depositors, or to deposit or arrange for the deposit of any securities issued by the United States Government, or any agency or instrumentality thereof, with a Federal Reserve Bank, but the books and records of the Trustee shall at all times show that all such investments are part of the Trust Fund; (b) to employ suitable agents, depositories and counsel, domestic or foreign, and to charge their reasonable expenses and compensation against the Trust Fund, and to confer upon any such depository the powers conferred upon the Trustee by paragraph (a) of this Section 8.2 as well as the power to appoint subagents and depositories, wherever situated, in connection with the retention of securities or other property; (c) at the direction of the Investment Advisory Board, to borrow money from any source as may be necessary or advisable to effectuate the purposes of the Trust on such terms and conditions as the Trustee, in its absolute discretion, may deem advisable; (d) as directed by the Investment Advisory Board, to deposit any funds of the Trust in accounts deposits or savings certificates, which bear a reasonable rate of interest, issued and maintained by Bankers Trust Company, in its separate corporate capacity, or in any other institution affiliated with Bankers Trust Company; (e) to compromise, compound, submit to arbitration or settle any debt or obligation owing to or from or otherwise adjust all claims in favor of or against the Trust Fund other than claims solely affecting the right of any Person to benefits under the Plans; to reduce or increase the rate of interest or extend, or otherwise modify, foreclose upon default, or enforce any such debt or obligation; at the direction of the Investment Advisory Board, to sue or defend suits or legal proceedings to protect any interest in the Trust and to represent the Trust in all suits or legal proceedings in any court or before any other administrative agency, body or tribunal; (f) to make any distribution or transfer of assets as of a Valuation Date or to effectuate participants' rights under the Plans in cash, and, in furtherance thereof, to value such assets, which valuation shall be conclusive and binding on all Persons; (g) upon the direction of the Investment Advisory Board, to maintain and operate one or more market inventory funds as a vehicle to exchange securities among Discretionary and Directed Funds without alienating the property from the Trust; (h) with the consent of the Investment Advisory Board, to loan securities held in the Trust Fund to brokers or dealers or other borrowers under such terms and conditions as the Trustee, in its absolute discretion, deems advisable, to secure the same in any manner permitted by law and the provisions of this Agreement, and during the term of any such loan, to permit the loaned securities to be transferred into the name of and voted by the borrowers or others, and, in connection with the exercise of the powers hereinabove granted, to hold any property deposited as collateral by the borrower pursuant to any master loan agreement in bulk, either as provided in paragraph (a) of this Section 8.2 or otherwise, together with the unallocated interests of other lenders, and to retain any such property upon the default of the borrower, whether or not investment in such property is authorized under this Agreement, and to receive compensation therefor out of any amounts paid by or charged to the account of the borrower; (i) to hold uninvested cash awaiting investment and such additional cash balances as it shall deem reasonable or necessary, without incurring any liability for the payment of interest thereon; (j) to furnish the Investment Advisory Board with such information in the Trustee's possession as the Investment Advisory Board may reasonably need for tax or other purposes; (k) at the direction of the Investment Advisory Board, to receive, hold and invest any funds or other property transferred to the Trustee from: (i) any other trust forming a part of a plan meeting the requirements of Section 401(a) of the Code; (ii) an employee of a Company if such funds or property qualify as a rollover described in Section 402(c) of the Code; or (iii) an individual retirement account or individual retirement annuity maintained by an employee of a Company, if such funds or property qualify as a rollover contribution described in Section 408(d)(3) of the Code; and to allocate, credit and distribute any such funds and other property so transferred in accordance with the direction of the Investment Advisory Board; (l) to transfer all or any portion of the Trust Fund to another trust or trusts forming a part of a plan or plans that meet the requirements of Section 401(a) of the Code, as directed by the Investment Advisory Board; (m) to transfer an eligible rollover distribution described in Section 402(c)(4) of the Code directly to an eligible retirement plan described in Section 402(c)(8)(B) of the Code, as directed by the Investment Advisory Board; and (n) generally, consistent with the provisions of this Agreement to perform all acts (whether or not expressly authorized herein) which it may deem necessary and prudent for the protection of the assets of the Trust. 8.3. Limitation of Powers. The foregoing provisions of this Article VIII shall not be deemed to expand the permissible investments for any Investment Fund under Section 6.1 or to limit the Investment Advisory Board's power to restrict the exercise of the powers of an Asset Manager as provided in this Agreement. In addition, any powers conferred on the Trustee or any other Asset Manager hereunder may be suspended or revoked at any time by the Investment Advisory Board upon notice to the Asset Manager or the Trustee, as the case may be. Any oral notice hereunder shall be promptly confirmed in writing to the Trustee and the Asset Manager, but the Trustee shall have no responsibility hereunder unless and until it has received notice in accordance with Section 14.5. ARTICLE IX Records and Accounts of Trustee ------------------------------- 9.1. Records. The Trustee shall keep accurate and detailed accounts of all investments, receipts, disbursements and other transactions in the Trust Fund and all accounts, books and records relating thereto shall be open to inspection and audit at all reasonable times during normal business hours by any Person designated by the Named Fiduciary. 9.2. Annual Account. Within ninety (90) days following the close of each Accounting Period, the Trustee shall file with the Account Party, in accordance with Section 14.5, a written account setting forth the receipts and disbursements of the Trust Fund and the investments and other transactions effected by it upon its own authority or pursuant to the directions of any Person as herein provided during the Accounting Period. 9.3. Periodic Account. If so required by the terms of the Plans and agreed to by the Trustee, within thirty (30) days following the close of each calendar month, calendar quarter or other time period (but not more frequently than monthly) the Trustee shall provide the Account Party with, in accordance with Section 14.5, a written account for the Plans, setting forth the receipts and disbursements of the Trust Fund (and each of the Plans thereunder) and the investments and other transactions effected by it upon its own authority or pursuant to the directions of any Person as herein provided during such period; provided, however, that such written account shall be limited to an accounting of investments and transactions in the Trust Fund (and each of the Plans thereunder) and shall not affect the responsibilities of the parties under Section 2.2 herein. 9.4. Account Stated. Upon the expiration of one hundred twenty (120) days from the date of filing its annual account with the Account Party, the Trustee shall be forever released and discharged from all liability and further accountability to the Companies, the Account Party or any other Person with respect to the accuracy of such accounting and the propriety of all acts and failures to act of the Trustee reflected in such account, except with respect to any such acts or transactions as to which the Account Party shall, within such 120-day period, file with the Trustee specific written objections. 9.5. Judicial Accountings. Nothing herein shall in any way limit the Trustee's right to bring any action or proceeding in a court of competent jurisdiction to settle its account or for such other relief as it may deem appropriate. 9.6. Necessary Parties. Except to the extent that Sections 502 and 504 of ERISA may provide otherwise, in order to protect the Trust Fund from the expense of litigation, no Person other than the Corporation shall be a necessary party in any proceeding under Section 9.5 or may require the Trustee to account or may institute any other action or proceeding against the Trustee or the Trust. 9.7. Retention of Records. All records and accounts maintained by the Trustee with respect to the Trust Fund shall be preserved for a period of seven years. Upon the expiration of any such required retention period, the Trustee shall have the right to destroy such records and accounts after first transferring to the Corporation any records and accounts requested. The Trustee shall have the right to preserve all records and accounts in original form, or on any microfilm, magnetic tape, or other similar process allowable under law to be admissible into evidence. ARTICLE X Compensation, Taxes and Expenses -------------------------------- 10.1. Compensation and Expenses. A reasonable compensation as may be agreed upon from time to time between the Corporation and the Trustee and between the Investment Advisory Board and any Asset Manager, Custodian or insurance company, and all costs, disbursements, charges and expenses (except those specifically described in the next sentence) reasonably incurred by the Trustee and the members of the Investment Advisory Board in the administration of this Trust Fund, including any compensation to, and expenses of, agents, attorneys, accountants and other persons employed by the Trustee or the Investment Advisory Board, as certified by the Trustee or a majority of the members of the Investment Advisory Board, will be paid from the Trust Fund, but only to the extent they are not paid by the Companies in such proportions as the Investment Advisory Board shall direct. Expenses solely attributable to the investment of the assets of an Investment Fund (such as brokerage, postage, express, or insurance charges and stock transfer stamps expense), other than compensation payable directly by the Companies or the Trust Fund, shall be paid from that Investment Fund. The Trustee's entitlement to reimbursement thereunder shall not be affected by the resignation or removal of the Trustee or by the termination of the Trust. Unless prohibited by law, and at the discretion of the Corporation, compensation may be paid by the Companies to any member or members of the Investment Advisory Board for services rendered as such. 10.2. Taxes. All taxes of any and all kinds whatsoever that may be levied or assessed under existing or future laws, domestic or foreign, upon the Trust Fund or the income thereof shall be paid from the Trust Fund. The Trustee shall notify the Named Fiduciary of any taxes that may be assessed. In the event that the Named Fiduciary shall determine that the taxes are not lawfully assessed, it may elect to direct the Trustee at the expense of the Trust, or may itself, contest such assessment. 