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 33-55558
WISCONSIN TISSUE MILLS INC. 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:
Statement of assets available for benefits with fund information
at December 30, 1998 4
Statement of net assets available for benefits with fund
information at December 31, 1997 6
Statement of changes in assets available for benefits with fund
information for the year ended December 30, 1998 8
Statement of changes in net assets available for benefits with
fund information for the year ended December 31, 1997 10
Notes to financial statements 12-18
Supplemental schedules:
Line 27a - Schedule of Assets Held for Investment Purposes at
December 30, 1998 19
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 Wisconsin Tissue Mills Inc. 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.
WISCONSIN TISSUE MILLS INC. 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 Wisconsin Tissue Mills Inc. 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 Wisconsin
Tissue Mills Inc. 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 and reportable 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-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 30, 1998
<TABLE>
<CAPTION>
Diversified Guaranteed Chesapeake Foreign Intermediate
Equity Principal Common Equity Bond
Fund Fund Stock Fund Fund Fund
----------- ---------- ---------- ------- -----------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $17,963,895) $22,026,436 $334,384
Fixed income
investments (cost
$229,837) $239,997
Chesapeake Corporation
common stock (cost
$1,112,987) $1,329,876
Money market
investments (cost
$2,985,154) $2,985,154
Loans to participants
(Note 5)
Receivables:
Employer contributions 8,762 2,730 1,472 177 186
----------- ---------- ---------- -------- --------
Assets available for
Benefits $22,035,198 $2,987,884 $1,331,348 $334,561 $240,183
=========== ========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-4-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, CONTINUED
December 30, 1998
<TABLE>
<CAPTION>
Conservative Vanguard Vanguard
Balance Wellington Index 500 Participant
Fund Fund Fund Loans Total
----------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $17,963,895) $ 157,836 $ 259,774 $1,641,587 $24,420,017
Fixed income
investments (cost
$229,837) 239,997
Chesapeake Corporation
common stock (cost
$1,112,987) 1,329,876
Money market
investments (cost
$2,985,154) 2,985,154
Loans to participants
(Note 5) $573,767 573,767
Receivables:
Employer contributions 497 241 1,348 15,413
----------- ---------- ---------- -------- -----------
Assets available for
Benefits $ 158,333 $ 260,015 $1,642,935 $573,767 $29,564,224
=========== ========== ========== ======== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-5-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Diversified Guaranteed Chesapeake Foreign Intermediate
Equity Principal Common Equity Bond
Fund Fund Stock Fund Fund Fund
----------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $15,159,458) $18,222,106 $272,466
Fixed income
investments (cost
$2,516) $ 2,610
Chesapeake Corporation
common stock (cost
$1,200,937) $1,438,663
Money market
investments (cost
$2,372,944) $2,358,041 14,903
Loans to participants
(Note 5)
Receivables:
Accrued income 10,900 6,587
Employer contributions 32,334 4,419 2,676 931 28
----------- ---------- ---------- -------- --------
Total assets 18,254,440 2,373,360 1,462,829 273,397 2,638
Liability:
Other liabilities 32,575 3,394 899 901 4
----------- ---------- ---------- -------- --------
Net assets available
for benefits $18,221,865 $2,369,966 $1,461,930 $272,496 $ 2,634
=========== ========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-6-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION, CONTINUED
December 31, 1997
<TABLE>
<CAPTION>
Conservative Vanguard Vanguard
Balance Wellington Index 500 Participant
Fund Fund Fund Loans Total
----------- ---------- --------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Assets:
Investments (Notes 1b,
10, and 11):
Equity investments
(cost $15,159,458) $ 21,858 $ 96,128 $ 481,893 $19,094,451
Fixed income
investments (cost
$2,516) 2,610
Chesapeake Corporation
common stock (cost
$1,200,937) 1,438,663
Money market
investments (cost
$2,372,944) 2,372,944
Loans to participants
(Note 5) $344,624 344,624
Receivables:
Accrued income 17,487
Employer contributions 218 469 1,322 42,397
