Chesapeake Restructuring

Chesapeake Corp. announced a restructuring program consistent with the company's intention to reduce corporate overhead and reduce its manufacturing network after undertaking a series of acquisitions in Europe over the past two years.

The restructuring program is comprised of the following:

In the third quarter, 2001, an after-tax charge of approximately $3.4 million will be recognized for costs associated with a salaried staff reduction of about 50 positions at corporate headquarters in Richmond, Va., achieved primarily through a voluntary separation program.

In the fourth quarter Chesapeake expects to record additional restructuring charges. The company is considering proposals to reduce the manufacturing capacity of two carton factories in Scotland.

Additional capacity reductions in the company's plants are also under consideration. The company will record a restructuring provision during the fourth quarter for costs associated with workforce and capacity reductions after employee representatives have been consulted. Savings related to these actions will be announced in the fourth quarter of this year.

Chesapeake also expects to complete the sale of its Thatcham, England factory in the fourth quarter. The Thatcham factory was closed at the end of 2000 as part of a restructuring provision recorded in the fourth quarter, 2000.