SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 30, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from ______ to ______
Commission file number 33-14927
CHESAPEAKE CORPORATION 401(k)
SAVINGS PLAN FOR SALARIED EMPLOYEES
CHESAPEAKE CORPORATION
1021 East Cary Street
P.O. Box 2350
Richmond, Virginia 23218-2350
INDEX OF FINANCIAL STATEMENTS AND SCHEDULES AND EXHIBIT
Page
Report of independent accountants 3
Financial statements:
Statements of net assets available for benefits with fund
information at December 30, 1998 and December 31, 1997 4-7
Statements of changes in net assets available for benefits with
fund information for the years ended December 30, 1998 and
December 31, 1997 8-11
Notes to financial statements 12-18
Supplemental schedules:
Line 27a - Schedule of Assets Held for Investment Purposes at
December 30, 1998 19
Line 27a - Schedule of Assets Held for Investment Purposes Which
Were Both Acquired and Disposed of Within the Plan Year for
the Year Ended December 30, 1998 20
Line 27b - Schedule of Loans or Fixed Income Obligations for
the Year Ended December 30, 1998 *
Line 27c - Schedule of Leases in Default or Classified as
Uncollectible for the Year Ended December 30, 1998 *
Line 27d - Schedule of Reportable Transactions for the Year
Ended December 30, 1998 21
Line 27e - Schedule of Non-exempt Transactions for the Year
Ended December 30, 1998 *
* There were no such transactions or obligations or leases
in default.
Exhibit:
23 - Consent of PricewaterhouseCoopers LLP
-1-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Chesapeake Corporation 401(k) Savings Plan for Salaried
Employees Committee (the "Committee") have duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
CHESAPEAKE CORPORATION 401(k)
SAVINGS PLAN FOR SALARIED EMPLOYEES
By: /s/ Thomas A. Smith
-------------------
Thomas A. Smith
Vice President - Human
Resources and Chairman of
the Committee
June 15, 1999
-2-
Report of Independent Accountants
To the Chesapeake Corporation 401(k) Savings
Plan for Salaried Employees Committee:
In our opinion, the accompanying statements of net assets available for
benefits with fund information and the related statements of changes in net
assets available for benefits with fund information present fairly, in all
material respects, the net assets available for benefits of the Chesapeake
Corporation 401(k) Savings Plan for Salaried Employees (the "Plan") at
December 30, 1998, and December 31, 1997, and the changes in net assets
available for benefits for the years ended December 30, 1998, and December
31, 1997 in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Plan's management;
our responsibility is to express an opinion on these financial statements
based on our audits. We conducted our audits of these statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes, assets held for investment purposes
which were both acquired and disposed of within the Plan year, and
reportable transactions are presented for the purpose of additional
analysis and are not a required part of the basic financial statements but
are supplementary information required by the Department of Labor's Rules
and Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974. The fund information in the statements of net
assets available for benefits with fund information and the statement of
changes in net assets available for benefits with fund information is
presented for purposes of additional analysis rather than to present the
net assets available for plan benefits and changes in net assets available
for benefits of each fund. These supplemental schedules and fund
information are the responsibility of the Plan's management. The
supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, are fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
/S/PRICEWATERHOUSECOOPERS LLC
-----------------------------
PRICEWATERHOUSECOOPERS LLC
Richmond, Virginia
June 15, 1999
-3-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 30, 1998
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ----------- ---------
Assets:
Investments (Notes 1b,
11, and 12):
Equity investments
(cost $34,186,740) $18,733,672 $20,199,353
