As filed with the Securities and Exchange Commission on January 3, 1995.
Registration Statement No. 33-56487
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
____________________
FORM S-8/A2
POST-EFFECTIVE
AMENDMENT NO. 2 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 INCLUDE A CORRECTED COPY OF EXHIBIT 4.5, AS
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 (previously filed).
5 Opinion of Hunton & Williams as to the legality of the securities
being registered (previously filed).
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 3rd day of
January, 1995.
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 3rd day of January, 1995.
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 3rd day of January, 1995.
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 (previously filed).
5 Opinion of Hunton & Williams as to the legality of the
securities being registered (previously filed).
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).
CHESAPEAKE PACKAGING CO.
401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
Effective January 1, 1995
<PAGE>
TABLE OF CONTENTS
Section Page
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-2
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-4
1.15. Defined Contribution Plan . . . . . . . . . . .I-4
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. Entry Date. . . . . . . . . . . . . . . . . . .I-5
1.22. ERISA . . . . . . . . . . . . . . . . . . . . .I-5
1.23. Excess Aggregate Contribution . . . . . . . . .I-6
1.24. Excess Contribution . . . . . . . . . . . . . .I-6
1.25. Excess Deferral . . . . . . . . . . . . . . . .I-6
1.26. Family Member . . . . . . . . . . . . . . . . .I-7
1.27. Fiduciary . . . . . . . . . . . . . . . . . . .I-7
1.28. Highly Compensated Employee . . . . . . . . . .I-7
1.29. Hour of Service . . . . . . . . . . . . . . . I-10
1.30. Investment Manager. . . . . . . . . . . . . . I-12
1.31. Matching Account. . . . . . . . . . . . . . . I-13
1.32. Matching Contribution . . . . . . . . . . . . I-13
1.33. Named Fiduciary . . . . . . . . . . . . . . . I-13
1.34. Normal Retirement Age . . . . . . . . . . . . I-13
1.35. Participant . . . . . . . . . . . . . . . . . I-13
1.36. Plan. . . . . . . . . . . . . . . . . . . . . I-13
1.37. Plan Administrator . . . . . . . . . . . . . I-13
1.38. Plan Year . . . . . . . . . . . . . . . . . . I-13
1.39. Qualified Domestic Relations
Order. . . . . . . . . . . . . . . . . . I-13
1.40. Qualified Matching Contribution . . . . . . . I-14
1.41. Qualified Non-Elective Contri-
bution . . . . . . . . . . . . . . . . . I-14
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-15
1.48. Trust Agreement . . . . . . . . . . . . . . . I-15
1.49. Trust Fund. . . . . . . . . . . . . . . . . . I-16
1.50. Trustee . . . . . . . . . . . . . . . . . . . I-16
1.51. Unrestricted 401(k) Employee. . . . . . . . . I-16
1.52. Unrestricted 401(m) Employee. . . . . . . . . I-16
1.53. Valuation Date. . . . . . . . . . . . . . . . I-16
1.54. Year of Service . . . . . . . . . . . . . . . I-16
ARTICLE II PARTICIPATION
2.01. Initial Eligibility to Partici-
pate . . . . . . . . . . . . . . . . . . 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
Rollover Contribution Only . . . . . . . II-2
ARTICLE III CONTRIBUTIONS
3.01. Elective Deferral Contributions . . . . . . .III-1
3.02. Matching Contributions. . . . . . . . . . . .III-1
3.03. Qualified Non-Elective Contribu-
tions and 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-7
3.08. General Provisions on Company
Contributions. . . . . . . . . . . . . .III-7
ARTICLE IV ALLOCATIONS
4.01. Participants' Accounts. . . . . . . . . . . . IV-1
4.02. Allocation of Rollover Contri-
butions. . . . . . . . . . . . . . . . . IV-1
4.03. Allocation of Company Contri-
butions. . . . . . . . . . . . . . . . . IV-1
4.04. Funding Policy. . . . . . . . . . . . . . . . IV-2
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. Amendment of Vesting Schedule . . . . . . . . .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 Contri-
butions. . . . . . . . . . . . . . . . . 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-10
6.11. Loans to Participants . . . . . . . . . . . .VI-12
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. Savings Plan Committee. . . . . . . . . . . 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-2
9.06. Directions to Trustee . . . . . . . . . . . . IX-3
9.07. Claims Procedure. . . . . . . . . . . . . . . IX-3
9.08. 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. Chesapeake 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 Company . . . . . . . . . . . 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
APPENDIX A
EXHIBIT I ELIGIBLE EMPLOYEES
EXHIBIT II MATCHING CONTRIBUTIONS
INTRODUCTION
The Chesapeake Packaging Co. 401(k) Savings Plan for
Hourly Employees (the Plan) is adopted effective January 1, 1995.
The Plan conforms to the provisions of the Tax Reform Act of 1986
and subsequent statutory and regulatory changes.
Chesapeake Corporation intends that Company contri-
butions to the Trust be deductible and that the Plan be a
discretionary contribution plan. Chesapeake Corporation 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.
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 Company 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, Company 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 Company, Qualified Non-Elective
Contributions and 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 Non-Elective Contribution or
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 a Company is
a member according to Code section 414(b);
(b) an unincorporated trade or business that is under
common control with a Company as determined according to Code
section 414(c);
(c) a member of an affiliated service group of which
a Company 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 direc-
tors of Chesapeake Corporation.
1.08. Break in Service means a Plan Year in which an indi-
vidual 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 Savings Plan Committee provided
for in Plan article IX.
1.11. Company means Chesapeake Packaging Co.
1.12. Compensation means an Employee's wages, salaries and
fees for professional services and other amounts received
(without regard to whether an amount is paid in cash) for
personal services actually rendered in the course of employment
with a Company maintaining the Plan to the extent that the
amounts are includible in gross income (including, but not
limited to, commissions paid salesmen, Compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, tips and bonuses). Compensation excludes
reimbursements or other expense allowances, cash and non-cash
fringe benefits, moving expenses, deferred compensation and
welfare benefits.
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.
Compensation shall include any amount that is contri-
buted by a Company 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 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 that 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 (to the extent not taken into account for purposes
of the ADP test) 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 and Qualified Non-
Elective 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, 1995.
1.18. Elective Deferral Account means that portion of a
Participant's Account to which his Elective Deferral Contri-
butions are allocated.
1.19. Elective Deferral Contributions means contributions
made to the Plan during the Plan Year by a Company, 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 an person employed by the Company who
is compensated on an hourly basis, who completes or is expected
to complete 1,000 Hours of Service during any twelve-month period
of employment that commences on his employment date or subsequent
anniversary thereof and who is employed at a job location and
category listed on Exhibit I to the Plan. Employee does not
include leased employees, as defined in Code section 414(n), or
independent contractors.
1.21. Entry Date means the first day of each calendar
quarter.
1.22. 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.
1.23. Excess Aggregate Contribution means the excess of the
aggregate amount of the Matching Contributions (and any Elective
Deferral Contributions and Qualified Non-Elective 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 determination shall
be made after first determining Excess Deferrals and then
determining Excess Contributions.
1.24. Excess Contribution means, with respect to a Plan
Year, the excess of the aggregate amount of Elective Deferral
Contributions, Qualified Non-Elective 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).
1.25. 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 an employer on behalf of
a Participant for the purchase of an annuity contract under Code
section 403(b) pursuant to a salary reduction election.
1.26. 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 1.05.
1.27. Fiduciary means a person or entity as defined in ERISA
section 3(21).
1.28. Highly Compensated Employee 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 determination
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 Adminis-
trator 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 repre-
sentative 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 1.05.
1.29. 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 a Company 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 a Company 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
a Company or an Affiliate regardless of whether it is made by or
due from a Company or an Affiliate directly, or indirectly
through a trust fund or insurer to which the Company 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 a Company 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 a
Company 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 a Company or an
Affiliate, was discharged from such service and was reemployed by
a Company 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 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 (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. Maternity 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.
1.30. 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.
1.31. Matching Account means that portion of a Participant's
Account to which his share of Matching Contributions is allo-
cated.
1.32. Matching Contribution means the Company contribution
described in Plan section 3.02 which is made to the Plan on
behalf of a Participant on account of Elective Deferral
Contributions made by such Participant.
1.33. Named Fiduciary means the Company.
1.34. Normal Retirement Age means the Participant's attain-
ment of age 65.
1.35. Participant means any Employee who has become and
continues to be a Participant as provided in Plan article II.
1.36. Plan means the Chesapeake Packaging Co. 401(k) Savings
Plan for Hourly Employees, as amended from time to time.
1.37. Plan Administrator means Chesapeake Corporation.
1.38. Plan Year means the 12-month period beginning on
January 1 and ending on December 31 of each calendar year.
1.39. 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 (i) 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 independently of the
Order; (ii) 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;
(iii) the number of payments or period to which the Order
applies; and (iv) 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).
1.40. Qualified Matching Contribution means the Matching
Contribution made to the Plan by the Company pursuant to Plan
section 3.03 and allocated to a Participant's Elective Deferral
Account by reason of Elective Deferral Contributions.
