THE MEAD CORPORATION
EXECUTIVE CAPITAL ACCUMULATION PLAN
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(As Amended and Restated Effective January 1, 1999)
TABLE OF CONTENTS
SECTION 1 - GENERAL . . . . . . . . . . . . . . . . . . . . . .1
1.1 Purpose and Effective Date . . . . . . . . . . . . .1
1.2 Plan Funding and Administration. . . . . . . . . . .1
1.3 Applicable Law . . . . . . . . . . . . . . . . . . .2
1.4 Gender and Number. . . . . . . . . . . . . . . . . .2
1.5 Assignment . . . . . . . . . . . . . . . . . . . . .2
1.6 Plan Year. . . . . . . . . . . . . . . . . . . . . .2
SECTION 2 - PARTICIPATION . . . . . . . . . . . . . . . . . . .2
2.1 Participation Requirement . . . . . . . . . . . . .2
2.2 Continued Participation . . . . . . . . . . . . . .3
2.3 Participation Not Contract of Employment. . . . . .3
SECTION 3 - DEFERRAL OF INCOME. . . . . . . . . . . . . . . . .3
3.1 Deferred Income Amount. . . . . . . . . . . . . . .3
3.2 Certain Conditions Relating to Income Deferral. . .5
3.3 Annual Election to Participate. . . . . . . . . . .6
SECTION 4 - PARTICIPANT ACCOUNTS. . . . . . . . . . . . . . . .7
SECTION 5 - ROLLOVERS . . . . . . . . . . . . . . . . . . . . .7
5.1 ICEP Rollovers. . . . . . . . . . . . . . . . . . .7
5.2 SERP Rollovers. . . . . . . . . . . . . . . . . . .7
5.3 Excess Plan Rollovers . . . . . . . . . . . . . . .7
5.4 415 Plan Rollovers. . . . . . . . . . . . . . . . .8
SECTION 6 - CREDITING OPTIONS . . . . . . . . . . . . . . . . .8
6.1 Establishment of Crediting Options. . . . . . . . .8
6.2 Participant Change of Crediting Options . . . . . .9
SECTION 7 - ADJUSTMENT OF PARTICIPANT ACCOUNTS. . . . . . . . .9
7.1 Adjustment of Participants' Participant Accounts. .9
7.2 Matching Amount . . . . . . . . . . . . . . . . . 10
7.3 Quarterly Statement of Participant Accounts 11
Balances
SECTION 8 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO
PARTICIPANTS. . . . . . . . . . . . . . . . . . . .11
8.1 Annual Distributions . . . . . . . . . . . . . . . .11
8.2 Interim Distributions. . . . . . . . . . . . . . . .12
8.3 Emergency Distributions. . . . . . . . . . . . . . .12
8.4 Elective Distributions . . . . . . . . . . . . . . .13
8.5 Change in Control Distributions 13
8.6 Withholding. . . . . . . . . . . . . . . . . . . . .13
SECTION 9 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO
BENEFICIARIES . . . . . . . . . . . . . . . . . . .14
9.1 Distribution to Beneficiary. . . . . . . . . . . . .14
9.2 Beneficiary. . . . . . . . . . . . . . . . . . . . .14
SECTION 10 - DISTRIBUTIONS TO INCAPACITATED PERSONS . . . . . .14
SECTION 11 - SECTION 162(m) LIMITATION ON DISTRIBUTIONS . . . .15
11.1 Tentative Section 162(m) Determination . . . . . . 15
11.2 Tentative Determination Amount Not in Excess of
162(m) Limit . . . . . . . . . . . . . . . . . . . 15
11.3 Tentative Determination Amount in Excess of 162(m)
Limit . . . . . . . . . . . . . . . . . . . . . . .16
11.4 Change in Control. . . . . . . . . . . . . . . . . 16
11.5 Certain Definitions. . . . . . . . . . . . . . . . 18
SECTION 12 - DISPUTE RESOLUTION . . . . . . . . . . . . . . . 19
12.1 Notice of Denial . . . . . . . . . . . . . . . . . 19
12.2 Notice of Appeal . . . . . . . . . . . . . . . . . .19
12.3 Decision on Appeal . . . . . . . . . . . . . . . . .20
SECTION 13 - AMENDMENT AND TERMINATION. . . . . . . . . . . . 20
EXHIBIT I - CREDITING OPTIONS
THE MEAD CORPORATION
EXECUTIVE CAPITAL ACCUMULATION PLAN
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SECTION 1 - GENERAL
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1.1 Purpose and Effective Date. Effective
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January 1, 1995, The Mead Corporation ("Mead"), an Ohio
Corporation, established The Mead Corporation Executive Capital
Accumulation Plan (the "Plan"). The Plan was subsequently
amended from time to time and the following provisions
constitute a further amendment, restatement and continuation of
the Plan, effective January 1, 1999. The purpose of the Plan
continues to be to provide recurring annual opportunities for the
deferment of payment of certain amounts otherwise currently
payable to its "Eligible Employees" (as defined below) and those
of any "Affiliate" (as defined below) who meet the requirements
to become a "Participant" set forth in subsection 2.1. Mead and
such Affiliates are sometimes referred to below, individually, as
an "Employer" and, collectively, as the "Employers". The term
"Eligible Employee" means any employee of an Employer:
(a) who is employed in the United States of
America or to whom the Plan has been
extended by the Compensation Committee
of the Board of Directors of Mead (the
"Committee") or its delegate; and
(b) who either:
(i) is compensated by his Employer at a
salary grade at least equivalent to
Mead's salary grade 19; or
(ii) has compensation that exceeds an
amount equal to the amount taken
into account for purposes ofsection
415 of the Internal Revenue Service
Code of 1986 (the "Code") and who
is designated by the Committee or
its delegate as an Eligible
Employee, but only for such period
as the Committee or its delegate
shall decide.
