SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant
Filed by a party other than the registrant
Check the appropriate box:
( ) Preliminary proxy statement
(X) Definitive proxy statement
(X) Definitive additional materials
( ) Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
Chesapeake Corporation
(Name of Registrant as Specified in Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
(X) $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
( ) $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
( ) Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transactions
applies:
(3) Per unit price of other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
<PAGE>
(L O G O)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
March 25, 1994
To the Stockholders of
Chesapeake Corporation:
We are pleased to invite you to attend the annual meeting of
stockholders of Chesapeake Corporation to be held at the Exhibition Hall
at the Fairgrounds on Strawberry Hill, 600 East Laburnum Avenue,
Richmond, Virginia, on Wednesday, April 27, 1994, at 11:00 A.M., for the
following purposes:
(1) to elect four directors to serve until the 1997 annual
meeting of stockholders;
(2) to approve the amendment and restatement of the
Chesapeake Corporation Salaried Employees' Stock
Purchase Plan;
(3) to ratify the appointment by the Board of Directors of
Coopers & Lybrand as independent accountants for 1994;
and
(4) to transact such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on March 11,
1994, are entitled to notice of, to vote at and to participate in the
meeting.
You are requested to mark, date, sign and return the enclosed form
of proxy in the enclosed envelope whether or not you expect to attend
the meeting in person.
By order of the Board of Directors:
J. P. Causey Jr.
Secretary
<PAGE>
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
(logo)
GENERAL INFORMATION
Solicitation of the enclosed proxy is made by and on behalf of
Chesapeake Corporation for use at the annual meeting of stockholders to
be held at the Exhibition Hall at the Fairgrounds on Strawberry Hill,
600 East Laburnum Avenue, Richmond, Virginia, on Wednesday, April 27,
1994, and at any adjournments of such meeting. An annual report,
including financial statements for the year ended December 31, 1993, is
enclosed with this proxy statement.
The expense of this solicitation will be paid by the Corporation.
Officers, directors and employees of the Corporation may make
solicitations of proxies by telephone or telegraph or by personal calls.
The firm of D.F. King & Co., Inc. has been retained to assist in the
solicitation of proxies at a fee estimated not to exceed $6,500, plus
direct out-of-pocket expenses. Brokerage houses, nominees and
fiduciaries have been requested to forward proxy soliciting material to
the beneficial owners of the stock held of record by them, and the
Corporation will reimburse them for their charges and expenses.
The Corporation's charter authorizes the issuance of up to 60,000,000
shares of Common Stock ($1 par value) (" Common Stock" ) and 500,000
shares of Preferred Stock ($100 par value). Only stockholders of record
at the close of business on March 11, 1994, are entitled to notice of,
to vote at and to participate in the meeting. On the record date, the
stock issued and outstanding consisted of 23,520,232 shares of Common
Stock. Holders of Common Stock will vote as a single class at the
annual meeting. Each outstanding share will entitle the holder to one
vote. All shares represented by properly executed and delivered proxies
will be voted at the meeting or any adjournments.
A majority of the votes entitled to be cast on matters to be
considered at the meeting constitutes a quorum. If a share is
represented for any purpose at the meeting, it is deemed to be present
for quorum purposes for all other matters as well. Abstentions and
shares held of record by a broker or its nominee ("Broker Shares" ) that
are voted on any matter are included in determining the number of votes
present or represented at the meeting. Broker Shares that are not voted
on any matter at the meeting will not be included in determining whether
a quorum is present at such meeting. Directors are elected by a
plurality of the votes cast by holders of Common Stock at a meeting at
which a quorum is present. Votes that are withheld and Broker Shares
that are not voted in the election of directors will not be included in
determining the number of votes cast. Approval of the amendment and
restatement of the Chesapeake Corporation Salaried Employees' Stock
Purchase Plan (the "Stock Purchase Plan" ) requires the affirmative vote
of the holders of a majority of the shares of Common Stock present or
represented by properly executed and delivered proxies, and entitled to
vote with respect thereto, at a meeting at which a quorum is present.
Abstentions will have the same effect as a negative vote for purposes of
approving the Stock Purchase Plan. Broker Shares that are not voted
with respect to approval of the Stock Purchase Plan will not be included
in determining the number of shares entitled to vote thereon.
This proxy statement and the enclosed form of proxy were first mailed
to stockholders on March 25, 1994.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Corporation's Board of Directors is divided into three classes.
At the annual meeting, four directors are expected to be elected to
Class II to hold office for a term of three years and until their
respective successors are duly elected and qualified. Sture G. Olsson,
a director of the Corporation since 1952 and currently Chairman of the
Board, is not standing for re-election. Mr. Olsson's son, C. Elis
Olsson, is among the nominees for election to Class II. The Board of
Directors has indicated its intent to elect Sture G. Olsson as Chairman
Emeritus of the Board and J. Carter Fox as Chairman of the Board and
President & Chief Executive Officer of the Corporation at its annual
organizational meeting following the annual meeting of stockholders.
Information Concerning Nominees
<TABLE>
Name and Age; Director
Principal Occupation or Continuously
Employment During Last Five Years Since
Class II (to serve until the 1997 annual meeting of stockholders)
<S> <C> <C>
(PHOTO) C. Elis Olsson, 29 ____
Assistant Manager of Manufacturing,
since 1993, and former Manager - Maintenance
Planning and Assistant to the Vice
President of Manufacturing, Chesapeake
Paper Products Company, a subsidiary of
Chesapeake Corporation.
(PHOTO) Wallace Stettinius, 61 1980
Chairman of the Board and Director, Cadmus
Communications Corporation, a graphic
communications holding company; Director
of American Filtrona Corporation.
(PHOTO) Joseph P. Viviano, 55 1988
President and Chief Operating Officer,
since 1993, and Director, Hershey Foods
Corporation, a manufacturer of confectionery
products, and former President, Hershey
Chocolate U.S.A., a division of Hershey Foods
Corporation.
(PHOTO) Harry H. Warner, 58 1978
Financial Consultant, since 1990, and retired
Executive Vice President, VMI Foundation, Inc.;
Director of Pulaski Furniture Corporation and
American Filtrona Corporation.
Unless authority to do so is withheld, shares represented by properly
executed proxies in the enclosed form will be voted for the election of
the four persons named above. Each of the nominees except Mr. Olsson is
currently a director and has served continuously since the year he
joined the Corporation's Board. If any of the nominees should become
unavailable, the Board of Directors may designate substitute nominees,
for whom the proxies will be voted. In the alternative, the Board may
reduce the size of the Class to the number of remaining nominees, for
whom the proxies will be voted.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL
1 TO ELECT MESSRS. OLSSON, STETTINIUS, VIVIANO AND WARNER TO THE BOARD
OF DIRECTORS TO SERVE UNTIL THE 1997 ANNUAL MEETING.
Directors Continuing in Office
There are eight directors whose present term of office will
continue until 1995 or 1996, as indicated below, and until their
respective successors are duly elected and qualified. Each has served
continuously since the year he joined the Corporation's Board.
</TABLE>
<TABLE>
Name and Age; Director
Principal Occupation or Continuously
Employment During Last Five Years Since
<S> <C> <C>
Class I (to serve until the 1996 annual meeting of stockholders)
(PHOTO) William D. McCoy, 64 1985
Chairman of the Board, Chief Executive
Officer and Director, Koch Label Co.,
a consumer products label printing company.
(PHOTO) John W. Rosenblum, 50 1984
Tayloe Murphy Professor of Business
Administration, since 1993, and former Dean,
Darden Graduate School of Business
Administration, University of Virginia;
Director of Cadmus Communications
Corporation, Comdial Corporation, T. Rowe Price
Associates, Inc. and Cone Mills Corporation.
(PHOTO) John Hoyt Stookey, 64 1990
Nonexecutive Chairman of the Board,
Quantum Chemical Corporation, a subsidiary
of Hanson Industries, a British industrial
management corporation, since 1993, and former
Chairman of the Board, Chief Executive Officer
and Director of Quantum Chemical Corporation;
Director of U.S. Trust Company, ACX
Technologies, Inc. and Cyprus Amax Minerals
Company.
(PHOTO) Richard G. Tilghman, 53 1986
Chairman of the Board, Chief Executive Officer
and Director, Crestar Financial Corporation, a
bank holding company.
Class III (to serve until the 1995 annual meeting of stockholders)
(PHOTO) Paul A. Dresser, Jr., 51 1991
Executive Vice President & Chief Operating
Officer, Chesapeake Corporation, since 1991,
and former Group Vice President - Finance &
Administration and Chief Financial Officer,
Chesapeake Corporation.
