As filed with the Securities and Exchange Commission on November 18, 1994.
Registration Statement No. 33-56487
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8/A1
POST-EFFECTIVE
AMENDMENT NO. 1 TO
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
____________________
CHESAPEAKE CORPORATION
(Exact name of Registrant as specified in its Charter)
Virginia 54-0166880
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1021 East Cary Street, Box 2350
Richmond, Virginia 23218-2350
(Address of principal executive office, including zip code)
CHESAPEAKE PACKAGING CO.
401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
(Full title of the Plan)
____________________
J. P. Causey Jr., Esq.
Vice President, Secretary and General Counsel
Chesapeake Corporation
1021 East Cary Street, Box 2350
Richmond, Virginia 23218-2350
804-697-1000
(Name, address and telephone number, including area code, of agent for service)
With copies to:
Hugh V. White, Jr., Esq.
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219-4074
804-788-8200
--------------------
<PAGE>
THIS AMENDMENT IS FILED TO CORRECT DATA TRANSMISSION ERRORS IN
THE ORIGINAL FILING THAT AFFECTED THE EXHIBITS FILED HEREWITH.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 8. Exhibits.
Exhibit No.
4.1 Articles of Incorporation (filed as Exhibit 3.1 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1989, and incorporated
herein by reference).
4.2 Bylaws (filed as Exhibit 3.2 to the Company's Annual Report on Form 10-K
for the year ended December 31, 1991, and incorporated herein by
reference).
4.3 Rights Agreement, dated as of March 15, 1988, between the Company and
Crestar Bank (filed as Exhibit 4.1 to the Company's Current Report on Form
8-K dated March 15, 1988, and incorporated herein by reference).
4.4 Rights Agreement Amendment, dated as of August 24, 1992, between the
Company and Harris Trust and Savings Bank (filed as Exhibit 4.4 to the
Company's Registration Statement on Form S-8, File No. 33-56473, and
incorporated herein by reference).
4.5 Form of Chesapeake Packaging Co. 401(k) Savings Plan for Hourly Employees
(filed herewith).
4.6 Form of Chesapeake Packaging Co. 401(k) Savings Plan for Hourly Employees
Trust Agreement between the Company and The Bank of New York (filed
herewith).
5 Opinion of Hunton & Williams as to the legality of the securities being
registered (filed herewith).
23.1 Consent of Hunton & Williams (included in Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P. (previously filed).
24 Powers of Attorney (included on original signature page).
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Richmond, Commonwealth of Virginia, on this 17th day of November, 1994.
CHESAPEAKE CORPORATION
(Registrant)
By /s/ J. P. Causey Jr.
J. P. Causey Jr.
Vice President,
Secretary
& General Counsel
Pursuant to the requirements of the Securities Act, this amendment has
been signed by the following persons in the capacities indicated on this 17th
day of November, 1994.
Signature Title
By /s/ J. Carter Fox* By /s/ Wallace Stettinius*
J. Carter Fox Chairman of the Wallace Stettinius
Board of Directors, President & Director
Chief Executive Officer
By /s/ Paul A. Dresser, Jr.* By /s/ John Hoyt Stookey*
Paul A. Dresser, Jr. Director, John Hoyt Stookey
Executive Vice President & Director
Chief Operating Officer
By /s/ Robert L. Hintz* By /s/ Richard G. Tilghman*
Robert L. Hintz Richard G. Tilghman
Director Director
By /s/ William D. McCoy* By /s/ Joseph P. Viviano*
William D. McCoy Joseph P. Viviano
Director Director
By /s/ C. Elis Olsson* By /s/ Harry H. Warner*
C. Elis Olsson Harry H. Warner
Director Director
By /s/ John W. Rosenblum* By /s/ Andrew J. Kohut*
John W. Rosenblum Andrew J. Kohut
Director Vice President - Finance & Chief
Financial Officer
By /s/ Christopher R. Burgess*
Christopher R. Burgess
Controller
*By /s/ J. P. Causey
J. P. Causey
Attorney-in-fact
<PAGE>
The Plan. Pursuant to the requirements of the Securities Act, the Plan
has caused this amendment to be signed on its behalf by the undersigned, thereto
duly authorized, in the City of Richmond, Commonwealth of Virginia, on this 17th
day of November, 1994.
CHESAPEAKE PACKAGING CO. 401(k) SAVINGS PLAN
FOR HOURLY EMPLOYEES
By /s/ Thomas A. Smith
Thomas A. Smith
Vice President - Human
Resources and
Assistant Secretary
<PAGE>
EXHIBIT INDEX
Sequentially
Exhibit No. Description Numbered Page
4.1 Articles of Incorporation (filed as Exhibit 3.1 to the
Company's Annual Report on Form 10-K for the year
ended December 31, 1989, and incorporated herein by
reference).
4.2 Bylaws (filed as Exhibit 3.2 to the Company's Annual
Report on Form 10-K for the year ended December 31,
1991, and incorporated herein by reference).
4.3 Rights Agreement, dated as of March 15, 1988, between
the Company and Crestar Bank (filed as Exhibit 4.1 to
the Company's Current Report on Form 8-K dated
March 15, 1988, and incorporated herein by reference).
4.4 Rights Agreement Amendment, dated as of August 24,
1992, between the Company and Harris Trust and Savings
Bank (filed as Exhibit 4.4 to the Company's
Registration Statement on Form S-8, File No. 33-56473,
and incorporated herein by reference).
4.5 Form of Chesapeake Packaging Co. 401(k) Savings Plan
for Hourly Employees (filed herewith).
4.6 Form of Chesapeake Packaging Co. 401(k) Savings Plan
for Hourly Employees Trust Agreement between the
Company and The Bank of New York (filed herewith).
5 Opinion of Hunton & Williams as to the legality of the
securities being registered (filed herewith).
23.1 Consent of Hunton & Williams (included in Exhibit 5).
23.2 Consent of Coopers & Lybrand L.L.P. (previously filed).
24 Powers of Attorney (included on original signature page).
Exhibit 4.5
CHESAPEAKE PAPER PRODUCTS COMPANY
401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
As Amended and Restated
Effective January 1, 1993
<PAGE>
Chesapeake Paper Products Company
401(k) Savings Plan for Hourly Employees
TABLE OF CONTENTS
INTRODUCTION
ARTICLE I DEFINITIONS
1.01. Account . . . . . . . . . . . . . . . . . . . . . I-1
1.02. Actual Deferral Percentage or ADP . . . . . . . . I-1
1.03. Affiliate . . . . . . . . . . . . . . . . . . . . I-2
1.04. Alternate Payee . . . . . . . . . . . . . . . . . I-2
1.05. Annuity Starting Date . . . . . . . . . . . . . . I-2
1.06. Beneficiary or Beneficiaries. . . . . . . . . . . I-2
1.07. Board or Board of Directors . . . . . . . . . . . I-3
1.08. Break in Service. . . . . . . . . . . . . . . . . I-3
1.09. Code. . . . . . . . . . . . . . . . . . . . . . . I-3
1.10. Committee . . . . . . . . . . . . . . . . . . . . I-3
1.11. Company . . . . . . . . . . . . . . . . . . . . . I-3
1.12. Compensation. . . . . . . . . . . . . . . . . . . I-3
1.13. Contribution Percentage . . . . . . . . . . . . . I-4
1.14. Defined Benefit Plan. . . . . . . . . . . . . . . I-5
1.15. Defined Contribution Plan . . . . . . . . . . . . I-5
1.16. Disabled or Disability. . . . . . . . . . . . . . I-5
1.17. Effective Date. . . . . . . . . . . . . . . . . . I-5
1.18. Elective Deferral Account . . . . . . . . . . . . I-5
1.19. Elective Deferral Contributions . . . . . . . . . I-5
1.20. Employee. . . . . . . . . . . . . . . . . . . . . I-5
1.21. Employer. . . . . . . . . . . . . . . . . . . . . I-6
1.22. Entry Date. . . . . . . . . . . . . . . . . . . . I-6
1.23. ERISA . . . . . . . . . . . . . . . . . . . . . . I-6
1.24. Excess Aggregate Contribution . . . . . . . . . . I-6
1.25. Excess Contribution . . . . . . . . . . . . . . . I-6
1.26. Excess Deferral . . . . . . . . . . . . . . . . . I-7
1.27. Family Member . . . . . . . . . . . . . . . . . . I-7
1.28. Fiduciary . . . . . . . . . . . . . . . . . . . . I-7
1.29. Highly Compensated Employee . . . . . . . . . . . I-7
1.30. Hour of Service . . . . . . . . . . . . . . . . .I-10
1.31. Investment Manager. . . . . . . . . . . . . . . .I-13
1.32. Matching Account. . . . . . . . . . . . . . . . .I-13
1.33. Matching Contribution . . . . . . . . . . . . . .I-13
1.34. Named Fiduciary . . . . . . . . . . . . . . . . .I-13
1.35. Normal Retirement Age . . . . . . . . . . . . . .I-13
1.36. Participant . . . . . . . . . . . . . . . . . . .I-13
1.37. Plan. . . . . . . . . . . . . . . . . . . . . . .I-13
1.38. Plan Administrator. . . . . . . . . . . . . . . .I-14
1.39. Plan Year . . . . . . . . . . . . . . . . . . . .I-14
1.40. Qualified Domestic Relations Order . . . . . . .I-14
1.41. Qualified Matching Contribution . . . . . . . . .I-15
1.42. Qualified Plan or Qualified Trust . . . . . . . .I-15
1.43. Restricted 401(k) Employee. . . . . . . . . . . .I-15
1.44. Restricted 401(m) Employee. . . . . . . . . . . .I-15
1.45. Rollover Account. . . . . . . . . . . . . . . . .I-15
1.46. Rollover Contributions. . . . . . . . . . . . . .I-15
1.47. Spouse or Surviving Spouse. . . . . . . . . . . .I-16
1.48. Trust Agreement . . . . . . . . . . . . . . . . .I-16
1.49. Trust Fund. . . . . . . . . . . . . . . . . . . .I-16
1.50. Trustee . . . . . . . . . . . . . . . . . . . . .I-16
1.51. Union . . . . . . . . . . . . . . . . . . . . . .I-16
1.52. Unrestricted 401(k) Employee. . . . . . . . . . .I-16
1.53. Unrestricted 401(m) Employee. . . . . . . . . . .I-16
1.54. Valuation Date. . . . . . . . . . . . . . . . . .I-17
1.55. Year of Service . . . . . . . . . . . . . . . . .I-17
ARTICLE II PARTICIPATION
2.01. Initial Eligibility to Participate. . . . . . . .II-1
2.02. Participation of Reemployed Individuals . . . . .II-1
2.03. Notification and Application to
Participate . . . . . . . . . . . . . . . .II-2
2.04. Change in Status. . . . . . . . . . . . . . . . .II-2
2.05. Cessation of Participation. . . . . . . . . . . .II-2
2.06. Participation for Purposes of Roll-
over Contribution Only. . . . . . . . . . .II-2
ARTICLE III CONTRIBUTIONS
3.01. Elective Deferral Contributions . . . . . . . . III-1
3.02. Matching Contributions. . . . . . . . . . . . . III-1
3.03. Qualified Matching Contributions. . . . . . . . III-1
3.04. Elective Deferral Contribution
Limitations . . . . . . . . . . . . . . . III-2
3.05. Matching Contribution Limita-
tions . . . . . . . . . . . . . . . . . . III-4
3.06. General Provisions on Elective
Deferral Contributions. . . . . . . . . . III-6
3.07. Rollover Contributions. . . . . . . . . . . . . III-6
3.08. General Provisions on Employer
Contributions . . . . . . . . . . . . . . III-7
ARTICLE IV ALLOCATIONS
4.01. Participants' Accounts. . . . . . . . . . . . . .IV-1
4.02. Allocation of Rollover Contribu-
tions . . . . . . . . . . . . . . . . . . .IV-1
4.03. Allocation of Employer Contribu-
tions . . . . . . . . . . . . . . . . . . .IV-1
4.04. Funding Policy. . . . . . . . . . . . . . . . . .IV-1
4.05. Allocation of Trust Income and
Gains and Losses. . . . . . . . . . . . . .IV-2
4.06. Excess Deferrals. . . . . . . . . . . . . . . . .IV-2
4.07. Excess Contributions. . . . . . . . . . . . . . .IV-3
4.08. Excess Aggregate Contributions. . . . . . . . . .IV-4
ARTICLE V VESTING
5.01. Rollover Account and Elective
Deferral Account. . . . . . . . . . . . . . V-1
5.02. Matching Account. . . . . . . . . . . . . . . . . V-1
5.03. Crediting
Years of Service. . . . . . . . . . . . V-1
5.04. Vesting Break in Service Rules. . . . . . . . . . V-2
5.05. Forfeitures . . . . . . . . . . . . . . . . . . . V-2
5.06. Amendments Affecting Vested Account Balance . . . V-3
ARTICLE VI DISTRIBUTIONS
6.01. Timing of Distributions . . . . . . . . . . . . .VI-1
6.02. Optional Forms of Benefit . . . . . . . . . . . .VI-2
6.03. Commutation of Benefits . . . . . . . . . . . . .VI-3
6.04. Commencement of Benefits. . . . . . . . . . . . .VI-3
6.05. Special Distribution Provisions . . . . . . . . .VI-3
6.06. Limitations on Distributions of
Elective Deferral Contribu-
tions . . . . . . . . . . . . . . . . . . .VI-5
6.07. Withdrawals . . . . . . . . . . . . . . . . . . .VI-6
6.08. Hardship Distributions. . . . . . . . . . . . . .VI-7
6.09. Qualified Domestic Relations
Order Payments. . . . . . . . . . . . . . .VI-8
6.10. Direct Rollovers. . . . . . . . . . . . . . . . VI-11
ARTICLE VII DEATH BENEFITS
7.01. General . . . . . . . . . . . . . . . . . . . . VII-1
7.02. Death Distributions . . . . . . . . . . . . . . VII-1
7.03. Designation of Beneficiary. . . . . . . . . . . VII-3
7.04. Election by Beneficiary . . . . . . . . . . . . VII-4
ARTICLE VIII APPOINTMENTS AND ALLOCATION OF
FIDUCIARY RESPONSIBILITY
8.01. Named Fiduciary . . . . . . . . . . . . . . . .VIII-1
8.02. Appointment of Investment Manager . . . . . . .VIII-1
8.03. Allocation of Responsibility. . . . . . . . . .VIII-1
8.04. Plan Administrator. . . . . . . . . . . . . . .VIII-1
8.05. Hourly 401(k) Savings Plan Com-
mittee. . . . . . . . . . . . . . . . . .VIII-2
8.06. Trustee . . . . . . . . . . . . . . . . . . . .VIII-2
8.07. Errors and Omissions. . . . . . . . . . . . . .VIII-2
8.08. Fiduciary Discretion. . . . . . . . . . . . . .VIII-3
ARTICLE IX PLAN ADMINISTRATION
9.01. General . . . . . . . . . . . . . . . . . . . . .IX-1
9.02. Duties of Plan Administrator. . . . . . . . . . .IX-1
9.03. Disclosure. . . . . . . . . . . . . . . . . . . .IX-1
9.04. Annual Accountings. . . . . . . . . . . . . . . .IX-2
9.05. Expenses and Compensation . . . . . . . . . . . .IX-3
9.06. Directions to Trustee . . . . . . . . . . . . . .IX-3
9.07. Claims Procedure. . . . . . . . . . . . . . . . .IX-3
9.08. Hourly 401(k) Savings Plan Committee. . . . . . .IX-5
ARTICLE X TRUST AGREEMENT AND INVESTMENTS
10.01. Trust Agreement . . . . . . . . . . . . . . . . . X-1
10.02. Participant Directed Investments. . . . . . . . . X-1
10.03. Investment of Income. . . . . . . . . . . . . . . X-6
10.04. Company Stock . . . . . . . . . . . . . . . . . . X-6
ARTICLE XI AMENDMENT AND TERMINATION OF THE PLAN
11.01. Amendment to the Plan . . . . . . . . . . . . . .XI-1
11.02. Termination of the Plan . . . . . . . . . . . . .XI-1
11.03. No Reversion to Employer. . . . . . . . . . . . .XI-2
11.04. Merger, Consolidation and Transfer
of Assets or Liabilities. . . . . . . . . .XI-3
ARTICLE XII GENERAL PROVISIONS
12.01. Qualification . . . . . . . . . . . . . . . . . XII-1
12.02. No Guarantees . . . . . . . . . . . . . . . . . XII-1
12.03. Limits on Assignment. . . . . . . . . . . . . . XII-2
12.04. Discharge of Liability. . . . . . . . . . . . . XII-2
12.05. Unclaimed Benefits. . . . . . . . . . . . . . . XII-2
12.06. Construction. . . . . . . . . . . . . . . . . . XII-2
12.07. Adoption by Affiliate . . . . . . . . . . . . . XII-3
SIGNATURE PAGE
EXHIBIT I INVESTMENT FUNDS
<PAGE>
INTRODUCTION
The Chesapeake Corporation 401(k) Savings Plan for Hourly Employees (the
Plan) was originally adopted effective January 1, 1989. The Plan was amended
and restated, effective January 1, 1993, to incorporate amendments adopted since
the Plan's original effective date and to conform to the provisions of the Tax
Reform Act of 1986 and subsequent statutory and regulatory changes. Effective
January 1, 1993, the name of the Plan is changed from the Chesapeake Corporation
401(k) Savings Plan for Hourly Employees to the Chesapeake Paper Products
Company 401(k) Savings Plan for Hourly Employees.
The Company intends that Employer contributions to the Trust be
deductible. The Company intends that the Plan be a discretionary contribution
plan. The Company further intends to comply fully with statutes and regulations
governing wages, compensation, and fringe employment benefits, especially
Internal Revenue Code sections 401(a) and 401(k). All questions arising in the
construction and administration of the Plan must be resolved accordingly.
<PAGE>
ARTICLE I
DEFINITIONS
1.01. Account means an actual account or bookkeeping record reflecting a
Participant's interest in the assets or value of the Trust Fund. A Participant
may have several Accounts. When the term Account is used without modification,
it means the sum of all of a Participant's Plan Accounts. Amounts credited to a
Participant's Account (other than a specially segregated account) do not give a
Participant a right to or claim on any asset of the Trust Fund.
SEE ALSO Elective Deferral Account, Matching Account, Rollover
Account.
1.02. Actual Deferral Percentage or ADP, for purposes of measuring
compliance with Code section 401(k), for a specified group of Employees for a
Plan year, means the average of the ratios (calculated separately for each
Employee in the group) of
(a) the amount of Employer contributions made on behalf of the Employee
for the Plan Year, to
(b) the Employee's compensation (as defined in Code section 414(s)) for
the Plan Year.
For purposes of this definition, Employer contributions shall include (i)
Elective Deferral Contributions, including Excess Deferrals of Highly
Compensated Employees, but excluding Excess Deferrals of non-Highly Compensated
Employees and Elective Deferral Contributions taken into account in the
Contribution Percentage test under Plan section 3.05, provided that the ADP test
under Plan section 3.04 is satisfied both with and without the exclusion of
these Elective Deferral Contributions and (ii) at the election of the Employer,
Qualified Matching Contributions. The Actual Deferral Percentage of an Employee
who is eligible to but does not make an Elective Deferral Contribution and who
does not receive an allocation of a Qualified Matching Contribution is zero.
1.03. Affiliate means
(a) a member of a controlled group of corporations as defined in Code
section 1563(a), determined without regard to Code section 1563(a)(4) and
1563(e)(3)(C), of which an Employer is a member according to Code section
414(b);
(b) an unincorporated trade or business that is under common control
with an Employer as determined according to Code section 414(c);
(c) a member of an affiliated service group of which an Employer is a
member according to Code section 414(m); or
(d) any entity required to be aggregated according to Code section
414(o).
1.04. Alternate Payee means a Participant's Spouse, former Spouse, child,
or other dependent who is recognized by a Qualified Domestic Relations Order as
having a right to receive all or a portion of the benefits payable under the
Plan with respect to the Participant.
1.05. Annuity Starting Date means the first day on which all events occur
that entitle a Participant to a benefit under the Plan. A Participant's Annuity
Starting Date cannot be earlier than 30 days or later than 90 days after he
receives the information requested by Plan section 6.01(b), unless he waives
such notice period in accordance with that Plan section.
1.06. Beneficiary or Beneficiaries means the individual or legal entity
designated by a Participant under Plan section 7.03 to receive any benefits
which may be payable under this Plan upon or after his death. A married
Participant's Beneficiary is the Participant's Spouse unless the Spouse has
consented to the Participant's designation of a different Beneficiary.
Despite the preceding, to the extent provided in a Qualified Domestic
Relations Order, Beneficiary means the Spouse, former Spouse, child, or other
dependent of a Participant who is recognized by such order as having a right to
receive all or a portion of any benefits payable under the Plan on behalf of
such Participant.
1.07. Board or Board of Directors means the board of directors of
Chesapeake Corporation.
1.08. Break in Service means a Plan Year in which an individual does not
complete at least 501 Hours of Service.
1.09. Code means the provisions of the Internal Revenue Code of 1986, as
amended, as may be in effect from time to time. Any reference to a specific
provision of the Code shall mean both that provision and any subsequent
legislation that modifies, amends, recodifies, or replaces that provision.
1.10. Committee means the Hourly 401(k) Savings Plan Committee provided
for in Plan article IX.
1.11. Company means Chesapeake Paper Products Company and Chesapeake
Forest Products Company.
1.12. Compensation means an Employee's wages within the meaning of Code
section 3401(a) and all other amounts for which a written statement must be
furnished under Code section 6041(d) and 6051(a)(3). Compensation does not
include any amounts paid or reimbursed by an Employer for moving expenses to the
extent that it is reasonable to believe that such amounts are deductible by the
Employee under Code section 217. Compensation is determined without regard to
any rules under Code section 3401(a) that limit the remuneration included in
wages based on the nature or location of the employment or the services
performed.
For Limitation Years beginning after December 31, 1991, for purposes of
applying the limitations of this Plan section, Compensation for a Limitation
Year is the Compensation actually paid or made available during such Limitation
Year. Notwithstanding the preceding sentence, Compensation for a disabled
Participant (as defined in Code section 72(m)(7)) is the Compensation such
Participant would have received for the Limitation Year if the Participant had
been paid at the rate of Compensation paid immediately before becoming disabled.
Such imputed Compensation for the disabled Participant may be taken into account
only if the Participant is not a Highly Compensated Employee and contributions
made on behalf of such Participant are nonforfeitable when made.
Compensation shall include any amount that is contributed by an Employer
pursuant to a salary reduction agreement and which is not includible in the
gross income of the Employee under Code section 125, 402(a)(8), 402(h) or
403(b).
The Compensation for an Employee taken into account under the Plan for any
year must not exceed the statutory limits of Code section 401(a)(17) for such
year. For Plan Years beginning after December 31, 1988, and before January 1,
1994, the limit is $200,000 as adjusted. For Plan Years beginning on or after
January 1, 1994, the limit is $150,000, as adjusted.
In determining Compensation for purposes of this limitation, the rules of
Code section 414(q)(6) shall apply, except in applying such rules the term
"family" shall include only the spouse of an Employee and any lineal descendants
of an Employee who have not attained age 19 before the end of the Plan Year. If,
as a result of the application of such rules, the adjusted Code section
401(a)(17) limitation is exceeded, then the limitation shall be prorated among
affected individuals in proportion to each such individual's Compensation as
determined prior to the application of this limitation.
1.13. Contribution Percentage, for purposes of measuring compliance with
Code section 401(m), for a specified group of Employees means the average of the
ratios (calculated separately for each Employee in the group) of
(a) the Matching Contributions and Qualified Matching Contributions
allocated to the Account of each such Employee for the Plan Year to
(b) the Employee's compensation (as defined in Code section 414(s)) for
the Plan Year.
Such Contribution Percentage shall not include forfeitures of Matching
Contributions attributable to Excess Aggregate Contributions and forfeited
pursuant to Plan section 4.08. Such forfeitures shall be taken into account in
the Plan Year in which they are allocated to the Participant's Account.
Elective Deferral Contributions, to the extent not taken into account in
the Actual Deferral Percentage test under Plan section 3.04, may be included in
a Participant's Contribution Percentage.
