SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant (X)
Filed by a Party other than the Registrant ( )
Check the appropriate box:
( ) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
(X) Definitive Proxy Statement
(X) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
CHESAPEAKE CORPORATION
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
(X) $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
( ) $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 transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) 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 24, 1995
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 26, 1995, at 11:00 A.M., for the following
purposes:
(1) to elect five directors to serve until the 1998 annual
meeting of stockholders;
(2) to ratify the appointment by the Board of Directors of
Coopers & Lybrand L.L.P. as independent accountants for 1995;
and
(3) to transact such other business as may properly come
before the meeting.
Only stockholders of record at the close of business on March 10,
1995, 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 26, 1995, and at any
adjournments of such meeting. An annual report, including financial statements
for the year ended December 31, 1994, 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 $7,000, 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 10, 1995, 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 23,762,670 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
matters considered at the meeting. 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.
This proxy statement and the enclosed form of proxy were first
mailed to stockholders on March 24, 1995.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Corporation's Board of Directors is divided into three classes. At the
annual meeting, five directors are expected to be elected to Class III to hold
office for a term of three years and until their respective successors are duly
elected and qualified.
<TABLE>
Information Concerning Nominees
Name and Age; Director
Principal Occupation or Continuously
Employment During Last Five Years Since
Class III (to serve until the 1998 annual meeting of stockholders)
<S> <C> <C>
[PHOTO] Paul A. Dresser, Jr., 52 1991
President & Chief Operating Officer, Chesapeake Corporation
(1995), and former Executive Vice President & Chief Operating
Officer (1991-1995) and Group Vice President - Finance &
Administration and Chief Financial Officer (1984-1991),
Chesapeake Corporation.
[PHOTO] M. Katherine Dwyer, 51 ____
Executive Vice President and General Manager for Mass
Cosmetics, Revlon Group, Inc., an international fragrance
and cosmetics company (1995), and former Executive Vice
President - Marketing, Revlon Group, Inc. (1993-1994), Vice
President - Marketing, Clairol, Inc. (1991-1993) and
Executive Vice President - Marketing and Product Development,
Victoria Creations, Inc. (1989-1991).
[PHOTO] J. Carter Fox, 55 1980
Chairman & Chief Executive Officer, Chesapeake
Corporation (1995), and former Chairman, President &
Chief Executive Officer (1994-1995) and President & Chief
Executive Officer (1980-1994), Chesapeake Corporation;
Director of Crestar Financial Corporation.
[PHOTO] Robert L. Hintz, 64 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, 55 1990
Physician; Director of Crestar Financial Corporation,
CSX Corporation, Best Products Co., Inc., Hospital
Corporation of America and Dominion Resources, Inc.
</TABLE>
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 five persons
named above. Each of the nominees except Ms. Dwyer 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 MR. DRESSER, MS. DWYER, MR. FOX, MR. HINTZ AND DR. ROYAL TO THE BOARD OF
DIRECTORS TO SERVE UNTIL THE 1998 ANNUAL MEETING.
There are eight directors whose present term of office will continue until
1996 or 1997, 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.
Directors Continuing in Office
<TABLE>
Name and Age; Director
Principal Occupation or Continuously
Employment During Last Five Years Since
Class I (to serve until the 1996 annual meeting of stockholders)
<S> <C> <C>
[PHOTO] William D. McCoy, 65 1985
Retired (since 1994); former Chairman of the Board, Chief
Executive Officer and Director, Koch Label Co., a
consumer products label printing company.
[PHOTO] John W. Rosenblum, 51 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, 65 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, 54 1986
Chairman of the Board, Chief Executive Officer and
Director, Crestar Financial Corporation, a bank
holding company.
Class II (to serve until the 1997 annual meeting of stockholders)
[PHOTO] C. Elis Olsson, 30 1994
Midwest Regional Sales Manager, Color-Box, Inc.,
a subsidiary of Chesapeake Packaging Co., since 1994,
and former Assistant to the President, Chesapeake
Packaging Co., a subsidiary of Chesapeake Corporation
(1994), Assistant Manager of Manufacturing (1993-1994),
Manager - Maintenance Planning (1992-1993) and
Assistant to the Vice President of Manufacturing
(1991-1992), Chesapeake Paper Products Company, a
subsidiary of Chesapeake Corporation.
[PHOTO] Wallace Stettinius, 62 1980
Retired (1995); former Chairman of the Board and Director,
Cadmus Communications Corporation, a graphic communications
holding company; Director of American Filtrona Corporation.
