Document:

EX-10.108

Exhibit 10.108

Director Compensation

On February 28, 2006, Andrx Corporation granted Restricted Stock Units (“RSUs”) to
Andrx’s non-employee directors in the amounts listed below, with each unit representing the right
to acquire one share of Andrx Group common stock. Subject to certain acceleration and other
conditions set forth in each director’s RSU agreement, the shares underlying these units vest in
five equal annual installments beginning one year from the date of grant. Upon vesting, a portion
of the vested shares may be withheld to satisfy applicable taxes.

	 	 	 	 	 
	Named of Director	 	RSUs Awarded on February 28, 2006
	Tamara A. Baum (Lead Director)
	 		7,500	
	Joseph E. Breslin
	 		5,000	
	Lawrence J. DuBow
	 		5,000	
	Elliot F. Hahn, Ph.D.
	 		5,000	
	Carter H. Eckert
	 		5,000	
	Irwin C. Gerson
	 		5,000	
	Melvin Sharoky, M.D.
	 		5,000	

Grant of RSUs to Named Executive Officers

On February 28, 2006, the Compensation Committee authorized a grant of RSUs to certain key
employees based on Andrx’s financial performance and the employee’s contribution to Andrx during
2005, with each unit representing the right to acquire one share of Andrx Group common stock. One
RSU award vests in seven equal annual installments beginning one-year from the date of grant (the
“Long-Term Incentive Award”). The other vests entirely on the fourth anniversary of the date of
grant, but is subject to acceleration, in whole or in part, if Andrx meets certain future financial
performance criteria (the “Performance-Based Award”). The RSUs are subject to certain
acceleration and other condition set forth in the employee’s RSU Agreement. Upon vesting, a
portion of the vested shares may be withheld to satisfy applicable taxes.

RSU grants on February 28, 2006 to Andrx’s current Named Executive Officers are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Total RSUs Awarded
	 	 	Long-Term Incentive	 	Performance-Based	 	on February 28,
	Named Executive Officer	 	Award	 	Award	 	2006
	Thomas P. Rice,
Andrx Corporation
Chief Executive
Officer
	 	 	40,000	 	 	 	10,000	 	 	 	50,000	 
	Angelo C. Malahias,
Andrx Corporation
President and Chief
Financial Officer
	 	 	30,000	 	 	 	10,000	 	 	 	40,000	 
	Lawrence Rosenthal,
Andrx
Pharmaceuticals, Inc.
President
	 	 	8,000	 	 	 	2,000	 	 	 	10,000exv4w4

 

Exhibit 4.4

Summary of Employment Arrangements

between Bayer Aktiengesellschaft

and Werner Wenning

Term: W. Wenning was appointed Chairman of the Board of Management of the Company by the
Supervisory Board effective April 27, 2002. The term will expire on January 31, 2007.

Compensation: The aggregate remuneration of W. Wenning for 2005 is comprised of the
following elements:

Base  salary: EUR 748,872. W. Wenning also received remuneration in kind and other payments
totaling EUR 40,169 and consisting mainly of amounts such as the value assigned for taxation
purposes to the use of a company car.

Fixed supplement: EUR 325,132

Variable bonus: EUR 1,554,615 (determined by attainment of the group gross EBITDA target)

Stock-based compensation: The current entitlement for 2005 — along with compensation
arising from previous years’ programs, parts of which are not yet earned was EUR 495,504.

     Retirement: W. Wenning is entitled to receive pension up from the age of 60. The
yearly pension entitlement is based on at least 30% of the sum of the last yearly base salary and
fixed supplement. This percentage increases over time depending on years of service as a Board
member and determines the final target pension level which is capped at 80%. Upon expiration of the
current term the level of 80% will be reached. These amounts are in addition to any amounts
received as a result of his participation in Bayer’s Employee Pension Plan (See Item 6).exv4w5

 

Exhibit 4.5

Summary of Employment Arrangements

between Bayer Aktiengesellschaft

and Dr. Udo Oels

Term: Dr. Oels joined the Board of Management in 1996 and his current term will expire on
April 28, 2006.

Compensation: The aggregate remuneration of Dr. Oels for 2005 is comprised of the following
elements:

Base salary: EUR 412,236. Dr. Oels also received remuneration in kind and other payments
totaling EUR 41,942 and consisting mainly of amounts such as the value assigned for taxation
purposes to the use of a company car.

