CHESAPEAKE CORP /VA/
10-K, 1997-03-27
PAPERBOARD MILLS
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         UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                          Washington, D.C. 20549

                                 FORM 10-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 
     For the fiscal year ended December 31, 1996

                                    OR
     
[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934 
     For the transition period from                 to                


                       Commission file number 1-3203
                                    
                         CHESAPEAKE CORPORATION
                                    
     Incorporated under the laws                    I.R.S. Employer
          of Virginia                        Identification No. 54-0166880

                           1021 East Cary Street
                              P. O. Box 2350
                       Richmond, Virginia 23218-2350
                      Telephone Number (804) 697-1000

Securities registered pursuant to Section 12(b) of the Act:

                                              Name of each exchange on
   Title of each class                            which registered    

Common Stock, par value $1                    New York Stock Exchange
Preferred Stock Purchase Rights               New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K or any amendment to
this Form 10-K. [X]

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes X No  
 
The aggregate market value on February 11, 1997, of the voting stock held by
non-affiliates of the registrant was $681 million.  In determining this
figure, the registrant has assumed that all of its directors and officers
are affiliates.  This assumption shall not be deemed conclusive for any
other purpose.

23,432,395 shares of the registrant's common stock, par value $1, were
outstanding as of February 11, 1997.

Portions of the registrant's Annual Report to Stockholders for the year ended
December 31, 1996 are incorporated in Parts I, II and IV by reference. 
Portions of the registrant's definitive Proxy Statement for the annual
meeting of stockholders to be held on April 23, 1997, are incorporated in
Part III by reference.










                              PART I



Item 1.  Business

GENERAL

Chesapeake Corporation, a Virginia corporation organized in 1918, is a
packaging and paper company, whose primary businesses consist of the
manufacture and sale of packaging, tissue, and kraft products.  Our
operating businesses include: in the packaging segment -- Chesapeake
Display and Packaging Company, Color-Box, Inc., Chesapeake Europe S.A., and
Chesapeake Packaging Co. (point-of-sale displays, graphic packaging, and
corrugated shipping containers); in the tissue segment -- Wisconsin Tissue
Mills Inc. and Wisconsin Tissue de Mexico, S.A. de C.V.(commercial and
industrial tissue products); in the kraft products segment -- Chesapeake
Paper Products Company and Chesapeake Forest Products Company (kraft
products, building products and woodlands operations); and Delmarva
Properties, Inc. and Stonehouse Inc. (land development).

Chesapeake competes in the large, capital-intensive paper and forest
products industry.  Until the mid 1980s, Chesapeake's products were
primarily kraft commodity products manufactured by Chesapeake Paper
Products.  In commodity markets, selling prices are controlled by total
market supply and demand.  Success in these markets hinges on maximizing
production and minimizing operating costs.  Selling prices and profits for
commodity products are typically cyclical and tend to follow general
economic conditions.

During the past several years, Chesapeake has pursued a strategy of
focusing on specialty products in markets that management believes have
growth potential or in which the Company has or may be able to achieve
competitive advantages.  The Company's strategy for success with its
specialty products is to utilize its recycling expertise creatively, to
differentiate itself from its competition by manufacturing products which
are distinctive and to utilize its superior ability to respond to
customers' requirements.  Management believes this strategy allows the
Company to achieve less cyclical and greater profits than with commodity
products and to better utilize Chesapeake's strengths.  During 1996, sales
of specialty products were more than 70% of Chesapeake's total sales,
compared to 60% in 1995.  Chesapeake expanded internationally for the first
time during 1996, acquiring display and packaging facilities in Canada and
France and tissue converting operations in Mexico.  See "Financial Review
1994-1996" of the Company's 1996 Annual Report to Stockholders (the "1996
Annual Report"), incorporated herein by reference.




                                                            
Because we understand the service needs of our customers, we believe we are
able to provide quality products quickly and efficiently.  Our
decentralized management style allows quick and creative decision making. 
Our operations are designed to be flexible to changing customer demands and
business conditions.

Our manufacturing and converting processes are capital intensive; property,
plant and equipment, including timber and timberlands, comprise
approximately 67% of our total assets.  Our tissue and kraft products
operations require major investments in paper machines, fiber preparation
equipment, and converting equipment.  In 1992, the Company completed an
eight-year $600 million capital spending program for machinery, equipment,
and new technology to increase production of specialty products while
reducing the Company's emphasis on commodity products such as brown
paperboard and bleached hardwood pulp.  About one-half of these
expenditures were for paper machine projects for our tissue and  kraft
products businesses.  Included in the  program was a $100 million project
for a recovery boiler, evaporators, and related equipment for our kraft
products business.  In 1995, we continued to expand our tissue business
with the acquisition of two paper mills. Further expansion of the tissue
business occurred in 1996 as two additional converting operations began
full operations and certain tissue converting assets and distribution
facilities were acquired in Mexico.  Growth in our packaging segment within
the past two years included: new graphic packaging plants in California and
Mississippi; a new custom packing operation in Memphis; and the
acquisitions of point-of-sale and packaging operations in Kentucky, Canada,
and France, and a corrugated container manufacturer in Richmond, VA.  Also,
capital expenditures intended to enhance efficiency, and to improve product
quality and productivity, were made at many of our existing packaging
facilities during 1995 and 1996.

Our businesses are grouped into three major segments:  packaging, tissue
and kraft products.  The information presented in "Notes to Consolidated
Financial Statements, Note 14 - Business Segment Information" of the 1996
Annual Report is incorporated herein by reference.  Information with
respect to the Company's  working capital practices is set forth under the
caption "Financial Review 1994-1996, Liquidity and Capital Structure" of
the 1996 Annual Report and is incorporated herein by reference. 
Information regarding the Company's anticipated capital spending is set
forth under the caption "Financial Review 1994-1996, Capital Expenditures"
of the 1996 Annual Report and is incorporated herein by reference.

PACKAGING

Chesapeake's packaging segment has three marketing thrusts:  point-of-sale
displays, graphic packaging, and corrugated shipping containers.  

We believe that our packaging group is a leader in serving the point-of-sale
display and specialty packaging needs of major national consumer
products companies.  Through a network of regional sales and design
offices, the point-of-sale group, Chesapeake Display and Packaging Company,
provides creative design services to our customers to meet their
promotional and permanent display needs.  Our manufacturing facilities
utilize modern production, assembly and packaging processes to meet our 

customers' stringent quality and shipment demands.  We have four
strategically located point-of-sale display and specialty packaging
manufacturing plants and four custom packing plants which provide service
to customers in the United States and Canada.  Included in these facilities
are the operations of the former Display Division of Dyment Limited, in
Erlanger, KY, and Toronto, Canada, which were acquired in 1996, and a new
custom packing plant in Memphis, TN, which began operations during 1996. 
Also in 1996, Chesapeake purchased the point-of-sale display and packaging
businesses of Sailliard S.A., a leading manufacturer of displays, rigid
boxes, and specialty folding cartons in France, as part of its strategy to
expand its packaging business globally.  The businesses include Sailliard
PLV, specializing in the design and manufacture of permanent and temporary
point-of-sale displays; Coffrets and Plastiphane, specializing in the
design and manufacture of rigid boxes, with a focus on perfume, champagne,
and specialty products customers; Raab Pige and Cecil, specializing in the
design, printing, and manufacture of folding cartons for the luxury goods
and pharmaceutical industries; and Linea, a design firm specializing in the
creative development of packaging and marketing materials for the fine
spirits industry.         

Our Color-Box subsidiary supplies graphic packaging to customers nationwide
that require attractive full litho-laminated retail packaging.  The final
phase of a $13 million expansion project to double the capacity of this
business was completed in 1993.  In January 1994, Chesapeake Packaging
acquired Lawless Holding Corporation, which included Lawless Packaging and
Display, a graphic packaging plant in Buffalo, NY, which is now operated as
the Buffalo division of Color-Box.  A graphic packaging plant in Visalia,
CA, began operation late in the second quarter of 1995, with the second
phase of this plant completed in 1996.  Also in 1996, a fourth graphic
packaging facility, located in Pelahatchie, MS, became operational.

As part of the Company's strategy to focus on specialty products, the
Company reorganized, in 1996, the operations of Chesapeake  Display and
Packaging Company and Color-Box, Inc. under a group identified as Specialty
Packaging and Merchandising Services.  

Twelve corrugated shipping container plants located in seven states
manufacture corrugated boxes and specialty packaging for customers within
each plant's geographic area.  The raw materials for the packaging plants
include paperboard and corrugating medium (purchased both from independent
suppliers and from Chesapeake Paper Products) that are converted to make
the walls of the packaging unit.  Various converting equipment is used to
print, cut, slot and glue the container to customer specifications.  In
September, 1996, substantially all the assets of Triad Packaging  Co.,
Inc., a manufacturer of corrugated containers in Richmond, VA, were
acquired.  The Lawless acquisition in January 1994 included the Lawless
Container Corporation corrugated container plant in North Tonawanda, NY,
and corrugated sheet plants in Scotia, NY; Le Roy, NY; and Madison, OH.


TISSUE

Chesapeake's tissue segment consists of Wisconsin Tissue Mills Inc. and
Wisconsin Tissue de Mexico, S.A. de C.V., which produce tissue for
industrial and commercial markets.  Chesapeake Consumer Products Company, a
converter of tissue products for the consumer market, was also part of this
segment until December 29, 1995, when it was sold to The Fonda Group, Inc.
of St. Albans, VT.

Wisconsin Tissue, acquired in 1985, manufactures napkins, tablecovers,
toweling, placemats, wipers and facial and bathroom tissue for commercial
and industrial markets.  Operations of the tissue segment now include:
paper mills in Menasha, WI; Flagstaff, AZ; and Chicago, IL; converting
facilities in Bellemont, AZ; Greenwich, NY; and Monterey and Puebla,
Mexico; and distribution facilities in Mexico City, Monterey, Puebla and
Guadalajara, Mexico.  The operations in Mexico were acquired late in 1996
from Jokel Desarrollos, S.A. de C.V. and Ambitec, S.A. de C.V., and are
consistent with Chesapeake's strategy to expand in the North American
commercial and industrial tissue market.  The Bellemont and Greenwich
converting operations became fully operational in 1996.  The 1995 addition
of the paper mills in Arizona and Illinois increased primary tissue
production capacity by 90,000 tons per year, or approximately 50%.  Our
2,200 products are found in full-menu and fast-food restaurants, hotels,
motels, clubs, health care facilities, schools and office locations, and on
airlines.

The raw material for the paper manufactured by Wisconsin Tissue is 100%
recovered paper.  Seven paper machines manufacture base tissue stock that
is converted on approximately 135 specialized machines.  The Company
believes that its computerized warehouse inventory and distribution systems
give it an advantage over many of its competitors in product shipping
efficiency and inventory control.  Our tissue products are sold throughout
the United States, Canada, and Mexico using our own sales force or brokers. 
Shipments by Wisconsin Tissue were 305,000 tons in 1996, 235,000 tons in
1995,  and 217,000 tons in 1994. 
                                                  
KRAFT PRODUCTS

Chesapeake's kraft products segment consists of Chesapeake Paper Products
Company, our kraft products operations, and Chesapeake Forest Products
Company, our woodlands and building products operations, both based in West
Point, VA.  Chesapeake Building Products Company, a wholly-owned subsidiary
of Chesapeake Forest Products Company, was formed in 1993.                 

Chesapeake Paper Products manufactures white-top paperboard, kraft
paperboard, kraft paper, corrugating medium, and bleached hardwood pulp at
its mill located in West Point, VA.  Paperboard and corrugating medium, the
outer and inner materials of a corrugated container, are sold to external
and company-owned container and packaging plants.  Kraft paper is sold to
external converters to make bags and wrappings. Bleached hardwood pulp is
sold primarily to non-pulp producing paper manufacturers which manufacture
predominantly printing and writing paper.  Most of our customers are
located in the eastern half of the United States, primarily in the mid-Atlantic
and northeastern states, where we have the advantage of lower
freight costs compared to many of our competitors.  We also sell to
international customers, primarily in Europe, Asia and Canada.  Our sales
force markets these products to integrated and independent converters and
manufacturers. 

During 1995, Chesapeake Paper Products completed the rebuild of the No.2
paper machine at the West Point, VA, mill.  While lost production
associated with the rebuild reduced shipments in 1995 and early in 1996,
the project increased the mill's capacity by 70,000 tons per year while
permitting a more profitable product mix.  Total shipments from the West
Point mill were 831,000 tons in 1996, 769,000 tons in 1995, and 850,000
tons in 1994.

In 1996, approximately 69% of the raw material for products manufactured by
our kraft products mill was virgin wood fiber, with the remainder being
recycled fiber recovered through our recycling system, which has the
capacity to use 360,000 tons of recycled fiber annually.  About 65% of the
virgin wood fiber used in 1996 was purchased from wood producers or
independent timberland owners and the rest was from company-owned
timberlands.  In addition to our three paper machines and a market pulp
machine, the West Point facility includes wood storage, wood pulping, paper
recycling and steam and power generation equipment.  

In recent years much emphasis has been placed on training, problem-solving
and employee involvement in all phases of the mill's operation.  These
factors, as well as the installation of new equipment, have enabled the
mill to improve product quality and reduce reject levels.  A mill
optimization program is also in place, which is intended to improve
efficiency in the manufacturing process.

Chesapeake Forest Products Company, Woodlands Division

Chesapeake Forest Products, Woodlands Division, owns and actively manages
approximately 326,000 acres of timberland located in Virginia, Maryland and
Delaware.  The primary objective of our woodlands operation is to provide
an adequate supply of wood at a competitive cost to the kraft products mill
located at West Point, VA.  Wood for our mill is provided from our company-owned
lands and from independent landowners.  Our foresters use environmentally
sound, modern forestry methods intended to ensure a long-term, low-cost fiber
supply.  Our genetically superior pine seedlings, which are used in our
reforestation program on company-owned land and made available to private
landowners, grow quicker and provide higher quality, more uniform fibers at
the time of harvest than traditional seedlings.  We are actively utilizing
natural reforestation techniques to generate new hardwood timber stands on
company-owned and privately held land. For more than 25 years, Chesapeake has
participated in research programs that have improved the quality, disease
resistance and growth rate of our planted trees. In addition, in 1995
Chesapeake Forest Products Company pledged to comply with new American Forest
and Paper Association guidelines of conduct that will govern the way we grow
and nurture our forests, known as the "Sustainable Forestry Initiative". 

Chesapeake Building Products Company

Chesapeake Building Products operates four sawmills in Virginia and
Maryland, manufacturing pine and hardwood lumber.  The raw materials are
provided both from company-owned timberlands and from other landowners. 
Our sawmill products are sold by our own sales force to independent users.

OTHER BUSINESSES

Delmarva Properties, Inc. and Stonehouse Inc.

Delmarva Properties develops and markets land that has potential for value
greater than timberland.  Nearly all of Delmarva Properties' present land
inventory of approximately 6,000 acres was formerly timberland owned by
Chesapeake Forest Products.  Delmarva Properties develops land in Virginia,
Maryland and Delaware primarily for residential housing.  Sales also
include large lots and acreage for others to develop for both residential
and commercial uses. A major project involves the development of a mixed-use
site next to a  horse racing track under construction in New Kent, VA.

Stonehouse Inc. is managing the planning for development of a new 7,400
acre planned community near Williamsburg, VA.  Stonehouse Inc.'s joint
venture with Dominion Capital, Inc. provides a partnership for development
of the first residential phase of the planned community in which lots will
be marketed in 1997.  Most of Stonehouse's land was formerly timberland
owned by Chesapeake Forest Products.

RAW MATERIALS

Most of the Company's raw materials are readily available at competitive
prices.  Prices of recycled fiber, a major raw material, reached historic
highs in 1994 and early 1995, but moderated by year-end 1995.  Prices
remained at a moderate level in 1996.  See "Financial Review 1994-1996" of
the 1996 Annual Report, incorporated herein by reference.

ENVIRONMENTAL

The information presented under the caption "Financial Review 1994-1996,
Environmental" of the 1996 Annual Report is incorporated herein by
reference.

EMPLOYEES

As of December 31, 1996, the Company had 6,914 employees.  The Company
believes that its relations with its employees are good.  In 1992,
Wisconsin Tissue and Chesapeake Paper Products entered into five-year
collective bargaining agreements with the unions representing employees at
the mills in Menasha, WI, and West Point, VA.  During 1994, a five-year
labor contract extension was negotiated with the union representing
employees at Chesapeake Paper Products mill in West Point, VA.  The Company
expects to negotiate a new collective bargaining agreement with the union
representing employees at Wisconsin Tissue's mill in Menasha, WI, to
replace the agreement that expires this year.  During 1994 and 1995,
Chesapeake Paper Products Company and Chesapeake Forest Products Company
implemented enhanced retirement programs affecting both hourly and salaried
employees at these operations. See "Financial Review 1994-1996" of the 1996
Annual Report incorporated herein by reference.

COMPETITION AND SEASONALITY

With its diversity of products, Chesapeake has many customers buying
different products and is not dependent on any single customer, or group of
customers, in any market segment. Longstanding relationships exist with
many of our customers who place orders on a continuing basis.  Because of
the nature of our business, order backlog is not large.  The third and
fourth quarters of each year are usually the highest in sales and earnings. 
Our major businesses generally experience peak activity during the months
of August through October.

Competition is intense in all business segments from much larger companies
and from local and regional producers and converters.  The Company believes
that competitive factors in our industry preclude a meaningful estimate of
the number of competitors and, except as noted, the Company's relative
competitive position.  The Company does not have any appreciable market
share in commodity products, such as bleached hardwood pulp and brown
paperboard.  For this reason, the Company has de-emphasized these products
to pursue specialty products that we believe have less pricing volatility,
resulting in increased profitability over the course of a full business 





cycle.  We believe that, with our strengths of customer service and
competitive products, we are well positioned to compete in these
specialized markets.

RESEARCH AND DEVELOPMENT                          
                 
In addition to forestry research programs, the Company conducts limited
continuing technical research and development projects relating to new
products and improvements of existing products and processes.  Expenditures
for research and development activities are not material.      

Item 2.  Properties

At year-end 1996, Chesapeake manufactured or converted paper and wood
products at multiple facilities in 16 states, Canada, Mexico and France. 
The information presented under "Operating Managers and Locations" in the
1996 Annual Report is incorporated herein by reference.  The Company owns
most of its production facilities, which are well maintained and in good
operating condition, and are utilized at practical capacities that vary in
accordance with product mixes, market conditions and machine
configurations.  

Item 3.  Legal Proceedings

The information presented in "Notes to Consolidated Financial Statements, 
Note 10 - Litigation" of the 1996 Annual Report is incorporated herein by
reference.
                        
Item 4.  Submission of Matters to a Vote of Security Holders

None<PAGE>


Executive Officers of the Registrant

The name and age of each executive officer of the Company  as of February
11, 1997, together with a brief description of the principal occupation or
employment of each such person during the past five years, is set forth
below.  Executive officers serve at the pleasure of the board of directors
and are elected at each annual organizational meeting of the board of
directors.

J. Carter Fox (57)
  Chairman since 1994
  Chief Executive Officer since 1980
  President 1980-1995, 1996
Thomas Blackburn (45)
  Group Vice President-Kraft, Packaging & Organizational          
Development since 1996
  President, Chesapeake Paper Products Company since 1991
  President, Chesapeake Forest Products Company  1991-1996
  Group Vice President-Kraft Products 1991-1996
Andrew J. Kohut (38)
  Group Vice President-Specialty Packaging & Merchandising Services
    since 1996
  Group Vice President-Finance & Strategic Development 1995-1996
  Chief Financial Officer 1991-1996
  Vice President-Finance 1991-1995 
William A. Raaths (50)
  Group Vice President-Tissue Products since 1995
  President-Wisconsin Tissue Mills Inc. since 1995
  Executive Vice President- Wisconsin Tissue Mills Inc. 1994-1995 
  President, Chesapeake Consumer Products Company 1989-1994
William T. Tolley (39)
  Group Vice President-Finance & Chief Financial Officer since 1996
  Vice President, Finance & Chief Financial Officer, Carrier            
Corporation, North American Operations, a division of United           
Technologies 1995-1996
  Vice President & Chief Financial Officer, Carrier Transicold, a           
 division of United Technologies 1991-1995
J. P. Causey Jr. (53)
  Senior Vice President, Secretary & General Counsel since 1995
  Vice President, Secretary & General Counsel  1986-1995
Thomas A. Smith (50)
  Vice President-Human Resources & Assistant Secretary since 1987

















                                  PART II



Item 5.  Market for Registrant's Common Equity and Related Stockholder
         Matters                        

The dividend and stock price information presented under the caption
"Recent Quarterly Results" of the 1996 Annual Report is incorporated herein
by reference.  The Company's common stock is listed on the New York Stock
Exchange under the symbol "CSK".  As of February 26, 1997, there were 7,179
stockholders of record of the Company's common stock.


Item 6.  Selected Financial Data

The information for the years 1992-1996 presented under the caption
"Eleven-Year Comparative Record" of the 1996 Annual Report is incorporated
herein by reference.


Item 7.  Management's Discussion and Analysis of Financial Condition and
         Results of Operation

The information presented under the caption "Financial Review 1994-1996" of
the 1996 Annual Report is incorporated herein by reference.


Item 8.  Financial Statements and Supplementary Data

The consolidated financial statements of the Company and its subsidiaries,
including the notes thereto, and the information presented under the
caption "Recent Quarterly Results" of the 1996 Annual Report are
incorporated herein by reference.

The Financial Accounting Standards Board recently issued Statement of
Financial Accounting Standards No. 128, "Earnings Per Share."  This
standard, which is effective for financial statements issued for periods
ending after December 15, 1997, simplifies the computation of earnings per
share ("EPS") by replacing the presentation of primary EPS with a
presentation of basic EPS.  This standard requires dual presentation of
basic and diluted EPS by entities with complex capital structures.  Basic
EPS includes no dilution, while diluted EPS reflects potential dilution of
securities that could share in the earnings of an entity.  The Company does
not expect the impact of this standard to be material to its financial
statements or earnings. 


Item 9.  Changes in and Disagreements with Accountants on
             Accounting and Financial Disclosure

None





                                 PART III



Item 10. Directors and Executive Officers of the Registrant

The information presented under the captions "Information Concerning
Nominees" and "Directors Continuing in Office" of the Company's definitive
Proxy Statement for the Annual Meeting of Stockholders to be held April 23,
1997 (the "1997 Proxy Statement") is incorporated herein by reference.


Item 11.  Executive Compensation      
         
The information presented under the captions "Compensation of Directors"
and "Executive Compensation" of the 1997 Proxy Statement (excluding,
however, the information presented under the subheadings "Compensation
Committee Report on Executive Compensation" and "Performance Graph") is
incorporated herein by reference.                                           
             

Item 12. Security Ownership of Certain Beneficial Owners and                
          Management 

The information presented under the caption "Security Ownership of Certain
Beneficial Owners and Management" of the 1997 Proxy Statement is
incorporated herein by reference.


Item 13.  Certain Relationships and Related Transactions

The information presented under the caption "Certain Transactions" of the
1997 Proxy Statement is incorporated herein by reference.                   
         

<PAGE>





                                  PART IV

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K   
 
a. Documents
    
  (i)Financial Statements 
  
The consolidated balance sheet of Chesapeake Corporation and subsidiaries
as of December 31, 1996 and 1995, and the related consolidated statements
of income and retained earnings and cash flows for each of the three years
in the period ended December 31, 1996, including the notes thereto, are
presented in the Company's 1996 Annual Report and are incorporated herein
by reference. The "Report of Independent Accountants" as presented in the
Company's 1996 Annual Report is incorporated herein by reference.  With the
exception of the aforementioned information, and the information
incorporated by reference in numbered Items 1, 2, 3, 5, 6, 7 and 8, no
other data appearing in the 1996 Annual Report is deemed to be "filed" as
part of this Form 10-K.                      

   (ii)        Financial Statement Schedules
               
No schedules are filed as part of this report because they are not
applicable or are not required. 
 
   (iii)       Exhibits filed or incorporated by reference
          
The exhibits that are required to be filed or incorporated by reference
herein are listed in the Exhibit Index found on pages 14-15 hereof. 
Exhibits 10.1-10.11 hereto constitute management contracts or compensatory
plans or arrangements required to be filed as exhibits hereto. 

b. Reports on Form 8-K

None        





















                               SIGNATURES
                                    
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                        CHESAPEAKE CORPORATION
                                        (Registrant)        
 
February 11, 1997                       By /s/ CHRISTOPHER R BURGESS 
                                           Christopher R. Burgess
                                           Controller
  
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.

                                                           
By                                      By /s/ WALLACE STETTINIUS   
        M. Katherine Dwyer                 Wallace Stettinius
   Director                                Director

By /s/ J. CARTER FOX                    By /s/ JOHN HOYT STOOKEY     
        J. Carter Fox                      John Hoyt Stookey
        Chairman of the Board              Director 
        of Directors; President &
        Chief Executive Officer

By /s/ ROBERT L. HINTZ             By /s/ RICHARD G. TILGHMAN              
   Robert L. Hintz                    Richard G. Tilghman  
   Director                           Director

By /s/ WILLIAM D. McCOY            By /s/ JOSEPH P. VIVIANO                
   William D. McCoy                   Joseph P. Viviano
   Director                           Director                        
By                                 By /s/ HARRY H. WARNER      
   C. Elis Olsson                     Harry H. Warner
   Director                           Director                       
By /s/ JOHN W. ROSENBLUM           By /s/ WILLIAM T. TOLLEY       
   John W. Rosenblum                  William T. Tolley
   Director                                Chief Financial Officer

By /s/ FRANK S. ROYAL                By /s/ CHRISTOPHER R. BURGESS              
   Frank S. Royal                            Christopher R. Burgess
        Director                             Controller                    
                                                                 

Each of the above signatures is affixed as of February 11, 1997. <PAGE>

                               EXHIBIT INDEX
                                                                   
            
3.1   Articles of Incorporation (filed as Exhibit 3.1 to the Registrant's
      Annual Report on Form 10-K for the year ended December 31, 1989 and
      incorporated herein by reference)

3.2   Amended and Restated Bylaws

4.1   Indenture, dated as of July 15, 1985, between the Registrant and
      Sovran Bank, N.A., as Trustee (filed as Exhibit 4.1 to Form S-3
      Registration Statement No. 33-30900 and incorporated herein by
      reference)

4.2   First Supplemental Indenture, dated as of September 1, 1989, to the
      Indenture dated as of July 15, 1985, between the Registrant and
      Sovran Bank, N.A., as Trustee (filed as Exhibit 4.1 to the
      Registrant's Current Report on Form 8-K filed October 9, 1990, and
      incorporated herein by reference)

4.3   Rights Agreement, dated as of March 15, 1988, between the Registrant
      and Crestar Bank (filed as Exhibit 4.1 to the Registrant's Current
      Report on Form 8-K dated March 15, 1988, and incorporated herein by
      reference)

4.4   Rights Agreement Amendment, dated as of August 24, 1992, between the
      Registrant and Harris Trust and Savings Bank, as successor rights
      agent (filed as Exhibit 4.4 to the Registrant's Registration
      Statement on Form S-8, File No. 33-56473, and incorporated herein by
      reference)
    
The registrant agrees to furnish to the Securities and Exchange Commission,
upon request, copies of those  agreements defining the rights of holders of
long-term debt of the registrant and its subsidiaries that are not filed
herewith pursuant to Item 601(b)(4)(iii) of Regulation S-K.