(PHOTO) J. Carter Fox, 54 1980
President & Chief Executive Officer, Chesapeake
Corporation; Director of Crestar Financial
Corporation.
(PHOTO) Robert L. Hintz, 63 1985
Chairman of the Board, R. L. Hintz and
Associates, a management services
consulting firm; Director of Reynolds Metals
Company, Scott & Stringfellow Financial, Inc.
and Ashland Coal, Inc.
(PHOTO) Frank S. Royal, 54 1990
Physician; Director of Crestar Financial
Corporation, CSX Corporation, Best Products Co.,
Inc. and Hospital Corporation of America.
The Board of Directors meets regularly every two months and
following each annual meeting of stockholders. During the last year
there were nine meetings of the Board.
The Board has standing Executive, Audit, Executive Compensation
and Nominating Committees. Members of the Executive Committee are
Messrs. Fox, Olsson, Stettinius, Tilghman and Warner. During the last
year, there were no meetings of the Executive Committee. The Executive
Committee reviews various matters and submits proposals or
recommendations to the Board of Directors. The Executive Committee is
empowered to and does act for the Board of Directors on certain matters.
Members of the Audit Committee are Messrs. Hintz, McCoy, Royal and
Tilghman. During the last year, there were three meetings of the Audit
Committee. The Audit Committee recommends an independent accounting
firm to be selected by the Board of Directors for the upcoming year.
The Audit Committee reviews and approves various audit functions
including the year-end audit performed by the Corporation's independent
accountants. The Corporation's internal auditors and independent
accountants regularly report directly to the Audit Committee.
Members of the Executive Compensation Committee (the "Compensation
Committee") are Messrs. Rosenblum, Stettinius, Stookey, Viviano and
Warner. During the last year, there were five meetings of the
Compensation Committee. The Compensation Committee approves officer
incentive awards, grants stock options and recommends to the Board of
Directors remuneration levels for officers, general remuneration plans
for all management personnel and other employee remuneration plans.
Members of the Nominating Committee are Messrs. Olsson, Rosenblum
and Stettinius. During last year, there were two meetings of the
Nominating Committee. The Nominating Committee reviews the performance
and attendance of directors, recommends to the full Board of Directors
persons to serve as directors of the Corporation and establishes such
procedures as it deems proper to receive and review information
concerning potential candidates for election or reelection to the Board
of Directors. Stockholders entitled to vote for the election of
directors may nominate candidates for consideration by the Nominating
Committee. Notice of nominations made by stockholders with respect to
the 1995 annual meeting must be received in writing by the Secretary of
the Corporation no earlier than January 2, 1995, and no later than
January 27, 1995, and must set forth (i) the name, age, business address
and, if known, residence address of each such nominee, (ii) the
principal occupation or employment of each such nominee and (iii) the
number of shares of capital stock of the Corporation beneficially owned
by each such nominee.
During 1993 all directors attended at least 75% of the meetings of
the Board of Directors and the committees to which they were assigned
except Mr. Stookey, who attended 70% of such meetings. As Chairman of
Quantum Chemical Corporation ("Quantum"), Mr. Stookey served from 1989
to 1993 as an executive officer of Petrolane Incorporated, Petrolane
Finance Corp. and QJV Corp., affiliates of Quantum, which companies were
reorganized on July 15, 1993, under the U. S. Bankruptcy Code.
Compensation of Directors
Employee directors of the Corporation are not paid for their
service on the Board of Directors or any Board committee. Non-employee
directors received an annual retainer of $12,000 for Board service and
an attendance fee of $950, plus travel expenses, for each day attending
a Board or committee meeting. Committee chairmen received an additional
annual retainer of $3,500, and the Chairman of the Board of Directors
received an additional annual retainer of $33,000. The Corporation has
a Directors' Deferred Compensation Plan under which directors may defer
all or a portion of their fees until their retirement or another
specified date. Interest accrues on the balance of the deferred account
at a New York bank's prime rate. The Corporation also has established
an unfunded Outside Directors' Retirement Plan (the "Outside Directors'
Plan" ). Under the Outside Directors' Plan, non-employee directors
retiring at or after age 65 after at least five years of service or
prior to age 65 after at least ten years of service are paid an amount
equal to their retainer at the time of their retirement for a period
equal to their period of service, up to ten years.
At the 1992 annual meeting, the stockholders approved the Non-
Employee Director Stock Option Plan (the " Director Plan" ). Under the
Director Plan, each non-employee director will receive an annual award
of an option to purchase Common Stock in lieu of projected increases in
the cash retainer and meeting fees (an "Automatic Award" ). The number
of shares of Common Stock covered by Automatic Awards reflects
assumptions regarding (i) the future increases in directors' fees that
would have been approved but for adoption of the Director Plan, and (ii)
the fair market value of the option privilege. Based on the advice of
an independent compensation consultant, the value of an option to
purchase Common Stock under the Director Plan was set at $8.00 per
share. Pursuant to the Director Plan, each non-employee director
received on May 1, 1993, an Automatic Award of a stock option to
purchase 375 shares of Common Stock at a price of $20.1625 per share.
Unless the director's service terminates earlier for reasons other than
death or disability, these options are first exercisable on April 26,
1994, and remain exercisable for a period of ten years from their date
of grant. Pursuant to the Director Plan, non-employee directors will in
the future receive Automatic Awards of stock options to purchase the
following numbers of shares: May 1, 1994, 500 shares; May 1, 1995, 625
shares; and May 1, 1996, 750 shares. Non-employee directors are also
eligible to choose to receive an annual award pursuant to the Director
Plan in lieu of all or a part of the director's cash retainer for a
period of one or more future years (an "Elective Award" ). A non-
employee director choosing to receive an Elective Award will receive an
option to purchase 125 shares of Common Stock for each $1,000 of
foregone retainer. On May 1, 1993, the following directors received
Elective Awards at a price of $20.1625 per share for the following
numbers of shares: Mr. Hintz, 6,000 shares; Mr. McCoy, 2,000 shares;
Dr. Royal, 6,000 shares; Mr. Stettinius, 3,000 shares; and Mr. Viviano,
6,000 shares. Elective Awards are first exercisable on or after the day
of the annual meeting next following the date of grant in installments,
the number of which correspond to the number of years covered by the
Elective Award. The option price per share for Automatic and Elective
Awards is the average closing sales price of the Common Stock for the
twenty trading days before the October 31st that immediately precedes
the date of grant.
The cash retainer and attendance fees described above, together
with Automatic Awards under the Director Plan, represent the
Corporation's standard arrangements for compensation of its non-employee
directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows, as of February 1, 1994, the direct and
indirect beneficial ownership of Common Stock by: each director,
nominee and executive officer named in the Summary Compensation Table;
all directors and executive officers of the Corporation as a group; and
all persons beneficially owning more than 5% of the outstanding Common
Stock.
Sole Voting and Aggregate
Investment Aggregate Percentage
Name Power (1) Other (2) Total Owned (3)
Thomas Blackburn . . . 11,553 11,553
Charles S. Cianciola . 42,899 75 42,974
Paul A. Dresser, Jr. . 67,205 10,744 77,949
J. Carter Fox . . . . . 185,170 34,152 219,322
Robert L. Hintz . . . . 650 650
William D. McCoy . . . 1,750 1,750
C. Elis Olsson . . . . 37,449 1,325 38,774
Sture G. Olsson . . . 889,724 1,425,380(4) 2,315,104(4) 9.84%
John W. Rosenblum . . . 1,150 1,150
Frank S. Royal . . . . 750 750
Wallace Stettinius . . 3,250 3,250
John Hoyt Stookey . . . 1,250 1,250
Samuel J. Taylor . . . 33,961 1,915 35,876
Richard G. Tilghman . . 1,635 1,209 2,844
Joseph P. Viviano . . . 12,116 12,116
Harry H. Warner . . . . 8,905 8,905
All Directors and
Executive Officers as
a Group (19 persons) 1,356,458 1,478,096 2,834,554 12.06
Crestar Bank
919 E. Main Street
Richmond, Virginia . 1,448,404 1,477,574(4) 2,925,978(4) 12.44
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 104,600 1,551,100 1,655,700 7.04
Thompson, Siegel &
Walmsley, Inc.
5000 Monument Avenue
Richmond, Virginia . 710,660 669,250 1,379,910 5.87
_______________
(1) Includes shares held in fiduciary capacities and (i) an
aggregate 243,298 shares that may be acquired by certain of the Corpora-
tion's officers within 60 days under the Corporation's 1987 Stock Option
Plan, and (ii) an aggregate 2,500 shares that may be acquired by certain
non-employee directors within 60 days under the Director Plan.
