SHOREWOOD PACKAGING CORP, PRER14A, 1999-12-28

SHOREWOOD PACKAGING CORP
PRER14A, 1999-12-28
CONVERTED PAPER & PAPERBOARD PRODS (NO CONTANERS/BOXES)

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REVISED PRELIMINARY COPY - SUBJECT TO COMPLETION-DATED DECEMBER 28, 1999

SCHEDULE 14A
(RULE 14A-101)

INFORMATION REQUIRED IN CONSENT STATEMENT

SCHEDULE 14A INFORMATION
CONSENT REVOCATION STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[X] Preliminary Consent Revocation Statement [_]Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[_] Definitive Consent Revocation Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

SHOREWOOD PACKAGING CORPORATION
(Name of Registrant as Specified in its Charter)

SHOREWOOD PACKAGING CORPORATION
(Name of Person(s) Filing Consent Statement)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required.

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)1 and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:

[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:

[LOGO OF SHOREWOOD PACKAGING CORPORATION]

REVISED PRELIMINARY COPY
SUBJECT TO COMPLETION, DATED DECEMBER 28, 1999

CONSENT REVOCATION STATEMENT
BY THE BOARD OF DIRECTORS OF SHOREWOOD PACKAGING CORPORATION
IN OPPOSITION TO THE SOLICITATION OF CONSENTS
BY CHESAPEAKE CORPORATION AND SHEFFIELD, INC.

This Consent Revocation Statement and the accompanying BLUE Consent
Revocation Card are being furnished by the Board of Directors (the
"Shorewood Board") of Shorewood Packaging Corporation, a Delaware
corporation (the "Company" or "Shorewood"), to the holders of the
outstanding shares of Shorewood common stock, par value $0.01 per share
(the "Common Stock"), in opposition to the solicitation by Chesapeake
Corporation, a Virginia corporation ("Chesapeake"), and its wholly owned
subsidiary Sheffield, Inc., a Delaware corporation ("Sheffield"), of
written consents from the stockholders of Shorewood (the "Consent
Solicitation").

On December 3, 1999, Chesapeake, acting through Sheffield, commenced
a consent solicitation in an effort to remove, WITHOUT CAUSE, every member
of the Shorewood Board and to replace your duly elected directors with a
slate of nominees hand-picked by Chesapeake. This action by Chesapeake was
taken in conjunction with the commencement by Chesapeake, through
Sheffield, of an unsolicited tender offer (the "Chesapeake Offer") to
purchase all of the outstanding shares of Common Stock, including the
associated rights to purchase preferred stock of Shorewood (the "Rights"),
issued pursuant to the Rights Agreement, dated as of June 12, 1995 (the
"Rights Agreement"), between Shorewood and The Bank of New York (the Common
Stock and the Rights together are referred to herein as the "Shares"), at
$17.25 in cash per Share (the "Offer Price"). On December 16, 1999, the
Shorewood Board unanimously determined that the Chesapeake Offer is
inadequate, does not reflect the value or prospects of Shorewood and is not
in the best interests of Shorewood and its stockholders. Accordingly, the
Shorewood Board has unanimously recommended that Shorewood stockholders
reject the Chesapeake Offer and not tender any of their Shares to
Chesapeake.

A consent in favor of Chesapeake's proposals is a consent to replace
your duly elected directors with Chesapeake's hand-picked nominees who
would then comprise the entire Shorewood Board. Chesapeake's nominees would
then control the Company and would be in a position to ensure that
Chesapeake can acquire Shorewood at a price determined by Chesapeake.
BECAUSE WE BELIEVE YOUR CURRENT SHOREWOOD BOARD IS IN THE BEST POSITION TO
EVALUATE THE STRATEGIC ALTERNATIVES AVAILABLE TO SHOREWOOD AND TO DECIDE ON
THE COURSES OF ACTION THAT ARE IN THE BEST INTERESTS OF SHOREWOOD'S
STOCKHOLDERS, WE ARE SEEKING THE REVOCATION OF ANY CONSENTS THAT MAY HAVE
BEEN GIVEN IN RESPONSE TO CHESAPEAKE'S SOLICITATION.

We believe that a Shorewood Board composed of Chesapeake's
hand-picked nominees would have substantial conflicts of interest in
evaluating these matters and would only attempt to complete a transaction
with Chesapeake. Your Shorewood Board believes that your interests will be
best served if Shorewood's current directors, acting independently of
Chesapeake, evaluate the strategic alternatives available to Shorewood and
decide and implement Shorewood's strategic plans. The Shorewood Board is
asking for your support in opposing Chesapeake's attempt to gain control of
Shorewood so that it can be assured that Shorewood gets sold to Chesapeake.

YOUR SHOREWOOD BOARD UNANIMOUSLY OPPOSES THE CONSENT SOLICITATION AND
URGES YOU NOT TO SIGN THE WHITE CONSENT CARD SENT TO YOU BY CHESAPEAKE.

EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED CHESAPEAKE'S WHITE CONSENT
CARD, YOU HAVE EVERY RIGHT TO CHANGE YOUR VOTE. WE URGE YOU TO SIGN, DATE
AND MAIL THE ENCLOSED BLUE CONSENT REVOCATION CARD IN THE POSTAGE-PAID
ENVELOPE PROVIDED. YOUR PROMPT ACTION IS IMPORTANT. PLEASE RETURN THE BLUE
CONSENT REVOCATION CARD TODAY.

IF YOUR SHARES ARE HELD IN "STREET NAME," ONLY YOUR BROKER OR BANKER
CAN VOTE YOUR SHARES. PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR
ACCOUNT AND INSTRUCT HIM OR HER TO VOTE A BLUE CONSENT REVOCATION CARD ON
YOUR BEHALF TODAY.

This Consent Revocation Statement and the enclosed BLUE Consent
Revocation Card are first being mailed to stockholders on or about December
[ ], 1999.

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. 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). 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 Chesapeake Offer, 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 (the "Exchange Act"), in the solicitation of consent
revocations, or that Schedule 14A requires the disclosure of certain
information concerning Bear Stearns and Jefferson Capital, respectively.
Additional information concerning the foregoing persons who may be deemed
to be participants in Shorewood's solicitation of revocations of consents,
including the number of Shares beneficially owned by such persons, is
included in Annex B hereto.

If you have any questions about giving your revocation of consent or
require assistance, please call Innisfree M&A Incorporated ("Innisfree"),
the firm assisting Shorewood in this
solicitation, at the phone numbers shown below:

INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022

CALL TOLL-FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833

REASONS YOUR BOARD OF DIRECTORS
OPPOSES THE CHESAPEAKE CONSENT SOLICITATION

Chesapeake is soliciting consents in favor of five separate proposals
(collectively, the "Proposals"), each designed to enable Chesapeake to take
control of your Shorewood Board. The Proposals are set forth below. Your
Shorewood Board believes that the Consent Solicitation is an attempt to
pressure it to accept Chesapeake's unsolicited and highly conditional
merger proposal without first having the opportunity to consider all of
Shorewood's strategic alternatives and decide what courses of action are in
the best interest of Shorewood and its stockholders. See "Background." WE
BELIEVE THAT SUCH UNDUE PRESSURE BY CHESAPEAKE IS NOT IN THE BEST INTERESTS
OF SHOREWOOD'S STOCKHOLDERS.

Chesapeake PROPOSAL 1:

Amend Article III, Section 1 of the Amended and Restated By-laws of
the Company (the "Amended By-laws") to remove the provision establishing a
staggered board of directors by deleting the second, third and fourth
sentences of Article III, Section 1 and inserting in lieu thereof the
sentence "Directors shall be elected annually to serve for one year terms"
and amend Article III, Section 2 of the Amended By-laws by deleting in the
third sentence the phrase "at which directors of this class are to be
elected."

Chesapeake PROPOSAL 2:

Remove each of the nine current members of the Shorewood Board and
any other person or persons who may be members of the Shorewood Board at
the time the Proposals become effective (other than the persons elected as
a result of the adoption of Proposal 4 set forth below).

Chesapeake PROPOSAL 3:

Amend Article III, Section 1 of the Amended By-laws to fix the number
of directors of Shorewood at three, by deleting the phrase "to consist of
not less than three nor more than twelve directors, as shall be determined
by resolution of the Shorewood Board from time to time" and inserting in
lieu thereof the phrase "to consist of three (3) directors."

Chesapeake PROPOSAL 4:

Elect three persons who have not yet been identified by Chesapeake (the
"Nominees") as members of the Shorewood Board.

Chesapeake PROPOSAL 5:

Repeal each amendment to the Amended By-laws (whether effected by
supplement to, deletion from or revision of the Amended By-laws) adopted
subsequent to November 22, 1999, and at or prior to the time the Proposals
become effective (other than the amendments adopted as a result of the
adoption of Proposal 1 and Proposal 3 set forth above).

Chesapeake has imposed the following conditions on the adoption of
its Proposals: (i) each of Proposals 3, 4 and 5 is conditioned upon the
approval of Proposal 1 and (ii) Proposal 2 is conditioned upon the approval
of Proposal 1 and at least one of the Nominees listed in Proposal 4 being
elected as a member of the Shorewood Board. Chesapeake has stated that none
of Proposals 3, 4 and 5 is conditioned upon the approval of any of the
other Proposals 3, 4 and 5.

All of the Proposals, taken together, are designed to enable
Chesapeake to take control of the Shorewood Board and expedite the prompt
consummation of Chesapeake's proposed acquisition of Shorewood without
having to negotiate with the current Shorewood Board. Proposal 5 is
designed to nullify unspecified By-laws which may be adopted by your
Shorewood Board in its efforts to act in, and protect, the interests of,
Shorewood's stockholders. As of the date of this Consent Revocation
Statement, the Shorewood Board has not adopted any amendments to the
Amended By-laws, other than one amendment adopted on December 15, 1999 to
correct a typographical error in Article VI, Section 6.

As discussed below under the caption "Background," your Shorewood
Board has unanimously determined that the Chesapeake Offer is inadequate,
does not reflect the value or prospects of Shorewood and is not in the best
interests of Shorewood and its stockholders. Chesapeake's acknowledged
purpose in pursuing the Consent Solicitation is to replace the duly elected
Shorewood Board with Chesapeake's own hand-picked nominees. Chesapeake also
acknowledges that it expects that the Nominees, if elected, would cause
Shorewood to be acquired by Chesapeake. While the Shorewood Board
recognizes that the Nominees, if elected, would have certain fiduciary
obligations under Delaware law to Shorewood and its stockholders, the
Shorewood Board expects that the Nominees would act in furtherance of the
interests of Chesapeake. In particular, if the Nominees are elected as your
directors, conflicts of interests are inevitable and would surely be
detrimental to the interests of Shorewood and its stockholders. Given that
it is in Chesapeake's interest to acquire Shorewood at the lowest possible
cost to Chesapeake by paying the lowest possible price for the Shares, the
Shorewood Board believes that it is unlikely that the Nominees would have
any incentive to develop other value enhancement alternatives for Shorewood
and its stockholders. In fact, during the period while Chesapeake is trying
to acquire Shorewood, it is completely contrary to the interests of
Chesapeake to take any steps to enhance the value of Shorewood. In this
connection, it is significant that Chesapeake discloses in the Consent
Solicitation Statement that the Nominees are being indemnified by
Chesapeake to the fullest extent permitted by applicable law, from and
against any and all expenses, liabilities, damages or losses of any kind
arising out of any threatened or filed action, suit or proceeding, whether
civil, criminal, administrative or investigative, asserted against or
incurred by a Nominee as a result of such Nominee's involvement in the
Consent Solicitation or such Nominee's role as a director in connection
with considering all proposals to acquire Shorewood submitted directly or
indirectly as the result of Chesapeake's proposed merger between Sheffield
and Shorewood (the "Proposed Chesapeake Merger") and implementing any such
proposal. The indemnification provided by Chesapeake is substantially more
expansive than the indemnification that Shorewood is allowed to provide
pursuant to Section 145 of the Delaware General Corporation Law, as amended
(the "DGCL"). Section 145 requires that, for a person to be indemnified by
a given corporation, the person must have "acted in good faith and in a
manner that the person reasonably believed to be in or not opposed to the
best interests of the corporation." In the context that Chesapeake has
agreed to indemnify its Nominees, the Nominees are indemnified, even if, as
directors of Shorewood, they fail to act in the best interests of Shorewood
and its stockholders.