10.1  1987 Stock Option Plan (filed as Exhibit A to the Registrant's
      definitive Proxy Statement for the Annual Meeting of Stockholders
      held April 22, 1987 and incorporated herein by reference)

10.2  Directors' Deferred Compensation Plan (filed as Exhibit VII to the
      Registrant's Annual Report on Form 10-K for the year ended December
      28, 1980 and incorporated herein by reference)

10.3  Non-Employee Director Stock Option Plan (filed as Exhibit 4.1 to
      Form S-8 Registration Statement No. 33-53478 and incorporated herein
            by reference)<PAGE>



                                     

10.4  Executive Supplemental Retirement Plan (filed as Exhibit VI to the
      Registrant's Annual Report on Form 10-K for the year ended December
      28, 1980 and incorporated herein by reference) 
                            
10.5  Retirement Plan for Outside Directors (filed as Exhibit 10.9 to the
      Registrant's Annual Report on Form 10-K for the year ended December
      31, 1987 and incorporated herein by reference)

10.7  Chesapeake Corporation Salaried Employees' Benefits Continuation
      Plan (filed as Exhibit 10.8 to the   Registrant's Annual Report on
      Form 10-K for the year ended December 31, 1989 and incorporated
      herein by reference)

10.8  Chesapeake Corporation Long-Term Incentive Plan (filed as Exhibit
      10.9 to the Registrant's Annual Report on Form 10-K for the year
      ended December 31, 1989 and incorporated herein by reference)

10.9  Chesapeake Corporation 1993 Incentive Plan (filed as Exhibit 4.1 to
      Form S-8 Registration Statement No. 33-67384 and incorporated herein
      by reference)

10.10  Chesapeake Corporation Directors' Stock Option and Deferred
       Compensation Plan.  

10.11  Chesapeake Corporation 401(k) Restoration Plan

11.1  Computation of Net Income Per Share of Common Stock

13.1  Portions of the Chesapeake Corporation Annual Report to Stockholders
      for the year ended December 31, 1996 

21.1  Subsidiaries

23.1  Consent of Coopers & Lybrand L.L.P.

27.1  Financial Data Schedule

99.1  Form 11-K Annual Report, Hourly Employees' Stock Purchase Plan for
      the plan fiscal year ended November 30, 1996. 

[ARTICLE] 5
[CIK] 0000019731
[NAME] CHESAPEAKE CORP /VA/
[MULTIPLIER] 1
<TABLE>
<S>                             <C>
[PERIOD-TYPE]                   YEAR
[FISCAL-YEAR-END]                          DEC-31-1996
[PERIOD-END]                               DEC-31-1996
[CASH]                                       9,800,000
[SECURITIES]                                         0
[RECEIVABLES]                              153,900,000
[ALLOWANCES]                                 4,700,000
[INVENTORY]                                134,400,000
[CURRENT-ASSETS]                           325,800,000
[PP&E]                                   1,619,800,000
[DEPRECIATION]                             756,300,000
[TOTAL-ASSETS]                           1,290,200,000
[CURRENT-LIABILITIES]                      166,800,000
[BONDS]                                    499,400,000
[COMMON]                                    23,400,000
[PREFERRED-MANDATORY]                                0
[PREFERRED]                                          0
[OTHER-SE]                                 445,700,000
[TOTAL-LIABILITY-AND-EQUITY]             1,290,200,000
[SALES]                                  1,158,600,000
[TOTAL-REVENUES]                         1,172,000,000
[CGS]                                      843,000,000
[TOTAL-COSTS]                            1,084,300,000
[OTHER-EXPENSES]                             6,200,000
[LOSS-PROVISION]                               500,000
[INTEREST-EXPENSE]                          33,900,000
[INCOME-PRETAX]                             47,100,000
[INCOME-TAX]                                17,000,000
[INCOME-CONTINUING]                         30,100,000
[DISCONTINUED]                                       0
[EXTRAORDINARY]                                      0
[CHANGES]                                            0
[NET-INCOME]                                30,100,000
[EPS-PRIMARY]                                     1.27
[EPS-DILUTED]                                     1.27
</TABLE>

                                                            EXHIBIT 3.2



                        AMENDED AND RESTATED BYLAWS

                                    of

                          CHESAPEAKE CORPORATION

           (as adopted 2/13/90, with amendments through 4/30/96)



                                 ARTICLE I

                                  Offices

     Section 1.  Principal Office.  The principal office of the Corporation
in the Commonwealth of Virginia shall be in the City of Richmond or such
other location as may be designated by the Board of Directors from time to
time.
     Section 2.  Other Offices.  The Corporation may have offices at such
other place or places as the Board of Directors may from time to time
designate or appoint.
                                ARTICLE II
                              Capital Shares
     Section 1.  Certificates.  Shares of the Corporation shall be
evidenced by certificates in forms prescribed by the Board of Directors and
executed in any manner permitted by law and stating thereon the information
required by law.
     Transfer books in which shares shall be transferred shall be kept by
the Corporation or by one or more transfer agents appointed by it.  A
record shall be kept of each share certificate that is issued.  The
Corporation shall have the right to appoint at any time or from time to
time one or more registrars of its capital shares.
     Section 2.  Transfer of Shares.  Shares of the Corporation shall be
transferable or assignable only on the books of the Corporation by the
holder in person or by an attorney on surrender of the certificate
representing such shares duly endorsed and, if sought to be transferred by
an attorney, accompanied by a written power of attorney.  The Corporation
will recognize, however, the exclusive right of the person registered on
its books as the owner of shares to receive dividends and to vote as such
owner.
     Section 3.  Lost, Destroyed and Mutilated Certificates. After
receiving notice from a shareholder of any loss, destruction or mutilation
of a share certificate, the Secretary or his nominee may in his discretion
cause one or more new certificates for the same number of shares in the
aggregate to be issued to such shareholder upon the surrender of the
mutilated certificate or upon satisfactory proof of such loss or
destruction and the deposit of a bond in such form and amount and with such
surety as the Secretary or his nominee may require.
     Section 4.  Record Date.  For the purpose of determining shareholders
entitled to notice of or to vote at any meeting of shareholders or any
adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purpose,
the Board of Directors may fix in advance a date as the record date for any
such determination of shareholders, such date in any case to be not more
than seventy (70) days prior to the date on which the particular action
requiring such determination of shareholders is to be taken.  If no record
date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of shareholders, or shareholders entitled to
receive payment of a dividend, the date on which notices of the meeting are
first mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record
date for such determination of shareholders. 
     Section 5.  Control Share Acquisitions Statute.  The provisions of
Article 14.1 of Chapter 9 of Title 13.1 of the Code of Virginia (1950), as
amended, entitled Control Share Acquisitions, shall not apply to the
Corporation.  
                                ARTICLE III
                               Shareholders
     Section 1.  Annual Meeting.  Subject to the Board of Directors'
ability to postpone a meeting under Virginia law, the annual meeting and
all other meetings of shareholders shall be held on such date and at such
time and place as may be fixed by the Board of Directors and stated in the
notice of the meeting.  The annual meeting shall be held for the purpose of
electing Directors and for the transaction of only such other business as
is properly brought before the meeting in accordance with these bylaws.  To
be properly brought before an annual meeting, business must be
(i) specified in the notice of annual meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (ii) otherwise
properly brought before the annual meeting by or at the direction of the
Board of Directors, or (iii) otherwise properly brought before the annual
meeting by a shareholder.  In addition to any other applicable requirements
for business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in
writing to the Secretary.   To be timely, a shareholder's notice must be in
writing and delivered or mailed to and received by the Secretary not less
than sixty (60) days before the first anniversary of the date of the
Corporation's proxy statement in connection with the last annual meeting. 
A shareholder's notice to the Secretary shall set forth as to each matter
the shareholder proposes to bring before the annual meeting (i) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting,
(ii) the name and record address of the shareholder proposing such
business, (iii) the class, series and number of the Corporation's shares
that are beneficially owned by the shareholder, and (iv) any material
interest of the shareholder in such business.  Notwithstanding anything in
these bylaws to the contrary, no business shall be conducted at the annual
meeting except in accordance with the procedures set forth in this Article
III(1); provided, however, that nothing in this Article III(1) shall be
deemed to preclude discussion by any shareholder of any business properly
brought before the annual meeting.  In the event that a shareholder
attempts to bring business before an annual meeting without complying with
the provisions of this Article III(1), the chairman of the meeting shall
declare to the shareholders present at the meeting that the business was
not properly brought before the meeting in accordance with the foregoing
procedures, and such business shall not be transacted.
     Section 2.  Special Meetings.  Special meetings of the shareholders
may be held at any time and at any place designated in the notice thereof,
upon call of the Chairman of the Board of Directors, the President or a
majority of the Board of Directors.
     Section 3.  Notice.  Notice in writing of every annual or special
meeting of the shareholders, stating the date, time and place, and, in case
of a special meeting, the purpose or purposes thereof, shall be mailed not
less than ten (10) nor more than sixty (60) days before any such meeting to
each shareholder of record entitled to vote at such meeting, at his address
as it appears in the share transfer books of the Corporation.  Such further
notice shall be given as may be required by law, but meetings may be held
without notice if all of the shareholders entitled to vote at the meeting
waive such notice, by attendance at the meeting or otherwise, in accordance
with law.
     Section 4.  Quorum.  A majority of the votes entitled to be cast by
any voting group on any matter, represented in person or by proxy, shall
constitute a quorum of such voting group with respect to action on such
matter.  If at the time and place of the meeting there be present less than
a quorum, the meeting may be adjourned from time to time by the vote of a
majority of the shares present in person or by proxy without notice other
than announcement at the meeting.
     Section 5.  Voting.  Except as otherwise specified in the Articles of
Incorporation or the Virginia Stock Corporation Act, at all meetings of the
shareholders, each holder of an outstanding share may vote in person or by
proxy, and shall be entitled to one vote on each matter voted on at such
meeting for each share registered in the name of such shareholder on the
books of the Corporation on the record date for such meeting.   Every proxy
shall be in writing, dated and signed by the shareholder entitled to vote
or his duly authorized attorney-in-fact.  
     Unless a greater vote is required pursuant to the Articles of
Incorporation or the Virginia Stock Corporation Act, if a quorum exists,
action on a matter (other than the election of Directors) by a voting group
is approved if the votes cast favoring the action exceed the votes cast
opposing the action.  Unless otherwise provided in the Article of
Incorporation, Directors shall be elected by a plurality of votes cast by
shares entitled to vote in the election at a meeting at which a quorum is
present.
     Section 6.  Presiding Officer.  All meetings of the shareholders shall
be presided over by the Chairman of the Board of Directors or, in his
absence or at his request, by the President.  In case there be present
neither the Chairman of the Board of Directors nor the President, the
meeting shall elect a chairman.  The Secretary or, in his absence or at his
request, an Assistant Secretary, shall act as secretary of such meetings. 
In case there be present neither the Secretary nor an Assistant Secretary,
a secretary may be appointed by the chairman of the meeting.
     Section 7.  Inspectors and Tellers.  An appropriate number of
inspectors and tellers for any meeting of the shareholders may be appointed
by or pursuant to the direction of the Board of Directors.  Inspectors and
tellers so appointed will open and close the polls, will receive and take
charge of proxies and ballots and will decide all questions as to the
qualifications of voters, validity of proxies and ballots and the number of
votes properly cast.
                                ARTICLE IV
                                 Directors
     Section 1.  General Powers.  The business and the affairs of the
Corporation shall be managed under the direction of the Board of Directors,
and, except as expressly provided by law, the Articles of Incorporation or
these bylaws, all of the powers of the Corporation shall be vested in such
Board of Directors.
     Section 2.  Number and Election of Directors.  The number of Directors
constituting the Board of Directors shall be twelve (12), who shall be
divided into three classes, Class I, Class II and Class III, as nearly
equal in number as possible.  Directors of each class shall be elected by
the shareholders to serve for the terms specified in the Articles of
Incorporation and, unless sooner removed in accordance with the Articles of
Incorporation and applicable law, shall serve until their respective
successors are duly elected and qualified.  The Board of Directors may
increase the number of Directors by two (2) during any twelve month period
and may decrease the number of Directors by thirty (30) percent or less of
the number of Directors last elected by the shareholders.  Any vacancy,
including a vacancy resulting from an increase in the number of Directors
as specified above, may be filled by the affirmative vote of a majority of
the remaining Directors, though less than a quorum of the Board of
Directors, and Directors so chosen shall hold office until the next meeting
of the shareholders at which Directors are elected.  At such meeting of the
shareholders, the shareholders shall elect a Director to fill the vacancy,
and the newly elected Director shall hold office for a term expiring at the
annual meeting of the shareholders at which the term of the class to which
he has been elected expires.
     Subject to any rights of holders of preferred shares, only persons who
are nominated in accordance with the procedures set forth in this Article
IV(2) shall be eligible for election as Directors.  Notice of nominations
made by shareholders entitled to vote for the election of Directors shall
be received in writing by the Secretary not less than fifty (50) nor more
than seventy-five (75) days before the first anniversary of the date of the
Corporation's proxy statement in connection with the last meeting of
shareholders called for the election of Directors.  Each notice shall set
forth (i) the name, age, business address and, if known, residence address
of each nominee proposed in such notice, (ii) the principal occupation or
employment of each such nominee, and (iii) the number of capital shares of
the Corporation beneficially owned by each such nominee.  The Secretary
shall deliver all such notices to the Corporation's Nominating Committee,
or such other committee as may be appointed by the Board of Directors from
time to time for such purpose, for review.  The Nominating Committee shall
thereafter make its recommendation with respect to nominees to the Board of
Directors.  The chairman of any meeting of shareholders called for the
election of Directors may, if the facts warrant, determine that a
nomination was not made in accordance with the foregoing procedures, and if
he should so determine, he shall so declare to the meeting and the
defective nomination shall be disregarded.
     Section 3.  Annual Meeting.  A regular annual meeting of the Board of
Directors shall be held following the adjournment of the annual meeting of
the shareholders at such place as the Board of Directors may designate. 
The regular annual meeting of the Board of Directors then just elected by
the shareholders shall be held for the election of officers of the
Corporation and the transaction of all other business as shall come before
the said meeting.
     Section 4.  Special Meetings.  Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board of
Directors, the President or by any two members of the Board of Directors on
such date and at such time and place as may be designated in such call, or
may be held on any date and at any time and place without notice by the
unanimous written consent of all the members or by the presence of all of
the members at such meeting.  
     Section 5.  Notice of Meetings.   Notice of the time and place of
every meeting of the Board of Directors shall be mailed, telephoned or
transmitted by any other means of telecommunication by or at the direction
of the Secretary or other officer of the Corporation to each Director at
his last known address not less than twenty-four (24) hours before such
meeting, provided that notice need not be given of the annual meeting or of
regular meetings held at times and places fixed by resolution of the Board
of Directors.  Such notice need not describe the purpose of a special
meeting.  Meetings may be held at any time without notice if all the
Directors waive such notice, by attendance at the meeting or otherwise, in
accordance with law.
     Section 6.  Quorum; Presence at Meeting.   A quorum at any meeting of
the Board of Directors shall consist of a majority of the number of
Directors fixed from time to time in these bylaws.  Members of the Board of
Directors may participate in any meeting of the Board of Directors by means
of a conference telephone or similar communications equipment whereby all
persons participating in the meeting may simultaneously hear each other,
and participation by such means shall be deemed to constitute presence in
person at such meeting. 
     Section 7.  Voting.  If a quorum is present when a vote is taken, the
affirmative vote of a majority of Directors present is the act of the Board
of Directors, unless the Articles of Incorporation or these bylaws require
the vote of a greater number of Directors.  A Director who is present at a
meeting of the Board of Directors or any committee thereof when corporate
action is taken is deemed to have assented to the action unless (i) he
objects at the beginning of the meeting, or promptly upon his arrival, to
holding it or transacting specified business at the meeting, or (ii) he
votes against, or abstains from, the action taken.  
     Section 8.  Compensation of Directors.  Directors, as such, shall not
receive any stated salary for their services, except that, by resolution of
the Board of Directors, Directors may be paid (i) a retainer in an amount
determined by the Board of Directors for their services as such, (ii) an
additional retainer in an amount determined by the Board of Directors for
their services as Chairman of the Board of Directors or chairman of any
special or standing committee of the Board of Directors, and (iii) a fixed
sum and expenses for attendance at each regular, adjourned, or special
meeting of the Board of Directors or any special or standing committee
thereof.  Nothing herein contained shall be construed to preclude any
Director from serving the Corporation in any other capacity and receiving
compensation therefor. 
     Section 9.  Eligibility.  Except as hereinafter provided, no person
shall be elected or re-elected to the Board of Directors if at the time of
any proposed election or re-election he shall have attained the age of 70
years; provided, however, that the foregoing provision shall not apply to
persons who were members of the Board of Directors on January 1, 1966.  Any
Director who (i) separates from employment with the business or
professional organization by which he was principally employed as of the
date of his most recent election or re-election to the Board of Directors,
or (ii) ceases to serve as an officer in any of the capacities in which he
served with such business or professional organization as of the date of
his most recent election or re-election to the Board of Directors, shall be
deemed to have submitted his resignation as a Director effective upon such
separation from employment or cessation of service as an officer.  Such
resignation shall be considered by the Board of Directors at its next
regularly scheduled meeting.
     
                                 ARTICLE V
                      Executive and Other Committees
     Section 1.  Creation of Executive Committee.  The Board of Directors
may, whenever it sees fit, by a majority vote of the number of Directors
fixed from time to time in these bylaws, designate an Executive Committee
which shall consist of three (3) or more Directors, including the Chairman
of the Board of Directors and the President, provided that the President
shall be a member of the Executive Committee only if designated the Chief
Executive Officer.  The Chairman of the Board shall be the Chairman of the
Executive Committee.  The members of the Executive Committee shall serve
until their successors are designated by the Board of Directors or until
removed or until the Executive Committee is dissolved by a majority vote of
the number of Directors fixed from time to time in these bylaws.
     Section 2.  Powers of Executive Committee.  Except as otherwise
provided by the Articles of Incorporation or these bylaws, the Executive
Committee, when the Board of Directors is not in session, shall have all
powers vested in the Board of Directors by law, by the Articles of
Incorporation or by these bylaws; provided, that the Executive Committee
shall not have the authority to take any action that may not be delegated
to a committee under the Virginia Stock Corporation Act.  The Executive
Committee shall report at the next regular or special meeting of the Board
of Directors on all action it has taken since the last regular or special
meeting of the Board of Directors.
     Section 3.  Committee of Outside Directors.  The Directors who are not
employees or former employees of the Corporation ("Outside Directors"),
shall constitute the Committee of Outside Directors.  The Committee of
Outside Directors shall (a) evaluate the performance of the Chairman of the
Board and the Chief Executive Officer, (b) recommend, when appropriate, a
successor for the Chairman of the Board and the Chief Executive Officer,
(c) in consultation with the Chairman of the Board, consider and make
recommendations to the Board of Directors for the election of the other
officers of the Corporation and (d) perform such other duties as may be
delegated to the Committee of Outside Directors by the Board of Directors. 
The Committee of Outside Directors shall at the annual meeting of the Board
of Directors elect from their number by a majority vote of the number of
Outside Directors a Chairman of the Committee of Outside Directors who
shall preside at meetings of the Committee of Outside Directors and perform
such other duties as may be assigned by the Committee of Outside Directors. 
No Director shall be elected Chairman of the Committee of Outside Directors
for more than three (3) consecutive full terms, provided that a director
shall be eligible for election as Chairman if he has not served as Chairman
during the immediately preceding eleven (11) months.
     Section 4.  Audit Committee.  The Board of Directors, by resolution
adopted by a majority of the number of Directors fixed in accordance with
these bylaws, shall elect an Audit Committee which shall consist of a
Chairman and not less than two (2) Directors, all of whom shall be Outside
Directors.  The Audit Committee shall review and discuss with the
corporation's independent accountants the financial records of the
Corporation and report to the Board of Directors with respect thereto, and
shall perform such other duties as may be assigned by the Board of
Directors.  The Audit Committee shall report regularly to the Board of
Directors all action which it has taken. 
     Section 5.  Executive Compensation Committee.  The Board of Directors,
by resolution adopted by a majority of the number of Directors fixed in
accordance with these bylaws, shall elect an Executive Compensation
Committee which shall consist of a Chairman and not less than two (2) other
members, all of whom shall be Outside Directors.  The Executive
Compensation Committee shall approve officers' incentive awards and stock
option grants, recommend to the Board of Directors remuneration levels for
executive officers, and perform such other duties as may be assigned to it
by the Board of Directors.  The Executive Compensation Committee shall
report regularly to the Board of Directors all action which it has taken. 
     Section 6.  Nominating Committee.  The Board of Directors, by
resolution adopted by a majority of the number of Directors fixed in
accordance with these bylaws, shall elect a Nominating Committee which
shall consist of a Chairman and not less than two (2) other members, all of
whom shall be Outside Directors.  The Nominating committee shall review
annually  the attendance and performance of the Directors, review the
compensation of Directors and make recommendations to the Board of
Directors as to such compensation, recommend nominees for election to the
Board of Directors and perform such other duties as may be assigned to it
by the Board of Directors.  The Nominating Committee shall report regularly
to the Board of Directors all action which it has taken. 
     Section 7.  Other Committees.  The Board of Directors, by resolution
adopted by a majority of the number of Directors fixed in accordance with
these bylaws, may establish such other standing or special committees of
the Board of Directors as it may deem advisable, consisting of two (2) or
more Directors.  The members, terms and authority of such committees shall
be set forth in the resolutions establishing the same.
     Section 8.  Meetings.  Regular and special meetings of any committee
established pursuant to this Article may be called by the Chairman of the
Board, the President, the Chairman of the committee involved or any two (2)
members of the committee involved and held subject to the same requirements
with respect to date, time, place and notice as are specified in these
bylaws for regular and special meetings of the Board of Directors.
     Section 9.  Quorum and Manner of Acting.  A quorum of the members of
any committee serving at the time of any meeting thereof for the
transaction of business at such meeting shall consist of (i) one-third (but
not fewer than two (2)) of such members in the case of any committee other
than the Executive Committee, and (ii) a majority of such members in the
case of the Executive Committee.  The action of a majority of those members
present at a committee meeting at which a quorum is present shall
constitute the act of the committee.
     Section 10.  Term of Office.  Members and the chairman of any
committee, excluding the Committee of Outside Directors, shall be elected
at the annual meeting of the Board of Directors and shall hold office until
the next annual meeting of the Board of Directors and until their
successors are elected by the Board of Directors, or until such committee
is dissolved by the Board of Directors.
     Section 11.  Resignation and Removal.  Any member of a committee may
resign at any time by giving written notice of his intention to do so to
the Chairman of the Board or the Secretary, or may be removed, with or
without cause, at any time by such vote of the Board of Directors or, in
the case of the Committee of Outside Directors, by such vote of the
Committee as would suffice for his election.
     Section 12.  Vacancies.  Any vacancy occurring in a committee
resulting from any cause whatever may be filled by a vote of a majority of
the number of Directors fixed by these bylaws.    

