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EXHIBIT 10.5
TUSCARORA INCORPORATED
COMMON STOCK PURCHASE PLAN FOR SALARIED EMPLOYEES
(AS AMENDED ON OCTOBER 11, 1996)
The purpose of the Common Stock Purchase Plan for Salaried Employees (the
"Plan") is to provide the eligible employees of Tuscarora Incorporated (the
"Company") and its Subsidiaries with a convenient means of purchasing shares of
Common Stock, without par value (the "Common Stock"), of the Company through
regular salary deductions, matching employer contributions and investment of
cash dividends. For the purposes of the Plan, the term "Subsidiary" means any
corporation in an unbroken chain of corporations beginning with the Company if
each of the corporations other than the last corporation in the unbroken chain
owns stock processing at least fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in the
chain.
PARTICIPATION IN THE PLAN IS VOLUNTARY, AND NO RECOMMENDATION IS MADE TO
ELIGIBLE EMPLOYEES AS TO WHETHER THEY SHOULD OR SHOULD NOT PARTICIPATE IN THE
PLAN. THERE IS NO GUARANTEE UNDER THE PLAN AGAINST LOSS BECAUSE OF FLUCTUATIONS
IN THE MARKET PRICE OF THE COMMON STOCK. IN SEEKING THE BENEFITS OF SHARE
OWNERSHIP, EACH PARTICIPANT MUST ALSO ACCEPT THE RISKS ATTENDANT TO SUCH
OWNERSHIP.
SECTION 1
ELIGIBILITY
All regular full-time salaried employees of the Company and its
Subsidiaries, are eligible to participate in the Plan, provided (i) they have
attained the age of 18 years and (ii) they have completed one year of service
with the Company or its subsidiaries. Employees of the Company and its
Subsidiaries whose wages and other conditions of employment are covered by a
collective bargaining agreement are not eligible to participate in the Plan
unless and until such agreement provides for the application of the Plan to
employees covered by such agreement.
SECTION 2
ADMINISTRATION
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board").
The Committee shall interpret the Plan and prescribe such rules,
regulations and procedures in connection with the operations of the Plan as it
shall deem to be necessary and advisable for the administration of the Plan
consistent with the purposes of the Plan.
The Committee shall keep records of action taken at its meetings. A
majority of the Committee shall constitute a quorum at any meeting and the acts
of a majority of the members present at any meeting at which a quorum is
present, or acts approved in writing by a majority of the Committee, shall be
the acts of the Committee.
The Company shall maintain an account for each participant in the name of
each participant and shall maintain all records in connection with the Plan.
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Neither the Company nor the Committee shall be liable for any act done in
good faith or for any good faith omission to act, including, without limitation,
any claim of liability with respect to the prices or times at which shares of
the Common Stock are purchased or sold for a participant or with respect to any
fluctuation in market value before or after any purchase or sale of shares.
SECTION 3
SHARES AVAILABLE UNDER THE PLAN
The aggregate number of shares of the Common Stock which may be issued by
the Company under the Plan is one hundred fifty thousand (150,000) shares,
subject to adjustment and substitution as set forth in this Section 3. The
shares which may be issued under the Plan may be either authorized but unissued
shares or shares previously issued and thereafter acquired by the Company or
partly each, as shall be determined from time to time by the Board. If a
dividend or other distribution shall be declared upon the Common Stock payable
in shares of the Common Stock, the number of shares of the Common Stock which
may be issued under the Plan but have not yet been issued shall be adjusted by
adding thereto the number of shares of the Common Stock which would have been
distributable thereon if such shares had been outstanding on the date fixed for
determining the shareholders entitled to receive such stock dividend or
distribution. If the outstanding shares of the Common Stock shall be changed
into or exchangeable for a different number of shares of the Common Stock, then
there shall be substituted for each remaining share of the Common Stock which
may be issued under the Plan, the number of shares of the Common Stock into
which each outstanding share of the Common Stock shall be so changed or for
which each such share shall be exchangeable.
SECTION 4
PARTICIPATION
An eligible employee may enroll as a participant at any time by completing
and signing an enrollment and salary deduction authorization form and delivering
it to the Company's Accounting Department, except that any eligible employee who
has made a hardship withdrawal from the Tuscarora Plastics, Inc. Savings Plan
(the "401(k) Plan") shall be prohibited, for a period of 12 months from the date
of the hardship withdrawal, from submitting such form. Enrollment shall become
effective as of the first day of the first month which begins after the date the
enrollment and salary deduction authorization form is received by the Company's
Accounting Department.
