SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
/x/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended December 30, 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 33-26150
CHESAPEAKE CORPORATION 401(k)
SAVINGS PLAN FOR HOURLY EMPLOYEES
CHESAPEAKE CORPORATION
1021 East Cary Street
P.O. Box 2350
Richmond, Virginia 23218-2350
INDEX OF FINANCIAL STATEMENTS AND SCHEDULES AND EXHIBIT
Page
Report of independent accountants 3
Financial statements:
Statements of assets available for benefits with fund information
at December 30, 1998 and December 31, 1997 4-7
Statements of changes in net assets available for benefits with
fund information for the years ended December 30, 1998 and
December 31, 1997 8-11
Notes to financial statements 12-18
Supplemental schedules:
Line 27a - Schedule of Assets Held for Investment Purposes at
December 30, 1998 19
Line 27a - Schedule of Assets Held for Investment Purposes Which
Were Both Acquired and Disposed of Within the Plan Year for
the Year Ended December 30, 1998
Line 27b - Schedule of Loans or Fixed Income Obligations for
The Year Ended December 30, 1998 *
Line 27c - Schedule of Leases in Default or Classified as
Uncollectible for the Year Ended December 30, 1998 *
Line 27d - Schedule of Reportable Transactions for the Year
Ended December 30, 1998 20
Line 27e - Schedule of Non-exempt Transactions for the Year
Ended December 30, 1998 *
* There were no such transactions or obligations or leases
in default.
Exhibit:
23 - Consent of PricewaterhouseCoopers LLP
-1-
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the members of the Chesapeake Corporation 401(k) Savings Plan for Hourly
Employees Committee (the "Committee") have duly caused this annual report
to be signed by the undersigned thereunto duly authorized.
CHESAPEAKE CORPORATION 401(k)
SAVINGS PLAN FOR HOURLY EMPLOYEES
By: /s/ Thomas A. Smith
-------------------
Thomas A. Smith
Vice President - Human
Resources and Chairman of
the Committee
June 15, 1999
-2-
Report of Independent Accountants
To the Chesapeake Corporation 401(k) Savings
Plan for Hourly Employees Committee:
In our opinion, the accompanying statements of net assets available for
benefits with fund information and the related statements of changes in net
assets available for benefits with fund information present fairly, in all
material respects, the net assets available for benefits of the Chesapeake
Corporation 401(k) Savings Plan for Hourly Employees (the "Plan") at
December 30, 1998, and December 31, 1997, and the changes in net assets
available for benefits for the years ended December 30, 1998, and December
31, 1997 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.
Our audits were conducted for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes, assets held for investment purposes
which were both acquired and disposed of within the Plan year, reportable
transactions, and non-exempt transactions are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. The fund information in
the statements of net assets available for benefits with fund information
and the statement of changes in net assets available for benefits with fund
information is presented for purposes of additional analysis rather than to
present the net assets available for plan benefits and changes in net
assets available for benefits of each fund. These supplemental schedules
and fund information are the responsibility of the Plan's management. The
supplemental schedules and fund information have been subjected to the
auditing procedures applied in the audits of the basic financial statements
and, in our opinion, are fairly stated in all material aspects in relation
to the basic financial statements taken as a whole.