Fixed income
investments (cost
$6,834,168)
Chesapeake Corporation
common stock (cost
$7,176,486) $ 9,298,437
Money market
investments (cost
$6,416,392) 464,299 $ 5,952,093
Loans to participants
(Note 6)
Receivables:
Accrued income 2,055 35,119
Employee contributions 18,505 35,529 33,233 8,303
Employer contributions 39,970 76,139 71,406 18,348
Other receivables 12,814 468,609 3,378 548,398
----------- ----------- ------------ -----------
Total assets 9,836,080 19,313,949 20,307,370 6,562,261
Liability:
Other liabilities 504,138 36,611 556,702
----------- ---------- ------------ -----------
Net assets available
for benefits $ 9,836,080 $18,809,811 $20,270,759 $ 6,005,559
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
-4-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, CONTINUED
December 30, 1998
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
Assets:
Investments (Notes 1b,
11, and 12):
Equity investments
(cost $34,186,740) $11,006,760 $49,939,785
Fixed income
investments (cost
$6,834,168) $ 4,509,436 $ 1,865,595 6,375,031
Chesapeake Corporation
common stock (cost
$7,176,486) 9,298,437
Money market
investments (cost
$6,416,392) 6,416,392
Loans to participants
(Note 6) $ 1,126,247 1,126,247
Receivables:
Accrued income 37,174
Employee contributions 34,403 12,564 5,534 148,071
Employer contributions 72,197 28,041 11,289 317,390
Other receivables 998,610 49,920 10,777 17,625 2,110,131
----------- ---------- ----------- ---------- ----------
Total assets 12,111,970 4,599,961 1,893,195 1,143,872 75,768,658
Liability:
Other liabilities 1,033,013 62,484 16,311 17,625 2,226,884
----------- ---------- ----------- ---------- ----------
Net assets available
for benefits $11,078,957 $4,537,477 $1,876,884 $1,126,247 $73,541,774
=========== ========== ========== ========== ===========
The accompanying notes are an integral part of the financial statements.
-5-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ---------- ---------
Assets:
Investments (Notes 1b,
11, and 12):
Equity investments
(cost $30,659,296) $19,372,405 $18,222,596
Fixed income
investments (cost
$6,414,297)
Chesapeake Corporation
common stock (cost
$6,298,080) $ 8,581,169
Money market
investments (cost
$5,279,374) 395,228 $ 4,884,146
Loans to participants
(Note 6)
Receivables:
Accrued income 56,800 1,843,203 38 25,225
Employer contributions 43,678 73,328 64,092 17,445
----------- ----------- ------------ -----------
Total assets 9,076,875 21,288,936 18,286,726 4,926,816
Liability:
Other liabilities 1,916,531 64,130 42,670
----------- ----------- ------------ -----------
Net assets available
for benefits $ 9,076,875 $19,372,405 $18,222,596 $ 4,884,146
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
-6-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, CONTINUED
December 31, 1997
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
Assets:
Investments (Notes 1b,
11, and 12):
Equity investments
(cost $30,659,296) $ 6,905,994 $44,500,995
Fixed income
investments (cost
$6,414,297) $ 5,806,002 $ 1,123,586 6,929,588
Chesapeake Corporation
common stock (cost
$6,298,080) 8,581,169
Money market
investments (cost
$5,279,374) 5,279,374
Loans to participants
(Note 6) $ 1,150,158 1,150,158
Receivables:
Accrued income 1,424,039 43,623 6,324 3,399,252
Employer contributions 51,995 32,710 7,701 290,949
----------- ----------- ----------- ----------- -----------
Total assets 8,382,028 5,882,335 1,137,611 1,150,158 70,131,485
Liability:
Other liabilities 1,476,034 76,333 13,590 3,589,288
----------- ----------- ----------- ----------- -----------
Net assets available
for benefits $ 6,905,994 $ 5,806,002 $ 1,124,021 $ 1,150,158 $66,542,197
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
-7-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 30, 1998
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ---------- ---------
Additions:
Interest and dividends
(Note 1b) $ 219,513 $ 394,489
Contributions (Notes 3
and 4):
Employee 486,948 $ 1,010,196 $ 907,511 219,718
Employer 216,497 352,477 313,887 81,370
Rollovers 298,105 116,009 752,303 36,021
Net appreciation
(depreciation) in fair
value of investments