1.41. Qualified Non-Elective Contribution means any contri-
bution made by the Company (other than Matching Contributions or
Qualified Matching Contributions) pursuant to Plan section 3.03
and allocated to a Participant's Elective Deferral Account.
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 par-
ticipate or by reason of the limitations of Code section 415) to
have Matching Contributions (or Elective Deferral Contributions
or Qualified Non-Elective Contributions, if the Plan takes
Elective Deferral Contributions or Qualified Non-Elective
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 Company 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. Unrestricted 401(k) Employee, for purposes of measur-
ing 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.
1.52. Unrestricted 401(m) Employee, for purposes of measur-
ing 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 or Qualified Non-Elective Contributions, if the
Plan takes Elective Deferral Contributions or Qualified Non-
Elective Contributions into account in determining Contribution
Percentages) 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. Valuation Date means each business day of the Plan
Year.
1.54. 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 a
Company) 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 a Company and who
subsequently becomes an Employee of a Company shall, subject to
the Plan's Break in Service rules, receive credit for all Years
of Service he is deemed to have completed for a Company.
ARTICLE II
PARTICIPATION
2.01. Initial Eligibility to Participate
Each Employee becomes a Participant in the Plan on 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 a Company or is entitled to benefits from the Plan.
2.02. Participation of Reemployed Individuals
(a) An Employee who, before satisfying the require-
ments 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 Company contributions and who has at
least five consecutive Breaks in Service, 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(b).
(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 and will be eligible to make Elective Deferral
Contributions under Plan section 3.01 as of the next Entry Date
immediately upon returning to an eligible class of Employees. 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 Company's Elective Deferral Contribution for
a Plan Year is the total of the Plan Year's salary-reduction
elections allowed according to this Plan section for Partici-
pants. The Company 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 Company'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 salary-
reduction election according to this Plan section.
(b) A Participant's Elective Deferral Contribution
may not exceed 10 percent of his Compensation and must be made in
increments of one percent.
3.02. Matching Contributions
(a) The Company's Matching Contributions are
described on Exhibit II to the Plan.
(b) Matching Contributions shall be vested according
to the schedule provided in Plan section 5.02.
3.03. Qualified Non-Elective Contributions and Qualified
Matching Contributions
(a) In lieu of distributing Excess Contributions, as
provided in Plan section 4.07, the Company may make Qualified
Non-Elective and 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 or
the Contribution Percentage test in Plan section 3.05. For the
Plan Year that begins January 1, 1995, the Company shall make a
Qualified Non-Elective Contribution in the amount of $250 for
each Eligible Employee of its Roanoke, Virginia division who is
an Eligible Employee on January 1, 1995.
(b) Qualified Non-Elective and 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 Partici-
pants who are Restricted 401(k) Employees shall not
exceed the Actual Deferral Percentage for Participants
who are Unrestricted 401(k) Employees multiplied by
1.25; or
(2) The Actual Deferral Percentage for Partici-
pants 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 an
Affiliate, the Elective Deferral Contributions, Qualified Non-
Elective Contributions, Qualified Matching Contributions and
Compensation of such Participant shall include the Elective
Deferral Contributions, Qualified Non-Elective 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, Qualified Non-Elective 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,
Qualified Non-Elective 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.
(h) The Actual Deferral Percentage for any Partici-
pant 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 an Affiliate, shall be
determined as if all Elective Deferral Contributions, Qualified
Non-Elective 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 an Affiliate 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).
(i) 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. 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 Company 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 the 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) For purposes of this Plan section, the Contribu-
tion Percentage for any Participant who is a Restricted 401(m)
Employee and who is eligible to have Matching Contributions
allocated to his Account under two or more plans described in
Code section 401(a), or arrangements described in Code sec-
tion 401(k), that are maintained by an Affiliate, shall be
determined as if the Matching Contributions were made under each
plan. If a Highly Compensated Employee participates in two or
more cash or deferred arrangements that have different plan
years, all cash or deferred 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(m).
(h) In the event that the Plan satisfies requirements
of Code section 401(m), 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 Code section 410(b) only if
aggregated with the Plan, then this Plan section shall be applied
by determining the Contribution Percentages of Participants 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 contribu-
tions to be made on a salary 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 salary
reductions as of any Entry Date on or after he is eligible to
become a Participant. An Employee may change such salary
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 salary reduction
elections that a Participant may submit each Plan Year. A salary
reduction election remains in effect until it is changed or
canceled. All salary reduction elections shall be made on forms
prescribed by the Plan Administrator.
(c) In order to assure compliance with Plan sec-
tion 3.04, the Plan Administrator may establish such closing
dates and formulate such other rules and procedures as may be
necessary to administer 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 Company 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.
(c) All Company 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 a Company 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 attri-
butable to Company contributions remaining at the termination of
the Trust due to statutory limits on contributions and benefits,
and as otherwise provided in this Plan section, Company
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 Company
contributions and is responsible only for assets received as
Trustee. Each Company may cause each Plan Year's Company
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 a Company 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 Company contributions, Participant
contributions, and any investment gains and losses attributable
to contributions, are allocated to the proper Participants'
Accounts in the same manner as Company contributions.
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 Company 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 a Company 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 Company Contributions
(a) Matching Contributions shall be allocated to a
Participant's Matching Account each calendar quarter.
(b) Qualified Non-Elective Contributions and
Qualified Matching Contributions shall be allocated as of the
last Valuation Date of the Plan Year among the Elective Deferral
Accounts of Unrestricted 401(k) Employees. The Qualified Non-
Elective Contribution and Qualified Matching Contributions will
be treated as an Unrestricted 401(k) Employee's Elective Deferral
Contribution and shall be allocated among Unrestricted 401(k)
Employees either on a pro rata basis according to their
Compensation for the Plan Year or as a flat-dollar amount.
(c) Elective Deferral Contributions shall be allo-
cated to a Participant's Elective Deferral Account as soon as
practicable following the date such Elective Deferral
Contributions are contributed to the Trust Fund.
(d) Despite the preceding subsections, a Partici-
pant'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 Company shall determine annually the amount of the
Company 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.
4.0 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
announced by the Plan Administrator 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 Company 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 Company. 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), distri-
butions 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 Company contributions for the Plan Year
in 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 the Company
shall have a fully vested, nonforfeitable interest in his
Matching Account.
(b) Otherwise, a Participant who receives a Matching
Contribution for Plan Years that begin on or after January 1,
1995, 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. An individual who was an Eligible Employee on January
1, 1995, shall receive credit for Years of Service with the
Company or an Affiliate. Service with the Company 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 limi-
tations and restrictions:
(a) If an Employee returns to service for a Company
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 a Company
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 a
Company, 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 Company 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 the Valuation Date following
the Participant's completion of five one-year Breaks in Service.
(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
Company contributions.
5.06. Amendment of Vesting Schedule
(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 Company 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.
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 effec-
tive; or
(3) 60 days after the Participant is issued
written notice of the amendment by the Company 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.
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 Company or age 62, if later; or (ii) his
death. A Participant who has terminated employment and whose
Account is no longer immediately distributable shall receive
distribution from his Account as soon as practicable after his
Account is no longer immediately distributable. 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 distribu-
tion 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 Partici-
pant's Account balance.
(b) Installment Payments. Distributions over a fixed
period in annual installments not extending beyond the lesser of
(i) fifteen 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 prior distribution under the Plan, 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 Partici-
pant'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. A Participant who has terminated employment may not
elect to delay receipt of benefits once the benefit is no longer
immediately distributable.
6.05. Special Distribution Provisions
(a) General Rules
(1) This Plan section is intended to describe
the requirements of the Code for the timing and amount
of benefits to be paid under the Plan if a Participant
is otherwise eligible for a benefit. This Plan
section does not entitle a Participant to a benefit
under the Plan.
(2) The requirements of this Plan section shall
apply to any distribution of a Participant's interest
and will take precedence over any inconsistent provi-
sions of the Plan.
(3) All distributions required under this Plan
article shall be determined and made in accordance
with Code section 401(a)(9) and regulations promul-
gated thereunder.
(4) 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 Benefi-
ciary,
(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 and Plan section 7.02, 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 distri-
buted 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 distribu-
tion 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 Regu-
lation 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 meaning of Code sec-
tion 72(m)(7) or under any other definition of disa-
bility consistent with Code section 401(k)(2)(B));
(3) the Participant has retired or otherwise
terminated employment with the Company;
(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 establish-
ment 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 Company 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 Company, 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 Company.
(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 30 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 of 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 last Valuation Date in any calendar
quarter. 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 sec-
tion 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 Elective Deferral
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 reasonably
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 Partici-
pant's representation that the financial needs cannot be
relieved:
(1) through reimbursement or compensation by
insurance or otherwise;
(2) by reasonable liquidation of the Partici-
pant's assets to the extent such liquidation would not
itself cause an immediate and heavy financial need;
(3) by cessation of Elective Deferral Contribu-
tions 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. No
distribution will be made under this Plan section until a
Participant has received all available distributions according to
Plan section 6.07.
(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 Admin-
istrator 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 Partici-
pant 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) 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 payment. 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.
(f) 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.
(g) 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.
(h) 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 7.01.
