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Exhibit 10.6
TUSCARORA INCORPORATED
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DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS
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1. Purpose
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The purpose of the Deferred Compensation Plan for Non-Employee
Directors (the "Plan") is to offer each non-employee member of the
Board of Directors (the "Board") of Tuscarora Incorporated (the
"Company") the opportunity to defer receipt of the compensation to be
earned for services as a director of the Company until after
termination of service as a director.
2. Definitions
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(a) "Account" or "Accounts" means one or more of the Interest
Account or the Stock Account maintained for a Participant.
(b) "Beneficiary" means the beneficiary provided for under
Section 7.
(c) "Committee" means the Compensation Committee (or any
successor) of the Board.
(d) "Common Stock" means the Common Stock, without par value, of
the Company.
(e) "Common Stock Unit" means a hypothetical share of the Common
Stock.
(f) "Compensation" means a Participant's annual retainer, fees for
attending meetings of the Board (i.e., Board meeting fees) and
compensation as chairman or a member of a Board Committee.
(g) "Interest Account" means a bookkeeping account maintained for
a Participant who elects to defer Compensation to it and to
which interest equivalents are credited.
(h) "Participant" means an eligible director who has elected to
participate in the Plan.
(i) "Stock Account" means a bookkeeping account maintained for a
Participant who elects to defer Compensation to it and to
which Common Stock Units are credited.
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3. Eligibility
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All directors of the Corporation who are not at the time also serving
as salaried employees of the Company are eligible to participate in
the Plan.
4. Deferral of Compensation
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(a) For any fiscal year, a Participant may elect to have (i) all
but not part of his or her Board meeting fees and/or (ii) all
but not part of his or her other Compensation deferred under
the Plan and credited to either the Interest Account or the
Stock Account.
(b) Except for the 1995 fiscal year, (i) each deferral election
must be made in writing prior to the start of the fiscal year
for which it is to become effective and (ii) will be
irrevocable for the next succeeding fiscal year, and unless
revoked in writing or superseded by a new election in writing
effective for fiscal years after the year in which such
revocation or new election is made, continue in effect for
each fiscal year thereafter. For the 1995 fiscal year,
deferral elections may be made prior to the 1994 Annual
Meeting of Shareholders by all directors who will continue as
directors after the Annual Meeting and within 30 days after
the Annual Meeting by new directors elected at the Annual
Meeting. Each deferral election must be made on a deferral
election form approved by the Company's Chief Financial
Officer.
(c) A deferred amount will be credited on the books of the Company
as a bookkeeping entry to the Interest Account or the Stock
Account of the Participant on the same date that the amount
would otherwise be paid to the Participant. No assets of the
Company will be segregated or earmarked in respect to any
amount credited to an Account and all Account balances will
constitute unsecured contractual obligations of the Company to
the Participants.
(d) Deferred amounts credited to the Interest Account will accrue
interest equivalents at a rate equal to 100% of the highest
Applicable Federal Rate for the period commencing on each
January 1 or July 1, as the case may be, determined pursuant
to Section 1274(d) of the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated thereunder
or in connection therewith, or such other rate as may be
required by any applicable successor law or regulation.
Interest equivalents will be compounded semi-annually as of
each January 1 and July 1.
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(e) Deferred amounts credited to the Stock Account will be
converted to Common Stock Units. The number of Common
Stock Units to be credited to the Stock Account of a
Participant will be the number determined by dividing the
deferred amount credited to the Stock Account by the closing
sales price of a share of the Common Stock on the date as of
which the deferred amount is credited (or if the Common Stock
was not traded on that date, on the next preceding date on
which it was traded), on the NASDAQ National Market System, as
reported in The Wall Street Journal. The number of Common
Stock Units will be carried to three decimal places. In
addition, dividend equivalents will be credited to each Stock
Account as additional Common Stock Units as of each dividend
payment date. The number of additional Common Stock Units to
be credited to the Stock Account of a Participant will be the
number determined by dividing the product of (i) the dividend
per share of the Common Stock which is payable as of the
dividend payment date, and (ii) the number of Common Stock
Units credited to the Stock Account as of the applicable
dividend record date by (iii) the closing sales price of a
share of the Common Stock on the dividend payment date (or if
the Common Stock was not traded on that date, on the next
preceding date on which it was traded) on the NASDAQ National
Market System, as reported in The Wall Street Journal. The
number of additional Common Stock Units will also be carried
to three decimal places.