Fixed supplement: EUR 170,647

Variable bonus: EUR 843,713 (determined by attainment of the group EBITDA target)

Stock-based compensation: The current entitlement for 2005 — along with compensation
arising from previous years’ programs, parts of which are not yet earned was EUR 285,748.

     Retirement: Dr. Oels is entitled to receive pension up from the age of 60. The yearly
pension entitlement is based on at least 30% of the sum of the last yearly base salary and fixed
supplement. This percentage increases over time depending on years of service as a Board member and
determines the final target pension level which is capped at 80%. Upon expiration of the current
term the level of 80% will be reached. These amounts are in addition to any amounts received as a
result of his participation in Bayer’s Employee Pension Plan (See Item 6).exv4w6

 

Exhibit 4.6

Summary of Employment Arrangements

between Bayer Aktiengesellschaft

and Klaus Kühn

Term: K. Kühn was appointed member of the Board of Management of the Company by the
Supervisory Board effective May 1, 2002. The term will expire on April 30, 2007.

Compensation: The aggregate remuneration of K. Kühn for 2005 is comprised of the following
elements:

Base  salary: EUR 412,236. K. Kühn also received remuneration in kind and other payments
totaling EUR 35,266 and consisting mainly of amounts such as the value assigned for taxation
purposes to the use of a company car.

Fixed supplement: EUR 170,647

Variable bonus: EUR 843,713 (determined by attainment of the group EBITDA target)

Stock-based compensation: The current entitlement for 2005 — along with compensation
arising from previous years’ programs, parts of which are not yet earned was EUR 285,748.

     Retirement: K. Kühn is entitled to receive pension up from the age of 60. The yearly
pension entitlement is based on at least 30% of the sum of the last yearly base salary and fixed
supplement. This percentage increases over time depending on years of service as a Board member and
determines the final target pension level which is capped at 80%. Upon expiration of the current
term the level of 80% will be reached. These amounts are in addition to any amounts received as a
result of his participation in Bayer’s Employee Pension Plan (See Item 6).exv4w7

 

Exhibit 4.7

Summary of Employment Arrangements

between Bayer Aktiengesellschaft

and Dr. Richard Pott

Term: Dr. Pott was appointed member of the Board of Management of the Company by the
Supervisory Board effective May 1, 2002. The term will expire on April 30, 2007.

Compensation: The aggregate remuneration of Dr. Pott for 2005 is comprised of the following
elements:

Base salary: EUR 412,236. Dr. Pott also received remuneration in kind and other payments
totaling EUR 39,044 and consisting mainly of amounts such as the value assigned for taxation
purposes to the use of a company car.

Fixed supplement: EUR 170,647

Variable Bonus: EUR 843,713 (determined by attainment of the group EBITDA target)

Stock-based compensation: The current entitlement for 2005 — along with compensation
arising from previous years’ programs, parts of which are not yet earned was EUR 284,248.

     Retirement: Dr. Pott is entitled to receive pension up from the age of 60. The yearly
pension entitlement is based on at least 30% of the sum of the last yearly base salary and fixed
supplement. This percentage increases over time depending on years of service as a Board member and
determines the final target pension level which is capped at 80%. Upon expiration of the current
term the level of 80% will be reached. These amounts are in addition to any amounts received as a
result of his participation in Bayer’s Employee Pension Plan (See Item 6).Exhibit 10.1 

CHESAPEAKE CORPORATION 

DIRECTORS’ DEFERRED COMPENSATION PLAN 

Effective January 1, 2005 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

TABLE OF CONTENTS 

 

									
	
