Exhibit 10.23

 

CARAUSTAR INDUSTRIES, INC.

 

RESTORATION PLAN

 

This Plan, established by Caraustar Industries, Inc., is effective this 22nd day
of November, 1996

 

ARTICLE 1 - PURPOSE OF PLAN

 

Section 1.1   Purpose: The purpose of this Plan is to provide supplemental
retirement benefits to certain named Caraustar Industries, Inc. Executives. The
benefits to be provided under this Plan are intended to supplement other
retirement benefits provided by the Company through plans qualified under
Section 401(a) of the Internal Revenue Code of 1986, unqualified plans, and the
federal Social Security system of the United States. Section 1.2   Design: The
Plan is designed to provide supplemental retirement benefits as described in
Section 3.3.

 

ARTICLE 2 - DEFINITIONS

 

Section 2.1   Average Annual Compensation: The average of the Executive’s annual
Compensation earned after December 31, 1993, over the five (5) consecutive
calendar years during the ten (10) most recent calendar years (including the
calendar year in which his Payment Event occurs) which produces the highest
average, or, if the Executive has less than five (5) consecutive years of
service after December 31, 1993, the average of his annual Compensation for his
full calendar years of Service after December 31, 1993. Section 2.2  
Beneficiary: The Spouse of the Executive as of his Payment Event, or, if the
Spouse predeceases the Executive, the person designated by the Executive to be
the alternate beneficiary in such event. See Section 3.3(a). Section 2.3  
Board: The Board of Directors of Caraustar Industries, Inc. Section 2.4  
Calculation Date: With respect to any Executive, the date on which his Payment
Event occurs.

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Section 2.5   Change-In-Control: The purchase or other acquisition by any
person, entity or group of persons, within the meaning of the Securities
Exchange Act of 1934 (“Act”), of 40 percent or more of either the outstanding
shares of common stock or the combined voting power of the Company, or the
approval by the stockholders of the Company of a reorganization, merger, or
consolidation, in each case, with respect to which persons who were stockholders
of the Company immediately prior to such reorganization, merger or consolidation
do not, immediately thereafter, own more than 50 percent of the combined voting
power entitled to vote generally in the election of the Board of Directors of
the reorganized, merged or consolidated the Company’s then outstanding
securities, or a liquidation or dissolution of the Company or of the sale of all
or substantially all of the Company’s assets. Section 2.6   Code: The Internal
Revenue Code of 1986, as amended, or as it may be amended from time to time.
Section 2.7   Company: Caraustar Industries, Inc. Section 2.8   Compensation:
Wages as defined in Section 3401 (a) of the Code for the purposes of income tax
withholding at the source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural
labor in Section 3401(a)(2)), reduced by all of the following items (even if
includible in gross income): reimbursements or other expense allowances, fringe
benefits (cash and noncash), moving expenses, deferred compensation, and welfare
benefits. Compensation shall also include any amount which is contributed by the
Company pursuant to a salary reduction agreement and which is not includible in
the Executive’s gross income under Sections 125, 402(a)(8), 402(h), or 403(b) of
the Code. Section 2.9   Compensation and Employee Benefits Committee: The
Compensation and Employee Benefits Committee as established by the Board.
Section 2.10   Covered Compensation: For the Executive, the amount determined
for the calendar year in which he attains or will attain his Social Security
Retirement Age under the Rounded Table in Internal Revenue Service Revenue
Ruling 93-20 (or any successor table as updated and issued by the Internal
Revenue Service from time to time) as in effect for the calendar year in which
his employment with the Employer terminates. No increase in Covered Compensation
shall decrease the Executive’s amount of benefits under this Plan after his
Calculation Date. Section 2.11   Employee: A participant of the “Caraustar
Industries, Inc. Retirement Plan.”