(f) In the event of any change in the outstanding shares of the
Common Stock, or in the number thereof, by reason of any stock
dividend or split, recapitalization, reorganization, merger,
consolidation, combination, sale of assets, exchange of
shares, spin-off or similar change, unless the Committee shall
determine otherwise, a corresponding change will be made in
the Common Stock Units, or the number thereof, credited to the
Stock Account, and any such change will be conclusive and
binding for all purposes.
5. Transfers Between the Accounts
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Transfers may not be made between the Accounts.
6. Payments From the Accounts
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(a) Payments from the Accounts will be made in cash.
(b) A Participant may elect to have payments from his or her
Interest Account and/or Stock Account made in a lump sum or in
up to 10 annual installments after the Participant ceases to
be a director of the Company. Separate payment elections may
be made with respect to payments from the Interest Account and
the Stock Account. If a lump sum payment is elected, the
payment will be made
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within 30 days after director status ceases. If
installment payments are elected, the first installment
payment will be made within 30 days after director status
ceases and installments after the first installment will be
paid within 30 days after the first day of January of each
year after the first installment.
(c) The initial payment election with respect to the Interest
Account or Stock Account must be made in writing at the same
time as the initial deferral election to the Interest Account
or the Stock Account. Each initial payment election with
respect to the Interest Account or the Stock Account is
irrevocable except that by making a new payment election prior
to the commencement of a fiscal year, a Participant may change
the payment method prospectively with respect to Compensation
deferred to the Interest Account or the Stock Account for
fiscal years commencing after the new payment election is
made. Each payment election must be made on a payment
election form approved by the Company's Chief Financial
Officer.
(d) In the case of installment payments from an Account, the
amount of each installment will be calculated so as to provide
approximately equal payments over the period designated. In
calculating the amount to be paid from the Stock Fund, the
value of Common Stock Units will be calculated on the basis of
the closing sales price of a share of the Common Stock on the
day prior to the date of payment (or if the Common Stock is
not traded on that date, on the next preceding date on which
it was traded) on the NASDAQ National Market System as
reported in The Wall Street Journal.
(e) In the event of the death of a Participant prior to the
payment of all amounts hereunder, payment from the Accounts
will be made to the Participant's Beneficiary in the same
manner as previously elected by the Participant or in a lump
sum as designated by the Participant in the Participant's
beneficiary designation form (see Section 7 below). In the
event that no person designated as Beneficiary survives the
Participant, payment from the Accounts will be made in a lump
sum to the Participant's estate.
7. Beneficiary Designation.
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At the time of a Participant's initial deferral election, the
Participant must designate in writing the person or persons to be
Beneficiary to receive any unpaid amounts under the Plan after the
death of the Participant. A Beneficiary designation may be changed at
any time prior to the death of the Participant. Each Beneficiary
designation must be made on a beneficiary designation form approved by
the Company's Chief Financial Officer.
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8. General Provisions
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(a) The Board may modify or amend the Plan, in whole or in part,
from time to time, or terminate the Plan at any time, without
the consent of any Participant or Beneficiary; provided,
however, that any modification, amendment or termination must
be of general application to all Participants and
Beneficiaries and must not, without the consent of the
Participant or, in the event of his or her death, the
Participant's Beneficiary adversely affect (i) any amount
credited to the Participant's Account(s) or (ii) the right of
the Participant to receive all amounts credited to the
Participant's Account(s), as of the date of such modification,
amendment or termination.
(b) The rights of a Participant (or Beneficiary) to the payment of
deferred compensation as provided in the Plan may not be
assigned, transferred, pledged or encumbered in any respect.
No Participant or Beneficiary) may borrow against an Account.
No account may be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, whether
voluntary or involuntary, including any liability which is for
alimony or other payments for the support of a spouse or
former spouse, or for any other relative of any Participant
(or Beneficiary).
(c) The Committee has full power to administer and interpret the
Plan and to adopt such rules, regulations, procedures and
resolutions consistent with the terms of the Plan as the
Committee deems necessary or advisable to carry out the terms
of the Plan.
(d) The place of administration of the Plan is conclusively deemed
to be within the Commonwealth of Pennsylvania, and the
validity, construction, interpretation and administration of
the Plan, and of any determinations or decisions made
thereunder, and the rights of any and all persons having or
claiming to have any interest therein or thereunder, will be
governed by, and determined exclusively and solely in
accordance with, the laws of the Commonwealth of Pennsylvania.
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