                               UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT


                               No. 04-2529



WILLIAM J. ADAMS,

                                                Plaintiff - Appellee,

          and


JAMES J. SHALVOY, III,

                                                            Plaintiff,

          versus


LOUISIANA-PACIFIC CORPORATION; ABT BUILDING
PRODUCTS CORPORATION; ABTCO, INCORPORATED; ABT
BUILDING PRODUCTS CORPORATION SUPPLEMENTAL
BENEFIT PLAN #2; RETIREMENT COMMITTEE FOR THE
ABT BUILDING PRODUCTS CORPORATION SUPPLEMENTAL
BENEFIT PLAN #2,

                                             Defendants - Appellants.


Appeal from the United States District Court for the Western
District of North Carolina, at Charlotte. Graham C. Mullen, Chief
District Judge. (CA-01-404-3)


Argued:   September 21, 2005                 Decided:   April 26, 2006


Before MOTZ, TRAXLER, and SHEDD, Circuit Judges.


Reversed in part, vacated in part, and remanded by unpublished per
curiam opinion.
ARGUED: Bruce A. Rubin, MILLER NASH, L.L.P., Portland, Oregon, for
Appellants.   Sara Wyche Higgins, KENNEDY, COVINGTON, LOBDELL &
HICKMAN, L.L.P., Charlotte, North Carolina, for Appellee.       ON
BRIEF: L. Neal Ellis, Jr., HUNTON & WILLIAMS, L.L.P., Raleigh,
North Carolina, for Appellants.       Kiran H. Mehta,     KENNEDY,
COVINGTON, LOBDELL & HICKMAN, L.L.P., Charlotte, North Carolina,
for Appellee.


Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).




                                2
PER CURIAM:

     In this ERISA case, the Louisiana-Pacific Corporation’s (“LP”)

Retirement    Committee,   which   is    the   plan   administrator   of

Supplemental Benefit Plan # 2 (the “Supplemental Plan”), excluded

the stock option income of William J. Adams in calculating his

retirement benefits and also actuarially reduced his benefits

because he retired before age 65.       Adams filed suit, alleging that

the LP Retirement Committee improperly reduced his retirement

benefits.     After the parties filed cross-motions for summary

judgment, the district court denied the defendants’ motion for

summary judgment but granted Adams’ motion for summary judgment.1

The defendants now appeal.   Because we hold that the LP Retirement

Committee did not abuse its discretion, we reverse the district

court’s grant of summary judgment in favor of Adams, vacate its

orders calculating benefits and awarding attorneys’ fees, and

remand for further proceedings.




     1
      The district court actually also granted part of the
defendants’ motion for summary judgment and denied part of Adams’
motion for summary judgment. Although Adams argued in its motion
for summary judgment that approximately $230,000 of severance pay
he received through October 2000 should have been included in
calculating his benefits, the district court concluded that the
Supplemental Plan prohibited including this income. Because Adams
has not appealed the district court’s grant of summary judgment in
favor of the defendants on this issue, that portion of the district
court’s judgment is not before us.

                                   3
                                      I.

     Adams was hired as an executive at ABTco, Inc. in 1992 and

participated in both its Retirement Plan and Supplemental Plan.

The Supplemental Plan was designed to provide additional retirement

benefits for only a select group of ABT’s top executives.                      The

Supplemental Plan contains many of the same contractual provisions

contained in the Retirement Plan.

     In   1998,   Adams     exercised       his   ABT   stock     options    worth

approximately $185,000.         All of this stock option income was

included in his 1998 Form W-2.

     On     January   18,   1999,    in     anticipation     of      the    planned

acquisition of ABT by LP, ABT established a golden parachute plan

entitling Adams and five other ABT top executives to receive

severance    benefits   after   LP   acquired      control      of   ABT.     This

severance pay package provided for a cash out of stock options,

eighteen months of severance pay, and several other benefits.                  The

day after ABT established its golden parachute plan LP agreed to

acquire ABT, and the LP Retirement Committee became the plan

administrator of ABT’s Retirement Plan and Supplemental Plan.

Thereafter, any benefits awarded under the Supplemental Plan were

to be funded directly from the general assets of LP.

     Adams terminated his employment with ABT on April 30, 1999,

and became an employee of LP the next day.              In 1999, Adams cashed

out his remaining ABT stock options worth approximately $870,000.