 

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Section 2.12   Executive: The participant in the Plan as appointed by the Chief
Executive Officer, upon receiving approval from the Compensation and Employee
Benefits Committee. Section 2.13   Final Average Compensation: The average
annual Compensation for the three (3) consecutive calendar years in which the
Executive was employed by the Company immediately preceding his Payment Event
excluding the calendar year in which his Payment Event occurs, or, if the
Executive’s entire period of service with the Employer is less than three (3)
consecutive calendar years, the average of his annual Compensation for his full
calendar years of Service. For purposes of this Section, Compensation for any
year in excess of the taxable wage base in effect at the beginning of such year
shall not be taken into account. Section 2.14   Fifty Percent (50%) Joint and
Survivor Annuity: An annuity which is payable monthly for the life of the
Executive, with a survivor annuity for the life of his Spouse which is Fifty
(50%) Percent of the amount of the annuity payable during the joint lives of the
Executive and his Spouse. Section 2.15   Hour of Service: Each hour for which an
Employee is paid, or entitled to payment, for the performance of duties for the
Company as an Employee during any period of employment. Section 2.16   Normal
Retirement Age: Age sixty-five (65). Section 2.17   Normal Retirement Date: The
first day of the month coincident with or next following the date the Executive
attains his Normal Retirement Age. Section 2.18   Payment Event: With respect to
any Executive, the first to occur of his Retirement Date, death, the date he
suffers a Total and Permanent Disability, or a Change-in-Control. Section 2.19  
Plan: The “Caraustar Industries, Inc. Restoration Plan”, as set forth herein or
in any amendment hereto. Section 2.20   Plan Administrator: The individual or
committee appointed pursuant to Article VII of the Retirement Plan, who shall
have the same powers and those duties with respect to the Plan as those
described in Article VII of the Retirement Plan. The Plan Administrator is the
named fiduciary for purposes of the Employee Retirement Income Security Act of
1974, as amended. Section 2.21   Plan Year: The calendar year.

 

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Section 2.22   Retirement Date: The first day of the month coincident with or
next following the date the Executive attains his Normal Retirement Age and
actually terminates employment with the Company. Section 2.23   Retirement Plan:
The Caraustar Industries, Inc. Retirement Plan for the Employees of Caraustar
Industries, Inc., as amended from time to time. Section 2.24   Service: An
Employee shall be credited with one (1) year of Service for each Plan Year
during which he completes one thousand (1,000) or more Hours of Service with the
Company. An Employee shall also be credited with Service solely for purposes of
determining his Accrued Benefit under Section 3.1 (but not for purposes of
vesting under Section 3.4) for employment with an employer other than the
Company provided the Chief Executive Officer makes a qualifying recommendation
and such recommendation is endorsed by the Board’s Compensation and Employee
Benefits Committee. Section 2.25   Spouse: The individual to whom the Executive
is legally married as of the earlier of the Executive reaching his Retirement
Date, suffering a Total and Permanent Disability (as defined in Section 1.66 of
the Retirement Plan and in accordance with a determination made by the SSA),
death, or upon the Change-In-Control of the Company. Section 2.26   Total and
Permanent Disability: The event shall have the meaning specified in Section 1.66
of the Retirement Plan, in accordance with a determination made by the Social
Security Administration. ARTICLE 3 - BENEFITS

 

Section 3.1   Accrued Benefit: The Accrued Benefit is an annual amount,
calculated as of the Executive’s Calculation Date, equal to the product of (A)
times (B) minus (C) where:     (A)   is 1.35% of Average Annual Compensation
times years of Service projected to Normal Retirement Date, offset by .65% of
Final Average Compensation up to Covered Compensation times years of Service
projected to Normal Retirement Date, and     (B)   is a fraction where the
numerator is years of Service as of the Calculation Date and the denominator is
the greater of years of Service as of the Calculation Date or years of Service
projected to Normal Retirement Date, and

 