1.14. Defined Benefit Plan means any plan established and qualified under
Code section 401 or 403, other than and to the extent it is not treated as a
Defined Contribution Plan. For purposes of limitations on benefits and
contributions, however, a Defined Benefit Plan that provides a benefit derived
from employer contributions and that is based partly on the balance of the
separate account of a Participant is treated as a Defined Contribution Plan to
the extent that benefits are based on the Participant's separate account and as
a Defined Benefit Plan for the remaining part of the benefits under the Plan.
1.15. Defined Contribution Plan means a pension, profit-sharing, or stock-
bonus plan established and qualified under Code section 401 or 403 that provides
an individual account for each Participant and for benefits based solely on the
amount contributed to each Participant's account, together with any income,
expenses, gains, losses, and any forfeitures of accounts of other Participants
that may be allocated to that Participant's account.
1.16. Disabled or Disability means a condition established by medical
evidence satisfactory to Chesapeake Corporation whereby a Participant by reason
of a mental or physical impairment is prevented from engaging in any occupation
or employment for substantial wage or profit, which condition is likely to be
permanent. The rules established for disability retirement shall be uniformly
and nondiscriminatorily applied to all persons under similar circumstances.
1.17. Effective Date means January 1, 1989. The Effective Date of the
amended and restated Plan is January 1, 1993.
1.18. Elective Deferral Account means that portion of a Participant's
Account to which his Elective Deferral Contributions are allocated.
1.19. Elective Deferral Contributions means contributions made to the Plan
during the Plan Year by an Employer, at the election of the Participant in lieu
of cash Compensation and pursuant to a salary reduction election or other
deferral mechanism. Elective Deferral Contributions shall not include any
deferrals properly distributed as Excess Annual Additions.
1.20. Employee means any individual employed by the Company who is an
hourly wage earner or any person eligible for coverage and who is employed by an
Employer that adopts this Plan pursuant to Plan section 12.07 and is covered by
a collective bargaining agreement between the Company and the Union. Employee
does not include (i) leased employees, as defined in Code sec- tion 414(n), (ii)
independent contractors or (iii) key employees, as defined in Code section
416(i).
1.21. Employer means Chesapeake Paper Products Company and any Affiliate,
individually or collectively, as applicable, that adopts the Plan; any successor
by merger, purchase, or otherwise that maintains this Plan in accordance with
any requirements set forth therein; or any predecessor that has maintained the
Plan or a predecessor plan that covered substantially the same employees and
provided the same benefits or was merged or consolidated with this Plan.
1.22. Entry Date means the first day of each Plan Year and the first day
of the seventh month of the Plan Year.
1.23. ERISA means the Employee Retirement Income Security Act of 1974, as
amended as of the relevant time. Any reference to a specific provision of ERISA
shall mean both that provision and any subsequent legislation that modifies,
amends, recodifies, or replaces that provision.
1.24. Excess Aggregate Contribution means the excess of the aggregate
amount of the Matching Contributions (and any Elective Deferral Contributions
taken into account in computing the Contribution Percentage) actually made on
behalf of Highly Compensated Employees for that Plan Year over the maximum
amount of such contributions permitted under the limitations described in Plan
section 3.05 (determined by reducing contributions made on behalf of Highly
Compensated Employees in order of their Contribution Percentages beginning with
the highest of such percentages). Such determinations shall be made after first
determining Excess Deferrals and Excess Contributions.
1.25. Excess Contribution means, with respect to a Plan Year, the excess
of the aggregate amount of Elective Deferral Contributions and Qualified
Matching Contributions actually paid to the Trust on behalf of the Highly
Compensated Employees for such Plan Year, over the maximum amount of such
contributions permitted under the limitations described in Plan section 3.04
(determined by reducing contributions made on behalf of Highly Compensated
Employees in order of their Actual Deferral Percentages beginning with the
highest of such percentages).
1.26. Excess Deferral means an elective deferral, to the extent such
elective deferral exceeds $7,000 (or such dollar amount as the Secretary of the
Treasury announces at the same time and in the same manner as the cost-of-
living adjustments applicable under Code section 415(d)) in any taxable year.
With respect to any taxable year, a Participant's elective deferrals are the sum
of all contributions made by an employer on behalf of such Participant pursuant
to:
(a) any election to defer under any qualified cash or deferred
arrangement as described in Code section 401(k);
(b) any simplified employee pension cash or deferred arrangement as
described in Code section 402(h)(1)(B);
(c) any eligible deferred compensation under Code section
457;
(d) any plan described under Code section 501(c)(18); and
(e) any contribution made by the employer on behalf of a Participant for
the purchase of an annuity contract under Code section 403(b) pursuant to a
salary reduction election.
1.27. Family Member means a member of the family of a five-percent owner
or a Highly Compensated Employee in the group consisting of the ten Highly
Compensated Employees paid the greatest Earnings from an Affiliate during the
Plan Year or the preceding Plan Year. For purposes of this Plan section, the
term "family" means, with respect to any Employee or former Employee, such
Employee's spouse and lineal ascendants or descendants and the spouse of such
lineal ascendants or descendants. Except as otherwise specified in regulations,
a Family Member is not considered to be an Employee separate from the Employee
whose status under this Plan causes the individual to be a Family Member. For
purposes of this definition, Earnings is defined in Appendix A section 1.03.
1.28. Fiduciary means a person or entity as defined in ERISA section
3(21).
1.29. Highly Compensated Employee, for Plan Years beginning after December
31, 1986, refers to those employees who are determined to be Highly Compensated
under the method set forth in subsection (a) or (b) below. The Plan
Administrator has the discretion to elect the method for making such deter-
mination in any Plan Year and may change the method for any Plan Year.
(a) Highly Compensated Employee means an employee who, during the
current or immediately preceding Plan Year,
(1) was at any time a five-percent owner (as defined in Code
section 416(i)(1));
(2) received Earnings from the Company or an Affiliate in excess
of $75,000 (or such higher dollar limit as the Secretary of
the Treasury announces at the same time and in the same
manner as the cost-of-living adjustments applicable to the
limitations under Code section 415(d)) during that Plan Year;
(3) received Earnings from the Company or an Affiliate in excess
of $50,000 (or such higher dollar limit as the Secretary of
the Treasury announces at the same time and in the same
manner as the cost-of-living adjustments applicable to the
limitations under Code section 415(d)) during that Plan Year
and was in the top 20 percent of the Employees in Earnings
during that Plan Year; or
(4) was at any time an officer of the Company or an Affiliate and
received during that Plan Year Earnings that exceeded 50
percent of the dollar amount in effect under Code section
415(b)(1)(A).
For purposes of this section, at least one officer of the Company or an
Affiliate must be treated as a Highly Compensated Employee, regardless of
Earnings. If at least three officers meet the Earnings figure, no more than 10
percent of the Employees may be treated as such an officer. In no event may the
Plan treat more than 50 Employees as such officers. For purposes of this
section, Earnings will be determined without regard to Code sections 125,
402(a)(8), 402(h)(1)(B), and in the case of employer contributions made pursuant
to a salary reduction agreement, without regard to Code section 403(b). The
determinations made under this section must be made in conformity with the rules
in Code section 414(q) and the related Treasury regulations. According to Code
section 414(q)(6)(A)(ii) and for purposes of applying the limitations under this
Plan, any Earnings paid to a Family Member (and any applicable contribution or
benefits on behalf of such individual) must be treated as if it were paid to (or
on behalf of) the relevant Highly Compensated Employee for that Plan Year. If
an employee is not described in (2), (3) or (4) for the preceding year, he shall
not be treated as described in (2), (3) or (4) for the current year unless he is
a member of the group consisting of the 100 employees of the Company and its
Affiliates paid the greatest Earnings during the current year.
(b) Alternatively, Highly Compensated Employee means an employee who,
during the current Plan Year only, met any of the criteria of paragraphs (1)
through (4) of subsection (a). Determination of Highly Compensated Employees
under this subsection may be made, at the Plan Administrator's discretion, on
the basis of
(1) all Workers of the Company and its Affiliates for the Plan
Year being tested; or
(2) all Workers of the Company and its Affiliates as of a
"Snapshot Day." For purposes of identifying Highly Compensated Employees for
the ADP or Contribution Percentage Tests, the Plan Administrator must, in
addition to those employees who are Highly Compensated Employees on the Snapshot
Day, treat as a Highly Compensated Employee any Worker for the Plan Year who
(A) terminated employment prior to the Snapshot Day and was
a Highly Compensated Employee in the prior year;
(B) terminated employment prior to the Snapshot Day and (i)
was a five-percent owner; (ii) had Earnings for the Plan Year greater than or
equal to the projected Earnings of any Worker who is treated as a Highly
Compensated Employee on the Snapshot Day (except for Workers who are Highly
Compensated Employees solely because they are officers or five-percent owners)
or (iii) was an officer and had Earnings greater than or equal to the projected
Earnings of any other officer who is treated as a Highly Compensated Employee
solely because he is an officer; or
(C) becomes employed subsequent to the Snapshot Day and (i)
is a five-percent owner, (ii) has Earnings for the Plan Year greater than or
equal to the projected Earnings of a Worker who is treated as a Highly
Compensated Employee on the Snapshot Day (except for Workers who are Highly
Compensated Employees solely because they are officers or five-percent owners)
or (iii) is an officer and has Earnings greater than or equal to the projected
Earnings of any other officer who is treated as a Highly Compensated Employee
solely because he is an officer.
(3) The following definitions apply solely for purposes of this
subsection:
(A) "Snapshot Day" refers to a single day during the Plan
Year that is reasonably representative of the workforce of the Company and its
Affiliates. The Snapshot Day must be consistent from Plan Year to Plan Year.
(B) "Worker" refers to an individual who renders personal
services to or through the Company or its Affiliates and who is subject to the
control of the Company or its Affiliates.
For purposes of this definition, Earnings is defined in Appendix A, section
1.03.
1.30. Hour of Service includes the following meanings:
(a) An Hour of Service is each hour for which an individual is paid or
is entitled to payment for the performance of duties for an Employer or an
Affiliate during the applicable computation period.
(b) An Hour of Service is each hour for which an individual is paid or
is entitled to payment by an Employer or an Affiliate on account of a period of
time during which no duties are performed (regardless of whether the employment
relationship has terminated) because of vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty, or leave of absence.
An individual may not, however, be credited with more than 501 Hours of Service
under this subsection (b) for any single continuous period during which he
performs no duties (whether or not the period occurs in a single computation
period). No Hours of Service are credited under this subsection (b) to an
individual with respect to any payment that is made or is due under a plan
maintained solely for the purpose of complying with applicable worker's
compensation or unemployment compensation or disability insurance laws, or for a
payment that solely reimburses an individual for his medical or medically
related expenses incurred. For purposes of this subsection (b), a payment is
deemed to be made by or be due from an Employer or an Affiliate regardless of
whether it is made by or due from an Employer or an Affiliate directly, or
indirectly through a trust fund or insurer to which the Employer or Affiliate
contributes or pays premiums and regardless of whether contributions made or due
to the trust fund, insurer, or other entity are for the benefit of particular
employees or on behalf of a group of employees in the aggregate.
(c) An Hour of Service is each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an Employer or an
Affiliate. The same Hours of Service shall not be credited both under
subsection (a) or (b) and also under this subsection (c). Crediting of Hours of
Service for back pay awarded or agreed to with respect to periods described in
subsection (b) is subject to the limitations set forth in that subsection.
(d) Each hour during a period in which an individual would have
performed services for and been compensated by an Employer or an Affiliate but
for the fact that such individual was on a military leave of absence for service
in the armed forces of the United States of America, provided the individual
entered such service directly from the employ of an Employer or an Affiliate,
was discharged from such service and was reemployed by an Employer or an
Affiliate within the period during which his employment rights as a veteran are
protected by law. Hours credited under this subsection shall be calculated, but
not limited, in accordance with subsection (b).
(e) For determining Hours of Service for reasons other than the
performance of duties, the special rule in Labor Regulation section 2530.200b-
2(b) is incorporated by reference. That rule provides that Hours of Service are
credited on the basis of the number of hours in the individual's regular work
schedule or, in the case of a payment not calculated by units of time, by
dividing the payment in question by the individual's most recent hourly rate of
pay.
(f) When crediting Hours of Service to computation periods, the special
rule in Labor Regulation section 2530.200b-2(c) is incorporated by reference.
That rule provides that Hours of Service are credited to individuals in the
computation periods covered by the individual's regular work schedule during the
period of nonperformance.
(g) Notwithstanding the above, each individual whose hours are not
required to be recorded under the Fair Labor Standards Act or other federal law
shall be credited with 45 Hours of Service for each week for which such
individual would be credited with at least one Hour of Service in lieu of the
Hours of Service which would otherwise be credited for such week hereunder.
(h) Despite the preceding subsections, solely for purposes of
determining whether a Break in Service for participation or vesting purposes, as
applicable, has occurred in a computation period, an individual who is on a
Maternity or Paternity Leave of Absence that began after January 1, 1985, will
receive credit for the Hours of Service that normally would have been credited
to such individual but for such Maternity or Paternity Leave of Absence or, in
any case in which such Hours of Service cannot be determined, eight Hours of
Service per day of Maternity or Paternity Leave of Absence. The total number of
Hours of Service that can be credited under the preceding sentence cannot exceed
501, and such Hours of Service shall be credited (1) in the computation period
in which the absence began if necessary to prevent the Break in Service in that
period, or (2) in all other cases, in the following computation period. Mater-
nity or Paternity Leave of Absence means an absence by reason of the pregnancy
of the individual, by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or for purposes
of caring for such child for a period beginning immediately following such birth
or placement.
(i) Despite the preceding subsections, solely for purposes of
determining whether a Break in Service for participation or vesting purposes has
occurred during a computation period, an individual who takes unpaid leave under
the Family and Medical Leave Act on or after August 5, 1993, will receive credit
for the Hours of Service that normally would have been credited to such
individual but for such leave. The total number of Hours of Service that can be
credited under this subsection cannot exceed 501, and such Hours of Service
shall be credited (i) in the computation period in which the absence began if
necessary to prevent the Break in Service in that period, or (ii) in all other
cases, in the following computation period. Any individual who receives credit
for Hours of Service under subsection (i) above will not receive credit for
those same Hours of Service under this subsection.
1.31. Investment Manager means any fiduciary other than the Named
Fiduciary
(a) which has the power to manage, acquire or dispose of any asset of
the Plan; and
(b) which is either
(1) registered as an Investment Advisor under the Investment
Advisors Act of 1940;
(2) a bank as defined by the Investment Advisors
Act of 1940; or
(3) an insurance company qualified to manage, acquire, or dispose
of any assets of the Plan under the laws of more than one state; and
(c) which has acknowledged in writing that it is a fiduciary with
respect to the Plan.
1.32. Matching Account means that portion of a Participant's Account to
which his share of Matching Contributions is allocated.
1.33. Matching Contribution means the Employer contribution described in
Plan section 3.02 which is made to the Plan on or after January 1, 1993, on
behalf of a Participant on account of Elective Deferral Contributions made by
such Participant.
1.34. Named Fiduciary means the Company.
1.35. Normal Retirement Age means the Participant's attainment of age 65.
1.36. Participant means any Employee who has become and continues to be a
Participant as provided in Plan article II.
1.37. Plan means the Chesapeake Paper Products Company 401(k) Savings Plan
for Hourly Employees, as amended from time to time. Effective January 1, 1993,
Plan means the Chesapeake Paper Products Company 401(k) Savings Plan for Hourly
Employees, as amended from time to time.
1.38. Plan Administrator means Chesapeake Corporation.
1.39. Plan Year means the 12-month period beginning on January 1 and
ending on December 31 of each calendar year.
1.40. Qualified Domestic Relations Order means a judgment, decree, order,
or approval of a property settlement agreement entered on or after January 1,
1985, that
(a) relates to the provision of child support, alimony payments, or
marital property rights to an Alternate Payee;
(b) is made pursuant to a state domestic relations or community property
law;
(c) creates or recognizes the right of, or assigns the right to, an
Alternate Payee to receive all or a portion of the benefit payable with respect
to the Participant under this Plan;
(d) clearly specifies (1) the name and last known mailing address (if
available) of the Participant and the name and mailing address of each Alternate
Payee, unless the Plan Administrator has reason to know the address indepen-
dently of the Order; (2) the amount or percentage of the Participant's benefits
to be paid by the Plan to each Alternate Payee or the manner in which such
amount or percentage is to be determined; (3) the number of payments or period
to which the Order applies; and (4) each plan to which the Order applies;
(e) does not require the Plan to provide any type or form of benefit, or
any option, not otherwise provided under the Plan;
(f) does not require the Plan to provide increased benefits (that is,
does not provide for the payment of benefits in excess of the actuarial
equivalent of the benefits to which the Participant would be entitled in the
absence of the Order); and
(g) does not require the payment of benefits to an Alternate Payee that
are required to be paid to another Alternate Payee under another order
determined previously to be a Qualified Domestic Relations Order.
A domestic relations order entered before January 1, 1985, is a Qualified
Domestic Relations Order if payment of Plan benefits pursuant to that order have
begun by January 1, 1985, regardless of whether the order satisfies the
requirements of Code section 414(p), and even if payments have not begun by
January 1, 1985, pursuant to such an order, it may still be treated as a
Qualified Domestic Relations Order even though it does not satisfy the
requirements of Code section 414(p).
1.41. Qualified Matching Contribution means the Matching Contribution made
to the Plan by the Employer pursuant to Plan section 3.03 on or after January 1,
1993, and allocated to a Participant's Account by reason of Elective Deferral
Contributions.
1.42. Qualified Plan or Qualified Trust refers to a plan or a trust
maintained as part of a plan in compliance with Code part I, subchapter D,
chapter 1, subtitle A.
1.43. Restricted 401(k) Employee, for purposes of measuring compliance
with Code section 401(k), means an Employee who is otherwise authorized under
the terms of the Plan (without regard to any suspension due to a distribution or
election not to participate by reason of Code section 415) to have Elective
Deferral Contributions allocated to his Account for all or part of the Plan Year
and who is a Highly Compensated Employee.
1.44. Restricted 401(m) Employee, for purposes of measuring compliance
with Code section 401(m), means an Employee who is otherwise authorized under
the terms of the Plan (without regard to any suspension due to a distribution or
election not to participate or by reason of the limitations of Code section 415)
to have Matching Contributions (or Elective Deferral Contributions, if the Plan
takes Elective Deferral Contribution allocations into account in determining
Contribution Percentages) allocated to his Account for all or part of the Plan
Year and who is a Highly Compensated Employee.
1.45. Rollover Account means that portion of a Participant's Account to
which his Rollover Contributions are credited.
1.46. Rollover Contributions means a transfer of assets to a qualifying
retirement plan according to Code sections 402(c), 403(a)(4) or 408(d)(3).
Unless specific Plan provisions require otherwise, a transfer of assets to the
Trust Fund is considered a Rollover Contribution to the extent the assets
transferred are not attributable to current Employer contributions.
1.47. Spouse or Surviving Spouse means the person to whom a Participant
was legally married on the earlier of his Annuity Starting Date or his death. To
the extent provided in any Qualified Domestic Relations Order, a former spouse
will be treated as the Participant's Spouse or Surviving Spouse for purposes of
the survivor annuity requirements.
1.48. Trust Agreement means the agreement between the Company and the
Trustee providing for the establishment and management of the Trust Fund.
1.49. Trust Fund means the assets of the Plan held in trust by the Trustee
pursuant to the terms of the Trust Agreement and the Plan.
1.50. Trustee means such individuals or entities as may be appointed by
the Board to hold the assets of the Trust Fund pursuant to the terms of the
Trust Agreement.
1.51. Union means the United Paperworkers International Union AFL-CIO,
West Point, Local 467.
1.52. Unrestricted 401(k) Employee, for purposes of measuring compliance
with Code section 401(k), means an Employee who is otherwise authorized under
the terms of the Plan (without regard to any suspension due to distribution or
election not to participate or by reason of the limitations of Code section 415)
to have Elective Deferral Contributions allocated to his Account for all or part
of the Plan Year and who is not a Highly Compensated Employee or a Family
Member.
1.53. Unrestricted 401(m) Employee, for purposes of measuring compliance
with Code section 401(m), means an Employee who is otherwise authorized under
the terms of the Plan (without regard to any suspension due to a distribution or
election not to participate or by reason of the limitations of Code section 415)
to have Matching Contributions (or Elective Deferral Contributions if the Plan
takes Elective Deferral Contributions into account in determining Contribution
Percentages) allocated to his Account for all of part of the Plan Year and who
is not a Highly Compensated Employee or a Family Member.
1.54. Valuation Date means the last business day of each calendar quarter
and such other dates as may be designated by the Company.
1.55. Year of Service means a Plan Year (beginning with the Plan Year that
includes the date an Employee is first credited with an Hour of Service for the
performance of duties with an Employer) in which an Employee is credited with at
least 1,000 Hours of Service. Further, an individual who is a leased employee
(as defined in Code section 414(n)) of an Employer and who subsequently becomes
an Employee of an Employer shall, subject to the Plan's Break in Service rules,
receive credit for all Years of Service he is deemed to have completed for an
Employer.
<PAGE>
ARTICLE II
PARTICIPATION
2.01. Initial Eligibility to Participate
Each Employee becomes a Participant in the Plan on the later of January 1,
1989, or the Entry Date coinciding with or immediately following the date he has
completed six months of service and attained age 18, and continues to be a
Participant as long as he continues to be employed by an Employer or is entitled
to benefits from the Plan.
2.02. Participation of Reemployed Individuals
(a) An Employee who, before satisfying the requirements of Plan section
2.01, has five consecutive Breaks in Service, loses credit for all service
completed before those Breaks in Service. Upon his reemployment as an Employee,
he must complete the requirements of Plan section 2.01 before he becomes a
Participant.
(b) A Participant who has no vested interest under the Plan attributable
to Employer contributions and who has at least five consecutive Breaks in
Service on or after January 1, 1985, loses credit for all Years of Service if
the number of his consecutive Breaks in Service equals or exceeds his Years of
Service, whether or not consecutive, completed before his Breaks in Service.
(c) An individual who loses credit for service prior to a Break in
Service under this Plan section is treated as a new employee on reemployment and
may thereafter become a Participant under the terms of Plan section 2.01.
(d) An individual who does not lose credit for service prior to a Break
in Service is eligible to participate in the Plan on the Entry Date immediately
following his reemployment and his prior service will be taken into account
effective as of his reemployment date.
(e) For purposes of applying the rules in this Plan section, a
Participant's total Years of Service does not include any Years of Service lost
as a result of an earlier Break in Service.
2.03. Notification and Application to Participate
An application to participate is not required. However, each Participant,
Beneficiary or Alternate Payee agrees, as a condition of participation, to
furnish any information or proof as may be requested from time to time to the
Plan Administrator to enable it to administer the Plan. Benefits will not be
distributed to any Participant, Beneficiary or Alternate Payee until such
requested information has been furnished.
2.04. Change in Status
If a Participant has a change in employment status such that he is no
longer an eligible Employee, but has not incurred a Break in Service, that
individual will again become a Participant immediately upon returning to an
eligible class of Employees and will be eligible to make Elective Deferral
Contributions under Plan section 3.01 as of the next Entry Date. If an
individual incurs a Break in Service, his subsequent eligibility will be
determined under the Break in Service rules of the Plan.
2.05. Cessation of Participation
Participation in the Plan ceases when a Participant is no longer an
Employee and his entire interest in the Plan has been distributed.
2.06. Participation for Purposes of Rollover Contribution Only
Notwithstanding anything herein to the contrary, if Rollover Contributions
have been authorized by the Plan Administrator, an Employee shall become a
Participant as of the date a Rollover Contribution is made on his behalf, if he
has not already become a Participant. Such person shall be a Participant only
for purposes of such Rollover Contribution, and shall not be eligible to make
Elective Deferral Contributions under Plan section 3.01.
<PAGE>
ARTICLE III
CONTRIBUTIONS
3.01. Elective Deferral Contributions
(a) The Employer's Elective Deferral Contribution for a Plan Year is the
total of the Plan Year's compensation-reduction elections allowed according to
this Plan section for Participants. The Employer must contribute each Plan
Year's Elective Deferral Contribution to the Trust Fund as soon as practicable
after the payroll period to which it relates but in no event more than 90 days
after that date. The Employer's Elective Deferral Contribution on behalf of any
Participant may not result in elective deferrals of more than $7,000 (or such
dollar amount as the Secretary of the Treasury announces at the same time and in
the same manner as the cost-of-living adjustments applicable under Code section
415(d)) in any taxable year. A Participant may cause an Elective Deferral
Contribution for himself only with regard to Compensation that is deferred
according to a compensation-reduction election according to this Plan section.