                               ARTICLE VI
                                Officers
     Section 1.  Required Officers.   The officers of the Corporation shall
be a Chairman of the Board, a President and a Secretary, together with such
other officers, including one or more Vice Presidents (whose seniority and
titles may be specified by the Board of Directors) and a Treasurer, as may
be elected from time to time by the Board of Directors.  Any two or more
offices may be held by the same person. 
     Section 2.  Election of Officers; Compensation.  The officers of the
Corporation shall be elected by the Board of Directors and shall hold
office until the next annual meeting of the Board of Directors and until
their successors are duly elected and qualified; provided, however, that
any officer may be removed and the resulting vacancy filled at any time,
with or without cause, by the Board of Directors.  The salaries or
compensation of all officers of the Corporation shall be fixed by or
pursuant to the direction of the Board of Directors.
     Section 3.  Chairman of the Board.  The Chairman of the Board shall
preside at all meetings of the shareholders, Directors and the Executive
Committee and shall have such other powers as may be conferred upon him by
the Board of Directors.  If the Chairman of the Board is not the Chief
Executive Officer, he shall, in the absence of or inability of the Chief
Executive Officer to act, be the Acting Chief Executive Officer until such
time as another person is designated by the Board of Directors as Chief
Executive Officer or Acting Chief Executive Officer.  He may sign and
execute in the name of the Corporation share certificates, deeds,
mortgages, bonds, contracts or other instruments except in cases where the
signing and the execution thereof shall be expressly and exclusively
delegated by the Board of Directors or by these bylaws to some other
officer or agent of the Corporation or shall be required by law otherwise
to be signed or executed.  
     Section 4.  President.  The President shall perform such duties as
shall be required of him by the Chairman of the Board or the Board of
Directors.  If the President is not the Chief Executive Officer, he shall,
in the absence of or inability of the Chief Executive Officer to act, be
the Acting Chief Executive Officer until such time as another person is
designated by the Board of Directors as Chief Executive Officer or Acting
Chief Executive Officer.  He may sign and execute in the name of the
Corporation share certificates, deeds, mortgages, bonds, contracts or other
instruments except in cases where the signing and the execution thereof
shall be expressly and exclusively delegated by the Board of Directors or
by these bylaws to some other officer or agent of the Corporation or shall
be required by law otherwise to be signed or executed.           
     Section 5.  Chief Executive Officer.  The Board of Directors shall
designate one of the officers of the Corporation as the Chief Executive
Officer of the Corporation.  The Chief Executive Officer shall be primarily
responsible for the implementation of policies of the Board of Directors. 
He shall have authority over the general management and direction of the
business and operations of the Corporation and its divisions, if any,
subject only to the ultimate authority of the Board of Directors 
     Section 6.  Vice Presidents.  The Vice Presidents shall perform such
duties as shall be required of them by the Chairman of the Board, the
President or the Board of Directors.  Any Vice President may sign and
execute in the name of the Corporation deeds, mortgages, bonds, contracts
or other instruments authorized by the Board of Directors, except where the
signing and execution of such documents shall be expressly and exclusively
delegated by the Board of Directors, the Chairman of the Board or the
President to some other officer or agent of the Corporation or shall be
required by law or otherwise to be signed or executed.
     Section 7.  Secretary.  The Secretary shall prepare and maintain
custody of the minutes of all meetings of the Board of Directors and
stockholders of the Corporation.  When requested, he shall also act as
secretary of the meetings of the committees of the Board of Directors.  He
shall see that all notices required to be given by the Corporation are duly
given and served; he shall have custody of all deeds, leases, contracts and
other important corporate documents; he shall have charge of the books,
records and papers of the Corporation relating to its organization and
management as a Corporation; and he shall in general perform all the duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the Chairman of the Board, the President or
the Board of Directors.  An Assistant Secretary may exercise any of the
functions or perform any of the duties of the Secretary.
     Section 8.  Treasurer.  The Treasurer shall have custody of the moneys
and securities of the Corporation, shall sign or countersign such
instruments as require his signature and shall perform such other duties as
may be incident to his office or are properly required of him by the
Chairman of the Board, the President, or the Board of Directors.  An
Assistant Treasurer may exercise any of the functions or perform any of the
duties of the Treasurer.

                                ARTICLE VII
                    Limit on Liability; Indemnification
Section 1.  Definitions.  In this Article:
            "applicant" means the person seeking indemnification pursuant
               to this Article;
            "expenses" includes counsel fees;
            "liability" means the obligation to pay a judgment, settlement,
               penalty, fine, including any excise tax assessed with respect
               to an employee benefit plan, or  reasonable expenses incurred
               with respect to a proceeding;
            "party" includes an individual who was, is or is threatened
               to be made a named defendant or respondent in a proceeding;
               and
            "proceeding" means any threatened, pending or completed action,
               suit or proceeding, whether civil, criminal, administrative
               or investigative and whether formal or informal.

Section 2.  Limitation on Liability.  To the full extent that the
Virginia Stock Corporation Act, as it exists on the date hereof or may
hereafter be amended, permits the limitation or elimination of the
liability of Directors and officers, no Director or officer of the
Corporation shall be liable to the Corporation or its shareholders for
monetary damages with respect to any transaction, occurrence or course of
conduct, whether prior or subsequent to the effective date of this Article.
     Section 3.  Indemnification.  The Corporation shall indemnify (a) any
person who was or is a party to any proceeding, including a proceeding
brought by or in the right of the Corporation, by reason of the fact that
he is or was a Director or officer of the Corporation, and (b) any Director
or officer of the Corporation who is or was serving at the request of the
Corporation as a director, trustee, partner or officer of another
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against any liability incurred by him in connection with
such proceeding unless he engaged in willful misconduct or a knowing
violation of the criminal law.  A person is considered to be serving an
employee benefit plan at the Corporation's request if his duties to the
Corporation also impose duties on, or otherwise involve services by, him to
the plan or to participants in or beneficiaries of the plan.  The Board of
Directors is hereby empowered, by a majority vote of a quorum of
disinterested Directors, to enter into a contract to indemnify any Director
or officer in respect of any proceeding arising from any act or omission,
whether occurring before or after the execution of such contract.
     Section 4.  Application; Amendment.  The provisions of this Article
shall be applicable to all proceedings commenced after the adoption hereof
by the shareholders of the Corporation, arising from any act or omission,
whether occurring before or after such adoption.  No amendment or repeal of
this Article shall have any effect on the rights provided under this
Article with respect to any act or omission occurring prior to such
amendment or repeal.  The Corporation shall promptly take all such actions,
and make all such determinations, as shall be necessary or appropriate to
comply with its obligation to make any indemnity under this Article and
shall promptly pay or reimburse all reasonable expenses, including
attorneys' fees, incurred by any Director or officer in connection with
such actions and determinations or proceedings of any kind arising
therefrom.
     Section 5.  Termination of Proceeding.  The termination of any
proceeding by judgment, order, settlement, conviction or upon a plea of
nolo contendere or its equivalent, shall not of itself create a presumption
that the applicant engaged in willful misconduct or a knowing violation of
the criminal law.
     Section 6.  Determination of Availability.  Any indemnification under
Section (3) of this Article (unless ordered by a court) shall be made by
the Corporation only as authorized in the specific case upon a
determination that indemnification of the applicant is proper in the
circumstances because he did not engage in willful misconduct or a knowing
violation of the criminal law.  The determination shall be made:
          (a)  by the Board of Directors by a majority vote of a quorum
consisting of Directors not at the time parties to the proceeding;
          (b)  if a quorum cannot be obtained under subsection (a) of this
section, by majority vote of a committee duly designated by the Board of
Directors (in which designation Directors who are parties may participate),
consisting solely of two or more Directors not at the time parties to the
proceeding;
          (c)  by special legal counsel:
              (i)  selected by the Board of Directors or its committee in
         the manner prescribed in subsection (a) or (b) of this section;
         or
                     (ii)  if a quorum of the Board of Directors cannot be
         obtained under subsection (a) of this section and a committee
         cannot be designated under subsection (b) of this subsection,
         selected by majority vote of the full Board of Directors, in
         which selection Directors who are parties may participate; or
         (d)  by the shareholders, but shares owned by or voted under the
control of Directors who are at the time parties to the proceeding may not
be voted on the determination.
         Any evaluation as to the reasonableness of expenses shall be made
in the same manner as the determination that indemnification is
permissible, except that if the determination is made by special legal
counsel, such evaluation as to reasonableness of expenses shall be made by
those entitled under subsection (c) of this section to select counsel.
         Notwithstanding the foregoing, in the event there has been a
change in the composition of a majority of the Board of Directors after the
date of the alleged act or omission with respect to which indemnification
is claimed, any determination as to indemnification and advancement of
expenses with respect to any claim for indemnification made pursuant to
this Article shall be made by special legal counsel agreed upon by the
Board of Directors and the applicant.  If the Board of Directors and the
applicant are unable to agree upon such special legal counsel, the Board of
Directors and the applicant each shall select a nominee, and the nominees
shall select such special legal counsel.
    Section 7.  Advances.  (a)  The Corporation may pay for or reimburse
the reasonable expenses incurred by any applicant who is a party to a
proceeding in advance of final disposition of the proceeding or the making
of any determination under Section (6) if:
              (i)  the applicant furnishes the Corporation a written
         statement of his good faith belief that he has met the standard
         of conduct described in Section (3); and
                     (ii)  the applicant furnishes the Corporation a written
         undertaking, executed personally or on his behalf, to repay the
         advance if it is ultimately determined that he did not meet such
         standard of conduct.
    Section 8.  Indemnification of Others.  The Board of Directors of
Directors is hereby empowered, by majority vote of a quorum of
disinterested Directors, to cause the Corporation to indemnify or contract
to indemnify any person not specified in Section (3) of this Article who
was, is or may become a party to any proceeding, by reason of the fact that
he is or was an employee or agent of the Corporation, or is or was serving
at the request of the Corporation as director, officer, employee or agent
of another corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, to the same extent as if such person were
specified as one to whom indemnification is granted in Section (3).  The
provisions of Sections (4) through (7) of this Article shall be applicable
to any indemnification provided hereafter pursuant to this Section (8).
    Section 9.  Insurance.  The Corporation may purchase and maintain
insurance to indemnify it against the whole or any portion of the liability
assumed by it in accordance with this Article and may also procure
insurance, in such amounts as the Board of Directors may determine, on
behalf of any person who is or was a Director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability asserted against or incurred by him in
any such capacity or arising from his status as such, whether or not the
Corporation would have power to indemnify him against such liability under
the provisions of this Article.
    Section 10.  Further Indemnity.  Every reference herein to Directors,
officers, employees and agents shall include former Directors, officers,
employees and agents and their respective heirs, executors and
administrators.  The indemnification hereby provided and provided hereafter
pursuant to the power hereby conferred on the Board of Directors shall not
be exclusive of any other rights to which any person may be entitled,
including any right under policies of insurance that may be purchased and
maintained by the Corporation or others, with respect to claims, issues or
matters in relation to which the Corporation would not have the power to
indemnify such person under the provisions of this Article.  Such rights
shall not prevent or restrict the power of the Corporation to make or
provide for any further indemnity, or provisions for determining
entitlement to indemnity, pursuant to one or more indemnification
agreements, bylaws, or other arrangements (including, without limitation,
creation of trust funds or security interests funded by letters of credit
or other means) approved by the Board of Directors (whether or not any of
the Directors of the Corporation shall be a party to or beneficiary of any
such agreements, bylaws or arrangements); provided, however, that any
provision of such agreements, bylaws or other arrangements shall not be
effective if and to the extent that it is determined to be contrary to this
Article or applicable laws of the Commonwealth of Virginia.
    Section 11.  Further Board Action.  Any other provision of this
Article notwithstanding, the Board of Directors shall be empowered to amend
this Article from time to time, to the extent permitted by then applicable
law, to limit, eliminate or extend the rights provided hereunder, provided
that no such amendment shall limit or reduce the rights provided under this
article with respect to any act or omission occurring prior to such
amendment.
    Section 12.  Severability.  Each provision of this Article shall be
severable, and an adverse determination as to any such provision shall in
no way affect the validity of any other provision.

                               ARTICLE VIII
                             Emergency Bylaws
    The emergency bylaws provided in this Article shall be operative
during any emergency, notwithstanding any different provision in the
preceding Articles of these bylaws, in the Articles of Incorporation or in
the Virginia Stock Corporation Act (other than those provisions relating to
emergency bylaws).  An emergency exists if a quorum of the Board of
Directors cannot readily be assembled because of some catastrophic event. 
To the extent not inconsistent with these emergency bylaws, the bylaws
provided in the preceding Articles shall remain in effect during such
emergency.  Upon the termination of such emergency, the emergency bylaws
shall cease to be operative unless and until another such emergency shall
occur.
    During any such emergency:
         (a)  Any meeting of the Board of Directors may be called by any
officer of the Corporation or by any Director.  The notice thereof shall
specify the date, time and place of the meeting.  To the extent feasible,
notice shall be given in accord with Article IV, Section (5) above, but
notice may be given only to such of the Directors as it may be feasible to
reach at the time, by such means as may be feasible at the time, including
publication or radio, and at a time less then twenty-four (24) hours before
the meeting if deemed necessary by the person giving notice.  Notice shall
be similarly given, to the extent feasible, to the other persons referred
to in Subsection (b) below.
         (b)  At any meeting of the Board of Directors, a quorum shall
consist of a majority of the number of Directors fixed at the time in
accordance with Article IV, Section (6) of these bylaws.  If the Directors
present at any particular meeting shall be fewer than the number required
for such quorum, other persons present as referred to below to the number
necessary to make up such quorum shall be deemed Directors for such
particular meeting as determined by the following provisions and in the
following order of priority:
         (i)  the President, if not already serving as a Director;
         (ii)  Vice Presidents not already serving as Directors, first in
    the order of the seniority of their title as designated by the Board
    of Directors before the emergency, and then in the order of their
    seniority of first election to such offices; provided, that if two or
    more shall have the same seniority of title or shall have been first
    elected to such offices on the same day, then in the order of their
    seniority in age;
         (iii)  [reserved for future use]       
         (iv)  all other officers of the Corporation in the order of their
    seniority of first election to such offices, or if two or more shall
    have been first elected to such offices on the same day, then in the
    order of their seniority in age; and
         (v)  any other persons who are designated on a list that shall
    have been approved by the Board of Directors before the emergency,
    such persons to be taken in such order of priority and subject to such
    conditions as may be provided in the resolution approving the list.
         (c)  The Board of Directors, during as well as before any such
emergency, may provide, and from time to time modify, lines of succession
in the event that during such an emergency any or all officers or agents of
the Corporation shall for any reason be rendered incapable of discharging
their duties.
         (d)  The Board of Directors, during as well as before any such
emergency, may, effective in the emergency, change the principal office, or
designate several alternative offices, or authorize the officers so to do.
         No officer, Director or employee shall be liable for action taken
in good faith in accordance with these emergency bylaws.
         These emergency bylaws shall be subject to repeal or change by
further action of the Board of Directors or by action of the shareholders,
except that no such repeal or change shall modify the provisions of the
next preceding paragraph with regard to action or inaction prior to the
time of such repeal or change.  Any such amendment of these emergency
bylaws may make any further or different provisions that may be practical
and necessary for the circumstances of the emergency.

                                ARTICLE IX
                               Miscellaneous
    Section 1.  Voting of Shares.  Shares of any corporation which this
Corporation shall be entitled to vote may be voted, either in person or by
proxy, by this Corporation's Chairman of the Board or President or by any
other officer expressly authorized by this Corporation's Board of Directors
or Executive Committee, and each such officer is authorized to give this
Corporation's consent in writing to any action of such corporation, and to
execute waivers and take all other necessary action on behalf of the
Corporation with respect to such shares.
    Section 2.  Seal.  The corporate seal of the Corporation shall consist
of a flat-faced circular die, of which there may be any number of
counterparts, on which there shall be engraved two concentric circles
between which is inscribed the name of the corporation, and in the center
the year of its organization and the words "corporate seal".
    Section 3.  Amendments to Bylaws.  Unless proscribed by the Articles
of Incorporation, the Board of Directors of the Corporation shall have the
power to adopt and from time to time amend, alter, change or repeal these
bylaws with or without the approval of the shareholders of the Corporation,
but bylaws so made, amended, altered or changed, may be further amended,
altered, changed or repealed by the shareholders.  The shareholders in
adopting or amending a particular bylaw may provide expressly that the
Board of Directors may not amend or repeal that bylaw.



                                                       EXHIBIT 10.10









                          CHESAPEAKE CORPORATION

                        DIRECTORS' STOCK OPTION AND
                        DEFERRED COMPENSATION PLAN














                          Effective June 1, 1996


























<TABLE>
                             TABLE OF CONTENTS

<CAPTION>
   Section                                                             Page
<S>            <C>                                                     <C>
ARTICLE I      DEFINITIONS

     1.01.          Administrator. . . . . . . . . . . . . . . . . . . .  1
     1.02.          Agreement. . . . . . . . . . . . . . . . . . . . . .  1
     1.03.          Beneficiary or Beneficiaries . . . . . . . . . . . .  1
     1.04.          Beneficiary Designation Form . . . . . . . . . . . .  1
     1.05.          Board. . . . . . . . . . . . . . . . . . . . . . . .  1
     1.06.          Change in Control. . . . . . . . . . . . . . . . . .  1
     1.07.          Code . . . . . . . . . . . . . . . . . . . . . . . .  1
     1.08.          Common Stock . . . . . . . . . . . . . . . . . . . .  1
     1.09.          Company. . . . . . . . . . . . . . . . . . . . . . .  2
     1.10.          Compensation . . . . . . . . . . . . . . . . . . . .  2
     1.11.          Control Change Date. . . . . . . . . . . . . . . . .  2
     1.12.          Date of Grant. . . . . . . . . . . . . . . . . . . .  2
     1.13.          Deferral Election Form . . . . . . . . . . . . . . .  2
     1.14.          Deferral Year. . . . . . . . . . . . . . . . . . . .  2
     1.15.          Deferred Benefit . . . . . . . . . . . . . . . . . .  2
     1.16.          Deferred Cash Account. . . . . . . . . . . . . . . .  2
     1.17.          Deferred Cash Benefit. . . . . . . . . . . . . . . .  3
     1.18.          Deferred Stock Account . . . . . . . . . . . . . . .  3
     1.19.          Deferred Stock Benefit . . . . . . . . . . . . . . .  3
     1.20.          Distribution Election Form . . . . . . . . . . . . .  3
     1.21.          Election Date. . . . . . . . . . . . . . . . . . . .  3
     1.22.          Fair Market Value. . . . . . . . . . . . . . . . . .  4
     1.23.          Meeting Fees . . . . . . . . . . . . . . . . . . . .  4
     1.24.          Option . . . . . . . . . . . . . . . . . . . . . . .  4
     1.25.          Participant. . . . . . . . . . . . . . . . . . . . .  4
     1.26.          Plan . . . . . . . . . . . . . . . . . . . . . . . .  4
     1.27.          Retainer Fee . . . . . . . . . . . . . . . . . . . .  4
     1.28.          Terminate, Terminating, or Termination . . . . . . .  4

ARTICLE II          PURPOSES . . . . . . . . . . . . . . . . . . . . . .  5

ARTICLE III    ADMINISTRATION. . . . . . . . . . . . . . . . . . . . . .  5

ARTICLE IV     GRANT OF OPTIONS

     4.01.          Option Grants. . . . . . . . . . . . . . . . . . . .  5
     4.02.          Option Price . . . . . . . . . . . . . . . . . . . .  6
     4.03.          Exercisability . . . . . . . . . . . . . . . . . . .  6
     4.04.          Maximum Option Period. . . . . . . . . . . . . . . .  7
     4.05.          Nontransferability . . . . . . . . . . . . . . . . .  7
     4.06.          Stock Subject to Options . . . . . . . . . . . . . .  7
     4.07.          Shareholder Rights . . . . . . . . . . . . . . . . .  7

ARTICLE V      DEFERRED BENEFITS

     5.01.          Deferral Election. . . . . . . . . . . . . . . . . .  7
     5.02.          Deferred Cash Benefits . . . . . . . . . . . . . . .  9
     5.03.          Deferred Stock Benefits. . . . . . . . . . . . . . . 10
     5.04.          Distribution of Deferred Benefits. . . . . . . . . . 10
     5.05.          Hardship Distributions . . . . . . . . . . . . . . . 13

ARTICLE VI     ADJUSTMENT UPON CHANGE IN COMMON STOCK. . . . . . . . . . 13

ARTICLE VII    COMPLIANCE WITH LAW AND APPROVAL OF
               REGULATORY BODIES . . . . . . . . . . . . . . . . . . . . 14

ARTICLE VIII   GENERAL PROVISIONS

     8.01.          Effect on Service. . . . . . . . . . . . . . . . . . 15
     8.02.          Unfunded Plan. . . . . . . . . . . . . . . . . . . . 15
     8.03.          Notices. . . . . . . . . . . . . . . . . . . . . . . 15
     8.04.          Rules of Construction. . . . . . . . . . . . . . . . 15

ARTICLE IX     AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE X      TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 16

ARTICLE XI     DURATION OF OPTION GRANTS . . . . . . . . . . . . . . . . 16

ARTICLE XII    EFFECTIVE DATE OF PLAN. . . . . . . . . . . . . . . . . . 16
</TABLE>

                                ARTICLE I
                                    
                               DEFINITIONS


1.011.   Administrator means the Company's Corporate Secretary.

1.012.   Agreement means a written Agreement (including any amendment or
supplement thereto) between the Company and a Participant specifying the
terms and conditions of an Option granted to such Participant.

1.013.   Beneficiary or Beneficiaries means a person or persons or other
entity designated on a Beneficiary Designation Form by a Participant as
allowed in subsection 5.04(c) to receive Deferred Benefits.  If there is no
valid designation by the Participant, or if the designated Beneficiary or
Beneficiaries fail to survive the Participant or otherwise fail to take the
benefit, the Participant's Beneficiary is the first of the following who
survives the Participant:  a Participant's spouse (the person legally
married to the Participant when the Participant dies); the Participant's
surviving children and the issue of Participant's deceased children, per
stirpes; the Participant's parents; and the Participant's estate.

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

1.015.   Board means the board of directors of the Company.

1.016.   Change in Control means a "Change in Control" as defined in the
Chesapeake Corporation Benefits Plan Trust. 

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

1.018.   Common Stock means the common stock of the Company.

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

1.10.   Compensation means a Participant's Meeting Fees and Retainer Fees
for the Deferral Year.

1.11.   Control Change Date means a "Control Change Date" as defined in the
Chesapeake Corporation Benefits Plan Trust.  

1.12.   Date of Grant means each May 1 beginning May 1, 1997, and ending
May 1, 2007. 
 
1.13.   Deferral Election Form means a document governed by the provisions
of Article V of this Plan, including the portion that is the Distribution
Election Form and the related Beneficiary Designation Form that applies to
all of that Participant's Deferred Benefits under the Plan.

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

1.15.   Deferred Benefit means either a Deferred Cash Benefit or a Deferred
Stock Benefit under the Plan for a Participant who has submitted an
operative Deferral Election Form pursuant to section 5.01 of this Plan.

1.16.   Deferred Cash Account means that bookkeeping record established for
each Participant who elects a Deferred Cash Benefit under this Plan.  A
Deferred Cash Account is established only for purposes of measuring a
Deferred Cash Benefit and not to segregate assets or to identify assets
that may or must be used to satisfy a Deferred Cash Benefit.  A Deferred
Cash Account will be credited with the Participant's Compensation deferred
as a Deferred Cash Benefit according to a Deferral Election Form and
according to section 5.02  of this Plan.  A Deferred Cash Account will be
credited periodically with amounts based upon interest rates in accordance
with subsection 5.02(b) of this Plan.

1.17.   Deferred Cash Benefit means the Deferred Benefit elected by a
Participant under section 5.01 that results in payments governed by
sections 5.02 and 5.04 of this Plan.

1.18.   Deferred Stock Account means that bookkeeping record established
for each Participant who elects a Deferred Stock Benefit under this Plan. 
A Deferred Stock Account is established only for purposes of measuring a
Deferred Stock Benefit and not to segregate assets or to identify assets
that may or must be used to satisfy a Deferred Stock Benefit.  A Deferred
Stock Account will be credited with the Participant's Compensation deferred
as a Deferred Stock Benefit according to a Deferral Election Form and
according to section 5.03 of this Plan.  A Deferred Stock Account will be
credited periodically with amounts in accordance with subsection 5.03(b) of
this Plan.

1.19.   Deferred Stock Benefit means the Deferred Benefit elected by a
Participant under section 5.01 that results in payments governed by
sections 5.03 and 5.04 of this Plan.

1.20.   Distribution Election Form means that part of a Deferral Election
Form used by a Participant according to this Plan to establish the duration
of deferral and the frequency of payments of a Deferred Benefit.  If a
Deferred Benefit has no Distribution Election Form that is operative
according to section 5.01 of this Plan, distribution of that Deferred
Benefit is governed by section 5.04(b) of this Plan.

1.21.   Election Date means the date established by this Plan as the date
before which a Participant must submit a valid Deferral Election Form to
the Administrator.  For each Deferral Year, the Election Date is December
31 of the preceding calendar year.  However, for an individual who becomes
a Participant during a Deferral Year, the Election Date is the thirtieth
day following the date that he becomes a member of the Board.  Despite the
two preceding sentences, the Administrator may set an earlier date as the
Election Date for any Deferral Year.  The Election Date for the 1996
Deferral Year is the thirtieth day following the date that the Plan is
approved by the Company's shareholders in accordance with Article XII.

1.22.   Fair Market Value means the average closing sales price of the
Common Stock on the New York Stock Exchange, composite tape, for the twenty
trading days before the Option's Date of Grant.

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

1.24.   Option means a stock option that entitles the holder to purchase
from the Company a stated number of shares of Common Stock at the shares'
Fair Market Value.

1.25.   Participant means a member of the Board who is not an employee of
the Company on the applicable Date of Grant.  For purposes of Article V of
this Plan, a Participant, with respect to any Deferral Year, means a member
of the Board who is not an employee of the Company and whose Deferral
Election Form is operative for that Deferral Year.

1.26.   Plan means the Chesapeake Corporation Directors' Stock Option and
Deferred Compensation Plan.

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

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

                               ARTICLE II
                                    
                                PURPOSES


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






                               ARTICLE III
                                    
                             ADMINISTRATION


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

                               ARTICLE IV
                                    
                            GRANT OF OPTIONS
                                    
                                    
 4.001.   Option Grants.  On each Date of Grant during the term of this
Plan, each Participant will be granted an Option for the number of shares
  of Common Stock determined in accordance with the following schedule:
<TABLE>
<CAPTION>
     Date of Grant  Number of Shares
<S>            <C>                 <C> 
     May 1, 1997      1500
     May 1, 1998      1700
     May 1, 1999      1900
     May 1, 2000      2100
     May 1, 2001      2300
     May 1, 2002      2500
     May 1, 2003      2700
     May 1, 2004      2900
     May 1, 2005      3100                        May 1, 2006     3300     May 1, 2007     3500
</TABLE>

All Options shall be evidenced by Agreements which shall be subject to
applicable provisions of the Plan and to such other provisions as the
Administrator may adopt.

4.002.   Option Price.  The price per share for Common Stock purchased on
the exercise of an Option shall be the share's Fair Market Value.  Payment
of the Option price shall be made in cash or a cash equivalent acceptable
to the Administrator.  In addition, all or part of the Option price may be
paid by surrendering shares of Common Stock to the Company.  If Common
Stock is used to pay all or part of the Option price, the fair market value
of the shares surrendered (determined as of the day before the date of
exercise and based on the closing sales price on the New York Stock
Exchange composite tape on such date), together with any cash and cash
equivalents paid, must not be less than the Option price for the number of
shares for which the Option is being exercised.