(2) Includes shares, if any: (a) owned by certain relatives; (b)
held in various fiduciary capacities; (c) held by certain corporations;
(d) held by the Corporation's Employee Stock Ownership Plan; and (e)
held by the Corporation's 401(k) Savings Plan for Salaried Employees.
These shares may be deemed to be beneficially owned under the rules and
regulations of the Securities and Exchange Commission (the "SEC" ), but
the inclusion of such shares in the table does not constitute an
admission of beneficial ownership. Certain shares may be deemed to be
beneficially owned by more than one person or group listed and,
accordingly, must be reported as being beneficially owned by each.
(3) Except as indicated, each person or group beneficially owns
less than 1% of the outstanding Common Stock.
(4) Includes 1,114,160 shares held in various trusts as to which
Crestar Bank and Mr. Olsson may be deemed to share beneficial ownership.
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
The Corporation's executive compensation programs are administered
by the Compensation Committee. The Compensation Committee is composed
of the individuals listed below, each of whom is a non-employee director
of the Corporation. The Compensation Committee grants stock options,
stock appreciation rights ( "SARs" ), performance shares or stock units,
and approves incentive awards, under the 1993 Incentive Plan for
management employees and recommends to the Board of Directors the salary
levels for executive officers. The Compensation Committee has retained
Frederic W. Cook & Co., Inc. as its consultant on executive
compensation, which consultant reports directly to the Compensation
Committee.
The executive compensation programs have been designed to enable
the Corporation to attract, develop and retain executive officers and
motivate them in an environment conducive to the attainment of the
Corporation's business goals. It is intended that the compensation
programs be kept externally competitive and internally equitable to
reflect differences in job responsibility and individual contribution to
the Corporation's success. The Corporation's goal is to pay average
base salaries in relation to the paper and forest products industry,
local competing industries or industry in general, as appropriate, with
appropriate bonus plans to provide incentive opportunities for the
executives. The intent of the incentive programs is to provide above-
average total pay for above-average company, individual business unit
and individual executive performance. The compensation programs also
encourage employee ownership of the Corporation's Common Stock.
In designing and administering the individual elements of
executive compensation, the Compensation Committee strives to balance
short- and long-term incentive objectives. The individual elements are
base salaries and annual incentive opportunities, which focus on short-
term objectives, and stock option grants and the Long-Term Incentive
Plan, which focus on long-term objectives. The individual elements have
been set by the Compensation Committee to provide that more than 50% of
the total compensation opportunities for the president & chief executive
officer (the "CEO" ) will be provided by annual incentives, stock options
and the Long-Term Incentive Plan, with the long-term elements being the
more significant. This results in the expected value of the CEO's total
compensation being set at competitive levels with a large portion at
risk based on actual performance. The short-term objectives are
primarily to achieve profitability, manage cash flow and operate safely
in compliance with applicable laws. Long-term objectives include
sustained growth, cash flow and returns for stockholders.
The Compensation Committee's policy on the tax deductibility of
compensation for the CEO and other executive officers is to maximize the
deductibility, to the extent possible, while preserving the Compensation
Committee's flexibility to maintain competitive compensation programs.
All executive compensation paid or awarded during 1993 is considered to
be fully deductible by the Corporation under the Revenue Reconciliation
Act of 1993.
Below is a discussion of each of the elements of executive
compensation along with a description of the decisions and actions taken
by the Compensation Committee with regard to 1993 compensation,
including a specific rationale for the decisions regarding the CEO's
compensation.
Base salaries for executive officers are approved by the Board of
Directors based upon recommendations by the Compensation Committee. The
Compensation Committee's recommendations result from a subjective review
of individual performance and competitive data supplied by its
consultant. The competitive data are based upon published survey
information which includes companies in the paper and forest products
industry and U.S. industry in general. The Compensation Committee
establishes pay ranges for executive officers based on these competitive
data, with the midpoints of the ranges set at the median salaries for
similar positions at comparable companies. During 1993, the
Compensation Committee recommended and the Board of Directors approved a
four-month delay in base salary increases for executive officers,
including the CEO, from March 1 to July 1, 1993. The Compensation
Committee recommended the delay because of the anticipated financial
performance of the Corporation during the first half of 1993. In
determining recommendations for specific salaries for executive
officers, the Compensation Committee considered the position of each
individual's salary within the respective pay range. The Compensation
Committee also considered the general merit increases for Chesapeake's
salaried employees and the merit increases for employees in the paper
and forest products industry and U.S. industry in general. The
Compensation Committee recommended and the Board of Directors approved
an increase in the CEO's salary of 4%. In addition to the
considerations stated above, the increase reflected the Compensation
Committee's subjective evaluation of the CEO's performance based on the
Corporation's financial performance, both in absolute terms and in
comparison with an internally generated peer group, and his achievement
of individual goals which primarily involve the strategic direction of
the Corporation and personal performance objectives. The peer group
included a majority of the companies in the S&P Paper and Forest
Products Group, which is used in the Corporation's performance graph
included in this proxy statement, plus other companies in the paper and
forest products industry with which the Corporation competes. The
Compensation Committee concluded that the Corporation's financial
performance was disappointing in absolute terms but in general compared
favorably with the financial performance of the peer group. The
Compensation Committee also concluded that the CEO's achievement of his
individual goals substantially met the Compensation Committee's
expectations. The CEO's performance was evaluated in the aggregate
without assigning specific weights to the individual elements upon which
his performance was evaluated.
The Compensation Committee also makes incentive awards to
executive officers under the 1993 Incentive Plan. The Compensation
Committee reviewed and discussed Chesapeake's 1993 performance and
compared it to the Corporation's 1992 performance, the 1993 business
plan, long-term standards of performance and the performance of the
internally generated peer group of companies mentioned above. In
evaluating the Corporation's performance, several financial performance
measures, including earnings, return on equity and cash flow, and the
Corporation's stock price performance were reviewed. Without assigning
relative weights to the different measures, the Compensation Committee
placed primary emphasis on cash flow generated by operations. The
Compensation Committee did not determine the awards based on pre-set
performance targets, but subjectively evaluated the various performance
measures and the aggregate amount deemed appropriate for incentive
awards. Based on this review, the Compensation Committee established a
total award pool for 1993 incentive awards for all officers. The total
award pool established by the Compensation Committee was substantially
less than 1992's total awards, and represented the lowest level of total
incentive awards paid to officers since 1985. The Compensation
Committee then allocated the pool among the individual officers based on
the recommendations of the CEO and a subjective evaluation of each
officer's individual performance and, where applicable, the financial
performance of certain business units of the Corporation. The financial
performance of the business units was evaluated primarily based on
earnings and cash flow. The annual award for the CEO was $44,000 for
1993, which was approximately 11% of his year-end salary, compared to an
annual award of approximately 20% for 1992 and 28% for 1991. The CEO's
award was based upon the Compensation Committee's assessment of his
individual performance against his individual goals approved by the
Compensation Committee at the beginning of the year and the Compensation
Committee's evaluation of the Corporation's performance as mentioned
above.
Stock option grants are awarded as a long-term incentive to
executives to align the executives' interests with those of other
stockholders and to encourage significant stock ownership. In 1993, the
Compensation Committee granted stock options for 167,350 shares of
Common Stock to employees, including options for 20,000 shares of Common
Stock to the CEO. In granting the 1993 options, the Compensation
Committee considered data supplied by its consultant with respect to
competitive practices obtained from a broad survey of U.S. industrial
companies, contributions by individual recipients to the overall
performance of the Corporation and their potential to contribute in the
future and prior grant levels. Based on its review, the Compensation
Committee granted stock options to individual employees consistent with
the individual grants for the past few years and increased by
approximately 10% the number of employees who received grants. The
Compensation Committee granted options with respect to the same number
of shares to the CEO as had been granted during 1992 and 1991. Awarding
grants to the executive officers at the same level for the past few
years has resulted in the grants being below competitive levels, but the
Compensation Committee believed this was appropriate based on the
overall financial performance of the Corporation. The stock options
become exercisable in one-third installments on each of the first three
anniversaries of the date of grant. The grant price was the average of
the closing prices of the Common Stock on the twenty days up to and
including the date of the grant. The option recipients, including the
CEO, will receive value from these grants only if the price of the
Common Stock increases above the grant price.