                                        4
All of this cancellation stock option income was reported on Adams’

1999 Form W-2.   Although Adams remained an employee at LP through

2000, he was also paid approximately $230,000 in 2000 in severance

pay under ABT’s golden parachute plan.

     Retirement benefits under the Supplemental Plan are based on

the retiring employee’s average “Compensation” over a specified

five-year period multiplied by his years of service.           Although

“Compensation” is not defined in the Supplemental Plan, section 4.1

of the Supplemental Plan expressly adopts the definition of that

term in the related Retirement Plan. Section 5.1 of the Retirement

Plan defines “Compensation” as:

     the compensation reported as wages on participant’s Form
     W-2, plus salary deferral contributions . . . , excluding
     other deferred compensation, reimbursements, fringe
     benefits, moving expenses and welfare benefits . . . .

J.A. 173 (emphasis added).      ABT hired an outside actuary (“the

retained actuary”) to perform its benefits calculations.

     One   difference   between     the   Retirement    Plan   and   the

Supplemental Plan is that the Retirement Plan has a specific

provision -- section 5.3 -- that actuarially reduces monthly

benefits if a participant retires before age 65.          Although the

Supplemental Plan has no such specific provision, it distinguishes

between “normal” and “early” retirement dates.         The Supplemental

Plan also provides that “[u]nless otherwise indicated, the terms

used in this Plan shall have the same meaning as set forth in the

Retirement Plan.”   J.A. 392.     The Retirement Plan defines “normal

                                    5
retirement date” as “the date the participant attains age 65,” and

defines “early retirement date” as “the first day of the calendar

month    coincident     with    or   next      following      the   date   of    the

participant’s retirement from the employ of the company . . .

before his or her normal retirement date but after having attained

age 55.”     J.A. 66.

       The   administrative     record       reveals   that    in   1995   the   ABT

Retirement     Committee       considered       several     issues    under      the

Supplemental Plan, including whether benefits should be actuarially

reduced for early retirement.         The ABT Committee proposed several

amendments to the Supplemental Plan, one of which was to pay early

retirement benefits on an unreduced basis.                 The retained actuary

analyzed the effect the early retirement amendment would have on

the Plan and recommended that it not be adopted because it would be

too costly. Despite this recommendation, ABT adopted the amendment

to the Supplemental Plan in July 1995, which provided that early

retirement benefits would be paid “on an unreduced basis.”                       J.A.

386.    All of the other proposed amendments were also adopted.

       However, two months later in September 1995, ABT issued a

revised Supplemental Plan, which included all of the provisions

adopted by ABT in July 1995 except for the provision requiring that

early retirement be paid “on an unreduced basis.” It is undisputed

that all benefits paid under this Supplemental Plan (and all




                                         6
earlier and later versions of the Plan) were actuarially reduced

for those retiring before age 65.2

       In   September      1999,    Adams      requested         from     ABT     a    benefits

calculation under the Retirement Plan and the Supplemental Plan for

three different start-payment dates, 1999 (when Adams turned 58),

2003 (when Adams turned 62), and 2006 (when Adams turned 65).                                    ABT

provided to its retained actuary the amounts of Adams’ compensation

for the five-year period 1995 through 1999 and requested a benefits

calculation for Adams.           In performing the requested calculations,

the    actuary     included        the    income         Adams        received        from       the

cancellation of his stock options in 1999.                        The retained actuary

provided     its    calculations          to       the    LP    Retirement        Committee,

explaining that it included the stock option income because the

“plan definition of compensation is essentially W-2, thus, if the

exercised options are included in W-2, we will use them.”                                        J.A.

910.

       In   October     1999,      the    LP       Retirement         Committee       passed       a

Resolution    relating      to     both    the      ABT    Retirement       Plan       and       the

Supplemental       Plan.        According          to    this    Resolution,          “payments

received     in    1999    by    participants            in     the    Plans     .     .     .    in

consideration for the cancellation of certain outstanding stock



       2
      The retained actuary did not know that the July 1995
amendment requiring payment of early retirement benefits “on an
unreduced basis” had been adopted until after Adams sought a
calculation of his retirement benefits in 1999.

                                               7
options . . . do not constitute “Compensation” as defined in

Section 5.1 of the Retirement Plan and in Section 4.1 of the

[Supplemental Plan].”     J.A. 469.

