WELLMAN, INC.

 

 

AMENDED AND RESTATED

EXECUTIVE RETIREMENT RESTORATION PLAN

 

 

 

 

 

 

Effective as of January 1, 1993,
and as Amended as of June 1, 1998 and May 31, 2001

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

SECTION

TITLE

PAGE

 

PREAMBLE

1

I

DEFINITIONS

2

 

1.1 Beneficiary

2

 

1.2 Code

2

 

1.3 Committee

2

 

1.4 Company

2

 

1.5 Company Contribution Benefits

2

 

1.6 Company Contribution Credits Account

2

 

1.7 Compensation

3

 

1.8 Contribution Credits Account

3

 

1.9 Deferral Election Form

3

 

1.10 Disability

3

 

1.11 Employee Contribution Credits

4

 

1.12 Employee Contribution Credits Account

4

 

1.13 ESOP

4

 

1.14 IRS

4

 

1.15 Limited Compensation

4

 

1.16 Participant

4

 

1.17 Plan

4

 

1.18 Plan Year

5

 

1.19 Qualified Retirement Plans

5

 

1.20 Retirement

5

 

1.21 Retirement Plan

5

 

1.22 Service

5

 

1.23 The Masculine Gender

5

 

 

 

II

ELIGIBILITY FOR RETIREMENT BENEFITS

6

 

 

 

III

CONTRIBUTIONS TO THE PLAN

7

 

3.1 Amount of Company Contribution Credits

7

 

3.2 Amount of Employee Contribution Credits

8

 

3.3 Crediting of Earnings

9

 

 

 

IV

DISTRIBUTABLE EVENTS AND DISTRIBUTION
OF AMOUNTS

10

 

4.1 Retirement

10

 

4.2 Death

10

 

4.3 Termination of Employment

11

 

4.4 Withdrawals/Loans Not Allowed

11

 

 

 

V

MISCELLANEOUS

12

PREAMBLE

 

The purpose of the Wellman, Inc. Executive Retirement Restoration Plan is to
provide for a selected group of senior executives an unfunded, non-qualified
defined contribution plan whose purposes are to (1) restore employer
contributions which cannot be made to the Company's qualified retirement plans
on behalf of these executives due to various IRS restrictions imposed on such
plans and (2) provide a mechanism for these executives to defer compensation
which cannot be contributed to the Company's qualified retirement plan due to
similar and additional IRS restrictions.

The Company plans whose employer contributions and employee deferral
opportunities are restored within this Plan include the following:

- the Wellman, Inc. Employee Stock Ownership Plan and Trust; and

- the Wellman, Inc. Retirement Plan.

The senior executives who are eligible to participate in this Plan will be
nominated and confirmed by the Compensation Committee of the Board of Directors
of Wellman, Inc. Each eligible executive must complete a Deferral Election Form
prior to the beginning of the period for which such deferrals shall become
effective.

This Plan shall initially be effective January 1, 1993, and as amended, shall be
effective as of May 31, 2001, with a proviso that any compensation deferred by
the executive into this Plan shall not be taken out of compensation earned prior
to the effective date of the executive's election.

 

SECTION I

DEFINITIONS

 

 

1.1 "Beneficiary" shall mean any person or persons last designated by the
Participant to receive amounts payable in accordance with this Plan in the event
of the Participant's death. In the absence of such designated person or persons,
the Participant's beneficiary shall be deemed to be his estate.

1.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.

1.3 "Committee" shall mean the Compensation Committee as appointed by the Board
of Directors of the Company, which has been given authority by the Board of
Directors to designate Participants and to administer the Plan.

1.4 "Company" means Wellman, Inc. and all affiliated employers participating in
the Qualified Retirement Plans.

1.5 "Company Contribution Credits" shall mean the amount of Company
contributions allocated to a Participant's account for any Plan Year to restore
lost Company contributions under the Qualified Retirement Plans in accordance
with Section 3. 1.