4.003.   Exercisability.  Subject to the provisions of this Plan, an Option
may be exercised on or after the day before the Annual Meeting of the
Company's shareholders next following its Date of Grant.  The preceding
sentence to the contrary notwithstanding, an Option shall be exercisable in
whole or in part as of a Control Change Date or the date that the
Participant's membership on the Board terminates as a result of the
Participant's death or permanent and total disability (as such term is
defined in Section 22(e)(3) of the Code).  An Option shall be forfeited if,
as of the termination of the Participant's membership on the Board, the
Option is not then exercisable and such termination occurs for any reason
other than the Participant's death or permanent and total disability (as
defined above).  Options that are exercisable or that become exercisable
upon the Participant's termination of membership on the Board will remain
exercisable until the tenth anniversary of the Option's Date of Grant.  An
Option may be exercised with respect to any number of whole shares less
than the full number for which the Option could be exercised.  A partial
exercise of an Option shall not affect the right to exercise the Option
from time to time in accordance with this Plan and the applicable Agreement
with respect to the shares remaining subject to the Option.

4.004.   Maximum Option Period.  No Option shall be exercisable after the
expiration of ten years from its Date of Grant.

4.005.   Nontransferability.  Options granted under this Plan shall be
nontransferable except by will or the laws of descent and distribution. 
During the lifetime of the Participant to whom the Option is granted, the
Option may be exercised only by the Participant.  No right or interest of a
Participant in any Option shall be subject to, any lien, obligation, or
liability of such Participant.

4.006.   Stock Subject to Options.  Upon the exercise of any Option, the
Company shall deliver to the Participant (or the Participant's broker if
the Participant so directs) shares of its previously authorized but
unissued Common Stock.

4.007.   Shareholder Rights.  No Participant shall have any rights as a
shareholder with respect to shares subject to his Option until the date of
the exercise of such Option.

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

(a)Before each Deferral Year's Election Date, each Participant will be
provided with a Deferral Election Form and a Beneficiary Designation Form. 
Under the Deferral Election Form for a single Deferral Year, a Participant
may elect on or before the Election Date to defer the receipt of all or
part of the Participant's Retainer Fee (in 10% increments) or the
Participant's Meeting Fees (in 10% increments) or both for the Deferral
Year.

(b)  A Participant's Deferral Election Form may specify either a Deferred
     Cash Benefit, a Deferred Stock Benefit or a combination thereof (in
     10% increments of the deferred amount).

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

(d)  Each Distribution Election Form is part of the Deferral Election Form
     on which it appears or to which it states that it is related.  The
     Administrator may allow a Participant to file one Distribution
     Election Form for all of the Participant's Deferred Cash Benefits, all
     of the Participant's Deferred Stock Benefits, or all of the
     Participant's Deferred Benefits.  The provisions of section 5.04(b) of
     this Plan apply to any Deferred Benefit under this Plan if there is no
     operative Distribution Election Form for that Deferred Benefit.

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

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

(g)  A Participant who has not submitted a valid Deferral Election Form to
     the Administrator on or before the relevant Election Date may not
     defer any part of the Participant's Compensation for the Deferral
     Year.  The Deferred Benefit of a Participant who submits a valid
     Deferral Election Form but fails to submit a valid Distribution
     Election Form for that Deferred Benefit before the relevant Election
     Date or who otherwise has no valid Distribution Election Form for that
     Deferred Benefit is governed by section 5.04(b).

5.052.   Deferred Cash Benefits.
(a)  Deferred Cash Benefits will be set up in a Deferred Cash Account for
     each Participant and credited with interest in accordance with
     subsection 5.02(b).  A Deferred Cash Benefit attributable to a
     deferred Retainer Fee is credited to the Participant's Deferred Cash
     Account as of the day that the  deferred Retainer Fee would have been
     paid but for the Participant's Deferral Election.  A Deferred Cash
     Benefit attributable to a deferred Meeting Fee is credited to the
     Participant's Deferred Cash Account as of the first day of the month
     following the month in which the deferred Meeting Fee would have been
     paid but for the Participant's Deferral Election.

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

5.053.   Deferred Stock Benefits.
(a)  Deferred Stock Benefits will be set up in a Deferred Stock Account for
     each electing Participant and credited with earnings in accordance
     with subsection 5.02(b).  A Deferred Stock Benefit attributable to a
     deferred Retainer Fee is credited to the Participant's Deferred Stock
     Account as of the day that the deferred Retainer Fee would have been
     paid but for the Participant's Deferral Election.  A Deferred Stock
     Benefit attributable to a deferred Meeting Fee is credited to the
     Participant's Deferred Stock Account as of the first day of the month
     following the month in which the deferred Meeting Fee would have been
     paid but for the Participant's Deferral Election.

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

5.054.   Distribution of Deferred Benefits.
(a)  A Deferred Cash Benefit must be distributed in cash.  Except as
     provided in Plan subsection 5.04(e) and section 5.05, a Deferred Stock
     Benefit must be distributed in shares of Common Stock.  However, cash
     must be paid in lieu of fractional shares of Common Stock otherwise
     distributable.

(b)  Deferred Benefits will be paid in a single sum unless the
     Participant's Distribution Election Form specifies annual installment
     payments over a period which shall not be more than ten years.  For a
     Deferred Cash Benefit, interest credits under Plan subsection 5.02(b)
     continue to accrue on the unpaid balance of a Deferred Cash Account. 
     For a Deferred Stock Benefit, additional credits under Plan subsection
     5.03(b) continue to accrue on the unpaid balance of a Deferred Stock
     Account.

 Notwithstanding the preceding paragraph, if a Participant Terminates as a
 result of permanent and total disability (as defined in Section 22(e)(3)
 of the Code), Deferred Benefits will be paid to such Participant in
 installment payments over a period of ten years commencing on the date
 the Participant's disability is certified by the Administrator unless the
 Administrator, in its sole discretion, approves a longer or shorter
 payment period.  If, after the Participant's Termination as a result of
 permanent and total disability (as defined above), such Participant
 recovers before the balance of the Participant's Deferred Cash and
 Deferred Stock Accounts under the Plan are exhausted, the Participant's
 distributions will be discontinued and any remaining Deferred Benefits
 under the Plan will be governed by the provisions of this section and the
 Participant's Distribution Election Forms.

 Unless otherwise specified in a Participant's Distribution Election Form
 or if there is no Distribution Election Form that is operative according
 to section 5.01 of this Plan, any lump sum payment will be paid or
 installment payments will begin to be paid as of February 15 of the year
 after the Participant's Termination or as of February 15 of the year
 after the Participant's attainment of age sixty-five, if earlier.  For
 distributions that would automatically be caused under the preceding
 sentence by a Participant's Termination (other than by death or
 disability) or for distributions that would otherwise automatically begin
 because a Participant reaches age sixty-five, the Participant may elect
 on his Distribution Election Form that payments are to begin

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

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

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

 For purposes of these distribution election alternatives, the specified
 age must be not less than the Participant's age two years from the
 Election Date pertaining to the applicable Deferral Year and not greater
 than the age at which there are no earnings limitations in order to
 receive full social security benefits. 

(c)  Deferred Benefits may not be assigned by a Participant or Beneficiary. 
     A Participant may use only one Beneficiary Designation Form to
     designate one or more Beneficiaries for all of the Participant's
     Deferred Benefits under the Plan; such designations are revocable. 
     Each Beneficiary will receive the Beneficiary's portion of the
     Participant's Deferred Cash Account and Deferred Stock Account as of
     February 15 of the year following the Participant's death unless the
     Beneficiary's request for accelerated payment is approved at the
     Administrator's discretion under section 5.05 of this Plan.  The
     Administrator may require that multiple Beneficiaries agree upon a
     single distribution method.

(d)  Any Common Stock distributed in settlement of a Deferred Stock Benefit
     shall be issued from the Company's previously authorized but unissued
     Common Stock.

(e)  Notwithstanding any other provision of this Plan or any Distribution
     Election Form, in the event of a Change in Control, all Deferred
     Benefits credited to Participants and Beneficiaries shall be paid in a
     lump sum, in cash, on the Control Change Date.

5.055.   Hardship Distributions.
(a)  At its sole discretion and at the request of a Participant before or
     after the Participant's Termination, or at the request of any of the
     Participant's Beneficiaries after the Participant's death, the
     Administrator may accelerate and pay all or part of any amount
     attributable to a Participant's Deferred Benefits under this Plan. 
     Accelerated distributions may be allowed only in the event of a
     financial emergency beyond the Participant's or Beneficiary's control
     and only if disallowance of a distribution would create a severe
     hardship for the Participant or Beneficiary.  An accelerated
     distribution must be limited to the amount determined by the
     Administrator to be necessary to satisfy the financial emergency.

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

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

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

                               ARTICLE VI
                                    
                 ADJUSTMENT UPON CHANGE IN COMMON STOCK
                                    
                                    
     The number of shares as to which Options may be granted under this
Plan, the terms of outstanding Options and each Deferred Stock Account
shall be proportionately adjusted as the Administrator determines to be
equitably required in the event that the Company (a) effects one or more
stock dividends, stock split-ups, subdivisions or consolidations of shares
or (b) engages in a transaction described in Section 424 of the Code.  Any
determination made under this Article VI by the Administrator shall be
final and conclusive.

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

                               ARTICLE VII
                                    
          COMPLIANCE WITH LAW AND APPROVAL OF REGULATORY BODIES


     No Option shall be exercisable, no Common Stock shall be issued, no
certificates for shares of Common Stock shall be delivered, and no payment
shall be made under this Plan except in compliance with all applicable
federal and state laws and regulations, any listing agreement to which the
Company is a party, and the rules of all domestic stock exchanges on which
the Company's shares may be listed.  The Company shall have the right to
rely on an opinion of its counsel as to such compliance.  Any share
certificate issued to evidence Common Stock for which an Option is
exercised or that is distributed under this Plan may bear such legends and
statements as the Board may deem advisable to assure compliance with
federal and state laws and regulations.  No Option shall be exercisable, no
Common Stock shall be issued, no certificate for shares of Common Stock
shall be delivered, and no payment shall be made under this Plan until the
Company has obtained such consent or approval as the Board may deem
advisable from regulatory bodies having jurisdiction over such matters.

                              ARTICLE VIII
                                    
                           GENERAL PROVISIONS


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

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

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

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


                               ARTICLE IX
                                    
                                AMENDMENT


     The Board may amend this Plan from time to time; provided, however,
that no amendment may become effective until shareholder approval is
obtained if the amendment (i) materially increases the aggregate number of
shares of Common Stock that may be issued under the Plan (other than an
adjustment authorized by Article VI), (ii) materially changes the class of
individuals eligible to become Participants or (iii) materially increases
the benefits that may accrue to Participants under the Plan.  The preceding
sentence to the contrary notwithstanding, the Plan may not be amended more
than once in any six month period unless such amendment is required to
comply with the Code or the Employee Retirement Income Security Act of
1974.  No amendment shall, without a Participant's consent, adversely
affect any rights of such Participant under the Plan or any Option as in
effect at the time such amendment is made.

                                ARTICLE X
                                    
                               TERMINATION
                                    
                                    
     The Board may terminate the Plan at any time.  The termination of this
Plan shall not affect any rights of a Participant under any Option or to
any Deferred Benefit payable under this Plan pursuant to the terms of this
Plan as in effect at the time of such termination.

                               ARTICLE XI
                                    
                        DURATION OF OPTION GRANTS


     No Option may be granted under this Plan after May 1, 2007.  Options
granted on or before May 1, 2007 shall remain valid in accordance with
their terms.

                               ARTICLE XII
                                    
                         EFFECTIVE DATE OF PLAN


     No Option will be granted under this Plan and no Deferral Election
shall be effective before this Plan is approved by a majority of the votes
entitled to be cast by the Company's shareholders, voting either in person
or by proxy, at a duly held shareholders' meeting.
RI-EB\t:\Chsapeak\12\96Plan.1
January 18, 1996


                                                       EXHIBIT 10.11













                          CHESAPEAKE CORPORATION

                          401(k) RESTORATION PLAN





























                           Effective May 1, 1996










<TABLE>
                             TABLE OF CONTENTS

<CAPTION>
                                                                       Page
<S>  <C>                                                               <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  2

    1.01.    Administrator . . . . . . . . . . . . . . . . . . . . . . .  2
    1.02.    Beneficiary or Beneficiaries. . . . . . . . . . . . . . . .  2
    1.03.    Change in Control . . . . . . . . . . . . . . . . . . . . .  2
    1.04.    Code. . . . . . . . . . . . . . . . . . . . . . . . . . . .  2
    1.05.    Committee . . . . . . . . . . . . . . . . . . . . . . . . .  2
    1.06.    Company . . . . . . . . . . . . . . . . . . . . . . . . . .  2
    1.07.    Compensation. . . . . . . . . . . . . . . . . . . . . . . .  2
    1.08.    Control Change Date . . . . . . . . . . . . . . . . . . . .  2
    1.09.    Deferral Election Form. . . . . . . . . . . . . . . . . . .  3
    1.10.    Deferral Year . . . . . . . . . . . . . . . . . . . . . . .  3
    1.11.    Deferred Account. . . . . . . . . . . . . . . . . . . . . .  3
    1.12.    Deferred Benefit. . . . . . . . . . . . . . . . . . . . . .  3
    1.13.    Election Date . . . . . . . . . . . . . . . . . . . . . . .  3
    1.14.    Eligible Employee . . . . . . . . . . . . . . . . . . . . .  3
    1.15.    Investment Options. . . . . . . . . . . . . . . . . . . . .  3
    1.16.    Participant . . . . . . . . . . . . . . . . . . . . . . . .  3
    1.17.    Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . .  3
    1.18.    Terminate, Terminating, or Termination. . . . . . . . . . .  4

ARTICLE II
PARTICIPATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5

ARTICLE III
DEFERRAL ELECTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

    3.01.    Timing of Election. . . . . . . . . . . . . . . . . . . . .  6
    3.02.    Effect of No Election . . . . . . . . . . . . . . . . . . .  7

ARTICLE IV
ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  8

    4.01.    Crediting of Accounts . . . . . . . . . . . . . . . . . . .  8
    4.02.    Vesting . . . . . . . . . . . . . . . . . . . . . . . . . .  8

ARTICLE V
INVESTMENT OPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .  9

    5.01.    Investment Funds. . . . . . . . . . . . . . . . . . . . . .  9
    5.02.    Earnings on the Interest Fund . . . . . . . . . . . . . . .  9
    5.03.    Earnings on the Stock Fund. . . . . . . . . . . . . . . . .  9

ARTICLE VI
DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

    6.01.    Timing of Distributions . . . . . . . . . . . . . . . . . . 10
    6.02.    Form of Distributions . . . . . . . . . . . . . . . . . . . 10
    6.03.    Effect of Code Limitations. . . . . . . . . . . . . . . . . 10
    6.04.    Beneficiary Designation . . . . . . . . . . . . . . . . . . 10
    6.05.    Change in Control . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE VII
COMPANY'S OBLIGATION . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE VIII
AMENDMENT AND TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . 13

    8.01.    Amendment.. . . . . . . . . . . . . . . . . . . . . . . . . 13
    8.02.    Termination . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE IX
ADMINISTRATION OF THE PLAN . . . . . . . . . . . . . . . . . . . . . . . 14

    9.01.    The Committee.. . . . . . . . . . . . . . . . . . . . . . . 14
    9.02.    Indemnification of the Committee. . . . . . . . . . . . . . 14
    9.03.    Powers of the Committee.. . . . . . . . . . . . . . . . . . 14
    9.04.    Information.. . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE X
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

    10.01.   Control by Participant. . . . . . . . . . . . . . . . . . . 15
    10.02.   Claims against Participant's Deferred Benefits. . . . . . . 15
    10.03.   Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 15
    10.04.   Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
    10.05.   Construction. . . . . . . . . . . . . . . . . . . . . . . . 15

ARTICLE XI
ADOPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

</TABLE>





















                               INTRODUCTION


     The Board of Directors of Chesapeake Corporation has adopted the
Chesapeake Corporation 401(k) Restoration Plan effective May 1, 1996 (the
"Effective Date").  The Board determined that the adoption of the Plan
would assist it in attracting and retaining those employees whose judgment,
abilities and experience will contribute to its continued progress.  The
purpose of the Plan is to restore lost opportunities for pre-tax deferral
under the Chesapeake Corporation 401(k) Savings Plan for Salaried Employees
by permitting eligible employees to defer a portion of their salary. 
Eligible Employees are selected by the Committee to participate in the
Plan.

     The Plan is intended to be unfunded and maintained primarily for the
purpose of providing deferred compensation for a "select group of
management or highly compensated employees" (as such phrase is used in the
Employee Retirement Income Security Act of 1974).  The Plan must be
administered and construed in a manner that is consistent with that intent.



                                ARTICLE I
                                    
                               DEFINITIONS
                                    
The following terms have the indicated meanings:

1.011.    Administrator means the person or entity appointed by the
Committee to carry out the day-to-day administration of the Plan.

1.012.    Beneficiary or Beneficiaries means, unless a Participant elects
otherwise on a form approved by the Administrator, a person or persons or
other entity that a Participant designates on a beneficiary designation
form to receive benefits under the Chesapeake Corporation 401(k) Savings
Plan for Salaried Employees (the Savings Plan) or if a Participant does not
execute a valid beneficiary designation form under the Savings Plan, then
the default beneficiary provisions of the Savings Plan will apply.  If a
Participant validly executes the Plan's beneficiary designation form for
Deferred Benefit payments, then Beneficiary or Beneficiaries means the
person or persons or other entity designated on such form.

1.013.    Change in Control means a "Change in Control" as defined in the
Chesapeake Corporation Benefits Plan Trust.

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

1.015.    Committee means the Executive Compensation Committee of the Board
of Directors of Chesapeake Corporation.

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

1.017.    Compensation means a Participant's salary, cash incentive pay and
other cash compensation from the Company including any amount that is
contributed by the Company pursuant to a salary reduction agreement and
which is not includable in the gross income of the Participant under Code
Section 125, 402(a)(8), 402(h) or 403(b).  Compensation excludes, however,
reimbursements or other expense allowances, cash and non-cash fringe
benefits, moving expenses, deferred compensation and other welfare
benefits.

1.018.    Control Change Date means a "Control Change Date" as defined in
the Chesapeake Corporation Benefits Plan Trust.


1.019.    Deferral Election Form means the form that a Participant uses to
elect to receive a Deferred Benefit pursuant to Article VI.  A
Participant's investment election is part of the Participant's Deferral
Election Form.

1.10.     Deferral Year means a calendar year for which a Participant's
Compensation is reduced pursuant to a valid Deferral Election Form.

1.11.     Deferred Account means a bookkeeping record established for each
Participant who elects to receive a Deferred Benefit.  A Deferred Account
shall be established only for purposes of measuring a Deferred Benefit and
not to segregate assets or to identify assets that may be used to satisfy a
Deferred Benefit.  A Deferred Account shall be credited with that amount of
a Participant's Compensation deferred as a Deferred Benefit according to a
Participant's Deferral Election Form.  A Deferred Account shall be credited
periodically with interest or dividends in accordance with a Participant's
investment election under Article V.

1.12.     Deferred Benefit means the benefit available to a Participant who
has executed a valid Deferral Election Form to defer his Compensation.

1.13.     Election Date means the date by which a Participant must submit a
valid Deferral Election Form.  A Participant's Election Date for a calendar
year is December 31 of the immediately preceding calendar year.  However,
if an individual becomes an Eligible Employee during a Deferral Year, his
Election Date shall be a date that is within thirty days after such
individual is named as an Eligible Employee.  The Election Date for the
first year the Plan is in effect is April 30, 1996.  Notwithstanding the
preceding sentences, the Administrator may set an earlier Election Date for
any Deferral Year.

1.14.     Eligible Employee means an employee who is designated by the
Committee as a participant in the Chesapeake Corporation Executive
Supplemental Retirement Plan.

1.15.     Investment Options means the investment funds described in
Article V.

1.16.     Participant means an Eligible Employee who has executed or has in
effect a valid Deferral Election Form for that Deferral Year.  An
individual remains a Participant while he is entitled to a Deferred Benefit
under the Plan even if he is no longer an Eligible Employee.

1.17.     Plan means the Chesapeake Corporation 401(k) Restoration Plan.

1.18.     Terminate, Terminating, or Termination, with respect to a
Participant, means the cessation of his employment with the Company for any
reason.

                               ARTICLE II
                                    
                              PARTICIPATION
                                    
    An Eligible Employee becomes a Participant by completing and filing a
valid Deferral Election Form according to Article III on or before an
Election Date.

                               ARTICLE III
                                    
                           DEFERRAL ELECTIONS

3.001.    Timing of Election.  A deferral election shall be valid when the
Deferral Election Form is completed, signed by the electing Participant,
and received by the Administrator on or before the Election Date for that
Deferral Year.  The following provisions apply to deferral elections.

    (a)   An Eligible Employee may elect to defer his Compensation for any
Deferral Year if he is an Eligible Employee at the beginning of that Defer-
ral Year or becomes an Eligible Employee during that Deferral Year.

    (b)   Before each Deferral Year's Election Date, each Participant shall
be provided with a Deferral Election Form.  Using the Deferral Election
Form, a Participant may elect on or before the Election Date to defer the
receipt of up to 10% of his Compensation for the Deferral Year in one
percent increments.

    (c)   If he does so before the Election Date, the Administrator may
reject any Deferral Election Form or any distribution election form or both
that does not conform to the provisions of the Plan.  The Administrator may
modify any distribution election at any time to the extent necessary to
comply with any federal securities laws or regulations.  The
Administrator's rejection or modification must be made on a uniform basis
with respect to similarly situated Participants.  If the Administrator
rejects a Deferral Election Form, the Participant shall be paid the amounts
he would have been entitled to receive if the Participant had not submitted
the rejected Deferral Election Form.

    (d)   A Participant may not revoke a Deferral Election Form after the
Deferral Year begins.  Any revocation before the beginning of the Deferral
Year has the same effect as a failure to submit a Deferral Election Form. 
Any writing signed by a Participant expressing an intention to revoke his
Deferral Election Form and delivered to the Administrator before the close
of business on the relevant Election Date shall be a revocation.

    (e)   A Participant's Deferral Election shall remain in effect for
subsequent Deferral Years unless revoked or revised by the Election Date
for the next Deferral Year.

3.002.    Effect of No Election.  An Eligible Employee who has not
submitted or has in effect a valid Deferral Election Form to the
Administrator on or before the relevant Election Date may not defer any
part of his Compensation for the Deferral Year.


                               ARTICLE IV
                                    
                                ACCOUNTS


4.041.    Crediting of Accounts.

    Deferred Benefits shall be credited to a Deferred Account as of a date
to be determined by the Administrator but in no event later than the last
day of the month in which the deferred Compensation would have been paid.

4.042.    Vesting.

    A Participant's interest in his Deferred Account shall be fully vested
and nonforfeitable when credited.


                                ARTICLE V
                                    
                           INVESTMENT OPTIONS

5.051.    Investment Funds.

    (a)   A Participant may elect to have his Deferred Account credited
with earnings based on an interest rate established by the Committee (the
"Interest Fund") or the value of Chesapeake Corporation Common Stock (the
"Stock Fund").

    (b)   A Participant may elect to allocate his Deferred Account among
the Investment Funds in 10% increments.

5.052.    Earnings on the Interest Fund.

    Earnings shall be credited monthly to a Participant's balance in the
Interest Fund on the first day of each month.  Interest shall be credited
until the month of distribution.  Unless the Committee changes the basis on
which interest shall be determined, earnings credited under the Interest
Fund shall be based on the prime rate established by the Company's
principal lender as of the last business day of each calendar quarter
preceding the day the interest is credited.

5.053.    Earnings on the Stock Fund.

    (a)  A Participant's interest in the Stock Fund shall be based on the
number of whole and fractional shares of Chesapeake common stock that a
Participant could have purchased with amounts deferred from his
Compensation based on the closing price of Chesapeake common stock on the
New York Stock Exchange on the trading date or the nearest preceding
trading date on which the deferred Compensation would be credited to the
Participant's Deferred Account under Plan Section 4.01.  The value of a
Participant's investment in the Stock Fund on any date shall be the value
of the Chesapeake common stock (whole and fractional shares) credited to
his Deferred Account based on the immediately preceding closing price of
Chesapeake common stock on the New York Stock Exchange.

    (b)   The Stock Fund also shall be credited with dividends as of any
dividend date.  A Participant's investment in the Stock Fund shall be
credited with the number of whole and fractional shares of Chesapeake
common stock that a Participant could have purchased with such dividends
based on the closing price of the Chesapeake common stock on such dividend
date.

                               ARTICLE VI
                                    
                              DISTRIBUTIONS

6.061.    Timing of Distributions.

    Except as provided in Plan section 6.05, all Deferred Benefits, less
withholding for applicable income and employment taxes, shall be paid
following Termination in accordance with section 6.02.

6.062.    Form of Distributions.

    (a)   Deferred Benefits shall be paid in a lump sum unless the
Participant elects, subject to the approval of the Committee and no later
than the last day of the calendar year in which his Termination occurs,
annual installment payments over a period of up to five years.  Installment
payments will be made in approximately equal amounts during each year of
the installment period.  Earnings on a Deferred Benefit payable in
installments shall continue to accrue on the unpaid balance in accordance
with Article V.

    (b)   Unless otherwise specified in a Participant's distribution
election, any lump sum payment shall be paid or installment payments shall
begin on or about February 15 of the year after the Participant's
Termination.

6.063.    Effect of Code Limitations.

    Notwithstanding any other provision of this Plan or a Participant's
distribution election, the Committee in its sole discretion may postpone
the distribution of all or part of a Deferred Benefit to the extent that
the payment would not be deductible under Code section 162(m).  A Deferred
Benefit distribution that is postponed pursuant to the preceding sentence
shall be paid as soon as it is possible to do so within the deduction
limitations of Code section 162(m).