      Section
	 	  	  	 	  	Page
	INTRODUCTION	  		  	
			
	ARTICLE I	  	DEFINITIONS	  	
					
		 	1.01.	 		  	Administrator	  	2
		 	1.02.	 		  	Beneficiary or Beneficiaries	  	2
		 	1.03.	 		  	Beneficiary Designation Form	  	2
		 	1.04.	 		  	Board	  	2
		 	1.05.	 		  	Change in Control	  	2
		 	1.06.	 		  	Code	  	2
		 	1.07.	 		  	Common Stock	  	2
		 	1.08.	 		  	Company	  	2
		 	1.09.	 		  	Compensation	  	3
		 	1.10.	 		  	Control Change Date	  	3
		 	1.11.	 		  	Deferral Election Form	  	3
		 	1.12.	 		  	Deferral Year	  	3
		 	1.13.	 		  	Deferred Benefit	  	3
		 	1.14.	 		  	Deferred Cash Account	  	3
		 	1.15.	 		  	Deferred Cash Benefit	  	3
		 	1.16.	 		  	Deferred Stock Account	  	4
		 	1.17.	 		  	Deferred Stock Benefit	  	4
		 	1.18.	 		  	Distribution Election Form	  	4
		 	1.19.	 		  	Election Date	  	4
		 	1.20.	 		  	Meeting Fees	  	4
		 	1.21.	 		  	Participant	  	4
		 	1.22.	 		  	Plan	  	5
		 	1.23.	 		  	Retainer Fee	  	5
		 	1.24.	 		  	Stock Fee	  	5
		 	1.25.	 		  	Terminate, Terminating, or Termination	  	5
			
	ARTICLE II	  	PURPOSES	  	
			
	ARTICLE III	  	ADMINISTRATION	  	
			
	ARTICLE IV	  	DEFERRED BENEFITS	  	
					
		 	4.01.	 		  	Deferral Election	  	8
		 	4.02.	 		  	Deferred Cash Benefits	  	9

 

(i) 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

									
		 	4.03.	 		  	Deferred Stock Benefits	  	9
		 	4.04.	 		  	Distribution of Deferred Benefits	  	10
		 	4.05.	 		  	Hardship Distributions	  	12
			
	ARTICLE V	  	ADJUSTMENT UPON CHANGE IN COMMON STOCK	  	
			
	ARTICLE VI	  	COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES	  	
			
	ARTICLE VII	  	GENERAL PROVISIONS	  	
					
		 	7.01.	 		  	Effect on Service	  	15
		 	7.02.	 		  	Unfunded Plan	  	15
		 	7.03.	 		  	Notices	  	15
		 	7.04.	 		  	Rules of Construction	  	15
			
	ARTICLE VIII	  	AMENDMENT	  	
			
	ARTICLE IX	  	TERMINATION	  	
			
	ARTICLE X	  	EFFECTIVE DATE OF PLAN	  	

 

(ii) 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

INTRODUCTION 

The Chesapeake Corporation Directors’ Stock Option and Deferred Compensation Plan (the “Original Plan”) was adopted effective June 1, 1996. The Original Plan provided for the grant of options to purchase Common Stock. The Original Plan also provided for the deferral of Retainer Fees and Meeting Fees by Participants. 

This Plan document is an amendment and restatement of the Original Plan and is effective as of January 1, 2005. The Plan amends the Original Plan by eliminating the provisions related to the grant of options. The Plan also amends the Original Plan to allow Participants to defer all of part of their Stock Fees. The Plan also amends the Original Plan to conform to the requirements of Section 409A of the Code (and the Plan must be interpreted and administered in a manner that satisfies Section 409A of the Code). 

This Plan governs Deferred Benefits for the 2005 and subsequent Deferral Years. The provisions of the Original Plan apply to Deferred Benefits for Deferral Years ending before 2005. 

 

- 1 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE I 

DEFINITIONS 

 

	1.01.	Administrator 

Administrator means the Company’s Corporate Secretary. 

 

	1.02.	Beneficiary or Beneficiaries 

Beneficiary or Beneficiaries means a person or persons or other entity designated on a Beneficiary Designation Form by a Participant as allowed in subsection 4.04(c) to receive Deferred Benefits. If there is no valid designation by the Participant, or if the designated Beneficiary or Beneficiaries fail to survive the Participant or otherwise fail to take the benefit, the Participant’s Beneficiary is the first of the following who survives the Participant: a Participant’s spouse (the person legally married to the Participant when the Participant dies); the Participant’s surviving children and the issue of Participant’s deceased children, per stirpes; the Participant’s parents; and the Participant’s estate. 

 

	1.03.	Beneficiary Designation Form 

Beneficiary Designation Form means a form acceptable to the Administrator or his designee used by a Participant according to this Plan to name the Participant’s Beneficiary or Beneficiaries who will receive Deferred Benefits under this Plan on account of the Participant’s death. 