(b) Until the Plan Administrator announces otherwise, a Participant may
make a compensation-reduction election indicating an amount of unpaid Compensa-
tion (between $10 and $200 (or such dollar amount as may be determined by the
Committee each year) of his Compensation for a weekly payroll period in $10
increments) that he desires to cause to be made as an Elective Deferral
Contribution for that Plan Year.
(c) Until the Plan Administrator announces otherwise, in addition to
any amounts deferred under subsection (b) above, a Participant may make a bonus-
reduction election indicating a percentage of unpaid incentive compensation
(between 1% and 10% or such other percentage as may be determined by the
Committee) that he desires to cause to be made as an Elective Deferral
Contribution for that Plan Year.
3.02. Matching Contributions
(a) Effective January 1, 1993, the Employer shall make a Matching
Contribution each Plan Year in an amount equal to 20 percent of each
Participant's Compensation that he elects to contribute to the Plan as an
Elective Deferral Contribution for that Plan Year up to a maximum contribution
for any such Participant of $250 each Plan Year.
(b) Matching Contributions shall be vested according to the schedule
provided in Plan section 5.02.
3.03. Qualified Matching Contributions
(a) In lieu of distributing Excess Contributions, as provided in Plan
section 4.07, the Employer may make Qualified Matching Contributions on behalf
of Unrestricted 401(k) Employees that is sufficient to satisfy the Actual
Deferral Percentage test described in Plan section 3.04.
(b) Qualified Matching Contributions shall be fully vested and
nonforfeitable when made and shall be subject to the distribution
restrictions governing Elective Deferral Contributions as provided in Plan
section 6.06.
3.04. Elective Deferral Contribution Limitations
(a) Plan sections 3.01 and 3.02 are intended to qualify as a cash or
deferred arrangement according to Code section 401(k), and all Plan and Trust
Agreement provisions must be construed to facilitate that qualification.
(b) For purposes of measuring compliance with Code section 401(k), it is
necessary to divide the Employees into Restricted 401(k) Employees and
Unrestricted 401(k) Employees.
(c) The Actual Deferral Percentage for Restricted 401(k) Employees for
each Plan Year and the Actual Deferral Percentage for Unrestricted 401(k)
Employees for the same Plan Year must satisfy one of the following tests:
(1) The Actual Deferral Percentage for Participants who are
Restricted 401(k) Employees shall not exceed the Actual Deferral Percentage for
Participants who are Unrestricted 401(k) Employees multi- plied by 1.25; or
(2) The Actual Deferral Percentage for Participants who are
Restricted 401(k) Employees for the Plan Year shall not exceed the Actual
Deferral Percentage for Participants who are Unrestricted 401(k) Employees
multiplied by 2.0; provided, however, that the Actual Deferral Percentage for
Participants who are Restricted 401(k) Employees does not exceed the Actual
Deferral Percentage for Participants who are Unrestricted 401(k) Employees by
more than two percentage points. The percentage difference between the Actual
Deferral Percentage for Participants who are Restricted 401(k) Employees and
Participants who are Unrestricted 401(k) Employees permissible under this
paragraph may be reduced as the Secretary of the Treasury shall prescribe to
prevent the multiple use of this alternate limitation with respect to any
Restricted 401(k) Employee.
(d) To meet the limitations of this Plan section and to avoid
discrimination prohibited by Code section 401(a)(4), to prevent the creation of
Excess Contributions for purposes of Code section 401(k), or, if it is necessary
to do so, to preserve the Plan's status as a qualified plan or the Plan's cash
or deferred arrangement according to Code section 401(k), the Plan Administrator
may adjust or reject, in whole or in part, any applications authorizing salary
reduction elections from Restricted 401(k) Employees. The Plan Administrator
may reduce any Participant's salary reduction election to prevent that
Participant from causing Excess Deferrals to his Elective Deferral Account.
(e) For purposes of determining the Actual Deferral Percentage of a
Participant who is a Five Percent Owner or one of the ten most highly paid
Highly Compensated Employees of the Employer, the Elective Deferral
Contributions, Qualified Matching Contributions and Compensation of such
Participant shall include the Elective Deferral Contributions, Qualified
Matching Contributions and Compensation of Family Members. Family Members, with
respect to Highly Compensated Employees, shall be disregarded as separate
Employees in determining the Actual Deferral Percentage for Restricted 401(k)
Employees.
(f) For purposes of satisfying the ADP test, Elective Deferral
Contributions and Qualified Matching Contributions must be contributed and
allocated to the Trust Fund no later than the last day of the 12-month period
immediately following the Plan Year for which such contributions are deemed
made.
(g) The Plan Administrator shall maintain records sufficient to
demonstrate satisfaction of the ADP test. The determination and treatment of
Elective Deferral Contributions and Qualified Matching Contributions and the
Actual Deferral Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the Treasury from time to
time.
(f) The Actual Deferral Percentage for any Participant who is a
Restricted 401(k) Employee for the Plan Year and who participates in two or more
arrangements described in Code section 401(k) that are maintained by the
Employer, shall be determined as if all Elective Deferral Contributions and
Qualified Matching Contributions allocated to his Account are made under a
single arrangement. If a Highly Compensated Employee participates in two or
more arrangements described in Code section 401(k) that are maintained by the
Employer and that have different Plan Years, all such arrangements ending with
or within the same calendar year shall be treated as a single arrangement.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code section 401(k).
(g) In the event that this Plan satisfies the requirements of Code
sections 401(k), 401(a)(4) or 410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such Code
sections only if aggregated with this Plan, then this section shall be applied
by determining the ADP of Participants as if all such plans were a single plan.
For Plan Years beginning after December 31, 1989, plans may be aggregated in
order to satisfy Code section 401(k) only if they have the same Plan Year.
3.05. Matching Contribution Limitations
(a) The Contribution Percentage for Restricted 401(m) Employees for each
Plan Year and the Contribution Percentage for Unrestricted 401(m) Employees for
the same Plan Year must satisfy one of the following tests:
(1) The Contribution Percentage for Participants who are
Restricted 401(m) Employees for the Plan Year shall not exceed the Contribution
Percentage for Participants who are Unrestricted 401(m) Employees for the Plan
Year multiplied by 1.25; or
(2) The Contribution Percentage for Participants who are
Restricted 401(m) Employees for the Plan Year shall not exceed the Contribution
Percentage for Participants who are Unrestricted 401(m) Employees for the Plan
Year multiplied by two, provided, however, that the Contribution Percentage for
Participants who are Restricted 401(m) Employees does not exceed the
Contribution Percentage for Participants who are Unrestricted 401(m) Employees
by more than two percentage points. The percentage difference between the
Participants who are Restricted 401(m) Employees and the Participants who are
Unrestricted 401(m) Employees permissible under this paragraph may be reduced as
the Secretary shall prescribe to prevent the multiple use of this alternative
limitation with respect to any Restricted 401(m) Employee.
(b) The Employer may treat all or part of the Elective Deferral
Contributions for the Plan Year as Matching Contributions for purposes of
calculating the Contribution Percentage, provided the Actual Deferral Percentage
test of Plan section 3.04 is satisfied both including and excluding Elective
Deferral Contributions that are treated as Matching Contributions for purposes
of the Contribution Percentage test.
(c) For purposes of determining the Contribution Percentage of a
Participant who is a Restricted 401(m) Employee, the Matching Contributions and
Compensation of such Participant shall include the Matching Contributions and
Compensation of Family Members. Family Members, with respect to Restricted
401(m) Employees shall be disregarded as separate Employees in determining the
Contribution Percentage both for Participants who are Unrestricted 401(m)
Employees and for Participants who are Restricted 401(m) Employees.
(d) The Plan Administrator shall maintain records sufficient to
demonstrate satisfaction of the Contribution Percentage test. The determination
and treatment of the Contribution Percentage of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary of the Treasury.
(e) For purposes of satisfying the Contribution Percentage test,
Matching Contributions must be paid to the Trust Fund no later than the last day
of the 12-month period immediately following the Plan Year for which such
contributions are deemed to be made.
(f) For purposes of determining the Contribution Percentage of a
Participant who is a five-percent owner or one of the ten most highly paid
Highly Compensated Employees, the Matching Contributions and Compensation of
such Participant shall include the Matching Contributions and Compensation for
the Plan Year of Family Members. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate Employees in determining
the Contribution Percentage both for Participants who are non-Highly Compensated
Employees and for Participants who are Highly Compensated Employees.
(g) In the event that this Plan satisfies the requirements of Code
section 401(m), 401(a)(4), or 410(b) only if aggregated with one or more plans,
or if one or more other plans satisfy the requirements of such Code sections
only if aggregated with this Plan, then this section shall be applied by
determining the Contribution Percentage of Employees as if all such plans were a
single plan. Plans may be aggregated in order to satisfy Code section 401(m)
only if they have the same Plan Year.
3.06. General Provisions on Elective Deferral Contributions
(a) The Plan Administrator may authorize contributions to be made on a
compensation-reduction basis and may also authorize Participants to cause other
additions to be made to their Accounts each Plan Year under this Plan section so
long as such reduction can be made without exceeding the limitations described
in Plan section 3.04, such reductions can be made in a manner that is
consistently applied to all Participants, affords the same election
opportunities to all similarly situated Participants, and are implemented in a
manner which does not discriminate in favor of Restricted 401(k) and 401(m)
Employees.
(b) An Employee may elect to begin such compensation reduction as of any
Entry Date on or after he is eligible to become a Participant. An Employee may
change such compensation reductions as of the first day of any calendar quarter
with 15 days' notice to the Plan Administrator. The Plan Administrator may
establish rules limiting the number of compensation-reduction elections that a
Participant may submit each Plan Year and rules regarding changes in elections
or cancellations of elections. A compensation-reduction election remains in
effect until it is changed or canceled. All compensation-reduction elections
shall be made on forms prescribed by the Plan Administrator.
(c) In order to assure compliance with Plan section 3.04, the Plan
Administrator may establish such closing dates and formulate such other rules
and procedures as may be necessary to administer to the provisions of this Plan
section so long as such rules are established and administered on a uniform and
nondiscriminatory basis.
3.07. Rollover Contributions
Subject to the approval of the Plan Administrator, each Participant may
transfer through (i) a rollover from an individual retirement account
established pursuant to Code section 408, or (ii) a direct rollover from another
Qualified Plan or Trust to a Rollover Account to be held by the Trustee on his
behalf, any nonforfeitable interest he has in assets attributable to
contributions made by an employer under another Qualified Plan or Trust,
provided, however, that the Trustee shall only accept contributions that satisfy
the requirements of Code section 402(c), 403(a)(4) or 408(d)(3). Rollover
Contributions shall be made in cash. Rollover Contributions shall be separately
accounted for and are at all times nonforfeitable.
3.08. General Provisions on Employer Contributions
(a) The Company intends that the Plan and the Trust always qualify under
Code sections 401(a) and 501(a).
(b) If the Internal Revenue Service determines that the Plan as
reflected in this document and the Trust Agreement as created or modified to
operate with the Plan as reflected in this document do not initially qualify
under Code sections 401(a) and 501(a), or that the Plan and Trust Agreement will
initially qualify only with amendments, caveats, or conditions not acceptable to
the Company, then the Company, at its option, may either amend this Plan or the
Trust Agreement or revoke and annul any amendment in any manner deemed advisable
to effect a favorable determination or to effect qualification, or may withdraw
and terminate the Plan or Trust Agreement and may also liquidate the Trust Fund.
All contributions made prior to the Plan's failure to qualify upon initial
qualification must be returned in kind to the contributor by the Trustee, but
the Trustee may charge an Employer for services rendered according to any
agreement between the Employer and the Trustee. Despite any provisions of this
Plan to the contrary, a Participant or Beneficiary has no right or claim to any
Plan asset or Trust Fund asset relating to any benefit under the Plan accruing
prior to the Plan's initial qualification by the Internal Revenue Service
refuses to determine that the Plan and Trust Agreement qualify under the
provisions of Code sections 401(a) and 501(a). This Plan as it appears in this
document is effective if the Internal Revenue Service determines that the Plan
and the Trust Agreement are qualified under the provisions of Code sections
401(a) and 501(a).
(c) All Employer contributions to the Trust Fund are conditioned on
their deductibility under Code section 404(a). If any deduction for any
contribution is not allowed in whole or in part under Code section 404(a), then
that disallowed portion must be returned to the contributor, but repayment must
be made no later than one year after the disallowance. For purposes of this
section, the disallowance may result from the opinion of any court whose
decision has become final or by any disallowance asserted by the Internal
Revenue Service to which the Company agrees.
(d) If any contribution is made by an Employer because of a mistake of
fact, then the portion of the contribution due to the mistake of fact must be
returned to the contributor. The repayment must be made no later than one year
after the contribution.
(e) Except for a balance in a suspense account attributable to Employer
contributions remaining at the termination of the Trust due to statutory limits
on contributions and benefits, and as otherwise provided in this Plan section,
Employer contributions to the Trust Fund are irrevocable. Contributions to and
income of the Trust Fund must not be used for or diverted to purposes other than
for the exclusive benefit of Participants or their Beneficiaries.
(f) The Trustee is not required to collect Employer contributions and is
responsible only for assets received as Trustee. Each Employer may cause each
Plan Year's Employer contribution, if any, to be paid to the Trust Fund in
installments and on the dates it elects, but it must designate the Plan Year for
which each contribution is attributable.
(g) Unless allocated as of an earlier date, any contributions made by an
Employer or by a Participant after the first day of the Plan Year may be held by
the Trustee and invested as a separate account, commingled with the Trust Fund,
and allocated to the Participant's Account as of the last day of the Plan Year.
The Trustee shall maintain such records as may be necessary to see that Employer
contributions, Participant contributions, and any investment gains and losses
attributable to contributions, are allocated to the proper Participants'
Accounts in the same manner as Employer contributions.
<PAGE>
ARTICLE IV
ALLOCATIONS
4.01. Participants' Accounts
The Plan Administrator shall cause to be established and maintained one or
more separate Accounts in the name of each Participant to which shall be
credited or charged the Participant's share of Employer contributions,
forfeitures, and Rollover Contributions, as well as a proportionate share of the
net earnings, gains, or losses of the Trust Fund allocable to the investment of
the applicable Accounts, and any distributions allocable to such Accounts. By
way of example and not of limitation, separate Accounts may be maintained as an
Elective Deferral Account, a Matching Account and a Rollover Account. Further,
any earnings, gains and losses or interim contributions shall be allocated as an
Employer contributions or Rollover Contributions, as applicable.
4.02. Allocation of Rollover Contributions
Rollover Contributions shall be allocated to the appropriate Participant's
Rollover Account.
4.03. Allocation of Employer Contributions
(a) Effective January 1, 1993, Matching Contributions shall be allocated
to a Participant's Matching Account each calendar quarter.
(b) Elective Deferral Contributions shall be allocated to a
Participant's Elective Deferral Account as soon as practicable following the
date such Elective Deferral Contributions are contributed to the Trust Fund.
(c) Despite the preceding subsections, a Participant's Account may not
receive allocations for any Limitation Year in excess of the maximum limits or
less than the minimum allowances under Appendix A.
4.04. Funding Policy
The Employer shall determine annually the amount of the Employer
contribution to the Plan, if any. The Plan Administrator shall communicate the
amount of such contribution, as well as the long-range and short-range
requirements of the Plan concerning liquidity and any material changes affecting
the Plan occurring since the last such communication, to the Trustee. These
communications may be made at such times as may be determined by the Plan
Administrator.
4.05. Allocation of Trust Income and Gains and Losses
(a) As of each Valuation Date, the Trustee shall revalue the net assets
of the Trust Fund at their then current market value and adjust proportionately
the applicable Accounts of Participants so as to reflect any increase or
decrease in value of the investments of the Trust Fund as of that day as
compared with the total value of such investments on the last preceding
Valuation Date.
(b) Allocations to Participants in accordance with the provisions of
this section shall not vest any right or title to any part of the assets of the
Trust Fund in such Participants except as otherwise provided in this Plan.
4.06. Excess Deferrals
(a) Notwithstanding any other provision of the Plan, Excess Deferrals
and any income or loss allocable thereto must be distributed no later than April
15 of the calendar year following the Plan Year in which the Excess Deferrals
were made, to the Participants to whose Account such Excess Deferrals were
allocated for the preceding calendar year. A Participant who has made elective
deferrals (as described in Code section 402(g)) to a plan of an employer who is
not an Affiliate may assign to this Plan any Excess Deferrals made during the
Participant's taxable year by notifying the Plan Administrator on or before the
date specified of the amount of the Excess Deferrals to be assigned to the Plan.
A Participant is deemed to notify the Plan Administrator of any Excess Deferrals
that arise by taking into account only those Elective Deferral Contributions
made to this Plan and any other plans of this Employer or an Affiliate.
(b) Excess Deferrals and any income or loss allocable thereto may be
distributed during the calendar year in which the Excess Deferrals were made to
the Participants to whose Account such Excess Deferrals were allocated for that
calendar year. A Participant is deemed to notify the Plan Administrator of any
Excess Deferrals that arise by taking into account only those Elective Deferral
Contributions made to this Plan and any other plans of this Employer. The
correcting distribution cannot occur until after the Plan has received the
Elective Deferral Contributions that caused the Excess Deferral.
(c) Excess Deferrals shall be adjusted for any income or loss for the
Plan Year. Income or loss for the Plan Year in which the Excess Deferral
occurred will be calculated in the same manner as under Plan section 4.05.
(d) The amount of Excess Deferrals that may be distributed with respect
to a Participant shall be reduced by any Excess Deferrals previously distributed
with respect to such Participant for the Plan Year beginning with or within such
taxable year. In no event may the amount distributed pursuant to this Plan
section exceed the Participant's total Elective Deferral Contributions for such
taxable year.
4.07. Excess Contributions
(a) If there are Excess Contributions for a Plan Year, the Plan
Administrator must elect between the alternative courses of action described in
this section and any additional choices available under the Treasury regulations
to Code section 401(k)(8).
(b) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose Account such Excess Contributions were allocated for the preceding Plan
Year. Such distribution shall be made to Highly Compensation Employees on the
basis of the respective portions of the Excess Contributions attributable to
each of such Employees. Excess Contributions of Participants who are subject to
the Family Member aggregation rules shall be allocated among the Family Members
in proportion to the Elective Deferral Contributions (and amounts treated as
Elective Deferral Contributions) of each Family Member that is combined to
determine the combined Contribution Percentage. In addition, the Plan
Administrator must cause each Participant's share of Excess Contributions to be
reduced in any manner not prohibited by law and not inconsistent with the
applicable Treasury regulations by that Participant's allocation of Excess
Deferrals that are distributed according to this Plan from the Trust Fund.
(c) Excess Contributions shall be adjusted for any income or loss for
the Plan Year. Income or loss for the Plan Year in which the Excess
Contribution occurred will be calculated in the same manner as under Plan
section 4.05.
4.08. Excess Aggregate Contributions
(a) If there are Excess Aggregate Contributions for a Plan Year, the
Plan Administrator may implement the provisions of this Plan section and take
any other action permissible according to Code section 401(m)(6) and Treasury
regulations to reduce or avoid other adverse consequences associated with Excess
Aggregate Contributions.
(b) Excess Aggregate Contributions, and any income or loss allocable
thereto, shall be forfeited, if forfeitable, or if not forfeitable, distributed
no later than the last day of the Plan Year to Participants to whose Accounts
Matching Contributions were allocated for the preceding Plan Year.
(c) As provided in Code section 401(m)(6)(C), distributions or
forfeitures of Excess Aggregate Contributions must be made to the Restricted
401(m) Employees on the basis of the respective portions of the Excess Aggregate
Contributions attributable to each of those Participants. Excess Aggregate
Contributions of Participants who are subject to the Family Member aggregation
rules shall be allocated among the Family Members in proportion to the Employee
and Matching Contributions (or amounts treated as Matching Contributions) of
each Family Member that is combined to determine the combined ACP.
(d) Excess Aggregate Contributions shall be adjusted for any income or
loss for the Plan Year. Income or loss for the Plan Year in which the Excess
Aggregate Contribution occurred will be calculated in the same manner as under
Plan section 4.05.
(e) Forfeitures of Excess Aggregate Contributions shall be used to
reduce Employer contributions for the Plan Year n which the forfeiture occurs.
Forfeitures according to this Plan section occur in the Plan Year after the
allocation that caused those amounts to be Excess Aggregate Contributions.
Amounts forfeited under this Plan section shall be treated as Annual Additions
under the Plan.
(f) To the extent that a Participant's share of the Excess Aggregate
Contributions is attributable to his allocations from Elective Deferral
Contributions, the Plan Administrator may cause the distributions authorized in
this Plan section from his Elective Deferral Account. To the extent that a
Participant's share of the Excess Aggregate Contributions is attributable to
allocations from his Matching Contributions, the Plan Administrator must cause
forfeitures authorized in this Plan section from the Participant's Excess
Aggregate Contributions and the Plan Administrator must cause distributions
authorized in this Plan section from the Participant's Matching Account. After
adjustment, as described, for Excess Deferrals or Excess Contributions that are
distributed, to the extent that the Plan Administrator causes forfeitures and
distributions to a Participant according to this Plan section, those
distributions must come from the Matching Contribution allocations to that
Participant's Matching Account, and next from that Participant's Elective
Deferral Contribution allocations to his Elective Deferral Account.
(g) The Plan Administrator must determine the amount of Excess Aggregate
Contributions after first determining the amount of Excess Deferrals and,
second, after determining the amount of Excess Contributions and causing those
Excess Deferrals and Excess Contributions to be adjusted, as authorized in Code
sections 401(k)(8) and 402(g).
<PAGE>
ARTICLE V
VESTING
5.01. Rollover Account and Elective Deferral Account
A Participant's interest in his Rollover Account and his Elective Deferral
Account is at all times fully vested and nonforfeitable.
5.02. Matching Account
(a) Each Participant who dies, becomes Disabled, or reaches Normal
Retirement Age while in the employ of an Employer shall have a fully vested,
nonforfeitable interest in his Matching Account.
(b) Otherwise, a Participant shall have a vested, nonforfeitable
interest in his Matching Account only to the extent he has satisfied the
requirements set forth in the following table:
Years of Service Vested Percentage
less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
5.03. Crediting Years of Service
(a) Except as provided in this Plan section and Plan section 5.04, all
of an Employee's Years of Service are counted to determine the vested interest
in a Participant's Matching Account. Service with the Employer before age 18
shall be excluded.
(b) A Participant's vested interest in his Matching Account will be
determined based on his whole Years of Service. Partial Years of Service will
be recognized only to the extent that, when aggregated, they equal whole Years
of Service.
5.04. Vesting Break in Service Rules
A Participant's Years of Service for purposes of Plan section 5.02 shall
be computed subject to the following limitations and restrictions:
(a) If an Employee returns to service for an Employer after incurring a
Break in Service but before incurring five consecutive one-year Breaks in
Service, he earns Years of Service for vesting purposes for both his service
before the Break in Service and his service after the Break in Service for
purposes of determining his nonforfeitable interest in his pre-break and post-
break Accounts.
(b) If an Employee returns to service with an Employer after incurring
five or more consecutive one-year Breaks in Service, all Years of Service after
such Breaks in Service will be disregarded for the purpose of vesting in his
pre-break Account. For purposes of determining such Participant's
nonforfeitable interest in his post-break Account, he retains his Years of
Service for vesting purposes for his service before the Breaks in Service only
if either of the following applies.
(1) He had a nonforfeitable interest in his Matching Account at
the time of his separation from service.
(2) At the time he returns to service for an Employer, the number
of his consecutive one-year Breaks in Service is less than his Years of Service.
5.05. Forfeitures
(a) When a Participant terminates his employment, the provisions of this
Plan section shall apply to any forfeitable portion of his Matching Account.
(b) Any forfeitures under the Plan shall be used to reduce Employer
contributions for the Plan Year in which the forfeiture occurs.
(c) Except as provided in subsections (d) and (e), the nonvested portion
of the Matching Account of a terminated Participant shall be forfeited as of
such Valuation Date. If the Participant is later reemployed and resumes
participation in the Plan before he has incurred five consecutive Breaks in
Service, the value of the nonvested portion of his Matching Account that was
forfeited pursuant to this subsection shall be reinstated at its value as of the
date of forfeiture without adjustment for any subsequent gains or losses to the
Trust Fund.
