Canal Corp – ‘10-K’ for 12/31/96

As of:  Thursday, 3/27/97   ·   For:  12/31/96   ·   Accession #:  19731-97-2   ·   File #:  1-03203

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                         14±    66K 
 3: EX-3        Articles of Incorporation/Organization or By-Laws     14±    62K 
 2: EX-5        Opinion re: Legality                                   1      7K 
 5: EX-10       401(K) Restoration Plan                               10±    40K 
 4: EX-10       Director's Stock Option & Deferred Compensation Pl    13±    52K 
 6: EX-11       Statement re: Computation of Earnings Per Share        1      8K 
 7: EX-13       Annual or Quarterly Report to Security Holders        39±   155K 
 8: EX-21       Subsidiaries of the Registrant                         2±     8K 
 9: EX-23       Consent of Experts or Counsel                          1      9K 
10: EX-99       Miscellaneous Exhibit                                  4     26K 

10-K   —   Annual Report
Document Table of Contents

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UNITED STATES 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, 1996                           

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 11, 1997, of the voting stock held by    
non-affiliates of the registrant was $681 million.  In determining this         
figure, the registrant has assumed that all of its directors and officers       
are affiliates.  This assumption shall not be deemed conclusive for any         
other purpose.                                                                  

23,432,395 shares of the registrant's common stock, par value $1, were          
outstanding as of February 11, 1997.                                            

Portions of the registrant's Annual Report to Stockholders for the year ended   
December 31, 1996 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 23, 1997, are incorporated in       
Part III by reference.                                                          

PART I              

Item 1.  Business                                                               

GENERAL                                                                         

Chesapeake Corporation, a Virginia corporation organized in 1918, is a          
packaging and paper company, whose primary businesses consist of the            
manufacture and sale of packaging, tissue, and kraft products.  Our             
operating businesses include: in the packaging segment -- Chesapeake            
Display and Packaging Company, Color-Box, Inc., Chesapeake Europe S.A., and     
Chesapeake Packaging Co. (point-of-sale displays, graphic packaging, and        
corrugated shipping containers); in the tissue segment -- Wisconsin Tissue      
Mills Inc. and Wisconsin Tissue de Mexico, S.A. de C.V.(commercial and          
industrial tissue products); in the kraft products segment -- Chesapeake        
Paper Products Company and Chesapeake Forest Products Company (kraft            
products, building products and woodlands operations); and Delmarva             
Properties, Inc. and Stonehouse Inc. (land development).                        

Chesapeake competes in the large, capital-intensive paper and forest            
products industry.  Until the mid 1980s, Chesapeake's products were             
primarily kraft commodity products manufactured by Chesapeake Paper             
Products.  In commodity markets, selling prices are controlled by total         
market supply and demand.  Success in these markets hinges on maximizing        
production and minimizing operating costs.  Selling prices and profits for      
commodity products are typically cyclical and tend to 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 manufacturing 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 1996, sales      
of specialty products were more than 70% of Chesapeake's total sales,           
compared to 60% in 1995.  Chesapeake expanded internationally for the first     
time during 1996, acquiring display and packaging facilities in Canada and      
France and tissue converting operations in Mexico.  See "Financial Review       
1994-1996" of the Company's 1996 Annual Report to Stockholders (the "1996       
Annual Report"), incorporated herein by reference.                              

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 and creative decision making.       
Our operations are designed to be flexible to changing customer demands and     
business conditions.                                                            

Our manufacturing and converting processes are capital intensive; property,     
plant and equipment, including timber and timberlands, comprise                 
approximately 67% of our total assets.  Our tissue and kraft products           
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 commodity products such as brown             
paperboard and bleached hardwood pulp.  About one-half of these                 
expenditures were for paper machine projects for our tissue and  kraft          
products businesses.  Included in the  program was a $100 million project       
for a recovery boiler, evaporators, and related equipment for our kraft         
products business.  In 1995, we continued to expand our tissue business         
with the acquisition of two paper mills. Further expansion of the tissue        
business occurred in 1996 as two additional converting operations began         
full operations and certain tissue converting assets and distribution           
facilities were acquired in Mexico.  Growth in our packaging segment within     
the past two years included: new graphic packaging plants in California and     
Mississippi; a new custom packing operation in Memphis; and the                 
acquisitions of point-of-sale and packaging operations in Kentucky, Canada,     
and France, and a corrugated container manufacturer in Richmond, VA.  Also,     
capital expenditures intended to enhance efficiency, and to improve product     
quality and productivity, were made at many of our existing packaging           
facilities during 1995 and 1996.                                                