 

	1.04.	Board 

Board means the board of directors of the Company. 

 

	1.05.	Change in Control 

Change in Control means a “Change in Control” as defined in the Chesapeake Corporation Benefits Plan Trust. 

 

	1.06.	Code 

Code means the Internal Revenue Code of 1986, as amended. 

 

	1.07.	Common Stock 

Common Stock means the common stock of the Company. 

 

	1.08.	Company 

Company means Chesapeake Corporation and any successor business by merger, purchase, or otherwise that maintains the Plan. 

 

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Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

	1.09.	Compensation 

Compensation means a Participant’s Meeting Fees, Retainer Fees and Stock Fees for the Deferral Year. 

 

	1.10.	Control Change Date 

Control Change Date means a “Control Change Date” as defined in the Chesapeake Corporation Benefits Plan Trust. 

 

	1.11.	Deferral Election Form 

Deferral Election Form means a document governed by the provisions of Article IV of this Plan, including the portion that is the Distribution Election Form and the related Beneficiary Designation Form that applies to all of that Participant’s Deferred Benefits under the Plan. 

 

	1.12.	Deferral Year 

Deferral Year means a calendar year for which a Participant has an operative Deferral Election Form. 

 

	1.13.	Deferred Benefit 

Deferred Benefit means either a Deferred Cash Benefit or a Deferred Stock Benefit under the Plan for a Participant who has submitted an operative Deferral Election Form pursuant to section 4.01 of this Plan. 

 

	1.14.	Deferred Cash Account 

Deferred Cash Account means that bookkeeping record established for each Participant who elects a Deferred Cash Benefit under this Plan. A Deferred Cash Account is established only for purposes of measuring a Deferred Cash Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Cash Benefit. A Deferred Cash Account will be credited with the Participant’s Compensation deferred as a Deferred Cash Benefit according to a Deferral Election Form and according to section 4.02 of this Plan. A Deferred Cash Account will be credited periodically with amounts based upon interest rates in accordance with subsection 4.02(b) of this Plan. 

 

	1.15.	Deferred Cash Benefit 

Deferred Cash Benefit means the Deferred Benefit elected by a Participant under section 4.01 that results in payments governed by sections 4.02 and 4.04 of this Plan. 

 

- 3 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

	1.16.	Deferred Stock Account 

Deferred Stock Account means that bookkeeping record established for each Participant who elects a Deferred Stock Benefit under this Plan. A Deferred Stock Account is established only for purposes of measuring a Deferred Stock Benefit and not to segregate assets or to identify assets that may or must be used to satisfy a Deferred Stock Benefit. A Deferred Stock Account will be credited with the Participant’s Compensation deferred as a Deferred Stock Benefit according to a Deferral Election Form and according to section 4.03 of this Plan. A Deferred Stock Account will be credited periodically with amounts in accordance with subsection 4.03(b) of this Plan. 

 

	1.17.	Deferred Stock Benefit 

Deferred Stock Benefit means the Deferred Benefit elected by a Participant under section 4.01 that results in payments governed by sections 4.03 and 4.04 of this Plan. 

 

	1.18.	Distribution Election Form 

Distribution Election Form means that part of a Deferral Election Form used by a Participant according to this Plan to establish the duration of deferral and the frequency of payments of a Deferred Benefit. If a Deferred Benefit has no Distribution Election Form that is operative according to section 4.01 of this Plan, distribution of that Deferred Benefit is governed by section 4.04(b) of this Plan. 

 

	1.19.	Election Date 

Election Date means the date established by this Plan as the date before which a Participant must submit a valid Deferral Election Form to the Administrator. For each Deferral Year, the Election Date is December 31 of the preceding calendar year. However, for an individual who first becomes a Participant during a Deferral Year (and who was not previously eligible to participate in a nonqualified deferred compensation plan that was maintained by the Company and that provides a benefit based on an account value), the Election Date is the thirtieth day following the date that he becomes a member of the Board. Despite the two preceding sentences, the Administrator may set an earlier date as the Election Date for any Deferral Year. 

 

	1.20.	Meeting Fees 

Meeting Fees means the amount paid to a member of the Board for attendance at Board meetings and meetings of the Board’s committees, according to the Company’s established rules and procedures for compensating members of the Board. 