(d) The nonvested portion of the Matching Account of a terminated
Participant who receives a distribution from his Matching Account prior to the
date on which he completes five consecutive one-year Breaks in Service shall be
forfeited as of the Valuation Date coincident with or immediately following the
date of distribution. If the Participant is later reemployed and resumes
participation in the Plan, the value of the nonvested portion of his Matching
Account that was forfeited pursuant to this subsection shall be reinstated to
its value as of the date of forfeiture, without adjustment for any subsequent
gains or losses of the Trust Fund, if the Participant repays in cash in a lump
sum the entire amount distributed to him before the earlier of five years after
the Participant's reemployment date or the date he incurs five consecutive
Breaks in Service following the date of distribution. If the Participant's
account is not reinstated, then all Years of Service prior to such Break in
Service will be disregarded.
(e) In the case of a terminated Participant whose vested interest in his
Matching Account is zero, such Participant shall be deemed to have received a
distribution of such vested Account balance as of the Valuation Date following
the Participant's termination of employment, and the Participant's nonvested
Account balance shall be forfeited as of such date. If the Participant is later
reemployed and resumes participation in the Plan before he has incurred five
consecutive Breaks in Service, the value of the nonvested portion of his
Matching Account that was forfeited, if any, pursuant to this subsection shall
be reinstated to his Matching Account at its value as of the date of forfeiture.
(f) Amounts reinstated under this Plan section may be made, as directed
by the Plan Administrator, from forfeitures or Employer contributions.
5.06. Amendments Affecting Vested Account Balance
(a) If the Plan's vesting schedule is amended, or the Plan is amended in
any way that directly or indirectly affects the computation of the Participant's
nonforfeitable percentage or if the Plan is deemed amended by an automatic
change to or from a top-heavy vesting schedule, each Participant with at least
three Years of Service with the Employer may elect, within a reasonable period
after the adoption of the amendment or change, to have the nonforfeitable
percentage computed under the Plan without regard to such amendment or change.
For Participants who do not have at least one Hour of Service in any Plan Year
beginning after December 31, 1988, the preceding sentence shall be applied by
substituting "five Years of Service" for "three Years of Service" where such
language appears.
The period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end of the latest
of:
(1) 60 days after the amendment is adopted;
(2) 60 days after the amendment becomes effective; or
(3) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
(b) No amendment to the Plan shall be effective to the extent that it
has the effect of decreasing a Participant's Account balance. Notwithstanding
the preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under Code section 412(c)(8). A plan amendment which has the
effect of decreasing a Participant's Account balance or eliminating an optional
form of benefit, with respect to contributions attributable to service before
the amendment shall be treated as reducing an Account balance. Furthermore, if
the vesting schedule of a plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is adopted or the date it
becomes effective, the nonforfeitable percentage (determined as of such date) of
such Employee's right to his Matching Account will not be less that his
percentage computed under the Plan without regard to such amendment.
<PAGE>
ARTICLE VI
DISTRIBUTIONS
6.01. Timing of Distributions
(a) Except as provided in subsections (b) and (c), in the event a
Participant terminates his employment for any reason, including Disability or
retirement, the entire vested portion of his Account shall be distributed to him
as of the Valuation Date coincident with or next following his termination of
employment or as soon thereafter as is practicable.
(b) If, as of the applicable Valuation Date, the value of the vested
portion of a terminated Participant's Account exceeds $3,500 (or has exceeded
$3,500 at the time of any prior distribution), then no fewer than 30 days and no
more than 90 days before his Annuity Starting Date, the Participant shall be
given a written notice (by first class mail or personal delivery), which
describes the following: (i) the terms and conditions of the optional forms of
benefit payment under Plan section 6.02; (ii) the Participant's right to defer
receipt of the distribution until it is no longer immediately distributable; and
(iii) the Participant's right to a period of 30 days after receipt of the notice
to consent to a distribution (and, if applicable, to elect a particular
distribution option). After receipt of the notice required by this subsection,
the terminated Participant must consent in writing to receive a distribution
pursuant to subsection (a). Such distribution may commence fewer than 30 days
after the notice required by this subsection is given provided that the
Participant elects in writing to receive such distribution.
(c) If, after receipt of the notice required by subsection (b), the
terminated Participant does not consent to receive a distribution pursuant to
subsection (a), the distribution of his Account will be postponed until the
earlier of (i) the date on which the Account is no longer immediately
distributable; or (ii) the date the terminated Participant elects to receive a
distribution pursuant to this subsection. A Participant's Account is
immediately distributable prior to the earlier of (i) the attainment of the
later of what would have been the Participant's Normal Retirement Age had he
continued his employment with the Employer or age 62, if later; or (ii) his
death. The terminated Participant's postponed distribution account will be held
as part of the Trust Fund and will participate in the income, gains, and losses
of the Trust on a proportionate basis.
(d) If a Participant who has not received a distribution of his
postponed distribution account is later reemployed as an Employee and resumes
participation in the Plan before he has incurred five consecutive Breaks in
Service, the portion of his postponed distribution account that is attributable
to the vested interest in his Matching Account shall be combined with the
nonvested portion of his Matching Account as reinstated pursuant to Plan section
5.05, if any, and all his accounts shall be invested as provided in Plan article
X.
6.02. Optional Forms of Benefit
Each Participant, or his duly appointed guardian or other personal
representative in the case of a Participant who is Disabled, may elect to have
the benefits to which he is entitled under the Plan paid under one of the
options in this Plan section.
(a) Lump Sum. A lump sum payment of such Participant's Account balance.
(b) Installment Payments. Distributions over a fixed period in annual
installments not extending beyond the lesser of (i) 15 years or (ii) his life
expectancy or the joint life expectancy of the Participant and his designated
Beneficiary.
(c) Cash Out. Notwithstanding the above, if the value of the vested
portion of a terminated Participant's Account has never exceeded $3,500 as of
the applicable Valuation Date at the time of any distribution, then the Trustee
shall distribute such Account balance in a lump sum as soon as practicable
following the Valuation Date following the Participant's termination of
employment, retirement or Disability.
(d) Medium of Payment. Payments under this Plan section will be made in
cash or, to the extent that a Participant's Account is invested in Chesapeake
Common Stock, in a combination of cash and stock.
6.03. Commutation of Benefits
If a Participant's Beneficiary is not a natural person, or if more than
one Beneficiary is entitled to receive installment payments, then, at the option
of the Trustee, the value of the Account with respect to the unpaid installments
may be commuted and paid in a lump sum.
6.04. Commencement of Benefits
Unless a Participant otherwise elects, his benefit payments under the Plan
must commence no later than 60 days after the close of the Plan Year in which
occurs the latest of the events listed in paragraphs (1) through (3) below.
However, if the benefit amount cannot be determined before payment is required,
or if it is not possible to pay when required because the Plan Administrator has
been unable to locate the Participant after making reasonable efforts to do so,
a payment retroactive to the required date may be made no later than 60 days
after the earliest date on which the amount of that payment can be determined
under this Plan or the date on which the Participant is located (whichever is
applicable):
(1) his Normal Retirement Age;
(2) the tenth anniversary of the date he began participation in
the Plan; or
(3) his termination of employment.
Notwithstanding the above, the failure of a Participant and his Spouse, where
applicable, to consent to a distribution while a benefit is immediately
distributable, within the meaning of Plan section 6.01(b) shall be deemed to be
an election to defer commencement of payment of any benefit sufficient to
satisfy this section.
6.05. Special Distribution Provisions
(a) General Rules
(1) The requirements of this Plan section shall apply to any
distribution of a Participant's interest and will take precedence over any
inconsistent provisions of the Plan.
(2) All distributions required under this Plan article shall be
determined and made in accordance with Code section 401(a)(9) and regulations
promulgated thereunder.
(3) The entire interest of a person must be or must begin to be
distributed not later than his Required Beginning Date.
(b) Distribution Periods. As of the Participant's Required Beginning
Date, distributions, if not made in a single-sum, may only be made over one of
the following periods (or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Beneficiary,
(3) a period certain not extending beyond the life expectancy of
the Participant, or
(4) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Beneficiary.
(c) Required Beginning Date. For purposes of this Plan article VI,
Required Beginning Date means the April 1 of the calendar year following the
calendar year in which the Participant attains age 70 1/2.
(d) Amount to be distributed each year. If the Participant's interest
is to be distributed in other than a single sum, the following minimum
distribution shall apply on or after the Required Beginning Date:
(1) If a Participant's benefit is to be distributed over (i) a
period not extending beyond the life expectancy of the Participant or the joint
life and last survivor expectancy of the Participant and the Participant's
designated Beneficiary or (ii) a period not extending beyond the life expectancy
of the designated Beneficiary, the amount required to be distributed for each
calendar year, beginning with the distributions for the first distribution
calendar year, must at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
(2) The amount to be distributed each year, beginning with
distributions for the first distribution calendar year shall not be less than
the quotient obtained by dividing the Participant's benefit by the lesser of (i)
the applicable life expectancy or (ii) if the Participant's Spouse is not the
designated Beneficiary, the applicable divisor determined from the table set
forth in Q&A-4 of Treasury Regulation section 1.401(a)(9)-2. Distributions
after the death of a Participant shall be distributed using the applicable life
expectancy in paragraph (1) above as the relevant divisor without regard to
Treasury Regulation section 1.401(a)(9)-2.
(3) The minimum distribution required for the Participant's first
distribution calendar year must be made on or before the Participant's Required
Beginning Date. The minimum distribution for other calendar years, including
the minimum distribution for the distribution calendar year in which the
Employee's Required Beginning Date occurs, must be made on or before December 31
of that distribution calendar year.
6.06. Limitations on Distributions of Elective Deferral Contributions
(a) Notwithstanding any other provision of the Plan, Elective Deferral
Contributions may not be distributed before one of the following events occur:
(1) the Participant has died;
(2) the Participant has become disabled (either Disabled, or
disabled within the sense of Code section 72(m)(7) or under any other definition
of disability consistent with Code section 401(k)(2)(B));
(3) the Participant has retired or otherwise terminated
employment with the Employer;
(4) the Participant has incurred a hardship according to Plan
section 6.08;
(5) the Participant has attained age 59 1/2;
(6) the Plan terminates without the establishment of a successor
qualified plan, other than an employee stock ownership plan (as defined in Code
section 409 or 4975(e)) or a simplified employee pension plan (as defined in
Code section 408(k));
(7) a Participant's Employer disposes of substantially all of its
assets, within the meaning of Code section 409(d)(2), used in its trade or
business and that Participant continues employment with the business that
acquires the assets; or
(8) a corporation disposes of its interest in the Participant's
Employer, which is a subsidiary of the selling corporation within the meaning of
Code section 409(d)(3), and the Participant continues his employment with the
Employer.
(b) A distribution cannot be made pursuant to an event described in
paragraph (8) unless distribution would be a lump sum distribution under Code
section 402(d)(4), without regard to clauses (i), (ii), (iii), and (iv) of
subparagraph (A), (B), or (H) and, with respect to paragraphs (7) and (8), the
transferor corporation continues to maintain the Plan after the disposition.
6.07. Withdrawals
(a) Rollover Account Withdrawals. As of the end of any calendar
quarter, a Participant may, on 60 days' prior written notice to the Plan
Administrator (unless the Plan Administrator consents to a shorter notice),
apply in writing for the withdrawal of all or part his Rollover Account as of
any Valuation Date. A Participant is limited to one such withdrawal during each
Plan Year. That portion of a Participant's Rollover Account attributable to
amounts that were and remain subject to the distribution restrictions of Code
section 401(k) or any other distribution restrictions, at any time prior to
their transfer to the Plan, can be withdrawn only pursuant to the provisions of
subsection (b) or such other restrictions that may apply to them as a matter of
law.
(b) Age 59 1/2 Withdrawals. A Participant who has attained age 59 1/2
may elect to withdraw cash amounts from his vested Account as of the next
Valuation Date. To be acceptable for processing within a given month, the
request for a withdrawal must be received by the Plan Administrator no later
than the 20th day of the month.
Any distribution made pursuant to this Plan section shall only be made
upon receipt of a written consent signed by the Participant.
6.08. Hardship Distributions
(a) A Participant may request a withdrawal from his Elective Deferral
Account if the Participant has incurred a financial hardship, as described
below. In no event may a Participant withdraw more than the value of his
Account as of the date of the hardship distribution.
(b) A Participant shall be considered to have incurred a financial
hardship if he has immediate and heavy financial needs that cannot be fulfilled
through other reasonable available financial sources of the Participant.
(c) The determination of financial hardship shall be made by the Plan
Administrator in a uniform and nondiscriminatory manner in accordance with such
standards as may be promulgated from time to time by the Internal Revenue
Service.
(d) The Plan Administrator may rely on the Participant's representation
that the financial needs cannot be relieved:
(1) through reimbursement or compensation by insurance or
otherwise;
(2) by reasonable liquidation of the Participant's assets to the
extent such liquidation would not itself cause an immediate and heavy financial
need;
(3) by cessation of Elective Deferral Contributions under the
Plan; or
(4) by other distributions or non-taxable loans from plans
maintained by an Affiliate or borrowing from commercial sources on reasonable
commercial terms.
The amount of an immediate and heavy financial need may include any amounts
necessary to pay any federal, state or local income taxes or penalties
reasonably anticipated to result from the distribution.
(e) A Participant who wishes to make a withdrawal shall apply in writing
to the Plan Administrator, on forms provided by the Plan Administrator. The
Participant must furnish such information in support of his application as may
be requested by the Plan Administrator. The Plan Administrator shall determine
the amount, if any, of the withdrawal that shall be made and may direct
distribution of as much of the Participant's Elective Deferral Account as it
deems necessary to alleviate or help alleviate the hardship.
(f) The amount of the withdrawal shall be made upon the Participant's
Elective Deferral Account balance as of the Valuation Date next preceding the
date of the withdrawal or, in the discretion of the Trustee, may be based upon
the Participant's Elective Deferral Account balance as of a valuation date as
close as practicable to the date of the withdrawal.
(g) The distribution shall be made as soon as possible after the
hardship withdrawal is approved. The Plan Administrator may not authorize a
hardship withdrawal in excess of the amount deemed necessary to alleviate the
hardship.
(h) A distribution from a Participant's Elective Deferral Account on
account of hardship is limited to the total of the Participant's Elective
Deferral Contributions as of the date of distribution minus any prior
distributions from his Elective Deferral Account.
6.09. Qualified Domestic Relations Order Payments
(a) Despite any other Plan provisions to the contrary, the Plan
Administrator must comply with the terms of a Qualified Domestic Relations
Order.
(b) The Plan Administrator must establish reasonable written procedures
for determining the qualified status of a domestic relations order and for
administering distributions under a Qualified Domestic Relations Order. The
Plan Administrator must promptly notify the Participant and each Alternate Payee
of the receipt of a domestic relations order and of the procedures for
determining its qualified status.
(c) During the 18-month period beginning on the date on which the Plan
Administrator receives a domestic relations order (or a modification of a
domestic relations order) for determination as a Qualified Domestic Relations
Order, the Plan Administrator must separately account for amounts that would
have been payable to the Alternate Payee during such period if the order had
been determined to be a Qualified Domestic Relations Order.
(d) No benefits will be distributed to the Participant to whom a
domestic relations order relates after the date on which the Plan Administrator
receives the order (or a modification of the order) for determination as a
Qualified Domestic Relations Order and before the earlier of (i) the expiration
of the 18-month period beginning on that date; (ii) the date on which the Plan
Administrator determines that the order (or a modification of the order) is a
Qualified Domestic Relations Order; or (iii) the date the parties notify the
Plan Administrator that they no longer intend to pursue a Qualified Domestic
Relations Order with respect to the Participant's Account.
(e) This provision applies to amounts that are subject to a domestic
relations order that is determined to be a Qualified Domestic Relations Order
prior to January 1, 1993. As to a Participant who has not separated from ser-
vice, a Qualified Domestic Relations Order may provide for payments to begin to
an Alternate Payee on or after the date on which the Participant attains or
would have attained the earliest retirement age under the Plan. If the
Participant whose benefit is subject to a Qualified Domestic Relations Order
described in the preceding sentence dies before the date on which he attains or
would have attained the earliest retirement age under the Plan, the Alternate
Payee is entitled to benefits only if the order requires survivor benefits to be
paid. For purposes of the two preceding sentences, the amount to be paid to the
Alternate Payee is computed by using the benefit that would be payable to the
Participant if he had retired on the date on which payment is to begin under
that order. The payment of early retirement benefits with respect to a
Participant who has not yet retired is not to be considered to violate the
no-increased-benefits provision in this Plan's definition of Qualified Domestic
Relations Order.
(f) The following provisions apply to amounts that are subject to a
domestic relations order that is determined to be a Qualified Domestic Relations
Order on or after January 1, 1993.
(1) Notwithstanding any Plan provision to the contrary, the
Alternate Payee shall receive payment of the amount awarded to him under the
Qualified Domestic Relations Order as soon as practicable after the date of
entry of the order, provided, however, that the amount paid to the Alternate
Payee pursuant to the Qualified Domestic Relations Order shall not exceed the
nonforfeitable value of the Participant's Account, valued as of the Valuation
Date coincident with or immediately preceding the date of entry of the order. A
Qualified Domestic Relations Order may not specify a date of payment to the
Alternate Payee that is later than the payment date specified under this
subparagraph. Payment of amounts with respect to a Participant who has not yet
separated from service is not to be considered to violate the
no-increased-benefits provision in this Plan's definition of Qualified Domestic
Relations Order.
(2) Notwithstanding the provisions of Plan section 6.08 or any
other Plan provisions to the contrary, payment shall be made to the Alternate
Payee in a single sum cash payment. A Qualified Domestic Relations Order may
not specify payment to the Alternate Payee in a form of distribution other than
a single sum cash payment.
(3) Unless otherwise specified in the Qualified Domestic
Relations Order, payment to the Alternate Payee will be charged proportionally
against Participant's Accounts under this Plan, including the earnings thereon.
(4) If the Alternate Payee dies before receiving his interest, if
any, in this Plan, then such interest shall be paid to the individual or other
entity designated as the Alternate Payee's Beneficiary or Beneficiaries under
Plan section 7.03. Payment shall be made to the Alternate Payee's designated
Beneficiary or Beneficiaries as soon as prac- ticable after the Valuation Date
coincident with or immediately preceding the date of death of the Alternate
Payee. If the Qualified Domestic Relations Order does not specify the
disposition of the Alternate Payee's interest in this Plan upon his death or if
the Alternate Payee makes no valid beneficiary designation, then the Alternate
Payee's interest shall be paid to his estate.
(5) If the Participant dies before the Alternate Payee and before
the Alternate Payee has received payment of his interest in this Plan in
accordance with subparagraph (A), the Alternate Payee shall only be entitled to
payment to the extent that he is designated as the Participant's surviving
spouse under the Qualified Domestic Relations Order. Payment shall be made to
the Alternate Payee as soon as practicable after the Valuation Date coincident
with or immediately preceding the date of death of the Participant.
6.10. Direct Rollovers
(a) This Plan section applies to distributions from the Plan made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary, a Distributee may elect, at the time and in the manner prescribed by
the Plan Administrator, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover.
(b) Definitions
(1) Eligible Rollover Distribution means any distribution of all
or any portion of the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include (i) any distribution that is one
of a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the Distributee and the
Distributee's designated Beneficiary, or for a specified period of ten years or
more; (ii) any distribution to the extent such distribution is required under
Code sec- tion 401(a)(9); (iii) the portion of any distribution that is not
includible in gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities); (iv) returns of
Elective Deferral Contributions pursuant to Treasury Regulation section
1.415-6(b)(6)(iv); (v) returns of Excess Contributions, Excess Deferrals and
Excess Aggregate Contributions pursuant to Treasury Regulation sections
1.401(k)-1(f)(4), 1.402(g)-1(e)(3) and 1.401(m)- 1(e)(3) and the income
allocable to those corrective distributions; (vi) dividends paid on employer
securities as described in Code section 404(k); and (vii) similar items
designated by the Commissioner of the Internal Revenue.
(2) Eligible Retirement Plan means an individual retirement
account described in Code section 408(a), an individual retirement annuity
described in Code section 408(b), an annuity plan described in Code section
403(a), or a qualified trust described in Code section 401(a), that accepts the
Distributee's Eligible Rollover Distribution. However, in the case of an
Eligible Rollover Distribution to the surviving Spouse, an Eligible Retirement
Plan is an individual retirement account or individual retirement annuity.
(3) Distributee means an Employee or former Employee. In
addition, the Employee's or former Employee's surviving Spouse and the
Employee's or former Employee's Spouse or former Spouse who is the Alternate
Payee under a Qualified Domestic Relations Order are Distributees with regard to
the interest of the Spouse or former Spouse.
(4) Direct Rollover means a payment by the Plan to the Eligible
Retirement Plan specified by the Distributee.
(c) The Plan Administrator may impose restrictions on Direct Rollovers
consistent with applicable Treasury regulations.
<PAGE>
ARTICLE VII
DEATH BENEFITS
7.01. General
(a) Active Participant. Upon death prior to his Annuity Starting Date,
the vested amount credited to the Account of a Participant who is an Employee
shall be distributed to the Participant's Beneficiary in accordance with the
provisions of this Plan article. The amount to be distributed shall consist of
the vested amount credited to the Participant's Account as of the Valuation Date
coincident with or immediately following the date of his death, plus any amount
that is subsequently allocated to his Account pursuant to Plan article IV.
(b) Terminated Participant. Upon death prior to his Annuity Starting
Date, the vested amount credited to the Account of a Participant who is no
longer an Employee shall be distributed to the Participant's Beneficiary as
provided in this Plan article. The amount to be distributed shall consist of
the vested amount credited to the Participant's Account as of the Valuation Date
coincident with or immediately following the date of his death, plus any amount
that is subsequently allocated to his Account pursuant to Plan article IV.
7.02. Death Distributions
(a) If a Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be distributed at
least as rapidly as under the method of distribution being used prior to the
Participant's death.
(b) If a Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death except to the extent that an election is made to
receive distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's interest is payable to a
Beneficiary, distributions may be made over the life or over a period certain
not greater than the life expectancy of the Beneficiary commencing on or before
December 31 of the calendar year immediately following the calendar year in
which the Participant died.
(2) If the Beneficiary is the Participant's Surviving Spouse, the
date distributions are required to begin in accordance with paragraph (1) above
shall not be earlier than the later of (i) December 31 of the calendar year
immediately following the calendar year in which the Participant died and (ii)
December 31 of the calendar year in which the Participant would have attained
age 70 1/2.
If the Participant has not made an election pursuant to this Plan section
by the time of his or her death, the Participant's Beneficiary must elect the
method of distribution no later than the earlier of (i) December 31 of the
calendar year in which distributions would be required to begin under this Plan
section, or (ii) December 31 of the calendar year which contains the fifth
anniversary of the death of the Participant. If the Participant has no Benefi-
ciary, or if the Beneficiary does not elect a method of distribution,
distribution of the Participant's entire interest must be completed by December
31 of the calendar year containing the fifth anniversary of the Participant's
death.
(c) For purposes of subsection (b), if the Surviving Spouse dies after
the Participant, but before payments to such Spouse begin, the provisions of
subsection (b), with the exception of paragraph (2), shall be applied as if the
Surviving Spouse were the Participant.
(d) For purposes of this Plan section, any amount paid to a child of the
Participant will be treated as if it had been paid to the Surviving Spouse if
the amount becomes payable to the Surviving Spouse when the child reaches the
age of majority.
(e) For purposes of this Plan section, distribution of a Participant's
interest is considered to begin on the Participant's required beginning date (or
if subsection (c) above is applicable, the date distribution is required to
begin to the Surviving Spouse pursuant to paragraph (b)(2) above).
7.03. Designation of Beneficiary
(a) A married Participant's Beneficiary is the Participant's Surviving
Spouse unless the Spouse consents to the Participant's designation of a
different Beneficiary. The Spouse must consent in writing to the specific non-
Spouse beneficiary named in such designation. The designation must name a
specific Beneficiary, including any class of Beneficiaries or contingent
Beneficiaries, which may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without further spousal con-
sent). The Spouse's consent must acknowledge the effect of the Participant's
election and must be witnessed by a Plan representative or notary public. A
consent that permits designations by the Participant without any requirement of
further consent by such Spouse must acknowledge that the Spouse has the right to
limit consent to a specific Beneficiary and that the Spouse voluntarily elects
to relinquish such right. However, the consent of a Spouse will not be required
if the Participant establishes to the satisfaction of the Plan Administrator
that such written consent cannot be obtained because there is no Spouse or
because the Spouse cannot be located. Any consent under this subsection is
valid only with respect to the Spouse who signed the consent. Any evidence that
the consent of a Spouse cannot be obtained is valid only with respect to that
designated Spouse.