----------- ---------- ---------- -------- -----------
Total assets 22,076 96,597 483,215 344,624 23,313,176
Liability:
Other liabilities 31 137 689 38,630
----------- ---------- ---------- -------- -----------
Net assets available
for benefits $ 22,045 $ 96,460 $ 482,526 $344,624 $23,274,546
=========== ========== ========== ======== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-7-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 30, 1998
<TABLE>
<CAPTION>
Diversified Guaranteed Chesapeake Foreign Intermediate
Equity Principal Common Equity Bond
Fund Fund Stock Fund Fund Fund
----------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends
Note 1b) $ 123,602 $ 29,663
Contributions (Notes 3
and 4):
Employee contributions$ 2,237,906 311,522 177,354 $ 49,058 $ 5,719
Employer contributions 328,059 54,679 33,260 7,695 1,111
Net appreciation
(depreciation) in the
fair value of
investments (Note 1b) 3,169,591 65,812 (4,478) 11,148
----------- ---------- ---------- -------- --------
5,735,556 489,803 306,089 52,275 17,978
Deductions:
Distributions to
participating employees
(Note 6) 489,750 235,721 4,994 6,310
Administrative fees 105,807 11,534 2,600 2,911 452
----------- ---------- ---------- -------- --------
595,557 247,255 7,594 9,221 452
----------- ---------- ---------- -------- --------
Net additions 5,139,999 242,548 298,495 43,054 17,526
----------- ---------- ---------- -------- --------
Interfund transfers, net (1,326,666) 375,370 (429,077) 19,011 220,023
Net assets available for
benefits, beginning of
year 18,221,865 2,369,966 1,461,930 272,496 2,634
----------- ---------- ---------- -------- --------
Assets available for
benefits, end of year $22,035,198 $2,987,884 $1,331,348 $334,561 $240,183
=========== ========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-8-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION,
CONTINUED
December 30, 1998
<TABLE>
<CAPTION>
Conservative Vanguard Vanguard
Balance Wellington Index 500 Participant
Fund Fund Fund Loans Total
----------- ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends
Note 1b) $ 7,955 $ 15,878 $ 21,749 $ 198,847
Contributions (Notes 3
and 4):
Employee contributions$ 31,920 55,191 197,554 3,066,224
Employer contributions 5,818 9,079 27,585 467,286
Net appreciation
(depreciation) in the
fair value of
investments (Note 1b) 14,766 11,065 243,000 3,510,904
----------- ---------- ---------- -------- -----------
52,504 83,290 484,017 21,749 7,243,261
Deductions:
Distributions to
participating employees
(Note 6) 42,419 6,142 23,685 15,314 824,335
Administrative fees 494 869 4,581 129,248
----------- ---------- ---------- -------- -----------
42,913 7,011 28,266 15,314 953,583
----------- ---------- ---------- -------- -----------
Net additions 9,591 76,279 455,751 6,435 6,289,678
----------- ---------- ---------- -------- -----------
Interfund transfers, net 126,697 87,276 704,658 222,708
Net assets available for
benefits, beginning of
year 22,045 96,460 482,526 344,624 23,274,546
----------- ---------- ---------- -------- -----------
Assets available for
benefits, end of year $ 158,333 $ 260,015 $1,642,935 $573,767 $29,564,224
=========== ========== ========== ======== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-9-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION
December 31, 1997
<TABLE>
<CAPTION>
Diversified Guaranteed Chesapeake Foreign Intermediate
Equity Principal Common Equity Bond
Fund Fund Stock Fund Fund Fund
----------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends
(Note 1b) $ 148,390 $ 36,211
Employee contributions
(Note 3) $ 2,092,922 355,073 249,323 $ 30,809 $1,650
Net appreciation
(depreciation) in the
fair value of
investments (Note 1b) 4,529,813 125,995 (3,559) 96
----------- ---------- ---------- -------- --------
6,622,735 503,463 411,529 27,250 1,746
Deductions:
Distributions to
participating employees
(Note 6) 84,928 86,249 47,750 367
Administrative fees 137,911 17,094 4,872 2,166 7
----------- ---------- ---------- -------- --------
222,839 103,343 52,622 2,533 7
----------- ---------- ---------- -------- --------
Net additions 6,399,896 400,120 358,907 24,717 1,739
----------- ---------- ---------- -------- --------
Interfund transfers, net (215,026) (325,640) (543,993) 247,779 895
Net assets available for
benefits, beginning of
year 12,036,995 2,295,486 1,647,016
----------- ---------- ---------- -------- --------
Assets available for