10.3. Allocation. Any tax or expense paid from the Trust Fund hereunder which is determined by the Named Fiduciary to be specifically allocable to one or more Investment Funds shall be charged against such Investment Fund in such proportions as the Named Fiduciary shall direct the Trustee. Any expense which is allocable to all of the Investment Funds shall be charged against the Trust Fund as a whole. 10.4. Agents, Attorneys, Accountants, Etc.. The Investment Advisory Board and the Trustee, individually, may employ such agents, attorneys, accountants, and other persons (who may be employed by the Corporation) as in its opinion may be necessary or desirable for the proper administration of the Plan(s) and this Trust Fund and to advise the Investment Advisory Board or the Trustee, as the case may be, and pay them a reasonable compensation. The Investment Advisory Board may delegate in writing to any agent, attorney, accountant, or other person selected by them, and the Trustee, by writing and with the approval of the Investment Advisory Board in any case in which the Trustee is not specifically authorized elsewhere in this Agreement or the Plans to do so, may delegate to any agent, attorney, accountant, or other person selected by it, any specifically described power or duty (except the Trustee may not delegate powers of management or control over Trust assets) vested in, imposed upon, or granted to it by this Agreement or the Plans, as the case may be; and the Investment Advisory Board and the Trustee may act or refrain from acting on the advice or opinion of reputable agents, attorneys, accountants, or other persons selected as above with reasonable diligence, without liability for so doing and without court action, except as otherwise provided by applicable law. The Investment Advisory Board and the Trustee shall give notice to the other of any delegation made pursuant to this Section. ARTICLE XI Resignation or Removal of Trustee --------------------------------- 11.1. Resignation or Removal. The Trustee may be removed by the Corporation at any time upon sixty (60) days' notice in writing to the Trustee. The Trustee may resign at any time upon sixty (60) days' notice in writing to the Corporation. 11.2. Designation of a Successor. Upon the removal or resignation of the Trustee, the Corporation shall either appoint a successor trustee who shall have the same powers and duties as those conferred upon the Trustee hereunder, and upon acceptance of such appointment by the successor trustee, the Trustee shall assign, transfer and pay over the Trust Fund to such successor trustee, or the Corporation shall direct the Trustee to assign, transfer and pay over the Trust Fund to one or more insurance companies pursuant to Insurance Contracts issued to the Plans. If, for any reason, the Corporation cannot or does not act promptly to appoint a successor trustee or designate an insurance company in the event of the resignation or removal of the Trustee, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor trustee. Any expenses incurred by the Trustee in connection therewith shall be charged to and paid from the Trust Fund as an expense of administration. 11.3. Duties of Resigning or Removed Trustee and of Successor Trustee. A trustee that resigns or is removed shall promptly furnish to the Investment Advisory Board and the successor trustee an account of its administration of the Trust from the date of its last account. Each successor trustee shall succeed to the title to the Trust Fund vested in its predecessor without the signing or filing of any further instrument, but each resigning or removed trustee shall execute all documents and do all acts necessary to vest such title of record in the successor trustee. Each successor trustee shall have and enjoy all of the powers conferred by this Agreement as if originally named trustee. Subject to applicable law, no successor trustee shall be personally liable for any act or failure to act of any predecessor trustee and with the approval of the Investment Advisory Board a successor trustee may accept the account rendered and the property delivered to it by a predecessor trustee as a full and complete discharge to the predecessor trustee without incurring any liability or responsibility for so doing. 11.4. Reserve for Expenses. The Trustee may reserve such amount as it may, in good faith, deem necessary for payment of its fees and expenses in connection with the settlement of its account or otherwise, and any balance of such reserve remaining after the payment of such fees and expenses shall be paid over in accordance with the directions of the Corporation under Section 11.2. The Trustee is authorized to invest such reserves in any investment authorized under the terms of this Agreement appropriate for the temporary investment of cash reserves of trusts. ARTICLE XII Amendment or Termination ------------------------ 12.1. Amendment. Subject to Section 1.4, the Corporation reserves the right at any time and from time to time to amend, in whole or in part, any or all of the provisions of this Agreement by notice thereof in writing delivered to the Trustee; provided, however, no amendment which affects the rights, duties or responsibilities of the Trustee may be made without its prior written consent. 12.2. Termination. Subject to Section 1.4, the Corporation reserves the right to terminate this Agreement by notice in writing thereof delivered to the Trustee. In the event of termination, the Trustee shall dispose of the Trust Fund, after the payment of, or other provision for, all of its expenses (including any compensation to which the Trustee may be entitled), all in accordance with the written directions of the Corporation. 12.3. Trustee's Authority to Survive Termination. Until the final distribution of the Trust Fund, the Trustee shall continue to have and may exercise all of the powers and discretions conferred upon it by this Agreement. 12.4. Approvals. In the event that this Trust Fund does not form a part of a plan subject to the jurisdiction of the Pension Benefit Guaranty Corporation, the Trustee shall distribute all cash, securities and other property then constituting the Trust Fund, less any amounts constituting charges and expenses payable from the Trust Fund, on the date or dates specified by the Investment Advisory Board to such persons and in such manner as the Investment Advisory Board shall direct. In making such distributions, the Trustee shall be entitled to assume that such distributions are in full compliance with and are not in violation of any applicable law regulating the termination of retirement plans such as the Plans. ARTICLE XIII Authorities ----------- 13.1. Corporation. Whenever the provisions of this Agreement specifically require or permit any action to be taken by the Corporation, such action must be by resolution of its Board of Directors or by a person authorized by resolution of its Board of Directors. 13.2. Form of Communications. Any agreement or understanding between the Corporation and any Person (including an Asset Manager) or any other provision of this Agreement to the contrary notwithstanding, all notices, directions and other communications to the Trustee shall be in writing or in such other form, including transmission by electronic means through the facilities of third parties or otherwise, specifically agreed to in writing by the Trustee. The Trustee shall be fully protected in acting in accordance therewith, but shall not thereby assume responsibility for the failure or breakdown of any such means of communication not due to its own negligence or willful misconduct. 13.3. Continuation of Authority. The Trustee shall have the right to assume, in the absence of written notice to the contrary, that no event constituting a change in the composition or authority of the Named Fiduciary or membership of the Investment Advisory Board or terminating the authority of any Person, including any Asset Manager, has occurred. 13.4. No Obligation to Act on Unsatisfactory Notice. The Trustee shall incur no liability under this Agreement for any failure to act pursuant to any notice, direction or any other communication from any Asset Manager, the Corporation, the Named Fiduciary, the Investment Advisory Board, or any other Person or the designee of any of them unless and until it shall have received instructions in a form specified in this Agreement. ARTICLE XIV General Provisions ------------------ 14.1. Governing Law. To the extent that state law shall not have been preempted by the provisions of ERISA or any other law of the United States heretofore or hereafter enacted, this Agreement shall be administered, construed and enforced according to the laws of the State of New York. 14.2. Entire Agreement. The Trustee's duties and responsibilities to the Plans or any Person interested therein shall be limited to those specifically set forth in this Agreement. No amendment to the Plans or agreement or instrument affecting the Plans or any other document shall affect the Trustee's duties or responsibilities hereunder without its prior written consent. 