1.6 "Company Contribution Credits Account" shall mean the account that will be
established by the Company to which shall be credited the Participant's Company
Contribution Credits plus any earnings credited thereon in accordance with
Section 3.3.

1.7 "Compensation" shall mean the base compensation paid to a Participant during
a Plan Year with respect to services performed for the Company plus bonuses paid
under the Wellman, Inc. Management Incentive Compensation Plan (other than such
bonuses and Wellman, Inc. Management Incentive Compensation Plan payments
received after the Participant's termination of employment with the Company)
plus any elective contributions made by the Company on behalf of the Participant
with respect to such Plan Year which are not includible in his gross income
under Sections 125 or 402(g) of the Code or as deferred under this Plan as
Employee Contribution Credits plus any amounts deferred under the Wellman, Inc.
Deferred Compensation and Restricted Stock Plan which are not includible in his
gross income, determined without regard to any limitation imposed under Section
401(a)(17) of the Code. In no event shall Compensation include any compensation
attributable to a Participant's receipt or exercise of any stock options.

1.8 "Contribution Credits Account" shall mean the sum of the Company
Contribution Credits Account and Employee Contribution Credits Account.

1.9 "Deferral Election Form" shall mean the form made available by the Committee
to a Participant which, when properly executed by the Participant, effects his
participation in the Plan for the next following Plan Year. However, within the
first year in which the Participant has become eligible for the Plan, the
Participant may make a Deferral Election which effects his participation in the
Plan with respect to Compensation earned following his election but within the
same Plan Year. A Deferral Election, once made, shall continue in effect from
Plan Year to Plan Year until it is modified or revoked. Such change shall only
be effective as of the first day of the Plan Year following the Plan Year in
which it is executed.

1.10 "Disability" shall mean total disability as determined by the Committee.

.

1.11 "Employee Contribution Credits" shall mean the amount of employee
contributions allocated to a Participant's account for any Plan Year based on
the Participant's election to defer Compensation in accordance with Section 3.2.

1.12 "Employee Contribution Credits Account" shall mean the account that will be
established by the Company to which shall be credited the Participant's Employee
Contribution Credits plus any earnings credited thereon in accordance with
Section 3.3.

1.13 "ESOP" shall mean the Wellman, Inc. Employee Stock Ownership Plan and
Trust.

1.14 "IRS" shall mean the Internal Revenue Service.

1.15 "Limited Compensation" shall mean a Participant's Compensation as defined
in Section 1.7 but determined with regard to the limitation imposed under
Section 40l(a)(17) of the Code.

1.16 "Participant" shall mean an individual who is in a select group of
management or highly compensated employees of the Company designated as a
Participant by the Committee. An employee shall become a Participant in the Plan
once he is selected by, named, or identified in the resolutions of the Committee
for inclusion in the Plan, and subsequently completes a Deferral Election Form
which provides for amounts to be credited to this Plan in accordance with
Section 3.2.

A Participant shall have the right exercisable within thirty days prior to the
beginning of any calendar year to elect to have Employee Contribution Credits
allocated to his Employee Contribution Credits Account for the ensuing Plan Year
by so electing on a new Deferral Election Form.

If a Participant does not execute and file a new Deferral Election Form with the
Committee, the Deferral Election previously made by the Participant shall
continue in effect.

1.17 "Plan" shall mean the Wellman, Inc. Executive Retirement Restoration Plan.

1.18 "Plan Year" shall mean the period from January 1, 1993 to December 31, 1993
and the twelve month period ending each December 31 thereafter. Effective May
31, 1997, the Plan Year was a short Plan Year of June 1, 1997 to February 28,
1998. Effective March 1, 1998, the Plan Year will be the twelve month period
beginning March 1 and ending the following February 28. The Committee in its
discretion may change the Plan Year from time to time.

1.19 "Qualified Retirement Plans" shall mean the following basic retirement
plans sponsored by Wellman, Inc. for its employees: (a) the ESOP and (b) the
Retirement Plan.