(Note 1b) 543,965 1,131,234 2,869,583
----------- ------------ ----------- -----------
1,765,028 2,609,916 4,843,284 731,598
Deductions:
Distributions to
participating employees
(Note 7) 1,042,396 1,624,050 1,520,985 1,400,046
Administrative fees 117,972 18,237
----------- ------------ ----------- -----------
1,042,396 1,624,050 1,638,957 1,418,283
----------- ------------ ----------- -----------
Net increase
(decrease) 722,632 985,866 3,204,327 (686,685)
----------- ------------ ----------- -----------
Interfund transfers, net 25,404 (1,559,676) (1,163,936) 1,808,349
Interplan transfers, net 11,169 11,216 7,772 (251)
Net assets available for
benefits, beginning of
year 9,076,875 19,372,405 18,222,596 4,884,146
----------- ------------ ----------- -----------
Net assets available for
benefits, end of year $ 9,836,080 $18,809,811 $20,270,759 $ 6,005,559
=========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
-8-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION,
CONTINUED
for the year ended December 30, 1998
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
Additions:
Interest and dividends
(Note 1b) $ 485,601 $ 109,579 $ 128,263 $ 1,337,445
Contributions (Notes 3
and 4)
Employee $ 846,961 349,692 123,226 3,944,252
Employer 289,328 130,254 43,092 1,426,905
Rollovers 96,817 16,594 6,586 4,804 1,327,239
Net appreciation
(depreciation) in fair
value of investments
(Note 1b) 2,559,971 (833,053) (83,166) 6,188,534
----------- ---------- ----------- ----------- -----------
3,793,077 149,088 199,317 133,067 14,224,375
Deductions:
Distributions to
participating employees
(Note 7) 708,130 671,019 73,075 93,077 7,132,778
Administrative fees 136,209
----------- ---------- ---------- ----------- -----------
708,130 671,019 73,075 93,077 7,268,987
----------- ---------- ---------- ----------- -----------
Net increase
(decrease) 3,084,947 (521,931) 126,242 39,990 6,955,388
----------- ---------- ---------- ----------- -----------
Interfund transfers, net 1,078,226 (746,706) 622,240 (63,901)
Interplan transfers, net 9,790 112 4,381 44,189
Net assets available for
benefits, beginning of
year 6,905,994 5,806,002 1,124,021 1,150,158 66,542,197
----------- ---------- ---------- ----------- -----------
Net assets available for
benefits, end of year $11,078,957 $4,537,477 $1,876,884 $1,126,247 $73,541,774
=========== ========== ========== ========== ==============
The accompanying notes are an integral part of the financial statements.
-9-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1997
Chesapeake Partners Diversified Fidelity LaSalle
Common Trust Equity High Income Income
Stock Fund Fund Fund Fund Plus Fund
----------- ---------- ----------- ----------- ---------
Additions:
Interest and dividends
(Note 1b) $ 280,078 $ 79,706 $ 275,388
Contributions (Notes 3
and 4):
Employee 642,732 1,082,570 $ 931,374 270,759
Employer 233,694 369,911 326,936 95,677
Rollovers 256,710 122,610 143,386 47,952
Net appreciation in fair
value of investments
(Note 1b) 446,655 4,658,111 5,105,144
----------- ----------- ----------- ---------- ----------
1,859,869 6,312,908 6,506,840 689,776
Deductions:
Distributions to
participating employees
(Note 7) 213,037 948,214 875,914 229,152
Administrative fees 109,073 11,079
----------- ----------- ----------- ---------- ----------
213,037 948,214 984,987 240,231
----------- ----------- ----------- ---------- ----------
Net increase
(decrease) 1,646,832 5,364,694 5,521,853 449,545
----------- ----------- ----------- ---------- ----------
Interfund transfers, net (666,714) 691,496 263,012 $ (5,707) 377,896
Interplan transfers, net 710,481 132 (1,308) (4,759)
Net transfer of plan assets
to St. Laurent Paperboard
Inc. (Note 14) (3,770,650) (5,285,247) (4,245,921) (1,137,112)
Net assets available for
benefits, beginning of
year 11,156,926 18,601,330 16,684,960 5,707 5,198,576
----------- ----------- ----------- ---------- ----------
Net assets available for
benefits, end of year $ 9,076,875 $19,372,405 $18,222,596 $ 0 $4,884,146
=========== =========== =========== ========== ==========
The accompanying notes are an integral part of the financial statements.