It is vital that Shorewood continue to have in place a Board of
Directors that will act solely in the best interests of Shorewood and its
stockholders and not be influenced by Chesapeake's goals or possibly be
financially protected by Chesapeake's indemnification commitments. We
believe that your duly elected Board of Directors, not Chesapeake's
proposed slate of hand-picked nominees, is in the best position to evaluate
Shorewood's strategic alternatives, decide on the courses of action that
are in the best interests of Shorewood's stockholders and to implement
those decisions.

For the foregoing reasons, your Shorewood Board believes that the
interests of Shorewood's stockholders are best served if Shorewood's
current directors, acting independently of Chesapeake, continue to manage
Shorewood and are in a position to implement such plans as they determine
to be in the best interests of Shorewood and its stockholders.

THE SHOREWOOD BOARD UNANIMOUSLY OPPOSES THE CONSENT SOLICITATION AND
URGES YOU NOT TO SIGN THE WHITE CONSENT CARD SENT TO YOU BY CHESAPEAKE.

EVEN IF YOU PREVIOUSLY SIGNED AND RETURNED CHESAPEAKE'S WHITE CONSENT
CARD, YOU CAN CHANGE YOUR MIND AND REVOKE YOUR CONSENT. WE URGE YOU TO
SIGN, DATE AND MAIL THE ENCLOSED BLUE CONSENT REVOCATION CARD IN THE
POSTAGE-PAID ENVELOPE PROVIDED.

If you have any questions, please call Innisfree toll-free at (888)
750-5834. Banks and brokers should call collect at (212) 750-5833.

BACKGROUND

Beginning in February 1999, Shorewood began accumulating shares of
Chesapeake's common stock solely for investment purposes. The investment
was motivated by Shorewood's view that Chesapeake's stock was undervalued
at the time.

On June 4, 1999, Mr. Shore met in New York City with Thomas H.
Johnson, President and Chief Executive Officer of Chesapeake, and two other
Chesapeake officials. At this meeting, Mr. Shore advised Mr. Johnson that
Shorewood had purchased shares of Chesapeake for investment purposes only.

Acquisitions of Chesapeake stock continued until July 16, 1999, at
which time Shorewood held 809,000 shares of Chesapeake, with a value of
$26,201,646. This represents approximately 4.6% of Chesapeake's outstanding
voting securities.

Mr. Shore met again with Mr. Johnson in New York City on August 17,
1999. Once again, Mr. Shore advised Mr. Johnson that Shorewood's purchase
of Chesapeake's stock was only for investment purposes.

Despite the fact that Chesapeake had announced its intention to do a
stock buyback, Chesapeake's stock price did not rise as expected by
Shorewood and began to decline, falling from $37 3/8 per share around the
end of June to approximately $30 per share by the end of July. While
Chesapeake's stock reached a price of $35 per share in early September, the
stock price again declined in September and October, falling to $27 1/2 per
share by late October.

By the latter half of October 1999, Shorewood began to reassess its
position respecting Shorewood's holdings of Chesapeake's stock. Shorewood
believed that Chesapeake's stock was not likely to turn around because the
investment community lacked confidence in Chesapeake. Accordingly,
Shorewood began to consider a possible negotiated acquisition of
Chesapeake.

At a meeting of Shorewood's Board of Directors on October 26, 1999,
the Board authorized Shorewood to make an offer to negotiate the
acquisition of all of Chesapeake's issued and outstanding common stock for
$40 per share.

On October 26, 1999, Mr. Shore called Mr. Johnson to inform him that a
letter would be forthcoming that would contain a proposal by Shorewood to
acquire Chesapeake (the "Shorewood Proposal"). During the telephone call,
Mr. Johnson, without inquiring as to any of the terms (including price) of
the Shorewood Proposal, informed Mr. Shore that Chesapeake was not for
sale. Mr. Johnson did, however, acknowledge his responsibility to bring the
Shorewood Proposal before the Chesapeake Board of Directors. Later that
day, the following letter was sent by Mr. Shore to Mr. Johnson:

October 26, 1999

STRICTLY CONFIDENTIAL

The Board of Directors
Chesapeake Corporation
1021 East Cary Street
Richmond, VA 23218

ATTENTION: Mr. Thomas H. Johnson, Chief Executive Officer

Dear Tom:

As you know, you and I have had a number of discussions regarding various
business arrangements between Shorewood and Chesapeake. I believe it is in
both of our companies' and their respective stockholders' best interest to
move these discussions forward. The purpose of this letter is to propose
that Shorewood acquire Chesapeake at a substantial premium to your current
market value. Shorewood's Board of Directors met today and has authorized
transmittal of this proposal to you and your Board.

Tom, I believe our proposal is a compelling one and would be very exciting
for Chesapeake's stockholders, employees, management and customers. We are
in a position to make a proposal to acquire Chesapeake at $40 per share in
cash which represents a 41% premium to yesterday's closing price and a 38%
premium to the 20-day average closing price. This proposal reflects the
input of our senior management team, many of whom were part of the
Shorewood due diligence team that reviewed our potential acquisition of
Field, and it also reflects a thorough review of all publicly available
information.

We have met with our financial advisors and financing sources and believe
that financing does not present an issue in this transaction. It would be
our expectation that the Board of Directors of Chesapeake would meet to
review this letter as soon as possible and authorize exclusive discussions
with us. At such time we would be prepared to discuss our financing plan
for the transaction with you (and would anticipate that our ultimate
agreement to acquire Chesapeake would not be subject to any type of
financing condition). Further, we do not believe that any significant
obstacles such as anti-trust or other conditions exist.

We are sensitive to the inherent difficulties faced by you in negotiating
this type of transaction in a public forum and are prepared to negotiate
confidentiality with you provided that you are prepared to begin these
negotiations in an exclusive and expedient fashion intended to result in a
transaction with Shorewood.

We feel that our proposal represents a significant immediate cash premium
to Chesapeake stockholders and represents a price that we believe your
Board and stockholders should enthusiastically support. We urge you and
your fellow directors to give serious consideration to the merits of this
transaction and reiterate our willingness to work with you in an expedient
and confidential manner intended to serve the interests of the stockholders
of Chesapeake Corporation.

I look forward to your response to this proposal and look forward to
working with all of you in achieving this major event for both of our
companies and their respective stockholders.

Sincerely,

SHOREWOOD PACKAGING CORPORATION

/s/ Marc P. Shore

Marc P. Shore
Chairman of the Board

On October 29, 1999, Mr. Johnson delivered the following letter to Mr.
Shore by facsimile:

October 29, 1999

Strictly Confidential

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 have received your letter of October 26, 1999.

As you know, Chesapeake is not for sale. We are in the process of
executing our strategy of building a global specialty packaging and
merchandising company, which we believe is in the best interests of
Chesapeake and its stockholders.

However, our Board of Directors, consistent with its fiduciary
duties, will consider carefully your letter. Completion of the appropriate
analysis to give due consideration to your letter and enable our Board to
become fully informed will require some time. I will respond to your letter
no later than one week from today, or Friday, November 5, 1999.

Sincerely,

/s/ Thomas H. Johnson

Thomas H. Johnson
President & Chief Executive Officer

On November 4, 1999, Mr. Johnson called Mr. Shore to suggest a
meeting. At the meeting, on November 10, 1999, Mr. Johnson (i) advised Mr.
Shore that Chesapeake was not for sale and that the Chesapeake Board had
unanimously determined that the Shorewood Proposal was inadequate and not
in the best interests of Chesapeake and its stockholders, (ii) expressed a
willingness to consider acquiring Shorewood at a price of $16.50 per share
in cash and (iii) suggested that, given that Chesapeake was a Virginia
corporation, Chesapeake would be a difficult target to be acquired on an
unsolicited basis. Mr. Shore stated that Shorewood was not for sale, but
that he would communicate the offer to the Shorewood Board. Prior to
November 10, 1999, Chesapeake had never indicated to Shorewood that it had
an interest in acquiring Shorewood and, in Shorewood's view, Chesapeake's
acquisition proposal was solely in response to the Shorewood Proposal and
was intended to deter Shorewood from proceeding further with any plans it
may have then had to acquire Chesapeake.

Later on November 10, 1999, Mr. Johnson delivered the following letter
to Mr. Shore:

November 10, 1999

Strictly Confidential

Mr. Marc P. Shore
Chairman of the Board & Chief Executive Officer
Shorewood Packaging Corporation
277 Park Avenue
New York, New York 10172

Dear Marc:

This letter follows our meeting today to discuss your letter, dated
October 26, 1999, in which you suggest a combination between Shorewood
Packaging Corporation and Chesapeake Corporation. Our Board of Directors,
in consultation with our management, legal, and financial advisors, has
reviewed thoroughly your expression of interest and related relevant
considerations.

As I advised you today, our Board of Directors, after careful review,
has unanimously determined that the acquisition of Chesapeake by Shorewood,
as set forth in your letter, is not in the best interests of Chesapeake and
its stockholders and has charged me with firmly and unambiguously rejecting
your proposal. Our Board of Directors' firm conviction is that the
interests of Chesapeake and its stockholders are best served by continuing
to pursue vigorously our current strategic plan as an independent company.

While we believe that your proposal is not in the best interests of
our stockholders, our analysis suggests that a combination of our
businesses through an acquisition of Shorewood by Chesapeake would be in
the best interests of our respective stockholders, employees, and
customers. Towards that end, Chesapeake's Board of Directors has
unanimously authorized me to propose that Chesapeake acquire Shorewood at
$16.50 in cash per share, representing nearly a 40% premium over
Shorewood's closing price yesterday. The transaction we propose can be
effected by Chesapeake immediately with its cash on hand and committed
credit facilities, and is, therefore, not subject to a financing condition.

Chesapeake has been evaluating a possible acquisition of Shorewood
since early 1998, as part of our ongoing strategy of building a global
specialty packaging and merchandising company. We believe that the
combination of Chesapeake and Shorewood would create one of the world's
premier specialty packaging and merchandising companies, enhancing
Chesapeake's position as a leader in this segment and benefitting our
customers through one-stop-shopping for complementary products.

We are prepared to commence immediately good faith negotiations on an
exclusive basis with the objective of entering into a definitive merger
agreement consistent with our proposal. To date, your letter to us has been
kept confidential, and we have reciprocally made our proposal to you on a
confidential basis. Should you choose to pursue this matter in the public
forum, be assured that we are prepared to pursue aggressively our own
objectives.

We appreciate the obligation of your Board of Directors, which you
acknowledged today, to meet and consider our proposal from the standpoint
of the best interests of all of your stockholders. Of course, we were
disappointed that you stated today that such a meeting would be a very
short one. Nevertheless, we hope that your Board will give our proposal
serious consideration.

I look forward to your prompt response.

Sincerely,

/s/ Thomas H. Johnson

Thomas H. Johnson
President & Chief Executive Officer

On November 18, 1999, Mr. Shore delivered the following letter to Mr.
Johnson by facsimile:

November 18, 1999

Mr. Thomas H. Johnson
President & Chief Executive Officer
Chesapeake Corporation
James Center II
1021 East Cary Street
Box 2350
Richmond, VA 23218

Dear Tom:

This is in response to the proposal you made at our meeting on
November 10, 1999 and in the letter you delivered to me late the same day.

Our Board of Directors has given due consideration to your proposal
and concluded that it is inconsistent with Shorewood's clear and
successfully implemented strategic direction and not in the best interests
of Shorewood's stockholders. After consulting with our legal and financial
advisors, our Board has determined that our stockholders will benefit most
if Shorewood continues to position itself as the premier supplier of high
end folding cartons to a multinational customer base. Accordingly, I have
been authorized to inform you that the Shorewood Board of Directors has
unanimously and unequivocally rejected your proposal that we enter into
negotiations for the acquisition of Shorewood by Chesapeake.

Nevertheless, we continue to believe that an acquisition of Chesapeake
by Shorewood, at a fair price and a significant premium to Chesapeake's
current market value would be a step in the best interests of Chesapeake's
stockholders, management, employees and customers. Moreover, we believe
that the price of $40 per share, which we have proposed, would be embraced
by Chesapeake's stockholders. That price would enable Chesapeake's
stockholders to realize a valuation nearly equivalent to their company's
all time market high and more than 30% above its current market value.

Tom, we want to enter into an amicable, albeit arm's length,
negotiated transaction with your company. Toward that end, we again propose
that your Board authorize you to enter into negotiations with us, so that
your stockholders may decide whether the proposal we have made is fair,
reasonable and in their best interests. We believe, without having had an
opportunity to do any due diligence other than with respect to publicly
available documents, that $40 fully values Chesapeake's stock. I trust you
will reconsider your position and respond so that we may further our mutual
interests.