benefits, end of year $18,221,865 $2,369,966 $1,461,930 $272,496 $ 2,634
=========== ========== ========== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-10-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
STATEMENT OF CHANGES IN ASSETS AVAILABLE FOR BENEFITS WITH FUND INFORMATION,
CONTINUED
December 31, 1997
<TABLE>
<CAPTION>
Conservative Vanguard Vanguard
Balance Wellington Index 500 Participant
Fund Fund Fund Loans Total
----------- ---------- --------- ----------- --------
<S> <C> <C> <C> <C> <C>
Additions:
Interest and dividends
(Note 1b) $ 2,131 $ 3,828 $ 11,636 $ 202,196
Employee contributions
(Note 3) $ 9,019 16,570 41,692 2,797,058
Net appreciation
(depreciation) in the
fair value of
investments (Note 1b) 1,874 5,801 27,188 4,687,208
----------- ---------- ---------- -------- -----------
10,893 24,502 72,708 11,636 7,686,462
Deductions:
Distributions to
participating employees
(Note 6) 368 7,903 227,565
Administrative fees 72 351 1,375 163,848
----------- ---------- ---------- -------- -----------
72 719 1,375 7,903 391,413
----------- ---------- ---------- -------- -----------
Net additions 10,821 23,783 71,333 3,733 7,295,049
----------- ---------- ---------- -------- -----------
Interfund transfers, net 11,224 72,677 411,193 340,891
Net assets available for
benefits, beginning of
year 15,979,497
----------- ---------- ---------- -------- -----------
Assets available for
benefits, end of year $ 22,045 $ 96,460 $ 482,526 $344,624 $23,274,546
=========== ========== ========== ======== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
-11-
WISCONSIN TISSUE MILLS INC. 401(k) SAVINGS PLAN FOR HOURLY EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
a. General
The Wisconsin Tissue Mills Inc. 401(k) Savings Plan for Hourly
Employees (the "Plan") covers certain employees of Wisconsin Tissue
Mills Inc. ("Wisconsin Tissue" or the "Employer"), a wholly owned
subsidiary of Chesapeake Corporation. The Plan's assets are held by
Associated Bank, N.A. ("Associated" or 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 sales 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 in Menasha, Wisconsin.
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:
Effective January 1, 1998, the Plan provided for discretionary
matching contributions of 50% of the participant's elective deferral
contribution, up to 5% and limited to a total of $500 per participant for
the entire Plan year. The matching contributions vest over a five-year
period of time based on years of service. Matching contributions for
highly compensated participants are limited by the Internal Revenue Code as
described in the Plan document.
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 secured by the balance in the participant's account and bear
interest at a rate commensurate with the prevailing interest rate charged
on similar commercial loans as determined by the plan administrator.
Interest rates range from 8.55% to 9.25%. 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. There were no forfeited nonvested accounts
at December 30, 1998, or December 31, 1997.
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. Trustees' fees are paid by the Trustee from Plan assets.
All other expenses associated with the administration of the Plan are paid
by Wisconsin Tissue.
9. Plan Termination:
While the Employer has not expressed any intent to discontinue the
Plan, 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 Wisconsin Tissue
Mills Inc. 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 5% increments in the Diversified Equity Fund,
Guaranteed Principal Fund, Chesapeake Common Stock, the Foreign Equity
Fund, Intermediate Bond Fund, Conservative Balance Fund, Vanguard
Wellington Fund or the Vanguard Index 500 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
---- ----
Diversified Equity Fund 919 1,105
Guaranteed Principal Fund 353 451
Chesapeake Common Stock Fund 284 569
Foreign Equity Fund 81 100
Intermediate Bond Fund 21 11
Conservative Balance Fund 52 24
Vanguard Wellington Fund 82 57
Vanguard Index 500 Fund 196 109
A description of the investment options currently available to
participants is as follows:
Diversified Equity Fund: This fund, managed by Associated Bank, is
designed to achieve growth of capital through investment in a widely
diversified portfolio of stocks. The fund will be broadly diversified
between large and small company stocks, foreign company stocks, and stocks
of specific market segments.