An eligible employee whose participation in the Plan has terminated may
reenroll in the Plan by following the above procedure. An employee who makes a
hardship withdrawal from the 401(k) Plan may, however, be prohibited from
reenrolling in the Plan for a certain period as set forth in the preceding
paragraph.
The Committee reserves the right to reject any enrollment and salary
deduction authorization form on the grounds of excessive reenrollment. This
reservation is intended to minimize unnecessary administrative expense and to
encourage use of the Plan as long-term shareholder and employee investment
service.
SECTION 5
EMPLOYEE CONTRIBUTIONS
Each eligible employee is permitted to authorize a deduction from his or
her salary, in even multiples of $1.00, of a minimum of $10.00 per month and a
maximum of $300.00 per month, provided, however, that the
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maximum deduction for any calendar year shall not exceed eight percent (8%) of
the annual salary of the eligible employee.
Salary deduction authorizations shall remain effective until changed or
terminated by the participant. A participant may change or terminate salary
deduction authorizations at any time by completing and signing a salary
deduction authorization change or termination form and delivering it to the
Company's Accounting Department. A change or termination of salary deductions
shall become effective as of the first day of the first month which begins after
the date the salary deduction authorization change or termination form is
received by the Company's Accounting Department. In addition, all salary
deductions for an employee shall be automatically suspended for a period of
twelve months from the date of a hardship withdrawal by the employee from the
401(k) Plan.
Contributions by a participant through salary deduction authorizations
shall be credited to the account under the Plan relating to the participant as
of each salary payment date and shall be used to purchase shares of Common Stock
for credit to such account as provided under Section 9 below.
SECTION 6
EMPLOYER CONTRIBUTIONS
On each Purchase Date, as defined in Section 9 below, the account relating
to each participant shall be credited with an amount equal to ten percent (10%)
of the amount credited to such account under Section 5 above the not previously
applied to the purchase of shares of Common Stock. Such amount shall be used to
purchase shares of Common Stock on such Purchase Date for credit to the account
relating to the participant as provided under Section 9 below.
SECTION 7
DIVIDENDS AND OTHER DISTRIBUTIONS
Except as provided below, each account relating to a participant shall be
credited with all cash dividends and other cash distributions, if any, paid in
respect of the full shares and any fractional interest in a share credited to
the account, less any amount the Company is required to deduct as backup
withholding in respect of the dividend or distribution received, or considered
to be received. Cash dividends and other cash distributions credited to a
participant's account shall be invested in Common Stock in accordance with
Section 9 below.
Cash dividends and other cash distributions paid in respect of shares
credited to a participant's account shall be paid directly to the participant
and shall not be credited to the participant's account or invested in Common
Stock for a period of twelve months from the date of a hardship withdrawal by
the participant to which the account relates from the 401(k) Plan if such
investment would constitute elective contributions or employee contributions
under an employer plan within the meaning of Treasury Regulations sec.
1.401(k)-1(d)(2)(iv)(B)(4) or any successor regulation.
Any stock dividends or stock splits in respect of shares of Common Stock
credited to an account shall be reflected in the account without charge. Any
distributions of other securities or rights to subscribe for additional shares
in respect of shares of Common Stock credited to an account relating to a
participant shall be made directly to the participant.
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SECTION 8
NO INTEREST ON AMOUNTS CREDITED TO ACCOUNTS
No interest shall be paid on amounts credited to the accounts relating to
the participants. Amounts credited to the accounts shall be under the control of
the Company and its Subsidiaries until used to purchase shares of Common Stock
or paid to participants and may be used for any corporate purpose.
SECTION 9
PURCHASE OF SHARES OF COMMON STOCK
On the sixth business day of each month (the "Purchase Date"), the
contributions by the participants and their employers which have been credited
to the accounts under the Plan and which have not been previously so applied
shall be applied to the purchase of shares of Common Stock from the Company.
Cash dividends or distributions which are to be invested in Common Stock under
the Plan shall be applied to the purchase of shares of Common Stock from the
Company on each dividend or distribution payment date. The purchase price of
each share shall be the fair market value (determined as set forth in Section 17
below) of a share of the Common Stock on the Purchase Date or the dividend or
distribution payment date, as the case may be. The shares purchased on each
Purchase Date and dividend or distribution payment date shall be credited to the
accounts for which the shares are purchased in proportion to the respective
amounts used to purchase shares from each account. Each allocation shall be made
in full shares and in fractional interests in a share to the ten-thousandth of a
share.