     In March 2000, the LP Retirement Committee responded to Adams’

request for benefit calculations, indicating that Adams would

receive approximately $1,000 a month under the Retirement Plan and

approximately $3,000 a month under the Supplemental Plan if he

began receiving retirement benefits at age 65.              Contrary to its

retained actuary’s recommendation, the LP Retirement Committee’s

calculation did not include the more than $1 million of income

Adams received from his exercise and cancellation of stock options

in 1998 and 1999.

     In May 2000, Adams complained to the LP Retirement Committee

that its benefits calculation significantly underestimated his

Supplemental Plan benefits for several reasons.            In particular, he

asserted that the calculation should have included the more than $1

million he received in stock option income in 1998 and 1999.           Adams

cited the retained actuary’s previous statement that all income

reported   on   a   retiree’s   Form   W-2   should   be   included   in   the

Supplemental Plan calculation.         He also asserted that the $230,000

he would receive in severance pay in 2000 should be included in his

benefits calculation. Moreover, Adams argued that the Supplemental

Plan did not provide for an actuarial reduction in benefits for

retirement before age 65, so he was entitled to begin receiving his


                                       8
benefits on an unreduced basis as of May 1999, when he retired from

ABT.    Based on his calculation, Adams claimed he was entitled to

monthly    payments   of   $6,901   under   the   Supplemental   Plan,

substantially more than the estimate provided by the LP Retirement

Committee.

       In its October 2000 response to Adams, the LP Retirement

Committee disagreed that Adams’ stock option income should be

included in the benefits calculation.        Instead, the Retirement

Committee asserted that, even though stock option income was

included on Adams’ Form W-2, it was properly excluded from Adams’

benefits calculation because it constituted a “fringe benefit”

under the Supplemental Plan’s definition of “Compensation.”       J.A.

1292.   The   Retirement Committee represented that the Supplemental

Plan’s definition of “Compensation” was fashioned after the IRS’s

“safe-harbor” definition to qualify the Plan for certain tax

protections and that the Retirement Committee deemed it appropriate

-- to ensure compliance with the IRS regulations -- to exclude

Adams’ stock option income as a fringe benefit.        The Retirement

Committee also indicated that it would be highly unusual to include

such an extraordinary amount of compensation in the calculation

since Supplemental Plan benefits were intended to replace the

retiree’s normal compensation stream, not a compensation stream

abnormally enhanced by exercise and cancellation stock option

income. The Retirement Committee acknowledged, however, that ABT’s


                                    9
prior practice was inconsistent because stock option income was

included in some prior benefits calculations but excluded in

others.

     The     LP     Retirement         Committee      also       asserted       that     the

Supplemental Plan provides for an actuarial reduction of benefits

for those participants who retire before age 65.                        It reasoned that

the July 1995 amendment providing that early retirement benefits

would   be      paid    “on    an     unreduced     basis”       must    have    been     an

administrative mistake and that, at any rate, it was removed from

the Supplemental Plan just two months later when the revised Plan

document was issued.                The Retirement Committee also noted that

section 4.2 of the Supplemental Plan provides that benefits are

payable    at     normal      and    early    retirement     dates.         Because      the

Retirement       Plan    requires       an     actuarial     reduction       for       early

retirement and because the Supplemental Plan generally provides

that its terms have the same meaning as the terms of the Retirement

Plan, the Retirement Committee reasoned that early retirement

benefits paid under the Supplemental Plan should be actuarially

reduced    in    the    same    manner       that   they   are    reduced       under    the

Retirement Plan.           The Retirement Committee also noted that all

previous Supplemental Plan early retirement benefits calculations

were actuarially reduced.              Last, the Retirement Committee agreed

with Adams that he was entitled to draw his benefits starting May

1, 1999.


                                              10
      In December 2000, Adams appealed the LP Retirement Committee’s

adverse determinations.       Adams cited Treas. Reg. § 1.61-21(a)(1),

which lists several examples of fringe benefits.                Because stock

option income is not on that list, Adams reasoned that the IRS did

not consider stock option income to be a fringe benefit.                Adams

also asserted that the IRS has several alternative safe-harbor

definitions of “Compensation,” one of which specifically excludes

stock option income.        Thus, Adams asserted that the Plan sponsor

must have intended to include stock option income or it would have

incorporated the safe-harbor definition specifically excluding it.