/S/PRICEWATERHOUSECOOPERS LLC
-----------------------------
PRICEWATERHOUSECOOPERS LLC
Richmond, Virginia
June 15, 1999
-3-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 30, 1998
<TABLE>
<CAPTION>
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ---------- ---------
<S> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $1,266,144) $344,192 $374,519
Fixed income
investments (cost
$343,238)
Chesapeake Corporation
common stock (cost
$180,107) $207,090
Money market
investments (cost
$218,859) 12,183 $206,676
Loans to participants
(Note 5)
Receivables:
Accrued income 56 1,078
Employee contributions 5,968 8,149 6,571 2,832
Employer contributions 3,031 4,268 3,800 2,591
Other receivables 1,327 1,896 1,020
-------- -------- -------- --------
Total assets 228,328 357,936 386,786 214,197
Liability:
Other liabilities 1,327 1,896 1,020
-------- -------- -------- --------
Net Assets available
for benefits $228,328 $356,609 $384,890 $213,177
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, CONTINUED
December 30, 1998
<TABLE>
<CAPTION>
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- -------- ----------- -----
<S> <C> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $1,266,144) $752,151 $1,470,862
Fixed income
investments (cost
$343,238) $130,547 $191,068 321,615
Chesapeake Corporation
common stock (cost
$180,107) 207,090
Money market
investments (cost
$218,859) 218,859
Loans to participants
(Note 5) $125,687 125,687
Receivables:
Accrued income 1,134
Employee contributions 14,861 3,624 4,426 46,431
Employer contributions 8,312 2,131 2,464 26,597
Other receivables 66,461 1,102 953 8,059 80,818
-------- -------- -------- -------- ----------
Total assets 841,785 137,404 198,911 133,746 2,499,093
Liability:
Other liabilities 66,461 1,102 953 8,059 80,818
-------- -------- -------- -------- ----------
Net Assets available
for benefits $775,324 $136,302 $197,958 $125,687 $2,418,275
======== ======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $816,754) $232,636 $238,534
Fixed income
investments (cost
$208,145)
Chesapeake Corporation
common stock (cost
$132,325) $149,256
Money market
investments (cost
$144,696) 11,429 $133,267
Loans to participants
(Note 5)
Receivables:
Accrued income 44 21,814 13 684
Employer contributions 1,339 2,363 1,952 887
-------- -------- -------- --------
Total assets 162,068 256,813 240,499 134,838
Liability:
Other liabilities 2,170 24,177 1,956 1,571
-------- -------- -------- --------
Net Assets available
for benefits $159,898 $232,636 $238,534 $133,267
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-6-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, CONTINUED
December 31, 1997
<TABLE>
<CAPTION>
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
<S> <C> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $816,754) $390,112 $ 861,282
Fixed income
investments (cost
$208,145) $ 86,072 $128,486 214,558
Chesapeake Corporation
common stock (cost
$132,325) 149,256
Money market
investments (cost
$144,696) 144,696
Loans to participants
(Note 5) $ 51,610 51,610
Receivables:
Accrued income 78,837 638 635 601 103,266
Employer contributions 3,665 1,035 1,001 12,242
-------- -------- -------- -------- ----------
Total assets 472,614 87,745 130,122 52,211 1,536,910
Liability:
Other liabilities 82,502 1,673 1,636 601 116,295
-------- -------- -------- -------- ----------
Net Assets available
for benefits $390,112 $ 86,072 $128,486 $ 51,610 $1,420,615
======== ======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-7-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 30, 1998
<TABLE>
<Caption
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Additions:
Interest and dividends
(Note 1b) $ 4,445 $ 10,945
Contributions (Notes 3
and 4):
Employee 85,189 $139,528 $116,215 67,634
Employer 13,951 20,429 17,903 10,018
Net appreciation
(depreciation) in fair
value of investments
(Note 1b) 12,895 15,496 71,608
-------- -------- -------- --------
116,480 175,453 205,726 88,597
Deductions:
Distributions to
participating employees
(Note 6) 6,404 11,681 8,815 13,060
Administrative fees 1,944 505
-------- -------- -------- --------
6,404 11,681 10,759 13,565
-------- -------- -------- --------
Net increase (decrease) 110,076 163,772 194,967 75,032
-------- -------- -------- --------
Interfund transfers, net (30,583) (28,156) (16,701) 4,625
Interplan transfers, net (11,063) (11,643) (31,910) 253
Net assets available for
benefits, beginning of year 159,898 232,636 238,534 133,267
-------- -------- -------- --------
Net assets available for
benefits, end of year $228,328 $356,609 $384,890 $213,177
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-8-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION,
CONTINUED
for the year ended December 30, 1998