-10-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION,
CONTINUED
for the year ended December 31, 1997
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
Additions:
Interest and dividends
(Note 1b) $ 2,622 $ 545,888 $ 56,875 $ 102,530 $ 1,343,087
Contributions (Notes 3
and 4)
Employee 741,090 446,341 113,708 4,228,574
Employer 243,658 164,524 37,936 1,472,336
Rollovers 256,542 99,163 80,444 11,036 1,017,843
Net appreciation in fair
value of investments
(Note 1b) 1,153,130 245,650 24,896 11,633,586
----------- ----------- ----------- ----------- -----------
2,397,042 1,501,566 313,859 113,566 19,695,426
Deductions:
Distributions to
participating employees
(Note 6) 394,926 301,862 12,621 383,983 3,359,709
Administrative fees 120,152
----------- ----------- ----------- ----------- -----------
394,926 301,862 12,621 383,983 3,479,861
----------- ----------- ----------- ----------- -----------
Net increase
(decrease) 2,002,116 1,199,704 301,238 (270,417) 16,215,565
----------- ----------- ----------- ----------- -----------
Interfund transfers, net (328,753) (677,483) 79,569 266,684
Interplan transfers, net 7,987 1,003 2,604 716,140
Net transfer of plan assets
to St. Laurent Paperboard
Inc. (Note 14) (1,509,529) (1,408,408) (153,944) (17,510,811)
Net assets available for
benefits, beginning of
year 6,734,173 6,691,186 894,554 1,153,891 67,121,303
----------- ----------- ----------- ----------- -----------
Net assets available for
benefits, end of year $ 6,905,994 $ 5,806,002 $ 1,124,021 $ 1,150,158 $66,542,197
=========== =========== =========== =========== ===========
The accompanying notes are an integral part of the financial statements.
-11-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR SALARIED EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
a. General
The Chesapeake Corporation 401(k) Savings Plan for Salaried Employees
(the "Plan") covers certain employees of Chesapeake Corporation's
("Chesapeake" or the "Employer") as described in the Plan agreement.
The Plan's assets are held by the Bank of New York (the "Trustee").
The accompanying financial statements of the Plan have been prepared
on the accrual basis in conformity with generally accepted accounting
principles.
b. Investment Valuation and Income
Investments are stated at fair value determined as follows:
Mutual and money market funds - Quoted market value
Chesapeake common stock - Last published sale price on the
New York Stock Exchange
Loans to participants - Balances due which approximate
fair value
Purchases and sales of securities are recorded on a trade-date basis.
Investment income is recorded as earned. Dividend income is recorded
on the ex-dividend date. The Plan presents in the statement of
changes in net assets available for benefits the "net appreciation
(depreciation) in the fair value of investments" which consists of the
realized gains and losses and the change in unrealized appreciation
(depreciation) on those investments.
c. Risks and Uncertainties
The Plan provides for various mutual fund investment options in
stocks, bonds, money market, and fixed income securities as well as
direct common stock investments. Investments are exposed to various
risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities,
it is at least reasonably possible that changes in risks in the near
term would materially affect participants' account balances and the
amounts reported in the statements of net assets available for
benefits and the statement of changes in net assets available for
benefits.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
-12-
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Significant Accounting Policies, continued:
liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
2. Description of Plan:
The Plan is a defined contribution plan. Information regarding Plan
benefits, priority of distributions upon termination of the Plan,
allocation of Plan investment earnings, disposition of forfeitures, and
vesting is provided in the Plan agreement which is available at the main
office of the Plan administrator at 2104 West Laburnum Avenue, Richmond,
Virginia 23227.
3. Employee Contributions:
A participant may elect to defer receipt of 1% to 10% of annual before-
tax compensation, in increments of 1%. Elective deferral contributions may
not exceed $10,000 per participant in any taxable year.
4. Employer Contributions:
The Plan provides for a matching contribution each Plan year in an
amount equal to 50% of the first 5% of each participant's compensation that
the participant elects to contribute to the Plan as an elective deferral
contribution for the Plan year. Matching contributions for highly
compensated participants are limited by the Internal Revenue Code as
described in the Plan document. Chesapeake may make contributions on
behalf of specified participants, regardless of whether the participants
make elective deferral contributions, as nonelective contributions.