[PHOTO] Joseph P. Viviano, 56 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, 59 1978
Financial Consultant; Director of Pulaski Furniture
Corporation and American Filtrona Corporation.
The Board of Directors meets regularly every two months and
following each annual meeting of stockholders. During the last year, there
were eight meetings of the Board.
The Board has standing Executive, Audit, Executive Compensation
and Nominating Committees. Members of the Executive Committee are Messrs.
Fox, Stettinius, Tilghman, Viviano 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, Royal, Tilghman
and Viviano. 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. McCoy, Rosenblum, Stettinius, Stookey 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 performance share awards 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. Rosenblum, Royal,
Stettinius and Stookey. During the last year, there were three 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 1996 annual meeting must
be received in writing by the Secretary of the Corporation no earlier than
January 9, 1996, and no later than February 3, 1996, 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.
The Board of Directors has also established a Committee of Outside
Directors composed of those directors who are not and have never been
employees of the Corporation. The Committee of Outside Directors meets
regularly, usually in conjunction with, but separately from, regular meetings
of the Board of Directors. The Committee of Outside Directors evaluates the
performance of the chief executive officer of the Corporation, reviews the
senior organizational structure of the Corporation and, when appropriate,
will recommend a successor for the chief executive officer. The chairman of
the Committee of Outside Directors acts as spokesperson for the outside
directors and as their liaison with the chief executive officer.
During 1994, all directors attended at least 75% of the meetings of
the Board of Directors and the committees to which they were assigned. As
Chairman of Quantum Chemical Corporation ( Quantum ), Mr. Stookey, a
director of the Corporation, 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. Mr. McCoy, a director of the Corporation, retired as
Chairman of the Board, Chief Executive Officer and Director of Koch Label
Co. ( Koch ) on January 1, 1994. Koch filed for protection under the U.S.
Bankruptcy Code in September 1994.
Compensation of Directors
Employee directors of the Corporation are not paid for their
service on the Board of Directors or any Board committee. During 1994,
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. The chairman of the Committee of
Outside Directors received an additional retainer at the annual rate of
$12,000, and other committee chairmen received an additional annual retainer
of $3,500. Effective April 1, 1995: the annual retainer for non-employee
directors was increased to $15,000; the meeting fee was increased to
$1,000; the additional annual retainer for the chairman of the Committee of
Outside Directors was increased to $30,000; and the additional annual retainer
for the other committee chairmen was increased to $5,000.
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 (an Automatic Award ). The number of shares
of Common Stock covered by Automatic Awards reflects assumptions made in 1992
regarding (i) 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, 1994, an Automatic Award of
a stock option to purchase 500 shares of Common Stock at an exercise price of
$20.625 per share. Unless the director's service terminates earlier for
reasons other than death or disability, these options are first exercisable
on April 26, 1995, 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, 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. Elective Awards are first exercisable on the day of the
annual meeting next following the date of grant in installments, the number of
which corresponds 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, 1995, the direct and
indirect beneficial ownership of Common Stock by: each director and nominee for
director; each 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.
</TABLE>
<TABLE>
Sole Voting and Aggregate
Investment Percentage
Name Power (1) Other (2) Total Owned (3)
<S> <C> <C> <C> <C>
Thomas Blackburn . . . . . . . . . 11,597 11,597
Charles S. Cianciola . . . . . . . 37,764 77 37,841
Paul A. Dresser, Jr. . . . . . . . 57,624 14,934 72,558
M. Katherine Dwyer . . . . . . . . 0 0
J. Carter Fox . . . . . . . . . . . 192,899 25,687 218,586
Robert L. Hintz . . . . . . . . . . 2,525 2,525
William D. McCoy . . . . . . . . . 2,625 2,625
C. Elis Olsson . . . . . . . . . . 38,107 1,775 39,882
John W. Rosenblum . . . . . . . . . 1,625 1,625
Frank S. Royal . . . . . . . . . . 2,625 2,625
Wallace Stettinius . . . . . . . . 5,125 5,125
John Hoyt Stookey . . . . . . . . . 1,625 1,625
Samuel J. Taylor . . . . . . . . . 27,586 4,910 32,496
Richard G. Tilghman . . . . . . . . 2,046 1,240 3,286
Joseph P. Viviano . . . . . . . . . 12,179 12,179
Harry H. Warner . . . . . . . . . . 9,280 9,280
All Directors, Nominee and
Executive Officers as
a Group (20 persons) . . . . . . 465,358 53,083 518,441 2.18%
Crestar Bank
919 E. Main Street
Richmond, Virginia . . . . . . . 1,430,227 1,439,617(4) 2,869,844(4) 12.08
Sture G. Olsson
Box 311
West Point, Virginia . . . . . . 886,799 1,599,494(4) 2,486,293(4) 10.47
_______________
(1) Includes shares held in fiduciary capacities and (a) an aggregate 193,697 shares that may be acquired by
employee directors and the Corporation's executive officers within 60 days under the Corporation's 1993 Incentive Plan
and 1987 Stock Option Plan, and (b) an aggregate 10,000 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 977,720 shares held in various trusts as to which Crestar Bank and Mr. Sture G. Olsson may be deemed
to share beneficial ownership.