The term "Affiliate" means any entity during the period that it
is, along with Mead, a member of a controlled group of
corporations, a controlled group of trades and businesses, an
affiliated service group or any other entity designated by the
Secretary of the Treasury (as described in sections 414(b),
414(c), 414(m), and 414(o), respectively, of the Code.
1.2 Plan Funding and Administration. The
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benefits payable under the Plan are unfunded and are payable,
when due, from the general assets of Mead; provided, however,
that Mead, in its discretion, may establish or maintain a trust
to pay such amounts, which trust shall be subject to the claims
of Mead's unsecured general creditors in the event of Mead's
bankruptcy or insolvency; and provided, further, that Mead shall
remain responsible for the payment of any such amounts which are
not so paid by any such trust. The Plan shall be administered by
a "Plan Administrator" who is appointed by, and serves at the
pleasure of, the Committee and who has the rights, powers and
duties with respect to the Plan that are hereinafter set forth
and such other rights, powers and duties as are reasonably
necessary for the administration of the Plan. As of the effective
date, the Plan Administrator is the Vice President-Human
Resources of Mead except as to distributions and dispute
resolution matters relating to him.
1.3 Applicable Law. The Plan will be construed
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and administered in accordance with the laws of the State of Ohio
to the extent that those laws are not preempted by the laws of
the United States of America.
1.4 Gender and Number. Where the context admits,
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words in any gender will include any other gender, words in the
singular will include the plural and the plural will include the
singular.
1.5 Assignment. No Plan right or interest of any
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Participant or Beneficiary shall be assignable or transferable,
in whole or in part, either directly or otherwise, including
without limitation thereto, by execution, levy, attachment,
garnishment, pledge or in any other manner, but excluding
transfers by death or mental incompetency; no attempted
assignment or transfer thereof shall be effective; and no such
right or interest shall be liable for, or subject to, any
obligation or liability of any Participant or Beneficiary; except
that a Participant may direct that payments be made during his
lifetime, when due, to a trust established by him and evidenced
to his Employer to be a trust treated as a grantor trust within
the meaning of section 671 of the Code.
1.6 Plan Year. The term "Plan Year" means the
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calendar year.
SECTION 2 - PARTICIPATION
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2.1 Participation Requirement. An
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employee of the Employers who is a Participant in the Plan on
January 1, 1999 will continue as such, subject to the
terms and conditions of the Plan. Each other employee of the
Employers will become a Participant in the Plan as of January 1,
1999, or on any subsequent January 1, if on such January 1 he:
(a) is an Eligible Employee;
(b) has executed an Annual
Participation Election form
(as described in subsection
3.3); and
(c) has executed such forms as the
Plan Administrator may
determine necessary to permit
Mead (at its discretion and
expense) to maintain a policy
of insurance on his life under
the terms of which Mead shall
be the policyholder, owner and
beneficiary.
Each employee of the Employers who becomes an Eligible Employee
on or after January 1, 1999 will become a Participant in the Plan
(on a prospective basis) on the earlier of the date on which the
Plan Administrator has received his executed Annual Participation
Election form if that date is within 30 days of the date he
becomes an Eligible Employee or on any subsequent January 1 if he
then meets the requirements set forth in paragraphs (a) through
(c) above.
2.2 Continued Participation. Until
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distribution of the entire balances of a Participant's
"Participant Accounts" (as described in Section 4) has
been made, a Participant or, in the event of his death, any
"Beneficiary" (as defined in subsection 9.2) of any of the
Participant's undistributed Participant Accounts, as the case may
be, will be considered and treated as a Participant for all
purposes of the Plan, except that any additional compensation
(other than severance benefits) deferral or "401(k) Top-Up
Contribution" (each as described in subsection 3.1) shall cease:
(a) as of the first day of the
month next following the date
on which he is no longer an
Eligible Employee; and
(b) for any period during which
his right to make "Before-tax
Contributions" under The Mead
401(k) Plan (the"401(k) Plan")
is suspended by reason of a
Financial Hardship
distribution made to him under
the terms of that plan.
2.3 Participation Not Contract of
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Employment. The Plan does not constitute acontract of employment
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and participation in the Plan does not give any employee the
right to be retained in the employ of the Employers nor give any
person any right or claim to any benefit under the terms of the
Plan unless such right or claim has specifically accrued under
the terms of the Plan.
SECTION 3 - DEFERRAL OF INCOME
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3.1 Deferred Income Amount. Subject to
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the provisions of subsection 3.2, by entering into a written
Annual Election to Participate as provided by subsection 2.1, a
Participant may elect:
(a) to defer a portion of the
amount of the base salary, the
annual incentive pay (which,
for purposes of the Plan,
shall include any spot bonus)
and the cash portion of the
long-term incentive pay, that
would otherwise be payable to
him for services performed
during the period that the
Annual Election to Participate
is effective;
(b) whether or not he has made an
election pursuant to paragraph
(a) above, a Participant who
has elected to make the
maximum Before-tax
Contribution that he is
permitted under the 401(k)
Plan for the period for which
the Annual Election to
Participate is effective may
elect to make a 401(k) Top-Up
Contribution for that period;
and
(c) to defer a retention bonus or
a severance benefit.
The term "401(k) Top-Up Contribution" means an additional
deferral amount which begins in the month that the maximum
Before-tax contribution allowed under the 401(k) Plan is reached.