In addition, effective January 1, 1998, the Employer established a
fixed minimum contribution to be made to the Plan as determined by the
Employer each Plan year. Total Employer contributions to the Plan,
including salary deferrals and matching contributions, will never be less
than the established fixed minimum contribution; if actual contributions
are less than the minimum, then a supplemental contribution would be made
by the Employer to the Plan. The minimum employer contribution for the
Plan year is allocated to each individual who is a participant on the first
day of the Plan year and who has made an elective deferral contribution
during the Plan year.
5. Discretionary Contributions:
The Employer may make discretionary contributions in cash or Company
stock as the Board of Directors or the Executive Compensation Committee of
the Board may determine.
-13-
NOTES TO FINANCIAL STATEMENTS, Continued
6. Participant Loans:
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of $50,000 or 50 percent of their
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant Loan Fund. Loan terms range from
1-5 years or up to 10 years for the purchase of a primary residence. The
loans are collateralized by the balance in the participant's account and
bear interest at a rate commensurate with the prime rate plus one percent
as determined monthly by the Plan administrator. Interest rates range from
9.25% to 10.00%. Principal and interest is paid ratably through monthly
payroll deductions.
7. Distributions:
Benefits under the Plan become distributable upon termination of
employment, upon early retirement, on or after normal retirement, or upon
death or disability. Benefit payments are made to the participant as a
lump-sum distribution or an annuity. Effective January 1, 1998, if the
present value of the benefit to be received is less than $5,000, a lump-sum
distribution is required.
8. Forfeitures:
Forfeitures resulting from separation from service are held in the Plan
and serve to reduce Employer contributions under certain conditions
described in the Plan document. The balance of forfeited nonvested
accounts was $92,617 and $46,199 at December 30, 1998, and December 31,
1997, respectively.
9. Plan Expenses:
Expenses incurred in connection with the purchase or transfer of
Chesapeake common stock are borne by a participant's account. Fees, if
any, of investment managers are borne by participants who select such
investments. All other expenses associated with the administration of the
Plan are paid by Chesapeake.
10. Plan Termination:
While the Company has not expressed any intent to discontinue its
contributions, continuance is not assumed as a contractual obligation and
any such discontinuance is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). In the event such
discontinuance results in the termination of the Plan, the Plan provides
that each participant shall be fully vested in his account and payment of
such amounts will be made by the Trustee as directed by the Chesapeake
Corporation 401(k) Savings Plan for Salaried Employees Committee.
-14-
NOTES TO FINANCIAL STATEMENTS, Continued
11. Investment Options:
Participants may elect to have amounts credited to their accounts in
the Plan invested in 1% increments in Chesapeake Common Stock, the Partners
Trust Fund, Diversified Equity Fund, LaSalle Income Plus Fund, American
Century Ultra Investors Fund, Phoenix High Yield A Fund, or the Dreyfus A
Bond Plus Fund. The following is the number of participants in each of the
investment options as of December 30, 1998, and December 31, 1997:
1998 1997
---- ----
Chesapeake Common Stock Fund 673 638
Partners Trust Fund 974 971
Diversified Equity Fund 924 879
LaSalle Income Plus Fund 389 391
American Century Ultra Investors Fund 770 639
Phoenix High Yield A Fund 561 558
Dreyfus A Bond Plus Fund 259 216
A description of the investment options currently available to
participants is as follows:
Chesapeake Common Stock Fund: This investment option consists of
shares of the common stock of Chesapeake Corporation that are purchased by
the Plan's Trustee at fair market value in the open market, in private
transactions, or directly from Chesapeake Corporation.
Partners Trust Fund: This fund, managed by Neuberger & Berman, invests
primarily in common stock and, to a lesser extent, short-term money market
instruments and other debt securities.
Diversified Equity Fund: This fund, managed by Associated Bank,
invests primarily in common stock of domestic and foreign publicly held
corporations.
LaSalle Income Plus Fund: This fund, managed by LaSalle National Bank,
invests in instruments designed to preserve capital, maximize income and
provide liquidity without sacrificing credit quality. Investments include
U.S. Government Securities, bank investment contracts and guaranteed
investment contracts issued by insurance companies.
