<PAGE>
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 14D-1
(AMENDMENT NO. 3)
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND
SCHEDULE 13D
(AMENDMENT NO. 3)
UNDER THE SECURITIES EXCHANGE ACT OF 1934
---------------
SHOREWOOD PACKAGING CORPORATION
(Name of Subject Company)
---------------
CHESAPEAKE CORPORATION
SHEFFIELD, INC.
(Bidders)
---------------
Common Stock, $0.01 Par Value Per Share
(Including Associated Rights)
(Title of Class of Securities)
---------------
825229107
(CUSIP Number of Class of Securities)
---------------
Thomas H. Johnson
President & Chief Executive Officer
Chesapeake Corporation
1021 East Cary Street
Richmond, Virginia 23218-2350
(804) 697-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
Copies to:
Gary E. Thompson, Esq.
Hunton & Williams
Riverfront Plaza, East Tower
951 East Byrd Street
Richmond, Virginia 23219-4074
(804) 788-8200
---------------
December 20, 1999
(Date of Event Which Requires Filing of This Statement)
- --------------------------------------------------------------------------------
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This Amendment No. 3 to Schedule 14D-1 supplements and amends the Tender
Offer Statement on Schedule 14D-1, filed on December 3, 1999 (the "Schedule
14D-1"), by Sheffield, Inc., a Delaware corporation ("Purchaser"), and
Chesapeake Corporation ("Chesapeake"), a Virginia corporation and the direct
owner of all of the outstanding capital stock of Purchaser. The Schedule 14D-1
relates to the offer by Purchaser to purchase all outstanding shares of common
stock, $0.01 par value per share (the "Common Stock"), including the
associated rights to purchase preferred stock (the "Rights" and together with
the Common Stock, the "Shares"), of Shorewood Packaging Corporation, a
Delaware corporation (the "Company"), not directly or indirectly owned by
Chesapeake and its subsidiaries, for a purchase price of $17.25 per Share, net
to the seller in cash, without interest thereon, on the terms and subject to
the conditions set forth in the Offer to Purchase, dated December 3, 1999 (the
"Offer to Purchase"), and in the related Letter of Transmittal and any
amendments or supplements thereto (which collectively constitute the "Offer").
Capitalized terms used and not otherwise defined herein have the meanings set
forth in the Schedule 14D-1. This Amendment No. 3 to Schedule 14D-1 also
constitutes Amendment No. 3 to the statement on Schedule 13D of Purchaser and
Chesapeake, filed on November 30, 1999.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company
The text of Section 10 of the Offer to Purchase is hereby amended and
supplemented by adding thereto the following:
(b) On December 16, 1999, the Company issued the following press release:
Shorewood Board Rejects Chesapeake's Offer as Inadequate
Files Counterclaims Alleging Chesapeake is 'Interested Stockholder';
Could Jeopardize its Financing if Merger not Possible for Three Years
NEW YORK, Dec. 16 /PRNewswire/--Shorewood Packaging Corporation (NYSE: SWD)
announced today that its Board of Directors voted unanimously to recommend
that stockholders reject the unsolicited $17.25 per share tender offer by
Chesapeake Corporation (NYSE: CSK) and not tender any of their shares pursuant
to the offer.
In recommending that stockholders reject Chesapeake's offer, Shorewood's
Board cited the following:
. the Board's view that the Chesapeake offer is inadequate and does not
reflect the inherent value of Shorewood as a leading value-added
provider of high quality printing and paperboard packaging products for
the music, computer software, cosmetics and toiletries, food, home
video, tobacco, and general consumer markets in North America.
. the written opinion of Bear, Stearns & Co. Inc., Shorewood's financial
advisor, that Chesapeake's offer price is inadequate from a financial
point of view to Shorewood's stockholders (other than Chesapeake and its
affiliates).
. the opportunistic timing of Chesapeake's offer, which seeks to exploit
Shorewood's recent stock price in relation to historic trading patterns.
. that Chesapeake's offer price represents a 15% to 20% discount to the
one year target prices for Shorewood's stock (without taking into
account any extraordinary transaction) which have been announced by
several major Wall Street brokerage firms that cover Shorewood.
. the significant uncertainties and contingencies associated with
Chesapeake's offer, including the numerous conditions to Chesapeake's
financing and the Board's belief that one or more of these conditions
cannot be satisfied.