Our businesses are grouped into three major segments:  packaging, tissue        
and kraft products.  The information presented in "Notes to Consolidated        
Financial Statements, Note 14 - Business Segment Information" of the 1996       
Annual Report is incorporated herein by reference.  Information with            
respect to the Company's  working capital practices is set forth under the      
caption "Financial Review 1994-1996, Liquidity and Capital Structure" of        
the 1996 Annual Report and is incorporated herein by reference.                 
Information regarding the Company's anticipated capital spending is set         
forth under the caption "Financial Review 1994-1996, Capital Expenditures"      
of the 1996 Annual Report and is incorporated herein by reference.              

PACKAGING                                                                       

Chesapeake's packaging segment has three marketing thrusts:  point-of-sale      
displays, 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 to meet their                
promotional and permanent display needs.  Our manufacturing facilities          
utilize modern production, assembly and packaging processes to meet our         

customers' stringent quality and shipment demands.  We have four                
strategically located point-of-sale display and specialty packaging             
manufacturing plants and four custom packing plants which provide service       
to customers in the United States and Canada.  Included in these facilities     
are the operations of the former Display Division of Dyment Limited, in         
Erlanger, KY, and Toronto, Canada, which were acquired in 1996, and a new       
custom packing plant in Memphis, TN, which began operations during 1996.        
Also in 1996, Chesapeake purchased the point-of-sale display and packaging      
businesses of Sailliard S.A., a leading manufacturer of displays, rigid         
boxes, and specialty folding cartons in France, as part of its strategy to      
expand its packaging business globally.  The businesses include Sailliard       
PLV, specializing in the design and manufacture of permanent and temporary      
point-of-sale displays; Coffrets and Plastiphane, specializing in the           
design and manufacture of rigid boxes, with a focus on perfume, champagne,      
and specialty products customers; Raab Pige and Cecil, specializing in the      
design, printing, and manufacture of folding cartons for the luxury goods       
and pharmaceutical industries; and Linea, a design firm specializing in the     
creative development of packaging and marketing materials for the fine          
spirits industry.                                                               

Our Color-Box subsidiary supplies graphic packaging to customers nationwide     
that require attractive full litho-laminated retail packaging.  The final       
phase of a $13 million expansion project to double the capacity of this         
business was completed in 1993.  In January 1994, Chesapeake Packaging          
acquired Lawless Holding Corporation, which included Lawless Packaging and      
Display, a graphic packaging plant in Buffalo, NY, which is now operated as     
the Buffalo division of Color-Box.  A graphic packaging plant in Visalia,       
CA, began operation late in the second quarter of 1995, with the second         
phase of this plant completed in 1996.  Also in 1996, a fourth graphic          
packaging facility, located in Pelahatchie, MS, became operational.             

As part of the Company's strategy to focus on specialty products, the           
Company reorganized, in 1996, the operations of Chesapeake  Display and         
Packaging Company and Color-Box, Inc. under a group identified as Specialty     
Packaging and Merchandising Services.                                           

Twelve corrugated shipping container plants located in seven states             
manufacture corrugated boxes and specialty packaging for customers within       
each plant's geographic area.  The raw materials 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.  In         
September, 1996, substantially all the assets of Triad Packaging  Co.,          
Inc., a manufacturer of corrugated containers in Richmond, VA, were             
acquired.  The Lawless acquisition in January 1994 included the Lawless         
Container Corporation corrugated container plant in North Tonawanda, NY,        
and corrugated sheet plants in Scotia, NY; Le Roy, NY; and Madison, OH.         

TISSUE                                                                          

Chesapeake's tissue segment consists of Wisconsin Tissue Mills Inc. and         
Wisconsin Tissue de Mexico, S.A. de C.V., which produce tissue for              
industrial and commercial markets.  Chesapeake Consumer Products Company, a     
converter of tissue products for the consumer market, was also part of this     
segment until December 29, 1995, when it was sold to The Fonda Group, Inc.      
of St. Albans, VT.                                                              