The monthly amount of the additional deferral is calculated by
multiplying the deferral percentage elected under the 401(k) Plan
by the salary and incentive compensation that would be eligible
for Before-tax Contributions to the 401(k) Plan (but for section
402(g) of the Code and any 401(k) Plan limitations) for the month
and subtracting from such product the amount, if any, of
Before-tax Contributions to the 401(k) Plan for such month. The
deferral percentage used for purposes of the 401(k) Top-Up
Contribution is the percentage currently elected under the
401(k) Plan for Before-tax Contributions. Subject to the
provisions of paragraph 7.1(d), a Participant's 401(k) Top-Up
Contribution and a portion of his other additional deferral
during any month shall be credited with a "Matching Amount" (as
described in subsection 7.2).
3.2 Certain Conditions Relating to
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Income Deferral. Deferrals of income permitted by subsection
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3.1 are subject to the following:
(a) The amount of a Participant's
annual base salary deferral:
(i) shall not exceed 80
percent of the amount of
that salary, determined
as of the last day of the
month during which the
election is made;
(ii) shall, at a Participant's
election made on his
Annual Written Election
to Participate, be
automatically increased
by an amount equal to all
or any part of the amount
of the income realized by
the Participant on the
exercise of non-qualified
stock options granted to
him by an Employer and
held by him for at least
5 years, subject to the
limitations of paragraph
(i) next above and to the
following:
(A) the amount of
increased deferral
shall:
(1) not exceed an
amount equal to
the
Participant's
remaining
unpaid annual
base salary for
the year of
exercise;
(2) be made in
equal monthly
increments,
beginning with
the calendar
month next
following the
month of
exercise of the
non-qualified
stock option
and continuing
for the
remainder of
the calendar
year;
(B) a Participant may
not elect an
increased deferral
with respect to
income realized on
account of his
exercise of a
non-qualified stock
option during the
month of December of
any calendar year;
and
(C) if a Participant is
subject to stock
ownership guidelines
established by Mead,
the increased
deferral
contemplated by this
paragraph 3.2(a) is
conditioned on the
Participant's
conformance with
those guidelines.
(b) a Participant may defer up to
80 percent of the amount of
his annual incentive pay and
of any spot bonus paid in lieu
of incentive pay;
(c) a Participant may defer up to
100 percent of the amount of
the cash portion of his
long-term incentive pay, spot
bonuses (other than spot
bonuses paid in lieu of
incentive pay), retention
bonuses and severance
benefits;
(d) all deferrals shall be
expressed in multiples of 1
percent; and
(e) in no event shall any portion
of the amount of any excess
Before-tax Contribution
returned to a Participant in
accordance with the terms of
the 401(k) Plan be subject to
deferral under this Plan.
3.3 Annual Election to Participate.
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The term "Annual Election to Participate" means a written
agreement, in a form furnished by the Plan Administrator, entered
into by and between a Participant and his Employer with respect
to a calendar year and setting forth:
(a) the deferral percentages
elected by the Participant in
accordance with paragraphs
3.1(a) and (b) for that
calendar year;
(b) the percentage of his total
deferral that is allocated to
each of the "Crediting
Options" (as described in
subsection 6.1) selected by
him;
(c) the "Distribution Period" (as
defined below) that he elects
to be applicable with respect
to the amounts deferred
pursuant to that Annual
Election to Participate and,
if applicable, the "Interim
Distribution" amount or
percentage that he elects to
have applicable to such
amounts as permitted by
subsection 8.2;
(d) subject to the provisions of
paragraph 8.1(b), the calendar
year in which the Distribution
Period is to commence; and
(e) the Beneficiary who is to
receive the remaining balance
of the Participant Accounts
established for the
Participant by reason of that
Annual Election to Participate
in the event of the
Participant's death prior to
distribution of the entire
balance of that Account to
him.
Each Annual Election to Participate shall be irrevocable by the
Participant after the last day of the calendar month preceding
its effective date. The term "Distribution Period" means, with
respect to any Participant Account, a period of 5, 10, 15 or 20
calendar years as elected by the Participant for whom the Account
is maintained.
3.4 Additional Elections to Defer. A
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written agreement, in a form furnished by the Plan Administrator,
can be entered into by and between a Participant and his Employer
to defer amounts listed in paragraph 3.1(c). The election to
defer any such amount must be made by one of the following dates
that is applicable:
(a) with respect to retention
bonuses, within 30 days
after the employee is notified
that he is eligible for such
bonus, but before such amount
becomes payable; and
(b) with respect to a severance
benefit, before such benefit
has been agreed.
SECTION 4 - PARTICIPANT ACCOUNTS
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For each calendar year, the Plan Administrator
shall cause a Participant Account to be established and
maintained by Mead in the name of each Participant to reflect the
amount of any deferrals that are the subject of the Participant's
Annual Election to Participate for that calendar year and of any
Matching Amounts attributable thereto. A Participant's
Participant Accounts shall be adjusted monthly as provided
in subsection 7.1 and shall be distributed to a Participant in
accordance with the provisions of Section 8 or, in the event of
the Participant's death, to his Beneficiary in accordance with
the provisions of Section 9.
SECTION 5 - ROLLOVERS
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5.1 ICEP Rollovers. Notwithstanding any
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provision of the Plan to the contrary, a Participant for whose
benefit a balance is maintained under the Incentive Compensation
Election Plan (the "ICEP") may elect, during December, 1994, to
have that balance transferred to the Plan and credited to a
separate Participant Account (to be identified as his "ICEP
Participant Account") established hereunder as of January 1,
1995, subject to the following:
(a) In no event may a Participant
elect to transfer to this Plan
any amount credited under the
Supplement to the ICEP.
(b) No ICEP rollover to the Plan
shall be permitted after
January 1, 1995.