. the significant uncertainties associated with the second-step merger
proposed by Chesapeake, including uncertainty as to the permissibility
of such merger within three years under Section 203 of the Delaware
corporate law.
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. the Board's belief that Chesapeake's offer represents an attempt by
Chesapeake to usurp for itself the future growth in revenues, net income
and cash flow and stock price appreciation that are only beginning to
result from Shorewood's recent capital expenditures and other
initiatives aimed at making Shorewood the premier global supplier of
value-added packaging.
. the Board's view that based on, among other things, the preliminary
discussions Shorewood has had with certain unsolicited third parties,
Shorewood has a variety of strategic alternatives available to it to
enhance stockholder value.
Marc P. Shore, Chairman and Chief Executive Officer, stated, "Chesapeake's
hostile offer is clearly inadequate. It represents a significant discount to
our 52-week high, does not accurately reflect the Company's growth prospects
and may not be capable of being completed. Shorewood is a strong and growing
company with a proven track record and an exciting future."
Shore added, "The Board is fully committed to enhancing value for Shorewood
stockholders and has authorized management and its advisors to explore the
various strategic alternatives available to us. We look forward to completing
that process."
Shorewood also announced today that it is filing counterclaims in the lawsuits
brought by Chesapeake in Delaware state and federal court. The counterclaims
allege, among other things, that when Chesapeake agreed on November 26 to
purchase 14.9% of Shorewood's outstanding shares from an institutional holder
that held over 20% of the outstanding shares, the institutional holder agreed
to vote the remaining shares in favor of Chesapeake's consent solicitation.
The counterclaims also allege that other provisions of the purchase agreement
amount to an arrangement and understanding between the institutional holder
and Chesapeake with respect to the entire 20% block. The effect of this
arrangement is to make Chesapeake an "interested stockholder" under Section
203 of the Delaware corporate law, thereby proscribing Chesapeake's ability to
consummate a merger for three years without the two-thirds vote of the
outstanding shares not owned by Chesapeake. The Chancery Court counterclaim
seeks a declaratory judgment that Chesapeake is an "interested stockholder".
The Federal counterclaim alleges that Chesapeake's tender offer materials do
not disclose the full beneficial ownership and that Chesapeake has misstated
and concealed the fact that its financing is subject to numerous conditions,
many of which cannot be satisfied.
Additional information with respect to the Board's decision to recommend that
stockholders reject Chesapeake's offer and the matters considered by the Board
in reaching such decision is contained in Shorewood's
Solicitation/Recommendation Statement on Schedule 14D-9, which is being filed
today with the Securities and Exchange Commission and will be mailed to
stockholders shortly.
Shorewood Packaging Corporation is a leading value-added provider of high
quality printing and paperboard packaging for the computer software, cosmetics
and toiletries, food, home video, music, tobacco and general consumer markets
in North America and China, with 16 plants in the United States, Canada and
China.
Certain statements included in this press release constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are typically identified by their inclusion of
phrases such as "Shorewood anticipates," "Shorewood believes" and other
phrases of similar meaning. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of Shorewood to be materially different
from any future results, performance or achievements expressed or implied by
such forward-looking statements. Such factors include, among others: general
economic and business conditions; competition; political changes in
international markets; raw material and other operating costs; costs of
capital equipment; changes in foreign currency exchange rates; changes in
business strategy or expansion plans; the results of continuing environmental
compliance testing and monitoring; quality of management; availability, terms
and development of capital; fluctuating interest rates and other factors
referenced in this release and in Shorewood's annual report on Form 10-K and
quarterly reports on Form 10- Q.
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THIS PRESS RELEASE DOES NOT CONSTITUTE A SOLICITATION TO REVOKE CONSENTS IN
CONNECTION WITH THE CONSENT SOLICITATION OF CHESAPEAKE CORPORATION. ANY SUCH
SOLICITATION WILL BE MADE ONLY BY MEANS OF SEPARATE CONSENT SOLICITATION
MATERIALS COMPLYING THE REQUIREMENTS OF SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER.