</TABLE>
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 ( Performance Shares ) and
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., an independent compensation consultant, to
advise the Compensation Committee with respect to executive
compensation matters.
Overview of Compensation Philosophy
Executive compensation programs are designed to enable the
Corporation to attract, develop and retain executive officers and motivate
them in an environment conducive to attaining the Corporation's business
goals. The Compensation Committee intends to keep compensation programs
externally competitive and internally equitable to reflect differences in job
responsibility and individual contribution to company success. The
Corporation's goal is to pay base salaries that are in the mid-range of
salaries offered in the paper and forest products industry, local competing
industries or industry in general, as appropriate, while offering
appropriate incentive opportunities for executives. The Corporation's
intent with respect to incentive programs is to provide executives the
opportunity to earn total compensation that exceeds the targeted mid-range in
return for superior Corporation, individual business unit and individual
executive performance. The compensation programs also encourage employee
ownership of the Corporation's Common Stock.
The individual elements of executive compensation are base salaries and
annual incentive opportunities, which focus on short-term objectives, and
grants of stock options and Performance Shares, which focus on long-term
objectives. In designing and administering the individual elements of
executive compensation, the Compensation Committee strives to balance short-
and long-term incentive objectives. In the case of the Corporation's Chief
Executive Officer (the CEO ), the individual elements have been set by the
Compensation Committee to provide that more than 50% of total compensation
will consist of short- and long-term incentive opportunities, with the
long-term elements being the more significant. This results in the expected
value of the CEO's total compensation being set at the mid-range of
competitive levels, as discussed below, with a large portion at risk based on
actual performance.
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 1994 is considered to be fully
deductible by the Corporation under the Revenue Reconciliation Act of 1993.
1994 Compensation
The following 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 1994 compensation, including a
specific rationale for the decisions regarding the CEO's compensation.
Base Salaries. 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 Compensation Committee first establishes a pay range
for each job classification by reference to the Project 777 Executive
Compensation Survey published by Management Compensation Services (the MCS
Survey ). The MCS Survey is a broad-based survey of U.S. industrial
companies, including most publicly held paper and forest products companies and
most companies represented in the S&P Paper and Forest Products Group used in
the stock performance graph. The MCS Survey is used for this purpose because
it provides detailed compensation information, by job classification
(weighted to reflect the relative sizes of the participating companies), for a
diverse sample of participating companies. The midpoint of the base
salary range for each executive job classification is set at the average
salary for similar positions reported in the MCS Survey (subject to adjustment
by the Compensation Committee based on its subjective evaluation of the
relationship of various job classifications within the Corporation). In
determining recommendations for specific salaries for executive officers within
the resulting pay ranges, the Compensation Committee considered the individual
officer's performance and the position of each individual's salary within the
respective pay range.
The Compensation Committee recommended and the Board of Directors
approved an increase in the CEO's salary of approximately 8% in 1994. As in the
case of executive officers generally, the Compensation Committee first
established a pay range for the CEO based on the MCS Survey. In determining
a recommendation for the CEO's salary within that range, in addition to the
considerations stated above for executive officers generally, the
Compensation Committee considered: the additional responsibilities
assumed by the CEO when he was promoted to the Chairman position; his
achievement of individual goals, which primarily involved the strategic
direction of the Corporation and personal performance objectives; and 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 of companies. The peer
group used for this purpose (the Compensation Peer Group ) consists of 18
paper and forest products companies with which the Corporation competes
(including most of the companies represented in the S&P Paper and Forest
Products Group used in the stock performance graph), which the Compensation
Committee believes is an appropriate comparison group for evaluating
relative financial performance. In evaluating the Corporation's financial
performance several measures were reviewed, including absolute and relative
earnings, return on equity, cash flow generated by operations and stock
price performance. Without assigning relative weights to the different
measures, the Compensation Committee placed primary emphasis on cash flow
generated by operations. The Compensation Committee concluded that the
Corporation's financial performance was improving and compared favorably
with the financial performance of the Compensation Peer Group. The Compensation
Committee also concluded that the CEO's achievement of his individual goals
substantially met the Compensation Committee's expectations. The
Compensation Committee further concluded that the CEO's actual salary for the
prior year had fallen below the targeted mid-range of competitive levels.