<TABLE>
<CAPTION>
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends
(Note 1b) $ 10,366 $ 12,122 $ 6,753 $ 44,631
Contributions (Notes 3
and 4)
Employee $247,790 57,502 65,023 778,881
Employer 37,474 9,643 10,936 120,354
Net appreciation
(depreciation) in fair
value of investments
(Note 1b) 163,428 (19,302) (8,690) 235,435
-------- -------- -------- -------- ----------
448,692 58,209 79,391 6,753 1,179,301
Deductions:
Distributions to
participating employees
(Note 6) 47,372 6,234 7,662 8,873 110,101
Administrative fees 2,449
-------- -------- -------- -------- ----------
47,372 6,234 7,662 8,873 112,550
-------- -------- -------- -------- ----------
Net increase (decrease) 401,320 51,975 71,729 (2,120) 1,066,751
-------- -------- -------- -------- ----------
Interfund transfers, net (5,188) (1,625) 1,431 76,197
Interplan transfers, net (10,920) (120) (3,688) (69,091)
Net assets available for
benefits, beginning of year 390,112 86,072 128,486 51,610 1,420,615
-------- -------- -------- -------- ----------
Net assets available for
benefits, end of year $775,324 $136,302 $197,958 $125,687 $2,418,275
======== ======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-9-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
for the year ended December 31, 1997
<TABLE>
<CAPTION>
Chesapeake Partners Diversified LaSalle
Common Trust Equity Income
Stock Fund Fund Fund Plus Fund
----------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Additions:
Interest and dividends
(Note 1b) $ 3,141 $ 943 $ 7,729
Contributions (Notes 3
and 4):
Employee 88,057 121,973 $107,883 62,022
Employer 6,233 5,181 5,269 2,817
Net appreciation in fair
value of investments
(Note 1b) 10,855 43,378 54,284
-------- -------- -------- --------
108,286 171,475 167,436 72,568
Deductions:
Distributions to
participating employees
(Note 6) 6,551 9,013 3,717 3,352
Administrative fees 1,293 338
-------- -------- -------- --------
6,551 9,013 5,010 3,690
-------- -------- -------- --------
Net increase 101,735 162,462 162,426 68,878
-------- -------- -------- --------
Interfund transfers, net (22,875) 6,412 3,388 (7,116)
Interplan transfers, net 4,544 (788) (101) (645)
Net transfer of plan assets
to St. Laurent Paperboard
Inc. (Note 14) (22,539) (61,481) (61,685) (84,126)
Net assets available for
benefits, beginning of year 99,033 126,031 134,506 156,276
-------- -------- -------- --------
Net assets available for
benefits, end of year $159,898 $232,636 $238,534 $133,267
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-10-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION,
CONTINUED
for the year ended December 31, 1997
<TABLE>
<CAPTION>
American
Century
Ultra Phoenix Dreyfus A
Investors High Yield Bond Participant
Stock Fund Fund Fund Loans Total
---------- ---------- ---------- ----------- -----
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends
(Note 1b) $ 148 $ 6,343 $ 6,527 $ 2,174 $ 27,005
Contributions (Notes 3
and 4)
Employee 219,968 50,606 68,205 400,349 1,119,063
Employer 8,974 2,277 2,973 33,724
Net appreciation in fair
value of investments
(Note 1b) 58,494 2,467 3,206 172,684
-------- -------- -------- -------- ----------
287,584 61,693 80,911 402,523 1,352,476
Deductions:
Distributions to
participating employees
(Note 6) 11,189 3,208 4,262 400,096 441,388
Administrative fees 1,631
-------- -------- -------- -------- ----------
11,189 3,208 4,262 400,096 443,019
-------- -------- -------- -------- ----------
Net increase (decrease) 276,395 58,485 76,649 2,427 909,457
-------- -------- -------- -------- ----------
Interfund transfers, net (19,296) (1,977) (2,218) 43,682
Interplan transfers, net (4,419) (1,018) (3,232) (6,385) (12,044)
Net transfer of plan assets
to St. Laurent Paperboard
Inc. (Note 14) (108,436) (28,915) (27,248) (394,430)
Net assets available for
benefits, beginning of year 245,868 59,497 84,535 11,886 917,632
-------- -------- -------- -------- ----------
Net assets available for
benefits, end of year $390,112 $ 86,072 $128,486 $ 51,610 $1,420,615
======== ======== ======== ======== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-11-
CHESAPEAKE CORPORATION 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
a. General
The Chesapeake Corporation 401(k) Savings Plan for Hourly Employees
(the "Plan") covers eligible hourly employees of Chesapeake
Corporation's (the "Company" or "Employer") building products
division, certain display and packaging division locations, and
certain Wisconsin Tissue Mills, Inc. locations, as described in the
Plan agreement. The Plan's assets are held by the Bank of New York
(the "Trustee"). The accompanying financial statements of the Plan
have been prepared on the accrual basis in conformity with generally
accepted accounting principles.