CERTAIN INFORMATION CONCERNING PARTICIPANTS
Shorewood Packaging Corporation ("Shorewood") and certain other persons named
below may be deemed to be participants in the solicitation of revocations of
consents in response to the consent solicitation being conducted by Chesapeake
Corporation ("Chesapeake"). The participants in this solicitation may include:
(i) the directors of Shorewood (Marc P. Shore (Chairman of the Board and Chief
Executive Officer), Howard M. Liebman (President and Chief Financial Officer),
Leonard Verebay (Executive Vice President), Andrew N. Shore (Vice President
and General Counsel), Kevin J. Bannon, Sharon R. Fairley, Virginia A. Kamsky,
R. Timothy O'Donnell and William P. Weidner; and (ii) William H. Hogan (Senior
Vice President, Finance and Corporate Controller). As of the date of this
communication, the number of shares of common stock, par value $0.01 per share
("Common Stock"), beneficially owned by the Shorewood participants (including
shares subject to stock options exercisable within 60 days) is as follows:
Marc P. Shore (4,750,485), Howard M. Liebman (233,269), Leonard J. Verebay
(500,180), Andrew N. Shore (169,052), Kevin J. Bannon (33,000), Virginia A.
Kamsky (4,500), R. Timothy O'Donnell (326,118); William P. Weidner (57,000);
and William H. Hogan (30,500 shares).
Shorewood has retained Bear, Stearns & Co. Inc. ("Bear Stearns") and Jefferson
Capital Group, Ltd. ("Jefferson Capital") to act as its co-financial advisors
in connection with the tender offer (the "Offer") by Chesapeake and its wholly
owned subsidiary, Sheffield, Inc., to purchase shares of Common Stock for
$17.25 per share net to the seller in cash, for which Bear Stearns and
Jefferson Capital may receive substantial fees, as well as reimbursement of
reasonable out-of-pocket expenses. In addition, Shorewood has agreed to
indemnify Bear Stearns, Jefferson Capital and certain related persons against
certain liabilities, including certain liabilities under the federal
securities laws, arising out of their engagement. Neither Bear Stearns nor
Jefferson Capital admit that they or any of their partners, directors,
officers, employees, affiliates or controlling persons, if any, is a
"participant" as defined in Schedule 14A promulgated under the Securities
Exchange Act of 1934, as amended, in the solicitation of consent revocations,
or that Schedule 14A requires the disclosure of certain information concerning
Bear Stearns and Jefferson Capital, respectively.
In connection with Bear Sterns' role as co-financial advisor to Shorewood,
Bear Stearns and the following investment banking employees of Bear Stearns
may communicate in person, by telephone or otherwise with a limited number of
institutions, brokers or other persons who are stockholders of Shorewood and
may solicit consent revocations therefrom: Terry Cryan (Senior Managing
Director), Charles Edelman (Senior Managing Director), Mark A. Van Lith
(Managing Director) and Karen Duffy (Vice President). Bear Stearns engages in
a full range of investment banking, securities trading, market-making and
brokerage services for institutional and individual clients. In the normal
course of its business Bear Stearns may trade securities of Shorewood for its
own account and the accounts of its customers, and accordingly, may at any
time hold a long or short position in such securities. Bear Stearns has
informed Shorewood that, as of the date hereof, Bear Stearns held no shares of
Common Stock for its own account. Bear Stearns and certain of its affiliates
may have voting and dispositive power with respect to certain shares of Common
Stock held in asset management, brokerage and other accounts. Bear Stearns and
such affiliates disclaim beneficial ownership of such shares of Common Stock.
In connection with Jefferson Capital's role as co-financial advisor to
Shorewood, Jefferson Capital and the following investment banking employees of
Jefferson Capital may communicate in person, by telephone or otherwise with a
limited number of institutions, brokers or other persons who are stockholders
of Shorewood and may solicit consent revocations therefrom: R. Timothy
O'Donnell (President) and Louis W. Moelchert (Vice President). R. Timothy
O'Donnell is the beneficial owner of 276,118 shares of Common Stock. Louis W.
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Moelchert is the beneficial owner of 1,500 shares of Common Stock. Jefferson
Capital has informed Shorewood that, as of the date hereof, it held 22,231
shares of Common Stock in its investment account.
Also on December 16, 1999, the Company filed a Solicitation/Recommendation
Statement on Schedule 14D-9.