(b) A Participant may designate a Beneficiary or Beneficiaries,
indicating single, multiple, primary, or secondary Beneficiaries.
Each designation must be in writing, signed by the Participant, delivered to the
Plan Administrator, and if applicable under subsection (a), be consented to by
the Participant's Spouse. Each designation by a Participant is revocable. A
Participant's Beneficiary change is not effective until received by the Plan
Administrator. The Plan Administrator, the Trustee, and an Employer are not
liable for a failure to make a change between the time requested and the
Participant's death unless the failure is willful or due to substantial
negligence; and one party is not liable for the failure of another party.
(c) If there is no valid Beneficiary designation by the Participant
(together with a valid spousal consent described in subsection (a), if
applicable) or if the designated Beneficiary or Beneficiaries fail to survive
the Participant or are no longer in existence at his death, Beneficiary means
the Participant's Surviving Spouse; and if there is no Surviving Spouse, the
Participant's descendants, per stirpes; and if there is no Surviving Spouse or
any such descendant, Beneficiary means the Participant's estate.
(d) Despite the preceding subsections, to the extent provided in a
Qualified Domestic Relations Order, Beneficiary means the Alternate Payee who is
recognized by such Order as having a right to receive all or a portion of any
benefits payable under the Plan on behalf of such Participant.
7.04. Election by Beneficiary
If a Participant dies before his Annuity Starting Date, any death benefits
payable to his Beneficiary may be paid (subject to any restrictions that may be
placed on the payments by the Participant) in any manner that is authorized by
Plan article VI, elected by the Beneficiary.
<PAGE>
ARTICLE VIII
APPOINTMENTS AND ALLOCATION OF FIDUCIARY
RESPONSIBILITY
8.01. Named Fiduciary
Chesapeake Corporation is the Named Fiduciary of the Plan.
8.02. Appointment of Investment Manager
At the direction of the Board, the Company may enter into an agreement
with an Investment Manager whereunder such Investment Manager shall manage,
acquire or dispose of assets of the Plan. Where an Investment Manager has been
appointed, such Investment Manager shall have complete control and authority
over all matters concerning the investment of Plan assets under its discretion
or control. An Investment Manager appointed hereunder shall acknowledge in
writing that it is a fiduciary with respect to the Plan.
8.03. Allocation of Responsibility
The Named Fiduciary shall have the power to allocate fiduciary
responsibilities among other Named Fiduciaries and to designate Fiduciaries to
carry out Fiduciary responsibilities in order to provide for the orderly
operation and administration of the Plan. Any allocation, delegation, or other
assignment of duties previously made is hereby confirmed and shall continue
until such time as it is revoked, modified, or altered by the Named Fiduciary.
The Named Fiduciary may permit any person to whom any authority or control has
been granted to further allocate, delegate, or assign any or all such duties to
such other person or entity as the Named Fiduciary may specify. A person or
entity serving as a Fiduciary with regard to the Plan may serve in more than one
Fiduciary capacity and may employ one or more persons to render advice with
regard to his Fiduciary responsibilities hereunder. To the extent allowed by
law, each Fiduciary's responsibility is limited to the duties allocated or
designated to it.
8.04. Plan Administrator
Chesapeake Corporation is the Plan Administrator. The Plan Administrator
has only the responsibilities described in this Plan. The Plan Administrator
has no responsibility for the control or management of the Trust Fund except as
specifically provided in this Plan.
8.05. Hourly 401(k) Savings Plan Committee
The Board shall have the power to appoint an Hourly 401(k) Savings Plan
Committee of at least three members which shall serve pursuant to Plan article
IX. The Board shall have the power to remove a member of the Committee at its
discretion for any reason. In the event of a removal or if for any other reason
there are less than three members of the Committee serving at any time the Board
shall as soon as practicable appoint a new member or members so that there shall
be a minimum of three members.
8.06. Trustee
The Board shall have the power to appoint one or more Trustees, to remove
a Trustee at its discretion upon 60 days' written notice unless a shorter period
is agreed to, to appoint a successor to any Trustee who has resigned, has been
removed, or has ceased to serve for any other reason, and to appoint a co-
Trustee with the consent of the Trustee then serving. The Trustee may resign at
any time upon 60 days' written notice to the Company unless a shorter period is
agreed to. The appointment of any Trustee or co-Trustee shall become effective
upon the Trustee's or co-Trustee's acceptance of the appointment in writing.
Each Trustee shall hold and invest the assets of the Plan under a Trust
established pursuant to a Trust Agreement between the Company and the Trustee.
Each Trustee shall further carry out all duties assigned to it by the Plan or
the applicable Trust Agreement.
8.07. Errors and Omissions
Individuals and entities charged with the administration of the Plan must
see that it is administered in accordance with the terms of the Plan as long as
the Plan does not conflict with the Code or ERISA. If an innocent error or
omission is discovered in the Plan's operation or administration, and the Plan
Administrator determines that it would cost more to correct the error than is
warranted, and if the Plan Administrator determines that the error did not
result in discrimination in operation or cause a qualification or excise-tax
problem, then, to the extent that an adjustment will not, in the judgment of the
Plan Administrator, result in discrimination in operation, the Plan Admin-
istrator may authorize any equitable adjustment it deems necessary or desirable
to correct the error or omission, including but not limited to the authorization
of additional Employer contributions designed, in a manner consistent with the
goodwill intended to be engendered by the Plan, to put Participants in the same
relative position they would have enjoyed if there had been no error or
omission. Any contribution made pursuant to this section is an additional
discretionary contribution.
8.08. Fiduciary Discretion
In discharging the duties assigned to it under the Plan, the Named
Fiduciary has the discretion to interpret the Plan; adopt, amend and rescind
rules and regulations pertaining to its duties under the Plan; and to make all
other determinations necessary or advisable for the discharge of its duties
under the Plan. The Named Fiduciary's discretionary authority is absolute and
exclusive if exercised in a uniform and nondiscriminatory manner with respect to
similarly situated individuals. The express grant in the Plan of any specific
power to a Fiduciary with respect to any duty assigned to it under the Plan must
not be construed as limiting any power or authority of the Fiduciary to
discharge its duties. A Fiduciary's discharge of its duties must be sustained
unless the Fiduciary abused its discretion.
<PAGE>
ARTICLE IX
PLAN ADMINISTRATION
9.01. General
(a) The Plan Administrator is responsible for the operation and
administration of the Plan, except to the extent its duties are allocated to or
assumed by other persons or entities according to the terms of the Plan.
(b) The Plan Administrator shall establish rules and procedures to be
followed by Participants and Beneficiaries in filing applications for benefits
and for furnishing and verifying proofs of any matter necessary to establish
their rights to benefits or other rights in accordance with the Plan.
(c) The Plan Administrator shall supply such full and timely information
on all matters relating to the Plan as the Trustee, each Fiduciary and other
persons performing services for the Plan may require for the effective discharge
of their respective duties.
9.02. Duties of Plan Administrator
It shall be the duty of the Plan Administrator or such persons as it may
designate to handle the day-to-day operations of the Plan including the
enrollment of Participants; the distribution of booklets, notices and other
information regarding the Plan; maintaining Beneficiary designation forms; and
communicating all other matters relating to Participants' participation and
entitlement to benefits to each Fiduciary and other persons performing services
for the Plan as may be necessary to enable them to discharge their duties under
the Plan. The Plan Administrator or such persons as it may designate shall
carry out the duties in a uniform, equitable, and nondiscriminatory manner with
regard to all Participants or Beneficiaries under similar circumstances.
9.03. Disclosure
(a) The Plan Administrator shall see that descriptions of the Plan are
prepared for filing with the Department of Labor and shall make available to
Participants and Beneficiaries receiving benefits under the Plan a summary of
the Plan at such place and at such times as may be required by federal statutes
and regulations.
(b) The Plan Administrator shall arrange for the preparation and filing
of such annual reports, including financial statements of the Plan's
assets and liabilities, schedules, receipts and disbursements and changes in
financial position in such form, at such place and at such times as may be
required by federal statutes and regulations. The Plan Administrator shall
furnish annually to all Participants and Beneficiaries receiving benefits under
the Plan a copy of a summary of the financial statement of the Plan's assets and
liabilities and schedules of receipts and disbursements and such other material
as is necessary to fairly summarize the latest annual report at such times and
to the extent required by federal statutes and regulations.
(c) The Plan Administrator shall also make available at its principal
office copies of the Plan, any Trust Agreement, copies of any contracts relating
to the Plan, descriptions of the Plan, and annual reports for examination by any
Participant or Beneficiary.
(d) Upon the written request of any Participant or Beneficiary receiving
benefits under the Plan, the Plan Administrator shall furnish him a copy of the
latest updated summary plan description, plan description, latest annual report,
and a copy of the Plan and Trust Agreement. The Plan Administrator may make a
reasonable charge for the costs of furnishing such copies not otherwise required
to be provided to such Participant or Beneficiary without charge as a matter of
law.
9.04. Annual Accountings
To the extent required by law, the Plan Administrator shall engage, on
behalf of all Participants, an independent qualified public accountant
designated by the Company, to certify and render an opinion that the financial
statements and schedules prepared in conjunction with the Plan are presented
fairly and are in conformity with generally accepted accounting principles.
9.05. Expenses and Compensation
(a) Although it is not required to do so, it is Chesapeake Corporation's
present intention to pay the reasonable expenses incurred in the administration
of the Plan. However, in its discretion and as permitted by ERISA, Chesapeake
Corporation may direct that such expenses shall be paid by the Trustee out of
the Fund. In no event, however, shall any Employee of the Company be entitled
to compensation for his services with respect to the Plan other than his normal
compensation received as an Employee and the reimbursement of his expenses
incurred with respect to the Plan.
(b) To the extent allowed under ERISA section 404(c), a Participant's
Account may be charged for the reasonable expense of carrying out that
Participant's investment direction.
9.06. Directions to Trustee
(a) Except as provided in Plan section 10.04, the Named Fiduciary shall
have the right to direct the Trustee with respect to the investment of all or a
designated part of the Trust Fund (other than the portion of the Trust Fund
subject to the control of an Investment Manager), either directly or indirectly
through such agents as it may retain to direct the investment of the Trust Fund.
(b) All directions from the Plan Administrator to the Trustee shall be
in writing from the Committee, or such other person or persons as may be
appointed in writing by the Committee. The Trustee shall rely on and shall act
in accordance with such directions, unless the Trustee knows or should know that
the directions constitute a breach of that person's or entity's or its own
obligations under the Plan.
9.07. Claims Procedure
(a) Claims for benefits under the Plan may be submitted to the Plan
Administrator or such persons as it may designate in writing who shall have the
initial responsibility for determining the eligibility of any Participant or
Beneficiary for benefits. Such claims for benefits shall be made in writing and
shall set forth the facts which such Participant or Beneficiary believes to be
sufficient to entitle him to the benefit claimed. The Plan Administrator may
adopt forms for the submission of claims for benefits in which case all claims
for benefits shall be filed on such forms.
(b) On receipt of a claim, the Plan Administrator must respond in
writing within 90 days. If necessary, the Plan Administrator's first notice
must indicate any special circumstances requiring an extension of time for the
Plan Administrator's decision. The extension notice must indicate the date by
which the Plan Administrator expects to give a decision. An extension of time
for processing may not exceed 90 days after the end of the initial ninety day
period.
(c) If a claim is wholly or partially denied, the Plan Administrator
must give written notice within that time provided in subsection (b). If notice
that a claim has been denied is not furnished within that time, the claim is
deemed denied. An adverse notice must be written in a manner calculated to be
understood by the claimant and must include (i) each reason for denial; (ii)
specific references to the pertinent provisions of the Plan or related documents
on which the denial is based; (iii) a description of any additional material or
information necessary for the claimant to perfect the claim and an explanation
of why that material or information is needed; and (iv) appropriate information
about the steps to be taken if the claimant wishes to submit the claim for
review.
(d) A claimant's proper written request for review must be received by
the Plan Administrator no less than 60 days after the claimant's receipt of
notice that a claim has been denied. The Plan Administrator may appoint a
committee to review benefit claims must review any claim that was denied. If no
committee is appointed, the Plan Administrator will process any valid claim.
(e) The decision on review must be furnished to the claimant in writing
within 60 days after the request for review is received, unless special
circumstances require an extension of time for processing. If an extension is
required, written notice of the extension must be furnished to the claimant
before the end of the 60-day period and the decision then must be given as soon
as possible, but not later than 120 days after the request for review was
received. The decision on review must be written in a manner calculated to be
understood by the claimant and must include specific reasons for the decision
and specific references to the pertinent provisions of the Plan or related
documents on which the decision is based. If the decision on review is not
received by the claimant within the time required in this subsection, the claim
is deemed denied on review.
(f) If a committee is appointed and if such committee has regularly
scheduled meetings at least quarterly, the rules in this subsection govern the
time for the decision on review and supersede the rules in subsection (f). If
the claimant's written request for review is received more than 30 days before a
meeting, a decision on review must be made at the next meeting after the request
for review has been received. If the claimant's written request for review is
received 30 days or less before a meeting of the committee, the decision on
review must be made at the committee's second meeting after the request for
review has been received. If an extension of time is required, written notice
of the extension must be furnished to the claimant before the extension begins.
If notice that a claim has been denied on review is not received by the claimant
within the time required in this subsection, the claim is deemed denied on
review.
(g) All good-faith determinations by the Plan Administrator or Committee
are conclusive and binding on all persons, and there is no right of appeal
except as provided above.
9.08. Hourly 401(k) Savings Plan Committee
(a) Powers and Duties. The Committee shall have all duties specifically
allocated to it hereunder or which are delegated to it by the Plan
Administrator, and shall have all necessary powers to carry out these duties.
The Committee shall have the power to construe the Plan and to determine all
questions that arise thereunder.
(b) Indemnification. The Employer shall indemnify and save harmless
each and all of the members of the Committee from the effect and consequences of
their acts, omissions and conduct in their official capacity, except to the
extent that such effects and consequences shall result from their own willful
misconduct or gross negligence.
(c) Abstention. A member of the Committee who is also a Participant in
the Plan shall abstain from any action which directly affects him as a
Participant in a different manner than other similarly situated Participants. In
the event of an abstention, matters shall be decided by the remaining members of
the Committee. Nothing herein, however, shall prevent any member of the
Committee who is also a Participant or Beneficiary from receiving any benefit to
which he may be entitled, so long as the benefit is computed and paid on a basis
that is consistently applied to all other Participants or Beneficiaries.
(d) Agents and Counsel. The Committee may engage agents to assist it in
its duties and may consult with counsel, who may be counsel for the Employer,
with respect to the meaning or construction of this document and its obligations
hereunder, or with respect to any action, proceeding, or question of law related
thereto.
(e) Officers. The Committee shall choose a chairman from its members
and may appoint a secretary to keep such records of the acts of the Committee as
may be necessary. The secretary may, but need not, be a member of the
Committee. The secretary may perform any and all purely ministerial acts which
may be delegated to him by the Committee.
(f) Rules and Regulations. The Committee may formulate such
rules and regulations which are not inconsistent with the purposes of the Plan
as it may deem necessary to enable it to carry out its duties hereunder.
<PAGE>
ARTICLE X
TRUST AGREEMENT AND INVESTMENTS
10.01. Trust Agreement
(a) The Company, in order to establish a Trust Fund for the payment of
benefits under the Plan, has entered into a Trust Agreement with the Trustee
whereby Plan contributions will be held, invested, and applied to the payment of
Plan benefits. The Trust Agreement refers to, and incorporates by reference,
the Plan. The Trust Agreement specifically provides, inter alia, for the
investment and reinvestment of the Trust Fund and its income, the management,
control, and disbursement of the assets of the Trust Fund, the responsibilities
and immunities of the Trustee, removal of the Trustee and the appointment of a
successor or successors, accounting by the Trustee, and such other provisions as
are not inconsistent with the provisions of the Plan and its nature and
purposes.
(b) The Trustee shall, in accordance with the terms of the Trust
Agreement, accept and receive all sums of money and such other property paid and
acceptable to it from time to time by the Employer, and shall hold, invest,
reinvest, manage and administer such monies, properties, and increments,
increases, earnings, and income as a Trust Fund for the exclusive benefit of
those entitled to receive benefits under the Plan. The Trustee shall have no
duty to inquire into the correctness of the amounts tendered to it by an
Employer, nor to enforce the payment of any contributions under the Plan.
10.02. Participant Directed Investments
(a) Opportunity to Direct Investments. The provisions of this Plan
section are effective as of the date announced by the Plan Administrator. Under
the terms of this Plan section, each Participant will have a reasonable
opportunity to give investment instructions to the Plan Administrator or his
delegate. The Plan Administrator or his delegate is obligated to comply with
such instructions except as provided in subsection (k), provided that the
instructions are in accordance with the procedures governing investment
elections and in accordance with the Trustee's fiduciary responsibilities under
ERISA.
(b) Directed Investments. Except as provided in subsections (c) and (k)
and except to the extent that a loan from a Participant's Account is considered
a directed investment according to the Plan, a Participant may direct the
investment of his Account into any of the Trust Fund's Investment Funds
described in Exhibit I in accordance with the investment election procedures
described in the following subsections. The Investment Committee may add or
delete Investment Funds from time to time. Participants shall be given notice
of all changes in the Investment Funds offered under the Plan. The availability
of Investment Funds shall be administered in a uniform and nondiscriminatory
basis with respect to all similarly situated Participants.
(c) Investment of Future Contributions. A Participant's investment
directions must be in whole percentages and in increments of 25 percent of his
Account. A Participant's directions must cover the entire amount of his
Account, except to the extent that a loan is considered a directed investment
according to the Plan. A Participant's direction must cover the entire amount
of his future contributions.
(d) Election Procedures. For each Plan Year, initial investment
elections and amendments of investment elections may be made on January 1, April
1, July 1 and October 1 or by announcement of the Plan Administrator. Each
Participant may make an election hereunder on or before the 15th day preceding
the investment election date for which it is to be effective. Any such election
shall continue in effect until amended or revoked. Investment elections must be
made on forms prescribed by the Plan Administrator for that purpose.
(e) Transfer Elections. A Participant may, in addition to the election
available under subsection (c), elect to change his investment elections with
respect to amounts allocated to Account by designating the percentage, in
multiples of 25 percent, of his Account to be invested in each Investment Fund.
A Participant may make such transfer elections effective as of January 1, April
1, July 1 and October 1. Each Participant may make an election hereunder on or
before the 15th day preceding the investment election date for which it will be
effective. Such elections shall be based on the value of the electing
Participant's Account as of the Valuation Date immediately preceding the
investment election date for which it will be effective. The Plan Administrator
may in its discretion grant permission for special transfer elections to all
Participants at such times as it may designate.
(f) Investment Information. The Investment Committee will provide
Participants with sufficient information concerning the Investment Funds to
permit the Participant to make an informed investment decision. Alternatively,
the Investment Committee may provide Participants with directions as to how such
investment information may be obtained.
(g) Selection of Investment Manager. The Plan Administrator may in its
discretion permit the Investment Committee to designate one or more Investment
Managers from which a Participant may choose to manage all or part of his
Account. The Investment Committee may not designate this responsibility to any
person or entity affiliated with an Investment Fund or any designated Investment
Manager.
(h) Other Participant Rights. The Plan Administrator may in its
discretion permit the Investment Committee to designate one or more brokers,
salesmen or agents from which a Participant may choose to execute investment
orders with respect to all or part of his Account.
(i) Charges and Expenses. A Participant's Account may be charged for
the reasonable expenses of carrying out his investment directions, provided that
reasonable procedures are established to inform the Participant of any charges.
Each Participant must also receive periodic reports on the actual expenses
incurred with respect to his Account.
(j) Investment in Company Stock. A Participant may direct all or a
portion of his Account to be invested in Company Stock provided that:
(1) the Company Stock is a qualifying employer security as
defined in ERISA section 407(d)(3);
(2) the Company Stock is publicly traded on a national exchange
or other recognized securities market;
(3) the Company Stock is traded with sufficient frequency and in
sufficient volume to assure that participant directions to buy or sell the stock
may be acted upon promptly and efficiently;
(4) the same information provided to shareholders of Company
Stock is provided to Participants who invest in such Company Stock;
(5) voting, tender and similar rights with respect to Company
Stock are passed through to Participants;
(6) information relating to the purchase, holding, and sale of
Company Stock and the exercise of voting, tender and similar rights with respect
to such stock by Participants is maintained in accordance with procedures
designed to safeguard the confidentiality of such information, except to the
extent necessary to comply with Federal laws or state laws not preempted by
ERISA; and
(7) the Plan Administrator designates a Fiduciary who is
responsible for ensuring that (i) the procedures required in paragraph (6) are
sufficient to safeguard the confidentiality of the information described in that
paragraph; (ii) such procedures are being followed; and (iii) an independent
fiduciary (who is not affiliated with an Employer) is appointed to carry out
activities relating to any situation which the Fiduciary designated for purposes
of this paragraph determines involve a potential for undue influence upon
Participants by any Employer (or an Affiliate) with regard to the direct or
indirect exercise of shareholder rights.
Absent the designation of a Plan fiduciary in accordance with this Plan section
on or before the prescribed date, the Investment Committee is designated as the
Plan fiduciary and shall continue as such, until it appoints a successor. The
Investment Committee shall retain the right to appoint and remove both the
Fiduciary required by this Plan section and any independent fiduciary appointed
pursuant to paragraph (7). If the Investment Committee fails to appoint an
independent fiduciary hereunder in circumstances which the Trustee believes
warrants such appointment, the Trustee may request the Investment Committee to
do so and the Investment Committee shall either make such appointment or the
Board of Directors of the Company shall appoint a successor Trustee.
(k) Trustee's Right to Decline. The Trustee may decline to implement
any Participant direction under this Plan section which, if implemented:
(1) would not be in accordance with the documents and instruments
governing the Plan, insofar as such documents are consistent with Title I of
ERISA;
(2) would cause the Trustee to maintain indicia of ownership of
any asset of the Plan outside the jurisdiction of the district courts other than
as permitted by ERISA section 404(b);
(3) would jeopardize the Plan's tax-qualified status under Code
section 401(a);
(4) would result in a direct or indirect:
(A) sale, exchange or lease of property between the
Employer and the Plan (other than a purchase or sale of Company Stock that
satisfies subsection (j);
(B) loan to the Employer or an Affiliate;
(C) acquisition or sale of any employer real property (as
defined in ERISA section 407(d)(2)); or
(D) acquisition or sale of any Company Stock except to the
extent that the acquisition of such stock satisfies subsection (j);
(5) would result in a prohibited transaction described in ERISA
section 406 or Code section 4975;
(6) would result in a loss in excess of the Participant's Account
balance; or
(7) would generate income that would be taxable to the Plan.
(l) Nondirected Accounts. If a Participant chooses not to direct the
investment of all or part of his Account (whether an affirmative choice or one
deemed by his failure to submit an election to invest his Account or part of his
Account), the Trustee shall invest his Account or that portion of his Account in
accordance with its powers under the Trust Agreement to the extent consistent
with its fiduciary duties under ERISA section 404.
(m) Definitions. The following definitions apply for purposes of this
Plan section:
(1) Company Stock means common stock of Chesapeake Corporation.
(2) Investment Committee means the Fiduciary that is not an
Investment Manager and that is named by the Company to act under the Trust
Agreement to advise or direct Trustee investment actions.
(3) Investment Fund means one of the investment media that the
Investment Committee or the Trustee selects and announces as being a permissible
investment vehicle in which a Participant may direct the investment of his
Account. The Investment Funds are described in Exhibit I.
10.03. Investment of Income
Except as may be otherwise provided in Plan section 10.02, earnings on
each Investment Fund collected by the Trustee, shall be credited to Participant
Accounts, on the basis of his interest in that fund and the amounts so credited
shall be reinvested in that fund.
10.04. Company Stock
(a) Acquisition of Company Stock. Company Stock shall be purchased by
the Trustee from time to time out of funds held by the Trustee under the Plan or
advanced by the Employers, either on the open market, from the Company's
authorized but unissued stock or by exercising any rights to purchase shares
granted with respect to shares of Company Stock held by the Trustee. The
Trustee shall hold, for the purpose of allocation to the Accounts of
Participants, shares of such Company Stock which the Trustee has acquired due to
withdrawals by Participants. Shares of Company Stock held by the Trustee as a
result of a withdrawal shall be deemed to have been purchased by the Trustee as
of the Valuation Date they were valued for purposes of the withdrawal and
reallocated at their current market value as of such Valuation Date.