At the time of purchase, the participant with respect to an account shall
immediately acquire full ownership of all shares and of any fractional interest
in a share purchased for and credited to the account. All shares purchased shall
be registered in the name of the Company or another nominee or custodian for the
benefit of the participants under the Plan. Although a participant may not
assign or hypothecate an interest in the Plan as such, upon purchase of shares
under the Plan such shares may be sold pursuant to the procedures set forth in
Sections 10 and 11 below or, following distribution of such shares to the
participant, may be sold, assigned, hypothecated or otherwise dealt with by the
participant as is the case with respect to any other shares of Common Stock the
participant may own.
Notwithstanding the foregoing, upon termination of an account relating to a
participant under Section 10 or Section 11 below, any employee contributions
credited to the account and not yet applied to the purchase of shares of Common
Stock from the Company shall not be so applied and shall be delivered to the
participant, and no employer contribution shall be made with respect to such
employee contributions. Also, notwithstanding the foregoing and the provisions
of Section 7 above, cash dividends or distributions with respect to shares of
Common Stock credited to an account shall be delivered to the participant
instead of credited to the account and applied to the purchase of shares of
Common Stock from the Company on the dividend or distribution payment date if
the date as of which the account is terminated is more than ten (10) calendar
days prior to the record date of the cash dividend or distribution.
SECTION 10
VOLUNTARY SALE OR WITHDRAWAL OF SHARES
A participant may direct at any time that any or all of the shares credited
to the account relating to the participant be sold. Upon such sale, a check for
the proceeds, less any brokerage commissions and other charges applicable to the
sale, shall be delivered to the participant. The participant may also request at
any
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time that a certificate or certificates representing any or all of the full
shares credited to the account relating to the participant be delivered to the
participant.
If the participant directs that all shares credited to the account relating
to the participant be sold and the net proceeds delivered to the participant or
requests that a certificate or certificates representing all full shares
credited to the account relating to the participant be delivered to the
participant, and the participant terminates or has terminated all salary
deduction authorizations, the account shall be terminated as of the later of the
date the direction or request is received and the effective date of the
termination of salary deductions.
Each direction or request referred to in this Section 10 shall be made by
the participant by completing and signing a sale or withdrawal form and
delivering it to the Company or an agent designated by the Company. Upon
termination, any fractional interest in a share credited to the account may be
sold and the net proceeds delivered to the participant or the value of the
fractional interest may be determined by reference to the current fair market
value of the Common Stock and paid to the participant in cash.
SECTION 11
TERMINATION OF ACCOUNT UPON TERMINATION OF EMPLOYMENT
The account relating to a participant whose employment with the Company and
its Subsidiaries terminates shall also be terminated as of the date of
termination of employment. The participant may direct that all shares credited
to the account be sold and the net proceeds delivered to the participant, or the
participant may request that a certificate or certificates representing all full
shares credited to the account be delivered to the participant. Any brokerage
commissions and other charges applicable to sales are payable by the participant
and will be deducted in determining the net proceeds. If no direction is
received from the participant prior to the time the account relating to a
participant would normally be settled, a certificate or certificates
representing all full shares credited to the account will be delivered to the
participant.
Each direction or request referred to in this Section 11 shall be made by
the participant by completing and signing a sale or withdrawal form and
delivering it to the Company or an agent designated by the Company. Upon
termination, any fractional interest in a share credited to the account may be
sold and the net proceeds delivered to the participant or the value of the
fractional interest may be determined by reference to the current fair market
value of the Common Stock and paid to the participant in cash.
SECTION 12
INFORMATION FOR PARTICIPANTS; VOTING RIGHTS
Each participant shall receive at least quarterly each year a statement of
all transactions affecting the account relating to the participant and the
number of shares (including any fractional interest in a share) of the Common
Stock credited to the account. Each participant shall also receive copies of all
reports, proxy statements and other communications distributed by the Company to
its shareholders generally at the time and in the manner such material is sent
to such shareholders.
Participants shall receive proxy soliciting material in connection with
each meeting of shareholders of the Company. Shares can be voted only by the
holder of record. The shares of Common Stock credited to each account (including
any fractional interest in a share) shall be voted by the holder of record only
in accordance with the participant's signed proxy instructions duly delivered to
the holder of record.
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SECTION 13
AMENDMENT OR TERMINATION OF PLAN
The Board reserves the right to amend or terminate the Plan at any time.
Any amendment or termination shall not result in the forfeiture of any funds
deducted from the salary of any participant, or of any shares of Common Stock or
fractional interest in a share credited to an account, or of any dividends or
other distribution in respect of such shares, before the effective date of the
amendment or termination.