1.20 "Retirement" shall mean the termination of a Participant's employment with
the Company, and any member of the same controlled group of corporations, as
defined in Section 1563(a) of the Code, on one of the retirement dates specified
in Section II.

1.21 "Retirement Plan" shall mean the Wellman, Inc. Retirement Plan.

1.22 "Service" shall mean a Participant's Service as defined in the ESOP.

1.23 The masculine gender, where appearing in the Plan, will be deemed to
include the feminine gender, and the singular may include the plural, unless the
context clearly indicates the contrary. Wherever appropriate, terms used in this
Plan shall have the meaning assigned to such terms under the Qualified
Retirement Plans.

SECTION II

ELIGIBILITY FOR RETIREMENT BENEFITS

Each Participant is eligible to retire and receive a benefit under this Plan
upon his Retirement beginning on one of the following dates:

(a) "Normal Retirement Date", which is the date the Participant attains his 65th
birthday;

(b) "Early Retirement Date", which is the date on or after the date the
Participant attains his 55th birthday and completes 5 years of Service;

(c) "Postponed Retirement Date", which is the date following the Participant's
Normal Retirement Date on which the Participant terminates employment with the
Company. To the extent permitted by law, the Company reserves the right to
require that a Participant obtain written consent from the Committee to continue
his employment beyond his Normal Retirement Date in accordance with this Section
II;

(d) "Disability Retirement Date", which is the date on which the Participant's
employment is terminated due to Disability.

 

 

 

 

 

 

 

SECTION III

CONTRIBUTIONS TO THE PLAN

3.1 Amount of Company Contribution Credits

The Company Contribution Credits for a Participant under this Plan on behalf of
each Plan Year shall equal the sum of the following: (a) the excess, if any, of
(i) the amount of Pension Contributions and Performance Contributions under the
Retirement Plan to which the Participant would have been entitled based on his
Compensation and without regard to Code restrictions on contributions made by or
on behalf of the Participant over (ii) the amount of Pension Contributions and
Performance Contributions actually contributed by the Company to the Retirement
Plan based on his Limited Compensation; (b) the excess, if any, of (i) the
amount of Basic Contributions under the ESOP to which the Participant would have
been entitled based on his Compensation and without regard to Code restrictions
on contributions made by or on behalf of the Participant over (ii) the amount of
Basic Contributions actually contributed by the Company to the ESOP based on his
Limited Compensation; and (c) the excess, if any, of (i) the combined amount of
Company matching contributions under the Retirement Plan and the ESOP to which
the Participant would have been entitled without regard to Code restrictions on
contributions made by or on behalf of the Participant based on (A) the sum of
his Employee Contribution Credits as defined under this Plan and his
Compensation Deferral Contributions under the Retirement Plan and under the ESOP
and (B) the actual matching contribution percentages for the Plan Year over (ii)
the combined amount of Company matching contributions actually contributed to
the Retirement Plan and ESOP based on the Compensation Deferral Contributions
made on behalf of the Participant to these plans and the actual matching
contribution percentages for the Plan Year. With respect to a Participant whose
date of employment occurs during the Plan Year in which he is first eligible to
participate, the calculation of Company Contribution Credits under this Section
3.1 shall be made under the presumption that the Participant was eligible upon
his date of employment with the Company to participate in the Retirement Plan
and the ESOP, but without presuming contributions on his behalf.

3.2 Amount of Employee Contribution Credits

The Employee Contribution Credits for a Participant under this Plan on behalf of
each Plan Year shall equal the excess, if any, of (i) the Compensation Deferral
Contributions which would have been made on behalf of the Participant under the
Retirement Plan and under the ESOP based on his Compensation and without regard
to Code restrictions on contributions made by or on behalf of the Participant
over (ii) the amount of Compensation Deferral Contributions actually made on
behalf of the Participant to the Retirement Plan and ESOP based on his Limited
Compensation. With respect to a Participant whose date of employment occurs
during the Plan Year in which he is first eligible to participate, the
calculation of Employee Contribution Credits under this Section 3.2 shall be
made under the presumption that the Participant was eligible upon his date of
employment with the Company to participate in the Retirement Plan and the ESOP,
but without presuming contributions on his behalf.

