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 [FEE REQUIRED]
for the fiscal year ended March 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for the transition period from _______ to _______
Commission file number 1-3203
SALARIED EMPLOYEES' STOCK PURCHASE PLAN
CHESAPEAKE CORPORATION
1021 East Cary Street
P. O. Box 2350
Richmond, Virginia 23218-2350
-1-
SALARIED EMPLOYEES' STOCK PURCHASE PLAN
Administration of the Plan:
The Plan is administered by the Salaried Employees' Stock
Purchase Plan 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 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 Senior Vice President - Finance &
Chief Financial Officer of the Corporation.
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:
Salaried Employees' Stock Purchase Plan:
Statements of Financial Condition
Statements of Income and Changes in Plan Equity
(b) Exhibit:
23.1 Consent of PricewaterhouseCoopers LLP
-2-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the members of the Salaried Employees' Stock Purchase Plan
Committee (the "Committee") have duly caused this annual report
to be signed by the undersigned hereunto duly authorized.
SALARIED EMPLOYEES' STOCK PURCHASE PLAN
/s/ Thomas A. Smith
-------------------
Thomas A. Smith,
Chairman of the Committee
June 4, 1999
-3-
Report of Independent Accountants
To the Salaried Employees' Stock
Purchase Plan Committee:
In our opinion, the accompanying statements of financial
condition and the related statements of income and changes in
plan equity present fairly, in all material respects, the
financial position of the Salaried Employees' Stock Purchase Plan
(the "Plan") at March 31, 1999 and 1998, and the changes in plan
equity for each of the three years in the period ended March 31,
1999, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of
the Plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with
generally accepted auditing standards which require that we plan
and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed
above.
/s/PRICEWATERHOUSECOOPERS LLP
-----------------------------
PRICEWATERHOUSECOOPERS LLP
Richmond, Virginia
June 4, 1999
-4-
SALARIED EMPLOYEES' STOCK PURCHASE PLAN
STATEMENTS OF FINANCIAL CONDITION
March 31, 1999 and 1998
1999 1998
------- -------
Asset:
Funds held by Chesapeake Corporation and
Participating subsidiaries (Note 2) $10,590 $13,459
======= =======
Plan Equity $10,590 $13,459
======= =======
The accompanying notes are an integral part of these financial
statements.
-5-
SALARIED EMPLOYEES' STOCK PURCHASE PLAN
STATEMENTS OF INCOME AND CHANGES IN PLAN EQUITY
For the years ended March 31, 1999, 1998 and 1997
1999 1998 1997
---- ---- ----
Contributions (Notes 1 and 4):
Employees $2,062,552 $2,121,744 $2,657,641
Employer: $663,891 in 1999, $373,316
in 1998 and $583,918 in 1997; less
withheld taxes of $263,748, $146,564
and $229,388, respectively 400,143 226,752 354,530
---------- ---------- ----------
2,462,695 2,348,496 3,012,171
Deductions:
Purchase and distribution to
participants at year end of 78,816
shares in 1999 ($28.84 per share),
59,857 shares in 1998 ($34.93 per
share), and 102,842 shares in 1997
($28.76 per share) of common stock of
Chesapeake Corporation (Note 1) 2,272,856 2,090,882 2,957,993
Refunds to employees withdrawing from
the Plan attributable to:
Employees' contributions for the year 190,832 117,132 52,269
Employees' account balances at
beginning of year 1,888 1,881 1,009
---------- ---------- ----------
2,465,576 2,209,895 3,011,271
---------- ---------- ----------
(Decrease) increase in plan equity
before transfers (2,881) 138,601 900
Net transfers from Hourly Employees'
Stock Purchase Plan 12 266 1,454
Net transfers due to sale to St.
Laurent Paperboard Inc. (Note 5) - (141,594) -
---------- ---------- ----------
(Decrease) increase in plan equity (2,869) (2,727) 2,354
Plan equity, beginning of year 13,459 16,186 13,832
---------- ---------- ----------
Plan equity, end of year $ 10,590 $ 13,459 $ 16,186
========== ========== ==========
The accompanying notes are an integral part of these financial
statements.