Also on December 16, 1999, the Company filed an answer to Chesapeake's
complaint in the Court of Chancery of the State of Delaware denying all
material allegations of Chesapeake's complaint. The Company also filed a
counterclaim seeking, among other things, an order (i) declaring that
Chesapeake is an "interested stockholder" and "associate" of the Company
within the meaning of Section 203 of the DGCL, (ii) declaring that Chesapeake
will remain an "interested stockholder" and "associate" of the Company during
the entire time period prescribed by Section 203 of the DGCL, (iii) declaring
that the refusal of the Company Board (as currently constituted or to be
constituted in the future within the time period prescribed by Section 203 of
the DGCL) to take any action rendering Section 203 of the DGCL inapplicable to
the Offer and the Proposed Merger does not constitute a breach of fiduciary
duty, (iv) declaring that the proposals to remove the members of the Company
Board found in Chesapeake's Consent Solicitation (the "Removal Proposals") are
invalid under Section 141 of the DGCL, and (v) temporarily and permanently
enjoining the plaintiffs, their affiliates and all others acting in concert
with them, from taking any action in furtherance of the Removal Proposals.
Also on December 16, 1999, the Company filed an answer and counterclaim to
Chesapeake's complaint in the United States District Court for the District of
Delaware seeking, among other things, an order (i) declaring that Chesapeake's
and Purchaser's Schedule 14D-1 and Schedule 13D are materially false and
misleading, in violation of Sections 13(e) and 14(e) of the Exchange Act, and
(ii) preliminarily and permanently enjoining Chesapeake and Purchaser from
proceeding with the Offer in violation of Sections 13(e) and 14(e) of the
Exchange Act.
Also on December 16, 1999, Chesapeake issued the follow press release:
CHESAPEAKE AFFIRMS COMMITMENT TO TENDER OFFER AND
CONSENT SOLICITATION
SEEKS TO JOIN SHOREWOOD'S STRATEGIC PROCESS
(Richmond, VA--December 16, 1999)--Chesapeake Corporation (NYSE:CSK) today
expressed its disappointment with Shorewood Packaging Corporation's (NYSE:
SWD) response to Chesapeake's $17.25 all cash tender offer. Chesapeake remains
committed to its fully-financed tender offer and planned consent solicitation.
Thomas H. Johnson, president and chief executive officer of Chesapeake, said,
"We are extremely disappointed with the Shorewood Board of Directors'
continued refusal to meet with us to discuss our fully-financed cash tender
offer of $17.25 per share. This is especially true because we note that
Shorewood has authorized management and its advisors to explore various
strategic alternatives. It would clearly be a disservice to Shorewood's
stockholders to exclude Chesapeake or any interested party from this process.
"For Shorewood to reject our offer, especially without talking to us, is
irresponsible. Our financing is fully committed, subject only to customary
conditions that can be readily satisfied. Moreover, Shorewood's claim that
Chesapeake has exceeded the 14.9 percent threshold for the Delaware
antitakeover statute is without merit. At no time has Chesapeake been a party
to any agreement or understanding that would cause us to exceed that
threshold. Our stock purchase agreement with an institutional investor has
been on file with the Securities and Exchange Commission since November 30,
1999," Mr. Johnson continued.
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"We are vigorously pursuing our litigation in the Court of Chancery for the
State of Delaware which, among other things, seeks an order that Shorewood's
directors have breached their fiduciary duties under Delaware law. We are also
asking the Court to prevent Shorewood and its directors from taking certain
actions to thwart or interfere with our tender offer and consent solicitation
efforts," Mr. Johnson concluded.
A trial has been scheduled in the Court of Chancery for the State of Delaware,
commencing January 10, 2000, regarding several key issues relating to
Chesapeake's tender offer and planned consent solicitation.
Chesapeake Corporation, headquartered in Richmond, Va., is a global leader in
specialty packaging and merchandising services. Chesapeake is the largest
North American producer of temporary and permanent point-of-purchase displays,
the North American leader for litho-laminated packaging, the leading European
folding carton, leaflet and label supplier, and a local leader in specific
U.S. markets for customized, corrugated packaging. Chesapeake has over 40
locations in North America, Europe and Asia. Chesapeake's net sales in 1998
were $950.4 million. Chesapeake's website is www.cskcorp.com.
# # #
This news release does not constitute an offer to purchase any securities, nor
a solicitation of proxies or consents, from the stockholders of Shorewood
Packaging Corporation. The tender offer, and any solicitation of written
consents, will be made only pursuant to separate materials in compliance with
the requirements of applicable federal and state law.
This news release, including comments by Thomas H. Johnson, contains forward-
looking statements that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The accuracy of such
statements is subject to a number of risks, uncertainties, and assumptions
that may cause Chesapeake's actual results to differ materially from those
expressed in the forward-looking statements including, but not limited to:
competitive products and pricing; production costs, particularly for raw
materials such as corrugated box, folding carton and display materials;
fluctuations in demand; government policies and regulations affecting the
environment; interest rates; currency translation movements; Year 2000
compliance; and other risks that are detailed from time to time in reports
filed by the Company with the Securities and Exchange Commission.