14.3. Mistake. No mistake made in good faith and in the exercise of due care in connection with the administration of the Trust Fund shall be deemed to be a breach of the Trustee's duties if, promptly after discovery of the mistake, the Trustee takes whatever action may be practicable in the circumstances to remedy the mistake. Any misstatement or any mistake of fact in any certificate, notice or other document filed with the Corporation, the Investment Advisory Board, the Trustee or any Asset Manager shall be corrected when it becomes known and the Corporation, the Investment Advisory Board, the Trustee or the Asset Manager, as the case may be, shall make such adjustment on account thereof as it considers equitable and practicable. 14.4. Reliance on Experts. The Trustee may consult with experts (who may be experts employed by the Corporation) including legal counsel, appraisers, pricing services, accountants or actuaries, selected by it with due care with respect to the meaning and construction of this Agreement or any provision hereof, or concerning its powers and duties hereunder, and shall be protected for any action taken or omitted by it in good faith pursuant to or on the basis of the opinion of any such expert. 14.5. Notices. All notices, reports, annual accounts and other communications from the Trustee to the Corporation, the Named Fiduciary, the Investment Advisory Board, an Asset Manager, or any other Person shall be deemed to have been duly given if mailed, postage prepaid, or delivered in hand to such Person at its address appearing on the records of the Trustee, which address shall be filed with the Trustee at the time of the establishment of the Trust and shall be kept current thereafter by the Named Fiduciary. All directions, notices, statements, objections and other communications to the Trustee shall be deemed to have been given when received by the Trustee at its offices in the form provided in Article XIII. 14.6. Plan Documents. The Named Fiduciary shall provide the Trustee with complete, current copies of the Plans and the most recent tax qualification letters relative thereto. The Trustee shall be entitled to rely upon the Named Fiduciary's attention to this obligation and shall be under no duty to inquire of any Person as to the existence of any documents not provided hereunder. 14.7. No Waiver; Reservation of Rights. The rights, remedies, privileges and immunities expressed herein are cumulative and are not exclusive, and the Trustee shall be entitled to claim all other rights, remedies, privileges and immunities to which it may be entitled under applicable law. 14.8. Descriptive Headings. The captions in this Agreement are solely for convenience of reference and shall not define or limit the provisions hereof. 14.9. Spendthrift Provision. Except as may be required by law, no interest or claim of interest of any kind of any participant in the Plans under the provisions of this Trust is assignable, nor may any such interest or claim be subject to garnishment, attachment, execution or levy of any kind, and no attempt to transfer, assign, pledge or otherwise encumber or dispose of such interest by act of the Person involved or by operation of law will be recognized. 14.10. Waiver of Notice. Any notice required under this Agreement may be waived by the Person entitled to such notice. 14.11. Gender and Number. Where the context admits, words in the masculine gender shall include the feminine and neuter genders, the plural shall include the singular, and the singular shall include the plural. 14.12. Counterparts. This Agreement may be executed in two or more counterparts, any one of which shall constitute an original without reference to the others. 14.13. Severability. In case any provisions of this Agreement shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of this Agreement and this Agreement shall be construed and enforced as if such illegal or invalid provision had never been set forth in this Agreement. 14.14. Scope of this Agreement. To the extent the parties are permitted to assign any rights or duties under this Agreement, this Agreement shall be binding upon the Corporation, the Companies, their successors and assigns, and upon the Trustee, the Investment Advisory Board, the Asset Managers, Custodians and their successors and assigns. 14.15. No Reversion in Companies. The Companies shall have no right, title or interest in the Trust Fund, nor shall any part of the Trust Fund revert or be repaid to a Company, directly or indirectly, unless: (a) a contribution is made by such Company by mistake of fact and such contribution is returned to the Company within one year after payment to the Trustee; or (b) a contribution conditioned on the deductibility thereof is disallowed as an expense for federal income tax purposes and such contribution (to the extent disallowed) is returned to the Company within one year after the disallowance of the deduction. The amount of any contribution that may be returned to a Company must be reduced by any portion thereof previously distributed from the Trust Fund and by any losses of the Trust Fund allocable thereto, and in no event may the return of such contribution cause any Plan participant's account balances to be less than the amount of such balances had the contribution not been made under the applicable Plan. ARTICLE XV Liabilities ----------- 15.1. Liabilities Mutually Exclusive. The Trustee, the Corporation, each member of the Investment Advisory Board, each Company, and each Asset Manager, Custodian and insurance company shall be responsible only for its or his own acts or omissions. 15.2. Limitation of Liability. To the extent permitted by law, no member of the Investment Advisory Board, no person to whom the Investment Advisory Board properly delegates any portion of its responsibilities under the Trust Fund, and no person who was, is or becomes a director, officer or employee of the Corporation or any of its subsidiaries or affiliates, shall have any personal liability of any nature for any act done or omitted to be done in good faith under or in connection with the Trust Fund. 15.3. Indemnification. To the extent permitted by law, any member or former member of the Investment Advisory Board, any person who was, is or becomes an officer or director of the Corporation or any of its subsidiaries or affiliates to whom the Investment Advisory Board or the Corporation has delegated any portion of its responsibilities under this Trust Fund, and each of them, shall be indemnified and saved harmless by the Corporation (to the extent not indemnified or saved harmless under any liability insurance or other indemnification arrangement with respect to the Trust Fund) from and against any and all liability to which such persons may be subjected to by reason of any act done or omitted to be done in good faith with respect to the administration of this Trust Fund or the investment of the Trust Fund, including all expenses reasonably incurred in their defense in the event that the Corporation failed to provide such defense after having been requested in writing to do so. In consideration of Bankers' agreeing to enter into this Agreement, the Corporation hereby agrees to hold harmless Bankers, individually and as Trustee, and Bankers' directors, officers, and employees, from and against all amounts, including without limitation taxes, expenses (including reasonable counsel fees), liabilities, claims, damages, actions, suits or other charges, incurred by or assessed against Bankers, individually or as Trustee, or its directors, officers or employees (i) as a direct or indirect result of any act or omission of any predecessor trustee or fiduciary appointed under the Plans; (ii) as a direct or indirect result of anything done in good faith, or alleged to have been done, by Bankers in reliance upon the directions of any Investment Manager (other than Bankers acting as Investment Manager), the Investment Advisory Board, the Corporation, or the Named Fiduciary, or anything omitted to be done in good faith, or alleged to have been omitted, in the absence of such directions, or (iii) as a direct or indirect result of the failure of the Corporation, the Investment Advisory Board, or the Named Fiduciary, to discharge its fiduciary responsibilities with respect to the Plans. Anything hereinabove to the contrary notwithstanding, the Corporation shall have no responsibility to Bankers under subsections (ii) or (iii) of the preceding sentence if Bankers knowingly participated in or knowingly concealed any act or omission of any Person described therein knowing that such act or omission constituted a breach of such Person's fiduciary responsibilities, or if Bankers fails to perform any of the duties specifically undertaken by it under the provisions of this Agreement in the manner herein provided, and in accordance with Section 1.4, or if Bankers fails to act in conformity with duly given and authorized directions hereunder. The Corporation further agrees that the undertaking made in the second sentence of this Section shall be binding on its successors or assigns, and shall survive termination, amendment or restatement of this Agreement, or the resignation or removal of the Trustee, and that this Article shall be construed as a contract between the Corporation and the Trustee according to the laws of the state of New York in effect from time to time. ARTICLE XVI Plans and Agreement ------------------- 16.1. Adoption of Agreement by Subsidiaries and Affiliates. Any Company which is a subsidiary of the Corporation or which may be affiliated with the Corporation in any way and which is now or may hereafter be organized under the laws of the United States of America, or of any state or Territory thereof, with the approval of the Corporation, and by resolution of its own Board of Directors, may adopt this Agreement, if such subsidiary or affiliate shall have adopted one or more plans qualified under Section 401(a) of the Code, as amended. If any such subsidiary or affiliate so adopts this Agreement, this Agreement shall establish the trust for such plans as are specified by such subsidiary or affiliate and shall constitute a continuation, amendment and restatement of any prior trust for any such plans. Furthermore, the assets of any such plans may be commingled with the assets of other plans held in the Trust Fund pursuant to Section 6.2 hereof. However, the assets of any plan so held in the Trust Fund shall not be subject to any claim arising under any other plan, the assets of which are commingled therewith by the Trustee for investment purposes, and under no circumstances shall any of the assets of one plan be available to provide the benefits under another plan. A separate trust shall be deemed to have been created with respect to each plan of such subsidiary or affiliate. 