American Century Ultra Investors Fund: This fund invests primarily in
common stock that are considered to have better than average prospects for
appreciation.
-15-
NOTES TO FINANCIAL STATEMENTS, Continued
11. Investment Options, continued:
Phoenix High Yield A Fund: This fund, managed by Phoenix investments,
intends to invest at least 65% of the value in high yield, high risk income
securities.
Dreyfus A Bond Plus Fund: This fund, managed by Dreyfus Corporation,
invests primarily in higher-quality corporate and government bonds to seek
income with preservation of capital.
12. Investments:
The investments are held in trust funds which are administered by the
Trustee.
The investments in Chesapeake common stock may be purchased by the
Trustee at fair market value in the open market, in private transactions,
or from the authorized but unissued shares of Chesapeake.
Investments at December 30, 1998 held by the trustee consist of:
Number Fair
of Shares Cost Value
--------- ---- -----
Investments at fair value as
determined by quoted market
price:
Equity funds:
Partners Trust Fund 1,036,728 $14,257,481 $18,733,672
Diversified Equity Fund 830,326 10,093,196 20,199,353
American Century Ultra
Investors Fund 329,445 9,836,063 11,006,760
Fixed income funds:
Dreyfus A Bond Plus Fund 133,257 1,930,707 1,865,595
Phoenix High Yield A Fund 578,875 4,903,461 4,509,436
Common stock:
Chesapeake Corporation 252,161 7,176,486 9,298,437
Money market funds:
LaSalle Income Plus Fund 5,952,093 5,952,093 5,952,093
Short-term investments 464,299 464,299 464,299
----------- -----------
$54,613,786 $72,029,645
=========== ===========
Participant loans $ 1,126,247 $ 1,126,247
=========== ===========
-16-
NOTES TO FINANCIAL STATEMENTS, Continued
12. Investments, continued:
Investments at December 31, 1997 held by the Trustee consist of:
Number Fair
of Shares Cost Value
--------- ---- -----
Investments at fair value as
determined by quoted market
price:
Equity funds:
Partners Trust Fund 1,109,531 $14,358,260 $19,372,405
Diversified Equity Fund 879,087 9,047,560 18,222,596
American Century Ultra
Investors Fund 252,967 7,253,476 6,905,994
Fixed income funds:
Dreyfus A Bond Plus Fund 76,539 1,096,410 1,123,586
Phoenix High Yield A Fund 633,152 5,317,887 5,806,002
Common stock:
Chesapeake Corporation 249,634 6,298,080 8,581,169
Money market funds:
LaSalle Income Plus Fund 4,884,146 4,884,146 4,884,146
Short-term investments 395,228 395,228 395,228
----------- -----------
$48,651,047 $65,291,126
=========== ===========
Participant loans $ 1,150,148 $ 1,150,148
=========== ===========
13. Tax Status:
The Plan obtained its latest determination letter on March 30, 1995, in
which the Internal Revenue Service stated that the Plan, as designed, was
in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, management and the Plan administrator believe that the Plan is
designed and is currently being operated in accordance with all applicable
rules and regulations.
14. Sale of Kraft and Packaging Operations:
On May 23, 1997, Chesapeake sold certain kraft and packaging operations
to St. Laurent Paperboard Inc. ("St. Laurent"). In connection with this
transaction, all participants who were employed by the operations which
were sold had their accounts transferred out of the Chesapeake Corporation
401(k) Savings Plan for Hourly Employees and into a plan sponsored by St.
Laurent. The net value of the accounts transferred from the Plan to St.
Laurent was $17,510,811.
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NOTES TO FINANCIAL STATEMENTS, Continued
15. Plan Amendments:
Effective for the period beginning January 1, 1998, the Plan year end
was changed to December 30. In addition, effective January 1, 1998, the
Company may make discretionary contributiuons in cash or Company stock as
the Board of Directors or the Executive Compensation Committee of the Board
may determine. Also effective January 1, 1998, the Plan was amended to
establish a fixed minimum contribution to be made by the Employer each Plan
Year, as described in Note 4.