b. Investment Valuation and Income
Investments are stated at fair value determined as follows:
Mutual and money market funds - Quoted market value
Chesapeake common stock - Last published sale price on the
New York Stock Exchange
Loans to participants - Balances due which approximate
fair value
Purchases and sales of securities are recorded on a trade-date basis.
Investment income is recorded as earned. Dividend income is recorded
on the ex-dividend date. The Plan presents in the statement of
changes in net assets available for benefits the "net appreciation
(depreciation) in the fair value of investments" which consists of the
realized gains and losses and the change in unrealized appreciation
(depreciation) on those investments.
c. Risks and Uncertainties
The Plan provides for various mutual fund investment options in
stocks, bonds, money market, and fixed income securities as well as
direct common stock investments. Investments are exposed to various
risks, such as interest rate, market and credit. Due to the level of
risk associated with certain investment securities and the level of
uncertainty related to changes in the value of investment securities,
it is at least reasonably possible that changes in risks in the near
term would materially affect participants' account balances and the
amounts reported in the statements of net assets available for
benefits and the statement of changes in net assets available for
benefits.
-12-
NOTES TO FINANCIAL STATEMENTS, Continued
1. Summary of Significant Accounting Policies, continued:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual
results could differ from those estimates.
2. Description of Plan:
The Plan is a defined contribution plan. Information regarding Plan
benefits, priority of distributions upon termination of the Plan,
allocation of Plan investment earnings, disposition of forfeitures, and
vesting is provided in the Plan agreement which is available at the main
office of the Plan administrator at 2104 West Laburnum Avenue, Richmond,
Virginia 23227.
3. Employee Contributions:
A participant may elect to defer receipt of 1% to 10% of annual before-
tax compensation, in increments of 1%. Elective deferral contributions may
not exceed $10,000 per participant in any taxable year.
4. Employer Contributions:
The Plan provides for discretionary matching contributions ranging
from 20% to 50% of the participant's elective deferral contribution.
Matching contributions from the Company are limited to annual dollar and
percentage thresholds which vary depending upon location. Matching
contributions for highly compensated participants are limited by the
Internal Revenue Code as described in the Plan document. The Company may
make contributions on behalf of specified participants, regardless of
whether the participants make elective deferral contributions, as
nonelective contributions.
In addition, effective January 1, 1998, the Employer established a
fixed minimum contribution to be made to the Plan as determined by the
Employer each Plan year. Total Employer contributions to the Plan,
including salary deferrals and matching contributions, will never be less
than the established fixed minimum contribution; if actual contributions
are less than the minimum, then a supplemental contribution would be made
by the Employer to the Plan. The minimum employer contribution for the
Plan year is allocated to each individual who is a participant on the first
day of the Plan year and who has made an elective deferral contribution
during the Plan year.
-13-
NOTES TO FINANCIAL STATEMENTS, Continued
5. Participant Loans:
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of $50,000 or 50 percent of their
account balance. Loan transactions are treated as a transfer to (from) the
investment fund from (to) the Participant Loan Fund. Loan terms range from
1-5 years or up to 10 years for the purchase of a primary residence. The
loans are collateralized by the balance in the participant's account and
bear interest at a rate commensurate with the prime rate plus one percent
as determined monthly by the Plan administrator. Interest rates range from
8.75% to 9.50%. Principal and interest is paid ratably through payroll
deductions.