16.2. Segregation from Further Participation. The Corporation or any Company may, at any time, segregate a Plan's trust from further participation in this Agreement. In such event, the Investment Advisory Board shall file with the Trustee a document evidencing the Company's or the Corporation's segregation of a Plan from the Trust Fund and its continuance of a separate trust in accordance with the provisions of this Agreement as though such Company or Corporation were the sole creator thereof. In such event, the Trustee shall deliver to itself as Trustee of such separate trust such share of the Trust Fund as may be determined by the Trustee to constitute the appropriate share of the Trust Fund, as confirmed by the Company or the Corporation, then held in respect of the participating employees of such subsidiary or affiliate, and such share shall be governed by a separate trust agreement containing such terms and conditions as are agreed to between the Company or the Corporation and the Trustee. Such Company or the Corporation may thereafter exercise, in respect of such separate trust, all of the rights and powers reserved to the Corporation under the provisions of this Agreement. The equitable share of any Plan participating in the Trust Fund shall be immediately segregated and withdrawn from the Trust Fund if the Plan ceases to be qualified under Section 401(a) of the Code and the Corporation shall promptly notify the Trustee of any determination by the Internal Revenue Service that any Plan has ceased to be so qualified. 16.3. Segregation of Assets Allocable to Specific Employees. The Investment Advisory Board may at any time direct the Trustee to segregate and withdraw the equitable share of any Plan, or that portion of such equitable share as may be certified to the Trustee by the Investment Advisory Board as allocable to any specified group or groups of employees or beneficiaries. Whenever segregation is required, the Trustee shall withdraw from the Trust Fund such assets as it shall deem to be equal in value to the equitable share to be segregated. Such withdrawal from the Trust Fund shall be in cash or in any property held in such Trust Fund, or in a combination of both, as directed by the Investment Advisory Board. The Trustee shall thereafter hold the assets so withdrawn as a separate trust fund in accordance with the provisions of this Agreement, which shall be construed in respect of such assets as if the Company or the Corporation maintaining such Plan (determined without regard to whether any subsidiaries or affiliates of such employer have joined in such Plan) has been named as the Corporation hereunder. Such segregation shall not preclude later readmission to the Trust Fund. ARTICLE XVII Merger or Consolidation ----------------------- 17.1. Merger or Consolidation of Trustee. Any corporation, or national association, into which the Trustee may be merged or with which it may be consolidated, or any corporation, or national association, resulting from any merger or consolidation to which the Trustee is a party, or any corporation, or national association, succeeding to the trust business of the Trustee hereunder, shall become the successor of the Trustee hereunder, without the execution or filing of any instrument or the performance of any further act on the part of the parties hereto. 17.2. Merger or Consolidation of Corporation. Any corporation into which the Corporation or any Company may be merged or with which it may be consolidated, or any corporation succeeding to all or a substantial part of the business interests of the Corporation may become the Corporation or Company hereunder by expressly adopting and agreeing to be bound by the terms and conditions of the Plans and this Agreement and so notifying the Trustee to such effect by submission to the Trustee of an appropriate written document. 17.3. Merger or Consolidation of Plan. In the event that the Investment Advisory Board or the Corporation authorizes and directs that the assets of another plan be merged or consolidated with or transferred to a Plan partici- pating in this Trust Fund, the Trustee shall take no action with regard to such merger, consolidation or transfer until it has been notified in writing that each participant covered under the plan the assets of which are to be merged, consolidated or transferred will immediately after such merger, consolidation or transfer be entitled to a benefit either equal to or then greater than the benefit he would have been entitled to had the plan been terminated. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized and their corporate seals to be hereunto affixed and attested to as of the day and year first above written. (Corporate Seal) FORT HOWARD CORPORATION Attest: By /s/ James W. Nellen II ---------------------- Title: Vice President /s/ Cheryl A. Thomson - ------------------------------------- Title: Assistant Corporate Secretary (Corporate Seal) BANKERS TRUST COMPANY Attest: By /s/ Gary Cohen ---------------------- Title: Vice President /s/ Robert M. Bynke - -------------------------------------- Title: Managing Director STATE OF WI ) ) ss.: COUNTY OF BROWN ) On the 29th day of December, 1995, before me personally came James W. Nellen II to me known, who being by me duly sworn, did depose and say: that he/she resides in Green Bay, Wisconsin; that he/she is the Vice President of FORT HOWARD CORPORATION, the corporation described in and which executed the above instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like order. /s/Jean M. Ehren ---------------------- Notary Public Commission Expires 3/23/97 STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) On the 29th day of December, 1995, before me personally came Gary Cohen to me known, who being by me duly sworn, did depose and say: that he/she resides in New York, New York; that he/she is the Vice President of BANKERS TRUST COMPANY, the corporation described in and which executed the above instrument; that he/she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by order of the Board of Directors of said corporation, and that he/she signed his/her name thereto by like order. /s/Richard Corazza ---------------------- Richard Corazza Notary Public, State of New York No. 31-4638819 Qualified in New York County Commission Expires 7/31/96 Exhibit A --------- Fort Howard Corporation Profit Sharing Retirement Plan Harmon Assoc., Corp. Profit Sharing Plan Appendix A ---------- Investment Funds ---------------- "Conservative" Balanced Investment Fund "Original" Balanced Investment Fund "Aggressive" Balanced Investment Fund Short-Term Investment Fund Fort Howard Common Stock Fund EX-4.5 6 Exhibit 4.5 ----------- FORT HOWARD CORPORATION PROFIT SHARING RETIREMENT PLAN SUMMARY PLAN DESCRIPTION Table of Contents Introduction Eligibility Requirements for Participation Service Reemployment Participant Contributions How the 401(k) Plan Works Annual Base Pay Company Contributions Allocation of the Company Contribution Example Contribution Limits Top-Heavy Rules Plan Accounts Investment Funds Balanced Investment Fund (BIF) Short Term Investment Fund (STIF) Fund Transfers Vesting Reemployed Participants Reemployment Before Incurring a One-Year Break in Service Reemployment After Incurring a One-Year Break in Service Restoration of Forfeited Amounts Break in Service Transferred Participants Payment of Accounts Death Benefits Inservice Withdrawals Withdrawals from Prior Participant Account Hardship Withdrawals from Deferred Wage Account Rollover Contributions Claiming Your Benefits Appealing a Denied Claim Administrative Information Formal Plan Document Name and Address of Employer Plan Year and Plan Number Plan Administrator Trustee Agent for Service of Legal Process Type of Plan Future of the Plan No Contract of Employment Assignment of Benefits Your Rights Under ERISA INTRODUCTION - ------------ The following is a summary of the Fort Howard Corporation Profit Sharing Retirement Plan (the "Plan") as in effect on January 1, 1990. The Plan is intended to provide future financial security for eligible employees of Fort Howard Corporation. As its name indicates, the Plan is a profit sharing plan, under which the Company contributes a share of its profits to the Plan each year. The Plan also contains a wage deferral provision under Section 401(k) of the Internal Revenue Code. This provision allows you to contribute a portion of your pay to the Plan on a pre-tax basis. With this combination of profit sharing and 401(k) wage deferral features, the Plan affords you a tax-effective opportunity to have: - - more money available at your retirement, and - - your own tax shelter. This summary describes the provisions of the Plan in detail. We urge you to review it carefully, so that you can make the most effective use of the Plan in your retirement planning. ELIGIBILITY REQUIREMENTS FOR PARTICIPATION - ------------------------------------------ You are eligible to participate in the Plan if you complete at least 1,000 Hours of Service during the 12 months ending on the first anniversary of your date of hire. If you satisfy this rule, you will enter the Plan on the June 30 or December 31 that immediately follows the first anniversary of your date of hire. If you do not satisfy this rule, you may become a participant on any December 31 following the first anniversary of your date of hire, provided you complete a Year of Service (see definition of "Year of Service" on Page 1105) during the calendar year ending on that December 31. Example: If you were hired by the Company on August 5, 1990, and you completed 1,000 Hours of Service in the 12 months thereafter, you would become a participant in the Plan on December 31, 1991. If you did not complete at least 1,000 Hours of Service in the 12 months following your date of hire, you would still be eligible to participate on December 31, 1991, provided you completed a Year of Service during the calendar year ending on that date. The Investment Advisory Board, which is responsible for the administration of the Plan, will notify you in advance of the date on which you will become eligible to