The CEO's performance was evaluated in the aggregate without assigning
specific weights to the individual elements upon which his performance
was evaluated.
Annual Incentive Program. The Compensation Committee also approves
annual incentive awards to executive officers in the form of bonuses under the
1993 Incentive Plan. The Compensation Committee reviewed and discussed
Chesapeake's 1994 financial performance and compared it to the Corporation's
1993 financial performance, the 1994 business plan, long-term standards of
financial performance and the relative financial performance of the Compensation
Peer Group (based on the same criteria discussed under Base Salaries above).
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 1994 incentive awards for executive officers. 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 generated by operations. The incentive award for the CEO was
$225,000 for 1994, which was approximately 50% of his year-end base salary,
compared to incentive awards of approximately 11% of year-end base salary for
1993 and 20% for 1992. The CEO's incentive award was based upon the
Compensation Committee's subjective assessment of his individual performance
against his individual goals approved by the Compensation Committee at the
beginning of the year (primarily relating to achieving profitability, managing
cash flow and operating safely in compliance with applicable laws) and the
Compensation Committee's evaluation of the Corporation's financial
performance, both in absolute terms and relative to the Compensation Peer
Group (based on the same criteria discussed above under Base Salaries ). The
CEO's performance was evaluated in the aggregate without assigning specific
weights to the individual elements upon which his performance was evaluated.
Long-Term Incentive Programs. The Compensation Committee also approves
long- term incentive awards to executive officers in the form of stock
options and Performance Shares. The Compensation Committee's
recommendations result from a subjective review of individual performance
and competitive data supplied by its consultant. The Compensation Committee
first considers competitive data supplied by its consultant with respect
to average long-term incentive levels, by job classification, derived
from the consultant's proprietary data base of long-term incentive
practices of approximately 35 U.S. industrial companies, which is weighted to
reflect the relative sizes of the participating companies. The data base does
not include any of the companies represented in the S&P Paper and Forest
Products Group used in the stock performance graph. The Compensation
Committee relies on the consultant's data base for this purpose based in part
on the consultant's advice that the data base provides a fair comparison group
for determining competitive long-term incentive practices, and because the data
base provides a consistent methodology for valuing and comparing grants. In
determining recommendations for specific long-term incentive awards to
executive officers, the Compensation Committee adjusts the average reflected in
the consultant's data in light of its subjective evaluation of: the
relationship of various job classifications within the Corporation;
contributions by each executive officer to overall company performance and such
officer's potential to contribute in the future; and, in the case of stock
option awards, prior grant levels.
Stock options are awarded to executives as a long-term incentive to
align the executives' interests with those of other stockholders and to
encourage significant stock ownership. In 1994, the Compensation Committee
granted options to purchase an aggregate of 198,700 shares of Common Stock to
the Corporation's employees, including options to purchase 24,000 shares of
Common Stock that were granted to the CEO, reflecting an increase in grant
levels to the CEO and other executive officers over 1993 levels. The
Compensation Committee had granted options for the same number of shares to
the CEO during 1993, 1992 and 1991. Awarding grants to the CEO at the same
level, and to the other executive officers at approximately the same levels,
over that period had resulted in the grants being below the average competitive
levels reflected in the consultant's data. In determining a recommendation
for the CEO's option grants, in addition to the factors set forth above for
executive officers generally, the Compensation Committee considered his
individual performance against his individual goals approved by the
Compensation Committee at the beginning of the year (primarily relating to
sustained growth, cash flow generated by operations and returns for
stockholders) and the overall financial performance of the Corporation, both
in absolute terms and relative to the Compensation Peer Group (based on the same
criteria discussed under Base Salaries above). The Compensation Committee
concluded that the Corporation's financial performance was improving and
compared favorably with the financial performance of the Compensation 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 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 Corporation's 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.