(b) Warrants, Rights and Options. A Participant shall have the right to
request, direct or demand the Trustee to exercise on his behalf any rights,
warrants or options issued with respect to Company Stock credited to his
Account, and the Trustee shall exercise or sell any such rights, warrants or
options in accordance with the Participant's directions.
(c) Stock Dividends and Stock Splits. The Trustee shall credit
Participants' Accounts with a proportionate number of shares of Company Stock
received by it as a result of a Company Stock dividend or Company Stock split on
the basis of the number of shares held in each Participant's Account as of the
Valuation Date coincident with or immediately preceding the ex-dividend or
record date, as applicable.
(d) Investment of Income. Dividends on Company Stock collected by the
Trustee and earnings on temporary investments of cash shall be credited to the
Participants' Accounts on the basis of the number of shares held in each
Participant's Account as of the Valuation Date coincident with or immediately
preceding the ex-dividend or record date, as applicable, and the amounts so
credited shall be invested in Company Stock.
(e) Expenses. When incurred, brokerage commissions, transfer taxes and
other charges, and expenses in connection with the purchase or sale of Company
Stock shall be added to the cost of such stock or deducted from the proceeds
thereof, as the case may be.
(f) Voting of Company Stock. Before each annual or special meeting of
the stockholders of the Company, the Company will furnish each Participant with
a copy of the proxy solicitation material for such meeting, together with a form
addressed to the Trustee requesting the Participant's confidential instructions
on how the full shares of Company Stock credited to the Participant's Account as
of the most recent Valuation Date preceding the record date for which the
allocations have been completed by the Trustee should be voted on each matter to
come before the meeting. Upon receipt of such instructions, the Trustee shall
vote such Company Stock as instructed. To the extent consistent with its
fiduciary duties under ERISA section 404, the Trustee shall not vote any shares
of Company Stock credited to a Participant's Account as of the applicable
Valuation Date as to which it receives no voting instructions pursuant to the
preceding sentence. Any shares of Company Stock credited to Participants'
Accounts or which are not credited to a Participant's Account as of the
applicable Valuation Date shall be voted by the Trustee in a manner that it
believes to be consistent with its fiduciary duties under ERISA section 404.
Notwithstanding the foregoing, if an independent fiduciary is appointed pursuant
to Plan section 10.02(j), such person or entity shall vote or direct the Trustee
how to vote any unallocated shares of Company Stock and all shares of Company
stock credited to Participants' Accounts as to which the Trustee is not provided
voting instructions.
(g) Tender of Company Stock. A Participant shall be entitled to direct
the Trustee whether to tender shares of Company Stock allocated to his Accounts
in response to a tender offer. The Trustee shall tender such shares in
accordance with directions received from the Participants, subject to procedures
established by the Plan Administrator. When tender directions are sought,
determination of the shares of Company Stock allocated to Participants' Accounts
shall be made as of the last Valuation Date for which an allocation of shares
has been completed, but shall take into account any distributions of shares to
Participants since such Valuation Date. To the extent consistent with its
fiduciary duties under ERISA section 404, the Trustee shall not tender any
Company Stock held in Participant Accounts for which it does not receive
directions as to whether to tender from Participants. Any shares of Company
Stock which are credited to Participants' Accounts or which are not credited to
a Participant's Account as of the applicable Valuation Date shall be voted by
the Trustee in a manner that it believes to be consistent with its fiduciary
duties under ERISA section 404. Notwithstanding the foregoing, if an
independent fiduciary has been appointed pursuant to Plan section 10.02(j), such
person or entity shall decide whether or not to tender unallocated shares of
Company Stock and all shares of Company stock credited to Participants' Accounts
as to which it is not provided instructions as to whether to tender.
<PAGE>
ARTICLE XI
AMENDMENT AND TERMINATION OF THE PLAN
11.01. Amendment to the Plan
The Board or the Executive Committee of the Board shall have the right to
modify, alter, or amend the Plan or the Trust Agreement in whole or in part by a
majority vote of its members at a meeting, by unanimous consent in lieu of a
meeting or in any other manner permissible under applicable state law. In
addition, the Board or the Executive Committee of the Board, may delegate to an
appropriate officer, or officers of the Company, or committee, all or part of
the authority to amend the Plan or Trust Agreement. No amendment may increase
the duties, powers, and liabilities of the Trustee without its written consent
nor may it affect adversely the benefits of persons who have retired or the
benefits that have accrued prior to the effective date of such action. No
amendment, modification, or alteration shall have the effect of revesting in any
Employer any part of the principal or income of the Fund or any policies or
contracts issued pursuant to the Plan. Except as otherwise allowed by Treasury
regulations, no amendment may eliminate or reduce an early retirement benefit or
a retirement-type subsidy (as defined in applicable Treasury regulations) or
eliminate an optional form of benefit with respect to benefits attributable to
service before the amendment.
11.02. Termination of the Plan
(a) While the Company expects to continue the Plan indefinitely,
continuance of the Plan is not assumed as a contractual obligation. The Company
reserves the right, on behalf of all Employers, to discontinue Employer
contributions and to terminate the Plan at any time by action of the Board in
accordance with the procedures described in Plan section 11.01. An Employer
reserves the right to discontinue Employer contributions and to terminate the
Plan on behalf of its Employees at any time by action of its board of directors.
(b) The Company shall give notice to the Plan Administrator and the
Trustee at least 30 days prior to the effective date of termination. The Plan
shall terminate without notice on the bankruptcy, insolvency or termination of
business of the Company, or the complete discontinuance of Employer
contributions.
(c) On termination of the Plan (or in the event of a complete or partial
termination, or complete discontinuance of contributions or curtailment), the
interests of present Participants (to the extent affected by such action) in
their Account balances as of the date of such event shall be nonforfeitable. The
Company may elect to continue the Trust in effect, in which case the Trustee
shall continue to administer the Trust in accordance with the provisions of the
Plan and the Trust Agreement for the sole benefit of the Participants or
Beneficiaries who are then receiving or entitled to receive future benefits; or
the Company may elect to discontinue the Trust, in which case the benefits of
Participants and Beneficiaries shall be distributed as provided in Plan articles
VI and VII. In the event of a termination, no further contributions will be
made to the Plan by the Employers or by the Participants, and the sole recourse
of Participants and Beneficiaries for benefits due under the Plan shall be to
Plan assets.
(d) Subject to the provisions of Plan section 6.04, the Employer may
discontinue the Trust and distribute each individual's interest in a single lump
sum.
11.03. No Reversion to Employer
The Employer has no beneficial interest in the Trust Fund, and no part of
the Trust Fund shall ever revert or be repaid to the Employer, directly or
indirectly, except:
(a) upon initial non-qualification pursuant to Plan section 12.01;
(b) in the event that the deduction of an Employer contribution to the
Plan under Code section 404 is disallowed, in which case the contribution (to
the extent disallowed) shall be returned to the Employer, upon the request of
the Employer, within one year after the disallowance of the deduction;
(c) in the event that the Employer contribution is made by mistake of
fact, in which case the amount of such mistaken contribution shall be returned
to the Employer provided no more than one year has elapsed since the date of
payment by the Employer of the mistaken contribution; or
(d) In the event of termination of the Plan with residual assets as
described in Plan section 11.02;
if, and to the extent, permitted by the Code and applicable regulations
thereunder.
11.04. Merger, Consolidation and Transfer of Assets or Liabilities
(a) No merger or consolidation with, or transfer of assets or
liabilities to this Plan or from this Plan to any other plan shall be made,
unless each Participant would receive immediately after such event a benefit
(determined as if the Plan had terminated at that time) which is equal to or
greater than the benefit he would have been entitled to receive under the Plan
immediately before such event had the Plan terminated at that time.
(b) Subject to subsection (a), the Trustee, with the consent of the
Company, may transfer the vested Account of a terminated Participant to another
Qualified Plan or Trust that accepts such transfers. Any amounts transferred
under this subsection must be fully vested and separately accounted for.
<PAGE>
ARTICLE XII
GENERAL PROVISIONS
12.01. Qualification
This Plan has been created for the exclusive purpose of providing benefits
to Participants and their Beneficiaries and defraying reasonable expenses of
administering the Plan. The Plan shall be interpreted in a manner consistent
with applicable provisions of the Code and of ERISA. Except as permitted by
law, under no circumstances shall any funds contributed to this Plan, any assets
of this Plan held under any Trust Agreement or income attributable to such
assets, revert to or be used or enjoyed by an Employer, nor shall any such
funds, assets or income ever be used or diverted to purposes other than the
exclusive benefit of Participants or their Beneficiaries, except as provided in
Plan article III.
12.02. No Guarantees
(a) Neither the Trustee, the Company, nor any other Employer in any way
guarantees the payment of any benefit or amount that may become due under the
Plan to any Participant or retired Participant, or to the legal representative
or Beneficiary of any such Participant or retired Participant. Neither the
Trustee, the Company, nor any Employer guarantees the payment by any insurance
company of any benefit or amount that may be due under any policy or contract.
Each Participant, retired Participant, or legal representative or Beneficiary of
any deceased or retired Participant, shall look solely to the assets of the
Trust Fund for the payment of benefits under the Plan.
(b) The Plan shall not be deemed to constitute a contract between any
Employer and an employee, or to be consideration or inducement for the
employment of any employee by any Employer. Nothing contained in the Plan shall
be deemed to give any employee the right to be retained in the service of any
Employer or to interfere with the rights of such Employer to discharge or to
terminate the service of any employee at any time without regard to the effect
such discharge or termination may have on any rights under the Plan.
12.03. Limits on Assignment
Except as allowed by Code section 401(a)(13) with respect to Qualified
Domestic Relations Orders, Plan benefits may not be anticipated, assigned
(either at law or in equity), alienated, or be subject to attachment,
garnishment, levy, execution, or other legal or equitable process.
12.04. Discharge of Liability
Any payment to a person entitled to a benefit under the Plan, or to the
legal representative of such person to the extent thereof (including any Plan
benefits that become payable to a Participant or Beneficiary who is a minor or
who, in the opinion of the Plan Administrator, is not legally capable of giving
valid receipt and discharge for such benefits), shall be in full satisfaction of
all claims hereunder against the Trustee, the Plan Administrator, and the
Employers, any of whom may require the person receiving such payment, as a
condition precedent to such payment, to execute a receipt and release in such
form as shall be determined by the Trustee, the Plan Administrator, or the
Employers, as the case may be.
12.05. Unclaimed Benefits
If the Trustee cannot make payments of any amount to a Participant or
Beneficiary within a reasonable time after the amount becomes payable because
the person's identity or whereabouts cannot be determined by the end of the
reasonable period, all amounts that would have been payable to that Participant
or Beneficiary must be segregated by the Trustee and then dealt with by the
Trustee according to the laws of the state by which this Plan is governed that
pertain to abandoned intangible personal property held in a fiduciary capacity.
12.06. Construction
(a) This Plan has been created for the exclusive purpose of providing
benefits to Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan. The Plan shall be interpreted in a manner
consistent with applicable provisions of the Code and of ERISA.
(b) Except as otherwise may be required by the controlling law of the
United States, the Plan shall be construed, administered, and enforced in
accordance with the laws of the Commonwealth of Virginia (except to the extent
that its choice-of-law rules would require the application of a state law other
than Virginia).
(c) The headings and subheadings in this Plan have been inserted for
convenience of reference only and are to be ignored in any construction of the
provisions of the Plan.
(d) In the construction of the Plan the masculine shall include the
feminine and the singular, the plural in all cases where such meanings are
indicated by the context.
12.07. Adoption by Affiliate
With the approval of the Company's Board, any Affiliate, by taking
appropriate corporate action, may become a party to the Plan by adopting the
Plan for its eligible Employees. Any Affiliate which becomes a party to this
Plan must promptly deliver to the Trustee a copy of the resolutions or other
documents evidencing its adoption of the Plan and a written instrument showing
the Board's approval of such Affiliate's becoming a party to the Plan.
<PAGE>
SIGNATURE PAGE
As evidence of its adoption of the Chesapeake Paper Products Company
401(k) Savings Plan for Hourly Employees, the Company has caused this document
to be executed by its duly authorized officer as of the ____ day of __________,
1994.
CHESAPEAKE PAPER PRODUCTS COMPANY
By ______________________________
<PAGE>
EXHIBIT I
INVESTMENT FUNDS
The Investment Funds currently available to Participants are as follows:
Chesapeake Common Stock Fund. A Participant may elect to have
contributions invested in Chesapeake Common Stock that will be purchased by the
Plan's trustee at fair market value in the open market, in private transactions,
or from authorized but unissued shares.
The Partners Fund. The Partners Fund invests primarily in common stock
and, to a lesser extent, short-term money market instruments and other debt
securities.
Income Plus Fund. The Income Plus Fund invests primarily in guaranteed
investment contracts issued by insurance companies and other interest-bearing
investments that the issuers claim involve a minimum risk to principal.
Exhibit 4.6
TRUST AGREEMENT
between
CHESAPEAKE CORPORATION
and
THE BANK OF NEW YORK
Dated as of _____________________________
<PAGE>
TRUST AGREEMENT
1. Establishment of Master Trust.. . . . . . . . . . . . . . . . . 1
1.1 The Master Trust. . . . . . . . . . . . . . . . . . . . 1
1.2 Establishment of Separate Funds . . . . . . . . . . . . 1
1.3 Company as Agent. . . . . . . . . . . . . . . . . . . . 2
1.4 Title to Assets . . . . . . . . . . . . . . . . . . . . 2
1.5 Acceptance of Trust . . . . . . . . . . . . . . . . . . 2
2. Investment of Master Fund.. . . . . . . . . . . . . . . . . . . 2
2.1 Appointment of Investment Managers and
Investment Committee. . . . . . . . . . . . . . . . . . 2
2.2 Discretionary Funds . . . . . . . . . . . . . . . . . . 3
(a) Permitted Investments. . . . . . . . . . . . . . 3
(b) Brokerage Commissions. . . . . . . . . . . . . . 4
(c) Funding Policy . . . . . . . . . . . . . . . . . 4
2.3 Directed Funds. . . . . . . . . . . . . . . . . . . . . 4
(a) Permitted Investments. . . . . . . . . . . . . . 4
(b) Investment Instructions. . . . . . . . . . . . . 4
2.4 Settlement of Securities Transactions . . . . . . . . . 5
2.5 Cash Balances . . . . . . . . . . . . . . . . . . . . . 5
2.6 Appointment of Administrative Agent . . . . . . . . . . 6
2.7 Transfer Among Funds. . . . . . . . . . . . . . . . . . 6
2.8 Transfers to Collective Trusts. . . . . . . . . . . . . 6
2.9 Insurance Contracts . . . . . . . . . . . . . . . . . . 7
(a) Procuring and Holding Contracts. . . . . . . . . 7
(b) Exercising Rights under Contracts. . . . . . . . 7
(c) Payment of Premiums. . . . . . . . . . . . . . . 8
(d) Payments under Contracts . . . . . . . . . . . . 8
(e) Liability of Master Trustee; Indemnification . . 8
2.10 Loans to Participants . . . . . . . . . . . . . . . . . 8
3. Powers of Master Trustee. . . . . . . . . . . . . . . . . . . . 9
3.1 In General. . . . . . . . . . . . . . . . . . . . . . . 9
3.2 At Direction of Named Fiduciary . . . . . . . . . . . . 11
3.3 With Respect to Participant-Directed Funds. . . . . . . 11
3.4 Administrative Powers . . . . . . . . . . . . . . . . . 11
4. Registration of Company Securities. . . . . . . . . . . . . . . 13
5. Accounts to be Maintained by the Master Trustee;
Payments from the Master Trust. . . . . . . . . . . . . . . . 13
5.1 Accounts. . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 No Separate Recordkeeping . . . . . . . . . . . . . . . 14
5.3 Payments; Disputes. . . . . . . . . . . . . . . . . . . 14
5.4 Direct Deposit of Payments. . . . . . . . . . . . . . . 14
5.5 Responsibility of Administrative Committee
and Administrative Agent. . . . . . . . . . . . . . . . 14
5.6 Returned and Uncashed Payments. . . . . . . . . . . . . 15
5.7 No Liability for Contributions. . . . . . . . . . . . . 15
6. Valuation of the Master Fund. . . . . . . . . . . . . . . . . . 15
7. Administrative Expenses, Taxes and Master Trustee's
Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 In General. . . . . . . . . . . . . . . . . . . . . . . 16
7.2 Fees of Investment Managers . . . . . . . . . . . . . . 16
8. Master Trustee's Liability; No Duty to Review;
Indemnification.. . . . . . . . . . . . . . . . . . . . . . . 16
8.1 Liability of Master Trustee . . . . . . . . . . . . . . 16
8.2 No Duty to Review . . . . . . . . . . . . . . . . . . . 17
8.3 Reliance on Certain Appraisals. . . . . . . . . . . . . 17
8.4 Indemnification of Master Trustee . . . . . . . . . . . 18
8.5 Limitation of Indemnity . . . . . . . . . . . . . . . . 18
8.6 Indemnification of Successor Trustee. . . . . . . . . . 18
9. Settlement of Master Trustee's Accounts.. . . . . . . . . . . . 18
9.1 Annual Accounting . . . . . . . . . . . . . . . . . . . 18
9.2 Other Accountings . . . . . . . . . . . . . . . . . . . 19
9.3 Settlement of Accounts. . . . . . . . . . . . . . . . . 19
10. Segregation of Parts of the Master Trust.. . . . . . . . . . . 20
10.1 Segregation . . . . . . . . . . . . . . . . . . . . . . 20
10.2 Segregated Property . . . . . . . . . . . . . . . . . . 20
11. Resignation and Removal of Master Trustee. . . . . . . . . . . 20
12. Evidence of Action by Company, Investment
Managers, Investment and Administrative Committees
and Administrative Agent, and of Appointment of
Named Fiduciary, Investment Managers, Investment
and Administrative Committees and Administrative
Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13. Amendment of Agreement, Termination of Trust,
Termination of Plan.. . . . . . . . . . . . . . . . . . . . . 22
13.1 Amendment of Agreement. . . . . . . . . . . . . . . . . 22
13.2 Termination of Master Trust . . . . . . . . . . . . . . 22
13.3 Termination of the Plan . . . . . . . . . . . . . . . . 23
13.4 Exclusive Benefit . . . . . . . . . . . . . . . . . . . 23
14. Inalienability of Benefits and Interests.. . . . . . . . . . . 23
15. No Merger, Consolidation or Transfer of Plan Assets or
Liabilities.. . . . . . . . . . . . . . . . . . . . . . . . . 24
16. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 24
<PAGE>
TRUST AGREEMENT
THIS AGREEMENT made as of __________________ __, 19__ by and between
___________________________________, a ______________ corporation (hereinafter
referred to as the "Company"), and THE BANK OF NEW YORK, a New York banking
corporation (hereinafter referred to as the "Master Trustee");
W I T N E S S E T H:
WHEREAS, the Company and certain of its subsidiaries and affiliates
have heretofore adopted or may hereafter adopt a qualified deferred compensation
plan for the benefit of its or their employees (such plan, as amended from time
to time, is referred to herein as the "Plan", and the Company and any such
subsidiary or affiliate are referred to herein as the "Employer"); and
WHEREAS, the Plan provides, among other things, for the financing by
means of a trust fund of all or a part of the benefits to be paid pursuant to
the Plan to certain employees (herein called "Participants") of the Employer and
their beneficiaries (herein called "Beneficiaries"), and the Company wishes The
Bank of New York to serve as Trustee thereunder in accordance with the
requirements of the Employee Retirement Income Security Act of 1974, as amended
(the "Act");
NOW, THEREFORE, the Company and the Master Trustee agree as follows:
SECTION 1. Establishment of Master Trust.
1.1 The Master Trust. The Company hereby establishes with the
Master Trustee a trust (hereinafter referred to as the "Master Trust") which
shall comprise all of the funds and other assets deposited herewith, together
with such other sums of money and such property acceptable to the Master Trustee
as shall from time to time be paid or delivered to the Master Trustee hereafter,
all investments made therewith and proceeds thereof and the earnings and profits
thereon. All such funds and property, together with such investments, proceeds,
earnings and profits, less the payments or other distributions which, at the
time of reference, shall have been made by the Master Trustee as authorized
herein, are referred to as the "Master Fund."
1.2 Establishment of Separate Funds. The Master Fund shall consist
initially of a single fund. At any time and from time to time the Master
Trustee shall, if so directed by _______ _________________, the party that under
the terms of the Plan is the named fiduciary with respect to control or
management of the assets thereof (hereinafter referred to as the "Named
Fiduciary"), establish within the Master Fund one or more investment funds, each
of which shall be invested or reinvested as provided in Section 2. The term
"Fund", as used herein, shall mean the initial fund or any other investment fund
so established, depending upon the fund to which such provision is being applied
at the time, and the term "Master Fund" shall refer to all such funds in the
aggregate. The functions of the Named Fiduciary may be divided among more than
one person or persons (in which case the term "Named Fiduciary" shall refer to
any such person or persons, as the context requires), and the same person or
persons may serve as the Named Fiduciary and the Investment Committee and/or the
Administrative Committee as hereinafter defined. The Master Trustee shall hold,
manage, administer, value, make purchases and sales for, distribute, account
for, and otherwise deal with each Fund separately.
1.3 Company as Agent. Each subsidiary or affiliate of the Company
adopting the Plan appoints the Company as its agent for purposes of this
Agreement and agrees that it shall be bound by the decisions, actions and
directions of the Company and any Investment Manager or Investment Committee (as
hereinafter defined) hereunder and that the Master Trustee shall be fully
protected in relying upon such decisions, actions and directions and shall in no
event be required to give notice to or otherwise deal with such subsidiary or
affiliate except by dealing with the Company as agent of such subsidiary or
affiliate.
1.4 Title to Assets. Neither the Plan nor the Participants or
their Beneficiaries shall have any right, title or interest in or to any
specific assets of the Master Fund, but shall have an undivided beneficial
interest in the Master Fund valued in accordance with Section 6 hereof.
Ownership of all the individual assets of the Master Fund shall be by the Master
Trustee. The Master Trustee shall not issue any certificate or other
documentation representing any interest in the Master Fund or part hereof.
1.5 Acceptance of Trust. The Master Trustee hereby accepts the
Master Trust created by this Agreement on the terms and conditions herein set
forth.
SECTION 2. Investment of Master Fund.
2.1 Appointment of Investment Managers and Investment Committee. At
the time each Fund is established, and from time to time thereafter, the Company
shall determine and advise the Master Trustee whether the investment of such
Fund is to be managed (a) by the Master Trustee in its sole discretion, (b) by
an investment manager who (i) is duly appointed by the Named Fiduciary, and (ii)
qualifies as an investment manager under Section 3(38)(B) of the Act (an
"Investment Manager"), or (c) by an Investment Committee appointed by the Named
Fiduciary (the "Investment Committee"). Any Fund that is managed by the Master
Trustee is hereinafter referred to as a "Discretionary Fund", and any Fund that
is managed by an Investment Manager or Investment Committee is hereinafter
referred to as a "Directed Fund". In the event that the Plan provides for
allocation of Trust Fund assets to the Funds at the direction of Participants,
the Funds in which Participants may direct their investments, whether or not
otherwise constituting Directed Funds or Discretionary Funds, shall be referred
to herein as "Participant-Directed Funds".
In the event the Investment Manager of any Directed Fund resigns or
is removed, the Named Fiduciary shall promptly notify the Master Trustee of such
resignation or removal and of the appointment of a successor to such Investment
Manager. Upon resignation or removal of an Investment Manager the Master
Trustee shall not have or be deemed to have any responsibility to manage and
control any asset held in the Directed Fund of such former Investment Manager,
except as set out in the sentence immediately following. If an Investment
Committee has been appointed, the Master Trustee shall treat such Fund as
managed by the Investment Committee pending notification from the Named
Fiduciary of the appointment of a different successor to the former Investment
Manager; if no Investment Committee has been appointed and if no notification of
the appointment of such a successor is received within seven days of
notification to the Master Trustee of the former Investment Manager's
resignation or removal, the Master Trustee shall thereafter treat such Directed
Fund as a Discretionary Fund unless and until it receives other instructions
from the Named Fiduciary as to the investment of such Fund.