participate. SERVICE An Hour of Service is any hour for which you are paid or entitled to payment by the Company for the performance of duties. Hours of Service also include certain periods during which no duties are performed, such as: - - Vacations and holidays, - 2 - - - Authorized disability absence, - - Periods during which you are laid off by the Company. However, if you are not called back to work within two years, your credit for Hours of Service will cease at the end of the two-year period. - - Military leaves required by law or granted by the Company. You will receive credit for Hours of Service for the period of the leave. - - Leaves of absence granted by the Company, but only for up to one year. A Year of Service is any calendar year in which you complete at least 1,000 Hours of Service with the Company or a Related Corporation. However, for periods prior to 1976, Years of Service are credited under the terms of the Plan in effect on December 31, 1975. The Company means Fort Howard Corporation and any subsidiary, affiliate, or division of Fort Howard Corporation that has adopted the Plan. A Related Corporation is any member of the controlled group to which the Company belongs. REEMPLOYMENT If you terminate your employment after becoming a participant, you will become a participant again immediately upon your reemployment. You may then begin your deferred wage contributions as of the December 31 or June 30 coincident with or next following your reemployment. PARTICIPANT CONTRIBUTIONS - ------------------------- You are not required to contribute to the Plan, but if you wish, you may elect to make deferred wage contributions of between one and eight percent (1, 2, 3, 4, 5, 6, 7, or 8%) of your Annual Base Pay. Deferred wage contributions are made by a reduction of your compensation each pay period and are contributed by the Company to the Plan on your behalf. To contribute, you must file a written election form with the Investment Advisory Board by such date as the Board determines. Your election will be effective beginning with the first paycheck in the month next following the date the Investment Advisory Board approves your election. If you are absent because of disability, leave of absence, layoff, or military leave when you first become eligible to contribute, you may not make contributions until you return to active employment. You may then make an election to contribute effective as of a date determined by the Investment Advisory Board. The amount by which your Annual Base Pay is reduced through deferred wage contributions is not reported as wages for federal income tax purposes on the W-2 form filed with the Internal Revenue Service at the end of each year. However, the amount of your Annual Base Pay reduced in this manner is subject to Social Security tax and, in some states, to state income taxes. - 3 - Example: Suppose that your Annual Base Pay for 1990 is $30,000. If you elect to make deferred wage contribution of 6%, $1,800 will be contributed to the Plan on your behalf and $28,200 will be reported as taxable income for federal income tax purposes on your 1990 Form W-2. However, $30,000 will be subject to Social Security tax. You may elect to change the rate of your deferred wage contributions, or discontinue or resume contributions, effective as of the first pay period for which compensation is received in the month next following the date the Investment Advisory Board approves your election. HOW THE 401(k) PLAN WORKS Prior to January 1, 1984, any contributions you made to the Plan were made on an "after-tax" basis. The amount of contribution was first taxed as part of your total cash pay and was then transferred to the Plan. Effective January 1, 1984, any contributions you make to the Plan are made on a "pre- tax" basis. The following is a general example that compares the tax effect of saving for your retirement by contributing to the Plan (pre-tax savings) versus depositing your money in an ordinary savings account or money market fund (after-tax savings). Assume that the employee would contribute 6% of pay to either the Plan or an ordinary after-tax savings account. First read the column marked "After-Tax Savings" downward to review how it works and then come back and read the second column downward to see how the Plan works. After-Tax Savings The Plan --------- -------- Employee's Annual $25,000 $23,500 Base Pay subject to ($25,000-$2,500 federal tax pre-tax contributin) Federal taxes at a rate 3,750 3,525 of 15% State taxes at a rate 1,250 1,175 of 5% Social Security taxes 1,912 1,912 at a rate of 7.65% Savings or Plan contribution at a rate of 6% 1,500 (already reflected above) Net, take home pay $16,588 $16,888 Tax Savings Under Plan: $300.00 - 4 - Under the Plan, this employee receives $300 more take home pay, which he or she may add to separate savings for retirement or use for other purposes. This example assumes that the state in which the employee resides does not impose state income tax on deferred wage contributions; if the state did impose such a tax, the employee's savings would be reduced by $75. ANNUAL BASE PAY - --------------- Your "Annual Base Pay" means your total compensation received from the Company for services rendered to the Company during a calendar year, including overtime, holiday pay, sick days, salary continuation, vacation pay, and any deferred wage contributions you elect to have made on your behalf under the Plan, but excluding goodwill and discretionary bonuses, short term disability benefits, suggestion awards and sales incentive compensation, amounts you contribute to a nonqualified retirement plan, and any other special or unusual compensation. Your Annual Base Pay in any Plan Year (January 1 through December 31) may not exceed $200,000 (or a greater amount determined by the Internal Revenue Service to reflect cost of living increases). COMPANY CONTRIBUTIONS - --------------------- Each Plan year (January 1 through December 31), the Company will make a contribution to the Plan equal to 10% of its adjusted profits, but not more than 10% of the total Annual Base Pay of all participants. However, to ensure financial stability of the Company and a fair return to the stockholders, the Company contribution under this formula will be limited, if necessary, so that the Company's net profit (after taxes, deductions and the contribution) are not less than 6% of the Company's net worth at the beginning of the Plan year. If profits are deficient under this 6% rule, or if the Company incurs a loss in any year, the amount of the deficiency or loss will be carried forward and charged to net profits in the next year or years. The Company may not make a contribution to the Plan under this formula until its net profits exceed 6% plus the amount of the accumulated deficiency or loss. Adjusted profits, net profits, and net worth are all generally determined according to recognized accounting principles and practices. In addition to the contribution described above, the Company may make a discretionary contribution to the Plan in such amount as the Board of Directors may determine. However, the total contributions by the Company are limited to the amount that it can deduct as an expense on its corporate income tax return. ALLOCATION OF THE COMPANY CONTRIBUTION You are eligible to share in the Company's contribution if you are employed by the Company during the Plan Year, but not if your employment terminated due to your resignation or dismissal. The Company's contribution and any forfeitures are allocated as of the end of the Plan Year, as follows: - - 25% of the Company contribution is allocated to the accounts of all participants, pro rata, according to their Annual Base Pay for the Plan Year, - 5 - - - 25% of the Company contribution is allocated to the accounts of all participants, pro rata, according to their Service Units (as defined below), and - - 50% of the Company contribution is allocated to the accounts of those participants making deferred wage contributions under the Plan, pro rata, according to the amount of such deferred wage contributions. You earn one Service Unit for each Year of Service (see Page 1105) you complete after January 1, 1976. If you were employed by the Company on December 31, 1975, you will be credited with Service Units for periods prior to that date as determined under the terms of the Plan then in effect. As long as you are eligible, you share in the Company's contribution even if you do not elect to make deferred wage contributions under the Plan. However, if you do make deferred wage contributions, you share in the entire Company contribution, not just half of it. Example: As an example, assume the following facts: Company contribution for the year - $10,000,000 Your deferred wage contributions - $ 1,500 Your Annual Base Pay - $ 25,000 Your Service Units at Dec. 31 - 10 Total of participants' deferred wage contributions - $ 4,700,000 Total of participants' Annual Base Pay - $ 90,000,000 Total of participants' Service Units - 40,000 Your share of the Company contribution is determined as follows: Portion of the Company contribution allocated on the basis of Annual Base Pay: $2,500,000 = 25% of total Company contribution $25,000 ----------- x $2,500,000 = $694.44 $90,000,000 Portion of the Company contribution allocated on the basis of Service Units: $2,500,000 = 25% of total Company contribution 10 ------ x $2,500,000 = $625.00 40,000 - 6 - Portion of the Company contribution allocated on the basis of deferred wage contributions: $5,000,000 = 50% of total Company contribution $1,500 ---------- x $5,000,000 = $1,595.74 $4,700,000 Because you elected to make deferred wage contributions to the Plan, you will receive a company contribution based on the above: $694.44 + $625.00 + $1,595.74 = $2,915.18 If you had not elected to make deferred wage contributions, you would have received a Company contribution of $1,319.44, based on your Annual Base Pay and Service Units only. CONTRIBUTION LIMITS - ------------------- Your deferred wage contributions in any calendar year may not exceed $7,000 (or greater amount determined by the Internal Revenue Service). Your deferred wage contributions are also subject to a discrimination test that compares the rate of contributions made by highly compensated employees to the rate of contributions made by all other employees. If the difference between the two rates becomes too