Performance Shares are awarded under the 1993 Incentive Plan, and
provide an incentive that focuses the executives' attention on the long-term
growth and financial success of the Corporation. A Performance Share award
represents the opportunity to earn up to the specified number of shares of
Common Stock over the course of the designated performance cycle by
achieving certain performance criteria specified by the Compensation Committee.
During 1994, the Compensation Committee granted the CEO the opportunity to
earn up to 17,500 Performance Shares for the 1994-1997 performance cycle.
Performance Shares were also granted to other executive officers. The size of
the Performance Share awards to the CEO and other executive officers for the
1994-1997 performance cycle were based on the Compensation Committee's
subjective analysis of the same factors considered for stock option awards, as
described above. Each year, a portion of the Performance Share award may be
earned based upon the Corporation's cash flow return on capital in excess of
its cost of capital and its relative cash flow return on capital compared to
the Compensation Peer Group; provided, however, that all Performance Shares
will be deemed to have been earned in the event of a change in control of
the Corporation (as defined below under the caption Description of
Compensation Plans ). As Performance Shares are earned, the participant
receives shares of Restricted Stock and Stock Units, each as defined below
under the caption Description of Compensation Plans, that remain forfeitable
until the end of the performance cycle (except that such shares will
become transferrable and nonforfeitable, and such units will become
nonforfeitable, upon the death, disability or retirement of the executive or
upon the occurrence of certain events following a change in control of the
Corporation). The CEO earned an estimated 6,388 Performance Shares
during 1994.
Executive Compensation Committee
Wallace Stettinius, Chairman
William D. McCoy
John W. Rosenblum
John Hoyt Stookey
Harry H. Warner
Description of Compensation Plans
Executive officers of the Corporation were entitled to participate
in the compensation plans described below during 1994.
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. Such shares may either be fully vested and transferable at the
time of grant, or may be non-transferable and subject to forfeiture until
certain conditions prescribed by the Administrator (such as a specific
period of employment with the Corporation) are satisfied ( Restricted Stock
). Shares of Restricted Stock may either be granted 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. The 1993 Incentive Plan also provides for the award of Performance
Shares, 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. The Administrator will prescribe the
requirements (such as a specified period of employment with the
Corporation or the attainment by the Corporation of certain stated
financial 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 shares of Restricted Stock and Stock Units. 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 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, outstanding stock awards will be earned in full and
outstanding Performance Shares will be deemed to have been earned in their
entirety and converted into shares of Restricted Stock and Stock Units in the
event of a change in control of the Corporation (as defined below). 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 the participant's refusal to move to
another location or upon a material reduction in the participant's
compensation or duties.
Salaried Employees' Stock Purchase Plan. Under the Salaried Employees'
Stock Purchase Plan (the Stock Purchase Plan ), approximately 1,450
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 specified matching
contribution, from which is deducted the amount required to be withheld
under income tax, FICA and similar laws. The amount of the matching
contribution, which may not exceed 60% of the participant's contribution,
or the manner in which the matching contribution will be determined (such
as a formula relating to the Corporation's financial performance), is
prescribed by the Compensation Committee prior to each plan year. The
matching contribution for the plan year that commenced July 1, 1994, was
set at 30% of each participant's contribution. The amount contributed
by the participants and the net amount contributed by their employers are
applied to purchase Common Stock.
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 ($9,240 in
1994), 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
Restricted Stock, either alone or together with Stock Units, 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 the participant's refusal to move to another location or upon a
material reduction in the participant's compensation or duties.
The Compensation Committee did not make any grants under the Long-Term
Plan during 1994. 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.
Definition of Change in Control. 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:
(i) 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); (ii) 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);
(iii) 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 (iv) 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.
Summary of Cash and Certain Other Compensation
The following table shows, for the fiscal years ended December 31,
1992, 1993 and 1994, 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 ).