(c) A Participant's Distribution
Period with respect to his
ICEP Participant Account shall
commence on the date on which
payment of his balance under
the ICEP would have commenced.
5.2 SERP Rollovers. Notwithstanding any
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provision of the Plan to the contrary, if a Participant who is
also a Participant under The Mead Corporation Supplemental
Executive Retirement Plan (the "SERP") has elected, at the time
and in the manner permitted by the SERP, to have any amount
otherwise payable to him under the terms of the SERP transferred
to this Plan and credited to a separate Participant Account then
such an Account (to be identified as his "SERP Participant
Account"), will be established hereunder as of the date payment
would have been made to him under the provisions of the SERP,
subject to the Participant's entering into an agreement setting
forth the matters described in paragraphs 3.3(b) through (e) of
this Plan.
5.3 Excess Plan Rollovers. Notwithstanding any
---------------------
provision of the Plan to the contrary, if a Participant who is
also a Participant under The Mead Corporation Excess Earnings
Benefit Plan (the "Excess Plan") has elected, at the time and in
the manner permitted by the Excess Plan, to have any
amount otherwise payable to him under the terms of the Excess
Plan transferred to this Plan and credited to a separate
Participant Account then such an Account (to be identified as his
"Excess Plan Participant Account") will be established hereunder
as of the date payment would have been made to him under the
provisions of the Excess Plan, subject to the Participant's
entering into an agreement setting forth the matters described in
paragraphs 3.3(b) through (e) of this Plan.
5.4 415 Plan Rollovers. Notwithstanding any
------------------
provision of the Plan to the contrary, if a Participant who is
also a Participant under The Mead Corporation Section 415 Excess
Benefit Plan (the "415 Plan") has elected, at the time and in the
manner permitted by the 415 Plan, to have any amount otherwise
payable to him under the terms of the 415 Plan transferred to
this Plan and credited to a separate Participant Account then
such an Account (to be identified as his "415 Plan Participant
Account") will be established hereunder as of the date payment
would have been made to him under the provisions of the 415 Plan,
subject to the Participant's entering into an agreement setting
forth the matters described in paragraphs 3.3(b) through (e) of
this Plan.
SECTION 6 - CREDITING OPTIONS
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6.1 Establishment of Crediting Options.
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The Committee shall designate "Crediting Options" (in such number
and of such asset character as it shall decide), the investment
experience of which shall be applied in adjusting Participants'
Participant Accounts, as provided in subsection 7.1. The
Crediting Options available as of January 1, 1999 are set
forth on Exhibit I of the Plan. On advance written notice to the
Participants, the Committee may cause any Crediting Option to be
prospectively deleted and may designate other Crediting Options.
In no event shall the assets of a Crediting Option be constituted
of securities of any Employer or Affiliate. Should any Employer
determine to invest any of its funds in the asset or assets
constituting a Crediting Option, amounts representing such
investment shall be the sole property of that Employer and shall
be subject to the claims of its general creditors. No
Participant or Beneficiary shall have any claim or right with
respect to any such amounts. Notwithstanding the foregoing
provisions of this subsection 6.1, upon and after the occurrence
of a Change in Control, the Committee shall have no power to
eliminate any Crediting Option which was available immediately
prior to the Change in Control and, if any Crediting Option shall
be eliminated through circumstances beyond the control of the
Committee, the Committee shall immediately add a Crediting Option
which will provide an investment return equal to
one-hundred-twenty percent (120%) of the long-term Federal
interest rate determined monthly under section 1274(d) of the
Code, compounded semi-annually.
6.2 Participant Change of Crediting
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Options. By writing filed with the Plan Administrator on or
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before the last business day of February, May, August or November
to be effective as of the first day of the following calendar
quarter, a Participant may elect:
(a) with respect to amounts to be credited
to any Participant Account on and after
that day pursuant to subsection 3.1, the
portion (expressed as a multiple of 1
percent) thereof that is to be adjusted
pursuant to subsection 7.1 to reflect
the investment experience of any
Crediting Option (referred to below as
an "Adjustment Portion"); and
(b) that all or a portion (expressed as a
multiple of 1 percent) of the balance of
any Participant Accounts then maintained
for his benefit that constitutes an
Adjustment Portion be changed to another
Adjustment Portion.
SECTION 7 - ADJUSTMENT OF PARTICIPANT ACCOUNTS
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7.1 Adjustment of Participants'
---------------------------
Participant Accounts. As of each "Accounting Date" (as defined
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below), the Plan Administrator shall cause each Participant
Accounts to be adjusted as follows:
(a) first, by charging to the
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proper Participant Accounts of
each Participant the amount of
any distribution made to, or
on account of, the Participant
from the Account since the
last preceding Accounting Date
and with the amount of any
forfeiture resulting from an
Elective Distribution made to
him pursuant to the provisions
of subsection 8.4, which
charges shall be made, pro
rata, according to the
Adjustment Portions of that
Participant Accounts;
(b) next, by adjusting each
----
Participant Account maintained
on behalf of a Participant,
upward or downward, as the
case may be, so that the
balance of the Participant
Accounts equals the aggregate
investment experience for the
month ended on that Accounting
Date of the Adjustment
Portions elected by him and
applicable to that Participant
Account as of that date;
(c) next, by crediting the last
----
Participant Account
established on behalf of
each Participant with the
amount of any deferrals made
by him during the month ending
on that date, and with any
Matching Amount to be credited
for that month, which amounts
shall be credited, pro rata,
according to Adjustment
Portions elected by the
Participant under that
Participant Account;
(d) next, if the Accounting Date
is December 31 and if the
Participant hasnot made
Before-Tax Contributions under
the 401(k) Plan for the
calendar year ended on that
date equal to the lesser of
the amount permitted under
section 402(g) of the Code for
that year or the amount
permitted by the terms of the
401(k) Plan for that year, by
debiting the Participant
Account established on behalf
of the Participant for the
calendar year ending on that
December 31 with an amount
equal to the Matching Amount
previously credited to that
Account, plus any increment
attributable thereto;
(e) next, if the Accounting Date
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is December 31, by charging
the Participant Account
established on behalf of each
Participant for the calendar
year ending on that December
31 with an annual
administrative fee of $100,
which administrative fee shall
be charged, pro rata,
according to the Adjustment
Portions of that Participant
Account; and
(f) finally, if the Accounting
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Date is the last day of a
calendar quarter, by executing
the Adjustment Portion change
elections made pursuant to the
provisions of subsection 6.2
that are to be effective as of
first day the next following
calendar quarter.