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    (C)    is the Accrued Benefit under the Retirement Plan as of the
Calculation Date, the accrued benefit under any Company paid deferred
Compensation arrangements as of the Calculation Date, and/or any other accrued
benefit payable through another employer’s plan as of the Calculation Date by
which the Executive has obtained additional years of Service. Section 3.2  
Forfeiture of Benefit: If the Executive engages in any acts or omissions
constituting dishonesty, intentional breach of fiduciary obligation or
intentional wrongdoing, in each case that results in substantial harm to the
business or property of the Company, he shall forfeit and be ineligible to
receive any benefits under this Plan, and any benefits paid to such Executive
(or Beneficiary) can be recovered by the Company. The recovery of any benefits
paid to such Executive shall not preclude the Company from taking any other
actions against the Executive. Section 3.3   Benefit Payments:     (a)    If a
Payment Event occurs with respect to an executive while an Executive is employed
with the Company, and if such Executive’s benefits hereunder are vested, then
the Executive (or his Beneficiary) will be entitled to receive a Fifty Percent
(50%) Joint and Survivor Annuity, paid in monthly payments, with the initial
annual amount being 90% of the Executive’s Accrued Benefit, and with a 10-year
guaranteed period (meaning that if the Executive dies less than 10 years after
the commencement of the annuity payments, the Executive’s spouse or alternate
Beneficiary will nevertheless receive the initial annual amount of the annuity
[ninety percent (90%) of the Accrued Benefit]), as follows:          (1)   
Retirement Payment. In the event that benefits become payable due to the
Executive’s retirement at or after Normal Retirement Age, the benefit will be
payable as of the Executive’s Retirement Date.          (2)    Disability
Payment. In the event that benefits become payable due to a Total and Permanent
Disability, the benefit will be payable as of the first day of the month
coincident with or next following the later of the date the Executive ceases to
perform services for the Company, or the date Worker’s Compensation and/or
Long-Term Disability benefits cease.          (3)    Death Payment. In the event
that benefits become payable due to the Executive’s death, the benefit specified
above will be reduced for early commencement by the percentage specified in
Section 3.4 of the Retirement Plan and the benefit will be payable as of the
first day of the month coincident with or next following the later of the
Executive’s death or the date on which the Executive would have reached age 55.

 

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    (b)        Change-In-Control. Except as provided in Section 3.2, in the
event that there is a Change-In-Control of the Company, the Executive shall
become fully vested and receive an immediate lump-sum distribution, and the Plan
shall terminate. The lump sum distribution shall be the Actuarial Equivalent of
a single life annuity beginning at age 65 in the amount of the Executive’s
Accrued Benefit, using the Actuarial Equivalent definition for lump sum payments
in Section 1.2 of the Retirement Plan. Section 3.4   Vesting of Benefits: An
Executive’s benefits under this Plan are not vested until the earlier of the
date the Executive completes 10 years of Service or the occurrence of a
Change-in-Control. If an Executive’s employment with the Company terminates, for
any reason, before his benefits have vested hereunder, the Executive will not be
entitled to any benefits hereunder. Section 3.5   Time of Benefit Payments:
Payment of Benefits under the Plan shall commence when such benefits become
payable pursuant to Section 3.3, or as soon thereafter as administratively
feasible. Section 3.6   Mental or Legal Incompetence: The Company, in its sole
discretion, may make distribution to the guardian or other legal representative
of the Executive or Beneficiary, if the Executive or Beneficiary is determined
by a court of proper jurisdiction to be mentally or legally incompetent to
receive such benefit distribution. Any such distribution shall be in full and
complete satisfaction of any and all claims whatsoever by or on behalf of such
Executive under this Plan against the Company, the Plan Administrator, any
member of the Board, other Executives or officers of the Company, other
employees, shareholders and any other person acting on behalf of them. Section
3.7   Benefits Unfunded: The benefits payable under the Plan shall be paid by
the Company and shall not be funded.    