6. Distributions:
Benefits under the Plan become distributable upon termination of
employment, upon early retirement, on or after normal retirement, or upon
death or disability. Benefit payments are made to the participant as a
lump-sum distribution or an annuity. Effective January 1, 1998, if the
present value of the benefit to be received is less than $5,000, a lump-sum
distribution is required.
7. Forfeitures:
Forfeitures resulting from separation from service are held in the Plan
and serve to reduce Employer contributions under certain conditions
described in the Plan document. The balance of forfeited nonvested
accounts was $1,189 and $369 at December 30, 1998 and December 31, 1997,
respectively.
8. Plan Expenses:
Expenses incurred in connection with the purchase or transfer of
Chesapeake Corporation common stock are borne by a participant's account.
Fees, if any, of investment managers are borne by participants who select
such investments. All other expenses associated with the administration of
the Plan are paid by Chesapeake.
9. Plan Termination:
While the Company has not expressed any intent to discontinue its
contributions, continuance is not assumed as a contractual obligation and
any such discontinuance is subject to the provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA"). In the event such
discontinuance results in the termination of the Plan, the Plan provides
that each participant shall be fully vested in his account and payment of
such amounts will be made by the Trustee as directed by the Chesapeake
Corporation 401(k) Savings Plan for Hourly Employees Committee.
-14-
NOTES TO FINANCIAL STATEMENTS, Continued
10. Investment Options:
Participants may elect to have amounts credited to their accounts in
the Plan invested in 1% increments in Chesapeake Common Stock, the Partners
Trust Fund, Diversified Equity Fund, LaSalle Income Plus Fund, American
Century Ultra Investors Fund, Phoenix High Yield A Fund, or the Dreyfus A
Bond Plus Fund. The following is the number of participants in each of the
investment options as of December 30, 1998, and December 31, 1997:
1998 1997
---- ----
Chesapeake Common Stock Fund 342 155
Partners Trust Fund 519 227
Diversified Equity Fund 462 209
LaSalle Income Plus Fund 305 145
American Century Ultra Investors Fund 685 301
Phoenix High Yield A Fund 320 143
Dreyfus A Bond Plus Fund 359 162
A description of the investment options currently available to
participants is as follows:
Chesapeake Common Stock Fund: This investment option consists of
shares of the common stock of Chesapeake Corporation that are purchased by
the Plan's Trustee at fair market value in the open market, in private
transactions, or directly from Chesapeake Corporation.
Partners Trust Fund: This fund, managed by Neuberger & Berman, invests
primarily in common stock and, to a lesser extent, short-term money market
instruments and other debt securities.
Diversified Equity Fund: This fund, managed by Associated Bank,
invests primarily in common stock of domestic and foreign publicly held
corporations.
LaSalle Income Plus Fund: This fund, managed by LaSalle National Bank,
invests in instruments designed to preserve capital, maximize income and
provide liquidity without sacrificing credit quality. Investments include
U.S. Government Securities, bank investment contracts and guaranteed
investment contracts issued by insurance companies.
American Century Ultra Investors Fund: This fund invests primarily in
common stock that are considered to have better than average prospects for
appreciation.
-15-
NOTES TO FINANCIAL STATEMENTS, Continued
10. Investment Options, continued:
Phoenix High Yield A Fund: This fund, managed by Phoenix investments,
intends to invest at least 65% of the value in high yield, high risk income
securities.
Dreyfus A Bond Plus Fund: This fund, managed by Dreyfus Corporation,
invests primarily in higher-quality corporate and government bonds to seek
income with preservation of capital.
11. Investments:
The investments are held in trust funds which are administered by the
Trustee.
The investments in Chesapeake common stock may be purchased by the
Trustee at fair market value in the open market, in private transactions,
or from the authorized but unissued shares of Chesapeake.