The term "Accounting Date" means the last business day of each
calendar month.
7.2 Matching Amount. A portion of the
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amount deferred, including the 401(k) Top-Up Contributions, is
eligible for a "Matching Amount." Subject to the provisions of
paragraph 7.1(d), the Matching Amount is made monthly with
respect to a deferred amount which is equal to the product
obtained by multiplying the deferral percentage elected under the
401(k) Plan by the gross salary and other cash compensation
(except for long term incentive compensation and severance
benefits) payable during a month and subtracting from such
product the portion of the Before-tax Contribution transferred to
the 401(k) Plan for such month and that is eligible for a
Matching Contribution thereunder. The deferral percentage used
for purposes of calculating the Matching Amount is the monthly
percentage in effect under the 401(k) Plan for Before-tax
Contributions and for months after the maximum contribution to
the 401(k) Plan is reached, the deferral percentage currently
elected under the 401(k) Plan for the month that the maximum
contribution is reached, provided that the deferral percentage
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cannot exceed the maximum percentage eligible for Matching
Contributions pursuant to the 401(k) Plan. The term "Matching
Amount" means a credit with respect to the deferral amount, as
determined pursuant to this subsection 7.2. The Matching Amount
is equal to the Matching Contribution that would have been made
on the eligible deferred amount as described in this subsection
7.2 had such deferral been made under the 401(k) Plan.
7.3 Quarterly Statement of Participant
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Accounts Balances. As soon as practicable, but not more than 30
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days after the last day of each calendar quarter, the Plan
Administrator shall provide each Participant with a statement of
the balances of his Participant Accounts as of that day.
SECTION 8 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO PARTICIPANTS
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8.1 Annual Distributions. Except as
--------------------
otherwise provided in this Section 8, if a Participant's
employment with the Employers and Affiliates is terminated
for any reason other than his death, and on the June 30 preceding
his initial "Distribution Payment Date" (as defined below) the
aggregate balances of his Participant Accounts equal at least
$50,000, each of the Participant's Participant Accounts will be
distributed to him in annual "Installment Distributions" (in the
annual amount determined as provided below), made on or about
each Distribution Payment Date, beginning:
(a) in the case of a Participant
whose employment terminates at
any age on account of
"disability" (as determined by
the Plan Administrator) or for
any reason at or after
reaching age 55 years, on or
about the Distribution Payment
Date of the calendar year
elected by him; and
(b) in all other cases, and
notwithstanding any previous
election, on or about the
Distribution Payment Date of
the calendar year next
following the calendar year
during which his termination
of employment occurs;
and continuing for the number of calendar years constituting the
Distribution Period he has irrevocably elected with respect to
that Participant Account. If on the June 30 preceding his
initial Distribution Payment Date the aggregate balances of a
Participant's Participant Accounts is an amount that is less than
$50,000, those balances shall be distributed to him on or about
his initial Distribution Payment Date in a single lump sum. The
amount of the annual "Installment Distribution" from a
Participant Account for a calendar year shall be equal to the
balance of that Participant Account as of June 30 of that year,
divided by the number of calendar years remaining in the
Distribution Period elected by the Participant with respect to
that Account. Notwithstanding any of the foregoing to the
contrary, if a Participant with respect to whom a Participant
Account has been established for calendar year 1995 or 1996 has
elected a Distribution Period that is less than 10 calendar
years, then, at any time, but at least one year prior to his
initial Distribution Payment Date, he may elect to have his
Distribution Period with respect to any such Participant Account
occur over a period of 10 or more years commencing on the
previously elected initial Distribution Payment Date. The term
"Distribution Payment Date" means July 20 of each year.
8.2 Interim Distributions. Subject to
---------------------
the following provisions of this subsection 8.2, at the time that
a Participant enters into an Annual Participation Election form,
he may elect to receive, as of any Distribution Payment Date
occurring at least 7 years after the effective date of that
Agreement, an Interim Distribution of any portion of the balance
of the Participant Account established by that Agreement,
determined as of the June 30 immediately preceding that
Distribution Payment Date. If a Participant becomes entitled to
receive an Interim Distribution from a Participant Account on or
after the initial Distribution Payment Date applicable to that
Account, no Interim Distribution shall be made to him and his
Installment Distributions being made pursuant to subsection 8.1
shall continue. A Participant shall express his election of an
Interim Distribution as a flat dollar amount or as a percentage
of the balance of his Participant Account, determined as of the
June 30 immediately preceding the date as of which the Interim
Distribution is to be made. Any Interim Distribution election
made by a Participant shall be automatically cancelled on the
date of his death. Notwithstanding any of the foregoing to the
contrary, if a Participant has elected to receive an Interim
Distribution with respect to a Participant Account established
for calendar years 1995 and 1996, then, at any time, but at
least one year prior to such Interim Distribution, he may elect
to reduce such Interim Distribution payable.