Payment shall be made to the Alternate Payee's designated
Beneficiary or Beneficiaries as soon as practicable 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.
(i) 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 subsection (e), 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 following the date of death
of the Participant.
6.10. Direct Rollovers
(a) 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 section 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) loans treated as
distributions under Code section 72(p) and not
excepted by Code section 72(p)(2) and loans in default
that are deemed distributions; (vii) dividends paid on
employer securities as described in Code section
404(k); and (viii) 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 Plan, that accepts the
Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distri-
bution 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.
6.11. Loans to Participants
(a) Effective as of the date announced by the Plan
Administrator, a Participant (or former Participant or Bene-
ficiary who is a party in interest as defined in ERISA
section 3(14)) who has become entitled to a benefit under the
Plan may apply to the Plan Administrator in writing (on a form
provided by the Plan Administrator for that purpose) for a loan
from the Trust Fund in accordance with the rules and procedures
set forth in this section.
(1) Loans shall be made available to all
Participants and Beneficiaries on a reasonably
equivalent basis.
(2) Loans shall not be made available to Highly
Compensated Employees in an amount greater than the
amount made available to other Participants and Bene-
ficiaries.
(3) Loans shall bear a reasonable rate of
interest. The interest rate shall be determined by
the Plan Administrator based on a rate of return
commensurate with the prevailing interest rate charged
on similar commercial loans by persons in the business
of lending money.
(4) Loans shall be adequately secured with
assets of the Participant's Account.
(b) Any loan to a Participant or Beneficiary, when
added to the outstanding balance of all loans from the Plan,
including for purposes of this subsection all other qualified
defined benefit and defined contribution plans maintained by the
Company, or by an Affiliate, to such Participant or Beneficiary,
shall not exceed the lesser of:
(1) $50,000, reduced by the excess (if any) of
the highest outstanding balance of loans from the Plan
during the one year period ending on the day before
the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made, or
(2) 50 percent of the then nonforfeitable
portion of the Participant's Account, valued as of the
Valuation Date coincident with or immediately
preceding approval of the loan request.
An assignment or pledge of any portion of the Participant's
interest in the Plan will be treated as a loan under this Plan
section.
(c) No loan shall be made to a Participant or
Beneficiary for an amount less than $1,000. No loan shall be
made to a Participant or Beneficiary who has an outstanding loan
balance under this Plan.
(d) Any loan to a Participant shall be required to be
repaid through payroll deductions. Any loan to a Beneficiary
shall be repaid in such a manner determined by the Plan
Administrator to assure repayment of the loan.
(e) Any loan to a Participant or Beneficiary, by its
terms, shall require that repayment (principal and interest) be
amortized in level payments, made not less frequently than
quarterly, over an period not to exceed five years. Notwith-
standing the preceding sentence, if such loan is to be used to
acquire a dwelling which, within a reasonable time, will be used
(to be determined at the time such loan is made) as the principal
residence of such Participant, the loan may provide for periodic
repayment over a reasonable period of time that may exceed five
years but not greater than 10 years.
(f) If a Participant's loan application is approved
by the Plan Administrator, such Participant shall be required to
sign a promissory note, loan agreement, and any other documents
required to establish the loan and assign the applicable portion
of his interest in the Plan as security for the loan.
(g) A Participant loan shall be in default if any
loan payment is not made within 90 days of such payment's due
date. In the event of default, the Plan Administrator shall
reduce the Participant's vested Account balance by the remaining
principal and interest on his or her loan. However, the Plan
Administrator shall not be required to commence such action
immediately upon default. The Plan Administrator may delay the
enforcement of the security interest until a distributable event
occurs, provided that such delay will not cause the loss of
principal or interest to the Plan.
(h) A Participant's loan shall immediately become due
and payable if such Participant terminates employment for any
reason. If such Participant terminates employment, the Plan
Administrator shall immediately request payment of principal and
interest on the loan. If the Participant refuses payment
following termination, the Plan Administrator shall reduce the
Participant's vested Account balance by the remaining principal
and interest on his or her loan. If a Participant's vested
Account balance is less than the amount due, the Plan
Administrator shall take whatever steps are necessary to collect
the balance due directly from the Participant.
(i) To the extent it is consistent with other provi-
sions of the Plan, all loans made under this Plan section are
considered directed investments of the borrowing Participant's
Account. As such, all repayments of principal and interest made
by the Participant shall be credited only to the Participant's
Account.
(j) The Plan Administrator may adopt and announce
additional loan rules not inconsistent with the provisions of
this Plan section.<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 the death of a
Participant who is no longer an Employee and prior to his Annuity
Starting Date, the vested amount credited to his Account as of
the Valuation Date coincident with or immediately following the
date of his death, plus the vested portion of amounts
subsequently allocated to his Account pursuant to Plan
article IV, if any, shall be distributed to the Participant's
Beneficiary as provided in this Plan article.
7.02. Death Distributions
(a) If a Participant dies after distribution from his
Account has begun, the remaining portion of his Account 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 Account begins, distribution of the Participant's entire
Account 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 Account
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 or (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 Beneficiary, or if the Beneficiary does not
elect a method of distribution, distribution of the Participant's
Account 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 Account is considered to begin on the Partici-
pant's Required Beginning Date, as defined in Plan section 6.05
(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 consent). 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 a Company 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. Savings Plan Committee
The Executive Compensation Committee of the Board
shall have the power to appoint a Savings Plan Committee of at
least three members which shall serve pursuant to Plan article
IX. The Executive Compensation Committee shall have the power to
remove a member of the Savings Plan 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 Savings Plan
Committee serving at any time the Executive Compensation
Committee 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 administra-
tion 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 Administrator 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
Company contributions designed, in a manner consistent with the
goodwill intended to be engendered by the Plan, to put Partici-
pants 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, each 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. Each 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 decision in the discharge of
its duties is final and conclusive unless it is established by
clear and convincing evidence that the Fiduciary's decision
constituted an abuse of 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 prepare and make
available to Participants and Beneficiaries receiving benefits
under the Plan a summary of the Plan and shall file such summary
plan description with the Department of Labor 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, 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
Chesapeake Corporation or an Affiliate 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 10.02, 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 90-day period.
(c) If a claim is wholly or partially denied, the
Plan Administrator must give written notice within the 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, which 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 (e). 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 Admini-
strator or Committee are conclusive and binding on all persons,
and there is no right of appeal except as provided above.
9.08. 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 Company 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 Company, 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 formu-
late 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) Chesapeake Corporation 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 Company, 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 a Company, nor to enforce the payment of any
contributions under the Plan.
10.02. Participant Directed Investments
(a) Opportunity to Direct Investments. The provi-
sions of this Plan section are effective as of the date announced
by the Plan Administrator. The provisions of this Plan section
are intended to satisfy the requirements of ERISA section 404(c)
and the regulations promulgated thereunder. 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. A
Participant who directs the investment of his Account in
accordance with this Plan section shall not be deemed to be a
Fiduciary of the Plan. In addition, no Fiduciary with respect to
the Plan shall be liable for any breach of Title I of ERISA as a
result of a Participant's investment direction.
(b) Directed Investments. Except as provided in sub-
sections (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 in
accordance with the investment election procedures described in
the following subsections. The 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. Except as
provided in the next sentence, a Participant's investment
directions must be in whole percentages and in increments of one
percent of his future contributions. A Participant's direction
must cover the entire amount of his future contributions, except
to the extent that a loan is considered a directed investment
according to the Plan.
(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 by the date announced by the Plan
Administrator 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 addi-
tion 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 one
percent, of his Account to be invested in each Investment Fund.
A Participant may make such transfer elections once per month
effective as of any day in the month. 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 Committee will
provide Participants with sufficient information concerning the
Investment Funds to permit the Participant to make an informed
investment decision. Alternatively, the Committee may provide
Participants with directions as to how such investment
information may be obtained.
(g) Selection of Investment Manager. The Plan Admin-
istrator may in its discretion permit the Committee to designate
one or more Investment Managers from which a Participant may
choose to manage all or part of his Account. The 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 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 Chesapeake Stock. A Participant
may direct all or a portion of his Account to be invested in
Chesapeake Stock provided that:
(1) the Chesapeake Stock is a qualifying
employer security as defined in ERISA section
407(d)(3);
(2) the Chesapeake Stock is publicly traded on a
national exchange or other recognized securities
market;
(3) the Chesapeake 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 share-
holders of Chesapeake Stock is provided to
Participants who invest in such Chesapeake Stock;
(5) voting, tender and similar rights with
respect to Chesapeake Stock are passed through to
Participants;
(6) information relating to the purchase, hold-
ing, and sale of Chesapeake 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 Fidu-
ciary 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 a Company) 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 Company (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 Committee
is designated as the Plan fiduciary and shall continue as such,
until it appoints a successor. The 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 Committee fails to appoint an independent
fiduciary hereunder in circumstances which the Trustee believes
warrants such appointment, the Trustee may request the Committee
to do so and the Committee shall either make such appointment or
the Board of Directors of Chesapeake Corporation 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 docu-
ments 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 Company and the Plan (other than a
purchase or sale of Chesapeake Stock that
satisfies subsection (j);
(B) loan to the Company or an Affiliate;
(C) acquisition or sale of any employer
real property (as defined in ERISA sec-
tion 407(d)(2)); or
(D) acquisition or sale of any Chesapeake
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) Chesapeake Stock means common stock of
Chesapeake Corporation.