SECTION 14
WITHHOLDING
The purchase of shares of Common Stock under the Plan may result in
compensation income to participants and may be subject to Federal income and
employment tax, state income tax and/or local income tax withholding. The
Company or one of its Subsidiaries shall withhold all applicable withholding
taxes on any such compensation income from the salary of the participant who
realizes such compensation income. Each participant's salary also shall be
subject to withholding of all applicable Federal income and employment, state
income and local income taxes without regard to any amounts deducted therefrom
as salary deductions authorized under the Plan.
SECTION 15
EXPENSES OF THE PLAN
The Company and its Subsidiaries will pay all expenses incident to the
operation of the Plan, including the costs of record keeping, accounting fees,
legal fees, issue or transfer taxes on purchases of shares of the Common Stock
pursuant to the Plan, the costs of delivery of stock certificates to
participants and the costs of delivery of shareholder communications. Neither
the Company nor any of its Subsidiaries will pay any expenses, commissions or
taxes incurred in connection with the sale of shares of Common Stock credited to
an account at the direction of the participant. Expenses in connection with any
such sale will be deducted from the proceeds of sale prior to any remittance to
the participant.
SECTION 16
RIGHTS NOT TRANSFERABLE
The right to purchase shares of Common Stock under the Plan shall not be
transferable by an eligible employee and such right shall be exercisable during
the eligible employee's lifetime only by the eligible employee. Upon the death
of a participant, any shares held for the account relating to the participant
and any cash payment for any fractional shares shall be transferred in
accordance with the Will of the participant, or, if the participant dies
intestate, the laws of descent and distribution of the state of domicile of the
participant at the time of death.
SECTION 17
FAIR MARKET VALUE
Fair market value of the Common Stock shall be the mean between the
following prices, as applicable, for the date as of which fair market value is
to be determined as quoted in The Wall Street Journal (or in such other reliable
publication as the Committee, in its discretion, may determine to rely upon):
(a) if the
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Common Stock is listed on the New York Stock Exchange, the highest and lowest
sales prices per share of the Common Stock as quoted in the NYSE--Composite
Transactions listing for such date, (b) if the Common Stock is not listed on
such exchange, the highest and lowest sales prices per share of the Common Stock
for such date on (or on any composite index including) the principal United
States securities exchange registered under the 1934 Act on which the Common
Stock is listed or (c) if the Common Stock is not listed on any such exchange,
the highest and lowest sales prices per share of the Common Stock for such date
on NASDAQ. If there are no such sale price quotations for the date as of which
fair market value is to be determined but there are such sale price quotations
within a reasonable period both before and after such date, then fair market
value shall be determined by taking a weighted average of the means between the
highest and lowest sales prices per share of the Common Stock as so quoted on
the nearest date before and the nearest date after the date as of which fair
market value is to be determined. The average should be weighted inversely by
the respective numbers of trading days between the selling dates and the date as
of which fair market value is to be determined. If there are no such sale price
quotations on or within a reasonable period both before and after the date as of
which fair market value is to be determined, then fair market value of the
Common Stock shall be the mean between the bona fide bid and asked prices per
share of the Common Stock as so quoted for such date on NASDAQ, or if none, the
weighted average of the means between such bona fide bid and asked prices on the
nearest trading date before and the nearest trading date after the date as of
which fair market value is to be determined, if both such dates are within a
reasonable period. The average is to be determined in the manner described above
in this Section 17. If the fair market value of the Common Stock cannot be
determined on the basis previously set forth in this Section 17 on the date as
of which fair market value is to be determined, the Committee shall in good
faith determine the fair market value of the Common Stock on such date. Fair
market value shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse.
SECTION 18
ISSUANCE OF SHARES
The obligation of the Company to issue shares of the Common Stock under the
Plan shall be subject to (i) the effectiveness of a registration statement under
the Securities Act of 1933, as amended, with respect to such shares, if deemed
necessary or appropriate by counsel for the Company, (ii) the condition that the
shares shall have been listed (or authorized for listing upon official notice of
issuance) upon each stock exchange, if any, on which the shares of Common Stock
may then be listed and (iii) all other applicable laws, regulations, rules and
orders which may then be in effect.
SECTION 19
TERMINATION OF PLAN
The Plan shall terminate when all of the shares of the Common Stock which
may be issued under the Plan have been purchased; provided that the Board, in
its sole discretion, may terminate the Plan at any time without any obligation
on account of such termination, except as hereinafter provided. Upon termination
of the Plan, distribution of each account shall be made as provided in Section
11 above in the case of a participant whose employment with the Company and its
Subsidiaries has terminated.
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