The Long-Term Incentive Plan provides an incentive that focuses
the executives' attention on the long-term growth and financial success
of the Corporation. The Compensation Committee granted Award
Potentials, as defined below, for 25,000 shares under the Long-Term
Incentive Plan to the CEO during 1989 for the 1989-93 plan cycle. Award
Potentials were also granted to other executive officers. Each year,
some or all of the Award Potentials may be earned based upon the
Corporation's cash flow and its relative return on equity compared to a
peer group of companies in the paper and forest products industry as
established by Business Week. As the Award Potentials are earned, the
participant receives shares of Restricted Stock and Stock Units, each as
defined below, that remain forfeitable until the end of the plan cycle.
The CEO earned 1,195 shares during 1989 through 1992 and an estimated
1,943 shares during 1993 under the Long-Term Incentive Plan. The shares
earned for 1993 resulted primarily from the Corporation's record level
of cash flow.
Executive Compensation Committee
Harry H. Warner, Chairman
John W. Rosenblum
Wallace Stettinius
John Hoyt Stookey
Joseph P. Viviano
Description of Compensation Plans
Executive officers of the Corporation were entitled to participate
in the compensation plans described below during 1993.
1993 Incentive Plan. The 1993 Incentive Plan provides that the
Compensation Committee or its delegate (the "Administrator" ) may, from
time to time, grant stock options, SARs, stock awards, performance
shares or stock units and may make incentive awards to the Corporation's
key employees and officers ( "Participants" ). Options granted under the
1993 Incentive Plan may be either incentive stock options ( "ISOs" ) or
nonqualified stock options. A stock option entitles the Participant to
purchase shares of Common Stock from the Corporation at the option
price. The option price will be fixed by the Administrator at the time
the option is granted, but the price cannot be less than the fair market
value of the stock on the date of grant in the case of an ISO, or 85% of
that amount in the case of a nonqualified stock option.
SARs may be granted in relation to option grants ( "Corresponding
SARs" ) or independently of option grants. The difference between these
two types of SARs is that to exercise a Corresponding SAR, the
Participant must surrender unexercised that portion of the stock option
to which the Corresponding SAR relates. SARs entitle the Participant to
receive the lesser of (i) the excess of the fair market value of a share
of Common Stock on the date of exercise over the initial value of the
SAR, or (ii) the initial value of the SAR. The initial value of the SAR
is the option price of the related option in the case of a Corresponding
SAR and the fair market value of a share of Common Stock on the date of
grant in the case of independent SARs.
Participants may also be awarded shares of Common Stock pursuant
to a stock award. The Administrator, in its discretion, may prescribe
that a Participant's rights in a stock award shall be nontransferable or
forfeitable or both unless certain conditions (such as a specified
period of employment with the Corporation or the achievement of stated
objectives) are satisfied. The 1993 Incentive Plan also provides for
the award of performance shares. A performance share award entitles the
Participant to receive a payment equal to the fair market value of a
specified number of shares of Common Stock. The Administrator will
prescribe the requirements (such as a specified period of employment
with the Corporation or the achievement of stated objectives) that must
be satisfied before a performance share award is earned. To the extent
that performance shares are earned, the obligation will be settled in
Common Stock. A Participant also may be awarded stock units under the
1993 Incentive Plan. A stock unit is an award, stated with reference to
a specified number of shares of Common Stock, that entitles the
Participant to receive a payment for each specified share equal to the
fair market value of the Common Stock on the date of settlement and
accumulated dividends. The Administrator, in its discretion, may
prescribe that a Participant's rights in stock units shall be
nontransferable or forfeitable or both unless certain conditions (such
as a specified period of employment with the Corporation or the
achievement of stated objectives) are satisfied. To the extent that any
such requirements are satisfied, the obligation may be settled in cash,
in Common Stock or by a combination of the two.
The 1993 Incentive Plan also allows the Administrator to make
incentive awards to Participants on such terms and conditions as the
Administrator prescribes. To the extent that any incentive awards are
granted, they may be settled in cash, in Common Stock or by a
combination of the two.
The 1993 Incentive Plan provides that outstanding options and SARs
will become exercisable and outstanding stock awards, performance
shares, stock units and incentive awards will be earned in full and
nonforfeitable in the event of a "change in control" of the Corporation
(as defined below).
1987 Stock Option Plan. The 1987 Stock Option Plan provides that
the Compensation Committee may from time to time grant stock options,
stock options with corresponding SARs and independent SARs to selected
employees of the Corporation and its subsidiaries. Under the terms of
the Stock Option Plan, grants may be made to employees who, in the
judgment of the Compensation Committee, have contributed significantly
or are expected to contribute significantly to the profits or growth of
the Corporation and its subsidiaries. The options granted may be ISOs
or nonqualified stock options.
The Compensation Committee did not make any grants under the 1987
Stock Option Plan during 1993 and has indicated that it does not intend
to make any additional grants under this plan in the future.
Salaried Employees' Stock Purchase Plan. Under the Stock Purchase
Plan, approximately 1,580 full-time salaried employees of the
Corporation or of one of its designated subsidiaries may authorize a
contribution of up to 5% of their basic compensation to the plan through
payroll deductions. At the end of each plan year, each participant's
employer makes a matching contribution equal to 30% of the amount
contributed by the participant, from which is deducted the amount
required to be withheld under income tax, FICA and similar laws. The
amount contributed by the participants and the net amount contributed by
their employers are applied to purchase Common Stock. As described
under Proposal 2 below, on February 8, 1994, the Board of Directors
amended and restated the Stock Purchase Plan effective July 1, 1994,
subject to the approval of the Corporation's stockholders.
401(k) Savings Plan for Salaried Employees. All salaried
employees of the Corporation who have attained age 18 are eligible to
participate in the Chesapeake Corporation 401(k) Savings Plan for
Salaried Employees (the "Savings Plan" ) after completing six months of
employment. Plan participants may elect to reduce their current
compensation and have pre-tax contributions of 1% to 10% of their gross
earnings, up to maximum amounts allowable under applicable Internal
Revenue Service regulations ($8,994 in 1993), made on their behalf to
the Savings Plan. The Corporation makes a matching contribution equal
to one-half of the pre-tax contribution made on behalf of the employee.
The maximum matching contribution that may be made by the Corporation is
2-1/2% of the employee's gross earnings.
Benefits Continuation Plan. The Chesapeake Corporation Salaried
Employees' Benefits Continuation Plan (the "Benefits Continuation Plan")
will provide benefits to all salaried employees of the Corporation and
its subsidiaries, including the executive officers named in the Summary
Compensation Table, who are terminated within twenty-four months of a
"change in control" of the Corporation (as defined below). The Benefits
Continuation Plan provides severance pay based on the participant's
credited service and compensation, with such severance pay not to exceed
twenty-four months' compensation. The participant's health and life
insurance benefits also will be continued for the period during which
the participant receives severance pay or until the participant obtains
other employment, whichever is earlier.
Long-Term Incentive Plan. The Long-Term Incentive Plan (the
"Long-Term Plan"), provides that the Compensation Committee may from
time to time grant to selected employees of the Corporation and its
subsidiaries (i) shares of Common Stock that are nontransferable and
subject to forfeiture until certain conditions prescribed by the
Compensation Committee (such as a specified period of employment with
the Corporation) are satisfied ("Restricted Stock"), either alone or
together with Restricted Stock Units ("Stock Units") that are to be used
to satisfy the participant's income and employment tax withholding
obligations with respect to the related Restricted Stock as such stock
vests in accordance with its terms, and (ii) award potentials (an "Award
Potential"), stated with reference to a specified number of shares of
Common Stock, that may entitle the participant to receive shares of
Restricted Stock together with Stock Units. As an Award Potential is
earned, the participant receives shares of Restricted Stock and Stock
Units totaling the number of shares of Common Stock earned. The
Compensation Committee, on the date of grant of an Award Potential, may
provide that the participant's right to receive Restricted Stock and
Stock Units in relation to an Award Potential will be forfeited unless
certain conditions (such as a specified period of employment with the
Corporation or the attainment by the Corporation of certain stated
financial objectives) are satisfied. The Corporation pays to holders of
Stock Units amounts equal to the dividends that would be payable on the
number of shares of Common Stock represented thereby, less applicable
income and employment taxes required to be withheld.
The Long-Term Plan provides that upon a "change in control" of the
Corporation (as defined below), each outstanding Award Potential will be
deemed to have been earned in its entirety and shall be converted into
Restricted Stock and Stock Units. Such Restricted Stock and Stock
Units, together with all other outstanding Restricted Stock and Stock
Unit awards, will thereafter become transferrable and nonforfeitable
upon the earlier of (i) the vesting dates set forth in the agreements
governing their grant, or (ii) the termination of the participant's
employment without cause or following his refusal to move to another
location or upon a material reduction in the participant's compensation
or duties.