(2) Investment Fund means one of the investment
media that the Committee or the Trustee selects and
announces as being a permissible investment vehicle in
which a Participant may direct the investment of his
Account.
10.03. Investment of Income
Except as may be otherwise provided in Plan sec-
tion 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. Chesapeake Stock
(a) Acquisition of Chesapeake Stock. Chesapeake
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
Company, either on the open market, from Chesapeake Corporation's
authorized but unissued stock or by exercising any rights to
purchase shares granted with respect to shares of Chesapeake
Stock held by the Trustee. The Trustee shall hold, for the
purpose of allocation to the Accounts of Participants, shares of
such Chesapeake Stock which the Trustee has acquired due to
withdrawals by Participants. Shares of Chesapeake 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 Chesapeake 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 Chesapeake Stock received by it as a result of a
Chesapeake Stock dividend or Chesapeake 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 Chesapeake
Stock collected by the Trustee and earnings on temporary invest-
ments 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 Chesapeake Stock.
(e) Expenses. When incurred, brokerage commissions,
transfer taxes and other charges, and expenses in connection with
the purchase or sale of Chesapeake Stock shall be added to the
cost of such stock or deducted from the proceeds thereof, as the
case may be.
(f) Voting of Chesapeake Stock. Before each annual
or special meeting of the stockholders of Chesapeake Corporation,
Chesapeake Corporation 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 Chesapeake
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 Chesapeake Stock as
instructed. To the extent consistent with its fiduciary duties
under ERISA section 404, the Trustee shall not vote any shares of
Chesapeake 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
Chesapeake 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 Chesapeake Stock and all shares of
Chesapeake Stock credited to Participants' Accounts as to which
the Trustee is not provided voting instructions.
(g) Tender of Chesapeake Stock. A Participant shall
be entitled to direct the Trustee whether to tender shares of
Chesapeake 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 Chesapeake
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 Chesapeake Stock held in Participant
Accounts for which it does not receive directions as to whether
to tender from Participants. Any shares of Chesapeake 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 Chesapeake Stock and all shares of
Chesapeake Stock credited to Participants' Accounts as to which
it is not provided instructions as to whether to tender.
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 Company 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 Chesapeake Corporation expects to continue
the Plan indefinitely, continuance of the Plan is not assumed as
a contractual obligation. Chesapeake Corporation reserves the
right, on behalf of all Company, to discontinue Company contribu-
tions and to terminate the Plan at any time by action of the
Board in accordance with the procedures described in Plan
section 11.01. A Company reserves the right to discontinue
Company contributions and to terminate the Plan on behalf of its
Employees at any time by action of its board of directors.
(b) Chesapeake Corporation 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 Chesapeake Corporation, or the complete
discontinuance of Company 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. Chesapeake Corporation 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 Partici-
pants or Beneficiaries who are then receiving or entitled to
receive future benefits; or Chesapeake Corporation 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 Company 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 6.03,
the Company may discontinue the Trust and distribute each
individual's interest in a single lump sum.
11.03. No Reversion to Company
The Company has no beneficial interest in the Trust
Fund, and no part of the Trust Fund shall ever revert or be
repaid to the Company, directly or indirectly, except:
(a) upon initial non-qualification pursuant to Plan
section 12.01;
(b) in the event that the deduction of a Company
contribution to the Plan under Code section 404 is disallowed, in
which case the contribution (to the extent disallowed) shall be
returned to the Company, upon the request of the Company, within
one year after the disallowance of the deduction;
(c) in the event that the Company contribution is
made by mistake of fact, in which case the amount of such
mistaken contribution shall be returned to the Company provided
no more than one year has elapsed since the date of payment by
the Company 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 Chesapeake Corporation, 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 a
Company, 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, Chesapeake Corporation, nor
any other Company 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, Chesapeake Corporation, nor
any Company 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 Company and an employee, or to be
consideration or inducement for the employment of any employee by
any Company. Nothing contained in the Plan shall be deemed to
give any employee the right to be retained in the service of any
Company or to interfere with the rights of such Company 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 Company, 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 Company, 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
The Committee may approve the participation in the
Plan by any Affiliate of the Company or any category of employees
of the Company. Any Affiliate 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
Committee's approval of such Affiliate's becoming a party to the
Plan.<PAGE>
SIGNATURE PAGE
As evidence of its adoption of the Chesapeake
Packaging Co. 401(k) Savings Plan for Hourly Employees,
Chesapeake Corporation has caused this document to be executed by
its duly authorized officer as of the ____ day of __________,
1994.
CHESAPEAKE CORPORATION
By ______________________________
<PAGE>
APPENDIX A
BENEFIT LIMITATIONS
AND TOP-HEAVY RULES
FOR THE
CHESAPEAKE PACKAGING CO.
401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
Effective January 1, 1995
<PAGE>
TABLE OF CONTENTS
Section Page
INTRODUCTION . . . . . . . . . . . . . . . Introduction-1
ARTICLE I DEFINITIONS
1.01. Aggregation Group. . . . . . . . . . . . A-I-1
1.02. Annual Addition. . . . . . . . . . . . . A-I-1
1.03. Annual Benefit . . . . . . . . . . . . . A-I-1
1.04. Determination Date . . . . . . . . . . . A-I-2
1.05. Earnings . . . . . . . . . . . . . . . . A-I-2
1.06. Excess Annual Additions. . . . . . . . . A-I-3
1.07. Interest . . . . . . . . . . . . . . . . A-I-3
1.08. Key Employee . . . . . . . . . . . . . . A-I-3
1.09. Limitation Year. . . . . . . . . . . . . A-I-4
1.10. Non-Key Employee . . . . . . . . . . . . A-I-4
1.11. Permissive Aggregation Group . . . . . . A-I-4
1.12. Predecessor Plan . . . . . . . . . . . . A-I-5
1.13. Projected Annual Benefit . . . . . . . . A-I-5
1.14. Qualified Plan or Trust. . . . . . . . . A-I-5
1.15. Related Entity . . . . . . . . . . . . . A-I-5
1.16. Required Aggregation Group . . . . . . . A-I-5
1.17. Suspense Account . . . . . . . . . . . . A-I-6
1.18. Test Accrued Benefit . . . . . . . . . . A-I-6
1.19. Top-Heavy Group. . . . . . . . . . . . . A-I-6
1.20. Top-Heavy Plan . . . . . . . . . . . . . A-I-6
1.21. Top-Heavy Valuation Date . . . . . . . . A-I-6
ARTICLE II LIMITATIONS
2.01. Contribution Limitations . . . . . . . . A-II-1
2.02. Multiple Plan Participation. . . . . . . A-II-1
2.03. Suspense Account Allocations . . . . . . A-II-2
ARTICLE III TOP-HEAVY RULES
3.01. Top-Heavy Years. . . . . . . . . . . . . A-III-1
3.02. Special Top-Heavy Definitions. . . . . . A-III-1
3.03. Top-Heavy Determination. . . . . . . . . A-III-1
3.04. Interests Measured . . . . . . . . . . . A-III-2
3.05. Treatment of Rollovers and Transfers . . A-III-5
3.06. Minimum Benefits for Top-Heavy Plans . . A-III-6
3.07. Aggregate Contribution and Benefit
Limitations. . . . . . . . . . . . . . A-III-10
APPENDIX A
INTRODUCTION
This Appendix has been adopted as part of the
Chesapeake Packaging Co. 401(k) Savings Plan for Hourly Employees
(the Plan) as a method of assuring compliance with sections 415
and 416 of the Internal Revenue Code of 1986, as amended (the
Code). This Appendix is part of the Plan.
The provisions of Appendix A Article II and certain
related definitions in Article I are intended to assure that the
Plan continues to qualify by not exceeding the limitations of
Code section 415 without losing any special benefit or
contribution allowance (including transitional allowances)
permitted under law. This Appendix supersedes any conflicting
provision in the Plan that relates to contribution or benefit
limitations under Code section 415.
The provisions of Appendix A Article III and certain
related definitions in Article I are intended to assure
compliance with Code section 416. Article III contains
provisions to determine whether this Plan (considered together
with other Qualified Plans if that is required by Code
section 416(g)(2)) is a top-heavy plan as defined in Code
section 416(g). Article III also contains provisions designed to
assure compliance by this Plan with Code sections 416(b), 416(c),
and 401(a)(17) if that is necessary to retain the Plan's status
as a Qualified Plan.
The definitions in Appendix A Article I may duplicate
or parallel the definitions in the Plan. Unless otherwise
indicated in the Plan, this Appendix's definitions apply only to
this Appendix's operative provisions and do not apply to the
Plan's provisions not superseded by this Appendix.
This Appendix must be construed in a manner consistent
with its purpose.<PAGE>
APPENDIX A
ARTICLE I
DEFINITIONS
1.01. Aggregation Group means either a Required Aggregation
Group or a Permissive Aggregation Group. An Aggregation Group
consists of two or more Company- or Affiliate-maintained
Qualified Plans.