 

	1.21.	Participant 

Participant means a member of the Board who is not an employee of the Company and whose Deferral Election Form is operative for that Deferral Year. 

 

- 4 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

	1.22.	Plan 

Plan means the Chesapeake Corporation Directors’ Deferred Compensation Plan. 

 

	1.23.	Retainer Fee 

Retainer Fee means that portion of the cash compensation payable to a member of the Board that is fixed and paid without regard to the member’s attendance at meetings, including any payment that is made on account of the individual’s service as chairman of a committee of the Board. 

 

	1.24.	Stock Fee 

Stock Fee means that portion of the compensation payable to a member of the Board (i) that is payable in Common Stock and (ii) that is fixed and paid without regard to the member’s attendance at meetings, including any amount that is paid on account of the individual’s service as chairman of a committee of the Board. 

 

	1.25.	Terminate, Terminating, or Termination 

Terminate, Terminating, or Termination with respect to a Participant, mean cessation of the Participant’s relationship with the Company as a member of the Board whether by death, disability or severance for any other reason. 

 

- 5 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE II 

PURPOSES 

The Plan is intended to promote a greater identity of interest between Participants and the Company’s shareholders. The Plan is also intended to provide an attractive investment opportunity for Participants by allowing Participants to receive a Deferred Benefit in lieu of all or part of the Compensation otherwise payable to the Participant. 

 

- 6 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE III 

ADMINISTRATION 

The Plan shall be administered by the Administrator. The Administrator shall have complete authority to interpret all provisions of this Plan; to prescribe the forms that will be used under the Plan; to adopt, amend, and rescind rules and regulations pertaining to the administration of this Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Administrator shall not be construed as limiting any power or authority of the Administrator. Any decision made, or action taken, by the Administrator or in connection with the administration of this Plan shall be final and conclusive. The Administrator shall not be liable for any act done in good faith with respect to this Plan or any Deferred Benefit. All expenses of administering this Plan shall be borne by the Company. 

 

- 7 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE IV 

DEFERRED BENEFITS 

 

	4.01.	Deferral Election 

A deferral election is valid when a Deferral Election Form is completed, signed by the electing Participant, and received by the Administrator or the Administrator’s delegate. Deferral elections are governed by the provisions of this section. 

(a) Before each Deferral Year’s Election Date, each Participant will be provided with a Deferral Election Form and a Beneficiary Designation Form. Under the Deferral Election Form for a single Deferral Year, a Participant may elect on or before the Election Date to defer the receipt of all or part of the Participant’s Retainer Fee (in 10% increments), all or part of the Participant’s Meeting Fees (in 10% increments), all or part of the Participant’s Stock Fee (in 10% increments rounded, if necessary, to the next higher whole share) or a combination of the foregoing for the Deferral Year. 

(b) A Participant’s Deferral Election Form may specify either a Deferred Cash Benefit, a Deferred Stock Benefit or a combination thereof (in 10% increments of the deferred amount). Notwithstanding the preceding sentence, a deferred Stock Fee shall be credited as a Deferred Stock Benefit. 

(c) Except as permitted by Rule 16b-3 of the Securities Exchange Commission, as in effect from time to time or any successor rule or regulation, a Participant may not elect to convert a Deferred Cash Benefit to a Deferred Stock Benefit or to convert a Deferred Stock Benefit to a Deferred Cash Benefit. The portion of a Deferred Stock Benefit attributable to a deferred Stock Fee may not be converted to a Deferred Cash Benefit. 

(d) Each Distribution Election Form is part of the Deferral Election Form on which it appears or to which it states that it is related. For each Deferral Year the Administrator may allow a Participant to file one Distribution Election Form for all of the Participant’s Deferred Cash Benefits, all of the Participant’s Deferred Stock Benefits, or all of the Participant’s Deferred Benefits. The provisions of section 4.04(b) of this Plan apply to any Deferred Benefit under this Plan if there is no operative Distribution Election Form for that Deferred Benefit. 