The amount of Employee Contribution Credits for any Plan Year will be determined
by a properly executed Deferral Election Form which requires the Employee to
irrevocably agree to make the maximum Compensation Deferral Contributions for
the applicable Plan Year as permitted under the Retirement Plan and ESOP.

Any Participant who receives a hardship withdrawal from the Retirement Plan or
the ESOP is prohibited from having Employee Contributions credited to this Plan
and all other plans maintained by the Company for a twelve (12) month period
beginning as of the first day of the month following receipt of the hardship
withdrawal.

 

3.3 Crediting of Earnings

(A) Sub-Accounts

Each Participant's Company Contribution Credits Account and Employee
Contribution Credits Account shall be comprised of sub-accounts which shall be
established in the discretion of the Committee.

New Company Contribution Credits and Employee Contribution Credits shall be
credited to the sub-accounts in accordance with the rules established by the
Committee.

 

 

SECTION IV

DISTRIBUTABLE EVENTS AND DISTRIBUTION OF AMOUNTS

4.1 Retirement

A Participant who reaches Retirement and retires from the Company shall receive
his Contribution Credits Account in ten annual installments payable as of the
beginning of each Plan Year following his Retirement date. Such installments
shall equal the Contribution Credits Account as of the end of the Plan Year in
which the Participant shall retire or terminate employment divided by the
appropriate number of remaining annual installments. Payments to a Participant
or Beneficiary shall be made from the Participant's sub-accounts in accordance
with rules established by the Committee.

The Compensation Committee has the discretion to determine when the Contribution
Credits Accounts are payable, including in a single lump sum or periodic
distribution. Once the balance in a Participant's account is paid in full, there
shall be no further benefits payable to the Participant or his Beneficiary from
the Plan.

All payments to Participants and Beneficiaries from the Plan shall be made in
cash.

4.2 Death

At the time that an Employee becomes a Participant, he shall designate in
writing a Beneficiary to receive any payments to which he would have been
entitled under the terms of the Plan. The Beneficiary referred to in this
paragraph may be designated or changed by the Participant (without the consent
of any prior Beneficiary) on a form provided by the Committee and delivered to
the Committee before his death. If no such Beneficiary shall have been
designated, or if no designated Beneficiary shall survive the Participant,
payments shall be made to the Participant's estate.

If the Participant's employment is terminated because of death, then the Company
shall deem the Participant to be fully vested and make payments to his
designated Beneficiary in the same manner and to the extent as provided in
Section 4.1 as if the Participant had retired on the date of his death.

4.3 Termination of Employment

In the event a Participant's employment with the Company terminates after five
years of Service for reasons other than Retirement or death, the Company shall
make payment to the Participant of the entire Contribution Credits Account in
the same manner and to the extent provided in Section 4.1 as if the person
retired on the date of termination. If the Participant's employment terminates
prior to five years of Service, the entire Employee Contribution Credits Account
and only the vested portion, if any, of the Company Contribution Credits Account
will be available for payment to the Participant in the same manner and to the
extent provided in Section 4.1 as if the person retired on the date of
termination. The Company Contribution Credits Account shall become vested, or
non-forfeitable, to the Participant in twenty percent (20%) increments based on
the Participant's years of Service as follows:

Years of Service

Percent Vested

Less than One

0%

One

20%

Two

40%

Three

60%

Four

80%

Five

100%

 

 

 

4.4 Withdrawals/Loans Not Allowed

No benefits shall be paid nor loans granted from this Plan while a Participant
is an employee of the Company. Benefits from the Plan shall be paid solely in
accordance with the provisions of Sections 4.1, 4.2 and 4.3 of the Plan.