16. Subsequent Event:
In April 1999, the Employer announced that it had signed letters of
intent to sell certain timberlands and its building products businesses.
These sales, which are anticipated to close in the third quarter of 1999,
will impact certain participants in the Plan.
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Line 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 30, 1998
SECURITY DESCRIPTION SHARES/UNITS/PAR VALUE COST MARKET VALUE
- -------------------- ---------------------- ---- ------------
COMMON STOCKS
CHESAPEAKE CORPORATION 252,161.00 7,176,485.73 9,298,436.88
TOTAL COMMON STOCKS 252,161.00 7,176,485.73 9,298,436.88
OTHER ASSETS
AMERICAN CENTY ULTRA FD INV 329,445.08 9,836,063.25 11,006,760.39
ASSOCIATED BANK DIV EQ FD 830,326.49 10,093,195.85 20,199,352.62
VALUE AS REPORTED BY ASSOCIATED
CHESAPEAKE CORP 1,126,247.15 1,126,247.15 1,126,247.15
LOANS TO PARTICIPANTS
DREYFUS A BD PLUS MUTUAL FD 133,256.76 1,930,706.84 1,865,594.75
LASALLE INTEREST INCOME FUND 5,952,092.58 5,952,092.58 5,952,092.58
VALUE AS REPORTED BY LASALLE
NEUBERGER BERMAN PARTNERS TRUST 1,036,727.84 14,257,481.46 18,733,672.14
VALUE AS REPORTED BY NEUBERGER
PHOENIX SER FD HIGH YIELD FD 578,874.91 4,903,461.36 4,509,435.55
TOTAL OTHER ASSETS 9,986,970.81 48,099,248.49 63,393,155.18
SHORT TERM INVESTMENTS
COLLECTIVE SHORT TERM INVEST FD 464,298.73 464,298.73 464,298.73
NON-DISCRETIONARY
TOTAL SHORT TERM INVESTMENTS 464,298.73 464,298.73 464,298.73
TOTAL INVESTMENTS 10,703,430.54 55,740,032.95 73,155,890.79
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Line 27d-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED OF WITHIN THE PLAN YEAR
for the year ended December 30, 1998
SECURITY DESCRIPTION SHARES/UNITS/PAR VALUE COST MARKET VALUE
- -------------------- ---------------------- ---- ------------
CHESAPEAKE CORP - ACQUISITIONS 557,636.32 557,636.32
DISPOSITIONS 581,546.94 581,546.94
TOTAL ACQUISITIONS: 557,636.32 557,636.32
DISPOSITIONS: 581,546.94 581,546.94
-20-
Line 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 30, 1998
NO OF NO OF TOTAL VALUE TOTAL VALUE NET
ISSUE PURCHASES SALES PURCHASES SALES GAIN/LOSS
- ----- --------- ----- ----------- ----------- ---------
COMMON STOCKS
CHESAPEAKE CORP 30 34 3,149,469.38 2,867,510.41 685,122.83
OTHER ASSETS
LASALLE INTEREST
INCOME FUND 85 83 4,436,982.78 3,369,037.19 .02
ASSOCIATED BANK DIV
EQ FD 96 103 2,918,896.53 3,924,299.29 1,938,901.84
AMERICAN CENTURY
ULTRA FUND 119 73 4,773,495.60 2,292,479.29 101,571.26
NEUBERGER BERMAN
PARTNERS TRUST 91 105 3,237,868.45 4,542,590.09 1,203,942.93
SHORT TERM INVESTMENTS
COLLECTIVE SHORT
TERM INVEST FD 113 101 5,561,611.53 5,492,540.83 .00
-21-
EXHIBIT 23.1
CONSENT OF PRICEWATERHOUSECOOPERS LLP
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (File No. 33-14927) of Chesapeake Corporation of our
report dated June 15, 1999 on the Chesapeake Corporation 401(k) Savings
Plan for Salaried Employees, appearing on page 3 of this Form 11-K.
/S/ PRICEWATERHOUSECOOPERS LLP
-----------------------------
PRICEWATERHOUSECOOPERS LLP
Richmond, Virginia
June 15, 1999
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