Alternatively, we are willing to let Chesapeake's stockholders decide
if our proposal is acceptable to them, whether or not your Board endorses
the proposal. Therefore, if you and your Board are unwilling to enter into
negotiations with us, we request that you remove the existing legal
impediments to a Shorewood tender offer so that your stockholders may
decide for themselves where their best interests lie.

As you know, Shorewood has a shareholding in Chesapeake which, based
on your most recent published information, is almost 5% of Chesapeake's
outstanding common stock. If you make continued progress in your share
repurchase program, Shorewood will become a 5% stockholder in your company,
even if it does not increase its position. In any event, we believe it
appropriate that Chesapeake's stockholders be made aware of the opportunity
that Shorewood is seeking to provide and that they, as well as Shorewood's
stockholders, be informed of your response to our proposal. To accomplish
that, we are issuing the enclosed press release simultaneously with the
delivery of this letter.

Cordially,

/s/ Marc P. Shore

Marc P. Shore
Chairman and Chief Executive Officer

Also on November 18, 1999, Shorewood issued the following press release:

SHOREWOOD PACKAGING CORPORATION PROPOSAL
TO CHESAPEAKE CORPORATION

NEW YORK, NY, November 18, 1999 - Shorewood Packaging Corporation
(NYSE:SWD) announced that Chesapeake Corporation's (NYSE:CSK) Board of
Directors has rejected a proposal by Shorewood to enter into negotiations
for the acquisition of Chesapeake with cash consideration of $40 per share,
a premium of 41% over the market price when the proposal was made, 33% over
yesterday's closing price and a valuation nearly equivalent to Chesapeake's
all time market high, reached in July 1998, well before it announced its
current stock buy-back program.

Shorewood stated that its proposal had been made to Chesapeake's Board of
Directors on October 26, 1999 and rejected by Chesapeake on November 10,
1999. Chesapeake's rejection included a counterproposal that Chesapeake
acquire Shorewood for cash consideration of $16.50 a share, a price well
below Shorewood's trailing 12 month closing high.

Shorewood's Board of Directors has rejected the counterproposal as being
inconsistent with the company's strategic plan to position itself as the
premier supplier of high end folding cartons to a multinational customer
base, as well as failing to recognize Shorewood's value and the benefits
that would be provided to Chesapeake's customers, employees and
stockholders if Shorewood were to acquire Chesapeake.

Shorewood owned 809,000 Chesapeake shares or 4.62% of Chesapeake as of
October 29, 1999, the date of Chesapeake's most recent 10-Q. Shorewood
noted that Chesapeake's anti-takeover provisions have the practical effect
of disenfranchising Chesapeake's stockholders. For example, Chesapeake's
"dead hand poison pill" makes it difficult for Shorewood to present its
proposal to Chesapeake's stockholders without the prior approval of
Chesapeake's Board of Directors. Accordingly, Shorewood stated, although it
is not currently contemplating a tender offer to Chesapeake's stockholders
without the prior approval of Chesapeake's Board of Directors, it has
requested Chesapeake's Board to redeem the "poison pill". If the "poison
pill" and other protective provisions were removed, Shorewood would move
promptly to bring its proposal directly to Chesapeake's stockholders.
Additionally, together with its financial and legal advisors, Shorewood is
considering other alternatives that would enable Chesapeake's stockholders
to decide whether $40 a share is a fair price.

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.

Also on November 18, 1999, Chesapeake issued the following press
release:

Chesapeake Confirms Proposal to Acquire Shorewood for $16.50 Per Share
in Cash

RICHMOND, Va., Nov. 18/PRNewswire/ - Chesapeake Corporation (NYSE: CSK -
news) today confirmed that it made a proposal to acquire Shorewood
Packaging Corporation (NYSE: SWD news) for $16.50 in cash per share, or in
the aggregate, approximately $480 million in equity plus approximately $260
million in debt. This represents nearly a 40% premium over Shorewood's
closing price on November 9, 1999, the day prior to Chesapeake's proposal.
The transaction can be effected by Chesapeake immediately with its cash on
hand and committed credit facilities, and is not subject to a financing
condition.

Chesapeake noted that the company is prepared to commence immediate good
faith negotiations on an exclusive basis with the objective of entering
into a definitive merger agreement consistent with its proposal.

Thomas H. Johnson, president and chief executive officer of Chesapeake,
said, "Chesapeake has been evaluating a possible acquisition of Shorewood
since early 1998, as part of our ongoing strategy of building a global
specialty packaging and merchandising company. We believe Chesapeake's
acquisition of Shorewood would create, under Chesapeake's leadership, one
of the world's premier specialty packaging and merchandising companies,
enhancing Chesapeake's position as a leader in this segment and benefitting
customers through one-stop shopping for complementary products.

"We at Chesapeake are continuing to pursue our strategic plan of
redeploying our capital into appropriate acquisitions to further our growth
and enhance stockholder value. We are currently in discussions with several
other attractive acquisition candidates," Mr. Johnson continued.

"We believe that Shorewood's decision to make public its unsolicited
proposal is the latest in a series of ill-conceived actions by Shorewood
following Shorewood's unsuccessful attempt to acquire Field Group plc,
which Chesapeake acquired in March 1999," concluded Mr. Johnson.

Chesapeake noted that its board of directors, in consultation with its
financial advisors, Goldman, Sachs & Co. and Donaldson Lufkin & Jenrette,
and legal advisor, Hunton & Williams, carefully considered Shorewood's
unsolicited proposal and unanimously concluded that the proposal is
inadequate and not in the best interests of Chesapeake's stockholders.

Chesapeake also noted that it has referred Shorewood's
heretofore-undisclosed accumulation of Chesapeake stock to the Federal
Trade Commission, requesting an investigation as to whether Shorewood has
violated the Hart-Scott-Rodino Antitrust Improvement Act.

Chesapeake Corporation, headquartered in Richmond, Va., is primarily
engaged in the manufacturing and sale of specialty packaging and
point-of-purchase displays. 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 http://www.cskcorp.com.

On November 22, 1999, Chesapeake issued the following press release
which contained the full text of a letter which was sent on such date by
Mr. Johnson to each member of Shorewood's Board of Directors:

CHESAPEAKE SENDS LETTER TO SHOREWOOD DIRECTORS
Indicates Willingness to Negotiate Price and Structure

(Richmond, VA - November 22, 1999) Thomas H. Johnson, President and CEO of
Chesapeake Corporation (NYSE:CSK), today sent the following letter to each
of the directors of Shorewood Packaging Corporation (NYSE:SWD) regarding
Chesapeake's proposal to acquire Shorewood for $16.50 per share in cash:

November 22, 1999

The Board of Directors
Shorewood Packaging Corporation
277 Park Avenue
New York NY 10172

Ladies and Gentlemen:

We were disappointed to learn of your rejection of our fully-financed
proposal to acquire Shorewood at $16.50 per share, representing a
substantial premium to your current market price. We continue to believe
that a combination of our businesses under Chesapeake's leadership would be
in the best interests of our respective stockholders, employees and
customers.

Your President, Mr. Liebman, was quoted in The Wall Street Journal as
saying that you are prepared to consider an offer at the "right price."
While we believe that our $16.50 proposal represents a full valuation, we
wish to reiterate that we are prepared to commence immediate good faith
negotiations regarding our proposal. Our offer is based on publicly
available information, and we remain open to the possibility that we may be
able to increase our offer with appropriate due diligence and access to
your business plan. We also stand ready to discuss alternatives to an
all-cash structure that may offer a tax- advantaged alternative for your
stockholders.

Given the importance to your stockholders of our continued interest and our
willingness to negotiate price and structure, we are issuing a press
release today concerning the subject of this letter.

We look forward to your prompt response, and to commencing good faith
negotiations regarding our proposal.

Sincerely,

/s/ Thomas H. Johnson
Thomas H. Johnson

Johnson commented that he hoped Shorewood's Board, upon receiving the
letter, would realize the promising opportunities that could be created
through a combination of the companies under Chesapeake's leadership.
"Under our proposal, the combined company would have a strong balance sheet
with financial and management capabilities to compete and grow globally.
Chesapeake has a proven track record as a global consolidator with
successful integration of acquired businesses."

Johnson continued, "Chesapeake Corporations's international strength is
important, because we believe that global consolidation to offer
multinational customers one-stop business solutions will drive our business
in the next century. Chesapeake has an experienced international management
team in place to operate a global packaging and merchandising company."

Johnson also cited Chesapeake's multiple leadership positions in specialty
packaging and merchandising. "Chesapeake is the largest North American
producer of temporary and permanent point-of-purchase displays, the North
American leader for colorful, litho-laminated packaging, a leading European
folding carton, leaflet and label supplier, and a local leader in specific
U.S. markets for customized, corrugated packaging. Our net sales for 1998
were $950.4 million and our net sales for 1999's first three quarters,
ending September 30, are $916.8 million. We are clearly in a strong
position to make the combination of our two businesses successful."

Chesapeake Corporation, headquartered in Richmond, Va., is primarily
engaged in the manufacturing and sale of a specialty packaging and
point-of-purchase displays. 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.

On November 29, 1999, Shorewood issued the following press release:

SHOREWOOD PACKAGING CORPORATION ISSUES STATEMENT

NEW YORK, Nov. 29 /PRNewswire/ - Shorewood Packaging Corporation (NYSE: SWD
news) remains committed to its $40 per share cash proposal to acquire
Chesapeake. Given the unwillingness of Chesapeake's management and Board of
Directors to consider Shorewood's proposal, Shorewood is continuing to
explore options to enable Chesapeake's stockholders to consider the
Shorewood proposal. Shorewood's proposal of $40 per share is significantly
above the consensus one year price target for Chesapeake and also
represents a 52-week high for the company.

Shorewood reiterated that it is not for sale and believes Chesapeake's
actions to date are solely in response to the Shorewood premium cash
proposal. Shorewood also believes that Chesapeake's actions reflect a
reckless disregard for the best interests of their stockholders and do not
reflect a careful evaluation of Shorewood or its business. Shorewood noted
that it views Chesapeake's proposal to acquire Shorewood for $16.50 per
share as grossly inadequate. That price is considerably below Shorewood's
52-week high and vastly below analysts' one-year price target for
Shorewood, which range as high as $25 per share.

Finally, Shorewood noted that an institutional investor has agreed to sell
14.9% of Shorewood to Chesapeake for $17.25 per share. In a call to
Shorewood, that investor informed Shorewood that its required regulatory
filing will disclose that the institution, which invested in Shorewood at a
low- cost basis, retains 100% of the upside with respect to those shares in
the event of a sale to Chesapeake at a higher price. Given the terms of
this arrangement, Shorewood does not believe the price to be paid by
Chesapeake reflects fair value for Shorewood, and believes its own $40 per
share offer for Chesapeake to represent superior value.

Also on November 29, 1999, Chesapeake issued the following press
release:

CHESAPEAKE CORPORATION AGREES TO ACQUIRE 14.9% OF
SHOREWOOD PACKAGING SHARES

(Richmond, VA - November 29, 1999) Chesapeake Corporation (NYSE:CSK) today
announced that it has agreed to purchase approximately 4.1 million shares,
or 14.9%, of Shorewood Packaging Corporation's (NYSE:SWD) outstanding
common stock from an institutional investor at a price of $17.25 per share.

Chesapeake previously announced that it has made a fully financed proposal
to Shorewood's directors to purchase Shorewood's shares at $16.50 per
share, nearly a 40% premium over Shorewood's closing price on November 9,
1999, the day before Chesapeake's proposal was presented to Shorewood.

Thomas H. Johnson, president and chief executive officer of Chesapeake,
said, "We are pleased with this agreement, which validates our view that
Chesapeake's acquisition of Shorewood makes great sense for Shorewood's
stockholders. We believe Chesapeake's acquisition of Shorewood would
create, under Chesapeake's leadership, one of the world's premier specialty
packaging and merchandising companies, enhancing Chesapeake's position as a
leader in this segment and benefitting customers through one-stop shopping
for complementary products.

"Chesapeake has a strong balance sheet with the management and financial
capabilities to compete and grow globally. Chesapeake also has a proven
track record as a global consolidator with successful integration of
acquired businesses. We renew our offer to Shorewood's directors to meet
and negotiate the terms of an acquisition of Shorewood by Chesapeake."

