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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, 1993
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 8, 1994, of the voting stock held by
non-affiliates of the registrant was $544 million. In determining this
figure, the company has assumed that all of its directors and officers are
affiliates. This assumption shall not be deemed conclusive for any other
purpose.
23,518,688 shares of the registrant's common stock, par value $1, were
outstanding as of February 8, 1994.
Portions of the registrant's Annual Report to Stockholders for the
year ended December 31, 1993 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 27, 1994 are
incorporated in Part III by reference.
PART I
Item 1. Business
GENERAL
Chesapeake Corporation, a Virginia corporation organized in 1918, is a
paper and packaging company, whose primary businesses are kraft products,
tissue and packaging. Our operating businesses include: Chesapeake Paper
Products Company and Chesapeake Forest Products Company (kraft products,
building products and woodlands operations); Wisconsin Tissue Mills Inc.
(commercial and industrial tissue products); Chesapeake Consumer Products
Company (consumer tabletop tissue products); Chesapeake Packaging Co.
(point-of-sale displays and specialty packaging, consumer graphic packaging
and corrugated shipping containers); and Delmarva Properties, Inc. and
Stonehouse Inc. (land development).
Chesapeake competes in a large, capital-intensive industry. Until
several years ago, Chesapeake's products were primarily kraft commodity
products manufactured at Chesapeake Paper Products. In commodity markets,
selling prices are controlled by total market supply and demand. To be
successful in these markets, it is important to maximize production and
minimize operating costs. Selling prices and profits for commodity
products are usually cyclical and 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 producing 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 1993, sales of specialty
products were approximately 60% of Chesapeake's total sales. During the
last three years, low selling prices for commodity products, such as
bleached market pulp and corrugating medium, have offset much of the
benefit derived from specialty product sales.
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 decision making. Our
operations are designed to be flexible to changing customer demands and
business conditions.
1
Our manufacturing and converting processes are capital intensive;
property, plant and equipment, including timber and timberlands, comprise
approximately 70% of our total assets. Our tissue and kraft 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 pure commodity products such as brown paperboard and
bleached hardwood pulp. About one-half of these expenditures have been for
paper machine projects for our kraft and tissue businesses. This program
also included a $100 million project for a recovery boiler, evaporators and
related equipment for our kraft business. At our other businesses, we have
continued to invest in specialized converting and processing equipment
needed to meet our strategic goals and customer requirements. During the
past nine years, acquisitions have amounted to approximately $200 million.
The major acquisition was Wisconsin Tissue, which provided the Company with
a significant, immediate presence in the industrial and commercial tissue
market. Other acquisitions, primarily in packaging, have benefited the
Company with immediate expertise or marketing strength for our future needs
and requirements.
Our businesses are grouped into three major segments: kraft products,
tissue and packaging. The information presented in "Notes to Consolidated
Financial Statements, Note 14 - Business Segment Information" of the 1993
Annual Report to Stockholders (the "1993 Annual Report") is incorporated
herein by reference. Industry segment groupings were changed in 1993 to
better reflect the way Chesapeake manages its businesses. Information with
respect to the registrant's working capital is set forth under the caption
"Financial Review 1991-1993, Liquidity and Capital Structure" of the 1993
Annual Report and is incorporated herein by reference. Information
regarding the registrant's anticipated capital spending is set forth under
the caption "Financial Review 1991-1993, Capital Expenditures" of the 1993
Annual Report and is incorporated herein by reference.
KRAFT PRODUCTS
Chesapeake's kraft products segment includes Chesapeake Paper Products
Company, our kraft products operations, and Chesapeake Forest Products
Company, our woodlands and building products operations, both based in West
Point, Virginia. Chesapeake Building Products Company, a wholly owned
subsidiary of Chesapeake Forest Products Company, was formed in 1993 with
the merger of the company's lumber division and Chesapeake Wood Treating
Co.
2
Chesapeake Paper Products Company
Chesapeake Paper Products manufactures white top paperboard, which
accounts for 80% of the total paperboard product mix, kraft paperboard,
kraft paper, corrugating medium and bleached hardwood pulp at its mill
located in West Point, Virginia. 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. Our 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 rates compared to many of our competitors. We also sell to
international customers, primarily in Canada and Europe. Our salesforce
markets these products to integrated and independent converters and
manufacturers. Total shipments from the West Point mill were 798,000 tons
in 1993, 721,000 tons in 1992 and 708,000 tons in 1991.