6.064.    Beneficiary Designation.

    A Participant or Beneficiary may not assign Deferred Benefits.  Unless
the Participant delegates a Beneficiary on a beneficiary designation form
approved by the Administrator, his beneficiary designation form under the
Savings Plan will designate one or more Beneficiaries for all of his
Deferred Benefits under the Plan.  In the latter case, the terms and
conditions of the Savings Plan for naming and revoking beneficiaries will
control.  Each Beneficiary shall receive his portion of the Participant's
Deferred Account on or about February 15 of the year following the
Participant's death.  

6.065.    Change in Control.

    Notwithstanding any other provision of this Plan or any Deferral
Election Form, in the event of a Change in Control, all Deferred Benefits
credited to Participants and Beneficiaries shall be paid in a lump sum, in
cash, on the Control Change Date.


                               ARTICLE VII
                                    
                          COMPANY'S OBLIGATION

    The Company has only a contractual obligation to pay the benefits
under the Plan.  All benefits are to be satisfied solely out of the general
corporate assets of the Company which shall remain subject to the claims of
its creditors.  No assets of the Company will be segregated or committed to
the satisfaction of its obligations to any Participant or Beneficiary under
this Plan.

                              ARTICLE VIII
                                    
                        AMENDMENT AND TERMINATION

8.081.    Amendment.  This Plan may be amended, at any time and for any
reason, by the Committee.  No amendment shall, without a Participant's
consent, adversely affect any rights of such Participant to any Deferred
Benefit payable under the provisions of the Plan as in effect at the time
of the amendment. 

8.082.    Termination.  The Board of Directors of Chesapeake Corporation
may terminate the Plan at any time.  The termination of this Plan shall
not, however, affect any rights of a Participant to any Deferred Benefit
payable under the Plan pursuant to the terms of this Plan in effect at the
time of such termination.


                               ARTICLE IX
                                    
                       ADMINISTRATION OF THE PLAN


9.091.    The Committee.

    The Plan shall be administered by the Committee.  Subject to the
provisions of the Plan, the Committee may adopt such rules and regulations
as may be necessary to carry out the purposes hereof.  The Committee's
interpretation and construction of any provision of the Plan shall be final
and conclusive.

9.092.    Indemnification of the Committee.

    The Company shall indemnify and save harmless each member of the
Committee against any and all expenses and liabilities arising out of
membership on the Committee, excepting only expenses and liabilities
arising out of a member's own willful misconduct.  Expenses against which a
member of the Committee shall be indemnified hereunder shall include
without limitation, the amount of any settlement or judgment, costs,
counsel fees, and related charges reasonably incurred in connection with a
claim asserted, or a proceeding brought or settlement thereof.  The
foregoing right of indemnification shall be in addition to any other rights
to which any such Committee member may be entitled.

9.093.    Powers of the Committee.

    In addition to the powers hereinabove specified, the Committee shall
have the power to compute and certify the amount and kind of benefits from
time to time payable to Participants and their Beneficiaries under the
Plan, to authorize all disbursements for such purposes, to appoint the
Administrator and to determine whether a Participant is entitled to a
benefit under the Plan.

9.094.    Information.

    To enable the Committee to perform its functions, the Company shall
supply full and timely information to the Committee on all matters relating
to the compensation of all Participants, their retirement, death or other
cause for termination of employment, and such other pertinent facts as the
Committee may require.

                                ARTICLE X
                                    
                              MISCELLANEOUS

10.101.   Control by Participant.

    A Participant shall have no control over Deferred Benefits except
according to his Deferral Election Form.

10.102.   Claims against Participant's Deferred Benefits.

    A Deferred Account shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and
any attempt to do so shall be void.  A Deferred Benefit shall not be
subject to attachment or legal process for a Participant's debts or other
obligations.  Nothing contained in this Plan shall give any Participant any
interest, lien, or claim against any specific asset of the Company.  A
Participant or his Beneficiary shall have no rights other than as a general
creditor of the Company.

10.103.   Notices.

    All notices or elections required under the Plan must be in writing. 
A notice or election shall be deemed delivered if it is delivered
personally or sent registered or certified mail to the person at his last
known business address.

10.104.   Waiver.

    The waiver of a breach of any provision in this Plan does not operate
as and may not be construed as a waiver of any later breach.

10.105.   Construction.

    This Plan shall be adopted and maintained according to the laws of the
Commonwealth of Virginia (except its choice-of-law rules).  Headings and
captions are only for convenience; they do not have substantive meaning. 
If a provision of this Plan is not valid or enforceable, the validity or
enforceability of any other provision shall not be affected.  Use of one
gender includes all, and the singular and plural include each other.

                               ARTICLE XI
                                    
                                ADOPTION
                                    
    IN WITNESS WHEREOF, Chesapeake Corporation (the Company) has caused
this Plan to be signed by a duly authorized officer, to be effective May 1,
1996.


                              CHESAPEAKE CORPORATION           



                              By:  


                              Date:                      , 1996


<TABLE>
                                                        EXHIBIT 11.1
                                                           

                  CHESAPEAKE CORPORATION AND SUBSIDIARIES
            COMPUTATION OF NET INCOME PER SHARE OF COMMON STOCK
                for the three years ended December 31, 1996

               (Share amounts in thousands, dollar amounts
                 in millions, except for per share amounts)
<CAPTION>

                                                1996     1995       1994
<S>                                            <C>      <C>        <C> 
Primary:
  Weighted average number of common shares
    outstanding                                    23,528    23,824     23,569
  Net additions to common shares assuming
    exercise of dilutive options,
    determined by treasury stock method               117       227        206
  Common shares and equivalents                    23,645    24,051     23,775
   
  Net income                                   $30.1     $93.4      $37.6
  
  Per share amount                             $1.27     $3.88      $1.58
  
Fully diluted:
  Common shares and equivalents                    23,645    24,051     23,775
  Net additional common shares
   issuable upon exercise of 
   dilutive options, determined
   by treasury stock method using
   year-end market price, if higher
   than average price                                  25         5         28
  Common shares, equivalents and other
      potentially dilutive securities              23,670    24,056     23,803
   
    Net income for fully diluted
      computation                                   $30.1     $93.4      $37.6
                                                                    
  Per share amount (a)                              $1.27     $3.88      $1.58
  
     
NOTE:  (a) Dilution is less than 3%.

</TABLE>


                                                                  
                                        EXHIBIT 13.1


                                                   



















                         Portions of the 
                     CHESAPEAKE CORPORATION
                 Annual Report to Stockholders
              For the year ended December 31, 1996
                                















<TABLE>
RECENT QUARTERLY RESULTS
<CAPTION>
<S>                   <C>       <C>         <C>        <C>         <C>         <C>      <C>    
                                                                Per Share                      
                                                            
              Net       Gross        Net                    Dividends    Stock Price   
Quarter            Sales     Profit       Income    Earnings     Declared   High        Low

                             (Dollar amounts in millions except per share amounts)

1994:
 First                $  212.0     $ 35.2       $ 2.0                  $0.09                $0.18       $27.25         $22.25  
 Second                  236.9       42.9         4.9      0.21         0.18      26.38             22.63  
 Third                   266.9       56.7        14.4      0.60         0.18      35.00             24.63  
 Fourth                  274.7       61.1        16.3      0.68         0.18      35.88     28.25
     
    Totals            $  990.5     $195.9       $37.6     $1.58        $0.72

1995:
 First                $  291.1     $ 70.5       $20.8     $0.87        $0.18     $34.25    $28.50
 Second                  315.1       71.4        18.5      0.77         0.20      33.75     28.50
 Third                   330.8       82.6        29.9      1.24         0.20      39.00     30.75
 Fourth                  296.7       67.7        24.2      1.00         0.20      35.38             27.50
       
    Totals            $1,233.7     $292.2       $93.4     $3.88        $0.78

1996:
 First                $  277.7     $ 53.8       $ 7.9     $0.33        $0.20     $30.50    $25.25
 Second                  276.6       51.5         3.9      0.17         0.20      30.50     25.25
 Third                   309.3       62.8         9.5      0.40         0.20      27.63     23.13
 Fourth                  295.0       60.4         8.8      0.37         0.20      31.75             26.50
       
                Totals           $1,158.6      $228.5    $30.1         $1.27      $0.80


</TABLE>
                                     

                     REPORT OF INDEPENDENT ACCOUNTANTS




To the Stockholders and Board of Directors
Chesapeake Corporation:

         We have audited the accompanying consolidated balance sheet of
Chesapeake Corporation and subsidiaries as of December 31, 1996 and 1995,
and the related consolidated statements of income and retained earnings and
cash flows for each of the three years in the period ended December 31,
1996.  These financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these financial
statements based on our audits.

         We conducted our audits in accordance with generally accepted
auditing standards.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

         In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Chesapeake Corporation and subsidiaries as of December 31, 1996
and 1995, and the consolidated results of their operations and their cash
flows for each of the three years in the period ended December 31, 1996 in
conformity with generally accepted accounting principles. 

         
                                                                
                                        /s/ Coopers & Lybrand L.L.P.

Richmond, Virginia
January 23, 1997













<TABLE>
                  CHESAPEAKE CORPORATION AND SUBSIDIARIES

                        CONSOLIDATED BALANCE SHEET
                                                                            
<CAPTION>  
                                                      December 31,
                                                    1996        1995 
                                                         (In millions)
ASSETS
<S>                                               <C>          <C>
Current assets:
      Cash and cash equivalents                       $    9.8     $    5.2
      Accounts receivable, net                           153.9        140.4
      Inventories                                        134.4        112.5
      Deferred income taxes                               16.5         16.6
      Other                                               11.2          6.9

          Total current assets                           325.8        281.6


Property, plant, and equipment:
      Plant sites and buildings                          197.1        163.0
      Machinery and equipment                          1,342.9      1,208.3
      Construction in progress                            40.0         45.1
                                                       1,580.0      1,416.4
      Less accumulated depreciation                      756.3        675.5

                                                         823.7        740.9

      Timber and timberlands                              39.8         40.0

           Net property, plant, and equipment            863.5        780.9

Other assets                                             100.9         83.8

                                                      $1,290.2     $1,146.3
                                                            

</TABLE>
   














<TABLE>
                                                       December 31,
                                                    1996          1995
                                                     (In millions)
<CAPTION>                                           
LIABILITIES AND STOCKHOLDERS' EQUITY                                
<S>                                                 <C>          <C>
Current liabilities:
      Accounts payable and accrued expenses             $  157.6    $  130.2
      Current maturities of long-term debt                   3.9         0.9
      Dividends payable                                      4.7         4.8
      Income taxes payable                                   0.6         3.4

           Total current liabilities                       166.8       139.3 

Long-term debt                                             499.4       393.6


Postretirement benefits other
 than pensions                                              28.0        26.5


Deferred income taxes                                      126.9       118.6  
 
  
Stockholders' equity:
      Common stock, $1 par value;
        authorized, 60 million shares;
        outstanding, 23.4 million and
         23.8 million shares                                23.4        23.8
      Additional paid-in capital                            97.2       107.3
      Retained earnings                                    348.5       337.2
                                                                            
                                            
                                                           469.1       468.3

                                                        $1,290.2    $1,146.3

The accompanying Notes to Consolidated Financial Statements are part of the
financial statements.















</TABLE>
<TABLE>
                   CHESAPEAKE CORPORATION AND SUBSIDIARIES
            CONSOLIDATED STATEMENT OF INCOME AND RETAINED EARNINGS
                                                
<CAPTION>

                                         For the years ended December 31, 
                                            1996          1995      1994
                                       (In millions except per share data)
<S>                                       <C>          <C>         <C>
Income:

 Net sales                                    $ 1,158.6     $1,233.7    $990.5

 Costs and expenses:

   Cost of products sold                          843.0        867.9     723.7
   Depreciation and cost of timber
    harvested                                      87.1         73.6      70.9
   Selling, general, and administrative
    expenses                                      154.2        130.9     114.8
     Income from operations                        74.3        161.3      81.1
  
   Other income, net                                6.7         11.1       8.2
     Income before interest and taxes              81.0        172.4      89.3

 Interest expense                                 (33.9)       (30.8)    (31.1)
  
     Income before taxes                           47.1        141.6      58.2

 Income taxes                                      17.0         48.2      20.6

     Net income                                $   30.1      $  93.4    $ 37.6    

 Earnings per share                            $   1.27      $  3.88    $ 1.58

Retained earnings:                                                        
 Balance, beginning of year                    $  337.2      $ 262.4    $241.9
 Net income                                        30.1         93.4      37.6
 Cash dividends declared per share,
  $0.80 in 1996, $0.78 in 1995, and 
  $0.72 in 1994                                   (18.8)       (18.6)    (17.1)
                     
     Balance, end of year                      $  348.5      $ 337.2    $262.4

</TABLE>
The accompanying Notes to Consolidated Financial Statements are part
of the financial statements.
















<TABLE>
                     CHESAPEAKE CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
                                           For the years ended December 31,
                                                   1996      1995      1994 
                                                         (In millions)
<S>                                              <C>       <C>       <C>
Operating activities:
  Net income                                       $ 30.1    $ 93.4    $ 37.6
  Adjustments to reconcile net income to
   net cash provided by operating activities:
      Depreciation, cost of timber harvested,
        and amortization of intangibles              90.2      75.8      73.3
      Deferred income taxes                           7.8      11.6      (0.1)
      (Gains) losses on sales of property,
         plant, and equipment, net                    0.5                (5.6)     (1.4)
      Gain on sale of business                        -        (1.8)      -
      Changes in operating assets and 
         liabilities, net of acquisitions
          and dispositions:
           Accounts receivable                       12.8               (22.6)    (34.2)
           Inventories                              (10.8)              (29.0)     (5.4)
           Other assets                              (5.0)      8.4       0.3 
           Accounts payable and accrued expenses                6.9      12.6      28.4 
           Income taxes payable                      (2.8)               (2.3)      2.3 
           Other payables                             1.5       3.2       2.8
  Net cash provided by operating activities         131.2     143.7     103.6

Investing activities:
  Purchases of property, plant and equipment       (128.8)   (157.7)    (54.3)
  Acquisitions                                      (47.2)    (69.7)    (16.7)
  Proceeds from sales of property, plant,
      and equipment                                   3.3       7.4       3.3
  Proceeds from sale of business                       -       28.9        - 
  Other                                                -        6.7       5.0 

  Net cash used in investing activities            (172.7)   (184.4)    (62.7)

Financing activities:
  Proceeds from long-term debt                       11.5       1.2      49.4
  Payments on long-term debt                        (15.2)              (71.7)    (35.4)
  Net borrowings (payments) on credit lines                    84.7     100.0      (3.1)
  Proceeds from issuances of common stock             0.1       2.2       1.9
  Purchases of outstanding common stock             (16.0)     (5.6)      -
  Dividends paid                                    (18.9)              (18.1)    (17.1)
  Other                                              (0.1)      0.9      (0.3)

  Net cash provided by (used in) financing
    activities                                       46.1       8.9      (4.6)
    Increase (decrease) in cash and
     cash equivalents                                 4.6               (31.8)     36.3
  Cash and cash equivalents
     at beginning of year                             5.2      37.0       0.7

  Cash and cash equivalents at end of year          $ 9.8     $ 5.2     $37.0
</TABLE>

The accompanying Notes to Consolidated Financial Statements are part of
the financial statements.
                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.  Summary of Significant Accounting Policies
    a.   Principles of Consolidation:  The consolidated financial
         statements include the accounts and operations of Chesapeake
         Corporation and subsidiaries (the "Company").  All significant
         intercompany accounts and transactions are eliminated. Certain
         prior-year amounts have been reclassified to conform to current
         presentations.
    b.   Cash and Cash Equivalents:  Cash and cash equivalents include
         highly liquid, temporary cash investments with original
         maturities of three months or less.
    c.   Inventories:  Inventories are valued at the lower of cost or
         market.  The cost of substantially all applicable product and
         manufacturing materials inventories is determined by the last-in,
         first-out (LIFO) method.  The cost of other inventories is
         determined principally by the average cost method.
    d.   Property, Plant, and Equipment:  Property, plant, and equipment,
         except timber and timberlands, are stated at cost.  Timber and
         timberlands are stated at cost net of the accumulated cost of
         timber harvested.  The costs of major rebuilds and replacements
         of plant and equipment are capitalized, and the costs of ordinary
         maintenance and repairs are charged to income as incurred.  When
         properties are sold or retired, their costs and the related
         accumulated depreciation are removed from the accounts, and the
         gains or losses are reflected in income.

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

 1.      Summary of Significant Accounting Policies, continued
    e.   Depreciation:  Depreciation for financial reporting purposes is
         computed principally by the straight-line method, based on the
         estimated useful lives of the assets.  Depreciation rates vary
         according to the class of equipment or buildings and average 6%
         for equipment and 4% for buildings.
    f.   Cost of Timber Harvested:  Cost of timber harvested is computed
         on quantities cut from individual company-owned tracts based on
         costs and estimated volumes of recoverable timber.
    g.   Income Taxes:  The Company defers to future periods the income
         tax  effects resulting from temporary differences (principally
         depreciation) between the financial and income tax basis of
         assets and liabilities.
    h.   Earnings Per Share:  Earnings per share are based on the weighted
         average number of outstanding common shares and equivalents
         (23,644,843 in 1996; 24,050,719 in 1995; and 23,775,582 in 1994).
    i.   Stock-Based Compensation: During 1996, the Company adopted
         Statement of Financial Accounting Standards ("SFAS") No. 123,
         "Accounting for Stock-Based Compensation."  This standard defines
         a "fair-value-based" method of accounting for stock option plans
         and similar equity instruments, but also allows for continued use
         of Accounting Principles Board ("APB") Opinion No. 25 to account
         for these plans and instruments, provided that financial statements
        include pro forma disclosure as if the fair value method had been 

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

1.  Summary of Significant Accounting Policies, continued
         adopted.  APB No. 25 measures compensation cost using the
         intrinsic-value-based method.  The Company has elected to
         continue to use APB No. 25 and provide pro forma disclosures.
    j.   Other:  Goodwill, the cost in excess of estimated fair value of
         identifiable assets of acquired businesses (net of $13.8 million
         and $12.5 million accumulated amortization at year-end 1996 and
         1995, respectively), is being amortized on a straight-line basis
         over 40 years or less.  The Company reviews goodwill annually for
         impairment. Specifically identifiable purchased intangible assets
         (net of $4.2 million and $4.1 million accumulated amortization at
         year-end 1996 and 1995, respectively) are being amortized on a
         straight-line basis according to estimated economic lives. 
         Research and development costs, not significant in amount, are
         charged to operations as incurred.
    k.   Risks and Uncertainties: Chesapeake operates in three business
         segments -- Packaging, Tissue and Kraft Products -- which offer a
         diversity of products over a broad geographic base.  The Company
         is not dependent on any customer, group of customers, market,
         geographic area, or supplier of materials, labor, or
         services.Financial statements include, where necessary, amounts
         based on the judgments and estimates of management.  These
         estimates include allowances for bad debts, accruals for landfill
         closing costs, environmental remediation costs, loss
         contingencies for litigation, self-insured medical and workers
         compensation insurance and income taxes, and determinations of
         discount and other rate assumptions for pensions and post-retirement
         benefit expenses.  Actual results could differ from these estimates.
<TABLE>                                               
2.      Inventories
     
        Year-end inventories consist of:          
 <CAPTION>    
                                            1996      1995     1994 
                                                 (In millions)
<S>                                        <C>      <C>       <C>
        Finished goods                         $ 44.1    $ 33.7    $ 26.6
        Work in process                          35.9      33.3      21.5
        Materials and supplies                   54.4      45.5      41.7

                Totals                         $134.4    $112.5    $ 89.8 
   </TABLE>                                                                
Inventories determined by the LIFO method, included in the above,
totaled (in millions) $75.7 for 1996, $63.7 for 1995, and $43.6 for 1994,
or $5.1, $16.2 and $12.1 less than the respective amounts of such
inventories stated at current costs.
    Effective January 1, 1994, the Company changed the method of valuation
of raw materials, work in process and finished goods of Wisconsin Tissue
Mills Inc. ("WT"), a wholly-owned subsidiary of the Company, from the
average cost method to the LIFO method and expanded the use of the LIFO
method to include  substantially all of the work in process and finished
goods of its Chesapeake Packaging Co. subsidiary.  The Company believes
that, in periods of rapid cost increases, use of the LIFO method will
result in a better matching of current costs with current revenues.  The
effects of adopting the LIFO method at WT and expanding the use of the LIFO
method at Chesapeake Packaging were to reduce consolidated 1994 year-end
inventories by $4.4 million and decrease net income for 1994 by $2.8
million ($0.12 per share).  The cumulative effect of this change to the
LIFO method on the operating results as of the beginning of 1994 has not
been presented, as the effect is not readily determinable.


<TABLE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                               
<CAPTION>
                                                                       
3.  Long-Term Debt

    Long-term debt at year-end consists of:
                                                       1996      1995 
                                                       (In millions)
<S>                                                   <C>       <C>
    Notes payable - banks (unsecured):
         Credit lines, interest 3.71% to 6.95%        $187.7    $100.0

         Term loan, interest 6.78%, due 2000            25.0      25.0

      Unsecured notes:

         5.25% notes, due 1997                           9.0      11.2
        
         10.375% notes, due 2000                        55.0      55.0
      
         9.875% notes, due 2003                         60.0      60.0 
 
         7.20% notes, due 2005                          85.0      85.0

      Industrial development authority 
        obligations:

         6.375% to 6.875% notes, due 1997-2003           5.9       6.0

         6.25% to 6.375% notes, due 2019                50.0      50.0
         
         5.8% notes, due 2021                           10.0         -

      Other debt                                         15.7       2.3

         Totals                                         503.3     394.5

      Less current maturities                             3.9       0.9
                                                       $499.4    $393.6
</TABLE>













 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

                                               
3.  Long-Term Debt, continued
         Principal payments on long-term debt (excluding credit lines and
    capital leases) for the next five years are (in millions): 1997 $1.9;
    1998 $1.5; 1999 $4.7; 2000 $81.1; and 2001 $1.1.  Because of the
    availability of long-term financing under the terms of the committed
    credit lines, the $9.0 million notes due in 1997 and the borrowings
    under uncommitted credit lines have been classified as long-term debt.
         The Company maintains credit lines with several banks,
    domestically and internationally, maturing in 1999-2001, under which
    it can borrow up to $225 million at interest rates not to exceed LIBOR
    plus 0.3%.  Nominal facility fees are paid on the credit lines.  Other
    lines of credit totaling $120 million are maintained with several
    banks on an uncommitted basis. 
         Certain loan agreements include provisions permitting the holder
    of the debt to require the Company to repurchase all or a portion of
    such debt outstanding upon the occurrence of specified events
    involving a change of control or ownership.  In addition, various loan
    agreements contain provisions that restrict the disposition of certain
    assets, require the Company to maintain a ratio of long-term debt to
    total capital not in excess of 60% and to meet an annual cash flow
    test.   
         Interest expense is net of capitalized interest of $0.3 million
    and $0.5 million for 1996 and 1994, respectively. No interest was
    capitalized in 1995.


           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued



3. Long-Term Debt, continued
         The Company has estimated the fair value of long-term debt for
    1996 to be $515.9 million, or 3% higher than the book value of $499.4
    million.  For 1995, the Company estimated the fair value of long-term
    debt to be $419.7 million, or 7% higher than the book value of $393.6
    million.  The fair value is based on the quoted market prices for
    similar issues or current rates offered for debt of the same or
    similar maturities.  The carrying amounts of temporary cash
    investments, trade receivables, and trade payables approximate fair
    value because of the short maturity of the instruments. 
         Financial instruments that potentially subject the Company to
    concentrations of credit risk consist principally of temporary cash
    investments and trade receivables.  The Company places its temporary
    cash investments in high quality financial instruments and, by policy,
    limits the amount of credit exposure relating to any one instrument. 
    Concentrations of credit risk in regard to trade receivables are
    limited due to the large number of customers and their dispersion
    across different industries and geographic areas. The Company has no
    material derivative instruments or transactions outstanding as of the
    end of 1996.






<TABLE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

<CAPTION>

4.  Income Taxes
    The provision for income taxes consists of:

                                             1996     1995      1994
                                                   (In millions)
<S>                                          <C>      <C>      <C>
        Currently payable:
          Federal                                $ 9.4    $32.7     $19.2
          State                                   (0.2)     2.8       1.5
              Total current                        9.2     35.5      20.7

        Deferred:
          Federal                                  7.4     12.5       0.7 
          State                                    1.1      0.2      (0.8)
          Foreign                                 (0.7)           -    - 
              Total deferred                       7.8     12.7      (0.1)

                 Total income taxes              $17.0    $48.2     $20.6

</TABLE>













<TABLE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
<CAPTION>                                                        

4. Income Taxes, continued
     Significant components of the year-end deferred income tax assets
   and liabilities are:
                                                 1996           1995
                                                    (In millions)
<S>                                             <C>           <C>

   Postretirement medical benefits                   $ 10.8        $ 10.2
   Other                                               20.9          23.6
     Deferred tax assets                               31.7          33.8
   Accumulated depreciation                          (133.3)       (124.4)
   Pension accruals                                    (7.5)         (7.0)
   Other                                               (1.3)         (4.4)
     Deferred tax liabilities                        (142.1)       (135.8)
     Net deferred taxes                             $(110.4)      $(102.0)

   Classified in balance sheet as
     Current assets                                  $ 16.5       $  16.6
     Long-term liabilities                           (126.9)       (118.6)
       Net deferred taxes                           $(110.4)      $(102.0)


</TABLE>
      




















<TABLE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                        
<CAPTION>
4.  Income Taxes, continued
         The differences between the Company's effective income tax rate
    and the statutory federal income tax rate are:
                                               1996     1995      1994
<S>                                            <C>      <C>       <C>
 
   Federal income tax rate                           35.0%             35.0%          35.0%

   State income tax, net of federal
     income tax benefit                               1.2               1.4            0.8

   Other, net                                        (0.1)             (2.4)          (0.4)

   Consolidated effective income
     tax rate                                        36.1%             34.0%          35.4%
    
   </TABLE>
           
   The Company's intention is to reinvest permanently the undistributed
earnings of its foreign subsidiaries.  Computation of the potential
deferred taxes associated with these undistributed earnings is not
practicable.