      Adams also argued that the LP Retirement Committee’s rationale

for   concluding    that    the     Supplemental   Plan     incorporated     the

Retirement Plan’s actuarial reduction for early retirement was

flawed in several respects.          He argued that the Supplemental Plan

included the terms “normal” and “early” retirement dates merely to

specify    when   payment    of     retirement   benefits    are   allowed    to

commence.    Adams also noted that the Supplemental Plan does not

specifically cross-reference section 5.3 of the Retirement Plan --

the provision that mandates an early retirement actuarial reduction

-- which ABT easily could have done if it intended to actuarially

reduce early retirement benefits.            Adams further noted that ABT

specifically included an actuarial reduction in the Supplemental

Plan in the case of those participants entitled to a joint and

survivor    annuity.        Thus,    Adams   reasoned,    ABT   knew   how    to


                                        11
actuarially      reduce     a   benefit   but    “chose    to   be    silent     as   to

actuarial reductions for pre-age 65 commencement of benefits.”

J.A. 1306 n.7. In response to the Retirement Committee’s assertion

that    all     prior    Supplemental     Plan     early    retirement       benefits

calculations had been actuarially reduced, Adams asserted that this

prior practice had no relevance because the clear language of the

Supplemental Plan does not provide for an actuarial reduction of

early retirement benefits.

       After receiving Adams’ appeal, the LP Retirement Committee

obtained a report from Robert Weatherford, the consulting actuary

it hired to analyze ABT’s prior practice of calculating benefits

under its retirement plans.           As part of his review, Weatherford

interviewed the former administrator of ABT’s Retirement Committee

and    reviewed    extensive      documentation     of     ABT’s     prior   benefits

calculations.           Weatherford determined that there was only one

instance, the calculation of retirement benefits for Ron Green, in

which the ABT Retirement Committee expressly directed its retained

actuary in writing regarding the elements of compensation that

should    be    included     in   benefits      calculations.         In   the   Green

calculation, the ABT Retirement Committee staff directed that only

“base pay, overtime and bonus amounts can be used in the benefit

calculation,” and, as a result, more than $900,000 in stock option

income was excluded from Green’s retirement benefit calculation.

J.A.     767.    Weatherford determined generally that ABT’s retained


                                          12
actuary    treated   stock    option    income   very   inconsistently   when

calculating retirement benefits under the ABT Retirement plans. In

most instances, stock option income was included, but in many

instances stock option income was excluded.               When stock option

income was included in benefits calculations, it appeared that such

inclusions resulted from the ABT payroll department providing the

retained actuary with only lump sum compensation figures that

included stock option income and not from any intentional decision

by the ABT Retirement Committee to include stock option income. In

some instances, these lump sums also included obvious fringe

benefits    like   moving    expenses    and   automobile   allowances   that

clearly should have been excluded from the benefits calculations.

In summary, Weatherford concluded:

     It seems reasonable to assume that prior to the date of
     [the acquisition of ABT by LP], at no time did the ABTco
     Plan Administrator or the Retirement Committee make an
     identifiable effort to consciously include stock options
     as an element of compensation used in benefit
     calculations for either the Retirement Plan or [the
     Supplemental Plan].    It appears more likely that the
     stock options included in the pension compensation
     provided to the prior actuary were a result of human
     error during the process of programming the payroll
     system, rather than a conscious act on the part of the
     [ABT] Plan Administrator.

J.A. 842.

     In February 2001, the LP Retirement Committee formally upheld

its denial of Adams’ claims.            In response to Adams’ claim that

Treas. Reg. § 1.61-21 does not include stock option income as a

fringe benefit, the Retirement Committee noted that the regulation

                                        13
lists examples of fringe benefits and does not purport to be an

exhaustive list.    Thus, just because stock option income is not

expressly included in the list does not mean that the IRS intended

to exclude it from the list.           The Retirement Committee further

stated it was not persuaded by Adams’ argument that the ABT would

have used the safe-harbor definition that specifically excluded

stock option income if it had intended to exclude stock option

income.   The Retirement Committee reasoned that there were several

other reasons why ABT may have decided to use the alternative safe-

harbor definition not specifically excluding stock option income.