In 1993, approximately 65% of the raw materials for products from our
kraft products mill was virgin wood fiber, with the remainder being
recycled fiber recovered through our recycling system. Five company-owned
recycling centers collect recycled fiber for the mill. About 76% of the
virgin wood fiber used in 1993 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.
Chesapeake Forest Products Company, Woodlands Division
Chesapeake Forest Products, Woodlands Division owns and actively
manages approximately 330,000 acres of timberland located in Virginia,
Maryland, Delaware and North Carolina. The primary objective of our
woodlands operation is to provide an adequate supply of wood at a
competitive cost to our kraft products mill located at West Point. Wood
comes 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 by private landowners, grow quicker and provide higher quality,
more uniform fibers at 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.
3
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.
Chesapeake Building Products Company
Chesapeake Building Products Company operates four sawmills in
Virginia and Maryland, manufacturing pine and hardwood lumber. The raw
materials are provided from both company-owned timberlands and from other
independent landowners. Our sawmill products are sold by our own
salesforce to independent users.
Substantially all of the assets of the former Chesapeake Wood Treating
Co. were conveyed to Universal Forest Products, Inc. under lease and
purchase agreements in October 1993. Chesapeake Wood Treating Co. produced
chemically treated pine lumber for the home improvement and residential
construction markets. Net sales of this business were $85.8 million in
1993, $97.7 million in 1992 and $81.7 million in 1991.
TISSUE
Chesapeake's tissue segment includes Wisconsin Tissue Mills Inc.,
which produces tissue for industrial and commercial markets, and Chespeake
Consumer Products Company, a converter of tissue products for the consumer
market.
Wisconsin Tissue Mills Inc.
Wisconsin Tissue, acquired in 1985, manufactures napkins,
tablecovers, toweling, placemats, wipers and facial and bathroom tissue for
commercial and industrial markets at its paper mill and converting
facilities located in Menasha, Wisconsin. Our strategy is to provide a
full line of disposable products for the commercial and industrial tissue
markets. 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 we manufacture is 100% recycled fiber.
Four paper machines manufacture base tissue stock that is converted on over
100 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 and in Canada by
our national salesforce. Shipments by Wisconsin Tissue were 220,000 tons
in 1993, 211,000 tons in 1992 and 190,000 tons in 1991.
4
Chesapeake Consumer Products Company
The strategic objective of Chesapeake Consumer Products, formed in
1989 from acquired companies and an internally developed product line, is
to expand the marketing and distribution of tabletop tissue products. In
1990 the product line was narrowed to focus on napkins, plates, cups,
tablecovers and accessories, and in 1992 and 1993 the company reorganized
the former Finess portion of the business. With our narrow product focus
we believe we can be successful in the highly competitive consumer products
marketplace. Our consumer products are sold throughout the United States
by our own salesforce and by independent representatives, and can be found
in supermarkets, retail chain stores and other mass merchandisers. We have
improved our manufacturing process by installing state-of-the-art napkin
converting and napkin wrapping machines and adding a new warehouse and
shipping area. During 1993, Chesapeake Consumer Products began producing
napkins that used flexographic edge-to-edge printing technology.
PACKAGING
Chesapeake Packaging Co.
Chesapeake Packaging has three marketing thrusts: point-of-sale
displays and specialty packaging, consumer 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. Our manufacturing
facilities utilize modern production, assembly and packaging processes to
meet our customers' stringent quality and shipment demands. With the
recent consolidation of the company's West Des Moines, Iowa packaging plant
into its Sandusky, Ohio facility, at year-end 1993 we had two strategically
located point-of-sale display and specialty packaging manufacturing plants
and four assembly plants which provide service to customers throughout the
United States.
Our Color-Box facility supplies consumer graphic packaging to
customers nationwide that require full litho-laminated point-of-sale
packaging. The final phase of a $13 million expansion project to double
the capacity of this facility was completed 1993.
At year-end 1993 we owned seven corrugated container plants that
manufactured corrugated boxes and specialty packaging for customers within
each plant's geographic area. The raw materials
5
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.
Additional growth is anticipated in graphic packaging and corrugated
shipping containers with the January 24, 1994 acquistion of Lawless Holding
Corporation by Chesapeake Packaging. This acquisition included the Lawless
Container Corporation corrugated container plant in North Tonawanda, New
York; corrugated sheet plants in Scotia, New York, LeRoy, New York and
Madison, Ohio; and Lawless Packaging and Display, a consumer graphic
packaging plant in Buffalo, New York.
OTHER BUSINESSES
Delmarva Properties, Inc. and Stonehouse Inc.