(e) On or before the Election Date of a Deferral Year, the Administrator may reject any Deferral Election Form or any Distribution Election Form or both, and the Administrator is not required to state a reason for any rejection. The Administrator may modify any Distribution Election Form at any time to the extent necessary to comply with any federal securities laws or regulations. However, the Administrator’s rejection of any Deferral Election Form or any Distribution Election Form or the Administrator’s modification of any Distribution Election Form must be based upon action taken without regard to any vote of the Participant whose Deferral Election Form or Distribution Election Form is under consideration, and the Administrator’s rejections must be made on a uniform basis with respect to similarly situated Participants. If the Administrator rejects a Deferral Election Form, the Participant must be paid the amounts that the Participant would then have been entitled to receive if the Participant had not submitted the rejected Deferral Election Form. 

 

- 8 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

(f) A Participant may not revoke or modify a Deferral Election Form or a Distribution Election Form after the Deferral Year begins. Any revocation before the beginning of the Deferral Year is the same as a failure to submit a Deferral Election Form or a Distribution Election Form. Any writing signed by a Participant expressing an intention to revoke a Deferral Election Form or a related Distribution Election Form and delivered to the Administrator before the close of business on the relevant Election Date is a revocation. 

(g) A Participant who has not submitted a valid Deferral Election Form to the Administrator on or before the relevant Election Date may not defer any part of the Participant’s Compensation for the Deferral Year. The Deferred Benefit of a Participant who submits a valid Deferral Election Form but fails to submit a valid Distribution Election Form for that Deferred Benefit before the relevant Election Date or who otherwise has no valid Distribution Election Form for that Deferred Benefit is governed by section 4.04(b). 

 

	4.02.	Deferred Cash Benefits 

(a) Deferred Cash Benefits will be set up in a Deferred Cash Account for each Participant and credited with interest in accordance with subsection 4.02(b). A Deferred Cash Benefit attributable to a deferred Retainer Fee is credited to the Participant’s Deferred Cash Account as of the day that the deferred Retainer Fee would have been paid but for the Participant’s Deferral Election. A Deferred Cash Benefit attributable to a deferred Meeting Fee is credited to the Participant’s Deferred Cash Account as of the first day of the month following the month in which the deferred Meeting Fee would have been paid but for the Participant’s Deferral Election. 

(b) Interest will be credited to Deferred Cash Accounts on the first day of each month based on the Deferred Cash Account balance at the end of the preceding day. The applicable rate for each month will be the prime rate established by the Company’s principal lender, as of the last business day of each calendar quarter preceding the date on which interest is credited to Deferred Cash Accounts. Interest is accrued through the end of the month preceding the month of distribution of a Deferred Cash Benefit. 

 

	4.03.	Deferred Stock Benefits 

(a) Deferred Stock Benefits will be set up in a Deferred Stock Account for each electing Participant and credited with earnings in accordance with subsection 4.03(b). A Deferred Stock Benefit attributable to a deferred Retainer Fee is credited to the Participant’s Deferred Stock Account as of the day that the deferred Retainer Fee would have been paid but for the Participant’s Deferral Election. A Deferred Stock Benefit attributable to a deferred Meeting Fee is credited to the Participant’s Deferred Stock Account as of the first day of the month following the month in which the deferred Meeting Fee would have been paid but for the Participant’s Deferral Election. A Deferred Stock Benefit attributable to a deferred Stock Fee is credited to the Participant’s Deferred Stock Account as of the day that the deferred Stock Fee would have been paid but for the Participant’s Deferral Election. 

 

- 9 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

(b) Credits will be added to Deferred Stock Accounts at variable rates equal to the value of dividends paid on Common Stock when the additional credit is made. The value of a Deferred Stock Account at any relevant time equals the value of the shares of Common Stock (based on the average closing price of the Common Stock on the New York Stock Exchange, composite type), as if the Compensation deferred by the Participant under the Plan and any additional credits under this subsection had been used to purchase Common Stock on the date those amounts were credited to the Deferred Stock Account. Additional credits are credited on the last day of each calendar quarter on accumulated Deferred Stock Accounts. Additional credits are accrued through the end of the month preceding the month of distribution of a Deferred Stock Benefit. 

 

	4.04.	Distribution of Deferred Benefits 

(a) A Deferred Cash Benefit must be distributed in cash. Except as provided in Plan subsection 4.04(d), subsection 4.04(e) and section 4.05, a Deferred Stock Benefit must be distributed in shares of Common Stock. However, cash must be paid in lieu of fractional shares of Common Stock otherwise distributable. 

