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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 11-K
ANNUAL REPORT
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended March 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the transition period from _______ to _______
Commission file number 1-3203
STOCK PURCHASE PLAN FOR HOURLY EMPLOYEES
OF WISCONSIN TISSUE MILLS INC.
CHESAPEAKE CORPORATION
1021 East Cary Street
P. O. Box 2350
Richmond, Virginia 23218-2350
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WISCONSIN TISSUE MILLS INC. HOURLY EMPLOYEES' STOCK PURCHASE PLAN
Administration of the Plan:
The Plan is administered by the Stock Purchase Plan for Hourly Employees of
Wisconsin Tissue Mills Inc. Committee (the "Committee") under the direction of
the Board of Directors of Chesapeake Corporation (the "Corporation"). The
present members of the Committee are as follows:
Name Address
Thomas A. Smith (1) Richmond, Virginia 23218
J. P. Causey Jr. (2) Richmond, Virginia 23218
William T. Tolley (3) Richmond, Virginia 23218
(1) Mr. Smith is Vice President - Human Resources & Assistant Secretary
of the Corporation and serves as the Committee Chairman.
(2) Mr. Causey is Senior Vice President, Secretary & General Counsel of
the Corporation.
(3) Mr. Tolley is Group Vice President - Finance & Chief Financial
Officer
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:
Wisconsin Tissue Mills Inc. Hourly Employees' Stock Purchase Plan:
Statements of Financial Condition
Statements of Income and Changes in Plan Equity
(b) Exhibit:
23.1 Consent of Coopers & Lybrand L.L.P.
1
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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.
STOCK PURCHASE PLAN FOR HOURLY
EMPLOYEES OF WISCONSIN TISSUE MILLS INC.
By: \s\ Thomas A. Smith
------------------------------------------
Thomas A. Smith, Chairman of the Committee
June 5, 1998
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Report of Independent Accountants
To the Stock Purchase Plan for Hourly Employees
of Wisconsin Tissue Mills Inc. Committee:
We have audited the accompanying statements of financial condition of the Stock
Purchase Plan for Hourly Employees of Wisconsin Tissue Mills Inc. (the "Plan")
of Chesapeake Corporation and participating subsidiaries as of March 31, 1998
and 1997, and the related statements of income and changes in plan equity for
the year ended March 31, 1998 and the five months ended March 31, 1997. 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 condition of the Plan as of March 31, 1998
and 1997, and the statements of income and changes in plan equity for the year
ended March 31, 1998 and the five months ended March 31, 1997, in conformity
with generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Richmond, Virginia
June 5, 1998
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<TABLE>
<CAPTION>
STOCK PURCHASE PLAN FOR HOURLY EMPLOYEES OF WISCONSIN TISSUE MILLS INC.
STATEMENTS OF FINANCIAL CONDITION
March 31, 1998 and 1997
1998 1997
<S> <C> <C>
Asset:
Funds held by Wisconsin Tissue Mills Inc. and its
designated subsidiaries (Note 2) $ 1,304 $ 1,029
======= =======
Plan equity $ 1,304 $1,029
======= =======
<CAPTION>
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
for the year ended March 31, 1998 and the five
months ended March 31, 1997
1998 1997
<S> <C> <C>
Contributions (Note 1):
Employees $64,677 $37,100
Employer: $11,883 in 1998 and $7,868 in 1997;
less withheld taxes of $5,056 and $3,277,
respectively 6,827 4,591
------- -------
71,504 41,691
Deductions:
Purchase and distribution to participants at
year end of 1,885 shares in 1998 ($34.93 per
share) and 1,345 shares in 1997 ($28.76 per
share) of common stock of Chesapeake
Corporation (Note 1) 65,845 38,686
Refunds to employees withdrawing from the
Plan attributable to:
Employees' contributions for the year 5,251 1,976
Employees' account balances at beginning of
year 133
------- -------
71,229 40,662
------- -------
Increase in plan equity 275 1,029
Plan equity, beginning of period 1,029
------- -------
Plan equity, end of period $ 1,304 $ 1,029
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
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STOCK PURCHASE PLAN FOR HOURLY EMPLOYEES OF WISCONSIN TISSUE MILLS INC.
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan:
The Board of Directors of Chesapeake Corporation (the "Corporation") has
approved the Stock Purchase Plan for Hourly Employees of Wisconsin Tissue
Mills Inc. (the "Plan") and reserved a total of 300,000 shares of the
Corporation's common stock for sale to certain eligible hourly employees of
participating operations of Wisconsin Tissue Mills Inc. and its designated
subsidiaries (the "Employer").
Participants in the Plan are permitted to invest up to 5% of their basic
compensation, as defined by the Plan. The Employer contributes to the Plan,
as of the end of the Plan year, an amount equal to the applicable percentage,
determined by the Executive Compensation Committee of the Board of Directors
of the Corporation, of the participant's contribution reduced by amounts
required to be withheld under income tax, F.I.C.A. and comparable laws. For
fiscal years 1998 and 1997, the employer contribution was 20% and 22.4%,
respectively. 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.
As of March 31, 1998, 3,230 shares (1,885 shares in the current year and 1,345
in the prior period) of the Corporation's common stock had been issued under
the Plan and 296,770 shares were available for future issuance.
An employee's participation in the Plan terminates if the participant ceases
to be employed by the Employer for any reason, including death or retirement.
A participant who retires may continue to participate in the Plan until the
end of the Plan year next following the date of the participant's retirement
without making future contributions. A participant may also voluntarily
terminate his participation in the Plan at any time. The Plan provides that
any participant whose participation in the Plan terminates and who receives a
refund of contributions will also receive an interest payment for the
contributions credited as of the end of the calendar quarter preceding the
date participation in the Plan is terminated. The Stock Purchase Plan for
Hourly Employees of Wisconsin Tissue Mills Inc. Committee (the "Committee")
will prescribe the applicable interest rate, or the manner in which such
interest rate will be determined, for each plan year. The interest rate for
the period beginning November 1, 1996 (date of commencement) was 5% per annum
compounded quarterly. This interest rate will stay in effect from year to
year until it is changed by the Committee. The employer paid $65 of interest
for the year ended March 31, 1998 and $12 of interest for the five months
ended March 31, 1997. An individual who terminates participation in the plan
forfeits all rights to any contribution from the Employer with respect to the
plan year that includes the date of such termination, except for any interest
credit. Participants have a 100% vested interest in their contributions.
1. Description of the Plan, continued:
The fiscal year of the Plan ends each March 31. The Plan was instituted
November 1, 1996; therefore, the period ended March 31, 1997 refelects only
five months of operations.
2. Funds Held by Wisconsin Tissue Mills Inc. and Its Designated
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.
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3. 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.
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EXHIBIT 23.1
Consent of Coopers & Lybrand L.L.P.
_______
We consent to the incorporation by reference in the registration statement on
Form S-8 of Chesapeake Corporation for the Stock Purchase Plan for Hourly
Employees of Wisconsin Tissue Mills Inc. (File No. 33-14189) of our report dated
June 5, 1998 on our audits of the financial statements of the Stock Purchase
Plan for Hourly Employees of Wisconsin Tissue Mills Inc. as of March 31, 1998
and 1997, and for the year ended March 31, 1998 and the five months ended
March 31, 1997, which report is included in this Annual Report on Form 11-K.
COOPERS & LYBRAND L.L.P.
Richmond, Virginia
June 26, 1998