Closing of the purchase of the Shorewood shares is subject to completion of
review of the transaction under the Hart-Scott-Rodino Antitrust
Improvements Act. Chesapeake will commence the time period of review by a
filing to be made today. Additional information will be set forth in a
Schedule 13D expected to be filed with the Securities and Exchange
Commission today. Information in this release is qualified by reference to
the information to be included in the Schedule 13D.

Chesapeake is the largest North American producer of temporary and
permanent point-of-purchase displays, the North American leader for
colorful, litho- laminated packaging, the premiere European folding carton,
leaflet and label supplier, and a local leader in specific U.S. markets for
customized, corrugated packaging.

Chesapeake Corporation, headquartered in Richmond, Va., is primarily
engaged in the manufacturing and sale of specialty packaging and
merchandising services. 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 http://www.cskcorp.com.

On November 30, 1999, Chesapeake filed a Schedule 13D with the
Securities and Exchange Commission (the "SEC") disclosing that, on November
26, 1999, Chesapeake had entered into a stock purchase agreement (the
"Purchase Agreement") to purchase 4,106,440 Shares (the "Purchased
Shares"), or approximately 14.9% of the outstanding Shares, from the
clients of Ariel Capital Management, Inc. ("Ariel") for $17.25 per Share.
In the Purchase Agreement, Ariel also agreed that, if Chesapeake commenced
a public tender offer for the Shares at a price that equaled or exceeded
$17.25 per Share, then Ariel would use its best efforts as investment
adviser to exercise its discretionary authority to cause its clients to (i)
tender the Purchased Shares in such tender offer and (ii) execute proxies
or written consents in the form solicited by Chesapeake or any of its
affiliates in any proxy or written consent solicitation commenced in
connection with such tender offer.

On December 3, 1999, Chesapeake commenced the Chesapeake Offer and
filed a preliminary Consent Solicitation Statement with the SEC in
connection with its intended solicitation of consents from the stockholders
of Shorewood.

In addition, on December 3, 1999, Chesapeake and Sheffield filed a
lawsuit in the Court of Chancery of the State of Delaware against Shorewood
and each member of the Shorewood Board, and filed a separate lawsuit
against Shorewood in the United States District Court for the District of
Delaware. See "Certain Litigation."

On December 9, 1999, the Shorewood Board held a special meeting at
which the Shorewood Board reviewed with Shorewood's management, Bear
Stearns and Jefferson Capital, Shorewood's financial advisors, and Skadden,
Arps, Slate, Meagher & Flom LLP ("Skadden Arps") and Bryan Cave, LLP
("Bryan Cave"), Shorewood's legal advisors, the Chesapeake Offer and its
terms and conditions and the related consent solicitation.

On December 13, 1999, Shorewood filed a preliminary Consent
Revocation Statement with the SEC in connection with its intended
solicitation of consent revocations from the stockholders of Shorewood.

On December 15, 1999, the Shorewood Board held a special meeting at
which the Shorewood Board again reviewed the Chesapeake Offer and its terms
and conditions with Shorewood's management and its legal and financial
advisors. At such meeting, Bear Stearns presented its financial analysis of
the Chesapeake Offer. In addition, Bear Stearns provided an oral opinion
(which was subsequently confirmed in writing) to the effect that, as of
December 15, 1999, the consideration offered in the Chesapeake Offer was
inadequate from a financial point of view to Shorewood's stockholders
(other than Chesapeake and its affiliates). The Shorewood Board was
informed by management that several third parties had expressed an
unsolicited interest in pursuing a potential extraordinary transaction
involving Shorewood and that Shorewood had engaged in preliminary
discussions in this regard. After lengthy discussions and presentations
from Bear Stearns and Skadden Arps, the Shorewood Board unanimously
concluded that the Chesapeake Offer is inadequate and not in the best
interests of Shorewood and its stockholders and recommended that
Shorewood's stockholders reject the Chesapeake Offer and not tender their
Shares pursuant to the Chesapeake Offer. Also at the meeting of the
Shorewood Board held on December 15, 1999, the Shorewood Board established
a Special Strategic Committee of Directors (consisting of Kevin J. Bannon,
Virginia A. Kamsky and William P. Weidner) for the purpose of reviewing
strategic alternatives which may develop and making recommendations thereon
to the Shorewood Board.

In addition, the Shorewood Board instructed management and its
financial advisors to explore potential strategic alternatives available to
Shorewood. Such alternatives could involve an extraordinary transaction or
combination of extraordinary transactions, including (i) a sale or issuance
of common stock, convertible preferred stock or other securities of
Shorewood to one or more buyers, (ii) a purchase, sale or transfer of a
material amount of assets by Shorewood or any of its subsidiaries, (iii) a
tender or exchange offer for, or open market or privately negotiated
purchases or other acquisition of securities by or of, Shorewood, (iv) a
merger or reorganization involving Shorewood or any of its subsidiaries,
(v) a leveraged recapitalization or stock repurchase, (vi) a material
change in the present capitalization or dividend policy of Shorewood, or
(vii) a joint venture or other strategic alliance involving Shorewood or
any of its subsidiaries. In this regard, Shorewood has entered into
confidentiality agreements concerning the furnishing of confidential
information to certain third parties, and has otherwise engaged and is
engaged in preliminary discussions with third parties concerning their
interest in pursuing a potential extraordinary transaction involving
Shorewood. Shorewood, Bear Stearns and Jefferson Capital have identified a
number of additional parties that may be interested in a possible
extraordinary transaction, and Shorewood may enter into confidentiality
agreements with, furnish confidential information to and engage in
discussions concerning such a transaction with some or all of such parties
or other parties. Shorewood expects that these discussions will include
negotiations with respect to one or more of the foregoing transactions.
There can be no assurance, however, that any of the foregoing will result
in any transaction being recommended to the Shorewood Board or that any
transaction that may be recommended will be authorized or consummated, or
that a transaction other than those described herein will not be proposed,
authorized or consummated. The initiation or continuation of any of the
foregoing may also be dependent upon the future actions of Chesapeake with
respect to the Chesapeake Offer.

In reaching its determination that the Chesapeake Offer is inadequate
and not in the best interests of Shorewood and its stockholders and its
recommendation that Shorewood's stockholders should reject the Chesapeake
Offer and not tender their Shares pursuant to the Chesapeake Offer, the
Shorewood Board considered a variety of factors, including, without
limitation, the following:

(i) The presentations by Bear Stearns and Jefferson Capital at
the meeting of the Shorewood Board held on December 15, 1999
concerning Shorewood and the financial aspects of the Chesapeake Offer
and the written opinion of Bear Stearns, dated December 15, 1999, to
the effect that, as of such date and based upon and subject to certain
matters stated in such opinion, the consideration of $17.25 per Share
being offered to the stockholders of Shorewood pursuant to the
Chesapeake Offer is inadequate from a financial point of view to such
stockholders (other than Chesapeake and its affiliates). The full text
of the written opinion dated December 15, 1999 of Bear Stearns was
attached to the Schedule 14D-9 filed by Shorewood with the SEC on
December 16, 1999. Holders of Shares are urged to read such opinion
carefully in its entirety.

(ii) The business, financial condition, results of operations,
current business strategy and future prospects of Shorewood and
whether the Chesapeake Offer was reflective thereof, including the
following:

o Shorewood's reputation 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.

o Shorewood's position in the packaging industry as a
technological leader and innovator.

o Shorewood's status as one of the largest manufacturers
of printed packaging for the entertainment and
multimedia markets in North America.

o Shorewood's strong relationships with key worldwide
customers.

o The strength of Shorewood's management team.

o Shorewood's successful track record of integrating
acquisitions.

o Shorewood's potential to grow its earnings through
international as well as domestic expansion.

o That Shorewood has not yet realized the benefits of the
substantial capital expenditures it has made to
position itself for future growth, including new
facilities in North America and Asia. Those benefits
include Shorewood's ability to continue leveraging its
state-of-the- art technology. Such technology, among
other things, has resulted, during Shorewood's second
fiscal quarter, in a 230 basis point increase in
Shorewood's gross profit margin to 26.5%, compared to
the same quarter last year and, during the six month
period ended October 30, 1999, in a 230 basis point
increase in Shorewood's gross profit margin to 25.5%,
compared to the same period last year.

o Shorewood's reported results for its second fiscal
quarter ended October 30, 1999, including revenues of
$165.3 million (which represented an increase of 14%
above the $145.4 million reported for the same period
last year), operating income of $21.9 million (which
represented a 17% increase over the $18.8 million
reported for the same period last year), earnings
before interest, taxes, depreciation and amortization
("EBITDA") of $29.1 million (which represented a 20%
increase over the $24.2 million reported for the same
period last year), earnings (before an extraordinary
item and the cumulative effect of a change in
accounting principle) of $11.6 million (which
represented a 17% increase over the $9.9 million in the
comparable period last year), and earnings per diluted
share of $0.42 (which represented a 14% increase over
the $0.37 per diluted share reported for the same
period last year).

o Shorewood's reported results for the six months ended
October 30, 1999, including net sales of $309.0 million
(which represented an increase of 19% above the $260.7
million reported for the same period last year),
operating income of $36.1 million (which represented a
14% increase over the $31.6 million reported for the
same period last year), EBITDA of $50.3 million (which
represented a 20% increase over the $41.8 million
reported for the same period last year), earnings
(before an extraordinary item and the cumulative effect
of a change in accounting principle) of $19.3 million
(which represented a 16% increase over the $16.7
million reported the same period last year), and
earnings per diluted share of $0.69 (which represented
an 11% increase over the $0.62 per diluted share
reported for the same period last year).

o Shorewood's historic five-year compounded annual
revenue growth rate of 21.13% (through fiscal year
1999).

o Shorewood's historic five-year compounded annual growth
rate of 24% for its earnings per diluted share (through
fiscal year 1999), excluding the after-tax gain
associated with the sale of a minority interest in
Shorewood's China facility.

o Shorewood's record during the past five years of
increasing its net income from continuing operations at
a compounded annual growth rate of 25% (through fiscal
year 1999), excluding the after-tax gain associated
with the sale of a minority interest in Shorewood's
China facility.

(iii) The opportunistic timing of the Chesapeake Offer, which
seeks to exploit Shorewood's recent stock price in relation to
historic trading patterns. In this regard, the Shorewood Board noted
the following:

o The Shorewood Board's belief that the trading price for
the Shares immediately prior to the announcement on
November 18, 1999 that Chesapeake had made a proposal
to acquire Shorewood did not reflect the long-term
value inherent in Shorewood.

o The historical trading prices of the Shares and the
fact that the Offer Price represents a 16.4% discount
from the Shares' 52-week high of $20.625.

o That the price-earnings multiple of 14.0 implied by the
Offer Price represents a discount to Shorewood's
average price-earnings multiple over the eight fiscal
quarters ended July 30, 1999 of 15.8.