Wisconsin Tissue, acquired in 1985, manufactures napkins, tablecovers,          
toweling, placemats, wipers and facial and bathroom tissue for commercial       
and industrial markets.  Operations of the tissue segment now include:          
paper mills in Menasha, WI; Flagstaff, AZ; and Chicago, IL; converting          
facilities in Bellemont, AZ; Greenwich, NY; and Monterey and Puebla,            
Mexico; and distribution facilities in Mexico City, Monterey, Puebla and        
Guadalajara, Mexico.  The operations in Mexico were acquired late in 1996       
from Jokel Desarrollos, S.A. de C.V. and Ambitec, S.A. de C.V., and are         
consistent with Chesapeake's strategy to expand in the North American           
commercial and industrial tissue market.  The Bellemont and Greenwich           
converting operations became fully operational in 1996.  The 1995 addition      
of the paper mills in Arizona and Illinois increased primary tissue             
production capacity by 90,000 tons per year, or approximately 50%.  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 manufactured by Wisconsin Tissue is 100%         
recovered paper.  Seven paper machines manufacture base tissue stock that       
is converted on approximately 135 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, Canada, and Mexico using our own sales force or brokers.     
Shipments by Wisconsin Tissue were 305,000 tons in 1996, 235,000 tons in        
1995,  and 217,000 tons in 1994.                                                

KRAFT PRODUCTS                                                                  

Chesapeake's kraft products segment consists of Chesapeake Paper Products       
Company, our kraft products operations, and Chesapeake Forest Products          
Company, our woodlands and building products operations, both based in West     
Point, VA.  Chesapeake Building Products Company, a wholly-owned subsidiary     
of Chesapeake Forest Products Company, was formed in 1993.                      

Chesapeake Paper Products manufactures white-top paperboard, kraft              
paperboard, kraft paper, corrugating medium, and bleached hardwood pulp at      
its mill located in West Point, VA.  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. 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 costs compared to many of our competitors.  We also sell to             
international customers, primarily in Europe, Asia and Canada.  Our sales       
force markets these products to integrated and independent converters and       
manufacturers.                                                                  

During 1995, Chesapeake Paper Products completed the rebuild of the No.2        
paper machine at the West Point, VA, mill.  While lost production               
associated with the rebuild reduced shipments in 1995 and early in 1996,        
the project increased the mill's capacity by 70,000 tons per year while         
permitting a more profitable product mix.  Total shipments from the West        
Point mill were 831,000 tons in 1996, 769,000 tons in 1995, and 850,000         
tons in 1994.                                                                   

In 1996, approximately 69% of the raw material for products manufactured by     
our kraft products mill was virgin wood fiber, with the remainder being         
recycled fiber recovered through our recycling system, which has the            
capacity to use 360,000 tons of recycled fiber annually.  About 65% of the      
virgin wood fiber used in 1996 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.                             

In recent years much emphasis has been placed on training, problem-solving      
and employee involvement in all phases of the mill's operation.  These          
factors, as well as the installation of new equipment, have enabled the         
mill to improve product quality and reduce reject levels.  A mill               
optimization program is also in place, which is intended to improve             
efficiency in the manufacturing process.                                        

Chesapeake Forest Products Company, Woodlands Division                          

Chesapeake Forest Products, Woodlands Division, owns and actively manages       
approximately 326,000 acres of timberland located in Virginia, Maryland and     
Delaware.  The primary objective of our woodlands operation is to provide       
an adequate supply of wood at a competitive cost to the kraft products mill     
located at West Point, VA.  Wood for our mill is provided 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 made available to private       
landowners, grow quicker and provide higher quality, more uniform fibers at     
the 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. 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. In addition, in 1995           
Chesapeake Forest Products Company pledged to comply with new American Forest   
and Paper Association guidelines of conduct that will govern the way we grow    
and nurture our forests, known as the "Sustainable Forestry Initiative".        

Chesapeake Building Products Company                                            

Chesapeake Building Products operates four sawmills in Virginia and             
Maryland, manufacturing pine and hardwood lumber.  The raw materials are        
provided both from company-owned timberlands and from other landowners.         
Our sawmill products are sold by our own sales force to independent users.      

OTHER BUSINESSES                                                                

Delmarva Properties, Inc. and Stonehouse Inc.                                   

Delmarva Properties develops and markets land that has potential for value      
greater than timberland.  Nearly all of Delmarva Properties' present land       
inventory of approximately 6,000 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 for both residential       
and commercial uses. A major project involves the development of a mixed-use    
site next to a  horse racing track under construction in New Kent, VA.          

Stonehouse Inc. is managing the planning for development of a new 7,400         
acre planned community near Williamsburg, VA.  Stonehouse Inc.'s joint          
venture with Dominion Capital, Inc. provides a partnership for development      
of the first residential phase of the planned community in which lots will      
be marketed in 1997.  Most of Stonehouse's land was formerly timberland         
owned by Chesapeake Forest Products.                                            

RAW MATERIALS                                                                   

Most of the Company's raw materials are readily available at competitive        
prices.  Prices of recycled fiber, a major raw material, reached historic       
highs in 1994 and early 1995, but moderated by year-end 1995.  Prices           
remained at a moderate level in 1996.  See "Financial Review 1994-1996" of      
the 1996 Annual Report, incorporated herein by reference.                       