SECTION V

MISCELLANEOUS

5.1 The Committee may, in its sole discretion, terminate, suspend or amend this
Plan at any time or from time to time, in whole or in part. Upon termination,
the Company shall pay to each Participant the entire value of his Contribution
Credits Account which would have been available had the Participant had a
termination of Service after five years of Service. The Company will make
payments in either installments or a single lump sum as soon as practicable
after the effective date of the termination of the Plan.

5.2 Nothing contained herein will confer upon any Participant the right to be
retained in the service of the Company, nor will it interfere with the right of
the Company to discharge or otherwise deal with Participants without regard to
the existence of this Plan.

5.3 The Company's obligations under this Plan shall be unfunded and an unsecured
promise to pay. The Company shall not be obligated under any circumstances to
fund its financial obligations under this Plan. All assets which the Company may
acquire to help cover its financial liabilities are and remain general assets of
the Company subject to the claims of its creditors. The Company does not give,
and the Plan does not give, any beneficial ownership interest in any asset of
the Company to a Participant or his Beneficiary. All rights of ownership in any
assets are and remain in the Company. The Company's liability for payment of
benefits shall be determined only under the provisions of this Plan as it may be
amended from time to time.

Notwithstanding the above, the Company reserves the right to establish a Rabbi
Trust for this Plan similar to the trust described in Revenue Procedure 92-64 or
any successor thereto or as otherwise provided in the Code.

5.4 The rights of a Participant or any Beneficiary of the Participant shall be
solely those of an unsecured general creditor of the Company. A Participant or
Beneficiary of the Participant shall have the right to receive those payments
specified under this Plan only from the Company. These parties have no right to
look to any specific or special property separate from the Company to satisfy a
claim for benefit payments.

A Participant agrees that neither he nor his Beneficiary shall have any right,
claim, security interest, or any beneficial ownership interest whatsoever in any
general asset that the Company may acquire or use to help support its financial
obligations under this Plan. Any general asset used or acquired by the Company
in connection with the liabilities it has assumed under this Plan shall not be
deemed to be held under any trust for the benefit of the Participant or his
Beneficiary, and no general asset shall be considered security for the
performance of the obligations of the Company.

Any such asset shall remain a general, unpledged and unrestricted asset of the
Company.

A Participant also understands and agrees that his participation in the
acquisition of any general asset for the Company shall not constitute a
representation to the Participant or his Beneficiary that any of them has a
special or beneficial interest in any general asset.

5.5 To the maximum extent permitted by law, no benefit under this Plan shall be
assignable or subject in any manner to alienation, sale, transfer, claims of
creditors, pledge, attachment or encumbrances of any kind.

5.6 The Committee may adopt rules and regulations to assist it in the
administration of the Plan. The Committee has sole and absolute discretion to
interpret all provisions of the Plan and to determine entitlement to benefits
under the Plan. The decision by the Committee regarding the Plan's provisions
and benefits is final.

5.7 The Plan shall be binding upon the Company and any successor company through
merger, acquisition or consolidation, and upon a Participant, his Beneficiary,
heirs, executors and administrators.

5.8 The Company may, in its sole discretion, permit the Participant to take a
leave of absence for a period determined by the Committee. During such leave,
the Participant will still be considered to be in the continuous employment of
the Company for purposes of this Plan.

5.9 Each Participant shall receive a copy of this Plan or any amendments thereto
and the Committee will make available for inspection by any Participant a copy
of any rules and regulations used by the Committee in administering the Plan.
Each Participant shall also be notified of any suspension or termination of this
Plan.

5.10 The Committee reserves the right to suspend, cancel, or forfeit the portion
of the installment payouts with respect to the Company Contribution Credits
Account should a Participant, upon his termination of employment or Retirement
from the Company, begin working on a consulting basis or as an employee of a
competing organization. The Participant will continue to receive the remaining
installment payments with respect to his Employee Contribution Credits Account.

The determination of whether the Participant is associated with the competing
organization will be left solely up to the Committee and such determination will
be final.

5.11 This Plan is established under and will be construed according to the laws
of the State of Delaware, except to the extent preempted by ERISA or other
federal regulations.