(iv) The significant uncertainties and contingencies associated
with the Chesapeake Offer, including the numerous conditions to the
Chesapeake Offer, some of which (i) are in the sole discretion of
Chesapeake, (ii) are subject to external events not directly related
to Shorewood or (iii) are not within the control of Shorewood or
Chesapeake. In this regard, the Shorewood Board noted the following:

o The Chesapeake Offer is conditioned upon, among other
things: (i) there being validly tendered prior to the
expiration of the Chesapeake Offer and not withdrawn a
number of Shares which, together with the Shares
beneficially owned by Chesapeake and its subsidiaries,
including Sheffield, will constitute at least a
majority of the outstanding Shares on a fully diluted
basis as of the date the Shares are accepted for
payment pursuant to the Chesapeake Offer (the "Minimum
Tender Condition"); (ii) the Rights having been
redeemed by the Shorewood Board or Sheffield otherwise
being satisfied, in its sole discretion, that such
Rights are otherwise invalid or inapplicable to the
Chesapeake Offer and the Proposed Chesapeake Merger;
(iii) the acquisition of Shares pursuant to the
Chesapeake Offer and the Proposed Chesapeake Merger
having been approved pursuant to Section 203 of the
DGCL ("Section 203") or Sheffield being satisfied, in
its sole discretion, that the provisions of Section 203
restricting certain business combinations are invalid
or inapplicable to the acquisition of Shares pursuant
to the Chesapeake Offer and the Proposed Chesapeake
Merger (the "Section 203 Condition"); and (iv) any
waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the
regulations thereunder and any laws of Canada, the
European Union, any member state of the European Union,
and any other foreign jurisdictions applicable to the
purchase of Shares pursuant to the Chesapeake Offer
having expired or been terminated. In addition to these
conditions, two of which are at the sole discretion of
Sheffield, there are eleven other paragraphs of
conditions to the Chesapeake Offer which are listed in
Chesapeake's Offer to Purchase dated December 3, 1999
(the "Offer to Purchase").

o As explained below, due to the Shorewood Board's belief
that Chesapeake is an interested stockholder, the
Shorewood Board questions whether the Section 203
Condition will be waived.

o The Chesapeake Offer is also conditioned upon there not
having occurred (i) any general suspension of, or
limitation on times or prices for, trading in
securities on any national securities exchange or in
the over-the-counter market, (ii) a declaration of a
banking moratorium or any suspension of payments in
respect of banks in the United States, (iii) the
outbreak or escalation of war, armed hostilities or
other international or national calamity directly or
indirectly involving the United States, (iv) any
limitation (whether or not mandatory) by any
governmental authority on, or any other event which
might affect the extension of credit by banks or other
lending institutions, (v) a suspension of or limitation
(whether or not mandatory) on the currency exchange
markets or the imposition of, or material changes in,
any currency or exchange control laws in the United
States or abroad, (vi) a general decline in the market
prices of securities of publicly-traded United States
companies in the packaging industry or (viii) in the
case of any of the foregoing existing at the time of
commencement of the Chesapeake Offer, a material
acceleration or worsening thereof. The Shorewood Board
took notice of the fact the none of the foregoing is
within the control of Shorewood or Chesapeake.

(v) The significant uncertainties associated with Chesapeake's
financing arrangements with respect to the Chesapeake Offer. In this
regard, the Shorewood Board noted the following:

o According to its Offer to Purchase, Chesapeake had only
$36 million in cash and cash equivalents and only
$139.5 million in working capital as of September 30,
1999. However, Chesapeake has estimated therein that
the total amount of funds required to purchase all of
the outstanding Shares (other than those owned by
Sheffield) on a fully diluted basis pursuant to the
Chesapeake Offer and the Proposed Chesapeake Merger and
to pay all related fees and expenses will be
approximately $525 million.

o Accordingly, based upon its Offer to Purchase,
Chesapeake does not have the funds to pay for the
Shares it has offered to purchase pursuant to the
Chesapeake Offer and the Proposed Chesapeake Merger in
the absence of financing from third parties.

o However, Chesapeake's financing is subject to numerous
conditions, many of which are in addition to the
conditions to the Chesapeake Offer and one or more of
which are not, in the view of the Shorewood Board,
capable of being satisfied. Among those is the
condition that provisions of Section 203 of the DGCL be
made invalid or inapplicable to the Chesapeake Offer
and the Proposed Chesapeake Merger (by action of the
Shorewood Board or otherwise). As explained below,
Chesapeake may be deemed to be an "interested
stockholder" under Section 203 and, accordingly, may be
barred from consummating the Proposed Chesapeake Merger
pursuant to Section 203.

o It is therefore possible that Chesapeake could accept
Shares for payment pursuant to the Chesapeake Offer and
not have the funds available to pay for such Shares.

(vi) The significant uncertainties associated with the Proposed
Chesapeake Merger, including uncertainty as to the completion and
timing of the Proposed Chesapeake Merger. In this regard, the
Shorewood Board noted the following:

o Chesapeake has reserved the right to waive the Minimum
Tender Condition. By reserving the right to waive the
Minimum Tender Condition, Chesapeake has called into
question its commitment to consummating the Proposed
Chesapeake Merger since it will not be able to ensure
consummation of the Proposed Chesapeake Merger if the
Minimum Tender Condition is not satisfied.

o The Shorewood Board has authorized the filing of
counterclaims in the Delaware lawsuits brought by
Chesapeake based upon Chesapeake's purchase of 14.9% of
the outstanding Shares from an institutional
stockholder and the agreement relating thereto. The
counterclaims assert that as a result of such purchase
and the arrangements and understandings relating
thereto, Chesapeake has acquired beneficial ownership
of more than 20% of the outstanding Shares and,
accordingly, is an "interested stockholder" pursuant to
Section 203 of the DGCL. As an "interested stockholder"
which did not receive the approval of the Shorewood
Board prior to entering into such agreement, Chesapeake
would be precluded from consummating the Proposed
Chesapeake Merger for three years unless approved by
the Shorewood Board and authorized by the vote of
two-thirds of the outstanding shares which are not
owned by the "interested stockholder." See "Certain
Litigation" for additional information concerning
Section 203 and for a more detailed description of the
counterclaims. The Shorewood Board specifically took
into account the terms and conditions of the proposed
bank financing of Chesapeake and noted the uncertainty
concerning Chesapeake's ability to obtain financing if
Chesapeake is determined to be an "interested
stockholder."

(vii) The Shorewood Board's belief that the Chesapeake Offer is
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 initiatives aimed
at making Shorewood the premier global supplier of value-added
packaging. In this regard, the Shorewood Board noted the following
completed and pending initiatives:

o The acquisition in October 1998 (the "Queens
Transaction") of Queens Group, Inc. ("Queens"), a
leading manufacturer of high quality, value-added
packaging for the music, multimedia and consumer
products industries, which acquisition has brought
Shorewood a roster of new customers and five additional
facilities in the United States.

o The opening of Shorewood's 125,000 square foot plant in
Guangzhou, China which is expected to accelerate
Shorewood's international growth.

o The discontinuation of manufacturing at Shorewood's
Stanley, North Carolina facility which will result in
an annual cost savings of $3 million. This action was
consistent with Shorewood's strategy of streamlining
operations to improve efficiencies and maximize
profitability.

o The creation of a strategic alliance with Westvaco
Corporation ("Westvaco"), one of the largest and most
highly regarded companies in the paper industry, by
selling them a 45% interest in Shorewood's Guangzhou,
China plant for $22.7 million, which included a $5
million premium to Shorewood's cost. The proceeds from
this transaction were used to pay down debt. By
partnering with Westvaco, Shorewood was able to reduce
the risk of its investment in China and gains access to
Westvaco's extensive knowledge and experience of the
China market. For two decades, Westvaco has been doing
business in China exporting paper, paperboard and
specialty chemicals to customers in China.

o The entering into a letter of intent to acquire 51%,
with an option to acquire the remaining 49%, of CD
CartonDruck, GmbH ("CD CartonDruck") and its
affiliates. CD CartonDruck, a well-known German
specialist in the manufacture of high quality
value-added folding cartons for the international
fragrance and cosmetics markets, is expected to
represent a formidable platform for Shorewood's future
growth within the European marketplace.

o Shorewood's ongoing review of other opportunities for
expansion in Europe and South America.

(viii)The Shorewood Board's belief that it is in the best
interests of Shorewood and its stockholders for Shorewood to review,
together with its financial advisors, the alternatives available to it
for enhancing stockholder value. In this regard, the Shorewood Board
noted the following:

o The fact that since the public announcement on November
18, 1999 of Chesapeake's interest in acquiring
Shorewood, Shorewood has received several unsolicited
inquiries from third parties who have expressed a
potential interest in pursuing a transaction with
Shorewood.

o The fact that Shorewood has entered into
confidentiality agreements with, and/or supplied
confidential information to, certain third parties and,
in that connection, has engaged in preliminary
discussions concerning their interest in pursuing an
extraordinary transaction involving Shorewood.

o That, based upon the preliminary discussions that
Shorewood has had with third parties, there exist
parties interested in pursuing a transaction with
Shorewood to enhance stockholder value.

(ix) Shorewood's continuing interest in acquiring Chesapeake and
the Shorewood Board's view that the interests of Shorewood and its
stockholders would be better served by an acquisition of Chesapeake by
Shorewood than an acquisition of Shorewood by Chesapeake.

(x) The Shorewood Board's belief, based in part on the factors
referred to in paragraphs (i) through (ix) above, that the interests
of Shorewood and its stockholders would best be served by Shorewood
exploring strategic alternatives available to it for enhancing
stockholder value.

In light of the above factors the Shorewood Board determined that the
Chesapeake Offer is not in the best interests of Shorewood and Shorewood's
stockholders. The foregoing discussion of the information and factors
considered by the Shorewood Board is not intended to be exhaustive but
addresses all of the material information and factors considered by the
Shorewood Board in its consideration of the Chesapeake Offer. In view of
the variety of factors and the amount of information considered, the
Shorewood Board did not find it practicable to provide specific assessments
of, quantify or otherwise assign any relative weights to the specific
factors considered in determining to recommend that stockholders reject the
Chesapeake Offer. Such determination was made after consideration of all
the factors taken as a whole. In addition, individual members of the
Shorewood Board may have given differing weights to different factors.
Throughout its deliberations regarding the Chesapeake Offer, the Shorewood
Board received the advice of Bear Stearns, Jefferson Capital, Skadden Arps
and Bryan Cave who were retained to advise the Shorewood Board in
connection with the Chesapeake Offer.

In connection with advising the Shorewood Board and rendering the
opinion referred to in clause (i) above, Bear Stearns performed a variety
of financial and comparative analyses and considered such information,
financial studies, analyses and investigations and financial, economic and
market criteria which it deemed relevant. No limitations were placed on
Bear Stearns in connection with the rendering of its opinion, although Bear
Stearns was not requested by Shorewood to, and did not contact third
parties to determine whether they would have any interest in a business
combination with Shorewood.

Additional information relating to the Shorewood Board's position with
respect to the Chesapeake Offer is set forth in Shorewood's Schedule 14D-9,
dated December 16, 1999, a copy of which has been filed with the SEC.

Also, on December 15, 1999, Mr. Johnson delivered the following letter
to Mr. Shore:

December 15, 1999

Mr. Marc Shore
Chairman and Chief Executive Officer
Shorewood Packaging Corporation
277 Park Avenue
New York NY 10172

Dear Marc:

As you may know, Chesapeake today announced a recommended cash tender
offer to acquire Boxmore International p1c, headquartered in Belfast,
Northern Ireland. Boxmore's board of directors has unanimously recommended
Chesapeake's offer to Boxmore's shareholders. Like Shorewood, this is a
company we have been evaluating for some time. We are delighted with the
enhancement of our global platform that this company offers and believe the
acquisition of Boxmore enhances the strategic rationale for our acquisition
of Shorewood.

At the same time, we want to reinforce our commitment to our $17.25
cash tender offer for Shorewood. We want you and your board to know that we
have in place a fully committed credit facility from First Union National
Bank that permits us to complete the 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. In this regard, we are ready to meet with you and your advisors
at your earliest convenience

Sincerely,

/s/ Thomas H. Johnson
Thomas H. Johnson

On December 16, 1999, Shorewood 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, December 16, 1999 -- 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:

o 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.

o 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).

o the opportunistic timing of Chesapeake's offer, which seeks to
exploit Shorewood's recent stock price in relation to historic
trading patterns.

o 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.

o 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.

o 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.

o 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.

o 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, one or more 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.

On December 17, 1999, Mr. Johnson delivered the following letter to
Mr. Shore:

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 14D-9
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 21, 1999, Shorewood issued the following press release
which contained the full text of a letter which Mr. Shore delivered on that
date to Mr.
Johnson:

SHOREWOOD SENDS LETTER TO CHESAPEAKE

NEW YORK, December 21, 1999 - Shorewood Packaging Corporation (NYSE:
SWD) today sent the following letter to Tom Johnson, President and Chief
Executive Officer of Chesapeake Corporation (NYSE: CSK):

December 21, 1999

Mr. Thomas H. Johnson
President and Chief Executive Officer
Chesapeake Corporation
1021 E. Cary Street
Richmond, Virginia 21218

Dear Tom:

I have read your letter dated December 17, 1999.

You are correct that our Board of Directors has authorized management and
our financial advisors to explore alternatives available to Shorewood to
enhance stockholder value. I understand that despite your commencement of a
highly conditional, inadequate tender offer, you now seek to have
discussions with us regarding your offer. We decline your request for a
meeting for the following reasons:

The current Chesapeake offer has been found by Shorewood's Board of
Directors to be inadequate; among other factors, it represents a 15% to 20%
discount to analysts' short-term trading targets for Shorewood shares.

We believe that Section 203 of the Delaware corporate law effectively
prevents Chesapeake from completing a merger with Shorewood for at least
three years.