ENVIRONMENTAL                                                                   

The information presented under the caption "Financial Review 1994-1996,        
Environmental" of the 1996 Annual Report is incorporated herein by              
reference.                                                                      

EMPLOYEES                                                                       

As of December 31, 1996, the Company had 6,914 employees.  The Company          
believes that its relations with its employees are good.  In 1992,              
Wisconsin Tissue and Chesapeake Paper Products entered into five-year           
collective bargaining agreements with the unions representing employees at      
the mills in Menasha, WI, and West Point, VA.  During 1994, a five-year         
labor contract extension was negotiated with the union representing             
employees at Chesapeake Paper Products mill in West Point, VA.  The Company     
expects to negotiate a new collective bargaining agreement with the union       
representing employees at Wisconsin Tissue's mill in Menasha, WI, to            
replace the agreement that expires this year.  During 1994 and 1995,            
Chesapeake Paper Products Company and Chesapeake Forest Products Company        
implemented enhanced retirement programs affecting both hourly and salaried     
employees at these operations. See "Financial Review 1994-1996" of the 1996     
Annual Report incorporated herein by reference.                                 

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 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 have less pricing volatility,      
resulting in increased profitability over the course of a full business         

cycle.  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 1996, Chesapeake manufactured or converted paper and wood           
products at multiple facilities in 16 states, Canada, Mexico and France.        
The information presented under "Operating Managers and Locations" in the       
1996 Annual Report is incorporated herein by reference.  The Company owns       
most of its production facilities, which are 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 1996 Annual Report is incorporated herein by       
reference.                                                                      

Item 4.  Submission of Matters to a Vote of Security Holders                    

None                                                                            

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Executive Officers of the Registrant                                            

The name and age of each executive officer of the Company  as of February       
11, 1997, together with a brief description of the principal occupation or      
employment of each such person during the past 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 (57)                                                              
Chairman since 1994                                                         
Chief Executive Officer since 1980                                          
President 1980-1995, 1996                                                   
Thomas Blackburn (45)                                                           
Group Vice President-Kraft, Packaging & Organizational                      
Development since 1996                                                          
President, Chesapeake Paper Products Company since 1991                     
President, Chesapeake Forest Products Company  1991-1996                    
Group Vice President-Kraft Products 1991-1996                               
Andrew J. Kohut (38)                                                            
Group Vice President-Specialty Packaging & Merchandising Services           
since 1996                                                              
Group Vice President-Finance & Strategic Development 1995-1996              
Chief Financial Officer 1991-1996                                           
Vice President-Finance 1991-1995                                            
William A. Raaths (50)                                                          
Group Vice President-Tissue Products since 1995                             
President-Wisconsin Tissue Mills Inc. since 1995                            
Executive Vice President- Wisconsin Tissue Mills Inc. 1994-1995             
President, Chesapeake Consumer Products Company 1989-1994                   
William T. Tolley (39)                                                          
Group Vice President-Finance & Chief Financial Officer since 1996           
Vice President, Finance & Chief Financial Officer, Carrier                  
Corporation, North American Operations, a division of United                    
Technologies 1995-1996                                                          
Vice President & Chief Financial Officer, Carrier Transicold, a             
division of United Technologies 1991-1995                                     
J. P. Causey Jr. (53)                                                           
Senior Vice President, Secretary & General Counsel since 1995               
Vice President, Secretary & General Counsel  1986-1995                      
Thomas A. Smith (50)                                                            
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" of the 1996 Annual Report is incorporated herein     
by reference.  The Company's common stock is listed on the New York Stock       
Exchange under the symbol "CSK".  As of February 26, 1997, there were 7,179     
stockholders of record of the Company's common stock.                           

Item 6.  Selected Financial Data                                                

The information for the years 1992-1996 presented under the caption             
"Eleven-Year Comparative Record" of the 1996 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 1994-1996" of     
the 1996 Annual Report is incorporated herein by reference.                     