For media relations, call: For investor relations, call:
Molly Remes William Tolley/Joel Mostrom
804-697-1110 804-697-1157/804-697-1147
Joele Frank or Andy Brimmer
Abernathy MacGregor Frank
212-371-5999
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On December 17, 1999, Chesapeake issued the following press release:
CHESAPEAKE SENDS LETTER TO SHOREWOOD BOARD
(Richmond, VA--December 17, 1999)--Chesapeake Corporation (NYSE: CSK) today
sent the following letter to Marc Shore and the board of directors of
Shorewood Packaging Corporation (NYSE: SWD) reiterating its desire to be
included in their exploration of strategic alternatives:
December 17, 1999
Mr. Marc P. Shore
Chairman of the Board & Chief Executive Officer
Shorewood Packaging Corporation
277 Park Avenue
New York, New York 10172
Dear Marc:
I am writing on behalf of the Board of Directors of Chesapeake. The 14-D9
Shorewood filed yesterday with the Securities and Exchange Commission
indicates that your Board is exploring alternatives to enhance stockholder
value. Your filing also indicates that Shorewood has entered into
confidentiality agreements and begun preliminary discussions with third
parties, other than Chesapeake, who are interested in pursuing a transaction.
You have told me personally that you and your board believe a combination of
our two companies makes strategic sense. Given that Shorewood is exploring
strategic alternatives, any process undertaken by the Shorewood Board to
enhance shareholder value must include Chesapeake or you would be doing a
disservice to your stockholders, as well as your customers and employees.
Chesapeake is a ready, willing and able buyer. As I indicated in an earlier
letter, we have in place a fully committed credit facility from First Union
National Bank that permits us to complete our acquisitions of both Boxmore and
Shorewood on the terms of our offers. Accordingly, neither offer is subject to
any financing conditions.
We reiterate our offer to meet with the Shorewood Board to negotiate the
terms, including price and structure, of an acquisition of Shorewood by
Chesapeake. Given the importance to your stockholders of our continued
interest in Shorewood, we are ready to meet with you and your advisors at your
earliest convenience.
Sincerely,
/s/ Thomas H. Johnson
Thomas H. Johnson
President & Chief Executive Officer
On December 3, 1999 Chesapeake announced that it would commence a tender offer
to acquire all the outstanding shares of Shorewood for $17.25 in cash per
share, or approximately $500 million. Chesapeake's tender offer represents an
approximate 45% premium to Shorewood's closing stock price on November 9,
1999, the day prior to Chesapeake's initial proposal to Shorewood's board of
directors.
Chesapeake Corporation, headquartered in Richmond, Va., is a global leader in
specialty packaging and merchandising services. Chesapeake is the largest
North American producer of temporary and permanent point-of-purchase displays,
the North American leader for litho-laminated packaging, the leading European
folding carton, leaflet and label supplier, and a local leader in specific
U.S. markets for customized, corrugated packaging. Chesapeake has over 40
locations in North America, Europe and Asia. Chesapeake's net sales in 1998
were $950.4 million. Chesapeake's website is www.cskcorp.com.
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# # #
This news release, including comments by Thomas H. Johnson, contains forward-
looking statements that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The accuracy of such
statements is subject to a number of risks, uncertainties, and assumptions
that may cause Chesapeake's actual results to differ materially from those
expressed in the forward-looking statements including, but not limited to:
competitive products and pricing; production costs, particularly for raw
materials such as corrugated box, folding carton and display materials;
fluctuations in demand; government policies and regulations affecting the
environment; interest rates; currency translation movements; Year 2000
compliance; and other risks that are detailed from time to time in reports
filed by the Company with the Securities and Exchange Commission.
For media relations, call: For investor relations, call:
Molly Remes William Tolley/Joel Mostrom
804-697-1110 804-697-1157/804-697-1147
Joele Frank or Andy Brimmer
Abernathy MacGregor Frank
212-371-5999
On December 20, 1999, Chesapeake issued the following press release:
CHESAPEAKE ANNOUNCES EXPIRATION OF
HART-SCOTT-RODINO WAITING PERIOD
Will Proceed With All Cash Tender Offer For Shorewood
(Richmond, VA--December 20, 1999)--Chesapeake Corporation (NYSE:CSK) today
announced that the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 has expired, satisfying one of the conditions to
proceed with its fully financed cash tender offer for all of Shorewood
Packaging Corporation's (NYSE:SWD) outstanding common stock at a price of
$17.25 per share.