For purposes of the 1993 Incentive Plan, the Long-Term Plan and
the Benefits Continuation Plan, change in control means, in general,
the occurrence of any of the following events: (a) any person or group
becomes the beneficial owner of 20% or more of the combined voting power
of the then-outstanding voting securities of the Corporation entitled to
vote generally in the election of directors (with certain exceptions);
(b) those persons who were members of the Corporation's Board of
Directors prior to the adoption of such plan, and those persons whose
subsequent nominations were approved by such directors, cease to
constitute a majority of the Board of Directors (with certain
exceptions); (c) the stockholders of the Corporation approve a
reorganization, merger, share exchange or consolidation involving the
Corporation unless immediately following such transaction all or
substantially all of the persons who beneficially own Common Stock and
any other then-outstanding voting securities of the Corporation
beneficially own at least 80% of the common stock and voting securities,
respectively, of the surviving entity in such transaction in
substantially the same proportions as their ownership immediately prior
to such transaction; or (d) the stockholders of the Corporation approve
a complete liquidation or dissolution of the Corporation or the sale of
all or substantially all of its assets (with certain exceptions). The
foregoing summary is qualified in its entirety by reference to the terms
of the 1993 Incentive Plan, the Long-Term Plan and the Benefits
Continuation Plan, copies of which will be provided promptly upon
request and without charge to each person to whom a copy of this proxy
statement is delivered. Requests should be directed to: J. P. Causey
Jr., Secretary, Chesapeake Corporation, 1021 East Cary Street, Box 2350,
Richmond, Virginia 23218-2350.
The Compensation Committee made grants of Award Potentials to
executive officers in 1989 for the 1989-93 performance cycle under the
Long-Term Plan. The Compensation Committee has indicated that it does
not intend to make any additional grants or awards under the Long-Term
Plan in the future.
Section 16(a) Compliance. Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires the Corporation's executive
officers, directors and persons owning more than 10% of the Common Stock
to file reports of ownership and changes in ownership of the Common
Stock and derivative securities of the Corporation with the SEC and the
New York Stock Exchange. During 1993, two reports relating to two
transactions (the cash-out of a fractional share distributed under the
Corporation's Employee Stock Ownership Plan and a gift to his spouse)
were filed late by Andrew J. Kohut, Vice President - Finance & Chief
Financial Officer of the Corporation.
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31,
1991, 1992 and 1993, the cash compensation paid by the Corporation and
its subsidiaries, as well as certain other compensation paid or accrued,
to the Corporation's CEO and its four other most highly compensated
executive officers (the "Named Executive Officers").
</TABLE>
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Awards Payout
Other Securities
Annual Underlying All Other
Name and Compen- Options/ LTIP Compen-
Principal Position Year Salary Bonus sation(1) SARs Payouts(2) sation(3)
<S> <C> <C> <C> <C> <C> <C> <C>
J. Carter Fox 1993 $408,000 $44,000 20,000 $49,547 $10,497
President & 1992 395,417 80,000 20,000 10,089
Chief 1991 372,500 103,865 20,000 1,409 9,825
Executive
Officer
Paul A. 1993 277,500 40,000 13,500 35,649 8,577
Dresser, Jr. 1992 269,167 55,000 13,500 8,274
Executive 1991 230,638 78,914 13,200 1,003 7,285
Vice
President &
Chief
Operating
Officer
Charles S. 1993 176,000 44,000 6,000 17,825 7,069
Cianciola 1992 169,167 60,611 6,000 6,797
Group Vice 1991 155,833 76,363 7,000 501 6,500
President -
Tissue
Products
Samuel J. 1993 175,750 44,000 6,000 17,825 7,062
Taylor 1992 167,667 61,894 6,000 6,729
Group Vice 1991 151,000 85,205 7,000 501 6,503
President -
Packaging
Thomas 1993 177,000 27,000 6,000 15,836 7,100
Blackburn 1992 171,251 40,510 $3,972(4) 6,000 16,304
Group Vice 1991 160,000 52,074 11,000 4,052
President -
Kraft
Products
(since
February
1991)
____________________
(1) None of the Named Executive Officers received perquisites or
other personal benefits, securities or property with an aggregate value
in excess of the lesser of $50,000 or 10% of the total of his salary
and bonus shown above.
(2) The amounts appearing in the long-term incentive plan
("LTIP") payouts column represent the value of Restricted Stock and
Stock Units received as Award Potentials were earned under the Long
-Term Plan for 1993 (estimated) and 1991 (actual), based on the closing
price for Common Stock of $25.50 and $23.875 on December 31, 1993, and
1991, respectively. No Award Potentials were earned in 1992. All
unearned Award Potentials granted under the Long-Term Plan for the
1989-1993 performance cycle expired as of December 31, 1993, and as of
December 31, 1993, all restrictions on shares of Restricted Stock
received under the plan expired. Accordingly, as of December 31,
1993, none of the Named Executive Officers held any shares of
Restricted Stock under the Long-Term Plan, nor did such individuals hold
any other shares of restricted stock of the Corporation as of such date.
(3) All Other Compensation for 1993 includes the following:
(a) the Corporation's 50% matching contributions under the Savings Plan
of $4,497 on behalf of each of the Named Executive Officers; and (b) the
Corporation's 30% matching contribution under the Stock Purchase Plan
of the following amounts made to the Named Executive Officers: Mr.
Fox, $6,000; Mr. Dresser, $4,080; Mr. Cianciola, $2,572; Mr. Taylor,
$2,565; and Mr. Blackburn, $2,603.
(4) This amount represents a payment to Mr. Blackburn to
assist in paying taxes on relocation
payments.
</TABLE>
Stock Options and SARs
The following table contains information concerning the grants of options
and SARs made during 1993 under the 1993 Incentive Plan to the Named Executive
Officers.
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Potential
Realizable value at
Assumed Annual
Rates of Stock Price
Appreciation
Individual Grants for Option Term(1)
- --------------------------------------------------------------------------- ----------------------------------
% of
Total 0% 5%(4) 10%(4)
Number of Options/
Securities SARs (Assumes (Assumes (Assumes
Underlying Granted to a Common a Common a Common
Options/ Employees Exercise Expira- Stock Stock Stock
SARs in Fiscal or Base tion Price of Price of Price of
Name Granted(2) Year Price(3) Date $19.15) $31.19) $49.67)
<S> <C> <C> <C> <C> <C> <C> <C>
J. Carter Fox 20,000 12.0% $19.15 8/8/03 $0 $240,800 $610,400
Paul A. Dresser, Jr. 13,500 8.1 19.15 8/8/03 0 162,540 412,020
Charles S. Cianciola 6,000 3.6 19.15 8/8/03 0 72,240 183,120
Samuel J. Taylor 6,000 3.6 19.15 8/8/03 0 72,240 183,120
Thomas Backburn 6,000 3.6 19.15 8/8/03 0 72,240 183,120
</TABLE>
____________________
(1) The potential realizable value is based upon assumed future
prices for the Common Stock that are derived from the specified assumed rates of
appreciation. Actual gains, if any, on stock option exercises and Common
Stock holdings are dependent on the actual future performance of the Common
Stock. There can be no assurance that the amounts reflected in this table
will be achieved.
(2) All option grants consisted of nonqualified stock options
granted under the 1993 Incentive Plan. These grants become exercisable in one-
third installments on each of the first three anniversaries of the date of
grant (August 9, 1993).
(3) The exercise price was set at the average of the closing prices
of Common Stock on the twenty trading days up to and including the date of the
grant. The exercise price may be paid in cash or in Common Stock valued at
fair market value on the date preceding the date of exercise, or a
combination of cash and Common Stock.
(4) The 5% and 10% assumed annual rates of stock price appreciation
used to calculate potential option gains shown above are required by the
rules of the SEC. The actual gains that will be realized, if and when the
Named Executive Officers exercise the options granted in 1993, will be
dependent on the future performance of the Common Stock. To put the
hypothetical gains shown in the table into perspective, the following is
provided:
<TABLE>
Annual Rate of Stock Price
Appreciation
5% 10%
<S> <C> <C>
Resulting stock price based on $19.15 starting price $ 31.19 $ 49.67
Per share gain 12.04 30.52
Aggregate gain that would be realized by all stockholders (based on 23,445,745 shares 282,286,770.00 715,564,137.00
outstanding on August 9, 1993)
Aggregate hypothetical gain on all 1993 options granted to the Named Executive Officers 620,060.00 1,571,780.00
if $31.19 and $49.67 prices, respectively, are achieved
Hypothetical aggregate gains for the Named Executive Officers as a percentage of all 0.2% 0.2%
stockholders' gains
</TABLE>
Option/SAR Exercises and Holdings
The following table sets forth information with respect to the
Named Executive Officers concerning the exercise of options and SARs
during 1993, and unexercised options and SARs held by them on December
31, 1993.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST YEAR AND YEAR-END OPTION/SAR VALUES
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs at
Options/SARs Year-End (1)
at
Year-End
Shares Value Exercisable/ Exercisable/
Name Acquired Realized Unexercisable Unexercisable
on (2) (2)
Exercise
<S> <C> <C> <C> <C>
J. Carter Fox 0 $ 0 80,767/40,001 $464,762/$189,436
Paul A. 0 0 36,300/26,900 207,671/127,255
Dresser, Jr.