great, the Investment Advisory Board will reduce contributions made by highly compensated participants (generally, those earning more than $50,000, as adjusted). If you are a highly compensated participant, another Internal Revenue Code discrimination test may restrict the amount of Company contributions that you may be allocated on the basis of your deferred wage contributions. The Internal Revenue Service limits the amount of contributions and forfeitures that may be credited to your accounts under the Plan. The limitation is currently $30,000, or 25% of your total Form W-2 compensation for the year, whichever is less. Any Company contributions and forfeitures that cannot be allocated to a participant's account under the Plan will be allocated to the accounts of remaining Plan participants. TOP-HEAVY RULES Finally, there are special rules that will apply in the very unlikely event that the Plan ever becomes "top-heavy." The Plan will be top-heavy if the account balances of key employees (e.g. officers) exceed 60% of the account balances of all participants in the Plan. If the Plan does become top-heavy: - - the vesting schedule for all participants will accelerate for the period of time the Plan remains top-heavy, and - - a non-key employee who is employed on the last day of a Plan Year during which the Plan is top-heavy will be entitled to a minimum allocation of the company contribution. This minimum will equal 3% of the employee's compensation, but not more than the highest percentage of compensation allocated to a key employee. - 7 - PLAN ACCOUNTS - ------------- The Trustee will maintain a "Company Contribution Account" to reflect your share of Company contributions and forfeitures (see Page 1117) and income attributable to those items. The Trustee will also maintain a "Deferred Wage Account" to reflect your deferred wage contributions, if any, and income attributable to those contributions. If you made contributions to the Plan prior to January 1, 1984 or you made a rollover contribution (see Page 1127), these will be maintained in a separate account, called your "Prior Participant Account." Your accounts will be invested in one or more investment funds as determined by the Investment Advisory Board. Currently, the Investment Advisory Board maintains two investment funds, as described in the next section. As of the last day of each month (an "accounting date"), your accounts will be adjusted, with the accounts of other participants, upward or downward, to reflect your share of the gains, losses, appreciation, and depreciation of the investment funds. This adjustment is made after your accounts have been charged with any payments or distributions made to you or for your benefit during the period. For example: If the total value of all accounts invested in an investment fund equals $10,000,000 and your account balance is $5,000, your account represents .05% of the total of all accounts: $5,000 ----------- = .05% $10,000,000 If the value of the investment fund increased by $75,000 during the month, your share of the fund increase would be $37.50: $75,000 x .05% = $37.50 As of the end of the month, your account would have a balance of $5,037.50 ($5,000 + $37.50). This example assumes an increase in the investment fund's value. Unfortunately, investments do not always work out so well. Should the investment fund have experienced a loss in value of $75,000 and all other amounts remain the same, then your account balance would have been reduced by $37.50 so that as of the end of the month it would total $4,962.50 ($5,000-$37.50). You will receive annual statements showing the amounts credited to your accounts. Your deferred wage contributions, Company contributions, and the interest or appreciation in the value of your accounts under the Plan are not taxable to you while such accounts are held in the Plan. These amounts accumulate on a tax-deferred basis and provide you with a very favorable tax shelter while you work for the Company. - 8 - INVESTMENT FUNDS - ---------------- The Trustee currently maintains two investment funds, the Balanced Investment Fund (BIF) and the Short Term Investment Fund (STIF). Each new participant will select the portion of his or her accounts, in increments of 10%, that is to be invested in either the BIF or the STIF. Participants under age 50 may allocate up to 50% of their total accounts to the STIF, while those age 50 and over may allocate up to 100% to the STIF. BALANCED INVESTMENT FUND (BIF) The objective of the Balanced Investment Fund is to invest profit sharing assets in a diversified group of securities through professional investment management. Investments by several specialized managers include stocks, bonds, short-term money market instruments and real estate. The Investment Advisory Board sets percentage targets for the mix of the various asset types in the Fund and may change these targets based upon changing conditions. SHORT TERM INVESTMENT FUND (STIF) The Short Term Investment Fund is composed of high grade money market instruments having maturities of less than one year, the majority of which are due within 30 days. Because preservation of the principal value is a prime objective, only the highest quality securities are used in this Fund. The Fund's purpose is to provide a money market fund alternative to the Balanced Fund's diversified investment approach. FUND TRANSFERS After initially choosing the percentage of their total account balances to be allocated to the BIF or the STIF, participants may make subsequent changes in the percentage amounts invested in each Fund. These changes may be made at any time during the year; however, once a change has been made, a participant may not make another change in the following 12 month period. When making a decision to change, a Participant should consider his or her closeness to retirement age and his or her need for more stable investment returns. Participants wishing to make changes may obtain forms through the Personnel Department. VESTING - ------- Being vested means that you have a nonforfeitable right to all or a portion of your accounts. Under the Plan, you are always fully vested in your Deferred Wage and Prior Participant Accounts, if any. If your employment terminates because of your retirement or death, you are also fully vested in your Company Contribution Account. So if you retire after age 55 or because of disability, or if you die while actively employed, you will have a right to the total amount credited to your accounts. - 9 - If you resign or are dismissed before retirement, however, you will be vested in your Company Contribution Account according to the following schedule: Years of Service Percentage Vested Less than 3 years 0% 3 years but less than 4 years 20% 4 years but less than 5 years 40% 5 years but less than 6 years 60% 6 years but less than 7 years 80% 7 years or more 100% If you were a participant in the Plan on or before December 31, 1988, the vested percentage of your Company Contribution Account will not be less than as determined under the vesting schedule in effect on that date. Subject to the following section on Reemployed Participants, any part of your account that is not vested when you terminate employment will be forfeited. Once each year, these "forfeitures" are allocated to the accounts of remaining participants in the same manner as Company contributions are allocated. Example: Suppose that you were hired January 1, 1986, and terminated your employment on November 15, 1991. If you completed at least 1,000 Hours of Service in each year (1986 through 1991), you would have 6 Years of Service and would be 80% vested; that is, you would be entitled to 80% of your Company Contribution Account. Of course, your Deferred Wage and Prior Participant Accounts, if any, would be 100% vested. REEMPLOYED PARTICIPANTS - ----------------------- The following rules apply to participants in the Plan who terminate employment and then become reemployed: REEMPLOYMENT BEFORE INCURRING A ONE-YEAR BREAK IN SERVICE If you terminate your employment but are reemployed before incurring a one- year break in service (see Page 1119), the nonvested portion of your account (if any) will be recredited to your Company Contribution Account. If you received a distribution of your vested accounts, the amount of any forfeiture resulting from the termination will be recredited. If you wish, you may repay the amount previously distributed, but you are not required to do so under the Plan. REEMPLOYMENT AFTER INCURRING A ONE-YEAR BREAK IN SERVICE If your employment terminated after December 31, 1975, and you are reemployed after incurring a one-year break in service, your prior Years of Service will be restored once you complete a Year of Service. However, if your employment terminated on or before December 31, 1975, your prior Years of Service will not be restored. - 10 - RESTORATION OF FORFEITED AMOUNTS If you terminate your employment on or after January 1, 1985 (or during 1984) and you are rehired before incurring five consecutive one-year breaks in service, but after your vested accounts had been distributed to you, you may repay (within five years of your reemployment or by the end of five consecutive one-year breaks in service that begin after your distribution, if earlier) the total amount distributed as a result of your earlier termination. If you made such repayment, both the amount repaid and the forfeiture resulting from your prior termination will be credited to your accounts. If you are reemployed following a break in service, you will lose the right to the forfeiture amount resulting from your prior termination under the following circumstances: - - you incur a one year break in service prior to January 1, 1985, - - you terminate after January 1, 1985, and incur five or more consecutive one-year breaks in service, or - - you terminate after January 1, 1985, are not fully vested when you terminate, are rehired before incurring five consecutive one-year breaks in service, and fail to repay the amount of your prior distribution as described above. However, if your accounts had not previously been distributed to you and you are reemployed before incurring five consecutive one-year breaks in service, the forfeiture resulting from your prior termination will be credited to your accounts. BREAK IN SERVICE A "break in service" means a calendar year during which you do not complete more