-6-
SALARIED EMPLOYEES' STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
1. Description of the Plan:
The stockholders of Chesapeake Corporation (the "Corporation")
have approved the Salaried Employees' Stock Purchase Plan (the
"Plan") and reserved a total of 2,587,559 shares of the
Corporation's common stock for sale to certain eligible full-
time salaried employees, as defined, of the Corporation and
participating subsidiaries (the "Employer").
The Plan is administered by the Salaried Employees' Stock
Purchase Plan Committee (the "Committee"), whose members are
appointed by the Corporation's Board of Directors and are
employees of the Corporation. Participants in the Plan are
permitted to invest between one and five percent of their basic
compensation, as defined by the Plan. The Employer contributes
to the Plan, as of the end of the Plan Year, a percentage
(determined by the Committee of the Plan, up to 60%) of the
participant's contribution reduced by amounts required to be
withheld under income tax, Federal Insurance Contributions Act
tax and comparable laws. For fiscal years 1999, 1998 and 1997,
the employer contribution was 35.4%, 20% and 20%, respectively,
of the participants' contributions net of refunds. 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.
As of March 31, 1999, 2,243,064 shares (78,816 shares in the
current year and 2,164,248 in prior years) of the Corporation's
common stock had been issued under the Plan and 344,495 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. A participant who retires may
continue to participate in the Plan until the end of the next
Plan Year 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
-7-
1. Description of the Plan, continued:
preceding the date participation in the Plan is terminated.
The Committee will prescribe the applicable interest rate, or
the manner in which such interest rate will be determined, for
each Plan Year. The interest rate for Plan Years commencing
April 1, 1995 and later has been 5% per annum compounded
quarterly. This interest rate will stay in effect from year to
year until it is changed by the Committee. For the Plan Years
ended March 31, 1999, 1998, and 1997, the Employer paid $2,107,
$1,159 and $460 of interest, respectively, to employees
withdrawing from the Plan. 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.
The fiscal year of the Plan ends each March 31.
2. 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.
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.
-8-
4. Contributions to the Plan:
Contributions (net of withheld taxes) were as follows:
For the Year Ended March 31,
1999 1998 1997
------------------------------------ ------------------
Employer Employees Employer Employees Employer Employees
Chesapeake
Corporation $ 41,540 $ 193,187 $ 25,639 $ 221,168 $ 27,636 $ 182,021
Subsidiaries:
Delmarva
Properties Inc. 6,608 30,279 2,909 23,627 3,210 23,225
Chesapeake
Packaging Co. 203,109 1,107,549 119,396 1,097,676 164,274 1,242,962
Wisconsin Tissue
Mills Inc. 137,007 670,805 71,237 615,185 72,219 548,515
Chesapeake Paper
Products
Company - - - 91,050 72,348 547,643
Chesapeake
Forest Products
Company 11,879 60,732 7,571 73,038 14,843 113,275
-------- ---------- -------- ---------- -------- ----------
Totals $400,143 $2,062,552 $226,752 $2,121,744 $354,530 $2,657,641
======== ========== ======== ========== ======== ==========
5. Sale of Kraft and Packaging Facilities:
On May 23, 1997, the Corporation sold specific kraft and
packaging facilities to St. Laurent Paperboard Inc. ("St.
Laurent"). The Corporation transferred accumulated 1996
carryover employee and employer contributions and 1997 employee
contributions made to the Plan prior to the date of the sale to
St. Laurent.
6. Subsequent Event:
In April 1999, the Employer announced that it had signed
letters of intent to sell certain timberlands and its building
products businesses. These sales, which are anticipated to
close in the third quarter of 1999, will impact certain
participants in the Plan.
-9-
EXHIBIT 23.1
Consent of PricewaterhouseCoopers LLP
_______
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (File No. 33-14926) of
Chesapeake Corporation of our report dated June 4, 1999 appearing
on page 3 of this Form 11-K.
/s/PRICEWATERHOUSECOOPERS LLP
------------------------------
PRICEWATERHOUSECOOPERS LLP
Richmond, Virginia
June 4, 1999
-1-