SUMMARY COMPENSATION TABLE
<TABLE>
Annual Compensation Long-Term Compensation
Awards Payouts
Other
Name and Annual All Other
Principal Position Compen- Options/ LTIP Compen-
as of December 31, Year Salary Bonus sation (1) SARS Payouts sation
1994
<S> <C> <C> <C> <C> <C> <C> <C>
J. Carter Fox 1994 $433,000 $225,000 24,000 $210,804 $ 9,990
Chairman, President 1993 408,000 44,000 20,000 49,547 10,497
& Chief Executive 1992 395,417 80,000 20,000 10,089
Officer
Paul A. Dresser, Jr. 1994 291,500 175,000 15,000 144,540 7,995
Executive Vice 1993 277,500 40,000 13,500 35,649 8,577
President & Chief 1992 269,167 55,000 13,500 8,274
Operating Officer
Thomas Blackburn 1994 190,250 150,000 $25,731(4) 7,500 72,270 43,286
Group Vice 1993 177,000 27,000 6,000 15,836 7,100
President - 1992 171,251 40,510 3,972(4) 6,000 16,304
Kraft Products
Samuel J. Taylor 1994 192,000 125,000 7,500 72,270 6,457
Group Vice 1993 175,750 44,000 6,000 17,825 7,062
President - 1992 167,667 61,894 6,000 6,729
Packaging
Charles S. Cianciola 1994 186,750 125,000 7,500 72,270 6,457
Group Vice 1993 176,000 44,000 6,000 17,825 7,069
President - Tissue 1992 169,167 60,611 6,000 6,797
Products
____________________
(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 earned under the 1993 Incentive Plan for 1994 (estimated) and the actual amounts earned
under the Long-Term Plan for 1993, based on the closing price for Common Stock of $33.00 and $25.50 on December 31, 1994,
and 1993, respectively. No such amounts were earned in 1992. As of December 31, 1994, none of the Named Executive
Officers held any shares of Restricted Stock of the Corporation. Each of the Named Executive Officers earned shares of
Restricted Stock under the 1993 Incentive Plan for 1994; however, the definitive number of such shares earned will not be
determined, and such shares will not be issued, until later in 1995. None of such shares will vest, in whole or in part,
in less than three years from the date of grant of the underlying Performance Share award (except upon the death,
disability or retirement of the executive or upon the occurrence of certain events following a change in control of the
Corporation, as described above under the caption Description of Compensation Plans ). Dividends will be paid on shares
of Restricted Stock at the same rate and times as on all other shares of Common Stock.
(3) All Other Compensation for 1994 includes the following: (a) the Corporation's 50% matching contributions
under the Savings Plan of $3,750 on behalf of each of the Named Executive Officers; (b) the Corporation's 30% matching
contribution under the Stock Purchase Plan of the following amounts made to the Named Executive Officers: Mr. Fox,
$6,240; Mr. Dresser, $4,245; Mr. Blackburn, $2,707; Mr. Taylor, $2,707; and Mr. Cianciola, $2,707; and (c) relocation
payments to Mr. Blackburn of $36,829.
(4) These amounts represent payments 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 1994 under the 1993 Incentive Plan to the Named
Executive Officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
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 $27.81) $45.30) $72.13)
<S> <C> <C> <C> <C> <C> <C> <C>
J. Carter Fox 24,000 12.1% $27.81 8/8/04 $0 $419,760 $1,063,680
Paul A. Dresser, Jr. 15,000 7.6 27.81 8/8/04 0 262,350 664,800
Thomas Blackburn 7,500 3.8 27.81 8/8/04 0 131,175 332,400
Samuel J. Taylor 7,500 3.8 27.81 8/8/04 0 131,175 332,400
Charles S. Cianciola 7,500 3.8 27.81 8/8/04 0 131,175 332,400
____________________
(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 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,
1994).
(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 1994, 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>
<TABLE>
Annual Rate of Stock Price
Appreciation
5% 10%
<S> <C> <C>
Resulting stock price based on $27.81 starting price $ 45.30 $
72.13
Per share gain 17.49 44.32
Aggregate hypothetical gain that would be realized by all 413,465,192 1,047,728,833
stockholders (based on 23,640,091 shares outstanding on August 9,
1994)
Aggregate hypothetical gain on all 1994 options granted to the Named 1,075,635 2,725,680
Executive Officers if $45.30 and $72.13 prices, respectively, are
achieved
Hypothetical aggregate gains for the Named Executive Officers as a 0.3% 0.3%
percentage of all 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 1994,
and unexercised options and SARs held by them on December 31, 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST YEAR AND YEAR-END OPTION/SAR VALUE
<TABLE>
Number of Value of Unexercised
Securities In-the-Money
Underlying Options/SARs at Year-
Unexercised End (1)
Options/SARs at
Year-End
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable (2) Unexercisable (2)
<S> <C> <C> <C> <C>
J. Carter Fox 11,668 $152,267 89,099/44,001 $1,135,230/$370,039
Paul A. Dresser, Jr. 25,200 291,531 24,500/28,500 288,280/243,540
Thomas Blackburn 9,000 101,695 3,000/13,500 27,360/112,565
Samuel J. Taylor 12,800 146,313 21,100/13,500 262,376/112,565
Charles S. Cianciola 0 0 28,800/13,500 379,255/112,565
____________________
(1) The value of unexercised in-the-money options/SARs represents the positive spread between the December 31,
1994, closing price of Common Stock ($33.00) 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, 1994, 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).