than 500 Hours of Service. However, if you are absent due to unpaid leave for maternity or child rearing, special rules apply to avoid a break in service in the first year of the absence. An unpaid leave for maternity or child rearing is a leave due to the pregnancy, birth, or adoption of your child or for the purpose of caring for your child following its birth or placement. TRANSFERRED PARTICIPANTS - ------------------------ If you transfer from employment with the Company to employment with a Related Corporation that has not adopted the Plan, or if you transfer to a position with the Company so that you are no longer eligible under the Plan, you will not be permitted to make deferred wage contributions, nor will you be eligible for Company contributions and forfeitures. However, you will continue to earn Years of Service as long as you are employed with the Company or a Related Corporation. You will be deemed to retire or otherwise terminate your employment when you are no longer employed by the Company or any Related Corporation. - 11 - PAYMENT OF ACCOUNTS - ------------------- Upon your retirement at age 55 or due to disability, or upon other termination of employment, you may elect to receive your accounts in either of the following forms: - - a lump sum, or - - a series of installments over a period not exceeding your life expectancy or the joint life expectancy of you and your beneficiary. Payments will begin as soon as possible after your retirement or termination. If your accounts exceed $3,500, however, they may not be paid prior to age 65 without your written consent. If you attain age 70-1/2 on or after January 1, 1988, you will be required to begin receiving payments even though you remain employed. These payments must begin no later than April 1 of the Plan Year following the Plan Year in which you reach age 70-1/2. If you elect installment payments, you may be permitted to change the installment period or the frequency of payments, in accordance with rules established by the Investment Advisory Board. However, all installment distributions must comply with the requirements of the Internal Revenue Code. DEATH BENEFITS - -------------- Upon your death, any remaining balance in your accounts will be paid to the beneficiary you have designated. If you are married and designate someone other than or in addition to your spouse as your primary beneficiary, your spouse must consent in writing to your designation. Your spouse's consent to your designation must be witnessed by a Plan representative or a notary public. You may select the form of payment to your beneficiary, but if you do not do so, the Investment Advisory Board will select the form of payment. If you die after the date your benefits are required to begin under the Internal Revenue Code (generally the April 1 of the Plan Year following the Plan Year in which you attain age 70-1/2), the balance in your accounts must be distributed over a period not exceeding the period over which payments were being made to you. If you die before the date your benefits are required to begin, your accounts must be distributed over a period not exceeding the greatest of the following: - - five years from your death, - - the life expectancy of your beneficiary, provided payments begin within one year of your death, or - - in the case of payments to your spouse, the life expectancy of your spouse, provided payments begin by the date you would have attained age 70-1/2. - 12 - It is important that you complete a beneficiary designation form and file it with the Investment Advisory Board. If you do not designate a beneficiary or if your designated beneficiary dies before you or before distribution of your accounts has been completed, the Investment Advisory Board will direct payment of your remaining accounts to the first surviving of the following in the order shown:: - - your spouse, - - your children (in equal parts), - - your parents (in equal parts), - - your brothers and sisters (in equal parts), or - - the executors or administrators of your estate. Copies of beneficiary designation forms may be obtained from the Investment Advisory Board. INSERVICE WITHDRAWALS - --------------------- Although the main purpose of the Plan is to provide retirement benefits, you may withdraw funds from your accounts while you are actively employed by the Company. Subject to certain conditions, you may withdraw amounts contributed to your Prior Participant Account or your Deferred Wage Account, but you may not withdraw the earnings on these Accounts. Also, you may not withdraw any amounts from your Company Contribution Account. Inservice withdrawals must be approved by the Investment Advisory Board. WITHDRAWALS FROM PRIOR PARTICIPANT ACCOUNT You may withdraw funds from your Prior Participant Account for the following purposes: - - medical expenses incurred by you, your spouse, or your dependents; - - payment on an existing mortgage on your principal residence; - - repairs on your residence; - - post high school education expenses for you, your spouse, or your dependents; or - - purchase by you of a new principal residence. Under the Plan, you may withdraw only the amount reasonably necessary to satisfy one of these needs and you must verify this amount by submitting certain information to the Investment Advisory Board. Withdrawals also are subject to certain minimum amounts. The information required to verify withdrawal amounts and the withdrawal minimums are: - 13 - For medical expenses: - --------------------- You must provide a copy of the explanation of benefits statement received from the applicable Fort Howard medical plan and the benefits statement from any other insurance company that may be involved. Minimum withdrawal: $500.00 For payments on an existing mortgage on your principal residence: - ----------------------------------------------------------------- You must provide a letter addressed to you from your present mortgage holder, signed by an officer of the mortgage holder, with the following information: - - current mortgage balance; - - address of residence; - - year the residence was purchased; - - present monthly mortgage payments; and - - monthly payments after reduction of mortgage; if applicable. Minimum withdrawal: $1,000.00 For repairs on your residence: - ------------------------------ You must provide a contractor's estimate showing the date, your name and address, a description of the work, itemized costs of materials and labor, and the contractor's signature. If you are doing the repair work yourself, you must provide a supplier's estimate showing the date, your name and address, and an itemized cost of materials and the supplier's signature. Minimum withdrawal: $1,000.00 For education expenses: - ----------------------- You must provide the name of the person seeking post high school education, as well as their relationship to you. You must also provide a letter from the school on its letterhead, indicating that this person has been accepted for enrollment, the estimated cost of room and board and tuition by semester, quarter, or other applicable payment period. Finally, you must provide the date this person is expected to begin school. Minimum withdrawal: $500.00 For purchase of a new principal residence: - ------------------------------------------ You must provide a copy of the offer to purchase signed by the seller and by you. This offer should include the address of the home being purchased, the purchase price, the amount of the downpayment and estimated closing costs, and the amount of the mortgage. The latter two items usually are provided by the mortgage lender on company letterhead and signed by an officer of the mortgage lender. You must also provide a statement that this residence will constitute your principal residence and indicate whether the residence is a single residence or a duplex. - 14 - Minimum withdrawal: $1,000.00. However, if you seek a withdrawal to purchase your first residence, the minimum withdrawal amount is waived. The Investment Advisory Board may also require that you provide paid receipts or other information verifying that your withdrawal was used for the stated purpose. The cumulative amount of all withdrawals may not exceed the lesser of your total prior participant contributions to the Plan or the balance of your Prior Participant Account as of the accounting date immediately preceding your withdrawal. Payments of withdrawal amounts will be made pro rata from the investment funds in which your Prior Participant Account is invested, or as the Investment Advisory Board permits you to direct in accordance with uniform rules and procedures. All or a portion of your withdrawal amount may be repaid to your Prior Participant Account as of the last day of any month. For more information regarding repayment of withdrawals, contact the Personnel Department. HARDSHIP WITHDRAWALS FROM DEFERRED WAGE ACCOUNT You may make withdrawals from your Deferred Wage Account for one of the following hardships: - - medical expenses described in Section 213(d) of the Internal Revenue Code incurred by you, your spouse, or your dependents; - - purchase of your principal residence (not including regular mortgage payments); - - tuition for the next semester or quarter of post-secondary education for you, your spouse, or your dependents; or - - preventing eviction from or foreclosure on your principal residence. A hardship withdrawal is permitted only if you can demonstrate an immediate and heavy financial need; to demonstrate your financial need, you will be required to submit the same types of documents as listed before for withdrawals from your Prior Participant Account (see Page 1122). In addition, the withdrawal must be necessary to satisfy your financial need. A withdrawal will be considered necessary to satisfy an immediate and heavy financial need if all of the following requirements are met: - - the withdrawal does not exceed the amount of the immediate and heavy financial need; - - you have obtained all distributions, other than inservice hardship withdrawals; - - your deferred wage contributions will be suspended for 12 months after receiving the withdrawal; and - - your deferred wage contributions for your taxable year immediately following the taxable year of the hardship withdrawal cannot exceed $7,000 (or a greater amount as determined by the Internal Revenue Service) less the amount of your deferred