Item 8.  Financial Statements and Supplementary Data                            

The consolidated financial statements of the Company and its subsidiaries,      
including the notes thereto, and the information presented under the            
caption "Recent Quarterly Results" of the 1996 Annual Report are                
incorporated herein by reference.                                               

The Financial Accounting Standards Board recently issued Statement of           
Financial Accounting Standards No. 128, "Earnings Per Share."  This             
standard, which is effective for financial statements issued for periods        
ending after December 15, 1997, simplifies the computation of earnings per      
share ("EPS") by replacing the presentation of primary EPS with a               
presentation of basic EPS.  This standard requires dual presentation of         
basic and diluted EPS by entities with complex capital structures.  Basic       
EPS includes no dilution, while diluted EPS reflects potential dilution of      
securities that could share in the earnings of an entity.  The Company does     
not expect the impact of this standard to be material to its financial          
statements or earnings.                                                         

Item 9.  Changes in and Disagreements with Accountants on                       
Accounting and Financial Disclosure                   

None                                                                            

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 23,     
1997 (the "1997 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 1997 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 1997 Proxy Statement is                
incorporated herein by reference.                                               

Item 13.  Certain Relationships and Related Transactions                        

The information presented under the caption "Certain Transactions" of the       
1997 Proxy Statement is incorporated herein by reference.                       

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PART IV     

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K     

a. Documents                                                                    

(i)Financial Statements                                                     

The consolidated balance sheet of Chesapeake Corporation and subsidiaries       
as of December 31, 1996 and 1995, 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, 1996, including the notes thereto, are         
presented in the Company's 1996 Annual Report and are incorporated herein       
by reference. The "Report of Independent Accountants" as presented in the       
Company's 1996 Annual Report is 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 1996 Annual Report is deemed to be "filed" as       
part of this Form 10-K.                                                         

(ii)        Financial Statement Schedules                                 

No schedules are filed as part of this report because they are not              
applicable or are not required.                                                 

(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 14-15 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                                                                            

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 11, 1997                       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               
M. Katherine Dwyer                 Wallace Stettinius           
Director                                Director                          

By /s/ J. CARTER FOX                    By /s/ JOHN HOYT STOOKEY                
J. Carter Fox                      John Hoyt Stookey            
Chairman of the Board              Director                     
of Directors; President &                                       
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 /s/ JOSEPH P. VIVIANO                     
William D. McCoy                   Joseph P. Viviano                      
Director                           Director                               
By                                 By /s/ HARRY H. WARNER                       
C. Elis Olsson                     Harry H. Warner                        
Director                           Director                               
By /s/ JOHN W. ROSENBLUM           By /s/ WILLIAM T. TOLLEY                     
John W. Rosenblum                  William T. Tolley                      
Director                                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 11, 1997.                

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EXHIBIT INDEX     

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   Amended and Restated Bylaws                                               

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)                                   

4.3   Rights Agreement, dated as of March 15, 1988, between the Registrant      
and Crestar Bank (filed as Exhibit 4.1 to the Registrant's Current  
Report on Form 8-K dated March 15, 1988, and incorporated herein by 
reference)                                                          

4.4   Rights Agreement Amendment, dated as of August 24, 1992, between the      
Registrant and Harris Trust and Savings Bank, as successor rights   
agent (filed as Exhibit 4.4 to the Registrant's Registration        
Statement on Form S-8, File No. 33-56473, 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  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)           

10.2  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)                      

10.3  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)                                           

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10.4  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)                      

10.5  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  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)                                                

10.8  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)       

10.9  Chesapeake Corporation 1993 Incentive Plan (filed as Exhibit 4.1 to       
Form S-8 Registration Statement No. 33-67384 and incorporated herein
by reference)                                                       

10.10  Chesapeake Corporation Directors' Stock Option and Deferred              
Compensation Plan.                                                

10.11  Chesapeake Corporation 401(k) Restoration Plan                           

11.1  Computation of Net Income Per Share of Common Stock                       

13.1  Portions of the Chesapeake Corporation Annual Report to Stockholders      
for the year ended December 31, 1996                                

21.1  Subsidiaries                                                              

23.1  Consent of Coopers & Lybrand L.L.P.                                       

27.1  Financial Data Schedule                                                   

99.1  Form 11-K Annual Report, Hourly Employees' Stock Purchase Plan for        
the plan fiscal year ended November 30, 1996.                       

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10-K’ Filing		Date		First		Last			Other Filings
		12/15/97		2
		4/23/97		1		2			DEF 14A
Filed on:		3/27/97
		2/26/97		2
		2/11/97		1		3
For Period End:		12/31/96		1		5			10-K/A
		11/30/96		5
		12/31/95		3					10-K
		12/29/95		1
		8/24/92		4
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