1.02. Annual Addition means, for any Limitation Year, the
sum of allocations to a Participant's Account attributable to (i)
Company contributions, (ii) the Participant's nondeductible
contributions, and (iii) any forfeitures. Any Excess Deferrals
(to the extent not distributed under Plan section 4.06), Excess
Contributions, or Excess Aggregate Contributions shall be treated
as Annual Additions for the Limitation Year. Amounts allocated
to an individual medical account, as defined in Code
section 401(h)(6) and referred to in Code section 415(l)(1), that
is part of a Defined Benefit Plan maintained by a Company or a
Related Entity are treated as Annual Additions to a Defined
Contribution Plan. Amounts that are attributable to post-
retirement medical benefits allocated to the separate Account of
a Key Employee (as defined in Code section 419A(d)(3)) under a
welfare benefit fund (as defined in Code section 419(e))
maintained by a Company or a Related Entity are treated as Annual
Additions to a Defined Contribution Plan.
1.03. Annual Benefit means a benefit payable in the form of
a straight-life annuity (with no ancillary benefits) under a plan
to which employees do not contribute and under which no Rollover
Contributions are made. If a benefit under a plan is payable in
any form other than a straight life annuity or if the employees
contribute to the plan or make Rollover Contributions, the
determination as to whether the limitations described in this
section have been satisfied must be made by adjusting that
benefit so that it is equivalent in value, according to
applicable Treasury regulations, to the Annual Benefit. For
purposes of this definition, any ancillary benefit that is not
directly related to retirement income benefits must not be taken
into account. Any benefits that are ancillary within the
definitions in Treasury Regulation section 1.411(a)-7(a)(1) are
ancillary benefits for purposes of this definition. Annual
Benefit does not include that portion of any joint and survivor
annuity (as defined in Code section 417(b)), in excess of the sum
of the value of a straight-life annuity beginning on the same
date and the value of any includable post-retirement death
benefits that would be payable even if the annuity were not in
the form of a joint and survivor annuity. For purposes of
adjusting any benefit under this section, the interest rate
assumption must not be less than the greater of five percent or
the rate specified in the plan and no adjustments under Code
section 415(d)(1) may be taken into account before the year for
which such adjustment first takes effect.
1.04. Determination Date means the date for a Qualified Plan
that is the last day of that Qualified Plan's preceding Plan Year
or, for a Qualified Plan's first Plan Year, the last day of that
first Plan Year.
1.05. Earnings, for any relevant period, means an individ-
ual's wages, salaries for personal services, and other amounts
received from the Company and their Related Entities for personal
services actually rendered. Earnings comprise, but are not
limited to, commissions paid salesmen; compensation for services
on the basis of percentage of profits; commissions on insurance
premiums; tips; bonuses; fringe benefits; reimbursements and
expense allowances; and other amounts permissibly included
according to Treasury regulations as the base for computing
statutory limits on Annual Benefits and Annual Additions.
Earnings do not mean deferred compensation, income attributable
to the receipt or exercise of certain stock options, and other
similar items that receive special tax benefits and are excluded
according to Treasury regulations from the base for computing
those statutory limits. When computed for any Limitation Year,
Earnings are those paid (or deemed paid if the Plan operates to
provide benefits according to accrued Earnings) or made available
to the Participant within the Limitation Year. Earnings are
those paid or made available to the Participant within the
Limitation Year.
For purposes of Plan sections 1.27, 1.29 and Article III of this
Appendix A, annual Earnings 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 on or after January 1, 1994, the limit is $150,000, as
adjusted.
In determining the Earnings 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 the
employee and any lineal descendants of the 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 the affected individuals in proportion to
each such individual's Earnings as determined prior to the
application of this limitation.
1.06. Excess Annual Additions are amounts that cannot be
Annual Additions in the Plan for a Limitation Year because of a
forfeiture allocation or a reasonable error in estimating a
Participant's Earnings or in estimating the amount of Elective
Deferral Contributions that may be allocated to his Account or
any other reason allowed by Treasury regulations. Excess Annual
Additions must be returned to the contributor, if that is allowed
by law. Otherwise, Excess Annual Additions are governed by
Appendix A section 2.02(c).
1.07. Interest is defined in Appendix A section 3.04.
1.08. Key Employee means with respect to any Plan Year, any
employee, former employee or other individual described in Code
section 416(i)(1) or a person related according to Code
section 416(i)(5) to such an individual who at any time during
the Plan Year containing the Top-Heavy Determination Date for
that Plan Year or during any of the four preceding Plan Years is
(a) an officer of the Company or an Affiliate having
total annual Earnings from the Company and any Affiliate for a
Plan Year greater than 50 percent of the dollar limitation in
effect under Code section 415(b)(1)(A) for the calendar year in
which the Plan Year ends;
(b) one of the ten Employees having total annual
Earnings from the Company and any Affiliate for a Plan Year
greater than the dollar limitation in effect under Code
section 415(c)(1)(A) for the calendar year in which the Plan Year
ends and owning the largest interest in the Company or an
Affiliate;
(c) an owner of more than five percent of the out-
standing stock or stock possessing more than five percent of the
total voting power of a corporate Company or Affiliate, or if an
owner of more than five percent of the capital or profits
interest in a Company or an Affiliates if the Company is not a
corporation; and
(d) a one-percent owner of the outstanding stock or
voting stock or the capital or profits interest in the Company or
an Affiliate who has total annual Earnings from the Company and
any Affiliate for a Plan Year of more than $150,000.
For purposes of Appendix A section 3.03, an individual's status
as a Key Employee is based on the Plan Year containing the
Determination Date and is based on his Earnings. For purposes of
Appendix A sections 3.06 and 3.07, an individual's status as a
Key Employee is based on the Plan Year to which those parts are
being applied.
1.09. Limitation Year means the Plan Year.
1.10. Non-Key Employee means an employee, former employee or
other individual described in Code section 416(i)(5) who is not a
Key Employee or a person related according to Code
section 416(i)(5) to such an individual. For purposes of
Appendix A section 3.03, an individual's status as a Non-Key
Employee is based on the Plan Year containing the Top-Heavy
Determination Date. For purposes of Appendix A sections 3.06,
3.07 and 3.08, an individual's status as a Non-Key Employee is
based on the Plan Year to which those parts are being applied.
1.11. Permissive Aggregation Group means an Aggregation
Group created at the election of the Company for purposes of
determining top-heaviness according to Appendix A section 3.03.
It is created by adding one or more Company-maintained or
Affiliate-maintained Qualified Plans that are not part of a
Required Aggregation Group to either (i) a Required Aggregation
Group or (ii) a single Company-maintained or Affiliate-maintained
Qualified Plan in which a Key Employee is a participant during
that plan's plan year containing the Determination Date or during
any of the four preceding plan years.
1.12. Predecessor Plan means a Qualified Plan that covered
substantially the same Employees as the Plan and provided
substantially the same benefits. A Qualified Plan that is or was
merged or consolidated with the Plan in a manner permitted
according to Code section 401(a)(12) and Code section 414(l) is
automatically a Predecessor Plan.
1.13. Projected Annual Benefit, as to a Participant, equals
the total of each Annual Benefit to which that Participant would
be entitled under the terms of this Plan and all other Defined
Benefit Plans maintained by the Company or a Related Entity in
which the Participant is a participant (assuming that the
Participant continued employment until each such plan's normal
retirement age or his current age, if later; that his Earnings
continued at the same rate as in effect in the Limitation Year
under consideration until those normal retirement ages; and that
all other relevant factors used to determine benefits under each
plan remained constant as of the current Limitation Year for all
future Limitation Years).
1.14. Qualified Plan or Trust refers to a plan or a trust
maintained as part of a plan in compliance with Internal Revenue
Code part I, subchapter D, chapter 1, subtitle A.
1.15. Related Entity means an Affiliate or a corporation
that would be an Affiliate if the phrase "at least 80 percent" in
Code section 1563(a) read "more than 50 percent" or an
unincorporated trade or business that would be an Affiliate if
Code section 414(c) were construed using the standard of "more
than 50 percent" instead of "at least 80 percent."
1.16. Required Aggregation Group means an Aggregation Group
consisting of all Company-maintained or Affiliate-maintained
Qualified Plans that have a Key Employee as a participant during
the plan year containing the Determination Date or during any of
the four preceding plan years. In addition, the Required
Aggregation Group contains each other Company-maintained or
Affiliate-maintained Qualified Plan that enables any Qualified
Plan described in the preceding sentence to meet the requirements
of Code sections 401(a)(4) or 410. Any Company-maintained or
Affiliate-maintained qualified plan that terminated within the
five-year period ending on the Top-Heavy Determination Date must
be taken into account.
1.17. Suspense Account means an Account required by Appen-
dix A section 2.02.
1.18. Test Accrued Benefit means a cumulative accrued bene-
fit (excluding amounts attributable to deductible employee
contributions) under a Defined Benefit Plan determined for a
current participant for that plan's first plan year according to
subsection (a) or subsection (b) at the Company's election, and
otherwise determined for a current participant according to
subsection (c), and determined according to subsection (d) for an
individual who is not a current participant.