Charles S. 0 0 22,466/12,334 133,019/58,876
Cianciola
Samuel J. 0 0 27,900/12,000 165,386/56,830
Taylor
Thomas 3,468(3) 10,194 6,000/12,000 27,740/56,830
Blackburn
____________________
(1) The value of unexercised in-the-money options/SARs
represents the positive spread between the December 31, 1993, closing
price of Common Stock ($25.50) and the exercise price of any unexercised
options and SARs.
(2) The shares represented could not be acquired by the named
executive as of December 31, 1993, and future exercisability is subject
to the executive remaining employed by the Corporation for up to three
years from the date of grant, subject to acceleration for retirement,
death or total disability of the executive or a "change in control" of
the Corporation (as defined in the 1993 Incentive Plan and the 1987
Stock Option Plan).
(3) Represents the total number of shares underlying stock
options and SARs exercised by Mr. Blackburn by surrendering previously
owned Common Stock, in which he acquired a net 397 shares.
</TABLE>
Pension Plans Table
The following table illustrates the approximate aggregate annual
retirement benefits payable to covered participants retiring at age 65
pursuant to the Corporation's funded retirement plan for its salaried
employees and unfunded supplemental retirement plan for certain officers
and other key employees.
<TABLE>
Estimated Annual Retirement Benefit at Age 65
Years of Credited Service (2)
Annual
Compensation (1) 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
$100,000 $ 30,000 $ 40,000 $ 48,000 $ 56,000 $ 64,000
200,000 60,000 80,000 96,000 112,000 128,000
300,000 90,000 120,000 144,000 168,000 192,000
400,000 120,000 160,000 192,000 224,000 256,000
500,000 150,000 200,000 240,000 280,000 320,000
600,000 180,000 240,000 288,000 336,000 384,000
__________________
(1) Annual compensation is the average of
the highest five consecutive years' salary and bonus paid during
the last ten consecutive years and, in the case of the Named
Executive Officers, approximates such amounts as set forth in the
Summary Compensation Table.
(2) The years of credited service for
the Named Executive Officers as of March 1, 1994, were: Mr. Fox,
30; Mr. Dresser, 12; Mr. Cianciola, 29; Mr. Taylor, 15; and Mr.
Blackburn, 3 (Messrs. Cianciola and Taylor each have 8 years
credited service under the supplemental retirement plan).
</TABLE>
The above amounts are stated as payments
in the form of a life annuity. Other actuarially equivalent forms
of benefit may be selected. The amounts shown in the table are
subject to reduction for a portion of Social Security benefits.
Performance Graph
The following graph compares the cumulative total return for the
Common Stock to the cumulative total returns for the S&P 500 Composite
Index and the S&P Paper & Forest Products Group Index for the Corporation's
last ten fiscal years. The graph assumes an investment of $100 in the
Common Stock and in each index as of December 31, 1988, and that all
dividends were reinvested.
(PERFORMANCE GRAPH)
Chesapeake S&P Paper & Forest
Corporation S&P 500 Products Group
1983 55 49 48
1984 49 52 51
1985 58 69 65
1986 78 82 84
1987 80 86 91
1988 100 100 100
1989 102 132 121
1990 73 128 110
1991 134 166 139
1992 118 179 159
1993 152 197 175
CERTAIN TRANSACTIONS
C. Elis Olsson, a nominee for election to the Board of Directors, is
Assistant Manager of Manufacturing of Chesapeake Paper Products Company, a
subsidiary of the Corporation. During 1993, the total cash compensation
paid by the Corporation and its subsidiaries to Mr. Olsson (including the
Corporation's contributions under certain employee benefit plans) was
$64,680. In addition during 1993, Mr. Olsson was granted nonqualified
stock options under the 1993 Incentive Plan for 400 shares of Common Stock,
at an exercise price of $19.15 and with an expiration date of August 8,
2003, which options will become exercisable in one-third installments on
each of the first three anniversaries of the date of grant (August 9,
1993). Mr. Olsson's compensation was consistent with that paid by the
Corporation and its subsidiaries in 1993 to other employees with similar
job titles and responsibilities.
PROPOSAL TO AMEND AND RESTATE
THE SALARIED EMPLOYEES' STOCK PURCHASE PLAN
(PROPOSAL 2)
The Stock Purchase Plan was originally approved at the 1974 annual
meeting of stockholders, and amendments to the Stock Purchase Plan were
last approved by the stockholders at the 1987 annual meeting. On February
8, 1994, the Board of Directors amended and restated the Stock Purchase
Plan, subject to the approval of the Corporation's stockholders. The
Corporation proposes that the stockholders approve the amendment and
restatement of the Stock Purchase Plan, to be effective July 1, 1994.
The purposes of the Stock Purchase Plan are to encourage ownership of
the Corporation's Common Stock by salaried employees of the Corporation and
its participating subsidiaries and to provide an additional incentive to
those employees to remain with and promote the success of the business of
the Corporation and its subsidiaries. The stockholders have previously
approved the issuance of a maximum of 1,950,000 shares of the Corporation's
Common Stock pursuant to the Stock Purchase Plan, of which 198,880 shares
remain available for issuance. The Corporation estimates that
approximately 100,000 of such available shares will be issued effective
July 1, 1994, for the Plan Year ending June 30, 1994. As amended and
restated, the Stock Purchase Plan provides that a maximum of 750,000 shares
of Common Stock (including the remaining estimated 98,880 previously
authorized but unissued shares) may be issued thereunder after July 1,
1994. The Stock Purchase Plan will be administered by a committee
appointed by the Compensation Committee (the "Committee").
The following paragraphs summarize the principal features of the Stock
Purchase Plan, as amended and restated, and the more important changes to
the prior version of the Stock Purchase Plan effected by such amendment and
restatement. This summary is subject, in all respects, to the terms of the
Stock Purchase Plan, as amended and restated. The Corporation will provide
promptly, upon request and without charge, a copy of the full text of the
Stock Purchase Plan, as amended and restated, to each person to whom a copy
of this proxy statement is delivered. Requests should be directed to:
J.P. Causey Jr., Secretary, Chesapeake Corporation, 1021 East Cary Street,
P.O. Box 2350, Richmond, Virginia 23218-2350.
Summary of the Amended and Restated Stock Purchase Plan
Each salaried employee of the Corporation who has attained age 18 is
eligible to participate in the Stock Purchase Plan after five months of
continuous employment, unless such employee is (i) subject to a collective
bargaining agreement that does not authorize such participation, (ii)
employed for less than 20 hours per week or (iii) employed for less than
five months in any calendar year. As of the date of this proxy statement,
approximately 1,580 persons were eligible to participate in the Stock
Purchase Plan.
An eligible employee becomes a participant in the Stock Purchase Plan
by authorizing a payroll deduction from his basic compensation, which
excludes bonuses and other extra compensation, at least 25 days before the
beginning of a Plan Year (as defined below) or at such other date as may be
determined by the Committee. A salaried employee who completes his initial
five months of continuous employment after any July 1 may become a
participant in the Stock Purchase Plan on the first day of the seventh
month of the Plan Year following the date he completes five months of
continuous employment, provided he authorizes a payroll deduction at least
25 days before that date. The "Plan Year" is determined by the Committee,
and is currently the twelve-month period beginning on each July 1 and
ending the following June 30.
A participant must specify the amount of his payroll deduction for
each Plan Year in multiplies of 1% of his basic compensation, not to exceed
5%. At the end of the Plan Year, the Corporation will make a matching
contribution to a participant's account, less the amount required to be
withheld under federal and state tax withholding, FICA and comparable laws.
The Stock Purchase Plan, as amended and restated, provides that the
Committee will prescribe the amount of the Corporation's contribution (not
to exceed 60% of the participant's contributions), or the manner in which
the Corporation's contribution will be determined, for a Plan Year. The
Committee has indicated its intent to prescribe a match, which may vary for
each Plan Year, based on a formula relating to the Corporation's financial
performance. Prior to its amendment and restatement, the Stock Purchase
Plan provided for a fixed matching contribution of 30% of each
participant's contributions.