8.3 Emergency Distributions. If, on
-----------------------
written application of a Participant, it is determined (as
provided below) that the Participant has experienced an
"Unforeseeable Emergency" (as defined below), then, as of the
first day of any calendar month, the Participant may elect to
receive an Emergency Distribution from one or more of his
Participant Accounts, provided that the aggregate amount of any
such distribution shall not exceed the amount reasonably needed
to satisfy the Participant's emergency need. The term
"Unforeseeable Emergency" means severe financial hardship to
the Participant resulting from a sudden and unexpected illness or
accident of the Participant or of a "dependent" (as defined in
section 152(a) of the Code) of the Participant, loss of the
Participant's property due to a casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result
of events beyond the control of the Participant. In determining
whether an Emergency Distribution should be made to a Participant
consideration may be given to the extent to which his
Unforeseeable Emergency can be relieved:
(a) through reimbursement or
compensation by insurance or
otherwise;
(b) by liquidation of the
Participant's assets, to the
extent the liquidation of such
assets would not itself cause
severe financial hardship;
(c) by cessation of deferrals
under the Plan; or
(d) other distributions to be made
to the Participant from the
Plan.
A determination with respect to whether a Participant has
experienced an Unforeseeable Emergency shall be made:
(a) in the case of a Participant
employed, or last employed, by
an Employer at a salary grade
below salary grade 24
(exclusive of an elected
officer of an Employer) and
his Beneficiary, the Plan
Administrator; and
(b) in the case of a Participant
employed, or last employed, by
an Employer at salary grade 24
or above or as an elected
officer of an Employer and
their Beneficiaries, the
Committee.
The provisions of Section 12 of the Plan shall not be applicable
with respect to any determination made pursuant to this
subsection 8.3.
8.4 Elective Distributions. As of the first day
----------------------
of any calendar month a Participant may elect, by writing filed
with the Plan Administrator, to receive an Elective Distribution
from one or more of his Participant Accounts, provided, however,
that if a Participant receives an Elective Distribution he shall
forfeit an amount equal to 20 percent of the amount of that
Elective Distribution, which amount shall be charged to
his Participant Accounts as provided in paragraph 7.1(a).
8.5 Change in Control Distributions.
-------------------------------
In connection with, but prior to, a "Change in Control" (as
defined in subsection 11.4), the Committee, in its sole
discretion, may authorize a Participant's Participant Accounts to
be distributed to him in a single lump sum.
8.6 Withholding. A Participant's
-----------
Employer shall withhold from the non-deferred portion of his
compensation for any period all Social Security Taxes as
required by sections 3101, 3102 and 3121(v) of the Code to be
paid with respect to the amount of his deferrals under the Plan
for that period. The Plan Administrator shall cause to be
withheld from any distribution made pursuant to the terms of the
Plan any other amount required to be withheld by federal, state
or local law.
SECTION 9 - DISTRIBUTION OF PARTICIPANT ACCOUNTS TO BENEFICIARIES
- -----------------------------------------------------------------
9.1 Distribution to Beneficiary. If a
---------------------------
Participant dies (either prior to or following his termination of
employment with the Employers and Affiliates) the undistributed
balance of each of his Participant Accounts will:
(a) if distribution has commenced
prior to his death, continue
to be distributed in annual
Installment Distributions, to
the deceased Participant's
Beneficiary with respect to
the Participant Account during
the remainder of the
Distribution Period applicable
to that Account as if the
deceased Participant had
lived; and
(b) if distribution has not
commenced prior to his death,
be distributed in annual
Installment Distributions
commencing on the Distribution
Payment Date and over the
Distribution Period elected by
the deceased Participant with
respect to that Participant
Account.
9.2 Beneficiary. The term
-----------
"Beneficiary" means, with respect to any Participant (or a
Participant's Beneficiary), such natural or legal person or
persons as may be designated by him (who may be designated
contingently or successively) to receive the remaining balance of
one or more of his Participant Accounts if he dies before a total
distribution of the balance is made to him. A Beneficiary
designation will be effective with respect to a Participant
Account only when a signed and dated Beneficiary designation form
applicable to that Account is filed with the Plan Administrator
while the Participant is alive, which form will cancel any
Beneficiary designation form relating to that Participant
Account signed and filed earlier. The same also applies to a
Beneficiary designation filed by a Beneficiary. If a Beneficiary
survives a Participant and such Beneficiary dies before a total
distribution of his Participant Accounts (without a contingent or
successive Beneficiary designated by a Participant), the balance
of such Account will be made to any person designated by such
Beneficiary. If a Participant (or his Beneficiary) is not
survived by any Beneficiary of a Participant Account, the Plan
Administrator shall distribute the balance of that Participant
Account to the legal representative or representatives of the
estate of the Participant (or his Beneficiary).
SECTION 10 - DISTRIBUTIONS TO INCAPACITATED PERSONS
- ---------------------------------------------------
Notwithstanding any other provision of the Plan,
if a Participant or other person entitled to a distribution under
the Plan is determined by a court of competent jurisdiction to be
physically, mentally or legally incapacitated and unable to
manage his financial affairs and claim is made by a conservator
or other person legally charged by such court with the care of
his person, the Plan Administrator shall make distributions to
such conservator or other person. Any distribution made in
accordance with this Section shall fully acquit and discharge
all persons from all further liability on account thereof.
SECTION 11 - SECTION 162(m) LIMITATION ON DISTRIBUTIONS.