(a) The accrued benefit is determined as if the indi-
vidual voluntarily terminated service as of the Determination
Date.
(b) The accrued benefit is determined as if the indi-
vidual voluntarily terminated service as of the Top-Heavy
Valuation Date, but taking into account the estimated accrued
benefit as of the Determination Date.
(c) The accrued benefit is determined as if the indi-
vidual voluntarily terminated service as of the Top-Heavy
Valuation Date.
(d) The accrued benefit is the participant's remain-
ing undistributed benefit as of the Determination Date.
The accrued benefit of any Participant (other than a Key
Employee) shall be determined under the method that is used for
accrual purposes under all Qualified Plans of the Employee or an
Affiliate or, if there is no such method, as if the benefit
accrued not more rapidly than the slowest accrual rate permitted
under Code section 411(b)(1).
1.19. Top-Heavy Group means an Aggregation Group that is
determined to be top-heavy under Code section 416(g) and Appendix
A section 3.03.
1.20. Top-Heavy Plan means a Qualified Plan that is deter-
mined to be a top-heavy plan as defined in Code section 416(g)
and Appendix A section 3.03.
1.21. Top-Heavy Valuation Date, for a Qualified Plan's plan
year, means the Qualified Plan's most recent valuation date
occurring within a 12-month period ending at the end of the
Determination Date for that plan year. A Defined Benefit Plan's
Top-Heavy Valuation Date must be the same valuation date used for
computing that plan's costs for determining minimum funding
according to Code section 412 for the plan year that contains the
Determination Date, regardless of whether a valuation is
performed that year.
<PAGE>
APPENDIX A
ARTICLE II
LIMITATIONS
2.01. Contribution Limitations
(a) A Participant's Annual Additions for a Limitation
Year may not exceed the lesser of (1) or (2) following:
(1) the greater of $30,000 or one-fourth of the
dollar limitation on Annual Benefits according to Code
section 415(b)(1)(A) for that Limitation Year; or
(2) 25 percent of the Participant's Earnings for
the Limitation Year.
2.02. Multiple Plan Participation
(a) If an individual is participating or has
participated in both the Plan and a Company-maintained or a
Related Entity-maintained Defined Benefit Plan, the sum of the
Participant's Defined Benefit Plan Fraction and his Defined
Contribution Plan Fraction for any Limitation Year may not exceed
1.0.
(1) For purposes of this subsection, a Partici-
pant's Defined Benefit Plan Fraction for any year is a
fraction the numerator of which is his Projected
Annual Benefit under a Related Entity-maintained
Defined Benefit Plan (determined as of the close of
the year) and the denominator of which is the lesser
of
(A) the product of 1.25 multiplied by the
dollar limitation in effect under Code sec-
tion 415(b)(1)(A) for the Participant for that
year or
(B) the product of 1.4 multiplied by the
amount that may be taken into account under Code
section 415(b)(1)(B) for that Participant for
that year.
(2) For purposes of this subsection, a Partici-
pant's Defined Contribution Plan Fraction for any
Limitation Year is a fraction the numerator of which
is the sum of his Annual Additions as of the close of
the year for that and all other Limitation Years and
the denominator of which is the sum of the lesser of
the following amounts determined for that year and for
each prior year of service with a Company or Related
Entity:
(A) the product of 1.25 multiplied by the
dollar limitation in effect under Code sec-
tion 415(c)(1)(A) (determined without regard to
(c)(6)) for the Participant for that year or
(B) the product of 1.4 multiplied by 25
percent of the Participant's Earnings for that
year.
(b) For purposes of applying the limitations of this
section, all Defined Benefit Plans (whether or not terminated) of
the Company and its Related Entities are treated as one Defined
Benefit Plan, and all Defined Contribution Plans (whether or not
terminated) of the Company and its Related Entities are treated
as one Defined Contribution Plan. An individual medical account,
as defined in Code section 401(h)(6) and referred to in Code sec-
tion 415(l)(1), will be treated as a Defined Contribution Plan.
With respect to key employees, as defined in Code
section 419A(d)(3), a welfare fund, as defined in Code
section 419(e), maintained by a Company or a Related Entity will
be treated as a Defined Contribution Plan. If the Company has
more than one Defined Benefit Plan, the limitation under
subsection (a) must be applied separately to each Plan, but in
applying those limitations to the total of those Defined Benefit
Plans for the purposes of this section, the high three years of
Earnings taken into account must be the same years.
2.03. Suspense Account Allocations
(a) No allocation or other addition to a Partici-
pant's Account is permitted under a plan that would result in
total Annual Additions under Defined Contribution Plans
maintained by the Company or its Related Entities exceeding the
limitation on Annual Additions set forth in Appendix A
section 2.01 for the appropriate Limitation Year. To the extent
that an allocation or addition pursuant to a plan intended for
one Participant's Account cannot be allocated or added to that
Account, it is treated as a mistake-of-fact contribution if that
is allowed by law, and to the extent that the allocation or
addition cannot be so treated without adverse consequences to the
Plan, it is allocated or distributed according to subsection (b).
(b) Each Participant's Annual Additions for Company-
maintained or Related Entity-maintained Qualified Plans are
absorbed on a dollar-for-dollar basis by Company-maintained and
Related Entity-maintained Qualified Plans according to the
hierarchy determined by the Company.
(c) Excess Annual Additions must be immediately
placed in a Suspense Account, and they offset (reduce) Company,
Related Entity, and Participant contributions in later Limitation
Years as they are allocated (and as they are reallocated) to all
Participants. To the extent that a Participant's Excess Annual
Additions are attributable to his Elective Deferral
Contributions, those Elective Deferral Contributions may be
returned to the Participant in the Limitation Year in which they
are determined to be Excess Annual Additions and will reduce that
Participant's Excess Annual Addition. If Elective Deferral
Contributions are returned to a Participant pursuant to this Plan
section, such Elective Deferrals will be disregarded for purposes
of the limitations on such contributions under Code
sections 402(g) and 401(k)(3). For any Limitation Year in which
a Suspense Account exists according to this section, the Suspense
Account is credited with investment gains and losses as if it
were a Participant's Account. If a Suspense Account exists
according to the provisions of this section when a plan
terminates, the Suspense Account must be treated as not part of
the plan assets and is returned to the contributor or
contributors, pro rata according to their contributions.
(d) Unless the Plan Administrator has passed a reso-
lution authorizing the adjustment of all benefits in pay status
under the Plan with respect to any Plan Year and all prior Plan
Years, as a result of changes in the limitations under Code
section 415(b) or 415(c), all determinations pursuant to this
Plan section and Appendix A section 2.01, shall be made as of the
applicable Annuity Starting Date. If the Plan Administrator acts
pursuant to this subsection to have subsequent changes in the
limitations under Code section 415(b) or 415(c) taken into
account with respect to benefits in pay status, such adjustments
shall apply to all affected benefits in pay status.
APPENDIX A
ARTICLE III
TOP-HEAVY RULES
3.01. Top-Heavy Years
The provisions of Appendix A sections 3.06 and 3.07
are effective only for Plan Years in which this Plan is a Top-
Heavy Plan according to the determination described in Appendix A
section 3.03.
3.02. Special Top-Heavy Definitions
The terms used in this article that are defined in
Appendix A article I apply only for purposes of this article.
Any defined term used in this article not found in Appendix A
article I is defined in Plan article I.
3.03. Top-Heavy Determination
(a) The determination of whether this Plan is a Top-
Heavy Plan for a Plan Year is made according to Interests as of
that Plan Year's Determination Date, based on the related Top-
Heavy Valuation Date, according to the procedures required in
this Appendix section.
(b) If this Plan is not part of an Aggregation Group,
it is a Top-Heavy Plan if, as of the Determination Date, the
Interests of all Key Employees in the Plan exceed 60 percent of
the combined Interests of all participants in the Plan.
(c) If this Plan is part of an Aggregation Group, the
determination of whether this and each plan in the Aggregation
Group is a Top-Heavy Plan is determined according to the
procedures required in this subsection, applying each
subparagraph in numerical sequence.
(1) As of each plan's Determination Date, sepa-
rately determine the Interests of all Key Employees in
each plan in the Aggregation Group and the Interests
of all participants in each plan in the Aggregation
Group.
(2) The Interests of all Key Employees in each
plan that is part of the Aggregation Group are added
to the Interests of all Key Employees in each other
plan in the Aggregation Group. The Interests of all
participants in the plans are totaled in the same
manner. The Interests are determined as of the plans'
Determination Dates that fall within the same calendar
year.
(3) The Aggregation Group is a Top-Heavy Group
and this Plan and each other plan that is in this
Plan's Required Aggregation Group are Top-Heavy Plans
if, after application of paragraph (2), the Interests
of all Key Employees in the Aggregation Group exceed
60 percent of the combined Interests of all partici-
pants under all plans in the Aggregation Group.
(d) The Company may create a Permissive Aggregation
Group, but a Qualified Plan may not be part of a Permissive
Aggregation Group unless all Qualified Plans within the Per-
missive Aggregation Group continue to meet the requirements of
Code sections 401(a)(4) and 410 with each added Qualified Plan
taken into account.