Delmarva Properties develops and markets land that has potential for
value greater than as timberland. Nearly all of Delmarva Properties'
present land inventory of approximately 15,000 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.
Stonehouse Inc. is managing the planning for development of a new
7,600-acre planned community near Williamsburg, Virginia. The company is
in the process of applying for required permits and approvals for this
large project. Sales are not anticipated until at least the latter part of
the 1990s. Most of Stonehouse's land was formerly timberland owned by
Chesapeake Forest Products.
RAW MATERIALS
The Company's raw materials are readily available at competitive
prices.
ENVIRONMENTAL
The information presented under the caption "Financial Review 1991-
1993, Environmental" of the 1993 Annual Report is incorporated herein by
reference.
6
EMPLOYEES
As of December 31, 1993, the Company had 4,833 employees. The Company
believes that its relations with its employees are good. In 1992, the
Company reached agreement on five-year collective bargaining agreements
with the unions representing employees at the Wisconsin Tissue and
Chesapeake Paper Products mills.
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 pure 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 will
provide less pricing volatility and increased profitability. 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 1993, Chesapeake manufactured or converted paper and wood
products at 36 facilities in 11 states. The information presented under
"Operating Managers and Locations" in the 1993 Annual Report is
incorporated herein by reference. The Company owns substantially all of
its production facilities, which are
7
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 1993 Annual Report is
incorporated herein by reference.
Item 4. Submission of Matters to a Vote of Security Holders
None
Executive Officers of the Registrant
The names and ages of each executive officer of Chesapeake, together
with a brief description of the principal occupation or employment of each
such person during the last 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 (54)
President & Chief Executive Officer since 1980
Paul A. Dresser, Jr. (51)
Chief Operating Officer since 1991
Executive Vice President since 1990
Chief Financial Officer 1981-1991
Group Vice President-Finance & Administration 1984-1990
Thomas Blackburn (42)
Group Vice President-Kraft Products since 1991
President, Chesapeake Paper Products Company and
Chesapeake Forest Products Company since 1991
Kraft Products-Executive Vice President 1990-1991
General Manager, Crossett, Arkansas,
Georgia-Pacific Corporation 1988-1990
Charles S. Cianciola (60)
Group Vice President-Tissue Products since 1988
President, Wisconsin Tissue Mills Inc. since 1988
Samuel J. Taylor (54)
Group Vice President-Packaging since 1988
President, Chesapeake Packaging Co. since 1988
J. P. Causey Jr. (50)
Vice President, Secretary & General Counsel since 1986
John W. Kirk (47)
Vice President-Strategic Development since 1992
Controller & Chief Acccounting Officer 1990-1992
Controller 1981-1992
8
Andrew J. Kohut (35)
Vice President-Finance & Chief Financial Officer since 1991
President and General Manager, Color-Box, Inc. 1989-1991
Senior Director-Strategic Development 1987-1989
Thomas A. Smith (47)
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" and the information concerning retained earnings
available for dividends presented in "Notes to Consolidated Financial
Statements, Note 3 - Long-Term Debt" of the 1993 Annual Report are
incorporated herein by reference. The Company is listed on the New York
Stock Exchange under the symbol - CSK. As of March 2, 1994, there were
7,466 stockholders of record of the Company's common stock.
Item 6. Selected Financial Data
The information for the years 1989-1993 presented under the caption
"Eleven-Year Comparative Record" of the 1993 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 1991-
1993" of the 1993 Annual Report is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data
The consolidated financial statements of the Company and subsidiaries,
including the notes thereto, and the information presented under the
caption "Recent Quarterly Results" of the 1993 Annual Report are
incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
None
9
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 27,
1994 (the "1994 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 1994 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 1994 Proxy Statement is
incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
The information presented under the caption "Certain Transactions" of
the 1994 Proxy Statement is incorporated herein by reference.
10
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
a. Documents
(i) Financial Statements
The financial statements incorporated by reference
into this report are listed in the Index to Financial
Statements and Schedules on page 13 hereof.
(ii) Financial Statement Schedules
The financial statement schedules filed as a part
of this report are listed in the Index to Financial
Statements and Schedules on page 13 hereof.
(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 18-19 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
11
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 8, 1994 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
Paul A. Dresser, Jr. Wallace Stettinius
Director
By /s/ J. CARTER FOX By /s/ JOHN HOYT STOOKEY J.