For instance, the definition ABT chose is perhaps the easiest to

administer and, while it does not specifically exclude stock option

income,   fringe   benefit    is   a   sufficiently    broad    category   to

encompass stock option income.

     As additional support for its conclusion that stock option

income should be considered a fringe benefit, the Retirement

Committee referenced IRS Publication 15-B, “Employer’s Tax Guide to

Fringe Benefits.”    Because this publication includes a discussion

of how to treat income derived from stock options, the Retirement

Committee   reasoned   that    “in     the   IRS’s    view,    exercise    and

cancellation [stock option] income are fringe benefits.” J.A. 952.

     The Retirement Committee also referenced in detail the recent

findings of Weatherford, its consulting actuary, who determined

that the past practice by ABT was generally to exclude stock option


                                       14
income under the Supplemental Plan for the most highly compensated

executives    whenever         the    benefit    calculations       were     processed

manually    outside      the     automated      payroll    system.         It    adopted

Weatherford’s theory that the inclusion of stock option income was

most likely a function of how the payroll system was programmed

rather than any conscious decision by ABT to include it.                         Notably,

in denying Adams’ claim that stock option income should be included

in his benefits calculation, the Retirement Committee did not rely

on its October 1999 Resolution excluding cancellation stock option

income received in 1999 from “Compensation.”

       The Retirement Committee also upheld its determination that

Adams’ benefits under the Supplemental Plan should be actuarially

reduced    because    he     retired     from    ABT   before    age       65.     While

acknowledging that Adams’ interpretation -- that the Supplemental

Plan    provides   for      an   unreduced      benefit    --   was    a    reasonable

interpretation,       the      Retirement      Committee    concluded        that    its

contrary interpretation more likely was consistent with ABT’s

intention, especially when the Supplemental Plan is read in context

with the Retirement Plan and when viewed in light of ABT’s prior

consistent practice of actuarially reducing all Supplemental Plan

early retirement benefits.            The Retirement Committee also reasoned

that there would have been no reason for ABT to attempt to amend

the    Supplemental    Plan      in   July   1995   to    provide     for    unreduced




                                          15
benefits if the Supplemental Plan already prohibited actuarial

reduction of early retirement benefits.

      After exhausting his administrative remedies, Adams filed this

ERISA action against the defendants.                 Following discovery, the

parties filed cross-motions for summary judgment.

      In granting summary judgment in favor of Adams, the district

court concluded that the Retirement Committee’s adoption of the

October 1999 Resolution violated the plain terms of section 7.2 of

the Supplemental Plan, which prohibits amending the Supplemental

Plan without first obtaining written consent of the affected

participant. Thus, because Adams did not consent to this amendment

to   the   Supplemental     Plan,    the   district     court     ruled    that    the

Retirement Committee abused its discretion by refusing to include

Adams’ stock option income in his benefits calculation.

      The district court also concluded that the LP Retirement

Committee was bound to apply the July 1995 amendment to the

Supplemental Plan mandating that benefits “be paid on an unreduced

basis,” because there was no documentation establishing that ABT

had revoked the amendment. Thus, the district court ruled that the

LP   Retirement    Committee     abused       its   discretion    by    actuarially

reducing    Adams’    benefits      in   contravention       of   the     July    1995

amendment.

      After issuing its summary judgment order, the district court

ordered    the    parties   to   recalculate        Adams’   Supplemental         Plan


                                         16
benefits consistent with its rulings.                 Without waiving their

objections to the court’s rulings, the defendants calculated Adams’

monthly benefits to be $6,315.83.                Adams calculated that his

monthly benefits should be $6,770.25.             The district court adopted

Adams’ calculation, and entered judgment accordingly.



                                        II.

       We review a grant of summary judgment de novo, applying the

same    standards    employed    by     the    district   court.       Evans    v.