(e) If, at any time during the five-year period
ending on the applicable Determination Date, an individual has
not performed services for a Company or Affiliate maintaining
this Plan or a plan that is a part of this Plan's Aggregation
Group, the Interest of such individual is not taken into account
for purposes of this section.
3.04. Interests Measured
(a) An individual's Interest in a Defined Contribu-
tion Plan is equal to his Account balance for that plan
(according to subsection (b) or (c)) for the Determination Date
and (to the extent not already included in determining his
Account balance) all distributions (excluding amounts
attributable to deductible employee contributions) with respect
to that individual from the Account during the five-year period
ending on the Determination Date.
(b) For purposes of subsection (a), an individual's
Account balance in a Qualified Plan not subject to Code
section 412 (that is, a non-pension plan) is his actual Account
balance (excluding amounts attributable to deductible employee
contributions) on the Top-Heavy Valuation Date and all
contributions actually made after the Top-Heavy Valuation Date
but on or before the Determination Date. However, for such a
Qualified Plan's first Plan Year, the amount determined in the
preceding sentence must be added to the amount of any
contributions made after the Determination Date that are
allocated as of a date in that first Plan Year.
(c) For purposes of subsection (a), an individual's
Account balance in a Defined Contribution Plan that is subject to
Code section 412 (that is, a pension plan) is his actual Account
balance (excluding amounts attributable to deductible employee
contributions) on the Top-Heavy Valuation Date, all contributions
due as of the Determination Date (that is, contributions that
would be allocated as of a date not later than the Determination
Date, even though those amounts are not yet required to be
contributed), and - for the Plan Year that contains the
Determination Date - all amounts actually contributed (or due to
be contributed) after the Top-Heavy Valuation Date but before the
expiration of the extended payment period in Code
section 412(c)(10).
(d) An individual's Interest in a Defined Benefit
Plan is equal to the present value (determined according to
subsection (e)) of his Test Accrued Benefit for that Plan as of
the Determination Date and (to the extent not already included in
determining his Test Accrued Benefit) all distributions from that
plan with respect to that individual during the five-year period
ending on the Determination Date.
(e) The computation of the present value of an indi-
vidual's Test Accrued Benefit is governed by this subsection.
(1) There are no specific prescribed actuarial
assumptions that must be used for determining the
present value of a Test Accrued Benefit. The assump-
tions used must be reasonable and need not relate to
the Qualified Plan's actual investment and other
experience. The assumptions need not be the same as
those used for minimum funding purposes or for
purposes of determining the actuarial equivalence of
optional benefits under the plan. For purposes of
this Plan, if a Qualified Plan does not specify the
actuarial assumptions it uses for determining the
present value of a Test Accrued Benefit, the
assumptions used must be those used in the Qualified
Plan for purposes of determining the actuarial
equivalence of optional benefits under the plan (or,
if no optional benefits are available, those used for
minimum funding purposes), except that the interest
assumption must be (as described in Labor Regulation
section 2619.26(c)(2)(iv)) the PBGC interest rate for
immediate annuities in effect on the Top-Heavy
Valuation Date as set forth in Appendix B (as amended)
to Part 2619 of 29 C.F.R. If a Qualified Plan
specifies the actuarial assumptions it uses for
determining the present value of its Test Accrued
Benefit, those assumptions govern for purposes of this
Plan as to that Qualified Plan's Test Accrued
Benefits.
(2) The present value must be computed using an
interest and a post-retirement mortality assumption
that are consistent with paragraph (1). Pre-
retirement mortality and future increases in costs of
living (but not in the maximum dollar amount permitted
by Code section 415(d)) may also be assumed. However,
assumptions as to future withdrawal or future salary
increases may not be used.
(3) In the case of a Defined Benefit Plan that
provides a joint and survivor annuity within the
meaning of Code sections 401(a)(11) and 417 as a
normal form of benefit, for purposes of determining
the present value of the Test Accrued Benefit, the
Participant's spouse may be assumed to be the same age
as the participant.
(4) Unless a Defined Benefit Plan provides for a
nonproportional subsidy according to subsection (f),
the present value must reflect a benefit payable
beginning at the Qualified Plan's normal retirement
age (or attained age, if later). Benefits not
relating to retirement benefits, such as pre-
retirement death and disability benefits and post-
retirement medical benefits, must not be taken into
account. Subsidized early retirement benefits and
subsidized benefit options must not be taken into
account unless they are nonproportional subsidies
according to subsection (f).
(5) If a Defined Benefit Plan provides for a
nonproportional subsidy, the benefit should be assumed
to begin at the age at which the benefit is most
valuable.
(6) If two or more Defined Benefit Plans are
being tested under Appendix A section 3.03, the
actuarial assumptions used for all Qualified Plans
within an Aggregation Group must be the same. If
paragraph (1) of this subsection would otherwise cause
the preceding sentence to be violated, the Company
must select one Qualified Plan's assumptions and use
them as adjusted according to the other paragraphs in
this subsection.
(f) For purposes of subsection (e), a subsidy is
nonproportional unless the subsidy applies to a group of
employees that would independently satisfy the requirements of
Code section 410(b).
3.05. Treatment of Rollovers and Transfers
(a) The provisions of this section govern the treat-
ment of rollovers or plan-to-plan transfers for purposes of
Appendix A sections 3.02 through 3.04.
(b) For purposes of this section, each Company and
its Affiliates are treated as the same employer.
(c) For a rollover or plan-to-plan transfer that is
both initiated by the employee and made from a Qualified Plan
maintained by one employer to a Qualified Plan maintained by
another employer,
(1) the Qualified Plan providing the distribu-
tion always counts the distribution as a distribution
under Appendix A sections 3.04(a) and (d), and
(2) the Qualified Plan accepting the rollover or
transfer does not consider it part of an Interest if
the rollover or transfer was accepted after
December 31, 1983, but it must be considered part of
an Interest if the rollover or transfer was accepted
before December 31, 1983.
(d) For a rollover or plan-to-plan transfer that
either is not initiated by the employee or is not made to a
Qualified Plan maintained by the same employer, the Qualified
Plan providing the rollover or transfer does not count the
rollover or transfer as a distribution under Appendix A
sections 3.04(a) and (d), and the Qualified Plan accepting the
rollover or transfer must count it as part of an Interest,
regardless of when the acceptance occurs.
3.06. Minimum Benefits for Top-Heavy Plans
(a) For any Plan Year in which this Plan is a Top-
Heavy Plan, the provisions of this section supersede conflicting
Plan provisions regarding contributions, allocations, and accrual
of benefits under the Plan.
(b) For purposes of this section, all Defined Contri-
bution Plans that are part of an Aggregation Group with this Plan
are treated as one Defined Contribution Plan, and all Defined
Benefit Plans that are part of an Aggregation Group with this
Plan are treated as one Defined Benefit Plan. According to the
other provisions of this article, the Company may elect to cause
the Company to satisfy the minimum benefit requirements of this
section in this Plan, within any one or more of the other
Qualified Plans in this Plan's Aggregation Group, or by
aggregating amounts from this Plan and one or more of those other
Qualified Plans.
(c) This subsection applies only when this Plan is
not part of an Aggregation Group. Each Non-Key Employee with
regard to this Plan who is eligible according to Plan article IV
for an allocation from contributions that a Company might make
must receive the minimum contribution allocation required by Code
section 416(c)(2), as described in subsection (d), if he has not
separated from service at the end of the Plan Year. In addition,
each Non-Key Employee with regard to this Plan who has not
separated from service at the end of the Plan Year and who has
otherwise failed to satisfy this Plan's requirements according to
Plan article IV to be eligible to receive an allocation (in full
or in part) from contributions that a Company might make (whether
the ineligibility relates to insufficient service during the Plan
Year, absence of required contributions, or insufficient
Earnings) must also receive the Code section 416(c)(2) minimum
contribution allocation if he must be considered for this Plan to
satisfy the coverage requirements of Code section 410(b) in
accordance with Code section 401(a)(5).
(d) The minimum allocation required by Code sec-
tion 416(c)(2) from this Plan for a Plan Year is equal to a
percentage of the individual's Earnings for the Plan Year. That
percentage is not more than three. That percentage otherwise is
equal to the percentage equivalent to the highest ratio for the
Plan Year for a Key Employee of this Plan of the sum of the Key
Employee's allocations from contributions (other than deductible
employee contributions) made (or required to be made without
regard to waivers granted pursuant to Code section 412(d)) and
Forfeitures for the Plan Year divided by that Key Employee's
Earnings for the Plan Year.
(e) This subsection applies only when this Plan is
part of an Aggregation Group that includes only Defined
Contribution Plans. Each Non-Key Employee with regard to a
Qualified Plan that is part of this Plan's Aggregation Group who
is eligible under the Qualified Plan's provisions (other than the
provisions that require Code section 416(c)(2) benefits) for an
allocation from contributions that his employer might make must
receive the minimum contribution allocation required by Code
section 416(c)(2), as described in subsection (f) if he has not
separated from service at the end of the Qualified Plan's Plan
Year. In addition, each Non-Key Employee with regard to a
Qualified Plan that is part of this Plan's Aggregation Group who
has not separated from service as of the end of his Qualified
Plan's Plan Year and who has otherwise failed to satisfy his
Qualified Plan's requirements (other than the provisions that
require Code section 416(c)(2) benefits) for an allocation (in
full or in part) from contributions that his employer might make
(whether the ineligibility relates to insufficient service during
the Plan Year, absence of required contributions, or insufficient
compensation) must also receive the Code section 416(c)(2)
minimum contribution allocation if he must be considered for his
Qualified Plan to satisfy the coverage requirements of Code
section 410(b) in accordance with Code section 401(a)(5).