Carter Fox John Hoyt Stookey
Director; President & Director
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
William D. McCoy Joseph P. Viviano
Director
By /s/ STURE G. OLSSON By /s/ H. H. WARNER
Sture G. Olsson Harry H. Warner
Chairman of the Board Director
of Directors
By /s/ JOHN W. ROSENBLUM By /s/ ANDREW J. KOHUT
John W. Rosenblum Andrew J. Kohut
Director Vice President & 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 8, 1994.
12
CHESAPEAKE CORPORATION
Index to Financial Statements and Schedules
The consolidated balance sheet of Chesapeake Corporation and
subsidiaries as of December 31, 1993 and 1992, 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, 1993, including the notes
thereto, are presented in the Company's 1993 Annual Report and are
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 1993 Annual
Report is deemed to be "filed" as part of this Form 10-K. The following
additional financial data should be read in conjunction with the
consolidated financial statements.
Page
Report of Independent Accountants .......................... 14
Financial Statement Schedules*
Schedules for each of the three years in the period ended
December 31, 1993
II. Amounts Receivable from Related Parties and
Underwriters, Promoters and Employees Other Than Related
Parties......... ............................ 15
V. Property, Plant and Equipment........................ 16
VI. Accumulated Depreciation of Property, Plant and
Equipment............................................. 17
*Schedules other than those listed above are omitted because they are not
applicable or are not required.
13
REPORT OF INDEPENDENT ACC0UNTANTS
To the Stockholders and Board of Directors
Chesapeake Corporation:
We have audited the consolidated financial statements of Chesapeake
Corporation and subsidiaries as of December 31, 1993 and 1992, and for each
of the three years in the period ended December 31, 1993, which financial
statements are included in the 1993 Annual Report to Stockholders of
Chesapeake Corporation and incorporated herein by reference. We have also
audited the financial statement schedules listed in the index on page 13 of
this Form 10-K. These financial statements and financial statement
schedules are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedules 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, 1993 and 1992,
and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1993 in conformity
with generally accepted accounting principles. In addition, in our
opinion, the financial statement schedules referred to above, when
considered in relation to the basic financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
As discussed in notes 4, 6 and 13 to the consolidated financial
statements, the company changed its methods of accounting for
postretirement benefits other than pensions and accounting for income taxes
in 1992.
/s/ COOPERS & LYBRAND
COOPERS & LYBRAND
Richmond, Virginia
January 25, 1994
14
CHESAPEAKE CORPORATION AND SUBSIDIARIES
SCHEDULE II - AMOUNTS RECEIVABLE (IN EXCESS OF $100,000)
FROM RELATED PARTIES AND UNDERWRITERS,
PROMOTERS AND EMPLOYEES OTHER THAN RELATED PARTIES
Balance
at
Deductions
end of
year Number of
Balance at Amounts
collateral
beginning Amounts written
Not
shares at
Name of debtor(a) of year Additions collected off
Current Current
end of year
(Dollar amounts
in thousands)
Year ended December 31, 1991:
J. Carter Fox $103 $ - $41 $ -
$ 32 $ 30
13,850
Year ended December 31, 1992:
J. Carter Fox $ 62 $ - $ 62 $ -
$ - -
-
Year ended December 31, 1993:
$ - $ - $ - $ -
$ - $ -
-
Note:
(a) Under the provisions of the Company's stock option plans, five-year
loans may be made to
individuals in connection with their exercise of options for shares of
common stock.
Outstanding loans bear interest at 9% per annum, mature within five years
in installments that
15
comply with applicable rules of the Federal Reserve Board and are collateralized
by shares of common
stock.