(b) Deferred Benefits will be paid in a single sum unless the Participant’s Distribution Election Form specifies annual installment payments over a period which shall not be more than ten years. For a Deferred Cash Benefit, interest credits under Plan subsection 4.02(b) continue to accrue on the unpaid balance of a Deferred Cash Account. For a Deferred Stock Benefit, additional credits under Plan subsection 4.03(b) continue to accrue on the unpaid balance of a Deferred Stock Account. 

Notwithstanding the preceding paragraph, if a Participant Terminates as a result of permanent and total disability (as defined in Section 22(e)(3) of the Code), Deferred Benefits will be paid to such Participant in installment payments over a period of ten years commencing on the date the Participant’s disability is certified by the Administrator; provided, however, that the first payment will be made on the first day of the seventh month beginning after the Participant’s Termination if the Participant is a “specified employee” (as defined in Section 409A of the Code) and the Participant is not “disabled” (as defined in Section 409A of the Code). If, after the Participant’s Termination as a result of permanent and total disability (as defined above), such Participant recovers before the balance of the Participant’s Deferred Cash and Deferred Stock Accounts under the Plan are exhausted, the Participant’s distributions will be discontinued and any remaining Deferred Benefits under the Plan will be governed by the provisions of this section and the Participant’s Distribution Election Forms. 

Unless otherwise specified in a Participant’s Distribution Election Form or if there is no Distribution Election Form that is operative according to section 4.01 of this Plan, any lump sum payment will be paid or installment payments will begin to be paid as of February 15 of the year after the Participant’s Termination or as of February 15 of the year after the Participant’s attainment of age sixty-five, if earlier. Except in the case of the Participant’s death or disability, the Participant may elect on his Distribution Election Form that payments are to begin 

 

- 10 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

(1) on the February 15 following the Participant’s Termination, without regard to the Participant’s age; or 

(2) on the February 15 following the Participant’s Termination and the Participant’s attainment of a specified age; or 

(3) even if the Participant does not Terminate, on the February 15 following attainment of a specified age. 

For purposes of these distribution election alternatives, the specified age must be not less than the Participant’s age two years from the Election Date pertaining to the applicable Deferral Year and not greater than the age at which there are no earnings limitations in order to receive full social security benefits. If the Participant is a “specified employee” (as defined in Section 409A of the Code), a distribution that is payable on account of the Participant’s Termination shall be delayed until the first day of the seventh month beginning after Termination except in the case of a Termination resulting from the Participant’s death or because the Participant is “disabled” (as defined in Section 409A of the Code). 

(c) Deferred Benefits may not be assigned by a Participant or Beneficiary. A Participant may use only one Beneficiary Designation Form to designate one or more Beneficiaries for all of the Participant’s Deferred Benefits under the Plan; such designations are revocable. Each Beneficiary will receive the Beneficiary’s portion of the Participant’s Deferred Cash Account and Deferred Stock Account as of February 15 of the year following the Participant’s death. The Administrator may require that multiple Beneficiaries agree upon a single distribution method. 

(d) Any Common Stock distributed in settlement of a Deferred Stock Benefit shall be issued from the Company’s previously authorized but unissued Common Stock pursuant to the Company’s 2005 Incentive Plan or another shareholder approved plan. If there is no Company plan that is authorized to issue shares in settlement of a Deferred Stock Benefit, the benefit shall be paid in a lump sum, in cash. 

(e) Notwithstanding any other provision of this Plan or any Distribution Election Form, in the event of a Change in Control, all Deferred Benefits credited to Participants and Beneficiaries shall be paid in a lump sum, in cash, on the Control Change Date if the Change in Control constitutes a “change in control” for purposes of Section 409A and, if not, as soon as practicable after the Participant’s Termination (or the first day of the seventh month beginning after the Participant’s Termination if the Participant is a “specified employee” (as deferred in Section 409A of the Code)). 