         










<TABLE>
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


5.  Employee Retirement Plans
         The Company maintains several noncontributory defined benefit
    retirement plans covering substantially all U.S. employees.  Pension
    benefits are based primarily on the employees' compensation and/or
    years of service.  Annual pension costs are actuarially determined,
    and the plans are funded with sufficient assets to meet future benefit
    payment and regulatory requirements.  The net periodic pension cost
    includes amortization of prior service costs over periods of the
    greater of 15 years or the average remaining employee service period.
         Assumptions used in determining the net pension credit (based on
    beginning-of-the-year assumptions) for 1996, 1995, and 1994 and
    related pension obligations (based on year-end assumptions) as of
    October 1 were:
<CAPTION>
                                            1996      1995      1994
<S>                                          <C>       <C>       <C>
    Discount rate                            7 %       7 %       8 1/4%

         Increase in future
          compensation levels                4         4         5 

         Long-term rate of return
          on assets                          9 1/4      9 1/4    9 1/4  
</TABLE>












<TABLE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


5.  Employee Retirement Plans, continued
         The following table, based on actuarial valuations as of October
    1, 1996 and 1995, sets forth the plans' funded status and amounts
    recognized in the Company's consolidated financial statements for 1996
    and 1995:
<CAPTION>
                                                      1996      1995 
                                                      (In millions)
        <S>                                         <C>      <C>
        Accumulated benefit obligation:
            Vested benefits                              $103.8    $ 93.9
            Nonvested benefits                             12.2       9.9 
               Totals                                     116.0     103.8

        Effect of projected future
         salary increases                                  21.1      19.1

        Projected benefit obligation
         for service rendered to date                     137.1     122.9

        Plan assets at fair value,
         primarily corporate equity and
         debt securities                                  158.2     143.3

        Plan assets in excess of projected
         benefit obligation                                21.1      20.4

        Unrecognized net (gain) loss from past
          experience different from that assumed
          and effects of changes in assumptions            (2.2)      2.3

        Unrecognized net asset at beginning of 
          plan year being amortized principally
        over 17 years                                      (9.2)    (10.6)

        Prepaid pension cost recognized in Other
            assets                                        $ 9.7    $ 12.1
</TABLE>









<TABLE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued



5.  Employee Retirement Plans, continued
         The components of the net pension cost (credit) for 1996, 1995,
    and 1994 are as follows:
<CAPTION>                                  1996      1995      1994
                                                (In millions)
<S>                                       <C>       <C>       <C>
        Service cost - benefits
         earned during the period              $ 4.9     $ 3.9     $ 4.2

        Interest cost on
         projected benefit obligation            9.4       8.2       7.0

        Actual return on plan assets           (18.6)    (22.1)     (6.8)

        Net amortization and deferral            5.4       9.4      (5.4)

          Net pension cost (credit)            $ 1.1     $(0.6)    $(1.0)

</TABLE>
         In the second quarter of 1995, Chesapeake Paper Products Company
    ("CPPC") implemented an enhanced retirement program for certain hourly
    employees at its West Point, VA, mill which resulted in a pre-tax charge
    of approximately $3.1 million related to pensions.  In the second quarter
    of 1994, CPPC and Chesapeake Forest Products Company ("CFPC") implemented
    an enhanced retirement program for certain salaried employees which
    resulted in a pre-tax charge of approximately $3.4 million related to
    pensions.
    






<TABLE>
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


                                    
6.  Postretirement Benefits Other Than Pensions
         The Company provides certain health care and life insurance benefits
    to certain hourly and salaried employees who retire under the provisions
    of the Company's retirement plans.  The Company does not pre-fund these
    benefits.
         During 1995 and 1994, CPPC and CFPC implemented enhanced retirement
    programs for certain hourly and salaried employees (see Note 5).  Service
    cost of $1.6 million relates to the 1995 program and service cost of $1.3
    million and interest cost of $0.1 million relate to the 1994 program.  The
    components of postretirement benefits expense for 1996, 1995, and 1994 are
    as follows:
        <CAPTION>
                                               1996     1995     1994
                                                    (In millions)
      <S>                                     <C>       <C>      <C>
        Service cost-benefits
         earned during the period                 $ 1.1      $2.4     $2.2
        Interest cost on accumulated
         postretirement benefit obligation          2.1       2.3      1.9
        Amortization of net loss                 -            0.2      0.2
        Net postretirement benefit cost            $3.2      $4.9     $4.3

        </TABLE>                                     









<TABLE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                              
6.  Postretirement Benefits Other Than Pensions, continued
         The following table sets forth the accumulated postretirement benefit
    obligation recognized in the Company's consolidated balance sheet as of
    December 31, 1996 and 1995.
<CAPTION>
                                                      1996      1995 
                                                       (In millions)
<S>                                                   <C>      <C> 
        Retirees                                          $19.6     $19.6
        Fully eligible active plan participants             5.0       4.0
        Other active plan participants                      5.1       4.8 
          Accumulated postretirement benefit
           obligation                                      29.7       28.4 
        Unrecognized prior service cost                    (0.1)          (0.1)
        Unrecognized net loss                              (1.6)     (1.8)
          Accrued postretirement benefit
           obligation                                     $28.0     $26.5

</TABLE>
         The assumed health care cost trend rate used in measuring future
    benefit costs was 12% in 1994, 11% in 1995 and 10% in 1996, gradually
    declining to 5.75% by 2002 and remaining at that level thereafter.  A 1%
    change in this annual trend rate would change the accumulated
    postretirement benefit obligation at December 31, 1996 by $2.3 million and
    the 1996 postretirement benefit expense by $0.3 million.  The assumed
    discount rate used in determining the accumulated postretirement benefit
    obligation was 7.75% in 1996, 7.75% in 1995 and 8.5% in 1994 and the
    assumed rate of increase in future compensation levels was 4.75% in 1996,
    4.75% in 1995, and 5% in 1994.
         During 1994, the Company adopted Statement of Financial Accounting
    Standards No. 112, "Employers' Accounting for Postemployment Benefits." 
    The effects of this adoption were not material to the Company's
    consolidated financial statements.

<TABLE>
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

7.  Capital Stock and Additional Paid-In Capital
    Changes in common stock and additional paid-in capital during 1994,
  1995, and 1996 were:
<CAPTION>                              
                                           Common Stock
                                                              Additional
                                                    Aggregate   Paid-In
                                        Shares      Par Value   Capital  
                                           (Dollar amounts in millions)
<S>                                    <C>            <C>         <C>
  Balances, January 1, 1994            23,514,378     $23.5       $102.6

  Issuances of shares:
    Employee stock plans                  239,328       0.3          4.8
  
  Other                                         -         -         (0.3)
  
  Balances, December 31, 1994          23,753,706       23.8        107.1

  Issuances of shares:
    Employee stock plans                  231,327        0.2          4.7
  
  Purchases of shares                    (192,600)      (0.2)        (5.4)

  Other                                         -          -          0.9 
  
  Balances, December 31, 1995          23,792,433       23.8        107.3

  Issuances of shares:
    Employee stock plans                  195,748        0.2          5.3 
    
  Purchases of shares                    (590,044)      (0.6)       (15.4)

  Balances, December 31, 1996          23,398,137      $23.4       $ 97.2

</TABLE>











       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                        

7.  Capital Stock and Additional Paid-In Capital, continued

         In addition to its common stock, the Company's authorized capital
    includes 500,000 shares of preferred stock ($100 par), of which 100,000
    shares are designated as Series A Junior Participating Preferred  Stock
    ("Series A Preferred").  None was outstanding during the three years ended
    December 31, 1996.
            Each outstanding share of the Company's common stock has
    attached to it one preferred share purchase right, which entitles the
    shareholder to buy one unit (one one-thousandth of a share) of Series A
    Preferred at an exercise price of $70 a share, subject to adjustment. 
    The rights will become exercisable only if a person or group acquires
    or announces a tender offer for 20% or more of Chesapeake's common
    stock.  When exercisable, Chesapeake may issue a share of common stock
    in exchange for each right other than those held by such person or
    group.  If a person or group acquires 30% or more of the common stock,
    each right will entitle the holder, other than the acquiring party,
    upon payment of the exercise price, to acquire Series A Preferred or,
    at the option of Chesapeake, common stock, having a value equal to
    twice the right's purchase price.  If Chesapeake is acquired in a
    merger or other business combination or if 50% of its earnings power is
    sold, each right will entitle the holder, other than the acquiring
    person, to purchase securities of the surviving company having a market
    value equal to twice the exercise price of the rights. The rights will
    expire on March 15, 1998, and may be redeemed by the Company at any
    time prior to the tenth day after an announcement that a 20% position 

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
 
7.  Capital Stock and Additional Paid-In Capital, continued
    has been acquired, unless such period has been extended by the board of
    directors.                        
        
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                                  

8.  Stock Options
         The 1993 Incentive Plan provides that the executive compensation
    committee of the board of directors or its delegate may grant stock
    options, stock appreciation rights ("SARs"), stock awards, performance
    shares, or stock units and may make incentive awards to the Company's
    key employees and officers.  The maximum aggregate number of shares of
    common stock that may be issued under the plan is the sum of 1% of the
    outstanding shares of common stock as of January 1 of each calendar
    year during the term of the plan.  The plan also limits the number of
    shares that may be covered by the grant of options, SARs, stock awards,
    performance shares, and stock units in any calendar year. The annual
    limitation is 1% of the outstanding shares of common stock as of
    January 1 of that year increased by (1) the number of shares available
    but not awarded during all prior years during the term of the plan plus
    (2) any forfeited or terminated grants that were not exercised. In
    addition, the maximum aggregate number of shares that may be covered by
    performance shares and that may be issued in any calendar year as a stock
    award or in settlement of stock units is 30% of the annual share
    limitation. The annual share limitation for 1996 was 320,954 shares. 
    The options granted may be either incentive stock options ("ISOs") or
    nonqualified stock options.  Options may be granted at not less than
    the fair market value at the date of grant if the option is an ISO, or
    not less than 85% of the fair market value if the option is a
    nonqualified stock option.  SARs may be granted in relation to option
    grants ("corresponding SARs") or independently of option grants. 
    Grants may provide options and SARs exercisable over periods of up to
    10 years.  Most grants vest over a period of one to three years.
         The Nonemployee Director Stock Option Plan provided for grants to
    the Company's nonemployee directors of stock options for up to 93,500
    shares of Chesapeake common stock.  The grants consisted of Automatic
    Awards as a part of the nonemployee directors' compensation, in
    addition to a cash retainer and meeting fees, and Elective Awards which
    participants could choose to receive in lieu of all or a portion of
    their cash retainer.  The option price was the average closing price of
    Chesapeake common stock for the 20 trading days before the October 31
    that immediately preceded the grant date.  Options for a total of
    47,825 shares were granted to nonemployee directors under the
    Nonemployee Director Stock Option Plan.  In 1996 the Nonemployee
    Director Stock Option Plan was replaced by the Directors' Stock Option
    and Deferred Compensation Plan, which provides for annual grants of
    stock options each May 1 beginning May 1, 1997, and ending May 1, 2007,
    to nonemployee directors as a part of the directors' compensation in
    addition to their cash retainer and meeting fees. A maximum of 350,000 
    shares  of common stock may be issued under the Directors' Stock Option
    and Deferred Compensation Plan.  The option price will be the average
    closing price of Chesapeake common stock for the 20 trading days
    preceding the grant date.  Participants will each receive options for
    1,500 shares on May 1, 1997. 
         For these plans, payment of the option price may be made by the
    participant in cash or by surrendering shares of Chesapeake common
    stock.  Up to 1,148,888 shares, plus 1% of shares outstanding as of
    January 1 of each calendar year through 2002, may be issued after
    December 31, 1995, upon exercise of options or SARs granted under the
    three plans.
         The 1987 Stock Option Plan provided for grants to the Company's
    key employees and officers of stock options and corresponding SARs for
    up to 1,000,000 shares of Chesapeake's  authorized but unissued common
    stock and up to 200,000 SARs independent of stock options.  As of
    December 31, 1996, there were 653,317 shares issuable related to
    options granted under this plan. With the adoption of the 1993
    Incentive Plan, awards under this plan were discontinued.
<TABLE>
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                             
8.  Stock Options, continued
        The following schedule summarizes stock option activity for the

     three years ended December 31, 1996:
<CAPTION>
                                       Number of     Weighted-Average
                                     Stock Options    Exercise Price 
    <S>                                  <C>           <C>
    Outstanding, January 1, 1994           853,706             $20.27
        Granted                            203,200              27.72 
        Exercised                          166,189              19.75
        Forfeited/expired                   40,209              18.05

    Outstanding, December 31, 1994         850,508              22.26
        Granted                            214,725              32.96 
    Outstanding, December 31, 1995         842,400              25.32
        Granted                            228,775              24.95 
        Exercised                           16,317              20.22       Forfeited/expired    11,255           28.44 

    Outstanding, December 31, 1996        1,043,603             25.28  

    Exercisable:
    December 31, 1994                      478,381                
    December 31, 1995                      453,744                
    December 31, 1996                      616,252                
    
    Weighted-average fair value of
     options granted during the year
    1995   $8.73
    1996    6.78
</TABLE>


<TABLE>
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


8. Stock Options, continued

            Information about options outstanding at December 31, 1996, is 

    summarized below:
<CAPTION>
<S>
                           Options                          Options 
                            Outstanding                       Exercisable        
                               Weighted-
                   Range       Number         Average                  Weighted-            Number    Weighted
                   of  Outstanding    Remaining   Average      Exercisable        Average
                   Exercise           At          Contractual  Exercise           at   Exercise
                   Prices             12/31/96    Life         Price              12/31/96  Price   
                   <C>              <C>               <C>        <C>          <C>          <C> 
                   $15.00-$20.00          250,426  5.0                    $19.20  250,426          $19.20
                   
                   $20.00-$25.00          380,536  7.5                     23.62         170,436           22.68
                   
                   $25.00-$30.00          196,116  7.6                     27.77         120,581           27.79
                   
                   $30.00-$35.00            216,525                8.5                           32.96   74,809           33.01
                   
                           1,043,603      7.1              25.28   616,252                       23.52
                   
                   </TABLE>
                   



                      <TABLE>
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                      
                      
                      8.          Stock Options, continued
                      
                                  Information about performance shares is shown below:
                      <CAPTION>
                      
                                                 1996      1995
                      <S>      <C>                                         <C>       <C>           
                                                Outstanding grants January 1              9,939    47,593
                      
                                                New shares granted  89,250                    -
                      
                                                Shares forfeited     3,741                    -
                      
                                                Shares converted to restricted stock units          7,920*   37,654
                      
                                                Shares paid out          -                    -
                      
                                                Outstanding grants December 31           87,528     9,939
                      
                      </TABLE>
                                                
                      <TABLE>
                      
                                               Information about restricted stock and stock units is shown
    below:
<CAPTION>
  1996                                                1995
<S>                                                 <C>       <C>
Outstanding grants January 1                         52,661    15,007

New grants                                                -         -
 
Converted performance shares                          7,920*   37,654

Shares forfeited                                          -         -

Shares vested                                         5,159         -

Outstanding grants December 31                       55,422    52,661

</TABLE>

*Estimate for restricted stock earned for 1996 performance








<TABLE>
       NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued

                                                          
8.  Stock Options, continued

    During 1995, the Financial Accounting Standards Board issued
  SFAS No. 123, "Accounting for Stock-Based Compensation."  This
  standard, effective in 1996, defines a "fair-value-based"  method of
  accounting for stock option plans and similar equity instruments, but
  also allows for the continued use of present accounting standards
  with respect to stock-based employee compensation.  The Company has
  elected to continue use of present accounting standards in accounting
  for its plans.
    Had compensation cost related to the issuance of stock options
  been determined on the "fair-value-based" methodology described in
  SFAS No. 123 at the grant dates, the Company's net income and
  earnings per share would have declined to the pro forma amounts
  indicated below:
<CAPTION>
             1996                            1995
    
                        (In millions except per share data)
<S>                                          <C>          <C>
     Net Income
         As reported                              $30.1        $93.4
         Pro forma                                $29.5        $92.2 

    Earnings per share
         As reported                              $1.27        $3.88
         Pro forma                                $1.23        $3.83  
</TABLE>


                                   
                                   
                                   
                                   
                                   
                                   
<TABLE>
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


8.  Stock Options, continued
         The Black-Scholes option pricing model was used to calculate      "fair-value" based on the following assumptions:
<CAPTION>
                                               1996        1995
<S>                                             <C>         <C>
         Dividend yield                         2.7%        2.7%

         Risk-free interest rates               6.6%        6.3%

         Volatility                            26.4        26.4

         Expected option term                   6.0         6.0
</TABLE>
         The effects of applying SFAS No. 123 for providing pro forma
    disclosures are not likely to be representative of the effects on
    reported net income for future years.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


9.  Employees' Stock Plans and Other Compensation Plans

         The Company has stock purchase plans for certain eligible salaried
    and hourly employees.  Shares of Chesapeake common stock are purchased
    based on participant and company contributions.  At December 31, 1996,
    1,124,792 shares remain available for issuance under these plans. 
         The Company also sponsors, in accordance with the provisions of
    Section 401(k) of the Internal Revenue Code, pre-tax savings programs
    for eligible salaried and hourly employees.  Certain participants'
    contributions are  matched up to designated contribution levels by the
    Company. Contributions are invested in several investment options,
    which may include Chesapeake common stock, as selected by the
    participating employee.  At December 31, 1996, 500,000 shares of
    Chesapeake common stock are reserved for issuance under these programs.
         The 1993 Incentive Plan (see Note 8) provides that the 
    executive compensation committee of the board of directors may select
    certain officers to receive annual incentive awards in the form of
    cash, common stock, or a combination, based on the Company's overall
    financial performance and the officer's individual performance. 
         The 1993 Incentive Plan provides that the executive compensation
    committee of the board of directors may grant performance share awards
    to key employees and officers.  During 1994, performance share awards
    with respect to 62,600 shares of common stock were granted, of which
    9,605 shares of restricted stock and 5,402 restricted stock units were
    earned for 1994 performance; 24,098 shares of restricted stock and
    13,556 restricted stock units were earned for 1995 performance; and an
    estimated 5,070 shares of restricted stock and 2,850 restricted stock
    units were earned for 1996 performance.  During 1996, performance share
    awards with respect to 89,250 shares of common stock were granted.  No
    shares were earned for 1996 performance.
         With the adoption in 1993 of the 1993 Incentive Plan, awards under
    the Officers' Incentive Program and the Long-Term Incentive Plan were
    discontinued.  As of December 31, 1996, 6,364 shares of restricted
    stock and 3,077 restricted stock units had been earned under the Long-Term
    Incentive Plan. There are no outstanding grants under this plan.
    The Company has other incentive compensation plans in effect for key
    employees under which awards are based principally on operating
    results.
   
         NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                      


9.  Employees' Stock Plans and Other Compensation Plans, continued

         The charges to income for these plans approximated $7.8 million in
    1996, $10.8 million in 1995, and $8.3 million in 1994.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued


10. Litigation

         WT has been identified by the federal government and the state of
    Wisconsin as a potentially responsible party with respect to possible
    natural resource damages in the Fox River and Green Bay System.  See
    "Financial Review 1994-1996, Environmental" for further information
    regarding this notice.
       The Company is a party to various other legal actions which are
   ordinary and incidental to its business. 
         While the outcome of legal actions cannot be predicted with
    certainty, the Company believes the outcome of any of these
    proceedings, or all of them combined, will not have a materially
    adverse effect on its consolidated financial position or results of
    operations.
<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                                 
11. Supplemental Balance Sheet Information
<CAPTION>
                                                     1996      1995 
                                                      (In millions)
<S>                                                  <C>      <C>
    a.   Accounts receivable, net:
         Trade                                           $154.5         $128.4
         Other                                              4.1      15.2
         Allowance for doubtful accounts                   (4.7)     (3.2)

                Totals                                   $153.9    $140.4
                                       

         b.  Other assets:
               Goodwill, net                             $ 58.3     $41.5
               Purchased intangible assets, net             3.1            1.4
               Other                                       39.5      40.9

                    Totals                               $100.9     $83.8
                 
     
         c.  Accounts payable and accrued expenses:
              Accounts payable:
                Trade creditors                          $ 55.6     $38.4
                Bank checks in transit                     18.5      20.5
                                                           74.1      58.9
              Accrued expenses: 
                Interest                                    6.6       6.7
                Compensation and employee benefits         39.1      36.0
                Other                                      37.8      28.6
                                                           83.5      71.3
                      Totals                             $157.6    $130.2
                 
</TABLE>

<TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                               


12.  Supplemental Cash Flow Information
<CAPTION>

                                             1996      1995      1994 
                                                  (In Millions)
<S>                                          <C>      <C>       <C>
        Cash paid for:

    Interest                                     $33.1     $32.8     $30.5

    Income taxes,
      net of refunds                             $12.9     $36.4     $18.6 
    
    
    Supplemental investing and
           financing non-cash transactions

          Capital lease obligations
            assumed in acquisitions              $10.1          $   -     $   -
          
          Long-term debt assumed in
            acquisitions                          17.1                 -         2.3
    
          Acquisitions financed by
            debt                                -         -           16.0

          Issuance of common stock 
            for employee benefit plans             5.4       2.7       3.2

          Dividends declared not paid              4.7       4.8       4.3
    
          Real estate transactions                 2.2       0.4       0.1

</TABLE>


            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                                                

13. Commitments and Other Matters

         At December 31, 1996, commitments, primarily for capital
    expenditures, approximated $53 million of the Company's 1997 capital
    spending estimate of $100 million.   These commitments include
    anticipated expenditures of $7 million in 1997 related to environmental
    protection in connection with planned expansions and upgrades mainly at
    the Company's tissue and kraft products mills.  The remaining
    commitments of $46 million are for various capital projects, none of
    which is individually material. Additional nondeterminable
    environmental protection expenditures could be required in the future
    when facilities are expanded or if more stringent standards become
    applicable.
         The Company leases certain assets (principally manufacturing,
    transportation, and information processing equipment and office space)
    generally for three- to five-year terms.  Rental expense for operating
    leases totaled (in millions) $14.9 for 1996, $13.8 for 1995, and $12.7
    for 1994.  As of December 31, 1996, aggregate minimum rental payments
    in future years on noncancelable operating leases approximated $45.5
    million.  The amounts applying to future years are (in millions):  1997
    $12.5; 1998 $9.7; 1999 $7.7; 2000 $5.0; 2001 $3.8; and thereafter $6.8.
    The Company leases certain assets (principally manufacturing equipment)
    under agreements which are classified  as capital leases.  As of
    December 31, 1996, the aggregate minimum payments under capitalized
    leases included in other long-term debt totaled $10.1 million.  The
    amounts applying to future years are (in millions): 1997 $2.0; 1998
    $4.0; and 1999 $4.1.  The present value of minimum capitalized lease
    payments at year-end was approximately $9.2 million.  The present value
    of any unrecorded capital leases and the impact on net income if these
    leases were recorded are not material. 
         In December, 1995, CPPC announced its planned participation in a
    comprehensive energy project with Virginia Power.  Through the project,
    Virginia Power plans to build a steam and electricity generating
    facility at CPPC's mill in West Point, VA, and become the primary
    supplier of all forms of energy to the mill.  This facility is
    scheduled for completion in 1998 and is subject to regulatory approval
    by the Virginia  State Corporation Commission and the signing of
    definitive agreements with Virginia Power and outside financing
    entities. If the transaction is not consummated, the Company is liable
    to Virginia Power and others for reimbursement of such parties'
    expenses incurred in connection with the project, which the Company
    estimates total approximately $6 million to date.
         Packaging segment acquisitions during 1996 were comprised of the
    April purchase of substantially all assets associated with the Display
    Division of Dyment Limited, with locations in Erlanger, KY, and
    Toronto, Canada; the August purchase of the point-of-sale display and
    packaging business of Sailliard S.A., with 10 locations in France; and
    the September purchase of the assets of Triad Packaging Co., Inc. in
    Richmond, VA, a manufacturer of corrugated containers.  In December, 

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                     
13. Commitments and Other Matters, continued
    1996, the tissue converting assets of Jokel Desarrollos, S.A. de C.V.
    and Ambitec, S.A. de C.V., both in Mexico, were acquired as part of the
    Tissue segment.  Acquisitions in 1995 were all in the Tissue segment
    and were comprised of the May purchase of the assets of the Flagstaff,
    AZ, mill of Orchids Paper Products Company; the November purchase of
    the Chicago, IL, mill of Chicago Tissue Company, L. P., and the
    purchase of a facility in Greenwich, NY, for a planned tissue
    converting operation.  In December, 1995, the Company sold its consumer
    tissue business, Chesapeake Consumer Products Company, to The Fonda
    Group, Inc.