16
CHESAPEAKE CORPORATION AND SUBSIDIARIES
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Cost of
timber
Balance at Additions
harvested
Balance
beginning at Sales and credited
to Other at
end
of year Cost retirements asset
cost Changes of
year
(In millions)
Year ended December 31, 1991
Land - plant sites $ 11.6 $ .2 $ .6 $ -
$ - $
11.2
Buildings and structures
111.1 5.5 1.6 -
-
115.0
Machinery and equipment 828.8 36.9 (a) 16.1
-
- 849.6
Construction in progress
19.4 47.5 (a) - -
-
66.9
Subtotals 970.9 90.1
18.3
- - - 1,042.7
Timber and timberlands 39.7 2.1 - 1.1
-
40.7
Totals $1,010.6 $92.2 $18.3
$ 1.1 $ -
$1,083.4
Year ended December 31, 1992
Land - plant sites $ 11.2 $ .1 $ - $ -
$ - $
11.3
Buildings and structures 115.0 5.4
.6
- - 3.2 (b) 123.0
Machinery and equipment 849.6 129.6 (a) 10.7
-
16.4 (b) 984.9
Construction in progress
66.9 (52.1) (a) - -
-
14.8
Subtotals 1,042.7 83.0 11.3
-
19.6 1,134.0
Timber and timberlands 40.7 2.0 .2
1.1
- - 41.4
17
Totals $1,083.4 $ 85.0 $11.5 $ 1.1
$19.6
$1,175.4
Year ended December 31, 1993
Land - plant sites $ 11.3 $ .4 $ .8 $ -
$ - $
10.9
Buildings and structures 123.0 12.6 5.5
-
(.2) 129.9
Machinery and equipment 984.9 44.4
30.1
- .2 999.4
Construction in progress
14.8 4.9 .4
-
- 19.3
Subtotals
1,134.0 62.3 36.8
-
- 1,159.5
Timber and timberlands
41.4 1.6 2.5 .7
-
39.8
Totals $1,175.4 $63.9 $39.3
$ .7 $ -
$1,199.3
Notes:
(a) Major additions
1991 and 1992 - Number 5 recovery boiler (Chesapeake Paper
Products)
(b) Adoption of SFAS 109
18
CHESAPEAKE CORPORATION AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION
OF PROPERTY, PLANT AND EQUIPMENT
Additions
Balance at charged to
Balance at
beginning costs and Other
end of
of
year expenses
Retirements changes year
(Inmillions)
Year ended December 31, 1991:
Buildings and structures $ 28.8 $ 4.3 $ 1.2 $
.3 $ 32.2
Machinery and equipment 365.6 56.7 13.0
.3 409.6
Totals $394.4 $61.0 $14.2 $
.6 $441.8
Year ended December 31, 1992:
Buildings and structures $ 32.2 $ 5.2 $ .5 $
1.6 (a)
$ 38.5
Machinery and equipment 409.6
60.2 9.9 8.7
(a) 468.6
Totals $441.8 $65.4 $10.4
$10.3 $507.1
Year ended December 31, 1993:
Buildings and structures $ 38.5 $ 5.1 $ 4.2 $
(.2) $ 39.2
Machinery and equipment 468.6 64.4 26.9
.2 506.3
Totals $507.1 $69.5 $31.1
$ - $545.5
Notes:
(a) Adoption of SFAS 109
19
EXHIBIT INDEX
2.1 Asset Purchase Agreement, dated as of September 24, 1993, By
and Between Chesapeake Building Products Company and Universal
ForestProducts, Inc.
2.2 Agreement of Merger, dated as of December 31, 1993, By andAmong
Chesapeake Packaging Co., Lawless Acquistion Co., Lawless
Holding Corporation and the Common Shareholders of Lawless Holding
Corporation
The registrant agrees to furnish supplementally to the
Securities and Exchange Commission, upon request, copies of the
schedules and exhibits to Exhibits 2.1 and 2.2 hereto that are not filed
herewith prusuant to Item 601(b)(2) of Regulation S-K.
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 Bylaws (filed as Exhibit 3.2 to the Registrant's Annual Report
on Form 10-K for the year ended December 31, 1991 and incorporated herein
by reference)
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)
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 1981 Stock Incentive Plan (included as Exhibit A to the
Prospectus contained in Post-Effective Amendment No. 1 to Form
S-8 Registration Statement No. 2-71595 and incorporated herein by
reference)
10.2 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)
20
10.3 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)
10.4 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)
10.5 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)
10.6 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 Officers' Incentive Program (filed as Exhibit 10.8 to the
Registrant's Annual Report on Form 10-K for the year
ended December 31, 1987 and incorporated herein by reference)
21
10.8 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)
10.9 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)
10.10 Chesapeake Corporation 1993 Incentive Plan (filed as Exhibit
4.1 to Form S-8 Registration Statement No. 33-67384 and incorporated
herrein by reference)
10.11 Agreement between Thomas Blackburn and Chesapeake Paper
Products Company dated as of November 24, 1993
11.1 Computation of Net Income Per Share of Common Stock
12.1 Computation of Ratio of Earnings to Fixed Charges
13.1 Portions of the Chesapeake Corporation Annual Report to
Stockholders for the year ended December 31, 1993
21.1 Subsidiaries
23.1 Consent of Coopers & Lybrand
28.1 Form 11-K Annual Report, Hourly Employees' Stock Purchase Plan
for the plan fiscal year ended November 30, 1993
22