Guaranteed Principal Fund: This fund, managed by Associated Bank, has
the objective of providing safety of principal. Assets will be invested in
short-maturity treasury bills and repurchase agreements. The investment
return earned will vary with changes in short-term interest rates.
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.
Foreign Equity Fund: This fund, managed by Associated Bank, is
designed to provide the investor exposure to investment opportunities
outside the United States through the purchase of foreign common stocks.
Intermediate Bond Fund: This fund, managed by Associated Bank, is
designed to earn a competitive total return through diversified investment
-15-
NOTES TO FINANCIAL STATEMENTS, Continued
10. Investment Options, continued:
in high quality fixed income securities. Assets of this fund will be
invested primarily in high quality notes issued by the United States,
federal agencies, and public corporations, as well as mortgaged backed,
asset backed, and certificate of deposit issues.
Conservative Balance Fund: This fund, managed by Associated Bank, is
designed to achieve both a competitive income return and growth of capital
through investment in a diversified portfolio of high-quality bonds and
stocks. The majority of the fund assets will be invested in U.S. Treasury
and other high-quality bonds, while the remainder of the fund will be
primarily invested in stocks of large domestic companies.Vanguard
Wellington Fund: This fund seeks conservation of capital and reasonable
income. The fund normally invests 60% to 70% of assets in common stocks
and convertible securities.
Vanguard Index 500 Fund: This fund seeks investment results that
correspond with the price and yield performance of the S&P 500 Index. The
fund allocates the percentage of net assets each company receives on the
basis of the stock's relative total market value.
11. Investments:
Investments at December 30, 1998 consisted of:
Number Fair
of Shares Cost Value
--------- ---- -----
Investments at fair value as
determined by quoted market
price:
Equity funds:
Diversified Equity Fund 201,403 $15,816,646 $22,026,436
Foreign Equity Fund 9,968 338,081 334,384
Conservative Balance Fund 2,812 145,368 157,836
Vanguard Wellington Fund 8,845 268,873 259,774
Vanguard Index 500 Fund 14,377 1,394,927 1,641,587
Fixed income fund:
Intermediate Bond Fund 13,651 229,837 239,997
Common stock:
Chesapeake Corporation 36,941 1,112,987 1,329,876
Money market funds:
Guaranteed Principal Fund 2,985,154 2,985,154 2,985,154
----------- -----------
$22,291,873 $28,975,044
=========== ===========
Participant loans $ 573,767 $ 573,767
=========== ===========
-16-
NOTES TO FINANCIAL STATEMENTS, Continued
11. Investments, continued:
Investments at December 31, 1997 consisted of:
Number Fair
of Shares Cost Value
--------- ---- -----
Investments at fair value as
determined by quoted market
price:
Equity funds:
Diversified Equity Fund 194,958 $14,305,635 $18,222,106
Foreign Equity Fund 8,452 277,323 272,466
Conservative Balance Fund 454 20,475 21,858
Vanguard Wellington Fund 3,264 96,332 96,128
Vanguard Index 500 Fund 5,350 459,693 481,893
Fixed income fund:
Intermediate Bond Fund 163 2,516 2,610
Common stock:
Chesapeake Corporation 41,852 1,200,937 1,438,663
Money market funds:
Guaranteed Principal Fund 2,358,041 2,358,041 2,358,041
Short-term investments 14,903 14,903 14,903
----------- -----------
$18,735,855 $22,908,668
=========== ===========
Participant loans $ 344,624 $ 344,624
=========== ===========
12. Tax Status:
The Plan obtained its latest determination letter on March 30, 1995, in
which the Internal Revenue Service stated that the Plan, as designed, is in
compliance with the applicable requirements of the Internal Revenue Code.
The Plan has amended since receiving the determination letter. However,
management and the Plan administrator believe that the Plan is currently
designed and 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. 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. Related-Party Transactions:
Certain Plan investments are shares of mutual funds managed by
Associated. Associated is the Trustee as defined by the Plan and,
therefore, these transactions qualify as party-in-interest. Fees paid by
the Plan for the investment management services amounted to $129,248 and
$163,848 for the years ended December 30, 1998, and December 31, 1997,
respectively.