- -------------------------------------------------------
11.1 Tentative Section 162(m)
----------------------
Determination. Notwithstanding any other provision of the Plan
- ------------- to the contrary, prior to a Participant's
Distribution Payment Date for any calendar year, the Chairperson
of the Committee may, in the Chairperson's discretion, make a
tentative determination as to whether the sum of:
(a) amounts otherwise
distributable to the
Participant under the Plan as
of that Distribution Payment
Date; and
(b) all other compensation
expected to be payable to the
Participant and deductible by
the Employers for that
calendar year;
will exceed the maximum deductible amount permitted with respect
to the Participant for that calendar year by section 162(m) of
the Code. Based on the Chairperson's tentative decision, the
provisions of subsection 11.2 or 11.3, as the case may be, shall
become applicable with respect to the Participant.
Notwithstanding the foregoing, the provisions of this Section
shall not be applicable with respect to any distribution
payable from the Plan during any calendar year following the
calendar year in which a "Change in Control" (as defined in
subsection 11.4) occurs.
11.2 Tentative Determination Amount Not in Excess
---------------------------------------------
of 162(m) Limit. If the Chairperson of the Committee tentatively
- --------------- determines that the sum of the amounts described
in paragraphs 11.1(a) and (b) payable to a Participant for a
calendar year will be fully deductible by the Employers for that
year, distribution from his Participant Accounts shall be made to
the Participant in accordance with the provisions of Section 8 of
the Plan as of his Distribution Payment Date. However, during
the month of December of that calendar year, the Chairperson of
the Committee shall make a final determination with respect to
whether the amounts described in paragraphs 11.1(a) and (b) are
fully deductible by the Employers, within the limitation of
section 162(m) of the Code. If he determines that they are not,
any amount distributed from a Participant's Participant Accounts
during the calendar year that is not deductible by the Employers
shall constitute a loan to the Participant and shall be repaid to
the Employers, with interest (at the rate provided by section
1274(d) of the Code), on or before the last day of that calendar
year. Any such repaid amount shall be credited to the
Participant's Participant Account from which it was distributed
as of the Accounting Date coincident with or next following the
date on which it is repaid.
11.3 Tentative Determination Amount in Excess of
-------------------------------------------
162(m) Limit. If the Chairperson of the Committee tentatively
- ------------
determines that the sum of the amounts described in paragraphs
11.1(a) and (b) payable to a Participant for a calendar year will
not be fully deductible by the Employers for that year, the
Chairperson of the Committee may direct that all or any portion
of the balances of the Participant's Participant Accounts
otherwise distributable as of his Distribution Payment Date for
that calendar year be retained under the terms of the Plan.
However, during the month of December of that calendar year, the
Chairperson of the Committee shall make a final determination
with respect to whether any portion of such retained amount will
be fully deductible to the Employer for that calendar year if
distributed to the Participant and such portion that is fully
deductible, if any, shall be distributed to the Participant on or
before that last day of that calendar year. Any such distribution
shall be charged to the Participant's Participant Account from
which it was distributed as of the Accounting Date coincident
with or next following the date of distribution.
11.4 Change in Control. A "Change in Control"
-----------------
shall be deemed to have occurred if an event set forth in any one
of the following paragraphs shall have occurred:
(a) date of expiration of a Tender
Offer (other than an offer by
Mead), if the offeror acquires
Shares pursuant to such Tender
Offer;
(b) the date of approval by the
shareholders of Mead of a
definitive agreement:
(i) for the merger or
consolidation of Mead or
any direct or indirect
subsidiary of Mead into
or with another
corporation, other than:
(A) a merger or
consolidation which
would result in the
voting securities of
Mead outstanding
immediately prior
thereto continuing
to represent,
(I) in the case of
a merger or
consolidation
of Mead, either
by remaining
outstanding or
by being
converted into
voting
securities of
the surviving
entity or
any parent
thereof, or
(II) in the case of
a merger or
consolidation
of any direct
or indirect
subsidiary of
Mead, either by
remaining
outstanding if
Mead continues
as a parent
of the merged
or consolidated
subsidiary or
by being
converted into
voting
securities of
the surviving
entity or any
parent thereof;
at least 51 percent of the
combined voting power of the
voting securities of Mead or
such surviving or parent
entity outstanding immediately
after such merger or
consolidation, or
(B) a merger or
consolidation
effected to
implement a
recapitalization of
Mead (or similar
transaction) in
which no Person (as
defined below) is or
becomes the
Beneficial Owner (as
defined below)
directly or
indirectly, of
securities of Mead
(not including in
the securities
Beneficially Owned
by such Person any
securities acquired
directly from Mead
or its Affiliates)
representing 25
percent or more of
the combined voting
power or Mead's then
outstanding
securities, or
(ii) for the sale or
disposition of all or
substantially all of the
assets of Mead, other
than a sale or
disposition by Mead of
all or substantially all
of Mead's assets to an
entity, at least 51
percent of the combined
voting power of the
voting securities of
which are owned (directly
or indirectly) by
shareholders of Mead in
substantially the same
proportions as their
ownership of Mead
immediately prior to
such sale or disposition;
(c) any Person is or becomes the
Beneficial Owner of 25 percent
or more of the voting power of
the then outstanding
securities of Mead (not
including in the securities
beneficially owned by such
Person any securities acquired
directly from Mead or its
affiliates), excluding any
Person who becomes such a
Beneficial Owner in connection
with a transaction described
in subparagraph (b)(i)(A) or
the date of authorization, by
both a majority of the voting
power of Mead and a majority
of the portion of such voting
power excluding the voting
power of interested Shares,
of a control share acquisition
(as such term is defined in
Chapter 1701 of the Ohio
Revised Code); and
(d) a change in the composition of
the Board of Directors such
that individuals who were
members of the Board of
Directors on the date two
years prior to such change
(and any new directors (other
than a director whose initial
assumption of office is in
connection with an actual or
threatened election contest,
including but not limited to a
consent solicitation, relating
to the election of directors
of Mead) who were elected, or
were nominated for election,
by Mead's shareholders with
the affirmative vote of at
least two-thirds of the
directors then still in office
who either were directors at
the beginning of such two year
period or whose election or
nomination for election was
previously so approved) no
longer constitute a majority
of the Board of Directors.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to have occurred by virtue of the consummation of any
transaction or series of integrated transactions immediately
following which the record holders of the common stock of Mead
immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership
in an entity which owns all or substantially all of the assets of
Mead immediately following such transaction or series of
transactions.