Metropolitan Life Ins. Co, 358 F.3d 307, 310 (4th Cir. 2004).                  When

parties file cross-motions for summary judgment, we must consider

each motion separately and view the facts relevant to each in the

light most favorable to the nonmoving party.                 Mellen v. Bunting,

327 F.3d 355, 363 (4th Cir. 2003).

       In cases in which the ERISA plan vests the plan administrator

with discretionary authority to construe the terms of the plan, we

review the administrator’s benefits determinations for an abuse of

that discretion.      Evans, 358 F.3d at 310.         Under this deferential

standard, we will not disturb the administrator’s decision if it is

reasonable, even if we would have come to a different conclusion

independently.      Booth v. Wal-Mart Stores, Inc. Assocs. Health &

Welfare   Plan,     201   F.3d   335,    341   (4th   Cir.    2000).     A   plan

administrator’s determination is reasonable if it is the product of

a deliberate and principled reasoning process and is supported by


                                        17
substantial evidence.   Brogan v. Holland, 105 F.3d 158, 161 (4th

Cir. 1997).

     However, even when a plan confers discretion on the plan

administrator to construe the meaning of the plan’s terms, the plan

administrator is “not free to alter the terms of the plan or to

construe unambiguous terms other than as written.” Colucci v. AGFA

Corp. Severance Pay Plan, 431 F.3d 170, 176 (4th Cir. 2005).    If a

denial of benefits is contrary to the clear terms of the plan, the

plan administrator’s determination “will constitute an abuse of

discretion.”   Lockhart v. United Mine Workers of America 1974

Pension Trust, 5 F.3d 74, 78 (4th Cir. 1993).

     Section 5.1 of the Supplemental Plan gives the LP Retirement

Committee, as the plan administrator, “full discretionary authority

to determine an individual’s eligibility for benefits . . . and to

otherwise interpret and administer the Plan.”      J.A. 452.    The

parties agree, based on the Plan’s grant of discretion, that our

review is for an abuse of discretion rather than de novo.   However,

Adams argues that the deferential abuse of discretion standard

should be lessened because the LP Retirement Committee was acting

under a clear conflict of interest.       He claims that the LP

Retirement Committee had a financial incentive to reduce Adams’

benefits as much as possible because LP would be required to pay

the benefits from its general assets and because only ABT, not LP,

employees are participants under the Supplemental Plan.         For


                                18
purposes of our review, we will assume that the LP Retirement

Committee   was   acting    under    a   conflict     of   interest    and   will,

therefore, reduce the amount of deference to the extent necessary

to counteract any undue influence resulting from the conflict. See

Doe v. Group Hospitalization &             Med. Servs., 3 F.3d 80, 87 (4th

Cir. 1993) (“[W]e will review the merits of the [administrator’s]

interpretation to determine whether it is consistent with an

exercise of discretion by a fiduciary acting free of the interests

that conflict with those of the beneficiaries.                  In short, the

fiduciary decision will be entitled to some deference, but this

deference will be lessened to the degree necessary to neutralize

any untoward influence resulting from the conflict”).3



                                     III.

                                         A.

     The    defendants     argue    that      the   district   court   erred   in

concluding that the LP Retirement Committee abused its discretion

in determining that Adams’ stock option income should not be



     3
      After oral argument in this case, we issued our opinion in
Colucci, 431 F.3d at 179, in which we stated that “the simple and
commonplace fact that a plan’s administrator is also its funder is
not enough to support a finding of a conflict of interest that
would cause an adjustment to our deference.” Under the particular
facts of that case, we declined to lessen the deference under the
abuse of discretion standard. Although it is possible that Colucci
would support the same result in this case, the defendants have not
attempted to supplement their briefs to argue that Colucci should
apply to the facts of this case.

                                         19
included in the benefits calculation under the Supplemental Plan.

We agree.

      The district court ruled that the LP Retirement Committee

contravened the clear language of the Supplemental Plan by adopting

the October 1999 Resolution amending the Supplemental Plan to

exclude stock option income as a component of “Compensation”

without    obtaining    Adams’   consent.      Thus,    the   district    court

concluded that the Retirement Committee abused its discretion by

relying on this improper amendment and excluding stock option

income from Adam’s benefits calculation.

      The district court’s ruling is incorrect for three reasons.