Investments at December 30, 1998 held by the trustee consist of:
Number Fair
of Shares Cost Value
--------- ---- -----
Investments at fair value as
determined by quoted market
price:
Equity funds:
Partners Trust Fund 19,048 $ 321,103 $ 344,192
Diversified Equity Fund 15,395 261,087 374,519
American Century Ultra
Investors Fund 22,513 683,954 752,151
Fixed income funds:
Dreyfus A Bond Plus Fund 13,648 197,322 191,068
Phoenix High Yield A Fund 16,758 145,916 130,547
Common stock:
Chesapeake Corporation 5,616 180,107 207,090
Money market funds:
LaSalle Income Plus Fund 206,676 206,676 206,676
Short-term investments 12,183 12,183 12,183
---------- ----------
$2,008,348 $2,218,426
========== ==========
Participant loans $ 125,687 $ 125,687
========== ==========
-16-
NOTES TO FINANCIAL STATEMENTS, Continued
11. Investments, continued:
Investments at December 31, 1997 held by the Trustee consist of:
Number Fair
of Shares Cost Value
--------- ---- -----
Investments at fair value as
determined by quoted market
price:
Equity funds:
Partners Trust Fund 13,324 $ 212,377 $ 232,636
Diversified Equity Fund 11,507 185,316 238,534
American Century Ultra
Investors Fund 14,290 419,061 390,112
Fixed income funds:
Dreyfus A Bond Plus Fund 8,753 125,810 128,486
Phoenix High Yield A Fund 9,386 82,335 86,072
Common stock:
Chesapeake Corporation 4,342 132,325 149,256
Money market funds:
LaSalle Income Plus Fund 133,267 133,267 133,267
Short-term investments 11,429 11,429 11,429
---------- ----------
$1,301,920 $1,369,792
========== ==========
Participant loans $ 51,610 $ 51,610
========== ==========
12. Tax Status:
The Plan obtained its latest determination letter on May 20, 1996, in
which the Internal Revenue Service stated that the Plan, as designed, was
in compliance with the applicable requirements of the Internal Revenue
Code. The Plan has been amended since receiving the determination letter.
However, management and the Plan administrator believe that the Plan is
designed and is currently being operated in accordance with all applicable
rules and regulations.
13. Plan Amendments:
Effective for the period beginning January 1, 1998, the Plan year end
was changed to December 30. In addition, effective January 1, 1998, the
Plan was amended to establish a fixed minimum contribution to be made by
the Employer each Plan Year, as described in Note 4.
-17-
NOTES TO FINANCIAL STATEMENTS, Continued
14. Sale of Kraft and Packaging Operations:
On May 23, 1997, Chesapeake sold certain kraft and packaging operations
to St. Laurent Paperboard Inc. ("St. Laurent"). In connection with this
transaction, all participants who were employed by the operations which
were sold had their accounts transferred out of the Chesapeake Corporation
401(k) Savings Plan for Hourly Employees and into a plan sponsored by St.
Laurent. The net value of the accounts transferred from the Plan to St.
Laurent was $394,430.
15. 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.