The amounts contributed by the participant and the Corporation will be
applied at the end of the Plan Year to purchase shares of Common Stock from
the Corporation at a price equal to the average of the closing prices of
the Common Stock on the New York Stock Exchange composite tape for the 20
consecutive trading days before the last day of the Plan Year. No
fractional shares will be issued. Any amount not used to purchase shares
of Common Stock will be credited to the participant's account for the next
Plan Year, provided he participates in the Stock Purchase Plan during that
Plan Year. If the participant does not participate in the Stock Purchase
Plan during the next Plan Year, such amount will be paid to him in cash.
An employee's participation in the Stock Purchase Plan terminates if
he ceases to be employed by the Corporation and its subsidiaries for any
reason, including death or retirement. A participant who retires may
continue to participate in the Stock Purchase Plan until the end of the
Plan Year that includes the date of his retirement without making further
contributions. A participant may also voluntarily terminate his
participation in the Stock Purchase Plan at any time by notifying his
payroll office, in which event the Corporation will return the
participant's contributions to the Stock Purchase Plan through such date.
The Stock Purchase Plan, as amended and restated, provides that any
participant whose participation in the plan terminates and who receives a
refund of his contributions will also receive an interest payment for the
contributions credited to his account as of the end of the calendar quarter
preceding the date his participation in the plan is terminated. The
Committee will prescribe the applicable interest rate, or the manner in
which such interest rate will be determined, for each Plan Year. An
individual who terminates his participation in the Stock Purchase Plan
forfeits all rights to any contribution from the Corporation with respect
to the Plan Year that includes the date of such termination, except for any
interest credit. Prior to its amendment and restatement, the Stock
Purchase Plan did not provide for the payment of interest on amounts
returned to participants who terminated their participation during a Plan
Year. A participant may withdraw his contributions to the Stock Purchase
Plan only if he terminates participation.
A participant who ceases to be a salaried employee of the Corporation
because he becomes an hourly-paid employee of the Corporation or one of its
participating subsidiaries and who meets the requirements of the
Corporation's Hourly Employees' Stock Purchase Plan will automatically
become a participant in the Corporation's Hourly Employees' Stock Purchase
Plan, unless he elects otherwise. In the discretion of the Committee, his
contributions under the Stock Purchase Plan may be transferred to the
Hourly Employees' Stock Purchase Plan or may be held under the Stock
Purchase Plan in the same manner as if the participant had suspended his
contributions.
A participant may suspend his contributions to the Stock Purchase Plan
at any time by notifying his payroll office. A suspension of contributions
will not terminate an employee's participation in the Stock Purchase Plan.
In such event, the Corporation will hold the amount previously contributed
and will make its matching contribution based on such amount. A
participant who terminates his participation in the Stock Purchase Plan or
suspends his contributions thereto may not resume contributions during the
same Plan Year.
The Board of Directors or its delegate may modify, amend or terminate
the Stock Purchase Plan. However, no modification, amendment or
termination may affect a participant's rights under an outstanding election
to purchase shares of Common Stock under the Stock Purchase Plan. In
addition, no amendment will be effective without stockholder approval if
the amendment (i) changes the class of individuals who are eligible to
participate in the Stock Purchase Plan, or (ii) increases the number of
shares of Common Stock issuable under the Stock Purchase Plan (other than
an adjustment to reflect stock dividends, split-ups, recapitalizations or
combinations). Prior to its amendment and restatement, the Stock Purchase
Plan required stockholder approval of any amendment that would increase the
Corporation's matching contribution above 50% of a participant's
contributions.
The Corporation cannot determine the amounts that participants will
contribute or the level of matching contributions that will be prescribed
by the Committee under the Stock Purchase Plan, as amended and restated,
for the Plan Year commencing July 1, 1994. The Corporation also cannot
determine the amounts that participants would have contributed, or the
level of the Corporation's matching contributions that the Committee would
have prescribed, if the Stock Purchase Plan, as amended and restated, had
been in effect for the Plan Year ending June 30, 1993, or any prior Plan
Year.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 2 TO
APPROVE THE AMENDMENT AND RESTATEMENT OF THE SALARIED EMPLOYEES' STOCK
PURCHASE PLAN.
SELECTION OF AUDITORS
(PROPOSAL 3)
The Board of Directors has appointed Coopers & Lybrand to serve as
independent certified public accountants of the Corporation and its
subsidiaries for 1994. Stockholders are requested to ratify this
appointment. Representatives of Coopers & Lybrand are expected to be
present at the meeting and will be given an opportunity to make a statement
and to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSAL 3 TO
RATIFY THE APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR 1994.
MATTERS TO BE PRESENTED FOR INCLUSION IN THE PROXY
STATEMENT FOR THE 1995 ANNUAL MEETING OF STOCKHOLDERS
Any proposal submitted by a stockholder for inclusion in the proxy
materials for the annual meeting of stockholders in 1995 must be delivered
to the Corporation at its principal office in Richmond, Virginia not later
than November 18, 1994.
OTHER MATTERS
As of the date of this proxy statement, management knows of no
business that will be presented for consideration at the annual meeting of
stockholders other than that stated herein. As to other business, if any,
and matters incident to the conduct of the meeting that may properly come
before the meeting, it is intended that proxies in the accompanying form
will be voted in respect thereof in accordance with the best judgment of
the person or persons voting the proxies.
Stockholders, whether or not they expect to attend the annual meeting
in person, are requested to mark, date and sign the enclosed proxy and
return it to the Corporation. Please sign exactly as your name appears on
the accompanying proxy. Stockholders may revoke their proxy by delivering
a written notice of revocation to the Corporation at its principal office
to the attention of J.P. Causey Jr., Secretary, at any time before the
proxy is exercised.
J. P. Causey Jr.
Secretary
March 25, 1994
<PAGE>
NOTICE
and
PROXY STATEMENT
for the
ANNUAL MEETING
of
STOCKHOLDERS
To Be Held
April 27, 1994
(LOGO)
<PAGE>
PROXY PROXY
CHESAPEAKE CORPORATION
Richmond, Virginia 23218
Proxy Solicited on Behalf of the Board of Directors
for The Annual Meeting of Stockholders, April 27, 1994
The undersigned hereby appoints Sture G. Olsson, J. Carter Fox and Harry H.
Warner and each of them as proxies (and if the undersigned is a proxy, as
substitute proxies), each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all
of the shares of Common Stock of the Corporation held of record by the
undersigned on March 11, 1994, at the annual meeting of stockholders to be
held at 11:00 A.M. on April 27, 1994, or any adjournments thereof.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE
(Continued on reverse)
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy
will be voted for each proposal presented.
1. ELECTION OF FOUR DIRECTORS FOR A THREE-YEAR TERM.
Class II (to serve until the 1997 annual meeting of
stockholders) Nominees: C. Elis Olsson, Wallace
Stettinius, Joseph P. Viviano and Harry H. Warner.
FOR WITHHOLD FOR all nominees
EXCEPT vote withheld from
the following nominee(s):
______________________________________________
2. To approve the amendment and restatement of the Chesapeake Corporation
Salaried Employees' Stock Purchase Plan.
FOR AGAINST ABSTAIN
3. To ratify the appointment of Coopers & Lybrand as independent
accountants for 1994.
FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such
other business and matters incident to the conduct of
the meeting as may properly come before the meeting.
The Board of Directors unanimously recommends a vote FOR each of the above
proposals:
Dated: ___________________________
Signature(s) _____________________________________________________
Please sign exactly as name appears hereon. Joint
owners should each sign. Where applicable, indicate
official position or representative capacity.
March 25, 1994
Dear Fellow Employee:
The instruction card to vote your Chesapeake Corporation common stock
held in the Employee Stock Ownership Plan of Chesapeake Corporation, the
Chesapeake Corporation 401(k) Plan for Salaried Employees or the Chesapeake
Corporation 401(k) Plan for Hourly Employees (the "Plans") is on the lower
portion of this page. Voting instructions from Wachovia Bank of North
Carolina, N.A., the trustee of the Plans, are enclosed. It is important
that you instruct the trustee to vote your shares held in the Plans by
completing the instruction card below and returning it in accordance with
the instructions from Wachovia.
As a participant in the Plans, you are entitled to attend the annual
meeting of stockholders of Chesapeake Corporation to be held at the
Exhibition Hall at the Fairgrounds on Strawberry Hill, 600 East Laburnum
Avenue, Richmond, Virginia, on Wednesday, April 27, 1994, at 11:00 A.M. If
you plan to attend the meeting and have not otherwise requested an
admittance card, you may request an admittance card by contacting the
corporation office in Richmond at (804) 697-1000.