2.2 Discretionary Funds.
(a) Permitted Investments. The Master Trustee shall invest
and reinvest any Discretionary Fund, without distinction between principal and
income, in such property (real, personal or mixed) as the Master Trustee, in its
sole discretion, shall deem suitable for such Fund, including without
limitation: any and all common stocks, preferred stocks, bonds, debentures,
mortgages on real or personal property wherever situated, equipment trust
certificates, notes or other evidence of indebtedness, or any other securities,
certificates of deposit, demand or time deposits (including any such deposits,
demand or time deposits with The Bank of New York), shares of investment
companies and mutual funds (irrespective of whether The Bank of New York is
performing services therefor), interests in partnerships and trusts, insurance
policies and contracts, repurchase agreements, and any other property or joint
or other part interest in property (including, without limitation, part
interests in bonds and mortgages or notes and mortgages), United States or
foreign, whether situated within or outside the United States (provided that,
except as provided in Section 3.4 hereof, the indicia of ownership thereof are
not maintained outside the jurisdiction of the district courts of the United
States), and of any kind, class or character, and irrespective in any case of
whether The Bank of New York or another, individually or as trustee or agent, is
acting as participator of any part interest in property that may be acquired.
Such investment and reinvestment shall not be restricted to property authorized
for investment by trustees under any present or future law. A Discretionary
Fund may be invested and reinvested whether or not the property acquired is
productive of income, is marketable or constitutes a wasting asset. Without
limiting the generality of the foregoing, a Discretionary Fund may be invested
in stocks of any classification, bonds or other securities issued or guaranteed
by the Company, or by any subsidiary or affiliate thereof, or in real property
which is owned by or leased to the Company, or any subsidiary or affiliate
thereof. Nothing herein contained, however, shall be deemed to purport to
authorize any investment or reinvestment in violation of the requirements of the
Act.
(b) Brokerage Commissions. In placing securities
transactions for a Discretionary Fund, the Master Trustee's primary objective
will be to obtain the most favorable net results, taking into account such
factors as the best net price available, the size of and difficulty in executing
the order, and the reliability, efficiency and financial responsibility of the
broker or dealer. When it can be done consistently with this goal, the Master
Trustee may allocate orders to brokers or dealers who also provide brokerage or
research services (as defined in Section 28(e) of the Securities Exchange Act of
1934).
The Company understands that such brokerage and research services may be useful
to other accounts managed by the Master Trustee and, similarly, research
generated through commissions paid by such other accounts may be useful in
connection with a Discretionary Fund.
(c) Funding Policy. The Named Fiduciary shall advise the
Master Trustee in writing of any funding policy and method or investment
guidelines which have been established to carry out the objectives of the Plan,
and shall promptly advise the Master Trustee of any changes therein.
2.3 Directed Funds.
(a) Permitted Investments. Each Directed Fund shall be
invested and reinvested, without distinction between principal and income, in
any property authorized in Section 2.2(a) above as the Master Trustee may be
directed by an Investment Manager or the Investment Committee.
(b) Investment Instructions. An Investment Manager or the
Investment Committee at any time and from time to time may issue orders directly
to a broker for the purchase or sale of securities for any Directed Fund that it
manages. The Investment Manager or Investment Committee will promptly give or
cause to be given to the Master Trustee notice of the issuance of such order and
the broker will confirm such order or cause it to be confirmed to the Master
Trustee. Such notice and confirmation may be given in writing, by telecopy or
by any other electronic means using a code for the authentication of messages,
and may include Trade Reports issued by the Institutional Delivery System of
Depository Trust Company. Receipt of a matching notice and confirmation or of
such a Trade Report shall be authority for the Master Trustee to settle such
trade. Except as provided in Section 2.1, in the absence of directions or
authorization from the Investment Manager or Investment Committee, the Master
Trustee shall have no power, duty or authority to invest any Directed Fund.
2.4 Settlement of Securities Transactions. When the Master Trustee
is instructed to deliver property against payment, delivery of the property and
receipt of payment may not be simultaneous. The risk of non- receipt of payment
shall be the Master Trust's and the Master Trustee shall have no liability
therefor. All credits to the Master Trust of the anticipated proceeds of sales
and redemptions of property and of anticipated income from property shall be
conditional upon receipt by the Master Trustee of final payment and may be
reversed to the extent final payment is not received. At the discretion of the
Master Trustee, the Master Trust may make use of such conditional credits. To
the extent such credits do not become unconditional by receipt of final payment,
the Master Trust shall reimburse the Master Trustee upon demand for the amount
of such conditional credits so used. When the Master Trustee is instructed to
receive property, it is authorized to accept documents in lieu of such property
as long as such documents contain the agreement of the issuer thereof to hold
such property subject to the Master Trustee's sole order. The Master Trustee
may, in its discretion, advance funds to the Master Trust to facilitate the
settlement of any trade. In the event of such an advance, the Master Trust
shall immediately reimburse the Master Trustee for the amount thereof.
2.5 Cash Balances. The Master Trustee may invest all or any
portion of any cash balances in any Discretionary Fund, and an Investment
Manager or the Investment Committee may, with the prior acceptance of the Master
Trustee, by written authorization delegate to the Master Trustee authority to
invest all or any portion of any cash balances in any Directed Fund, in the
Master Trustee's sole discretion, including, without limitation, investments in
part interests in obligations, irrespective of whether The Bank of New York or
another, individually or as trustee or agent, is acting as a participator. The
Master Trustee shall not be liable for interest on any cash balances in any
Directed Fund that it holds uninvested pending receipt of directions from the
Investment Manager or the Investment Committee, in the absence of authorization
from the latter to invest the same in the Master Trustee's sole discretion, nor
liable for interest on any cash balances it may be authorized to invest in its
sole discretion, and may hold uninvested as it deems to be in the best interests
of the Master Fund.
2.6 Appointment of Administrative Agent. The Named Fiduciary shall
certify to the Master Trustee the name of any third party administrator (the
"Administrative Agent") appointed by it or the Company to receive, cumulate and
communicate investment and distribution directions with respect to
Participant-Directed Funds from Plan Participants, and to whom the Named
Fiduciary has delegated such responsibility and authority as it shall
communicate to the Master Trustee. For the purposes of this Agreement, such
Administrative Agent shall be a delegee of the Named Fiduciary in accordance
with Section 405(c)(1)(B) of the Act. The Master Trustee may rely on such
certification and delegation until notified in writing to the contrary by the
Named Fiduciary.
2.7 Transfer Among Funds. The Administrative Committee or the
Administrative Agent shall direct the Master Trustee with respect to the
allocation of assets to the Funds and with respect to transfers among the Funds.
The Master Trustee shall have no duty to invest, and shall not be liable for
interest on, any such assets it holds uninvested pending receipt of directions
from the Administrative Committee or the Administrative Agent to allocate
contributions among the Funds.
2.8 Transfers to Collective Trusts. Notwithstanding any provision
of the Plan or of this Agreement to the contrary, the Master Trustee may, in its
sole discretion with respect to any Discretionary Fund and, if authorized or
directed by the Investment Manager or Investment Committee of any Directed Fund,
with respect to such Directed Fund, transfer all or any part of the assets of
such Fund to, or withdraw the same from, any collective investment trust that
shall be or shall have been created and administered by The Bank of New York or,
if such Investment Manager is a bank or an affiliate of a bank, by such
Investment Manager or its banking affiliate, for the collective investment of
the property of employee benefit trusts of which The Bank of New York or such
Investment Manager or its banking affiliate is trustee or agent, provided that
such trust is qualified under the provisions of Section 401(a) of the Internal
Revenue Code (the "Code") and exempt under the provisions of Section 501(a) of
the Code. To that end, the Master Trustee is hereby expressly authorized to
permit the commingling of any or all of the assets of such Fund with the assets
of other trusts eligible to participate in such collective investment trusts.
Any Investment Manger holding such trust funds shall have with respect to such
funds the powers of the Master Trustee set forth in Sections 2.2(a), 3.1, 3.2
and 3.4. The Master Trustee shall have no responsibility for the custody or
safekeeping of assets so transferred. To the extent that property of the Master
Fund is invested in any such collective investment trust, the declaration of
trust pertaining thereto, as amended from time to time, and the trust thereby
created, shall be a part of this Agreement and of the Plan. The Master Trustee
shall have, with respect to the interest of such Fund in such collective
investment trust, the powers conferred by this Agreement to the extent that such
powers are not inconsistent with the provisions of such declaration of trust.
For purposes of any valuation of the Master Fund or any valuation of the
interest or of the account of any Participant or Beneficiary under the Plan, the
interest of the Master Trust in such collective investment trust shall be valued
at the times and in the manner prescribed by the declaration by which such trust
was created. A copy of the declaration of trust as presently in effect of any
collective investment trust to which the assets of the Plan are transferred
pursuant to this Section 2.8 shall be provided to the Named Fiduciary and copies
of amendments thereto shall be forwarded to the Named Fiduciary promptly after
their adoption.
2.9 Insurance Contracts.
(a) Procuring and Holding Contracts. The Master Trustee,
upon written direction of the Named Fiduciary, shall pay from the Master Trust
such sums to such insurance company or companies as the Named Fiduciary may
direct for the purpose of procuring individual or group annuity contracts or
other insurance contracts (hereinafter referred to as "Contracts"). The Named
Fiduciary shall prepare, or cause to be prepared in such form as it shall
prescribe, the application for any Contract to be applied for. The Master
Trustee shall receive and hold in the Master Trust, subject to the provisions
hereinafter set forth in this Section, all Contracts obtained, the proceeds of
any sale, assignment or surrender of any such Contract and any and all dividends
and other payments of any kind received with respect to any such Contract.
(b) Exercising Rights under Contracts. The Master Trustee
shall be the complete and absolute owner of Contracts held in the Master Trust,
provided that the Named Fiduciary shall have power, without the consent of any
other person, to exercise any and all of the rights, options or privileges that
belong to the Master Trustee as such absolute owner or that are granted by the
terms of any such Contract or by the terms of this Agreement, and the Master
Trustee shall not exercise any of the foregoing powers or take any other action
permitted by any such Contract other than upon the written direction of the
Named Fiduciary. The Master Trustee shall have no duty to exercise any of such
powers or to take any such action unless and until it shall have received such
direction. The Master Trustee, upon the written direction of the Named
Fiduciary, shall deliver any Contract held in the Master Trust to such person or
persons as may be specified in the direction.
(c) Payment of Premiums. Upon the written direction of the
Named Fiduciary, the Master Trustee shall pay from the Master Trust premiums,
assessments, dues, charges and interest, if any, upon any Contract held in the
Master Trust. The Master Trustee shall have no duty to make any such payment
unless and until it shall have received such direction.
(d) Payments under Contracts. Any sums paid out by any
insurance company under the terms of a Contract held in the Master Trust either
to the Master Trustee, or, in accordance with its direction, to any other person
or persons designated as payees in such Contract shall be a full and complete
discharge of the liability to pay such sums, and the insurance company shall
have no obligation to look to the disposition of any sums so paid. No insurance
company shall be required to look into the terms of this Agreement, or to
question any action of the Master Trustee or to see that any action of the
Master Trustee is authorized by the terms of this Agreement.
(e) Liability of Master Trustee; Indemnification. Anything
contained herein to the contrary notwithstanding, to the extent permitted by
law, the Master Trustee shall not be liable for the refusal of any insurance
company to issue or change any Contract or take any other action requested by
the Master Trustee; for any assets invested in a Contract at the direction of
the Named Fiduciary; for the form, terms, genuineness, validity, sufficiency or
effect of any Contract held in the Master Trust; for the act of any person or
persons that may render any such Contract null and void; for the failure of any
insurance company to pay the proceeds of any such Contract as and when the same
shall become due and payable; for any delay in payment resulting from any
provision contained in any such Contract nor for the fact that for any reason
whatsoever (other than the Master Trustee's own negligence or willful
misconduct) any Contract shall lapse or otherwise become uncollectible. The
Company hereby agrees to indemnify the Master Trustee and to hold it harmless
from and against any claim, liability, loss, damage or expense that may be
asserted against the Master Trustee by reason of any action taken or omitted by
the Master Trustee in connection with any Contract at the direction of the Named
Fiduciary.
2.10 Loans to Participants.
(a) On the direction of the Administrative Committee or the
Administrative Agent, the Master Trustee shall make loans from the assets of the
Trust Funds to Participants in the Plan. All promissory notes evidencing such
loans shall constitute assets of the trust estate, shall be held in a separate
Fund, known as the "Loan Fund" and, except as otherwise provided herein, shall
be held by the Master Trustee. The Master Trustee shall have no responsibility
with respect to the holding, investment or administration of the Loan Fund,
except as specified in the written directions of the Administrative Committee or
the Administrative Agent with respect thereto.
(b) Each such loan shall bear a reasonable rate of interest
(within the meaning of Regulation Section 2550.408(b)(1) promulgated by the
Department of Labor) as determined by the Administrative Committee and shall be
secured by the Participant's account balance in the Trust Fund. Unless otherwise
instructed in writing by the Administrative Committee, the Master Trustee shall
not file a UCC-1 form or take other action in order to perfect its security
interest in the accounts of a Participant to whom a loan is made.
(c) The Administrative Committee or the Administrative Agent
will provide the Master Trustee with such information as may from time to time
be required for the Master Trustee to exercise its rights under the documents
relating to plan loans including, without limitation, the occurrence of events
of default by Participants.
(d) The Administrative Committee (or, if the Committee so
directs, the Administrative Agent,) is hereby appointed as custodian for the
Master Trustee of all original promissory notes and security agreements which
shall be held subject to the order of the Master Trustee. In the event that the
Master Trustee or the Administrative Committee terminates such custodianship
(which either may do on written notice to the other), the Administrative
Committee shall deliver the originals of all promissory notes and security
agreement to the Master Trustee.
(e) In addition to all other indemnities provided to the
Master Trustee in this Agreement, the Company hereby indemnifies the Master
Trustee and its directors, officers and employees, and holds it and them
harmless from and against any claim, liability, loss, damage or expense
(including reasonable attorneys' fees) which it may incur by reason of its not
filing or otherwise perfecting a security interest granted to the Master Trustee
with respect to a loan to a Participant and in connection with the
Administrative Committee or Administrative Agent acting as custodian of
promissory notes pursuant to paragraph (d) above.
SECTION 3. Powers of Master Trustee.
3.1 In General. The Master Trustee is authorized and empowered, in
its discretion with respect to a Discretionary Fund and at the direction of an
Investment Manager or the Investment Committee with respect to a Directed Fund:
(1) to sell, exchange, convey, transfer or otherwise dispose of
any property, real or personal, at any time held by the Master Trustee, by
private contract or at public auction, for cash or on credit, (in the case of a
Directed Fund, upon such conditions, at such prices and in such manner as the
Investment Manager or Investment Committee shall direct), and no person dealing
with the Master Trustee shall be bound to see to the application of the purchase
money or to inquire into the validity, expediency or propriety of any such sale
or other disposition.
(2) to grant options to purchase securities held in the Fund
("covered call options") and other property held in the Fund and options to sell
securities and other property to the Fund, as well as combinations of such
options to purchase and such options to sell; and to acquire options to purchase
securities and other property for the Fund and options to sell securities and
other property held in the Fund, as well as combinations of such options to
purchase and such options to sell;
(3) to sell or exercise any conversion privileges, subscription
rights, warrants or other options and to make any payments incidental thereto,
and to consent to or otherwise participate in corporate reorganizations,
mergers, consolidations or other changes affecting corporate securities and to
delegate discretionary powers and to pay any assessments or charges in
connection therewith; but the Company understands that, where warrants, options,
tenders or other rights have fixed expiration dates, in order for the Master
Trustee to act with respect to a Directed Fund, it must receive instructions at
its offices, addressed as the Master Trustee may from time to time request, by
no later than noon (N.Y. City time) at least one business day prior to the last
scheduled date to act with respect thereto (or such earlier date or time as the
Master Trustee may direct);
(4) to compromise, compound, settle or arbitrate any claim,
debt or obligation due to or from it as Master Trustee and to reduce the rate of
interest on, extend or otherwise modify, or to foreclose upon default or
otherwise enforce any such obligation; to bid in property on foreclosure or to
take a deed in lieu of foreclosure with or without paying consideration therefor
and in connection therewith to release the obligation on the bond secured by the
mortgage, and, in the case of a Discretionary Fund, to abandon any property
determined by it to be worthless;
(5) to vote upon any stocks, bonds or other securities and to
give general or special proxies or powers of attorney with or without power of
substitution, provided that, in the case of a Directed Fund, unless the Master
Trustee is instructed otherwise, all proxies and proxy materials relating to
securities held in the Master Fund shall be signed by the Master Trustee without
indication of voting preference, and forwarded to the Investment Manager or
Investment Committee for the making of all decisions with respect thereto; and
to enter into any voting trust or similar agreement;
(6) to manage, administer, operate, lease for any period of
years, regardless of any restrictions on leases made by fiduciaries, develop,
improve, repair, alter, demolish, mortgage, pledge, grant options with respect
to or otherwise deal with any real property or interest therein at any time held
by it;
(7) for the purposes of the Master Trust, to engage in
transactions involving financial futures, including but not limited to stock
index futures, and options on financial futures; and in carrying out such
transactions to open accounts to trade in and to make or take delivery of
financial futures, to provide original, variation, maintenance and other
required margin in the form of moneys, securities, or otherwise, and to exercise
options; and
(8) generally to exercise any of the powers of an owner with
respect to stocks, bonds, securities or other property held in any Fund.
3.2 At Direction of Named Fiduciary. The Master Trustee is
authorized and empowered, with the approval of the Named Fiduciary with respect
to any Fund:
(1) for the purposes of the Master Trust, to borrow money from
any person or persons, including The Bank of New York, to issue the Master
Trust's promissory note or notes therefor, and to secure the repayment thereof
by pledging, mortgaging or otherwise encumbering any property in its possession;
and
(2) to designate The Bank of New York to act on its behalf in
lending securities held in the Master Fund to brokers, dealers, banks or other
financial institutions, on such terms as are consistent with the Act.
3.3 With Respect to Participant-Directed Funds. The Master Trustee
is authorized and empowered, at the direction of the Administrative Committee or
the Administrative Agent (which direction may include standing instructions)
with respect to any Participant-Directed Fund, to sell, or to purchase, any
property held in such Funds, as appropriate to effectuate transfers among Funds
in accordance with Section 2.7, and/or distributions from Funds in accordance
with Section 2.10 or 5.3.
3.4 Administrative Powers. The Master Trustee is authorized and
empowered in its sole administrative discretion with respect to both
Discretionary and Directed Funds:
(1) to make, execute, acknowledge and deliver any and all
documents of transfer and conveyance and any and all other instruments that may
be necessary or appropriate to carry out the powers granted herein;
(2) to collect all interest, dividends and other income payable
with respect to property in the Master Fund, and to surrender securities at
maturity or when advised of earlier call for redemption, provided that the
Master Trustee shall not be liable for failure to surrender any security in a
Directed Fund for redemption prior to maturity or take other action if notice of
such redemption or other action was not provided to the Master Trustee by the
issuer, the Investment Manager, the Investment Committee or one of the
nationally recognized bond or corporate action services to which the Master
Trustee subscribes;
(3) to exchange securities in temporary form for securities in
definitive form, and to effect an exchange of shares where the par value of
stock is changed;
(4) to hold property in its vaults, at a domestic or (to the
extent permitted by regulations issued by the Secretary of Labor under Section
404(b) of the Act) foreign central depository or clearing corporation, in
non-certificated form with the issuer, on Federal Book Entry at the Federal
Reserve Bank of New York, with a custodian appointed pursuant to clause (5)
below, or, with the approval of the Named Fiduciary, at any other location;
(5) to appoint any other bank as custodian for any foreign
securities or other foreign assets constituting part of the Master Fund, and to
arrange for the custody of such securities or assets and the indicia of
ownership thereof to be held outside the jurisdiction of the district courts of
the United States by such other bank and/or its agents, to the extent permitted
by regulations issued by the Secretary of Labor under Section 404(b) of the Act,
and to pay the reasonable expenses and compensation of such bank from the Master
Fund;
(6) to hold property of the Master Trust in its own name or in
the name of a nominee, including the nominee of any central depository, clearing
corporation or custodian with which securities of the Master Trust may be
deposited (and the Company agrees to hold the Master Trustee and any such
nominee harmless from any liability as a holder of record), and to hold any
investment in bearer form, but the books and records of the Master Trustee shall
at all times show that all such investments are part of the Master Trust;
(7) to form corporations and to create trusts under the laws of
any state for the purpose of acquiring and holding title to any securities or
other property, all on such terms and conditions as it deems advisable;
(8) to employ suitable agents, including auditors and legal
counsel (who may be counsel to the Company or to the Master Trustee in its
corporate capacity) or other advisers, without liability for any loss occasioned
by any such agent selected with the care, skill, prudence and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity
and familiar with such matters would use in the conduct of an enterprise of a
like character with like aims, and to pay their reasonable expenses and
compensation from the Master Fund; and
(9) to take any action with respect to the Master Fund that it
deems necessary in carrying out the purposes of this Agreement.
SECTION 4. Registration of Company Securities.
In the event that the property initially delivered to the Master
Trustee hereunder includes any stocks of any classification, bonds or other
securities issued or guaranteed by the Company, or by any subsidiary or
affiliate thereof, or that the Master Trustee purchases for any Discretionary
Fund or an Investment Manager or the Investment Committee directs the purchase
for any Directed Fund of any such securities, and the Master Trustee should
thereafter determine (with respect to a Discretionary Fund) or the Investment
Manager or Investment Committee should thereafter direct the Master Trustee
(with respect to a Directed Fund) to dispose of any such securities under
circumstances which, in the opinion of the Master Trustee, require registration
of such securities under the Securities Act of 1933 and/or qualification of such
securities under the Blue Sky laws of any state or states, then the Company, at
its own expense, will promptly take or cause to be taken any and all action
necessary or appropriate to effect such registration and/or qualification; in
such event, the Master Trustee shall not be required to dispose of such
securities until such registration and/or qualification are complete and
effective, and the Master Trustee shall not be liable for any loss or
depreciation of the Fund resulting from any delay attributable thereto. The
Company will indemnify and hold the Master Trustee and its officers and
directors harmless with respect to any claim, liability, loss, damage or expense
incurred as a result of such registration or qualification or as a result of any
information in connection therewith furnished by the Company or as a result of
any failure by the Company to furnish any such information.
SECTION 5. Accounts to be Maintained by the Master Trustee; Payments
from the Master Trust.
5.1 Accounts. The Master Trustee may maintain one or more accounts
for the purpose of making disbursements at the direction of the named fiduciary
authorized to direct and make payments from the Plan (the "Administrative
Committee") and such other purposes, if any, as may be reasonably required for
the convenient administration of the Plan or of the Master Trust.
5.2 No Separate Recordkeeping. The Master Trustee shall not be
required to maintain any separate records or accounts with respect to the
Participants (or their Beneficiaries), and any such records or accounts required
to be maintained pursuant to the terms of the Plan shall be maintained by the
Employer or by the Administrative Committee.
5.3 Payments; Disputes. The Master Trustee, from time to time,
upon receipt of a written order from the Administrative Committee or the
Administrative Agent, shall make payments from the Master Fund to such persons
(including the Administrative Committee or any member of such Committee), and in
such amounts as the Committee or the Administrative Agent shall direct, and
amounts paid pursuant to such direction thereafter no longer shall constitute a
part of the Master Trust. Orders from the Administrative Committee or the
Administrative Agent need not specify the purpose of the payments so ordered,
and, except as provided by law, the Master Trustee shall not be responsible in
any way respecting the purpose or propriety of such payments or for the
administration of the Plan. Any such order shall constitute a certification
that the payment directed is one which the Administrative Committee or the
Administrative Agent is authorized to direct, and the Master Trustee need make
no further investigation. Payments by the Master Trustee may be made (i) by its
check to the order of the payee and mailed to the payee at the address last
furnished to the Master Trustee by the Administrative Committee or the
Administrative Agent or by the payee, or if no such address has been so
furnished, to the payee in care of the Company, or (ii) by direct deposit to an
account of the payee in accordance with Section 5.4. If a dispute arises as to
who is entitled to or should receive any benefit or payment, the Master Trustee
may withhold or cause to be withheld such payment until the dispute has been
resolved.
5.4 Direct Deposit of Payments. At the request of any Participant
or Beneficiary, the Master Trustee shall deposit periodic payments directly into
the bank account of such person, provided that such person and its depository
bank shall have entered into a depository agreement with the Master Trustee that
is satisfactory to the Master Trustee. The Company hereby agrees to indemnify
the Master Trustee and to hold it harmless from and against any claim,
liability, loss, damage or expense that may be asserted against it as a result
of making any such deposit.