On December 3, 1999, Chesapeake announced that it would commence a tender
offer to acquire all the outstanding shares of Shorewood for $17.25 in cash
per share, or approximately $500 million. Chesapeake's tender offer represents
an approximate 45 percent premium to Shorewood's closing stock price on
November 9, 1999, the day prior to Chesapeake's initial proposal to
Shorewood's board of directors.
Chesapeake Corporation, headquartered in Richmond, Va., is a global leader in
specialty packaging and merchandising services. Chesapeake is the largest
North American producer of temporary and permanent point-of-purchase displays,
the North American leader for litho-laminated packaging, the leading European
folding carton, leaflet and label supplier, and a local leader in specific
U.S. markets for customized, corrugated packaging. Chesapeake has over 40
locations in North America, Europe and Asia. Chesapeake's net sales in 1998
were $950.4 million. Chesapeake's website is www.cskcorp. com.
# # #
This news release, including comments by Thomas H. Johnson, contains forward-
looking statements that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The accuracy of such
statements is subject to a number of risks, uncertainties, and assumptions
that may cause Chesapeake's actual results to differ materially from those
expressed in the forward-looking statements including, but not limited to:
competitive products and pricing; production costs, particularly for raw
materials such as corrugated box, folding carton and display materials;
fluctuations in demand; government policies and regulations affecting the
environment; interest rates; currency translation movements; Year 2000
compliance; and other risks that are detailed from time to time in reports
filed by the Company with the Securities and Exchange Commission.
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For media relations, call: For investor relations, call:
Molly Remes William Tolley/Joel Mostrom
804-697-1110 804-697-1157/804-697-1147
Joele Frank or Andy Brimmer
Abernathy MacGregor Frank
212-371-5999
Item 10. Additional Information
The text of Section 15 of the Offer to Purchase is hereby amended and
supplemented by adding thereto the following:
(c) On December 20, 1999, Cheasapeke announced that the waiting period under
the HSR Act had expired, satisfying one of the conditions to proceed with the
Offer. See the press release issued by Chesapeake on December 20, 1999, the
text of which is set forth in Item 3 above.
(e) On December 16, 1999, the Company filed an answer to Chesapeake's
complaint in the Court of Chancery of the State of Delaware denying all
material allegations of Chesapeake's complaint. The Company also filed a
counterclaim seeking, among other things, an order (i) declaring that
Chesapeake is an "interested stockholder" and "associate" of the Company
within the meaning of Section 203 of the DGCL, (ii) declaring that Chesapeake
will remain an "interested stockholder" and "associate" of the Company during
the entire time period prescribed by Section 203 of the DGCL, (iii) declaring
that the refusal of the Company Board (as currently constituted or to be
constituted in the future within the time period prescribed by Section 203 of
the DGCL) to take any action rendering Section 203 of the DGCL inapplicable to
the Offer and the Proposed Merger does not constitute a breach of fiduciary
duty, (iv) declaring that the proposals to remove the members of the Company
Board found in Chesapeake's Consent Solicitation (the "Removal Proposals") are
invalid under Section 141 of the DGCL, and (v) temporarily and permanently
enjoining the plaintiffs, their affiliates and all others acting in concert
with them, from taking any action in furtherance of the Removal Proposals.
On December 16, 1999, the Company filed an answer and counterclaim to
Chesapeake's complaint in the United States District Court for the District of
Delaware seeking, among other things, an order (i) declaring that Chesapeake's
and Purchaser's Schedule 14D-1 and Schedule 13D are materially false and
misleading, in violation of Sections 13(e) and 14(e) of the Exchange Act, and
(ii) preliminarily and permanently enjoining Chesapeake and Purchaser from
proceeding with the Offer in violation of Sections 13(e) and 14(e) of the
Exchange Act.
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SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: December 20, 1999
CHESAPEAKE CORPORATION
/s/ J. P. Causey Jr.
By: _________________________________
J. P. Causey Jr.
Senior Vice President, Secretary
& General Counsel
SHEFFIELD, INC.
/s/ J. P. Causey Jr.
By: _________________________________
J. P. Causey Jr.
Vice President & Secretary
10