-18-
Line 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 30, 1998
SECURITY DESCRIPTION SHARES/UNITS/PAR VALUE COST MARKET VALUE
- -------------------- ---------------------- ---- ------------
COMMON STOCKS
CHESAPEAKE CORPORATION 5,616.00 180,107.25 207,090.00
TOTAL COMMON STOCKS 5,616.00 180,107.25 207,090.00
OTHER ASSETS
AMERICAN CENTY ULTRA FD INV 22,512.75 683,954.29 752,151.18
ASSOCIATED BANK DIV EQ FD 15,395.17 261,086.93 374,518.52
VALUE AS REPORTED BY ASSOCIATED
CHESAPEAKE CORP 125,687.25 125,687.25 125,687.25
LOANS TO PARTICIPANTS
DREYFUS A BD PLUS MUTUAL FD 13,647.74 197,321.67 191,068.37
LASALLE INTEREST INCOME FUND 206,675.54 206,675.54 206,675.54
VALUE AS REPORTED BY LASALLE
NEUBERGER BERMAN PARTNERS TRUST 19,047.69 321,103.30 344,191.79
VALUE AS REPORTED BY NEUBERGER
PHOENIX SER FD HIGH YIELD FD 16,758.24 145,915.68 130,546.76
TOTAL OTHER ASSETS 419,724.38 1,941,744.66 2,124,839.41
SHORT TERM INVESTMENTS
COLLECTIVE SHORT TERM INVEST FD 12,182.94 12,182.94 12,182.94
NON-DISCRETIONARY
TOTAL SHORT TERM INVESTMENTS 12,182.94 12,182.94 12,182.94
TOTAL INVESTMENTS 437,523.32 2,134,034.85 2,344,112.35
-19-
Line 27d-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED OF WITHIN THE PLAN YEAR
for the year ended December 30, 1998
SECURITY DESCRIPTION SHARES/UNITS/PAR VALUE COST MARKET VALUE
- -------------------- ---------------------- ---- ------------
CHESAPEAKE CORP - ACQUISITIONS 124,175.81 124,175.81
DISPOSITIONS 50,098.40 50,098.40
TOTAL ACQUISITIONS: 124,175.81 124,175.81
DISPOSITIONS: 50,098.40 50,098.40
-20-
Line 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 30, 1998
NO OF NO OF TOTAL VALUE TOTAL VALUE NET
ISSUE PURCHASES SALES PURCHASES SALES GAIN/LOSS
- ----- --------- ----- ----------- ----------- ---------
COMMON STOCKS
CHESAPEAKE CORP 20 12 70,694.51 25,756.30 2,843.86
OTHER ASSETS
LASALLE INTEREST INCOME FUND 89 35 99,752.16 26,344.11 .00
ASSOCIATED BANK DIV EQ FD 82 55 131,390.79 43,124.40 11,394.21
CHESAPEAKE CORP 37 60 124,175.81 41,225.90 .00
AMERICAN CENTURY ULTRA FUND 90 41 330,352.38 68,919.83 3,460.44
DREYFUS A BONDS PLUS FUND 94 22 91,997.92 20,547.76 61.68
NEUBERGER BERMAN PARTNERS
TRUST 84 44 161,569.75 57,001.08 4,157.74
PHOENIX HIGH YIELD FUND (A) 83 18 75,005.70 11,228.17 (196.73)
SHORT TERM INVESTMENTS
COLLECTIVE SHORT TERM
INVEST FD 98 50 117,690.68 116,936.94 .00
-21-
Line 27e-SCHEDULE OF NON-EXEMPT TRANSACTIONS
for the year ended December 30, 1998
<TABLE>
<CAPTION>
a. b. c. d. e. f.
Identity of Relationship Description of Purchase Selling Lease
party to plan, employer transactions Price Price Rental
involved or other party-in including
interest maturity date,
rate of
interest,
collateral,
par or maturity
value
<S> <S> <S> <S> <S> <S> <S>
Chesapeake Plan sponsor Failure to remit
Corporation participant contributions
within 15 business days
of the month following
the contribution on
three separate occasions*
g. h. i. j.
Expense Cost Current Net gain
incurred in of value (loss)
connection asset of on each
with trans- asset trans-
action action
<S> <S> <S> <S>
$52,833
for the
total of
the three
separate
occasions
*Delayed remittance was the result of complications associated with the
implementation of a new payroll system. The Plan sponsor subsequently rectified
the situation; the allocation of participant investment earnings was
recalculated assuming that participant contributions were remitted in a timely
manner. Participants' accounts were then credited with any favorable
difference.
</TABLE>
-22-
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. 33-26150) of Chesapeake Corporation of our
report dated June 15, 1999 on the Chesapeake Corporation 401(k) Savings
Plan for Hourly Employees, appearing on page 3 of this Form 11-K.
/S/ PRICEWATERHOUSECOOPERS LLP
-----------------------------
PRICEWATERHOUSECOOPERS LLP
Richmond, Virginia
June 15, 1999
-23-