We are concerned that the inadequate offer you have made is also highly
conditional. For example, Chesapeake's proposed bank financing does not
appear to contemplate the situation where Chesapeake could be a majority
stockholder with fiduciary duties to the minority, which would preclude it
from utilizing Shorewood's cash for its own use and otherwise consolidating
operations. Although Chesapeake has stated that it is a "willing" buyer, we
question whether it is financially "ready" or "able."

As fiduciaries, we consider the best interests of all stockholders. In this
regard we seek value and certainty on behalf of the entire stockholder base
and are reluctant to support any transaction which is fraught with serious
contingencies.

Due to concerns regarding the inadequacy of your offer, your conditional
financing and completion risks, we do not believe it is in the best
interests of our stockholders to pursue your inadequate proposal.

Sincerely,

/s/ Marc P. Shore

Marc P. Shore

Shorewood Packaging Corporation is a leading value-added provider of
high quality printing and paperboard packaging for the music, computer
software, cosmetics and toiletries, food, home video, tobacco and general
consumer markets in North America and China, with 16 plants in the United
States, Canada and China.

THE CONSENT PROCEDURE

Article VI, Section 6 of the Amended By-laws establishes orderly
procedures for the setting of a record date for consent solicitations. This
section of the Amended By-laws provides that any stockholder of record of
Shorewood seeking to have Shorewood's stockholders authorize or take
corporate action by written consent shall, by written notice to Shorewood's
Corporate Secretary, request the Shorewood Board to fix a record date. The
Shorewood Board is required, within ten (10) days after the date on which
such request is received, to adopt a resolution fixing the record date,
which record date shall not be more than ten (10) days after the date upon
which the resolution was adopted.

As of the date hereof, neither Chesapeake nor Sheffield has requested
that the Shorewood Board fix a record date in connection with the Consent
Solicitation and, accordingly, no record date has been set. Chesapeake and
Sheffield have challenged the validity of Shorewood's By-law provision
relating to the fixing of the record date (the "Record Date By-Law"). In
the event that a court determines that the Record Date By-law is invalid,
reference is hereby made, in accordance with Rule 14a-5(c), as promulgated
under the Exchange Act, to Chesapeake's Consent Solicitation Statement for
the procedures that Chesapeake and Sheffield intend to follow. See "CERTAIN
LITIGATION."

Under the DGCL, unless otherwise provided in a corporation's
certificate of incorporation, stockholders may act without a meeting,
without prior notice and without a vote, if consents in writing setting
forth the action to be taken are signed by holders of outstanding shares
having not less than the minimum number of votes that would be necessary to
authorize or take the action at a meeting at which all shares entitled to
vote thereon were present and voted.

Shorewood's Certificate of Incorporation does not prohibit stockholder
action by written consent. The unrevoked consent of the holders of not less
than (i) a majority of the outstanding Shares entitled to vote on the
record date, once established, must be obtained within the time limits
specified herein to adopt Chesapeake Proposals Nos. 2 and 4, and (ii)
two-thirds (66 2/3%) of the outstanding Shares entitled to vote on the
record date, once established, must be obtained within the time limits
specified herein to adopt Chesapeake Proposals 1, 3 and 5. Chesapeake and
Sheffield have challenged the validity of Shorewood's By-law which requires
the affirmative vote of the holders of two-thirds of Shorewood's
outstanding shares to amend the By-laws. See "Certain Litigation."

Shorewood's By-laws provide that each stockholder shall be entitled to
vote each share of stock which has voting rights on the matter in question.
Under Delaware law, no written consent is effective to take the action
referred to therein unless, within sixty (60) days of the date of the
earliest dated consent delivered, written consents signed by the holders of
a sufficient number of shares required to take such action are properly
delivered to the corporation. Failure to consent to any of the Proposals
and broker non-votes will have the effect of a vote against those
Proposals.

A stockholder may revoke any previously signed consent by signing,
dating and returning a BLUE Consent Revocation Card included with this
Consent Revocation Statement. If no direction is made on the Consent
Revocation Card with respect to one or more of the Proposals, or if a
stockholder marks either the "revoke consent" box or the "abstain" box on
the Consent Revocation Card with respect to one or more of those Proposals,
all previously executed consents with respect to such Proposals will be
revoked. A consent may also be revoked by delivery of a written consent
revocation to Shorewood or Chesapeake. STOCKHOLDERS ARE URGED, HOWEVER, TO
DELIVER ALL CONSENT REVOCATIONS TO INNISFREE M&A INCORPORATED, THE FIRM
ASSISTING SHOREWOOD IN THIS SOLICITATION, AT 501 MADISON AVENUE, 20TH
FLOOR, NEW YORK, NEW YORK 10022. Shorewood requests that if a consent
revocation is instead delivered to Chesapeake, a copy of the revocation
also be delivered to Shorewood, c/o Innisfree M&A Incorporated, at the
address set forth above, so that Shorewood will be aware of all
revocations. Any consent revocation may itself be revoked at any time by
signing, dating and returning to Chesapeake a subsequently dated white
Consent Card sent to you by Chesapeake, or by delivery of a written
revocation of such consent revocation to Shorewood or Chesapeake.

If any shares of Common Stock that you owned on the record date were
held for you in an account with a stock brokerage firm, bank nominee or
other similar "street name" holder, you are not entitled to vote such
shares directly, but rather must give instructions to the stock brokerage
firm, bank nominee or other "street name" holder to grant or revoke consent
for the shares held in your name. Accordingly, you should contact the
person responsible for your account and direct him or her to execute the
enclosed BLUE Consent Revocation Card on your behalf. You are urged to
confirm in writing your instructions to the person responsible for your
account and provide a copy of those instructions to Shorewood, c/o
Innisfree M&A Incorporated, at the address set forth above, so that
Shorewood will be aware of your instructions and can attempt to ensure that
those instructions are followed.

YOU HAVE THE RIGHT TO REVOKE ANY CONSENT YOU MAY HAVE PREVIOUSLY GIVEN
TO CHESAPEAKE. TO DO SO, YOU NEED ONLY SIGN, DATE AND RETURN IN THE
ENCLOSED POSTAGE-PAID ENVELOPE THE BLUE CONSENT REVOCATION CARD WHICH
ACCOMPANIES THIS CONSENT REVOCATION STATEMENT. IF YOU DO NOT INDICATE A
SPECIFIC VOTE ON THE BLUE CONSENT REVOCATION CARD WITH RESPECT TO ONE OR
MORE OF THE CHESAPEAKE PROPOSALS, THE CONSENT REVOCATION CARD WILL BE USED
IN ACCORDANCE WITH THE RECOMMENDATION OF THE SHOREWOOD BOARD TO REVOKE ANY
CONSENT WITH RESPECT TO THE PROPOSALS.

If you do not support the Proposals and have not signed Chesapeake's
white Consent Card, you may show your opposition to those Proposals by
signing, dating and returning the enclosed BLUE Consent Revocation Card.
This will better enable Shorewood to keep track of how many stockholders
oppose the Proposals.

Shorewood has retained Innisfree M&A Incorporated to assist in
communicating with stockholders in connection with the Chesapeake Consent
Solicitation and to assist in our efforts to obtain consent revocations. If
you have any questions about how to complete or submit your BLUE Consent
Revocation Card or any other questions, Innisfree will be pleased to assist
you. You may call Innisfree toll-free at (888) 750-5834. Banks and brokers
should call collect at (212) 750-5833.

STOCKHOLDER RIGHTS PLAN

On May 4, 1995, the Shorewood Board authorized and declared a dividend
distribution of one Right for each outstanding share of Common Stock to
stockholders of record at the close of business on June 14, 1995. Each
Right entitles the registered holder to purchase from Shorewood a unit
consisting of one one-hundredth of a share of Series B Junior Participating
Preferred Stock ("Preferred Stock"), par value $10.00 per share, at a
purchase price of $17.00 per unit, subject to adjustment.

Initially, the Rights attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates
were distributed. The Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial
ownership of 25% or more of the outstanding shares of Common Stock or (ii)
10 business days (or such later date as may be determined by the Shorewood
Board) following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer that would result in the beneficial
ownership by a person or a group of 25% or more of the outstanding shares
of Common Stock.

The Rights are not exercisable until the Distribution Date and will
expire at the close of business on June 14, 2005, unless earlier redeemed
by Shorewood as described below.

Shares of Preferred Stock purchasable upon exercise of the Rights will
not be redeemable. Each share of Preferred Stock will be entitled to a
minimum preferential quarterly dividend payment of $1 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared per
share of Common Stock. In the event of liquidation, the holders of the
shares of Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100 per share but will be entitled to an aggregate
payment of 100 times the payment made per share of Common Stock. Each share
of Preferred Stock will have 100 votes, voting together with the Common
Stock. Finally, in the event of any merger, consolidation or other
transaction in which shares of Common Stock are exchanged, each share of
Preferred Stock will be entitled to receive 100 times the amount received
per share of Common Stock. These rights are protected by customary
antidilution provisions.

Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share
of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.

In the event that Shorewood is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or
earning power are sold after a person or group has become an Acquiring
Person, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, in lieu of Preferred Stock, a number
of shares of Common Stock of the acquiring company at a fraction of the
then-current market price for such shares. In the event that any person or
group of affiliated or associated persons becomes an Acquiring Person,
proper provision shall be made so that each holder of a Right, other than
Rights beneficially owned by the Acquiring Person (which will thereafter be
void), will thereafter have the right to receive upon exercise, in lieu of
Preferred Stock, a number of shares of Common Stock at a fraction of the
then-current market price for one share of Common Stock. Based on the
market price for a share of Common Stock as of the date hereof, such
issuance of Common Stock would be effected at approximately one-quarter the
current market price of a share of Common Stock.

At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding shares of Common Stock, the Shorewood Board may exchange the
Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of
Common Stock, or one one-hundredth of a share of Preferred Stock (or of a
share of a class or series of Shorewood's preferred stock having equivalent
rights, preferences and privileges), per Right, subject to adjustment.

At any time prior to the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 25% or more of
the outstanding Common Stock, the Shorewood Board may redeem the Rights in
whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on
such basis with such conditions as the Shorewood Board in its sole
discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.

The terms of the Rights may be amended by the Shorewood Board without
the consent of the holders of the Rights, including an amendment to lower
certain thresholds described above to not less than the greater of (i) any
percentage greater than the largest percentage of voting power of Shorewood
then known to be beneficially owned by any person or group of affiliated or
associated person (excluding certain persons affiliated with Shorewood),
other than a person holding voting power of Shorewood in excess of the
then-existing thresholds pursuant to the written permission of the
Shorewood Board, and (ii) 10%, except that from and after such time as any
person or group of affiliated or associated persons becomes an Acquiring
Person no such amendment may adversely affect the interests of the holders
of the Rights.

Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of Shorewood, including, without limitation, the
right to vote or to receive dividends.

The Shorewood Board adopted the Rights Agreement to assure that all of
Shorewood's stockholders receive fair and equal treatment in the event of
any proposed takeover of Shorewood and to guard against partial tender
offers, open market accumulations and other abusive tactics to gain control
of Shorewood without paying all stockholders a control premium. The Rights
will cause substantial dilution to a person or group that acquires 25% or
more of the Common Stock on terms not approved by the Shorewood Board. The
Rights should not interfere with any merger or other business combination
approved by the Shorewood Board at any time prior to the first date that a
person or group has become an Acquiring Person.

At the December 15, 1999 meeting of the Shorewood Board, the Shorewood
Board resolved to delay any Distribution Date under the Rights Agreement
that arises solely by the virtue of the lapse of time following the public
announcement of the Chesapeake Offer, until such time as the Shorewood
Board or any authorized committee thereof shall designate, by subsequent
resolution fully adopted by the Shorewood Board or such committee thereof.