First, the October 1999 Resolution was not an amendment to the

Supplemental Plan that required consent by Adams.                Instead, the

Resolution was simply the LP Retirement Committee’s interpretation

of   the   definition   of   “Compensation,”    and    section   5.1     of   the

Supplemental Plan expressly authorizes the Retirement Committee

“to interpret” the terms of the Plan.                  Second, even if the

Resolution were an impermissible amendment to the Plan, there is no

indication that the Retirement Committee relied on the Resolution

in deciding during its administrative review of Adams’ claim that

stock option income was a fringe benefit that must be excluded from

the calculation of Adams’ benefits.             Although the Retirement

Committee gave several rationales for its determination that stock

option income was excludable, it never mentioned the October 1999


                                     20
Resolution during its administrative review.             Third, the October

1999 Resolution applies only to cancellation stock option income

received in 1999, so the Retirement Committee could not have relied

on that Resolution in deciding to exclude the exercise stock option

income that Adams’ received in 1998.

     In   deciding     whether    an    administrator       has   abused   its

discretion, we consider several factors, including, but not limited

to: (1) the language of the plan; (2) the sufficiency of the

materials considered in making the decision and the extent to which

they support it; (3) whether the administrator’s determination was

consistent with previous interpretations of the plan; and (4)

whether the decisionmaking process was reasoned and principled.

Booth, 201 F.3d at 342-43.       We conclude that all of these factors

support the conclusion that the LP Retirement Committee did not

abuse its discretion by deciding to exclude stock option income

from Adams’ benefits calculation.

     First,   the     language   of    the   Supplemental    Plan   does   not

specifically state whether stock option income should be included

in calculating benefits. Instead, the Plan requires the Retirement

Committee to take into account all compensation reported on the

participant’s Form W-2 and then subtract from that figure several

particular    forms    of   compensation     including    fringe    benefits.

Because the term “fringe benefits” is not defined under the Plan

and its meaning is susceptible to more than one meaning, the


                                       21
Retirement Committee acted within its authority in attempting to

determine if stock option income reasonably fell within that

category of excludable compensation.

        Second, the Retirement Committee considered a wide range of

materials in reaching its decision. The Retirement Committee hired

Weatherford to review how ABT treated stock option income in

benefit calculations before LP acquired ABT.                  Weatherford reviewed

voluminous      records   and       also   interviewed      ABT   employees     before

submitting his results to the Retirement Committee. The Retirement

Committee also reviewed various Treasury regulations to determine

whether the IRS considered stock option income to be a fringe

benefit. Although none of these materials conclusively established

that    stock   option    income      is    a    fringe    benefit,    they    provided

sufficient      support       for    the    Retirement       Committee’s       ultimate

conclusion that stock option income should be considered a fringe

benefit and should, therefore, be excluded from Adams’ benefits

calculations.

       Third, the LP Retirement Committee’s decision was consistent

with most of ABT’s prior “interpretations” under the Supplemental

Plan.     It is undisputed that stock option income was not treated

consistently      by    the    ABT    Retirement      Committee       in   calculating

benefits.       After     reviewing        ABT’s    past    practice,       Weatherford

surmised    that,      when    ABT’s       Retirement      Committee       specifically

considered whether to include or exclude stock option income, it


                                            22
decided to exclude it.   On the other hand, Weatherford opined that

the inclusion of stock option income in calculations did not appear

to be based on a specific interpretation of the Supplemental Plan

by the ABT Retirement Committee but seemed instead to be the

product of the payroll department reporting stock option income in

the data it forwarded to the retained actuary.     That data was often

incorrect because in some instances it failed to exclude even

obvious fringe benefits like automobile allowances and moving

expenses.   Under Weatherford’s theory, although the LP Retirement

Committee’s   interpretation   excluding   stock   option   income   was

inconsistent with ABT’s past “practice” of including it in many

instances, it was consistent with those instances in which ABT

specifically “interpreted” the Supplemental Plan to exclude stock

option income.

     Finally, although the LP Retirement Committee’s interpretation

was not consistent with its retained actuary’s recommendation that

stock option income be included, the Retirement Committee’s refusal

to adopt the retained actuary’s recommendation is reasonable.         In

his September 1999 letter to the LP Retirement Committee, the

retained actuary insisted that “the plan definition of compensation

is essentially W-2, thus, if the exercised options are included in

W-2, we will use them.” This assertion, however, ignores the clear

definition of “Compensation” in the Supplemental Plan requiring

that several components of “Compensation” that are included on Form


                                 23
W-2, including fringe benefits, must be excluded for purposes of

calculating benefits.4

       Fourth, the LP Retirement Committee’s decisionmaking process

was    reasoned    and   principled.        The    LP     Retirement   Committee

thoroughly reviewed ABT’s prior practices and interpretations,

consulted related Treasury regulations, and carefully responded to

Adams’ many countervailing arguments. In sum, even considering the

Retirement    Committee’s     conflict      of   interest,    its   decision    to

exclude    stock   option    income   as    a    fringe   benefit   from     Adams’

benefits calculation was reasonable and supported by substantial

evidence.