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                    
14. Business Segment Information
         The Company's three business segments are Packaging, Tissue and
    Kraft Products.  Packaging consists of point-of-sale displays, graphic
    packaging, and corrugated shipping containers.  Tissue is comprised of
    commercial and industrial tissue products.  The Kraft Products segment
    includes kraft, forest, and building products.    General corporate
    expenses, gain from the sale of a business and land development are
    shown as corporate.
         Sales between segments reflect transfer prices at market value. 
    Intersegment sales not included below were $52.8 million in 1996, $48.4
    million in 1995, and $28.0 million in 1994.  Segment operating income 

           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
                                     
14.  Business Segment Information, continued

     is revenue less allocable operating expenses.  Operating expenses
     include all expenses except interest and income taxes.
         Segment identifiable assets are those which are directly used in
     segment operations.  Timber and timberlands are included in the Kraft
     Products segment.  Corporate assets are cash, certain nontrade
     receivables, real estate held for sale, and other assets.
         Export sales, principally to Europe, Canada and Asia, were (in
     millions):  1996 $114.5; 1995 $138.0; and 1994 $94.9. 
<TABLE>
   Financial information by business segments:
<CAPTION>
                                             1996      1995      1994 
                                                   (In millions)
<S>                                       <C>       <C>         <C>
   Net sales:
      Packaging                               $  474.1  $  452.6    $349.8
      Tissue                                     392.0     372.7     304.1
      Kraft Products                             284.5               401.0     330.8
      Corporate                                    8.0       7.4       5.8
         Consolidated net sales               $1,158.6  $1,233.7    $990.5
                        
   Operating income:
      Packaging                                $  22.8   $  36.9    $ 24.7
      Tissue                                      65.0      48.1      40.7
      Kraft Products                              11.3     100.4      36.1
                                                  99.1               185.4     101.5

      Corporate                                  (18.1)    (13.0)    (12.2) 
      Income before interest and
       taxes                                      81.0               172.4      89.3
   Interest expense                              (33.9)    (30.8)    (31.1) 
      Income before taxes                      $  47.1   $ 141.6    $ 58.2
                       
   Identifiable assets:
      Packaging                               $  359.7             $ 231.3  $  190.3
      Tissue                                     439.4               411.7     324.1
      Kraft Products                             456.4     461.9     434.7
      Corporate                                   34.7      41.4      67.8
        
          Consolidated assets                 $1,290.2  $1,146.3  $1,016.9 

   Capital expenditures and acquisitions:
      Packaging                                 $ 83.2    $ 43.5    $ 37.5
      Tissue                                      61.7     107.4       9.9
      Kraft Products                              30.0      76.2      23.5
      Corporate                                    1.1       0.3       0.1
         Totals                                 $176.0    $227.4    $ 71.0
                                                                      
   Depreciation and cost of timber
    harvested:
      Packaging                                 $ 17.5    $ 13.1    $ 11.0
      Tissue                                      28.0      23.9      23.6
      Kraft Products                              41.2      36.3      36.0
      Corporate                                    0.4       0.3       0.3
        Totals                                  $ 87.1    $ 73.6    $ 70.9
</TABLE>

<TABLE>
   ELEVEN-YEAR COMPARATIVE RECORD

(Dollar amounts in millions except per share data)
<CAPTION>               
                                       1996      1995     1994 1993 1992
<S>                                 <C>        <C>       <C>     <C>    <C> 
Operating Results
  Net sales                           $1,158.6   $1,233.7  $990.5 $885.0  $888.4
  Net cost except depreciation,
   cost of timber harvested, and
    interest expense                     990.5      987.7   830.3  762.1   768.0
  Depreciation and cost of
   timber harvested                       87.1       73.6    70.9   70.2    66.5
  Interest expense                        33.9       30.8    31.1   32.0    31.4
  Income before taxes and
   cumulative effect of
    accounting changes                    47.1      141.6    58.2   20.7    22.5
  Income taxes                            17.0       48.2    20.6   10.3     8.1
  Income before cumulative
   effect of accounting changes           30.1       93.4    37.6   10.4    14.4
  Cumulataive effect of
   accounting changes                      -         -       -       -       9.7
  Net income                              30.1       93.4    37.6   10.4     4.7
  Cash dividends declared
   on common stock                        18.8       18.6    17.1   16.8    16.7
  Income retained for use
   in the business                        11.2       74.8    20.5   (6.4)  (12.0)
  Net cash provided by
   operating activities                  131.2      143.7   103.6  113.6    69.2
  Percent of income before cumulative
   effect of accounting changes 
    To net sales                           2.6%       7.6%    3.8%   1.2%    1.6%
    To stockholders' equity                6.4       23.7    10.2    2.8     4.5
    To total assets                        2.6        9.2     4.1    1.1     1.6
Common Stock
  Number of stockholders of record       7,567      7,456   7,804  7,778   7,964
  Shares outstanding (in thousands)     23,398     23,792  23,754 23,514  23,330
  Per share
    Earnings before cumulative
      effect of accounting changes      $ 1.27     $ 3.88  $ 1.58  $0.44   $0.63
  Earnings                                1.27       3.88    1.58   0.44   $0.17
  Dividends declared                      0.80       0.78    0.72   0.72    0.72
  Stockholders' equity                   20.05      19.68   16.56  15.65   15.88
Financial Position                                     
  Working capital                       $159.0     $142.3  $144.3 $ 87.1  $122.2
  Property, plant and 
   equipment, net                        863.5      780.9   646.4  653.8   668.3
  Total assets                         1,290.2    1,146.3 1,016.9  919.3   958.9
  Total capital                        1,095.4      980.5   862.5  799.7   849.6
   Long-term debt                        499.4      393.6   364.0  333.1   382.8
   Deferred income taxes                 126.9      118.6   105.2   98.6    96.4
   Stockholders' equity                  469.1      468.3   393.3  368.0   370.4
  Percent of long-term debt
   To total capital                       45.6%      40.1%   42.2%  41.7%   45.1%
   To stockholders' equity               106.5       84.0    92.6   90.5   103.3 
Additional Data
  Capital expenditures and
   acquisitions                            $176.0     $227.4   $71.0          $63.9     $85.0
    Acres of timberland owned
  (in thousands)  326325328329350
 Number of employees                     6,914      5,305   5,209  4,833   5,062
</TABLE>


NOTES TO ELEVEN-YEAR COMPARATIVE RECORD

    Accounting policies are stated in Note 1 of Notes to Consolidated
Financial Statements.  This summary retroactively reflects common stock
splits of two-for-one in 1987 and three-for-two in 1986.  Percent of income
before cumulative effect of accounting changes information is calculated
using beginning of year and acquisition amounts where appropriate.
    1.   Includes an after-tax charge of $2.8 million, or $0.12 per share,
         related to a change to the LIFO method of accounting for certain
         inventories.
    2.   Includes net one-time, after-tax charge of $9.7 million, or $0.46
         per share, related to the adoption of SFAS 106 and SFAS 109 in
         1992.
    3.   Excludes 13,000 - 25,000 acres held by land development
                  subsidiaries during 1988 - 1996.<PAGE>
         <TABLE>
Financial Review  1994-1996
Earnings Overview

    Net sales for 1996 were $1,158.6 million, down 6% from 1995's record
net sales of $1,233.7 million, but 17% higher than net sales of $990.5
million in 1994.  Net income for 1996 of $30.1 million, or $1.27 a share,
was 67% less than record net income of $93.4 million, or $3.88 a share,
earned in 1995, and 20% less than the $37.6 million, or $1.58 a share,
earned in 1994.  Cash flow from operations of $131.2 million was down 9%
from the record $143.7 million of last year, but was 27% higher than the
$103.6 million achieved in 1994.  Results for 1996 were unfavorably impacted
by weak market conditions for certain products in the kraft products
business and start-up costs associated with several strategic growth
initiatives in the packaging and tissue businesses.  Significant growth in
tissue shipments helped to mitigate the impact of these conditions and
costs.
<CAPTION>
                                        1994      1995               1996
<S>                                   <C>       <C>        <C>
Graph: Sales by Business Segment      
       (Millions of $)
          Packaging                        349.8     452.6     474.1
         Tissue                            304.1     372.7     392.0
         Kraft Products                    330.8     401.0     284.5

</TABLE>
     Chesapeake continues to concentrate on providing specialty products and
services that the Company believes have less price volatility and higher
growth and profitability potential than commodity products.  Because of
strategic initiatives implemented by management, more than 70% of
Chesapeake's total 1996 sales came from these specialty products.  Until the
early 1980s, Chesapeake's products were primarily commodities in slow-growth
markets.  
         During 1993, the bottom of the last down cycle in the paper
industry, Chesapeake earned $0.44 a share.  During 1996, with margins in the
kraft products segment similar to 1993, Chesapeake earned $1.27 a share. 
This substantial bottom-to-bottom earnings improvement is primarily due to
the packaging and tissue businesses becoming larger and more important parts
of the corporation, a strategy that Chesapeake continues to implement.
         Chesapeake expanded internationally for the first time during
1996, acquiring display and packaging facilities in Canada and France and
tissue converting operations in Mexico.  These acquisitions are part of the
Company's strategy to expand its packaging and tissue businesses globally.
Liquidity and Capital Structure
     Net cash provided by operating activities was $131.2 million in 1996,
down 9% from the record $143.7 million in 1995, but 27% higher than the
$103.6 million achieved in 1994.  EBITDA, a measure of internal cash flow
combining earnings before interest and income taxes plus non-cash charges
for depreciation, cost of timber harvested, and amortization, was $170.7
million for 1996, 31% lower than 1995's EBITDA of $247.8 million.  Changes
in net income were the primary reason for the differences in cash flow from
operations and EBITDA comparisons.  Compared to year-end 1995, working
capital increased $16.7 million to $159.0 million at year-end 1996,
primarily as a result of higher accounts receivable and inventories, offset
in part by higher accounts payable and accrued expenses.  The ratio of
current assets to current liabilities was  1.95 at year-end 1996, compared
to year-end 1995's 2.0 and year-end 1994's 2.1.  Accounts receivable
increased $13.5 million from year-end 1995, with the average collection
period increasing 5 days from last year.  Inventories at the end of the year
were up $21.9 million compared to 1995.  The annual inventory turnover rate
decreased from 8.1 for 1995 to 7.0 for 1996.  Accounts payable and accrued
expenses increased $27.4 million from year-end 1995.  The increases in
accounts receivable, inventories, and accounts payable  and the reduction in
the annual inventory turnover rate are primarily the result of growth in the
specialty packaging business. 
<TABLE>
 <CAPTION>                             1994      1995      1996
<S>                                    <C>       <C>       <C>  
    Graph:  Net Income                      37.6      93.4      30.1
        (Millions of $)

</TABLE>
     The Company generally uses long-term debt to fund major capital
expansions that cannot be funded by internally generated funds.  Net cash
used in investing activities of $172.7 million was down $11.7 million, or
6%, from the prior year as a result of lower capital expenditures and
acquisition costs.  Net cash used in investing activities exceeded net cash
provided by operating activities by $41.5 million.  This was one of the
primary reasons that long-term debt increased by $105.8 million in 1996 to
$499.4 million.  Net cash flow provided by financing activities in 1996 was
$46.2 million compared to $8.9 million in 1995. This increase was primarily
attributable to the change in long-term debt.  See Note 3 to the
consolidated financial statements for additional long-term debt information.
<TABLE>
 <CAPTION>                             1994      1995      1996
<S>                                    <C>       <C>       <C>
Graph:  EBITDA
 (Millions of $)
    Earnings before interest
      and income taxes                      89.3     172.4      81.0

    Noncash charges for depreciation,
     cost of timber harvested and
       amortization                         72.8      75.4      89.7
</TABLE>

   
    Chesapeake's total capitalization was $1,095.4 million at the end of
1996 compared, to $980.5 million at the end of 1995.  The year-end ratio of
long-term debt to total capital was 45.6% for 1996, up from 40.1% for 1995. 
Chesapeake's long-term debt-to-total-capital ratio target range is 35% to
45%.  The year-end ratio of long-term debt to stockholders' equity was
106.5% for 1996 and 84.0% for 1995. The higher ratios in 1996 are the result
of the increase in long-term debt.
    During 1996, the Company paid quarterly cash dividends of $0.20 a
share.  For the year, dividends were $0.80 a share compared to $0.78 a share
in 1995, as quarterly dividends were raised to $0.20 a share from $0.18 a
share beginning with the second quarter of 1995.  Chesapeake's dividends
paid as a percentage of net cash provided by operating activities were 14%
for 1996, 13% for 1995, and 17% for 1994.  Outstanding common shares at
year-end 1996 totaled 23.4 million shares, a decrease of 0.4 million shares
from year-end 1995, as purchases of 0.6 million shares by the Company during
the year exceeded shares issued for employee benefit plans.  Shares
purchased in 1995 generally offset shares issued for benefit plans.  No
shares were purchased by the Company under board of directors' stock
purchase authorizations in 1994.  See Note 7 to the consolidated financial
statements for capital stock and additional paid-in capital information. 
Year-end 1996 stockholders' equity was $469.1 million, or $20.05 a share, up
slightly over year-end 1995.  The market price for Chesapeake's common stock
ranged from $23.13 per share to $31.75 per share in 1996, with a year-end
market price of $31.38 per share, up $1.75 a share from 1995's closing price
of $29.63 per share.


<TABLE> 
<CAPTION>                              1994      1995      1996
<S>                                    <C>      <C>        <C>

Graph:  Income from Operations              81.1     161.3      74.3
        (Millions of $) 

</TABLE>
                                   
Capital Expenditures
      Expenditures in 1996 for property, plant, and equipment and
acquisitions totaled $176.0 million and related primarily to growth
initiatives in the packaging and tissue businesses.  Acquisition
expenditures in 1996 were $47.2 million and included: the purchase of
substantially all assets of the Display Division of Dyment Limited with
locations in Erlanger, KY and Toronto, Canada; the acquisition of the
point-of-sale display and packaging businesses of Sailliard S.A. with 10
locations in France; the purchase of substantially all of the assets of Triad
Packaging Co., Inc., a manufacturer of corrugated containers in Richmond,
VA; and the acquisition of certain tissue converting assets and distribution
facilities of Jokel Desarrollos, S.A. de C.V. and Ambitec, S.A. de C.V.,
both in Mexico.  The remaining capital expenditures of $128.7 million in
1996 included: the second phase of the Visalia, CA, manufacturing plant for
the Company's Color-Box graphic packaging business; a new consumer graphic
packaging  manufacturing plant in Pelahatchie, MS; a new custom packing
operation in Memphis, TN; and new tissue converting equipment at the
Bellemont, AZ, and Greenwich, NY, sites.  No other 1996 capital projects
were individually material.  Capital spending and acquisitions in 1995 were
$227.4 million, of which more than 60% were for acquisitions and other
growth-related projects.  Acquisition costs in 1995 totaled $69.7 million,
and included the purchase of the assets of the Flagstaff, AZ, tissue mill,
the tissue-converting facility in Greenwich, NY, and the Chicago, IL, tissue
mill.  The remaining capital expenditures of $157.7 million in 1995 related
primarily to the internal expansions of the packaging and kraft businesses.
These expenditures included the first phase of the manufacturing plant
located in Visalia, CA, for the Company's Color-Box graphic packaging
business; additional equipment at the existing Color-Box plant in Richmond,
IN; modernization of the North Tonawanda, NY, corrugated container plant; a
new tissue converting facility in Bellemont, AZ; and an upgrade of the No. 2
paper machine at the West Point, VA, kraft products mill.  Capital spending
in 1994 was $71.0 million and included the acquisition of Lawless Holding
Corporation, which included five packaging plants.  The remaining 1994
expenditures focused primarily on maintenance and reliability of the West
Point, VA, kraft products mill.               
 <TABLE> 
 <CAPTION>                             1994      1995      1996
<S>                                    <C>       <C>       <C>
Graph: Interest Expense                     31.1      30.8      33.9
       (Millions of $)                            

 </TABLE>  
 Planned capital spending for 1997 is expected to be about $100 million, a
level that approximates expected depreciation.  Planned initiatives include:
new tissue converting equipment at the Bellemont, AZ, and Greenwich, NY,
facilities; expansion of the Erlanger, KY, display and packaging plant; and
maintenance and reliability projects at the West Point, VA, kraft products
mill.  These projects are consistent with Chesapeake's strategy of expanding
the packaging and tissue businesses, reducing costs, and focusing capital
spending on projects that generate a high return on investment.  No other
1997 projects are expected to account for more than 5% of the total planned
spending.  Projected 1997 capital expenditures are expected to be funded
with internally generated cash.  See Note 13 to the consolidated financial
statements for information regarding capital commitments.  
Operating Results
1996 vs 1995
      Chesapeake's 1996 net sales were $1,158.6 million, down 6% from 1995's
record net sales of $1,233.7 million.  Higher shipments for all three
business segments, but most significantly the tissue segment, were more than
offset by substantially lower selling prices in the kraft products business. 
<TABLE>
<CAPTION>
                                       1994      1995      1996
<S>                                    <C>       <C>       <C>
Graph:  Capital Structure
        (Millions of $)
          Long-Term Debt                   364.0     393.6     499.4
          Deferred Taxes                   105.2     118.6     126.9
          Stockholders' Equity             393.3     468.3     469.1

</TABLE>

     Net income for 1996 was $30.1 million, or $1.27 a share, down  67% from
record net income of $93.4 million, or $3.88 a share, earned in 1995. 
Earnings for 1996 were unfavorably impacted by lower selling prices in the
kraft products segment and costs related to various growth initiatives in
the packaging and tissue businesses, offset in part by higher packaging and
tissue shipments and lower prices for recovered paper, a major raw material
for the tissue and kraft businesses.  Earnings for 1995 included a pre-tax
gain of $1.8 million, or $0.05 a share after tax, from the sale of the
Consumer Products business; a $3.0 million pre-tax, or $0.08 a share after
tax, reduction in earnings related to lost production associated with
completion of the No.2 paper machine rebuild project at the West Point, VA,
kraft products mill; and onetime pre-tax charges of $8.0 million, or $0.21 a
share after tax, associated with an enhanced retirement package for certain
hourly employees at Chesapeake Paper Products and with certain post-closing
obligations related to the sale of Chesapeake's wood treating operations.  
     Income from operations for 1996 was $74.3 million, down 54%  compared
to 1995's $161.3 million.  Depreciation increased $13.5 million over the
previous year due to higher capital investment.  Cost of products sold was
down $24.9 million, or 3%,  from 1995, but as a percentage of net sales
increased to 73% for 1996 compared to 70% for 1995.  Gross profit and
operating margins were down 4 points and 7 points, respectively, compared to
the previous year.  Selling, general and administrative expenses in 1996
increased $23.3 million, or 18%, compared to 1995, and were 13% of net sales
in 1996, compared to 11% last year. 
     Other income (net) in 1996 was $6.7 million, down $4.4 million, as a
result of the gains in 1995 on the sale of Consumer Products and the sale of
land that was no longer considered to be of strategic importance.   Interest
expense for 1996, net of $0.3 million of capitalized interest, was $33.9
million.  Interest expense for 1995 was $30.8 million, with no interest
capitalized during the year.  Excluding capitalized interest, interest
expense increased $3.4 million due to increased borrowings. 
Packaging
     The packaging segment was again the largest in terms of  revenue. 
Overall net sales were up 5% compared to 1995, and up 3% excluding the
European acquisition. The domestic point-of-sale display business led the
way with a 19% sales increase for the year.  For the sixth consecutive year,
this segment achieved record shipments, as shipments from domestic
operations were up for all three packaging businesses--point-of-sale
displays, consumer graphic packaging and corrugated shipping containers. 
The packaging segment's EBIT of $22.8 million for 1996 was down 38% from its
EBIT of $36.9 million for 1995, as this segment incurred start-up costs
related to various growth initiatives.  A fourth consumer graphic packaging
facility located in Pelahatchie, MS, came on-line during the year, as did a
new custom packing facility in Memphis, TN.  The Display Division of Dyment
Limited, with locations in Erlanger, KY, and Toronto, Canada, was acquired
in April, 1996, and in August, 1996, Chesapeake completed the acquisition of
Chesapeake Europe S.A., a point-of-sale display and packaging business in
France.  Growth is anticipated from our specialty packaging businesses as
sales and marketing efforts are expanded to effectively utilize the capacity
in our new facilities in the U.S. and Europe. 
<TABLE>
<CAPTION>
                                       1994      1995      1996
<S>                                    <C>       <C>       <C>
Graph:  Net Cash Provided by
          Operating Activities             103.6     143.7     131.2
        (Millions of $)                                    
</TABLE>
Tissue
     Wisconsin Tissue's net sales were a record in 1996, about 20% higher
than last year, excluding the sale of the Consumer Products business, which
was sold in the latter part of the fourth quarter of 1995.  Increased sales
from expanded mill and converting operations more than offset the loss of
sales attributable to the Consumer Products business.  Overall average
selling prices changed little from 1995, but tissue shipments of 305,000
tons were 30% higher than last year.  Almost 20% of shipments were from new
facilities in northern AZ, Chicago, IL, and Greenwich, NY.  The Flagstaff,
AZ, mill, and the Chicago, IL, mill purchased in May, 1995 and November,
1995, respectively, both operated for a full year in 1996.  The converting
site at Bellemont, AZ, became fully operational in the first quarter of 1996
and the Greenwich, NY, site, started up in the third quarter of 1996.  EBIT
for 1996 was a record, up 35% over the previous record set in 1995, and up
38% excluding the Consumer Products business.  Costs for recovered paper, a
major raw material for this segment, were down considerably from the high
prices experienced last year.  Tissue converted-product sales growth
continues to be strong and above industry growth rates.
<TABLE>
<CAPTION>
                                        1994     1995      1996
<S>                                    <C>       <C>       <C>
Graph:  Total Assets                  
        (Millions of $)
                
       Goodwill & Other Assets              95.1      83.8      100.9
       Current Assets                      275.4     281.6      325.8
       Property, Plant & Equipment         646.4     780.9      863.5 
        
</TABLE>
Kraft Products
     The kraft products segment, which earned more than $100 million in
1995, experienced an $89 million reduction in EBIT in 1996 to $11.3 million,
almost entirely due to reduced market pricing for its products.  Earnings
for 1995 included the charges related to an enhanced retirement program and
the charges related to post closing obligations for the Company's former
treated wood business.  There were no significant sales of non-strategic
land in 1996.  Gains on sales were $3.7 million in 1995.
     Earnings of Chesapeake Paper Products Company in 1996 declined
significantly from last year, due primarily to weak market conditions.  Net
sales were 29% lower than the prior year as selling prices were down for all
major product lines.  Average selling prices were 32% lower than last year,
with the largest decline in market pulp.  Shipments of 831,000 tons were up
8% from 1995, when  production was lost related to a rebuild of the No. 2
paper machine.  However, the rebuilt machine has increased production
capacity of the West Point, VA, mill by 70,000 tons per year.  Shipments of
specialty white-top paperboard, which has a higher profit margin than brown
paperboard, continued to increase.  Prices of recovered paper, a major raw
material, dropped significantly compared to 1995, favorably impacting costs
by nearly $25 million.       
     Earnings of Chesapeake Building Products declined somewhat from 1995's
results, as lumber markets were weaker for much of the year.  Net sales
increased 2% from 1995, as average selling prices were down with shipments
up slightly.
1995 vs 1994
      Chesapeake's 1995 net sales were a record $1,233.7 million, up 25%
over 1994's net sales of $990.5 million.  Higher shipments for the packaging
and tissue segments and greatly improved selling prices for most product
lines were responsible for the increase.  The Company's packaging segment
achieved its fifth consecutive year of record shipments in 1995. 
<TABLE>
<CAPTION>
                                       1994      1995      1996
<S>                                    <C>       <C>       <C>          
Graph:  Capital Expenditures           
          and Acquisitions                  71.0               227.4     176.0
        (Millions of $)

</TABLE>
    Net income for 1995 was a record $93.4 million, or $3.88 a share, up 2.5
times the $37.6 million, or $1.58 a share, earned in 1994.  Earnings for
1995 included: a pre-tax gain of $1.8 million, or $0.05 a share after tax,
from the sale of the Consumer Products business; a $3.0 million pre-tax, or
$0.08 a share after tax, reduction in earnings related to lost production
associated with completion of a paper machine rebuild project at the West
Point,  VA, kraft products mill; and one-time pre-tax charges of $8.0
million, or $0.21 a share after tax, associated with an enhanced retirement
package for certain hourly employees at Chesapeake Paper Products and with
certain post-closing obligations related to Chesapeake's former wood
treating operations.  Included in 1994 earnings was a pre-tax charge of $4.4
million, or $0.12 a share after tax, reflecting a change in the method of
accounting for certain inventories in the tissue and packaging segments from
the average cost valuation method to the LIFO valuation method.  Also
included in 1994 results was a pre-tax charge of $4.9 million, or $0.13 a
share after tax, associated with an enhanced retirement program for certain
salaried employees at Chesapeake Paper Products Company and Chesapeake
Forest Products Company. 
<TABLE>
<CAPTION>
                                        1994      1995      1996
<S>                                     <C>       <C>       <C>
Graph: Earnings Per Share                    1.58      3.88      1.27
        (Dollars)                                

</TABLE>
     Income from operations for 1995 was $161.3 million, or nearly twice
1994's $81.1 million.  Depreciation increased $2.7 million over 1994 due to
higher capital spending.  Income for 1995 was reduced as a result of lost
production associated with the No. 2 paper machine rebuild project. 
Operating expenses for 1995 and 1994 included one-time charges related to
the enhanced retirement programs, while operating expenses for 1994 included
the charge relating to the expansion of the LIFO method of valuing certain
inventories.  Cost of products sold was up $144.2 million, or 20%, from
1994, but as a percentage of net sales dropped to 70%  for 1995 compared to
73% for 1994.  Gross profit and operating margins for 1995 were up 4 points
and 5 points, respectively, compared to 1994.  Selling, general, and
administrative expenses in 1995 increased $16.1 million, or 14%, compared to
1994, but were 11% of net sales in 1995, compared to 12% in 1994. 
     Other income (net) in 1995 was $11.1 million, up $2.9 million from
1994, as a result of the gain on the sale of the Consumer Products business
and the sale of land that was no longer considered to be of strategic
importance.  Interest expense for 1995 was $30.8 million, with no interest
capitalized during the year.  Interest expense for 1994, net of $0.5 million
of capitalized interest, was $31.1 million.  Excluding capitalized interest,
interest expense decreased $0.8 million. 
Packaging
     The packaging segment was the largest in terms of  revenue in 1995, as
net sales and shipments were at record levels for all three packaging
businesses--point-of-sale displays, consumer graphic packaging, and
corrugated shipping containers.  Higher-margin point-of-sale displays showed
the strongest improvement, continuing the momentum begun in 1994.  Net sales
of point-of-sale displays were up 36% and shipments were up 15% compared to
1994.  Overall net sales in 1995 were up 29% compared to 1994.  Chesapeake
Packaging's EBIT of $36.9 million for 1995 improved 49% from its EBIT of
$24.7 million for 1994. Packaging results for 1994 included the change in
the method of valuing certain inventories to the LIFO  method, which
resulted in a pre-tax charge to operations of $0.5 million.  The graphic
packaging plant at Visalia, CA, which began production late in the second
quarter of 1995, was in full operation by the end of the year. <PAGE>
<TABLE>
<CAPTION>
                                        1994     1995      1996
<S>                                     <C>      <C>       <C>
Graph:  Common Stock Price Range
          & Stockholders' Equity       
        (Dollars)