-18-
Line 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 30, 1998
<TABLE>
<Caption
Face Amt/
Shares Total Cost Mkt Value Est Ann Inc Yield
Description # of Shares Cost/unit Mkt Price % Accrual to Mkt
- ----------- ----------- ---------- --------- - ----------- ------
<S> <C> <C> <C> <C> <C> <C>
Goldman 2,985,153.700 2,985,153.700 2,985,153.700 100.00 139,902.00 4.69
1.000 1.000 11,988.81
Int Term Bond 13,651.460 229,837.210 239,996.899 100.00 14,569.00 6.07
16.836 17.580310 0.00
Chesapeake 36,941.000 1,112,986.860 1,329,876.000 5.16 32,758.00 2.46
30.129 36 0.00
Foreign Eqty 9,968.154 338,081.130 334,384.477 1.30 1,709.00 0.51
33.916 33.545276 0.00
Conserv Bal 2,811.544 145,368.290 157,835.542 0.61 6,798.00 4.31
51.704 56.138386 0.00
Divers Stock 201,403.296 15,816,646.450 22,026,436.221 85.54 238,747.00 1.08
78.532 109.364825 0.00
Van Well 8,844.863 268,873.120 259,773.626 1.01 16,628.00 6.40
30.399 29.370 0.00
Van 500 14,377.184 1,394,927.100 1,641,586.869 6.38 29,969.00 1.83
97.024 114.180 0.00
Total Common
Stocks 25,749,892.736 100.00
Loans/Mortgages
Rappert 968.530 968.530 968.530 2.22 89.00 9.19
1.000 1.000 129.05
Nate 10,112.820 10,112.820 10,112.820 23.22 N/A
1.000 1.000 -17.23
Finger 25,349.100 25,349.100 25,349.100 58.19 2,341.00 9.24
1.000 1.000 2,428.03
Wonm 7,131.080 7,131.080 7,131.080 16.37 N/A
1.000 1.000 -12.30
Total Loans/
Mort 43,561.530 43,561.530 100.00
Master Loan 530,205.870 530,205.870 530,205.870 100.00 -597.62
1.000 1.000
</TABLE>
-19-
Line 27d-SCHEDULE OF REPORTABLE TRANSACTIONS
for the year ended December 30, 1998
<TABLE>
<CAPTION>
# of Purch/ Description Carrying Net Gain/
Trans Sale of Asset Purch Price Sale Price Value Loss
- ---- ------ ----------- ----------- ---------- -------- ---------
<C> <S> <S> <C> <C> <C> <C>
281 Purchase Goldman Sachs $7,854,487.82 $7,854,487.82 $0.00
190 Sale Goldman Sachs $5,319,932.80 $5,319,932.80 $0.00
75 Purchase Assoc Int Term Bond $293,763.68 $293,763.68 $0.00
17 Sale Assoc Int Term Bond $67,514.22 $66,442.85 $1,071.37
68 Purchase Assoc Foreign Eqty $188,471.18 $188,471.18 $0.00
36 Sale Assoc Foreign Eqty $122,072.72 $127,713.05 ($5,640.33)
83 Purchase Assoc Conserv Bal $309,993.81 $309,993.81 $0.00
15 Sale Assoc Conserv Bal $188,538.54 $185,100.35 $3,438.19
137 Purchase Assoc Diversified $4,320,846.25 $4,320,846.25 $0.00
124 Sale Assoc Diversified $3,684,363.71 $2,809,835.13 $874,528.58
23 Purchase Chesapeake Com Stk $300,356.51 $300,356.51 $0.00
52 Sale Chesapeake Com Stk $474,923.45 $388,306.56 $86,616.89
95 Purchase Vanguard Wellington $256,925.32 $256,925.32 $0.00
28 Sale Vanguard Wellington $84,810.28 $84,384.54 $425.74
136 Purchase Vanguard Index 500 $1,107,145.74 $1,107,145.74 $0.00
32 Sale Vanguard Index 500 $184,949.75 $171,911.37 $13,038.38
</TABLE>
-20-
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. 33-55558) of Chesapeake Corporation of our
report dated June 15, 1999 on the Wisconsin Tissue Mills Inc. 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
-21-