(f) For purposes of subsection (e), the minimum allo-
cation required by Code section 416(c)(2) for a Plan Year is
equal to a percentage of the individual's Earnings for the Plan
Year. That percentage is not more than three. That percentage
otherwise is equal to the percentage equivalent to the highest
ratio for the Plan Year for a Key Employee of any Qualified Plan
within this Plan's Aggregation Group of the sum of the Key
Employee's allocations from contributions (other than deductible
employee contributions) made (or required to be made without
regard to waivers granted pursuant to Code section 412(d)) and
forfeitures for the Plan Year divided by that Key Employee's
Earnings. An individual's minimum benefit described in this
subsection that is required from this Plan for a Plan Year is
equal to the full benefit described in this subsection reduced by
the total of all allocations received for the Plan Year from
Company contributions or from forfeitures from the other Defined
Contribution Plans in this Plan's Aggregation Group.
(g) This subsection applies only when this Plan is
part of an Aggregation Group that includes a Defined Benefit
Plan.
(1) Each Non-Key Employee with regard to a
Defined Contribution Plan that is part of this Plan's
Aggregation Group who is eligible under the Defined
Contribution Plan's provisions (other than the provi-
sions that require any Code section 416(c) benefits)
for an allocation from contributions that his employer
might make qualifies under this paragraph if he has
not separated from service at the end of the Defined
Contribution Plan's Plan Year. In addition, each Non-
Key Employee with regard to a Defined Contribution
Plan that is part of this Plan's Aggregation Group who
has not separated from service at the end of the
Defined Contribution Plan's Plan Year and who has
otherwise failed to satisfy the Defined Contribution
Plan's requirements (other than the provisions that
require any Code section 416(c) benefits) for an
allocation (in full or in part) from contributions
that his employer might make (whether the
ineligibility relates to insufficient service during
the Plan Year, absence of required contributions, or
insufficient compensation) also qualifies under this
paragraph if he must be considered for the Defined
Contribution Plan to satisfy the coverage requirements
of Code section 410(b) in accordance with Code
section 401(a)(5).
(2) Each Non-Key Employee with regard to a
Defined Benefit Plan that is part of this Plan's
Aggregation Group who has at least 1,000 Hours of
Service credited during the Defined Benefit Plan's
Plan Year (or the plan's specified accrual computation
period if that is different) or who is credited with
equivalent service under Labor Regulation sec-
tion 2530.2006-3 qualifies under this paragraph. If a
Defined Benefit Plan that is part of this Plan's
Aggregation Group does not base accruals on accrual
computation periods, its Non-Key Employees qualify
under this paragraph for all periods of service
required to be credited for benefit accrual pursuant
to Treasury Regulation section 1.410(a)-7. A Non-Key
Employee with regard to a Defined Benefit Plan that is
part of this Plan's Aggregation Group does not fail to
qualify under this paragraph merely because he was not
employed on a specified date; he does not fail to
qualify because he is excluded from participation (or
because he accrued no benefit) merely because his
Earnings are less than a stated amount; and he does
not fail to qualify because he is excluded from the
Defined Benefit Plan because of a failure to make
mandatory employee contributions.
(3) An individual who qualifies only under
paragraph (1) must receive the minimum contribution
allocation required by Code section 416(c)(2), as
described in subsection (h).
(4) An individual who qualifies only under
paragraph (2) must receive the minimum benefit
required by Code section 416(c)(1) from the Defined
Benefit Plan, from one or more other Defined Benefit
Plans within this Aggregation Group, or from among
this Aggregation Group's Defined Benefit Plans by
applying the authorization described in subsec-
tion (b).
(5) An individual who qualifies under both
paragraphs (1) and (2) must receive the minimum bene-
fit required by Code section 416(c), as described in
subsection (i).
(h) For purposes of subsection (g), the minimum allo-
cation required by Code section 416(c)(2) for a Plan Year is
equal to a percentage of the individual's Earnings for the Plan
Year.
(1) The percentage is three, unless para-
graph (3) or (4) applies to the Defined Contribution
Plan and yields a lower percentage.
(2) Paragraph (3) does not apply to a Defined
Contribution Plan included in this Plan's Aggregation
Group if that plan enables a Defined Benefit Plan
included in this Plan's Aggregation Group to meet the
requirements of Code section 401(a)(4) or Code sec-
tion 410.
(3) The percentage is equal to the percentage
(if lower than three) equivalent to the highest ratio
for the Plan Year for a Key Employee of any Defined
Contribution Plan within this Plan's Aggregation Group
of the sum of the Key Employee's allocations from
contributions (other than deductible employee
contributions) made (or required to be made without
regard to waivers granted pursuant to Code sec-
tion 412(d)) and forfeitures for the Plan Year divided
by that Key Employee's Earnings.
(4) The alternative lower percentage for a
Defined Contribution Plan described in paragraph (2)
is computed in the same manner as described in para-
graph (3) except that the dependent Defined Benefit
Plan's benefits for Key Employees are included in the
computation after having been converted to equivalent
contributions pursuant to the procedure prescribed in
Revenue Ruling 81-202, 1981-2 C.B. 93.
(i) In determining an individual's minimum-benefit
entitlement and in determining whether that entitlement has been
satisfied, any employer contribution attributable to a salary
reduction or similar arrangement is taken into account only to
the extent expressly required by Code section 416(c)(2)(C).
(j) If the Plan Administrator deems it advisable to
do so (for example, if an employer would be required by this Plan
article to contribute additional amounts but it cannot or will
not), the Plan Administrator may cause a shift in allocations
from Key Employees to Non-Key Employees by applying the
principles for reallocations in Plan article IV.
3.07. Aggregate Contribution and Benefit Limitations
(a) For any Plan Years in which this Plan is a Top-
Heavy Plan, the provisions of this section supersede conflicting
Plan provisions regarding limitations on contribution and
benefits under this Plan.
(b) Effective for Limitation Years that began after
December 31, 1982, if an individual is or was a participant in
both a Defined-Benefit-Plan Qualified Plan and a Defined-
Contribution-Plan Qualified Plan maintained by a Company or a
Related Entity, the sum of the fraction described in paragraph
(1) and the fraction described in paragraph (2) for any
Limitation Year may not exceed 1.0.
(1) For each Participant the fraction's
numerator is the projected annual benefit under such
Defined Benefit Plans (determined as of the close of
the Limitation Year), and the fraction's denominator
is the lesser of the denominators in subparagraphs (A)
and (B).
(A) For any Limitation Year beginning with
or within a Plan Year for which the Plan is a
Super Top-Heavy Plan or for which the Plan is a
Top-Heavy Plan and does not provide any minimum
benefit required by Code section 416(h)(2), the
denominator as to any Key Employee is the product
of 1.0 multiplied by the dollar limitation in
effect under Code section 415(b)(1)(A) for that
year (or the current accrued benefit, if larger).
(B) The denominator is the product of 1.4
multiplied by the amount that may be taken into
account under Code section 415(b)(1)(B) for that
Participant for that year.
(2) For each Participant, the fraction's
numerator is the sum of the Annual Additions under
such Defined Contribution Plans as of the close of the
Limitation Year for that and all prior Limitation
Years, and the fraction's denominator is the sum of
the lesser of the denominators described in subpara-
graphs (A) and (B), determined separately for that
Limitation Year and for each prior Limitation Year of
his service with a Company or a Related Entity.
(A) For any Limitation Year beginning with
or within a Plan Year for which the Plan is a
Super Top-Heavy Plan or for which the Plan is a
Top-Heavy Plan and does not provide any minimum
benefit required by Code section 416(h)(2), the
denominator as to any Key Employee is the product
of 1.25 multiplied by the dollar limitation in
effect under Code section 415(b)(1)(A) for that
year.
(B) The denominator is the product of 1.4
multiplied by the amount that may be taken into
account under Code section 415(c)(1)(B) for that
Participant under such plans for that year.
(c) Subsection (b) will not apply with respect to
this Plan if the requirements of subparagraphs (1) and (2) below
are met with respect to the Plan.
(1) The requirements of this subparagraph are
met with respect to the Plan (and any plan in this
Plan's Required Aggregation Group) if this Plan meets
the minimum-benefit requirements of Appendix A sec-
tion 3.06 applied by substituting "four percent" for
"three percent."
(2) The requirements of this subparagraph are
met with respect to the Plan if this Plan would not be
a Top-Heavy Plan as determined under Appendix A
section 3.03 if "90 percent" were substituted for "60
percent" each place it appear.
(d) Paragraph 6(B)(i) of Code section 415(e) will be
applied by substituting "$41,500" for "$51,875" if the transition
rule described in Code section 415(e) is available.