5.5 Responsibility of Administrative Committee and Administrative
Agent. In directing the Master Trustee to make payments out of the Master
Trust, the Administrative Committee and the Administrative Agent shall follow
the provisions of the Plan, so that it shall be impossible, either during the
existence or upon the discontinuance of the Plan, for any part of the Master
Fund to be used for or diverted to purposes other than for the exclusive benefit
of the Participants or their Beneficiaries, at any time prior to the
satisfaction of all liabilities with respect to the Participants and their
Beneficiaries, or for any part thereof to be paid or applied to the use of any
Employer except, upon the termination of the Plan, to the extent of any surplus
resulting from an actuarial error.
5.6 Returned and Uncashed Payments. In the event that any payment
ordered by the Administrative Committee or the Administrative Agent shall be
distributed by the Master Trustee in accordance with Section 5.3 or Section 5.4
and (i) such payment shall be returned to the Master Trustee because the payee
or the payee's account cannot be located at such address, or (ii) any check so
mailed shall not be presented for payment within six months of the date thereof,
the Master Trustee shall promptly notify the Committee or the Administrative
Agent, as the case may be, of such return or failure to present. Upon the
expiration of 60 days after such notification such payment order shall become
void, and unless and until a further order of such Committee or Administrative
Agent is received by the Master Trustee with respect to such payment, the Master
Trustee shall return such payment to the Master Trust and continue to administer
the Master Trust as if such order had not been made. The Master Trustee shall
not be obligated to search for or ascertain the whereabouts of any such person
(or his duly appointed representative).
5.7 No Liability for Contributions. The Master Trustee shall be
under no duty to enforce payment of any contribution and shall not be
responsible for the adequacy of the Master Trust to meet and discharge any
liabilities under the Plan.
SECTION 6. Valuation of the Master Fund.
As of the inception of the Master Fund and at such other times as may
be agreed upon by the Master Trustee and the Named Fiduciary or as the Master
Trustee may deem appropriate (the "Valuation Date"), the Master Trustee shall
determine the market value of the Master Fund. Such determination may be made
either by the Master Trustee itself or by such person or persons believed by the
Master Trustee to be competent to make such determination as the Master Trustee
may select, but in accordance with a method consistently followed and uniformly
applied. The Master Trustee's determination of the value of the Master Fund
shall be conclusive and binding upon the Plan, each Employer, the Named
Fiduciary, the Administrative Committee, the Administrative Agent, and the
Participants and their Beneficiaries.
SECTION 7. Administrative Expenses, Taxes and Master Trustee's
Compensation.
7.1 In General. All brokerage costs and transfer taxes incurred in
connection with the investment and reinvestment of any Fund, all income taxes or
other taxes of any kind whatsoever which may be levied or assessed under
existing or future laws upon or in respect of such Fund, all expenses incurred
in connection with the acquisition or holding of real or personal property, any
interest therein or mortgage thereon, all other administrative expenses incurred
by the Master Trustee in the performance of its duties, including fees for legal
services rendered to the Master Trustee, the compensation of the Master Trustee
set forth on Exhibit A attached hereto, as the same may be amended from time to
time as provided in this Section, including without limitation any management
fees charged in respect of assets of a Directed Fund that are invested pursuant
to Section 2.5 at the discretion of the Master Trustee, and all other proper
charges and disbursements of the Master Trustee, shall be paid by the Fund, and,
until paid, shall constitute a charge upon the Fund. From time to time the
Master Trustee may provide the Company with written notice of an amendment to
Exhibit A. Such amendment shall become effective on the 60th day after the
Master Trustee mails it to the Company unless the Company shall have provided
the Master Trustee with written notice of objection thereto.
7.2 Fees of Investment Managers. The Named Fiduciary may direct
the Master Trustee to pay from the Master Fund the fees of any Investment
Manager and the administrative expenses of the Plan, including but not limited
to actuarial fees.
SECTION 8. Master Trustee's Liability; No Duty to Review;
Indemnification.
8.1 Liability of Master Trustee. With respect to a Discretionary
Fund, the Master Trustee shall not be liable for any loss to or diminution of
the Discretionary Fund resulting from any action taken or omitted by the Master
Trustee except if due to any failure of the Master Trustee to act in accordance
with the requirements of Part 4 of Title I of the Act.
With respect to any Directed Fund hereunder, the Master Trustee shall not be
liable for the making, retention or sale of any investment or reinvestment made
or received by it at the direction of an Investment Manager, the Investment
Committee or the Administrative Agent, as herein provided, nor for any loss to
or diminution of the Fund resulting from any action taken, or from any act
omitted, by the Master Trustee at the direction of an Investment Manager, the
Investment Committee or the Administrative Agent as herein provided. The Master
Trustee shall not be responsible for the adequacy of any funding policy of the
Plan of which it is advised pursuant to Section 2.2(c) or the diversification of
the investments of the Plan. Responsibility for monitoring adherence to funding
policies and for investment diversification, and for advising the Master Trustee
accordingly with respect to any Discretionary Fund and advising the Investment
Manager or Investment Committee accordingly with respect to any Directed Fund,
shall rest solely with the Named Fiduciary.
The Master Trustee may from time to time consult with legal counsel,
who may be counsel to the Company or to the Master Trustee in its corporate
capacity, and shall be fully protected in acting upon the advice of counsel.
To protect the Master Trust from expenses which might otherwise be
incurred, the Company shall have sole authority to enforce this Agreement on
behalf of all persons claiming any interest in the Master Trust or under the
Plan, and no other person may institute or maintain any action or proceeding
against the Master Trustee or the Master Trust in the absence of written
authority from the Company or a judgment of a court of competent jurisdiction
that in refusing authority the Company acted fraudulently or in bad faith.
8.2 No Duty to Review. Supervision of Investment Managers and the
Investment Committee shall be the exclusive responsibility of the Named
Fiduciary. The Master Trustee shall be under no duty or obligation to review
any investment or reinvestment made or received at the direction of an
Investment Manager or the Investment Committee nor to make any recommendation as
to the disposition or continued retention thereof. Without limiting the
generality of the foregoing, in the case of any transaction which is both
directed by and executed by or through an Investment Manager or the Investment
Committee, the Investment Manager or Investment Committee shall have entire
responsibility for assuring that the transaction does not violate the
prohibitions of any applicable state or federal law, including Sections 406 and
407 of the Act.
8.3 Reliance on Certain Appraisals. To the extent that the Master
Trustee shall be required to value the assets of the Master Fund for any
purpose, including without limitation any valuation pursuant to Section 6, any
accounting pursuant to Section 9 and any segregation of assets pursuant to
Section 10 hereof, the Master Trustee may rely for all purposes of this
Agreement upon any certified appraisal or other form of valuation submitted to
it by any Investment Manager or the Investment Committee and, with respect to
any insurance contract referred to in Section 2.9 hereof, by the insurance
company issuing such contract, and, with respect to an interest in any venture
capital organization, by the manager of such organization and, with respect to
any mutual funds held in the Master Fund, by the servicing agent of such mutual
fund, and, with respect to an interest of the Master Trust in any collective
investment trust (other than a collective investment trust established and
maintained by The Bank of New York), by the trustee or investment manager of
such collective investment trust.
8.4 Indemnification of Master Trustee. The Company recognizes that
a burden of litigation may be imposed upon the Master Trustee, as the result of
some act or transaction for which it has no responsibility or over which it has
no control under this Agreement. Accordingly, the Company hereby agrees to
indemnify the Master Trustee, individually and as Master Trustee under this
Agreement, and its directors, officers and employees, and to hold it and them
harmless from and against any claim, liability, loss, damage or expense which
may be asserted against it or them by reason of any action taken or omitted by
or on behalf of the Master Trustee at the direction of any Investment Manager or
Investment Committee, the Named Fiduciary, the Administrative Agent, or the
Administrative Committee, or by virtue of being the holder of the Master Trust.
8.5 Limitation of Indemnity. Nothing herein is intended to or
shall be construed to relieve the Master Trustee from any responsibility or
liability it may have under Part 4 of Title I of the Act.
8.6 Indemnification of Successor Trustee. If The Bank of New York
is acting as a successor trustee or succeeds to responsibility hereunder for
management of plan assets with respect to the Master Fund (or any portion
thereof), the Company hereby agrees to hold The Bank of New York harmless from
and against any tax, claim, liability, loss, damage or expense incurred by or
assessed against it as such successor as a direct or indirect result of any act
or omission of a predecessor trustee or any other person charged under any
agreement affecting Master Fund assets with investment responsibility with
respect to such assets.
SECTION 9. Settlement of Master Trustee's Accounts.
9.1 Annual Accounting. The Master Trustee shall keep accurate and
detailed accounts of all investments, receipts, disbursements and other
transactions hereunder, accounting separately for each Fund, and all accounts,
books and records relating thereto shall be open to inspection and audit at all
reasonable times by any person designated by the Company or the Named Fiduciary.
Within 90 days after the close of each fiscal year of the Master Trust (or such
other date as may be agreed upon in writing between the Company and the Master
Trustee), and within 120 days after the effective date of the removal or
resignation of the Master Trustee as provided in Section 11 hereof, the Master
Trustee shall file with the Company a written account, setting forth all
investments, receipts, disbursements and other transactions effected by it
during the year ending on such date (but not including any part of such year for
which such an account has previously been filed) and certified as to the
accuracy of the information set forth therein. Such account may incorporate by
reference any and all schedules and other statements setting forth investments,
receipts, disbursements and other transactions effected during the period for
which such account is rendered which the Master Trustee has furnished to the
Company prior to the filing of such account. Each account so filed (and copies
of any schedules and statements incorporated therein by reference as aforesaid)
shall be open to inspection at the offices of the Company and the Master Trustee
during their respective regular business hours by the Named Fiduciary, by any
person designated by the Company or the Named Fiduciary, by Participants and
Beneficiaries of the Plan, and by any Administrative Committee, Investment
Manager or Investment Committee affected thereby, for a period of 60 days
immediately following the date on which the account is filed with the Company.
If for any reason an account required of the Master Trustee hereunder shall not
be filed within the applicable time specified in the preceding sentence, such
account may be filed by the Master Trustee after the expiration of such time,
provided such account otherwise complies with the requirements of this
Agreement, and such account so filed shall be open to inspection as aforesaid by
any of the parties aforementioned for a period of 90 days immediately following
the date on which the account is filed. In the event that any assets of the
Fund have been transferred to a collective investment trust pursuant to Section
2.8 hereof, such account shall include a copy of the latest annual written
account of such collective investment trust.
9.2 Other Accountings. The Master Trustee shall provide to the
Company from time to time such other reports as may be agreed upon between the
Master Trustee and the Company. The Company agrees to examine each such report
promptly and to file any exceptions thereto within 90 days of the date thereof.
9.3 Settlement of Accounts. Upon the expiration of the 60-day or
90-day period referred to in Section 9.1 or 9.2, as the case may be, the Master
Trustee shall be forever released and discharged from all liability and
accountability to anyone with respect to the account or report, including,
without limitation, all acts and omissions of the Master Trustee shown or
reflected in such account or report, except with respect to any acts or
omissions as to which the Company, the Named Fiduciary or the Administrative
Committee shall have filed written objections with the Master Trustee within
such 60-day or 90-day period. Nothing herein contained shall impair the right
of the Master Trustee to a judicial settlement of any account of proceedings
rendered by it. In any proceeding for such judicial settlement the only
necessary parties shall be the Master Trustee, the Company, the Named Fiduciary,
the Administrative Committee and any other party or parties whose participation
is required by law, and any judgment, decree or final order entered therein
shall be conclusive on all persons having or claiming an interest in the Master
Trust or the Plan.
SECTION 10. Segregation of Parts of the Master Trust.
10.1 Segregation. The equitable share in the Master Trust of any
part of the Plan or the proportionate share of any Participant or group of
Participants and their Beneficiaries may be segregated and withdrawn from the
Master Trust upon the direction of the Named Fiduciary setting forth the portion
of the Plan's equitable share to be so treated or the Participants and
Beneficiaries for whose accounts such segregation and withdrawal are to be
carried out. The Master Trustee may condition its transfer or distribution of
any assets upon the Master Trustee's receiving assurances satisfactory to it
that the approval of appropriate governmental or other authorities has been
secured and that all notice and other procedures required by applicable law have
been complied with.
Unless otherwise directed by the Named Fiduciary pursuant to
the Preceding Paragraph, the Master Trustee shall hold, invest and administer
the Master Trust as a single fund without identification of any part of the
Master Fund with or allocation of any part of the Master Fund to the Company or
to any subsidiary or affiliate of the Company designated by it as a
Participating company under the Plan or to any Participant or group of
Participants or their Beneficiaries.
10.2 Segregated Property. Segregation and withdrawal of the
equitable share of a Participant or group of Participants shall be made as of
the Valuation Date immediately following the date of the notice or instruction
referred to in Section 10.1. The selection of the particular assets to be
segregated pursuant to Section 10.1 shall be made by the Named Fiduciary. Such
property shall be held as a separate trust fund for the exclusive benefit of the
withdrawing Participant or group of Participants and their Beneficiaries, under
a separate agreement of trust substantially identical to this Agreement.
SECTION 11. Resignation and Removal of Master Trustee.
The Master Trustee may resign at any time upon 60 days' notice in
writing to the Company and the Named Fiduciary. The Master Trustee may be
removed by the Company at any time upon 60 days' notice in writing to the Master
Trustee and the Named Fiduciary. If within such 60-day period a successor to
the Master Trustee shall not have been appointed the resigning or removed Master
Trustee may apply to any court of competent jurisdiction for the appointment of
such successor. Any successor trustee shall have the same powers and duties as
those conferred upon the Master Trustee hereunder (other than those relating to
the collective investment trust of The Bank of New York) and subject to receipt
by the Master Trustee of written acceptance of such appointment by the successor
trustee, the Master Trustee shall assign, transfer and pay over to such
successor trustee the moneys and properties then constituting the Master Fund,
withdrawing any part of any Fund then held in any collective investment trust of
The Bank of New York. The Master Trustee may reserve such sum of money as it
may deem advisable for payment of its reasonable fees and expenses in connection
with the settlement of its account or otherwise, payment of such fees and
expenses may be withdrawn from such reserve. Any balance of such reserve
remaining after the payment of such fees and expenses shall be paid over to the
successor trustee. If such reserve shall be insufficient to pay such charges,
such resigning or removed Master Trustee shall be entitled to recover the amount
of any deficiency from the Company or from the successor trustee or from both
the Company and the successor trustee. All provisions of this Agreement shall
apply to any successor trustee appointed as aforesaid with the same force and
effect as if such successor had been originally named herein as the Master
Trustee.
SECTION 12. Evidence of Action by Company, Investment Managers,
Investment and Administrative Committees and Administrative Agent, and of
Appointment of Named Fiduciary, Investment Managers, Investment and
Administrative Committees and Administrative Agent.
Except as otherwise herein provided, any action by the Company
pursuant to any of the provisions of this Agreement shall be evidenced by a
resolution of its Board of Directors (which may include a resolution authorizing
one or more officers to act on its behalf) certified by the Secretary or any
Assistant Secretary of the Company, and the Master Trustee shall be fully
protected in acting in accordance with such resolution so certified to it. The
Company shall furnish the Master Trustee from time to time with certified copies
of resolutions of its Board of Directors or of other corporate action appointing
and terminating the office of the Named Fiduciary and the Administrative
Committee, and appointing successors. The Named Fiduciary shall furnish the
Master Trustee with a copy of the instrument duly appointing and terminating the
Administrative Agent, and appointing and terminating successors thereto and
shall certify to the Master Trustee the responsibilities and authorities which
the Named Fiduciary has delegated to such Administrative Agent. The Named
Fiduciary shall furnish the Master Trustee with a copy of the instrument duly
appointing and terminating any Investment Committee and appointing and
terminating successors thereto. The Named Fiduciary shall file with the Master
Trustee a copy of the instrument duly appointing each Investment Manager, who
shall file with the Master Trustee a copy of his written acceptance of his
appointment and acknowledgement that he is a "fiduciary" with respect to the
Plan within the meaning of Section 3(21) of the Act and due evidence of his
qualification under Section 3(38)(B) of the Act. Any such appointment shall
continue to be effective until receipt by the Master Trustee of written notice
to the contrary from the Named Fiduciary. Each Investment Manager and the
Administrative Agent and the Investment Committee shall furnish the Master
Trustee from time to time with a certificate setting forth the name and specimen
signature of each person authorized to act on its behalf. Unless otherwise
provided in a certificate from the Named Fiduciary, all orders, requests and
instructions to the Master Trustee from the Named Fiduciary or the
Administrative Committee shall be in writing or by telecopy signed by two
authorized persons, and all orders, requests and instructions to the Master
Trustee from an Investment Manager, the Administrative Agent, or the Investment
Committee shall be in writing, by telecopy or by any other electronic means
using a code for the authentication of messages, and signed or transmitted by an
authorized representative of the Investment Manager, Administrative Agent, or
Investment Committee, and the Master Trustee shall be fully protected in acting
in accordance with any such order, request, or instruction. The Master Trustee
shall have the right to rely on and shall be fully protected in acting in
accordance with any resolution, order, request or instruction which it believes
to be genuine and which purports to have been signed or transmitted in
accordance with this section.
SECTION 13. Amendment of Agreement, Termination of Trust,
Termination of Plan.
13.1 Amendment of Agreement. Subject to the restrictions set forth
below, the Company reserves the right at any time and from time to time to
modify, amend or terminate, in whole or in part, any or all of the provisions of
this Agreement; provided, however, that no such modification or amendment which
affects the rights, duties or responsibilities of the Master Trustee may be made
without its consent in writing.
13.2 Termination of Master Trust. In the event of the termination
of the Master Trust, the Master Trustee shall continue to administer the Master
Trust as hereinabove provided until all of the purposes for which it has been
established have been accomplished or the Master Trustee has disposed of the
Master Fund after the payment of or other provision for all expenses incurred in
the administration of the Master Trust (including any compensation to which the
Master Trustee may be entitled), all in accordance with the written order of the
Company or any successor thereto. Until the final distribution of the Master
Fund, the Master Trustee shall continue to have and may exercise all of the
powers and discretions conferred upon it by this Agreement. Upon any such
termination, or the resignation or removal of the Master Trustee under Section
11 hereof, Section 7.1 and all indemnities herein, including without limitation
those set forth in Sections 2.9(e), 2.10(e), 3.4(6), 4, 5.4, 8.4 and 8.6 hereof,
shall remain in full force and effect.
13.3 Termination of the Plan. Upon receipt of notice from the
Company that the Plan is terminated in whole or in part, with respect to all or
any group of Participants and their Beneficiaries, the Master Fund, or the
portion thereof with respect to which the Plan is terminated, shall, subject to
the provisions of Section 7 hereof, be segregated in accordance with Section 10
and held and/or disposed of by the Master Trustee in accordance with the written
order of the Administrative Committee. The Master Trustee may condition its
delivery, transfer or distribution of any assets upon the Master Trustee's
receiving assurances satisfactory to it that the approval of appropriate
government or other authorities has been secured and that all notice and other
procedures required by applicable law have been complied with.
13.4 Exclusive Benefit. Anything in this Agreement to the contrary
notwithstanding, at no time prior to the satisfaction of all liabilities with
respect to the Participants and their Beneficiaries shall any part of the Master
Fund be used for or diverted to purposes other than for the exclusive benefit of
the Participants and their Beneficiaries and defraying reasonable expenses of
administering the Plan; provided, however, that nothing herein contained shall
preclude the return to an Employer of any contribution whose return is permitted
by Section 403(c) of the Act or successor legislation.
SECTION 14. Inalienability of Benefits and Interests.
No distribution or payment under this Agreement to any Participant or
Beneficiary shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance or charge, whether voluntary or
involuntary, and no attempt so to anticipate, alienate, sell, transfer, assign,
pledge, encumber or charge the same shall be valid or recognized by the Master
Trustee, nor shall any such distribution or payment be in any way liable for or
subject to the debts, contracts, liabilities, engagements or torts of any person
entitled to such distribution or payment, except in the case of any voluntary
and revocable assignment of any benefit payment permitted by law and except to
such extent as may otherwise be required by law. If the Master Trustee is
notified by the Administrative Committee that any such Participant or
Beneficiary has been adjudicated bankrupt or has purported to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any such
distribution or payment, voluntarily or involuntarily, the Master Trustee shall,
if so directed by the Committee, hold or apply such distribution or payment or
any part thereof to or for the benefit of such Participant or Beneficiary in
such manner as the Committee shall direct.
SECTION 15. No Merger, Consolidation or Transfer of Plan Assets or
Liabilities.
Anything herein to the contrary notwithstanding, the Master Trust
shall under no circumstances be so operated as to permit, and nothing herein
contained shall be deemed to authorize, any merger, consolidation, or transfer
of the assets or liabilities of the Plan with or to any other plan except in
compliance with the provisions of the Act and the Code which are applicable to
such mergers, consolidations, or transfers, including without limitation
Sections 208 and 4043(b)(8) of the Act and Sections 401(a)(12), 414(1), and
6058(b) of the Code, and Regulations promulgated pursuant to the foregoing
Sections.
SECTION 16. Governing Law.
This Agreement shall be administered and construed according to the
internal substantive laws (and not the choice of law provisions) of the State of
New York, except as may otherwise be required by Section 514 of the Act. The
invalidity, illegality or unenforceability of any provision of this Agreement
shall in no way effect the validity, legality or enforceability of any other
provision. The Master Trust shall at all times be maintained as a domestic
trust in the United States.
IN WITNESS WHEREOF, this Agreement has been executed, attested and
sealed, as of the date first above written, by the duly authorized officers of
the Company and The Bank of New York.
(Corporate Seal) _______________________________
Attest:
_________________________ By______________________________
Secretary Name:
Title:
(Corporate Seal) THE BANK OF NEW YORK
Attest:
________________________ By______________________________
Assistant Secretary Name:
Title:
<PAGE>
STATE OF )
: ss.:
COUNTY OF )
On the ____ day of ________________, 19__, before me personally came
_______________________________, to me known, who, being by me duly sworn, did
depose and say that he resides at _________________________________, that he is
_____________________ of _____________________ CORPORATION, the corporation
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the By-laws of said corporation,
and that he signed his name thereto by like order.
________________________________
Notary
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the ____ day of ________________, 19__, before me personally came
_______________________________, to me known, who, being by me duly sworn, did
depose and say that he resides at _________________________________, that he is
_______________________ of THE BANK OF NEW YORK, the corporation described in
and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the By-laws of said corporation, and that
he signed his name thereto by like order.
________________________________
Notary
<PAGE>
Exhibit A. Master Trustee's Fees
<PAGE>
Exhibit A
Master Trustee's Fees
Exhibit 5
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219
November 15, 1994
The Board of Directors
Chesapeake Corporation
1021 E. Cary Street
James Center II - 22nd Floor
Richmond, VA 23218
Chesapeake Corporation
Registration Statement on Form S-8
Gentlemen:
We have acted as counsel to Chesapeake Corporation, a Virginia
corporation (the "Company"), in connection with the preparation and filing of a
registration statement on Form S-8 under the Securities Act of 1933, as amended,
with respect to 100,000 shares of the Company's Common Stock, $1.00 par value
(the "Shares"), to be offered pursuant to the Company's 401(k) Savings Plan For
Hourly Employee (the "Plan"), together with an indeterminate amount of interests
in the Plan. Each Share shall be accompanied by one Preferred Share Purchase
Right (the "Rights") issued pursuant to the Rights Agreement, dated as of March
15, 1988, between the Company and Harris Trust and Savings Bank, as successor
rights agent (as amended, the "Rights Agreement").
In rendering this opinion, we have relied upon, among other things,
our examination of the Plan and the Rights Agreement and of such records of the
Company and certificates of its officers and of public officials as we have
deemed necessary.
Based upon the foregoing and the further qualifications stated below,
we are of the opinion that:
1. the Company is duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Virginia;
2. the Shares have been duly authorized and, when issued in
accordance with the terms of the Plan, will be legally issued, fully paid and
non-assessable; and
3. the Rights have been duly authorized and, when issued in tandem
with the Shares in accordance with the Plan and the Rights Agreement, will be
legally issued.
We hereby consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to such registration statement.
Very truly yours,
/s/ Hunton & Williams