</TABLE>
Long-Term Incentive Awards
The following table contains information concerning the award of
Performance Shares made during 1994 under the 1993 Incentive Plan to the
Named Executive Officers for the 1994-1997 performance cycle.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
<TABLE>
Performance Estimated Future Payouts
Number of or Other under Non-Stock Price-Based Plans
Shares, Units Period Until
or Maturation
Name Other Rights(1) or Payout Threshold (2) Target (3) Maximum
<S> <C> <C> <C> <C> <C>
J. Carter Fox 17,500 1994-1997 0 17,500 17,500
Paul A. Dresser, Jr. 12,000 1994-1997 0 12,000 12,000
Thomas Blackburn 6,000 1994-1997 0 6,000 6,000
Samuel J. Taylor 6,000 1994-1997 0 6,000 6,000
Charles S. Cianciola 6,000 1994-1997 0 6,000 6,000
__________________
(1) All awards consist of Performance Shares granted under the 1993 Incentive Plan for the 1994-1997 performance
cycle. Performance Shares are earned each year based upon the Corporation's cash flow return on capital in excess of its
cost of capital and its relative cash flow return on capital compared to the Compensation Peer Group, as described above
in the Compensation Committee Report on Executive Compensation. Performance Shares earned each year are settled with
Restricted Stock and Stock Units. See Description of Compensation Plans - 1993 Incentive Plan.
(2) The amounts set forth in the Threshold column represent the minimum number of Performance Shares that may be
earned by each of the Named Executive Officers under the terms of the award.
(3) Performance Share awards do not contemplate the achievement of specific target award levels. Instead, a portion
of the award may be earned each year based on the performance criteria described in footnote 1 to this table. In
accordance with SEC regulations, the amounts set forth in the Target column represent the number of Performance Shares
that would be earned by each of the Named Executive Officers over the course of the 1994-1997 performance cycle, assuming
that the Corporation's financial performance for each year in the cycle is consistent with 1994 results.
</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
700,000 210,000 280,000 336,000 392,000 448,000
__________________
(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, 1995, were: Mr. Fox, 31; Mr.
Dresser, 13; Mr. Blackburn, 4; Mr. Taylor, 16; and Mr. Cianciola, 30 (Messrs. Taylor and Cianciola each have 9 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.
Certain Transactions
C. Elis Olsson, a member of the Board of Directors, served during 1994 as
Midwest Regional Sales Manager for Color- Box, Inc., a subsidiary of
Chesapeake Packaging Co., as Assistant to the President of Chesapeake
Packaging Co., a subsidiary of the Corporation, and as Assistant Manager
of Manufacturing for Chesapeake Paper Products Company, a subsidiary of the
Corporation. During 1994, 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 $85,091. In
addition during 1994, Mr. Olsson was granted nonqualified stock options under
the 1993 Incentive Plan for 500 shares of Common Stock, at an exercise
price of $27.81 and with an expiration date of August 8, 2004, which
options will become exercisable in one-third installments on each of the
first three anniversaries of the date of grant (August 9, 1994). Mr.
Olsson's compensation was consistent with that paid by the Corporation
and its subsidiaries in 1994 to other employees with similar job titles and
responsibilities.
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, 1989, and that all dividends were reinvested.
[INSERT GRAPH HERE]
<TABLE>
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CSK 49 59 78 78 97 100 72 130 115 148 197
S&P 40 52 62 65 76 100 97 126 136 150 152
S&P Paper & Forest 42 54 69 75 82 100 90 115 131 144 150
</TABLE>
SELECTION OF AUDITORS
(PROPOSAL 2)
The Board of Directors has appointed Coopers & Lybrand L.L.P.
to serve as independent certified public accountants of the Corporation
and its subsidiaries for 1995. Stockholders are requested to ratify this
appointment. Representatives of Coopers & Lybrand L.L.P. 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
2 TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS FOR 1995.
MATTERS TO BE PRESENTED FOR INCLUSION IN THE PROXY STATEMENT FOR THE 1996
ANNUAL MEETING OF STOCKHOLDERS
Any proposal submitted by a stockholder for inclusion in the
proxy materials for the annual meeting of stockholders in 1996 must be
delivered to the Corporation at its principal office in Richmond, Virginia
not later than November 25, 1995.