wage contributions for the taxable year of the hardship withdrawal. - 15 - For example, if you contribute $1,200 in 1991 and then make a hardship withdrawal in May 1991, your contributions will be suspended for the next 12 months. When your contributions resume in June 1992, they will be limited to $7,979 (or a greater limit then in effect) minus $1,200 or $6,779. For purposes of hardship withdrawals, your resources include any assets of your spouse and minor children that are reasonably available to you. Withdrawals are subject to certain minimum amounts. If your withdrawal is needed for a medical or educational hardship, the minimum amount is $500.00. If your withdrawal is needed for purchase of a new residence or for preventing eviction from or foreclosure on your residence, the minimum amount is $1,000.00. The cumulative amount of all hardship withdrawals may not exceed the lesser of your total deferred wage contributions to the Plan or the balance of your Deferred Wage Account as of the accounting date immediately preceding your hardship withdrawal. Payments of withdrawal amounts will be made pro rata from the investment funds in which your Deferred Wage Account is invested, or as the Investment Advisory Board permits you to direct in accordance with uniform rules and procedures. ROLLOVER CONTRIBUTIONS - ---------------------- A rollover contribution is a transfer of money or property to the Plan upon distribution from another qualified employee benefit plan or from an Individual Retirement Account. If you receive such a distribution, you may make a written request to the Investment Advisory Board to make a rollover contribution to the Plan even if you are not a participant in the Plan. A rollover contribution must be made within 60 days of your receipt of the distribution and must meet certain rules set forth in the Plan and the Internal Revenue Code. If you make a rollover contribution to the Plan, your contribution will be credited to a rollover subaccount established within your Prior Participant Account. You will be considered a participant in the Plan only for the purpose of maintaining this subaccount. You will not be eligible for Company contributions or forfeitures, nor will you be eligible to make deferred wage contributions until you satisfy the requirements set forth on Page 1103. Your rollover subaccount will be credited with investment gains or losses as described on Page 1113. You will always be fully vested in your rollover subaccount. CLAIMING YOUR BENEFITS - ---------------------- When you terminate your employment or retire, you should complete a form to request the manner in which you would like your account balances distributed. If you feel you are entitled to benefits that have not been paid, you may notify the Investment Advisory Board in writing. Within 90 days after receiving your claim, the Investment Advisory Board will either grant or deny - 16 - your claim. If your claim is denied for any reason, the Investment Advisory Board will provide written notice of the denial setting forth. - - the specific reasons for denial, - - reference to the Plan provisions on which the denial is based, - - any additional information necessary to perfect the claim, and - - a description of the procedure for requesting a review of the denial. APPEALING A DENIED CLAIM - ------------------------ If you are not satisfied with the Investment Advisory Board's decision, you may appeal. If you decide to proceed with a formal appeal, you may submit additional information and comments with your request. You may also request and receive copies of pertinent documents, although in some cases approval may be needed for the release of confidential information. Any formal written appeal should include the following: - - the date on which your request for review was filed with the Investment Advisory Board, - - the specific portions of the Investment Advisory Board's denial that you wish the Board to review, - - a statement of why you believe the Investment Advisory Board should reverse its previous denial of your claim, and - - any written material you wish the Investment Advisory Board to examine in its consideration of your position. You must file your written appeal within 60 days after you have been notified of the claim's denial. A decision will be made within 60 days following the receipt of your request for review. Notification of the decision on review will specify the reasons for the decision. Any decision made by the Investment Advisory Board in good faith is final and binding. ADMINISTRATIVE INFORMATION - -------------------------- FORMAL PLAN DOCUMENT This document is only a summary of the Plan. It is not a part of the formal Plan document and does not modify the Plan. In the event of conflict between this summary and the formal Plan document, the terms of the formal Plan document will control. The Plan document may be examined at any reasonable time in the Fort Howard offices. If you have any questions about the Plan after reading this summary, you should contact the Personnel Department. - 17 - NAME AND ADDRESS OF EMPLOYER Fort Howard Corporation 1919 South Broadway P. O. Box 19130 Green Bay, Wisconsin 54307-9130 Telephone: (414) 435-8821 ID No. 39-1090992 PLAN YEAR AND PLAN NUMBER The financial records of the Plan are kept on a Plan Year basis ending on each December 31. The Plan number is 001. PLAN ADMINISTRATOR The Plan Administrator is the Investment Advisory Board, which is a group of individuals appointed by the Chairman of the Board of the Company. The Plan Administrator has the authority to control and manage the operation and administration of the Plan. The Plan Administrator's address and telephone number are: Investment Advisory Board c/o Fort Howard Corporation 1919 South Broadway P. O. Box 19130 Green Bay, Wisconsin 54307-9130 Telephone: (414) 435-8821 The Plan Administrator's decisions will be final and binding. TRUSTEE All contributions to the Plan are deposited into a trust fund, which is held and invested pursuant to a trust agreement between the Company and the Trustee. The name and address of the Trustee are: Mellon Bank, N.A. One Mellon Bank Center Pittsburgh, Pennsylvania 15258 AGENT FOR SERVICE OF LEGAL PROCESS The Plan Administrator is designated as the agent for service of legal process. Legal process may be served upon the Plan Administrator or the Trustee of the Plan at the addresses set forth in the preceding sections. TYPE OF PLAN The Plan is a profit sharing and salary deferral (401(k)) plan. The Plan is not insured by the Pension Benefit Guaranty Corporation (PBGC) because the PBGC does not extend its insurance program to these types of plans. FUTURE OF THE PLAN Although the Company intends to continue the Plan indefinitely, the Company reserves the right to terminate, suspend, withdraw, amend or modify the Plan - 18 - in whole or in part at any time, subject to the provisions of the Plan. If the Plan should ever terminate, you will be 100% vested in all of your account balances. NO CONTRACT OF EMPLOYMENT This Plan is not a contract of employment between Fort Howard and any person, nor does it give any person a right to continue in the employment of Fort Howard or limit in any way the right of Fort Howard to discharge any person at any time, with or without notice and with or without cause, which right is hereby reserved. ASSIGNMENT OF BENEFITS Except as may be required by the tax withholding provisions of the Internal Revenue Code or any state's income tax act, or by a qualified domestic relations order, your accounts under the Plan are not subject to the claims of your creditors and cannot be assigned in any way or used as collateral. YOUR RIGHTS UNDER ERISA - ----------------------- As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all Plan participants shall be entitled to: Examine, without charge, at the Plan Administrator's office, all Plan documents and copies of all documents filed by the Plan with the U.S. Department of Labor, such as annual reports and Plan descriptions. Obtain copies of all Plan documents and other Plan information upon written request to the Investment Advisory Board. The Investment Advisory Board may make a reasonable charge for the copies. Receive a summary of the Plan's annual financial report. The Investment Advisory Board is required by law to furnish each participant with a copy of this summary annual report. Obtain a statement of your vested accounts under the Plan. If you do not have vested rights, the statement will tell you how many years you have to work to have vested rights. This statement must be requested in writing and is not required to be given more than once a year. The Plan must provide the statement free of charge. In addition to creating rights for Plan participants, ERISA imposes duties upon the persons who are responsible for the operation of the Plan. The persons who operate your Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries. No one, including your employer or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a retirement benefit or exercising your rights under ERISA. If your claim for a retirement benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have a right to have the Plan review and reconsider your claim. - 19 - Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in federal court. In such a case, the court may require the Investment Advisory Board to provide the materials and pay you up to $100 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Investment Advisory Board. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that the Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. If you have any questions about the Plan, you should contact the Investment Advisory Board. If you have any questions about this statement or about your rights under ERISA, you can contact the nearest area Office of the U.S. Labor- Management Services Administration, Department of Labor. - 20 - EX-23 7 Exhibit 23 ---------- CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated January 31, 1995, included in Fort Howard Corporation's Form 10-K for the year ended December 31, 1994, and our report dated May 11, 1995, included in Fort Howard Corporation's Form 11-K for the year ended December 31, 1994, and to all references to our Firm included in this registration statement. ARTHUR ANDERSEN LLP Milwaukee, Wisconsin December 27, 1995. -----END PRIVACY-ENHANCED MESSAGE-----