CERTAIN LITIGATION

CHESAPEAKE COMPLAINTS

On December 3, 1999, Chesapeake and Sheffield commenced a lawsuit in
the Court of Chancery of the State of Delaware against Shorewood and each
of the members of the Shorewood Board seeking, among other things, an order
(i) declaring that the Shorewood Board breached its fiduciary duties by
adopting certain amendments to Shorewood's By-laws (the "By-law
Amendments"), which amendments, among other things (A) require the
affirmative vote of holders of two-thirds (66 2/3%) of the outstanding
shares of Common Stock for the stockholders to amend, add to, alter or
repeal Shorewood's By-laws or adopt new By-laws for Shorewood (the "Super
Majority By-law"), (B) revise the procedure by which the Shorewood Board
fixes a record date for a solicitation of written consents from Shorewood's
stockholders pursuant to the Record Date Bylaw, (C) eliminate the ability
of 20% of the stockholders to call a meeting of stockholders, (D) provide
that only the Chairman and the President of Shorewood can call a meeting of
the Shorewood Board, (E) provide that only the Shorewood Board can fill
vacancies on the Shorewood Board between meetings of stockholders, and (F)
provide that directors can be removed from the Shorewood Board only
pursuant to Section 141(k) of the DGCL, (ii) declaring the Super Majority
By-law and the Record Date By-law void, and enjoining the Shorewood Board
from implementing the Super Majority By-law, the Record Date By-law and the
By-law Amendments as a whole, (iii) declaring that failure to redeem the
Rights issued pursuant to the Rights Agreement, or to render the Rights
inapplicable to the Chesapeake Offer and the Proposed Chesapeake Merger or
to approve the Chesapeake Offer and the Proposed Chesapeake Merger would
constitute a breach of the Shorewood Board's fiduciary duties under
Delaware law, (iv) invalidating the Rights or compelling the Shorewood
Board to redeem the Rights or render the Rights inapplicable to the
Chesapeake Offer and the Proposed Chesapeake Merger, (v) declaring that
failure to approve the Chesapeake Offer and the Proposed Chesapeake Merger
for purposes of Section 203 of the DGCL would constitute a breach of the
Shorewood Board's fiduciary duties under Delaware law, (vi) compelling the
Shorewood Board to approve the Chesapeake Offer and the Proposed Chesapeake
Merger for purposes of Section 203 of the DGCL, (vii) enjoining the
Shorewood Board from taking any other actions designed to impede or which
have the effect of impeding the Chesapeake Offer, the Consent Solicitation
or the Proposed Chesapeake Merger and declaring that any such actions would
constitute a breach of the Shorewood Board's fiduciary duties under
Delaware law, and (viii) enjoining the Shorewood Board from taking any
other actions to impede, or refuse to recognize the validity of, the
Consent Solicitation Statement.

Also on December 3, 1999, Chesapeake and Sheffield commenced
litigation against Shorewood in the United States District Court for the
District of Delaware seeking, among other things, a declaratory judgment
that Chesapeake and Sheffield have disclosed all information required by,
and are otherwise in full compliance with, the Exchange Act, and any other
federal securities laws, rules or regulations deemed applicable to the
Chesapeake Offer and the Consent Solicitation Statement.

The Court of Chancery of the State of Delaware has scheduled a trial
on certain issues for January 10, 11 and 13, 2000.

SHOREWOOD COUNTERCLAIMS

On December 16, 1999, Shorewood 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. Shorewood also filed a
counterclaim seeking, among other things, an order (i) declaring that
Chesapeake is an "interested stockholder" and "associate" of Shorewood
within the meaning of Section 203 of the DGCL, (ii) declaring that
Chesapeake will remain an "interested stockholder" and "associate" of
Shorewood during the entire time period prescribed by Section 203 of the
DGCL, (iii) declaring that the refusal of the Shorewood 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 Chesapeake Offer and the Proposed
Chesapeake Merger does not constitute a breach of fiduciary duty, (iv)
declaring that the proposals to remove the members of the Shorewood 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, Shorewood 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 Sheffield's Schedule 14D-1 and Schedule 13D are materially
false and misleading, in violation of Section 14(e) of the Exchange Act,
and (ii) preliminarily and permanently enjoining Chesapeake and Sheffield
from proceeding with the Chesapeake Offer in violation of Section 14(e) of
the Exchange Act.

Neither Chesapeake nor Sheffield has filed an answer to either of
Shorewood's counterclaims.

Shorewood expects that one or more of its counterclaims will be heard
by the Court of Chancery of the State of Delaware at the trial scheduled to
be held on January 10, 11 and 13, 2000.

INFORMATION ABOUT
THE BOARD OF DIRECTORS OF SHOREWOOD

The names of the current members of the Shorewood Board, their ages
and certain biographical information about each of them are set forth
below.

NAME AGE DIRECTOR SINCE
---- --- --------------
Marc P. Shore.................... 45 1982
Howard M. Liebman................ 57 1996
Sharon R. Fairley................ 39 1999
Leonard J. Verebay............... 55 1999
William P. Weidner............... 54 1993
R. Timothy O'Donnell............. 44 1991
Kevin J. Bannon.................. 47 1992
Andrew N. Shore.................. 47 1999
Virginia A. Kamsky............... 46 1999

Marc P. Shore

Marc P. Shore was elected Chairman of the Shorewood Board and Chief
Executive Officer of Shorewood in January 1996 following the passing of his
father, Paul B. Shore, the founder of Shorewood. He served as the President
of Shorewood from October 1991 until the election of Howard M. Liebman as
President in June 1999. Mr. Shore has been employed by Shorewood in various
executive capacities since 1982.

Howard M. Liebman

Howard M. Liebman joined Shorewood as Executive Vice President and
Chief Financial Officer in June 1994. He was elected as a director of
Shorewood in January 1996, and was elected as President of Shorewood in
June 1999. Mr. Liebman is a Certified Public Accountant.

Sharon R. Fairley

Sharon R. Fairley has been employed by Pharmacia & UpJohn since 1998
as Director of Direct to Consumer Communications with responsibility for
consumer promotion of pharmaceutical products on a global basis. Prior to
joining Pharmacia & UpJohn, Ms. Fairley was Senior Vice President of the
Senior Network, Inc. overseeing Shorewood's consumer goods marketing
consulting practice. She served in that capacity from June 1995 to August
1998. From February 1993 through June 1995, Ms. Fairley was senior vice
president at the DMB&B advertising agency.

Leonard J. Verebay

Leonard J. Verebay joined Shorewood as Executive Vice President in
October 1998 following the Queens Transaction. He was elected as a Class
III Director in February 1999. Mr. Verebay served as the President of
Queens, a manufacturer of value added packaging for the music, multimedia
and consumer product industries, at the time of its acquisition by
Shorewood. Mr. Verebay had held such positions since 1979. Mr. Verebay was
elected to the Shorewood Board pursuant to a right granted to Messrs.
Leonard J. Verebay and Eric Kaltman under a certain Stockholders' and
Registration Rights Agreement dated October 30, 1998 (the "Stockholders'
Agreement") to designate one member of the Shorewood Board. Upon the
expiration of Mr. Verebay's term, if either Mr. Verebay or Mr. Kaltman (i)
holds at least 400,000 shares of Common Stock (subject to adjustment for
stock splits and like events) and (ii) is then either employed by Shorewood
or subject to a then effective non-competition restriction, that person
will be entitled to be included in management's slate of nominees for
election to the Shorewood Board at the next meeting. If both of them are so
qualified, they shall jointly designate one of them to so serve. Further,
under the terms of the Stockholders' Agreement, for so long as Messrs.
Verebay and Kaltman own in the aggregate at least 800,000 shares of Common
Stock (subject to adjustment for stock splits and like events), whichever
one of Messrs. Verebay and Kaltman is not then serving on the Shorewood
Board will, provided he meets certain qualification requirements, be
entitled to participate in the Shorewood Board meetings as an observer,
subject to certain limitations regarding confidentiality. These provisions
terminate under various circumstances, including the occurrence of certain
types of capital events and "change of control" transactions, as defined in
the Agreement.

William P. Weidner

William P. Weidner is the President and Chief Operating Officer of Las
Vegas Sands, Inc., a developer of hotel and casino properties based in Las
Vegas, Nevada. He assumed that position in December 1995. From 1985 until
December 1995, he served as the President and Chief Operating Officer of
Pratt Hotel Corporation, a worldwide operator and developer of casino and
resort properties. He also served as the President of Hollywood
Casino-Aurora, Inc., an operator of river boat casinos, from 1992 until
December 1995.

R. Timothy O'Donnell

R. Timothy O'Donnell is the President of Jefferson Capital, an
investment banking firm located in Richmond, Virginia. He has served in
that capacity since August 1989. Previously he served as First Vice
President in charge of Leisure and Entertainment Corporate Finance at
PaineWebber. He is on the Board of Directors of Global Trade Technologies,
MicroMass Communications Inc., The Hobart West Group and The University of
Virginia's Health Medical Services Board.

Kevin J. Bannon

Kevin J. Bannon is an Executive Vice President and Chief Investment
Officer of the Asset Management Sector of The Bank of New York. From April
1979 to the present date, Mr. Bannon has held various management positions
with The Bank of New York. He is a Chartered Financial Analyst.

Andrew N. Shore

Andrew N. Shore joined Shorewood as General Counsel in June 1996. Mr.
Shore was elected Secretary of Shorewood in August 1996 and was appointed a
Vice President of Shorewood in November 1996. Prior to joining Shorewood,
Mr. Shore practiced law in Los Angeles, California, concentrating in the
areas of real estate finance and commercial law. For a period of two years
prior to joining Shorewood, Mr. Shore provided legal services to Shorewood.
Prior to engaging in private law practice, Mr. Shore served as general
counsel of DeAnza Group, Inc., a real estate investment firm. Andrew N.
Shore is the brother of Marc P. Shore, Shorewood's Chief Executive Officer
and Chairman of the Shorewood Board.

Virginia A. Kamsky

Virginia A. Kamsky is the Founder, Chief Executive Officer and
Chairman of Kamsky Associates, Inc. ("KAI"), a consulting firm, with
offices in both the United States and Beijing, China, which provides
advisory services to corporate clients in connection with commercial
dealings in China and the Far East. She has served in those capacities
since 1980. Ms. Kamsky serves on the Board of Directors and Compensation
Committee of Sealed Air Corporation.

BOARD MEETINGS AND COMMITTEES

During the fiscal year ended May 1, 1999 ("fiscal year 1999"), the
Shorewood Board held five meetings, two of which were held by telephone
conference call, and the Compensation and Stock Option Committee (the
"Compensation Committee") held one meeting. In July 1999, the Audit
Committee held a meeting in respect of fiscal year 1999. During fiscal year
1999, each of the directors attended at least 75% of the aggregate of (1)
the total number of meetings of the Shorewood Board (held during the period
that such director served) and (2) the total number of meetings held by all
committees of the Shorewood Board on which such director served (during the
period that he served). Shorewood's directors discharge their
responsibilities throughout the year, not only at the Shorewood Board's and
committee meetings, but also through personal meetings and other
communications, including telephone contacts with the Chairman and others.

Shorewood has an Executive Committee which is currently composed of
Marc P. Shore, Howard M. Liebman and Kevin J. Bannon. The Executive
Committee has the responsibility, between meetings of the Shorewood Board,
to take all actions with respect to the management of Shorewood's business
that require action by the Shorewood Board, except for certain specified
matters that by law must be approved by the entire Shorewood Board. The
Executive Committee also coordinates and implements financial and other
policies and reviews the status of all operational activities.

In addition, Shorewood has an Audit Committee which is currently
composed of William P. Weidner, R. Timothy O'Donnell and Virginia A.
Kamsky, each of whom is not an officer or employee of Shorewood or its
subsidiaries. The Audit Committee has the responsibility of recommending
Shorewood's outside auditors, reviewing the scope and results of audits,
and examining procedures for ensuring compliance with Shorewood's policies
on conflicts of interest.

The Compensation Committee currently consists of William P. Weidner,
Kevin J. Bannon and R. Timothy O'Donnell. In addition, during fiscal year
1999, Melvin L. Braun served as an alternate member with respect to any
matter in connection with which a regular member is by statute or
regulation deemed not to be disinterested. No member or alternate member of
the Compensation Committee is a current or former officer or employee of
Shorewood or any of its subsidiaries. The Compensation Committee works
closely with the Shorewood Board in establishing and implementing
Shorewood's compensation policies and practices. Additionally, it
administers Shorewood's bonus and other compensation programs and
Shorewood's Incentive Programs under which employees of Shorewood are
eligible to receive stock options, restricted stock and other benefits.

Shorewood does not have a nominating committee.