 

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Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

	4.05.	Hardship Distributions 

(a) At its sole discretion and at the request of a Participant before or after the Participant’s Termination, the Administrator may accelerate and pay all or part of any amount attributable to a Participant’s Deferred Benefits under this Plan. Accelerated distributions may be allowed only in the event of “unforeseeable emergency” (as defined in Section 409A of the Code). An accelerated distribution must be limited to the amount that may be distributed under Section 409A of the Code on account of such unforeseeable emergency. 

(b) For purposes of an accelerated distribution of a Deferred Stock Benefit under this section, the Deferred Stock Benefit’s value is determined by the value of the Deferred Stock Account at the time of the distribution. 

(c) Only cash distributions are permitted under this section. Distributions under this section must first be made from the Participant’s Deferred Cash Account before accelerating the distribution of any amount attributable to a Deferred Stock Benefit. 

(d) A distribution under this section is in lieu of that portion of the Deferred Benefit that would have been paid otherwise. A Deferred Cash Benefit is adjusted for a distribution under this section by reducing the Participant’s Deferred Cash Account balance by the amount of the distribution. A Deferred Stock Benefit is adjusted for a distribution under this section by reducing the value of the Participant’s Deferred Stock Account by the amount of the distribution. 

 

- 12 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE V 

ADJUSTMENT UPON CHANGE IN COMMON STOCK 

Each Deferred Stock Account shall be proportionately adjusted as the Administrator determines to be equitably required in the event that the Company (a) effects one or more stock dividends, stock split-ups, subdivisions or consolidations of shares or (b) engages in a transaction described in Section 424 of the Code. Any determination made under this Article V by the Administrator shall be final and conclusive. 

The issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, for cash or property, or for labor or services, either upon direct sale or upon the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect to, Deferred Stock Accounts. 

 

- 13 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE VI 

COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES 

No payment shall be made under this Plan except in compliance with all applicable federal and state laws and regulations, any listing agreement to which the Company is a party, and the rules of all domestic stock exchanges on which the Company’s shares may be listed. The Company shall have the right to rely on an opinion of its counsel as to such compliance. No payment shall be made under this Plan until the Company has obtained such consent or approval as the Board may deem advisable from regulatory bodies having jurisdiction over such matters. 

 

- 14 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE VII 

GENERAL PROVISIONS 

 

	7.01.	Effect on Service 

Neither the adoption of this Plan, its operation, nor any documents describing or referring to this Plan (or any part thereof) shall confer upon any Participant any right to continue service as a member of the Board. 

 

	7.02.	Unfunded Plan 

The Plan shall be unfunded, and the Company shall not be required to segregate any assets that may at any time be represented by Deferred Benefits under this Plan. Any liability of the Company to any person with respect to any Deferred Benefit payable under this Plan shall be based solely upon any contractual obligations that may be created pursuant to this Plan. No such obligation of the Company shall be deemed to be secured by any pledge of, or other encumbrance on, any property of the Company. 

 

	7.03.	Notices 

Notices and elections under this Plan must be in writing. A notice or election is deemed delivered if it is delivered personally or if it is mailed by registered or certified mail to the person at such person’s last known business address. 

 

	7.04.	Rules of Construction 

Headings are given to the Articles and Sections of this Plan solely as a convenience to facilitate reference. The reference to any statute, regulation, or other provision of law shall be construed to refer to any amendment to or successor of such provision of law. This Plan is created, adopted and maintained according to the laws of the Commonwealth of Virginia (other than its choice-of-law rules). 

 

- 15 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE VIII 

AMENDMENT 

The Board may amend this Plan from time to time. No amendment shall, without a Participant’s consent, adversely affect any rights of such Participant under the Plan as in effect at the time such amendment is made. No amendment shall cause a distribution of a Deferred Benefit in violation of Section 409A of the Code. 

 

- 16 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE IX 

TERMINATION 

The Board may terminate the Plan at any time. The termination of this Plan shall not affect any rights of a Participant to any Deferred Benefit payable under this Plan pursuant to the terms of this Plan as in effect at the time of such termination. The termination of this Plan shall not result in a distribution of Deferred Benefits except as permitted under Section 409A of the Code. 

 

- 17 - 

Chesapeake Corporation 

Directors’ Deferred Compensation Plan 

Effective January 1, 2005 

 

ARTICLE X 

EFFECTIVE DATE OF PLAN 

The Plan, as amended and restated herein shall be effective as of January 1, 2005. 

 

- 18 -

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