Sincerely,
J. P. Causey Jr.
Secretary
IMPORTANT: INFORMATION REGARDING ANNUAL MEETING OF
STOCKHOLDERS OF CHESAPEAKE CORPORATION
TO: Participants in the Chesapeake Corporation Employee
Stock Ownership Plan, the Chesapeake Corporation
401(k) Plan for Salaried Employees, and the Chesapeake
Corporation 401(k) Plan for Hourly Employees
(collectively referred to as the "Plans")
FROM: Wachovia Bank of North Carolina, N.A., Trustee of the
Plans ("Wachovia")
Enclosed for your consideration are the proxy materials in connection with
Chesapeake Corporation's stockholders meeting to be held on April 27, 1994.
Also enclosed is an instruction card requesting your direction in (i) the
election of members of the Board of Directors, (ii) the approval of the
amendment and restatement of the Chesapeake Corporation Salaried Employees'
Stock Purchase Plan, (iii) the ratification of the appointment of Coopers &
Lybrand as Independent Accountants for 1994, and your instruction for any
other matters incident to the conduct of the meeting that may come before
the annual stockholders meeting. Shares of Chesapeake Corporation common
stock are allocated to your accounts in the Plans. Wachovia has employed
Automatic Data Processing (ADP), as its agent, to receive and tabulate the
instruction cards. All directions given to ADP will be confidential.
To be effective, your instruction card must be received by ADP at the
address below by the close of business (5:00 PM EST), April 25, 1994.
Instruction cards received after the close of business on April 25, 1994,
or received at an address other than that listed below, will not be
effective. If you do not direct the vote of the shares of common stock
allocated to your accounts, Wachovia will vote such shares in accordance
with the terms of the Plans. You may revoke your instructions by
delivering a written notice of revocation to ADP at the address below by
the close of business (5:00 PM EST), April 25, 1994. Any notice of change
must be timely, contain your name, your social security number, and be
signed and dated.
For questions or additional information concerning your voting directions,
please call 910/770-5829.
By Regular or Express Mail
ADP Proxy Services
53 Mercedes Way
Edgewood, NY 11717
Attn: Vote Processing
Very truly yours,
WACHOVIA BANK OF NORTH CAROLINA, N.A.
Joe O. Long
Senior Vice President
Enclosures
TO: WACHOVIA BANK OF NORTH CAROLINA, N.A.
Trustee of the Employee Stock Ownership Plan
of Chesapeake Corporation, the Chesapeake
Corporation 401(k) Savings Plan for Salaried
Employees, and the Chesapeake Corporation 401(k)
Savings Plan for Hourly Employees
With respect to the shares of Common Stock of Chesapeake Corporation
represented by my interest in the Trust Funds of the Employee Stock
Ownership Plan, the 401(k) Savings Plan for Salaried Employees or the
401(k) Savings Plan for Hourly Employees, you are directed to sign and
forward a proxy in the form being solicited by the Board of Directors of
Chesapeake Corporation to instruct the persons named therein, or their
substitutes, to vote in accordance with the proxy statement as designated
on the reverse.
PLEASE SIGN AND DATE ON THE REVERSE
Continued on the reverse side.
The Board of Directors Unanimously Recommends a Vote FOR Each of the
Following Proposals:
1. Election of Four Directors For a Three Year Term. Class II (To serve
until the 1997 annual meeting of stockholders): C. Elis Olsson, Wallace
Stettinius, Joseph P. Viviano and Harry H. Warner.
FOR WITHHOLD EXCEPTIONS: Withhold vote on the
all nominees vote for all nominees following nominee(s) only:
listed above
___________________________________________________________
2. To approve the amendment and restatement of the Chesapeake Corporation
Salaried Employees' Stock Purchase Plan.
FOR AGAINST ABSTAIN
3. To ratify the appointment of Coopers & Lybrand as independent
accountants for 1994.
FOR AGAINST ABSTAIN
4. In their discretion, the proxies are authorized to vote upon such
other business and matters incident to the conduct of the meeting as may
properly come before the meeting and any adjournments.
_________________
Account Number
Please mark all
choices like this X
Signature__________________________________ Date __________________
March 25, 1994
TO: Participants in the Wisconsin Tissue Mills Inc. 401(k) Savings Plan
for Hourly Employees
Enclosed are proxy materials in connection with Chesapeake Corporation's
stockholders meeting to be held on April 27, 1994. Also enclosed are the
instructions for Associated Bank to vote your full shares of Chesapeake
Corporation common stock held in the Wisconsin Tissue Mills Inc. 401(k)
Savings Plan for Hourly Employees (the "Plan"). It is important that you
instruct Associated Bank, the trustee of the Plan, to vote your shares held
in the Plan and allocated to your account by completing and returning the
instructions enclosed. All voting instructions given to Associated Bank
will be confidential.
To be effective, your proxy must be received by Associated Bank by the
close of business (5:00 p.m. EST), April 25, 1994. If you do not direct
the vote of the shares of common stock allocated to your account,
Associated Bank will not vote those shares. You may revoke your proxy by
delivering a written notice of revocation to Associated Bank at the address
below by the close of business (5:00 p.m. EST), April 25, 1994. Any notice
of change must be timely, contain your name, your social security number,
and be signed and dated.
Associated Bank, Trustee
P. O. Box 408
Neenah, Wisconsin 54957-0408
As a participant in the Plan, you are entitled to attend the annual
meeting of stockholders of Chesapeake Corporation to be held at the
Exhibition Hall at the Fairgrounds on Strawberry Hill, 600 East Laburnum
Avenue, Richmond, Virginia, on Wednesday, April 27, 1994, at 11:00 A.M. If
you plan to attend the meeting and have not otherwise requested an
admittance card, you may request an admittance card by contacting the
Chesapeake corporate office in Richmond at (804) 697-1000.
Sincerely,
J. P. Causey Jr.
Secretary
NOTE: PLEASE MARK THE ENCLOSED VOTING
INSTRUCTIONS AND MAIL TO ASSOCIATED
BANK IN THE ENVELOPE PROVIDED.
VOTING INSTRUCTIONS
TO: ASSOCIATED BANK
Trustee of the Wisconsin Tissue Mills Inc. 401(k) Savings Plan
for Hourly Employees
With respect to the full shares of Common Stock of Chesapeake
Corporation allocated to my account in the Wisconsin Tissue Mills Inc.
401(k) Savings Plan for Hourly Employees, you are directed to sign and
forward a proxy in the form being solicited by the Board of Directors of
Chesapeake Corporation to instruct the persons named therein, or their
substitutes, to vote in accordance with the proxy statement as designated
below.
The Board of Directors unanimously recommends a vote FOR each of the
following proposals:
1. ELECTION OF FOUR DIRECTORS FOR A THREE-YEAR TERM:
( ) FOR all nominees listed below ( ) WITHHOLD
AUTHORITY to vote
for all nominees
listed below:
Class II (to serve until the 1997 annual meeting of stockholders)
C. Elis Olsson, Wallace Stettinius, Joseph P. Viviano, and Harry H.
Warner
(Instruction: To withhold authority to vote for any individual
nominee, strike a line through the nominee's name in the list below:)
2. TO APPROVE THE AMENDMENT AND RESTATEMENT OF THE CHESAPEAKE
CORPORATION SALARIED EMPLOYEES' STOCK PURCHASE PLAN.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND AS INDEPENDENT
ACCOUNTANTS FOR 1994.
( ) FOR ( ) AGAINST ( ) ABSTAIN
4. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AND MATTERS INCIDENT TO THE CONDUCT OF THE MEETING
AS MAY PROPERLY COME BEFORE THE MEETING AND ANY ADJOURNMENTS.
NAME: Please sign and return promptly to the
Trustee.
SHARES: _______________________________________
Signature
DATE _____________________________, 1994
PLEASE MAIL THESE INSTRUCTIONS IN THE ENCLOSED ENVELOPE TO ASSOCIATED BANK
April 11, 1994
A REMINDER
Dear Stockholder:
Proxy material for the annual meeting of stockholders of Chesapeake
Corporation was sent to you under date of March 25, 1994.
According to our records, your proxy for this meeting, which will be
held on Wednesday, April 27, 1994, has not yet been received. Regardless
of the number of shares you may own, it is important that they be
represented.
If you have not already returned your proxy card, I urge you to sign,
date and mail the enclosed duplicate promptly. If you returned the
original card but did so more than a week ago, I request that you sign,
date and mail the enclosed duplicate.
Sincerely,
J. P. Causey Jr.
Secretary