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 24, 1995
<PAGE>
NOTICE
and
PROXY STATEMENT
for the
ANNUAL MEETING
of
STOCKHOLDERS
To Be Held
April 26, 1995
[LOGO]
************************************** APPENDIX ********************************
PROXY PROXY
CHESAPEAKE CORPORATION
Richmond, Virginia 23218
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
for The Annual Meeting of Stockholders, April 26, 1995
The undersigned hereby appoints J. Carter Fox, Wallace Stettinius 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
10, 1995, at the annual meeting of stockholders to be held at 11:00 A.M. on
April 26, 1995, 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 FIVE DIRECTORS FOR A THREE-YEAR TERM.
Class III (to serve until the 1998 annual meeting of stockholders)
Nominees: Paul A. Dresser, Jr., M. Katherine Dwyer, J. Carter Fox,
Robert L. Hintz and Frank S. Royal.
( ) FOR ( ) WITHHOLD FOR all nominees EXCEPT vote withheld from the
following nominee(s):
______________________________________________
2. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
accountants for 1995.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. 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:_____________________________________, 1995
Signature(s)______________________________________
Please sign exactly as name appears hereon. Joint
owners should each sign. Where applicable, indicate
official position or representative capacity.
<PAGE>
IMPORTANT: INFORMATION REGARDING ANNUAL MEETING OF
STOCKHOLDERS OF CHESAPEAKE CORPORATION
TO: Participants in the Chesapeake Corporation Employee
Stock Ownership Plan and the Chesapeake Paper Products
Company 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 26, 1995.
Also enclosed is an instruction card requesting your direction in (i) the
election of members of the Board of Directors, (ii) the ratification of the
appointment of Coopers & Lybrand L.L.P. as independent accountants for 1995,
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 24, 1995. Instruction cards
received after the close of business on April 24, 1995, 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 24, 1995.
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.
S. Jane Price
Vice President
Enclosures
<PAGE>
March 24, 1995
Dear Fellow Employee:
The instruction card to vote your Chesapeake Corporation common stock held
in the Employee Stock Ownership Plan of Chesapeake Corporation or the Chesapeake
Paper Products Company 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 26, 1995, 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 corporate office in Richmond at (804)
697-1000.
Sincerely,
J. P. Causey Jr.
Secretary
<PAGE>
TO: WACHOVIA BANK OF NORTH CAROLINA, N.A.
Trustee of the Employee Stock Ownership Plan
of Chesapeake Corporation and the Chesapeake
Paper Products Company 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 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 FIVE DIRECTORS FOR A THREE YEAR TERM.
Class III (to serve until the 1998 annual meeting of stockholders)
Nominees: Paul A. Dresser, Jr., M. Katherine Dwyer, J. Carter Fox,
Robert L. Hintz and Frank S. Royal.
( ) FOR ( ) WITHHOLD EXCEPTIONS: Withhold vote on the
following nominee(s) only:
____________________________________
2. To ratify the appointment of Coopers & Lybrand L.L.P. as independent
accountants for 1995.
( ) FOR ( ) AGAINST ( ) ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business and matters incident to the conduct of themeeting as may properly
come before the meeting and any adjournments.
_________________
Account Number
Signature____________________________ Date_________________________, 1995
<PAGE>
March 24, 1995
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 26, 1995. 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 24, 1995. 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 24, 1995. 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 26, 1995, 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.
<PAGE>
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 FIVE DIRECTORS FOR A THREE-YEAR TERM:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to vote
for all nominees listed below:
Class III (to serve until the 1998 annual meeting of stockholders)
Paul A. Dresser, Jr., M. Katherine Dwyer, J. Carter Fox, Robert L. Hintz
and Frank S. Royal
(Instruction: To withhold authority to vote for any individual nominee, strike
a line through the nominee's name in the list below:)
2. TO RATIFY THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT
ACCOUNTANTS FOR 1995.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. 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 _____________________________, 1995
PLEASE MAIL THESE INSTRUCTIONS IN THE ENCLOSED ENVELOPE TO ASSOCIATED BANK
<PAGE>
April 10, 1995
A REMINDER
Dear Stockholder:
Proxy material for the annual meeting of stockholders of Chesapeake
Corporation was sent to you under date of March 24, 1995.
According to our records, your proxy for this meeting, which will be held
on Wednesday, April 26, 1995, 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