ARTICLE 4 - MISCELLANEOUS

 

Section 4.1   Amendment or Termination: The Chief Executive Officer, upon
receiving approval from the Compensation and Employee Benefits Committee, shall
have the right to amend this Plan from time to time and to terminate this Plan
at any time; provided, however, no such action shall reduce the Accrued Benefit,
as of the date of such action, of any Executive whose benefits hereunder are
vested, or defer the time for paying such benefits under Section 3.3.

 

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Section 4.2   Company Liability: Nothing in this Plan shall be construed to
limit in any way the right of the Company to terminate the employment of the
Executive at any time; or to be evidence of any agreement or understanding,
express or implied, that the Company or any affiliate company will employ the
Executive in any particular position or at any particular rate or remuneration
or for any particular period of time. Section 4.3   Indemnification: The Company
shall indemnify and hold harmless the Administrator, any member thereof and any
Employee who may act on behalf of the Company in the administration of this Plan
from and against any liability, loss, cost or expense (including reasonable
attorneys’ fees) incurred at any time as a result of or in connection with any
claims, demands, actions or causes of action of the Executive, any person
claiming through or under any of them, or any other person, party or authority
claiming to have an interest in this Plan or standing to act for any persons or
groups having an interest in this Plan, for or on account of, any of the acts or
omissions (or alleged acts or omissions) of the Administrator, any member
thereof or any such Employee, except to the extent resulting from such person’s
willful misconduct. Section 4.4   Tax Effects: The Company makes no warranties
or representations with regard to the tax effects or results of this Plan. The
Executive participating under this Plan shall be deemed to have relied upon his
own tax advisors with regard to such effects. Section 4.5   No Assignment:
Binding Effect: Neither the Executive nor Beneficiary shall have the right to
alienate, assign, commute or otherwise encumber his benefit for any purpose
whatsoever, and any attempt to do so shall be disregarded completely as null and
void. The provisions of this Plan shall be binding on the Executive and on each
person who claims a benefit under him and on the Company. Section 4.6  
Self-interest: The Executive shall not have any right to vote or decide upon any
matter related directly or indirectly to him or any right to claim any benefit
under this Plan. Section 4.7   Construction: This Plan shall be construed in
accordance with the laws of the State of Georgia. The headings and subheadings
in this Plan have been inserted for convenience of reference only and are to be
ignored in construction of the provisions of this Plan. In the construction of
this Plan, the masculine shall include the feminine and the singular the plural
wherever appropriate.

 

[Cont’d on Page 8]

 

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IN WITNESS WHEREOF, the Company has caused its duly authorized officers to
execute and seal this Plan as of this 22 day of November, 1996.

 

PLAN SPONSOR:

 

CARAUSTAR INDUSTRIES, INC.

 

By:  

/s/ Thomas V. Brown

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Title:   President & CEO

 

(CORPORATE SEAL) Attest:  

/s/ Marinan R. Mays

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Title:   Corporate Secretary

 

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FIRST AMENDMENT TO THE CARAUSTAR INDUSTRIES, INC.

 

RESTORATION PLAN

 

Pursuant to Article 2 of the Caraustar Industries, Inc. Restoration Plan, (the
“Plan”) Caraustar Industries, Inc. does hereby amend the Plan in the following
respects effective February 7, 2002:

 

The following new sections are added and numbered as appropriately to follow the
definition of Normal Retirement Age.

 

2.16(a) Early Retirement Age. Age 62 with thirty (30) years credited service
recognized by the Plan.

 

2.16(b) Early Reduction Factors. Early Retirement Factors will be the same
reduction factors as defined in the Caraustar Industries, Inc. Retirement Plan.

 

IN WITNESS WHEREOF, Caraustar Industries, Inc. has caused this Amendment to be
executed by its officers, this 15th day of February, 2002.

 

CARAUSTAR INDUSTRIES, INC. By:  

/s/ Thomas V. Brown

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    Thomas V. Brown Title:   President & Chief Executive Officer

 

ATTEST:

/s/ Marinan R. Mays

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Marinan R. Mays

Title: Corporate Secretary