11.5 Certain Definitions. The
-------------------
following definitions shall be applicable with respect to
subsection 11.4:
(a) Affiliate shall have the meaning
---------
set forth in Rule 12b-2 promulgated
under Section 12 of the Exchange
Act.
(b) Beneficial Owner shall have the
----------------
meaning defined in Rule 13d-3 under
the Exchange Act.
(c) Exchange Act shall mean the
Securities Exchange Act of 1934, as
amended from time to time.
(d) Person shall have the meaning given
in Section 3(a)(9) of the Exchange
Act, as modified and used in
Sections 13(d) and 14(d) thereof,
except that such term shall not
include:
(i) Mead or any of its
subsidiaries,
(ii) a trustee or other fiduciary
holding securities under an
employee benefit plan of Mead
or any of its Affiliates,
(iii) an underwriter temporarily
holding securities pursuant to
an offering of such
securities, or
(iv) a corporation owned, directly
or indirectly, by the
shareholders of Mead in
substantially the same
proportions as their ownership
of stock of Mead.
(e) Shares shall mean shares of common
------
stock, without par value, of The
Mead Corporation.
(f) Tender Offer shall mean a tender
------------
offer or a request or invitation
for tenders or an exchange offer
subject to regulation under Section
14(d) of the Exchange Act and the
rules and regulations thereunder,
as the same may be amended,
modified or superseded from time to
time.
SECTION 12 - DISPUTE RESOLUTION
- -------------------------------
12.1 Notice of Denial. If any dispute arises
----------------
with respect to a Participant or Beneficiary (a "Claimant") under
the Plan, Mead will provide the Claimant with a written notice of
its resolution of the dispute setting forth:
(a) the provisions of the Plan upon
which the resolution was based; and
(b) an explanation of this claims
procedure.
If Mead rejects a Claimant's application for failure to furnish
certain necessary materials or information, the written notice to
the Claimant will explain what additional material is needed and
why, and advise the Claimant that he may refile a proper
application. In the event that Mead fails to take any action on
the Claimant's initial application within 90 days after receipt,
the application will be deemed denied, and the Claimant's appeal
rights under subsection 11.2 will be in effect as of the end of
such period.
12.2 Notice of Appeal. Within 60 days after
----------------
the receipt of Mead's notice ofresolution, the Claimant may file
a written notice of appeal of the resolution with the "Claims
Reviewer" (as defined below). In addition, within such appeal
period, the Claimant may review pertinent documents at such
reasonable times and places as the Claims Reviewer may specify
and may submit any additional written material pertinent to the
appeal not set forth in the notice of appeal. The appeal shall
be determined by the Claims Reviewer, and the Claimant shall be
entitled to appear before the Claims Reviewer to present his
claim. The term "Claims Reviewer" means:
(a) in the case of a Participant
employed, or last employed, by an
Employer at a salary grade below
salary grade 24 (exclusive of an
elected officer of an Employer) and
of his Beneficiary, a panel of 3
persons appointed by the Plan
Administrator; and
(b) in the case of a Participant
employed, or last employed, by an
Employer at salary grade 24 or
above or as an elected officer of
an Employer their Beneficiaries,
the Chairperson of the Committee.
12.3 Decision on Appeal. The panel referred
------------------
to in paragraph 12.2(a) or the Chairperson, as the case may be,
will make a written decision on the appeal not later than 60 days
after its receipt of the notice of appeal unless special
circumstances require an extension of time, in which case
a decision will be given as soon as possible, but not later that
120 days after receipt of the notice of appeal. The decision on
the appeal will be in writing and shall include specific reasons
for the decision, making specific reference to the provision of
the Plan upon which the decision was based.
SECTION 13 - AMENDMENT AND TERMINATION
- --------------------------------------
The Committee reserves the right to amend the Plan
at any time, except that no amendment shall reduce a
Participant's Participant Account balances to less than the
amounts that he would have been entitled to receive on the later
of the effective date of the amendment or the date on which the
amendment is adopted. The Plan will terminate on the date on
which it is terminated by the Committee, provided, however, that:
(a) at least two Crediting Options
shall be maintained until the
aggregate balances of all
Participant Accounts have been
distributed; and
(b) distributions from the Plan shall
continue to be made under Section 8
or Section 9, as the case may be,
pursuant to elections previously
made by Participants or as
otherwise provided under Section 8
or 9.
EXHIBIT I
TO
THE MEAD CORPORATION
EXECUTIVE CAPITAL ACCUMULATION PLAN
-----------------------------------
The Crediting Options available under the Plan as of January 1,
1999 are:
Type Fund Managed By
--------- ----------
(1) Money Market PacMutual
(2) Managed Bond PIMCO
(3) Multi Strategy J.P. Morgan
(4) Equity Income J.P. Morgan
(5) Equity Index Bankers Trust
(6) Growth Cap Guardian Trust
(7) Growth L.T. Janus Capital
(8) International Morgan Stanley