       Equity Per Share                     16.56     19.68     20.05            
       Common Stock Price Range               
             High                           35.88     39.00     31.75 
             Low                            22.25     27.50     23.13
</TABLE>

Tissue
     Wisconsin Tissue's net sales for 1995 were 23% higher than in  1994 as
a result of higher selling prices, an improved product mix for converted
products, and strategic growth initiatives.  Selling prices were up 16%,
while tissue shipments of 235,000 were 8% higher than 1994.  EBIT for 1995
was a then-record, up 18% over the previous record set in 1994, despite
recovered paper costs adding approximately $30 million in costs compared to
1994.  Recovered paper costs moderated during the second half of 1995.  The
change in the method of valuation of raw materials, work in process, and
finished goods inventories of Wisconsin Tissue from the average cost method
to the LIFO method resulted in a charge of $3.9 million in 1994.  Results of
the tissue segment in 1994 were positively impacted by a nonrecurring
settlement gain.  The Flagstaff, AZ, mill, purchased in May, 1995,
successfully began operating in the third quarter, and construction of a
tissue converting facility in Bellemont, AZ, was near completion by the end
of the year.  The acquisition of Chicago Tissue was concluded in November
1995.  These acquisitions increased primary tissue production capacity by
90,000 tons per year, or approximately 50%.  The Greenwich, NY, facility was
acquired in the third quarter of 1995, with plans to operate it as an
additional tissue converting plant. 
      The Consumer Products business achieved its second positive EBIT in
1995, with net sales increasing to approximately $48 million, up 5% from
1994.  During 1995,  Chesapeake announced its intention to sell this
business.  Although many improvements had been made in this business,
resulting in profitability in 1994 and 1995, the Company determined it had
better strategic alternatives for its capital.  The sale of this business to
The Fonda Group, Inc. was completed on December 29, 1995.
<TABLE>

<CAPTION>                              1994      1995      1996
<S>                                    <C>       <C>       <C>
Graph:   Return on Common
           Stockholders' Equity             10.2%     23.7%      6.4%
      (Percent)                                                   
</TABLE>

Kraft Products
     EBIT for the kraft products segment was $100.4 million in 1995,
compared to $36.1 million in 1994.  Earnings for both years included charges
related to enhanced retirement programs.  Earnings for 1995 also included
charges for post-closing obligations related to the Company's former treated
wood business.  Gains on the sale of land no longer considered to be of
strategic importance were $3.7 million in 1995, compared to $0.6 million in
1994.
     Earnings of Chesapeake Paper Products Company in 1995 improved
significantly from 1994, due primarily to higher selling prices.   Net sales
improved 21% over 1994 as selling prices were up for all major product
lines.  Average selling prices in 1995 were 41% higher than in 1994.  The
largest gains were in market pulp.  Shipments of 769,000 tons were down 10%
from 1994 due to lost production associated with a rebuild of the No. 2
paper machine and weaker market conditions near the end of 1995. However,
the rebuilt machine increased production capacity of the West Point, VA,
mill by 70,000 tons per year.  Specialty white top paperboard, which has a
higher profit margin than brown paperboard, increased to 90% of the
paperboard mix compared to approximately 83% in 1994.  Prices of recycled
paper, a major raw material, dropped significantly by year-end 1995 from a
mid-year peak, but averaged 50% higher in 1995 than in 1994, and added
approximately $17.0 million in additional costs compared to 1994. 
     Earnings of Chesapeake Building Products in 1995 declined somewhat from
1994's excellent results, as lumber markets were weaker for most of the
year.  Selling prices and shipments for lumber were down, causing net sales
to decline by 9%.
Other
     More information about Chesapeake's businesses is provided under the
caption "Business Segment Highlights"  and in Note 14 to the consolidated
financial statements.
Environmental
   Chesapeake has a strong commitment to protecting the environment.  The
Company has an environmental audit program to monitor compliance with
environmental laws and regulations.  The Company is committed to abiding by
the environmental, health and safety principles of the American Forest &
Paper Association.  Each expansion project has been planned to comply with
applicable environmental regulations and to enhance environmental protection
at existing facilities.  The Company faces increasing capital expenditures
and operating costs to comply with expanding and more stringent
environmental regulations, although compliance with existing environmental
regulations is not expected to have a materially adverse effect on the
Company's earnings, financial position, or competitive position.  See Note
13 to the consolidated financial statements on page 32 for further capital
spending information relating to environmental compliance.
     The Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA") and similar state "superfund" laws impose liability, without
regard to fault or to the legality of the original action, on certain
classes of persons (referred to as potentially responsible parties or
"PRPs") associated with a release or threat of a release of hazardous
substances into the environment.  Financial responsibility for the clean-up
or other remediation of contaminated property or for natural resource
damages can extend to previously owned or used properties, waterways, and
properties owned by third parties, as well as to properties currently owned
and used by a company even if contamination is attributable entirely to
prior owners.  Except for the United States Department of Interior, Fish and
Wildlife Service ("FWS") claims related to the Fox River discussed below,
the Company is not presently named as a PRP at any CERCLA-related sites. 
However, there can be no assurance that the Company will not be named as a
PRP at any other sites in the future, or that the costs associated with
additional sites would not be material to the Company's financial position
or results of operation.
     In June 1994, the FWS, a federal natural resources trustee, notified
Wisconsin Tissue ("WT"), a wholly-owned subsidiary of the Company, that it
had identified WT and four other companies located along the lower Fox River
in northeast Wisconsin as PRPs for purposes of natural resources liability
under CERCLA arising from alleged releases of polychlorinated biphenyls
("PCBs") in the Fox River and Green Bay System.  The FWS and other
governmental and tribal entities, including the state of Wisconsin, allege
that natural resources, including endangered species, fish, birds, tribal
lands, or lands held by the United States in trust for various Indian
tribes, have been exposed to PCBs that were released from facilities located
along the Fox River.  The FWS is proceeding with a natural resource damage
assessment with respect to the alleged discharges and on January 31, 1997,
the FWS notified WT of it intent to file suit, subject to final approval by
the Department of Justice, against WT to recover natural resource damages. 
WT and other PRPs are engaged in negotiations with the parties asserting
trusteeship of the natural resources concerning the proposed damage
assessment and restoration plans.
     WT and other PRPs are also engaged in discussions with the State of
Wisconsin with respect to resolving possible state claims concerning
remediation, restoration, and natural resource damages related to the
alleged discharge of PCBs into the Fox River and Green Bay System.  The PRPs
have signed an interim partial settlement with Wisconsin.  WT's obligation
under the interim settlement would not be material to the Company's
financial position or results of operations.  Based on presently available
information, the Company believes that there are additional parties, some of
which may have substantial resources, that may also be identified as PRPs
with respect to this matter and could be expected to participate in any
final settlement.
     The ultimate cost to WT, if any, associated with this matter cannot be
predicted with certainty at this time, due to: the inability to determine
the outcome of pending settlement discussions or, if a settlement cannot be
reached, WT's share of any multi-party clean-up; the uncertain extent of any
contamination; the varying costs of alternative clean-up methods; the
evolving nature of clean-up technologies and governmental regulations; the
extent to which contribution will be available from other parties; and the
scope of potential recoveries from insurance carriers and prior owners of
WT.  The Company believes that it is entitled to indemnification from a
prior owner of WT, pursuant to a stock purchase agreement between the
parties, with respect to all liabilities related to this matter.  The prior
owner has reimbursed WT for out-of-pocket costs and attorneys' fees related
to investigation of the matter.  The Company believes that the prior owner
intends to, and has the financial ability to, honor its indemnification
obligation under the stock purchase agreement.
     In March 1995, the United States Environmental Protection Agency
("EPA") issued "Final Guidance" for basin-wide water quality standards
pursuant to the Great Lakes Water Quality Agreement between the U.S. and
Canada regarding the development of water quality standards for the Great
Lakes and their tributaries.  The State of Wisconsin is in the process of
modifying state regulations to comply with the Final Guidance.  Assuming
state approval, compliance with the modified state regulations will be
required as early as the third quarter of 1997. Based on the regulations as
presently proposed by Wisconsin, WT does not anticipate significant capital
expenditures or additional operating costs in complying with the modified
regulations. 
     The EPA has published draft rules under the Clean Water Act and the
Clean Air Act which would impose new air and water quality standards for
pulp and paper mills (the "Cluster Rules").  The definitive Cluster Rules,
when promulgated, are expected to require compliance within three years
after the date of adoption.  The rules as currently proposed would primarily
affect the Company's bleached kraft products mill in West Point, VA.  Based
on the Company's preliminary estimates, if the Cluster Rules were adopted in
substantially the form currently proposed, compliance would require capital
expenditures totaling not more than approximately $55.0 million at the
Company's two largest paper mills located in West Point, VA, and Menasha,
WI.  The eventual capital expense impact on the Company of compliance with
the definitive Cluster Rules is not presently determinable and will depend
on a number of factors, including: the scope of the standards imposed and
time permitted for compliance; the Company's strategic decisions related to
compliance, including potential changes in product mix and markets; and
developments in compliance technology.  The additional effect, if any, on
the Company's business of compliance with the definitive Cluster Rules will
depend on a number of other factors, including: the domestic and
international competitive effects of compliance; and the effect of evolving
consumer demands related to environmental issues on the Company and its
competitors. 
     Chesapeake operates under, and believes that it is in substantial
compliance with, the terms of various air emission and water and effluent
discharge permits and other environmental regulations.               
      The "Financial Review" may include "forward-looking statements" that
involve risks and uncertainties.  Political, climatic, currency, regulatory,
technological, competitive, and other factors could cause actual results to
differ materially from those anticipated in the forward-looking statements. 
Additional information regarding these risk factors and uncertainties is
detailed from time to time in Chesapeake Corporation's SEC filings.

                    OPERATING MANAGERS AND LOCATIONS
                      (as of December 31, 1996)





KRAFT PRODUCTS                    
CHESAPEAKE PAPER PRODUCTS COMPANY
  Thomas Blackburn
    West Point, VA

CHESAPEAKE FOREST PRODUCTS COMPANY
  Thomas Blackburn
   Jack C. King
    West Point, VA
     Pocomoke City, MD
     Elizabeth City, NC
     Keysville, VA
  Chesapeake Building Products Company
       Princess Anne, MD
       Keysville, VA
       Milford, VA
       West Point, VA

  
TISSUE                    
WISCONSIN TISSUE MILLS INC.
  William A. Raaths
       Menasha, WI
        Bellemont, AZ
        Flagstaff, AZ
        Chicago, IL
        Greenwich, NY
        Neenah, WI

WISCONSIN TISSUE de MEXICO, S.A. de C.V.
  Alberto Navarro Bori
       Mexico, D.E.*
        Guadalajara*
        Monterrey
        Puebla*

<PAGE>
OPERATING MANAGERS AND LOCATIONS, (Continued)


PACKAGING                                    
SPECIALITY PACKAGING & MERCHANDISING SERVICES
    Andrew J. Kohut
    Chesapeake Display and Packaging Company
       George F. Barnes
         Winston-Salem, NC
          Marion, IA 
          Erlanger, KY
          Rural Hall, NC*
          Pennsauken, NJ*
          Sandusky, OH*
          Memphis, TN*
          Toronto, Ontario, Canada
    Color-Box, Inc.
       Jack L. Creech
         Richmond, IN
          Visalia, CA
          Pelahatchie, MS
          Buffalo, NY
   Chesapeake Europe S.A. (France)
      Vincent W. Hockett
         Noisy-le-Grand
          Chesapeake Coffrets
           Ezy sur Eure
           Noisy-le-Grand
          Linea
           Angouleme*
          Plastiphane
           Migennes
          Raab-Pige
           Avallon
           Noisy-le-Grand
           St. Pierre des Corps
           Ussel
          Sailliard PLV
           Noisy-le-Grand
           Rosny sous Bois
<PAGE>
OPERATING MANAGERS AND LOCATIONS, (Continued)


   Chesapeake Packaging Co.
       Robert F. Schick
        Edward R. Badyna
            Binghamton, NY
            Scranton, PA
       Anthony S. Brozna
            Richmond, VA
       Edward P. Godsey
            Baltimore, MD
       John A. Goodloe
            Roanoke, VA
       Wesley N. Herman
            Le Roy, NY
            North Tonawanda, NY
            Scotia, NY
       Terry R. Jenkins
            St. Anthony, IN
            Louisville, KY
       Ronald J. Marchewka
            Madison, OH



LAND DEVELOPMENT
  Joel K. Mostrom
     Delmarva Properties, Inc.
         West Point, VA*
    Stonehouse Inc.
         Williamsburg, VA*


Corporate Headquarters
1021 East Cary Street, Box 2350
Richmond, VA  23218-2350*
804/697-1000                              


* Leased real property


<TABLE>
                                                    EXHIBIT  21.1 

                   SUBSIDIARY CORPORATIONS OF 
                      CHESAPEAKE CORPORATION

                        December 31, 1996
<CAPTION>
                                               State of
                Name                         Incorporation
<S>                                          <C>
Cary St. Company                               Delaware

Chesapeake Consumer Products Company           Virginia
 
The Chesapeake Corporation of Virginia         Virginia

Chesapeake Display and Packaging Company       Iowa

Chesapeake Forest Products Company             Virginia

Chesapeake Packaging Co.                       Virginia

Chesapeake Paper Products Company              Virginia
 
Chesapeake Recycling Co.                       Virginia

Chesapeake Resources Company                   Virginia

Chesapeake Trading Corp.                       Virginia

Chesapeake Trading Company, Inc.               U. S. Virgin Islands  

Chesapeake Building Products Company           Virginia 

Color-Box, Inc.                                Indiana

Delmarva Properties, Inc.                      Virginia

Stonehouse Inc.                                Virginia 

Wisconsin Tissue Mills Inc.                    Delaware
  
Chesapeake International Holding Company       Virginia     

Wisconsin Tissue de Mexico S.A. de C.V.        Mexico
</TABLE>
Chesapeake Display and Packaging
 (Canada) Limited                              Ontario, Canada

Chesapeake Europe S.A.                         France 

Sailliard PLV                                  France

Raab-Pige                                      France

Chesapeake Coffrets                            France

Linea                                          France

Plastiphane                                    France



















                                             EXHIBIT 23.1



Consent of Coopers & Lybrand L.L.P.



We consent to the incorporation by reference of our report dated January 23, 
1997 on our audits of the consolidated financial statements of Chesapeake
Corporation and subsidiaries as of December 31, 1996 and 1995, and for each
of the three years in the period ended December 31, 1996, which report is
incorporated by reference in this Annual Report on Form 10-K, in the
following registration statements on Form S-8:

The Chesapeake Corporation of Virginia 1981 Stock Incentive Plan
(File No. 2-71595)
     Salaried Employees' Stock Purchase Plan (File No. 33-14926)
     Hourly Employees' Stock Purchase Plan (File No. 2-79636)
     Chesapeake Corporation 1987 Stock Option Plan (File No. 33-14925)
     Chesapeake Corporation 401(k) Savings Plan for Salaried Employees
       (File No. 33-14927)
     Chesapeake Corporation 401(k) Savings Plan for Hourly Employees
       (File No. 33-26150)
     Chesapeake Corporation Non-Employee Director Stock Option Plan
     (File No. 33-53478)
     Wisconsin Tissue Mills Inc. 401(k) Savings Plan for Hourly Employees
      (File No. 33-55558)
     Chesapeake Corporation 1993 Incentive Plan (File No. 33-67384)
     Chesapeake Packaging Co. 401(k) Savings Plan for Hourly Employees
      (File No. 33-56473)
     Chesapeake Corporation Stock Purchase Plan for Hourly Employees of
      Wisconsin Tissue Mills Inc. (File No. 33-314189)

We consent to the incorporation by reference in the registration statement on
Form S-8 for the Hourly Employees' Stock Purchase Plan (File No. 2-79636) of
our report dated March 7, 1997 on our audits of the balance sheets of the
Hourly Employees' Stock Purchase Plan of Chesapeake Corporation and
participating subsidiaries as of November 30, 1996 and 1995, and the related
statements of changes in plan equity for each of the three fiscal years in
the period ended November 30, 1996, which report is included in the Annual
Report on Form 11-K (Exhibit 99.1).


                                        /s/ Coopers & Lybrand L.L.P.

Richmond, Virginia
March 25, 1997


                                             EXHIBIT 99.1










            U. S. SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D. C.  20549

                           FORM 11-K

[X]  ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND EXCHANGE
     ACT OF 1934 [FEE REQUIRED]
     for the fiscal year ended November 30, 1996
         OR
[ ]  TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES AND     
     EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
     for the transition period from _______ to _______
     Commission file number 2-79636

             HOURLY EMPLOYEES' STOCK PURCHASE PLAN

                     CHESAPEAKE CORPORATION
                     1021 East Cary Street
                         P. O. Box 2350
                 Richmond, Virginia  23218-2350
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                

             HOURLY EMPLOYEES' STOCK PURCHASE PLAN
                                

Administration of the Plan:

  The Plan is administered by the Hourly Employees' Stock Purchase Plan
  Committee (the "Committee") under the direction of the Board of
  Directors of Chesapeake Corporation (the "Corporation").  At November
  30, 1996, the Committee members were:

                       Name                       Address
                Thomas A. Smith* (1)       Richmond, Virginia  23218

                J. P. Causey Jr. (2)       Richmond, Virginia  23218

                Andrew J. Kohut  (3)       Richmond, Virginia  23218

   (1)  Mr. Smith is Vice President - Human Resources & Assistant Secretary
        of the Corporation.
  
   (2)  Mr. Causey is Senior Vice President, Secretary & General Counsel
        of the Corporation.
  
   (3)  Mr. Kohut is Group Vice President - Specialty Packaging and
        Merchandising Services & Chief Financial Officer of the Corporation.
  
     *Committee Chairman
  
     Committee members are appointed by and serve at the pleasure of the
     Board of Directors of the Corporation.  Committee members are
     employees of the Corporation and receive no additional compensation
     for serving on the Committee.  The Plan provides that the Corporation
     will indemnify members of the Committee to the same extent and on the
     same terms as it indemnifies its officers and directors by reason of
     their being officers and directors.

Financial Statements and Exhibits:

   (a)  Financial statements:

        Hourly Employees' Stock Purchase Plan:
        Balance Sheet
        Statement of Changes in Plan Equity
    
        (b)    Exhibits:
   See Exhibit 23.1 to the Chesapeake Corporation Annual Report
  on Form 10-K for the year ended December 31, 1996 for consent of
    independent accountants.<PAGE>
                               SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Committee have duly caused this annual report to be signed
by the undersigned hereunto duly authorized.

                                   HOURLY EMPLOYEES' STOCK PURCHASE PLAN

                              By:     /s/ Thomas A. Smith 
                                     Thomas A. Smith
                                   Chairman of the Committee



























<PAGE>
Report of Independent Accountants

To the Hourly Employees' Stock
Purchase Plan Committee:
We have audited the balance sheet of the Hourly Employees' Stock Purchase
Plan (the "Plan") of Chesapeake Corporation and participating subsidiaries as
of November 30, 1996 and 1995, and the related statement of changes in plan
equity for each of the three years in the period ended November 30, 1996. 
These financial statements are the responsibility of the Plan's management. 
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. 
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Plan as of November 30,
1996 and 1995, and the changes in plan equity for each of the three years in
the period ended November 30, 1996, in conformity with generally accepted
accounting principles.

                                       /s/ COOPERS & LYBRAND L.L.P.

Richmond, Virginia
March 7, 1997<PAGE>
<TABLE>
HOURLY EMPLOYEES' STOCK PURCHASE PLAN OF CHESAPEAKE CORPORATION AND
PARTICIPATING SUBSIDIARIES
BALANCE SHEET
November 30, 1996 and 1995
<CAPTION>

                                                     1996      1995
<S>                                                <C>       <C> 
Asset:
   Funds held by Chesapeake Corporation
    and participating subsidiaries
         (Note 4)                                       $12,222   $12,827
                                                                         
Plan equity                                             $12,222   $12,827

STATEMENT OF CHANGES IN PLAN EQUITY
for the years ended November 30, 1996, 1995 and 1994
<S>                                     <C>         <C>         <C>
                                           1996        1995        1994 
Contributions:
 Employees                             $1.279,809  $1,217,129  $1,145,546
 Employer:  $598,671 in 1996,
  $586,903 in 1995, and $546,775
  in 1994; less withheld taxes of 
  $245,301, $240,413 and $213,046,
    respectively                          353,370     346,490     333,729
                                        1,633,179   1,563,619   1,479,275
                                                                   
Deductions:                                                             Purchase and distribution to
  participants at year end of
  53,574  shares in 1996
  ($29.1688 per share),52,112 shares
  in 1995 ($29.4375 per share),
  and 46,937 shares in 1994 
 ($30.6438 per share) of common stock 
 of Chesapeake Corporation (Note 1)     1,562,687   1,534,045   1,438,325
 Refunds to employees withdrawing
  from the Plan                            53,665      25,856      27,879
                                                                              1,616,352      1,559,901      1,466,204
                                                                   
Net transfers to Salaried Employees'
 Stock Purchase Plan                        2,640       3,791        9,463

Net transfers to the Wisconsin Tissue
 Mill Hourly Employees' Stock Purchase
 Plan                                      14,792           -           -

                                        1,633,784   1,563,692   1,475,667

    (Decrease) increase in plan 
       equity                                (605)        (73)      3,608

Plan equity, beginning of year             12,827      12,900       9,292

    Plan equity, end of year           $   12,222   $  12,827   $  12,900

</TABLE>
The accompanying notes are an integral part of these financial statements.



NOTES TO FINANCIAL STATEMENTS

1.   Description of the Plan:
     The stockholders of Chesapeake Corporation (the "Corporation") have
     approved the Hourly Employees' Stock Purchase Plan (the "Plan") and
     reserved a total of 900,000 shares of the Corporation's common stock
     for sale to eligible hourly employees, as defined, of the Corporation
     and participating subsidiaries (the "Employer").
     The Plan is administered by a committee (the "Committee") appointed by
     the Corporation's Board of Directors.  Participants in the Plan, which
     became effective in December 1982, are permitted to invest between one
     and five percent of their basic compensation, as defined.  The
     Employer contributes to the Plan, as of the end of the Plan Year (see
     Note 3), a percentage (determined by the Committee of the Plan,
     generally 30% to 50%) of the participant's contribution reduced by
     amounts required to be withheld under income tax, Federal Insurance
     Contributions Act tax and comparable laws.  The combined amount
     becomes available to purchase from the Corporation, shares of its
     common stock at a price equal to the average of the closing prices of
     such common stock on the New York Stock Exchange (composite tape) for
     the 20 consecutive trading days immediately preceding the last day of
     the Plan Year.  The funds held by the Employer at the end of the year
     represent the remaining amounts in participants' accounts after the
     purchase of whole shares as the Plan does not provide for the purchase
     of fractional shares.  A participant may terminate his participation
     in the Plan at any time.  Upon termination, the Employer will return
     his contributions and the participant will forfeit all rights to any
     contribution which would have been made at the end of the plan year.
     As of November 30, 1996, 661,218 shares (53,574 shares in the current
     year and 607,644 in prior years) of the Corporation's common stock had
     been issued under the Plan and 238,782 shares were available for
     future issuance.

 2.  Reclassifications:
     Certain 1995 and 1994 amounts have been reclassified to conform with
     the current year's presentation.

3.   Plan Year:
     The fiscal year of the Plan ends each November 30.

4.   Funds Held by Chesapeake Corporation and Participating Subsidiaries:
     Funds received or held by the Employer with respect to the Plan may be
     used for any corporate purpose; therefore, the Plan does not prevent
     the Employer from creating a lien on these funds.
 












NOTES TO FINANCIAL STATEMENTS, Continued

5.   Taxes and Expenses:

     The Plan is not qualified under Section 401(a) of the Internal Revenue
     Code and is not subject to the provisions of the Employee Retirement
     Income Security Act of 1974.  The Employer's contribution, when made
     to the Plan, is taxable to a participant as ordinary income. 
     Purchases of stock by the Plan result in no gain or loss to the
     participant; therefore, no tax consequences are incurred by a
     participant upon receipt of stock purchased under the Plan.  Sale by a
     participant of shares acquired under the Plan will result in a gain or
     loss in an amount equal to the difference between the sale price and
     the price paid for the stock acquired pursuant to the Plan.  The Plan
     is not subject to income taxes.

     Expenses of administering the Plan are borne by the Employer.
<TABLE>
6.   Contributions to the Plan:

     Contributions (net of withheld taxes) were as follows:
<CAPTION>
                                1996              1995           1994
                           Employer  Employees                Employer Employees  Employer Employees
<S>                       <C>       <C>      <C>     <C>      <C>     <C>
Chesapeake Corporation
 Subsidiaries:
  Chesapeake Display and 
   Packaging Company       $ 36,962   $129,764                 $35,590   $125,626  $32,155 $ 110,272
  Chesapeake Packaging Co.   32,143    123,582                  33,706    115,494   37,046    107,304
  Chesapeake Forest Products
   Company                  237,010    819,448                  12,854     59,246   14,342     65,107
  Chesapeake Paper Products
   Company                   13,513     60,982                 238,585    821,650  222,611    784,144
  Color-Box, Inc.            33,742    131,241                  25,755     95,113   27,575     78,719
  Wisconsin Tissue 
     Mills Inc.              14,792*                                                                   

        Totals             $353,370 $1,279,809                $346,490 $1,217,129 $333,729  $1,145,546

</TABLE>
*During the Plan year contributions totaling $14,792 attributable to the
Wisconsin Tissue Mills hourly employees were made to the Plan.  Such
contributins were made prior to the establishment of the Wisconsin Tissue
Mills Hourly Employees' Stock Purchase Plan ("WTM Plan").  Such assets were
transferred to the WTM Plan on November 1, 1996.
                                             
                                             






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