                                       B.

       The defendants next argue that the district court erred in

determining that the LP Retirement Committee abused its discretion

in    deciding    to   actuarially    reduce     Adams’    benefits    for    early

retirement.      We agree.

       The district court ruled that the Retirement Committee was

required to apply the July 1995 amendment mandating that early


       4
      Adams also cites to the retained actuary’s November 1999
correspondence to the LP Retirement Committee, even though this
letter was not included in the administrative record. Assuming
that this letter is properly before us, it does not affect our
ruling.    The retained actuary reasserts his opinion that
“Compensation” is “basically W-2 compensation.” J.A. 1076. This
letter, like his September 1999 correspondence, does not discuss
whether stock option income can be subtracted as a fringe benefit.


                                       24
retirement benefits be paid “on an unreduced basis,” because there

was no evidence in the administrative record that this amendment

had formally been revoked.          We conclude that this ruling is not

supportable under the particular facts of this case.

     Even assuming that the July 1995 amendment was not properly

revoked in 1995, Adams would be entitled to rely on it only for his

benefits that vested prior to the September 1995 version of the

Supplemental      Plan,   which    did    not   incorporate   the    July    1995

amendment.   It is undisputed that none of Adams’ Supplemental Plan

benefits vested until after 1995, so the July 1995 amendment would

not apply to any of Adams’ benefits.

     Having found that the basis of the district court’s ruling was

incorrect,   we    also   conclude       that   the   Retirement    Committee’s

decision to actuarially reduce Adams’ benefits was the product of

a deliberate and principled reasoning process and is supported by

substantial evidence.            See Brogan, 105 F.3d at 161.            Adams’

principal    argument     that    the    Retirement    Committee    abused   its

discretion because actuarially reducing benefits contravenes the

clear language of the Supplemental Plan is not persuasive.                   The

Supplemental Plan does not expressly provide that early retirement

benefits must be paid on an unreduced basis.               Instead, the Plan

sets out a formula to calculate benefits but also distinguishes

between “early” retirement and “normal” retirement. Although Adams

insists that this distinction is only meant to determine when


                                         25
benefits      may     commence,       the    reason    for   this    distinction     is

susceptible to more than one reasonable interpretation.                          Because

the Supplemental Plan supplements benefits under the Retirement

Plan and shares many of the same terms and meanings, we conclude

that    it    was    reasonable    for      the   Retirement      Committee   to   draw

inferences from how the Retirement Plan treats early retirement

benefits in determining how they should be treated under the

Supplemental Plan.

       Moreover, we conclude that the Retirement Committee reviewed

adequate materials (the prior plan revisions and amendments and

prior ABT calculations) in reaching its decision and thoroughly

responded      to    all   of   the    contrary       arguments    raised   by   Adams.

Finally, it is undisputed that actuarially reducing benefits for

early retirement is entirely consistent with ABT’s prior practice

under the Supplemental Plan.



                                             C.

       The defendants also argue that the district court erred in

adopting Adams’ calculation of benefits and awarding attorneys’

fees.    Because our opinion reversing the judgment of the district

court    on    the    stock     option      and   early   retirement    issues     will

necessarily affect the district court’s benefits calculations, we

decline to address the defendants’ additional arguments at this

time.    Instead, we vacate the district court’s orders calculating


                                             26
benefits and awarding attorneys’ fees and remand for further

proceedings.



                                IV.

     We hold that the LP Retirement Committee did not abuse its

discretion in deciding to exclude Adams’ stock option income in his

benefits   calculation.   We   also   hold   that   the   LP   Retirement

Committee did not abuse its discretion in actuarially reducing

Adams’ benefits for early retirement.    Accordingly, we reverse the

grant of summary judgment in favor of Adams, vacate the orders

calculating benefits and awarding attorneys’ fees, and remand for

further proceedings consistent with this opinion.



                                                     REVERSED IN PART,
                                                      VACATED IN PART,
                                                          AND REMANDED




                                 27