DIRECTOR COMPENSATION

During the fiscal year ended May 1, 1999, each director who was not an
officer or an employee of Shorewood (an "Outside Director") received a
director's fee of $8,000 per annum plus $2,000 for attendance at each
meeting of the Shorewood Board and $1,000 for attendance at each meeting of
a committee of the Shorewood Board, ordinarily excluding Shorewood Board or
committee meetings held by telephone conference call. All directors of
Shorewood are also reimbursed for expenses. Under the 1993 Incentive
Program (the "1993 Program"), as amended in fiscal year 1997, the full
Shorewood Board, in its discretion, is authorized to grant to each Outside
Director options to purchase shares of Common Stock, at option prices equal
to the fair market value of Common Stock on the date of grant. In June
1999, each Outside Director received an option to purchase 4,000 shares of
Common Stock pursuant to the 1993 Program on account of services in 1999.
The vesting of the options and certain other terms of the options are
determined by the full Shorewood Board in its discretion. Typically, the
terms of the options provide that the options are exercisable in full
immediately upon the death of the grantee or retirement from the Shorewood
Board by reason of disability or upon a "change of control" of Shorewood
(as defined in the 1993 Program). Any unexercised options shall terminate
upon the expiration of ten years from the date of grant or, if sooner, two
years after the termination of a director for any reason other than cause.
If a director is removed for cause, all director options immediately
terminate.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee currently consists of Messrs. William P.
Weidner, Kevin J. Bannon and R. Timothy O'Donnell. During fiscal year 1999,
Melvin L. Braun served as an alternate member of the Compensation
Committee. No member of Shorewood's Compensation Committee is a current or
former officer or employee of Shorewood or any of its subsidiaries. There
are no compensation committee interlocks between Shorewood and any other
entities involving any of the executive officers or directors of such other
entities.

Jefferson Capital, of which R. Timothy O'Donnell is the President and
a principal stockholder, has served as an investment advisor to Shorewood
on various matters, including, but not limited to, the Chesapeake Offer.
Additional information concerning Jefferson Capital and its relationship
with Shorewood is set forth in Annex B.

The Bank of New York, of which Kevin J. Bannon is an Executive Vice
President, is a participant in Shorewood's lending syndicate. The aggregate
amount of The Bank of New York's participation in Shorewood's outstanding
borrowings pursuant to credit facilities as at the end of fiscal year 1999
was approximately $25,039,500. The Bank of New York also acts as
Shorewood's transfer agent.

CERTAIN TRANSACTIONS

On June 20, 1985, Marc P. Shore, Kenneth Rosenblum and Charles
Kreussling each entered into a non-competition agreement with Shorewood.
Each non-competition agreement was entered into as a result of an
investment by Shorewood International, Inc. in Shorewood and was further to
a stock purchase and redemption agreement between Shorewood and each of
Messrs. Shore, Rosenblum and Kreussling. The non-competition agreements
restrict each of Messrs. Shore, Rosenblum and Kreussling from competing
with Shorewood for five years from the date of their termination of
employment with Shorewood; provided that, however, nothing prevents any of
them from owning up to 2% of the outstanding stock of any corporation whose
shares are publicly traded on a regular basis.

In May 1995, Shorewood loaned $2.0 million to Marc P. Shore, the
Chairman and Chief Executive Officer of Shorewood. The loan is due on May
4, 2000 and bears interest payable quarterly at the Applicable Federal
Rate, as defined, adjusted monthly. Mandatory prepayments of the loan are
required if Mr. Shore's compensation exceeds certain specified thresholds.
The Compensation Committee waived the required prepayment for 1999. The
aggregate principal amount outstanding under this loan as at the end of
fiscal year 1999 was $2.0 million.

There is a stock option agreement (the "Option Agreement"), dated
April 17, 1997, between Shorewood and Marc P. Shore, pursuant to which Mr.
Shore was granted non-qualified stock options to purchase 225,000 Shares
(the "Option Shares") at an exercise price of $12.08 per Share. The
exercise period is ten years from the date of the grant. The Option
Agreement provides that at any time prior to the tenth anniversary of the
grant, Mr. Shore shall have the right to have Shorewood prepare and file a
registration statement (and any other necessary documents) with the SEC to
comply with the provisions of the Securities Act of 1933, as amended (the
"Securities Act"), so as to permit a public sale of the Option Shares
(unless to do so would interfere with another material transaction by
Shorewood). Furthermore, if at any time Shorewood proposes to register any
Shares (with some exceptions as detailed in the Option Agreement) under the
Securities Act for sale to the public in an underwritten offering, it will
at each such time give written notice to Mr. Shore and, upon Mr. Shore's
request within 30 calendar days, Shorewood will use its best efforts to
effect the registration of the Option Shares for which the request was
made.

In May 1997, Shorewood guaranteed a portion of an $8.5 million loan
made by The Chase Manhattan Bank to Marc P. Shore in connection with his
purchase of certain real estate. As a result of provisions in the related
agreement and payments made by Mr. Shore, the guaranty was terminated in
September 1998.

Bryan Shore Resnick, the sister of Marc P. Shore and Andrew N. Shore,
is a travel agent with Reliable Travel, a travel agency which provides
travel services to Shorewood. Based upon information provided to Shorewood
by Reliable Travel, in fiscal year 1999, Reliable Travel earned
approximately $182,500 in commissions, of which approximately $89,500 was
paid to Bryan Shore Resnick. Such commissions were earned in the ordinary
course of business and, to the best knowledge of Shorewood, the services
performed were at terms no less favorable to Shorewood than had the
services been provided by an unrelated third party.

In April 1998, Shorewood loaned $630,000 to Howard M. Liebman, the
President and Chief Financial Officer of Shorewood, in connection with his
purchase of a new residence. The loan is evidenced by a note which is
secured by a first priority mortgage on the property. Shorewood's interest
in the mortgage is insured by a title insurance company. The loan bears
interest at the rate of 6.5% per annum. Interest is payable annually on
August 1 of each year commencing August 1, 1999. The final payment of
principal and interest is due August 1, 2013. In addition, Shorewood may
accelerate repayment of the loan in the event Mr. Liebman sells the
property prior to maturity or ceases to be employed by Shorewood. The
aggregate principal amount outstanding under this loan as at the end of
fiscal year 1999 was $630,000.

Effective June 23, 1999, Shorewood loaned $341,145 to Howard M.
Liebman in connection with his exercise of stock options to purchase 29,241
Shares. Mr. Liebman paid the equivalent of $358,857 with Shares already
owned by him as the purchase price for 30,759 Shares. Effective July 26,
1999, Shorewood loaned an additional $316,376 to Mr. Liebman in connection
with his exercise of stock options to purchase 26,736 Shares. Both loans
bear interest at the rate of 6.5% per annum, commencing as of the
respective effective dates of the loans. The principal amounts of and
accrued interest on the loans are due and payable October 2, 2000. The
loans are collateralized by a pledge of 55,977 Shares.

Effective July 26, 1999 Shorewood loaned $527,316 to Marc P. Shore in
connection with his exercise of stock options to purchase 44,562 Shares.
The loan bears interest at the rate of 6.5% per annum, commencing as of the
effective date of the loan. The principal amount of and accrued interest on
the loan is due and payable October 2, 2000. The loan is collateralized by
a pledge of 44,562 Shares. During fiscal year 2000, Shorewood advanced to
Mr. Shore approximately $2.6 million. These advances were repaid in
December 1999, including interest at an annual rate of 6.71%.

There is a stockholder's and registration rights agreement (the
"Stockholder's Agreement"), dated October 30, 1998, between Shorewood and
Messrs. Verebay and Kaltman. The Stockholder's Agreement relates to the
aggregate of 1,000,000 Shares issued to Messrs. Verebay and Kaltman
pursuant to a purchase and sale agreement with Shorewood. The shares
received are "restricted securities" under the Securities Act and may be
resold without registration only under limited circumstances. There can be
no sale, gift or encumbrance of the shares from the date of the
Stockholder's Agreement until the second anniversary of the closing date
(the "Restricted Period") other than with the Shorewood Board's consent or
according to the terms of the agreement. Otherwise, each stockholder shall
have full rights as a stockholder, including voting and dividend rights.

Messrs. Verebay and Kaltman may, at any time after the expiration of
the Restricted Period, give Shorewood a written demand for the registration
of the unregistered securities held by the stockholder which are not
eligible for distribution under Securities Act Rule 144(k) or otherwise
under Rule 144. Shorewood shall give written notice to both stockholders
under the Stockholder's Agreement and they shall have 30 days to deliver a
notice to Shorewood demanding registration of the securities. Shorewood
shall then file, within 60 days of receipt of the demand, the appropriate
documents with the SEC to effect the registration of the securities.
Furthermore, if Shorewood proposes to register securities for its own
account, Shorewood shall include in its proposed registration, all
registrable securities held by a stockholder if requested by the
stockholder within ten days of receipt of notice by Shorewood.

The Stockholder's Agreement also provides that Messrs. Verebay and
Kaltman may designate one member of the Shorewood Board. Upon the
expiration of Mr. Verebay's term, if either Mr. Verebay or Mr. Kaltman (i)
holds at least 400,000 Shares (subject to adjustment for stock splits and
like events) and (ii) is then either employed by Shorewood or subject to a
then effective non-competition restriction, that person will be entitled to
be included in management's slate of nominees for election to the Shorewood
Board at the next meeting. If both of them are so qualified, they shall
jointly designate one of them to so serve. Further, under the terms of the
Stockholder's Agreement, for so long as Messrs. Verebay and Kaltman own in
the aggregate at least 800,000 Shares (subject to adjustment for stock
splits and like events), whichever one of Messrs. Verebay and Kaltman is
not then serving on the Shorewood Board will, provided he meets certain
qualification requirements, be entitled to participate in Shorewood Board
meetings as an observer, subject to certain limitations regarding
confidentiality. These provisions terminate under various circumstances,
including the occurrence of certain types of "capital events" and "change
of control" transactions, as defined in the Stockholder's Agreement.

EXECUTIVE OFFICERS OF SHOREWOOD

The names of the executive officers who are not also directors of
Shorewood, their ages and certain information about them are set forth
below:

<TABLE>
<CAPTION>
POSITIONS AND OFFICES PRINCIPAL OCCUPATIONS AND
NAME AGE WITH SHOREWOOD EMPLOYMENT DURING PAST 5 YEARS
- -------------------- ----- ---------------------- ------------------------------
<S> <C> <C> <C>
Charles Kreussling.. 70 Executive Vice President - Mr. Kreussling has been employed
Manufacturing by Shorewood since its inception
in 1966 and has been an Executive
Vice President of Shorewood since
1979. Mr. Kreussling is responsible
for Shorewood's overall manufacturing
and plant administration.

Kenneth M. Rosenblum... 56 Senior Vice President - Mr. Rosenblum joined Shorewood in 1969
Sales, Home Entertainment as an account executive for the music
industry. From 1970 until 1993, Mr.
Rosenblum served as Vice President -
Sales of Shorewood. In 1993, he was
promoted to Senior Vice President -
Sales, Home Entertainment, and he is
presently responsible for the video and
computer software markets. Mr. Rosenblum
became an executive officer in 1988.

William H. Hogan... 40 Senior Vice President - Mr. Hogan joined Shorewood as Corporate
Finance Controller in June 1995. He was elected
Vice President - Finance of Shorewood in
October 1996 and was promoted to Senior
Vice President - Finance of Shorewood in
June 1999. Mr. Hogan, a Certified Public
Accountant, was a senior manager with the
accounting firm of Grant Thornton, LLP, from
1994 to 1995. From 1981 until 1994, Mr. Hogan
was employed by the accounting firm of
Deloitte & Touche LLP, where he was
actively involved in servicing Shorewood.
He was a senior manager with Deloitte
& Touche LLP from 1989 until 1994.

Eric Kaltman........ 56 Executive Vice President Mr. Kaltman joined Shorewood as
Executive Vice President in October
1998 following the closing of the Queens
Transaction. Mr. Kaltman was serving
as Vice President and Chief Executive
Officer of Queens at the time of its
acquisition by Shorewood. He held
various managerial positions at Queens
for more than five years.
</TABLE>

EXECUTIVE OFFICER COMPENSATION

Summary information with respect to the compensation of Shorewood's
chief executive officer and certain other executive officers is set forth
in Annex A.

SECURITY OWNERSHIP

SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS

According to information furnished to Shorewood as of December 10,
1999, the directors of Shorewood, Shorewood's "named executive officers"
(the "Named Executive Officers") within the meaning of Item 402(a)(3) of
Regulation S-K, and all directors and executive officers as a group,
beneficially owned shares of Common Stock of Shorewood as set forth below.
Beneficial ownership has been determined for purposes herein in accordance
with Rule 13d-3 of the Exchange Act under which a person is deemed to be
the beneficial owner of securities if such person has or shares voting
power or investment power in respect of such securities or has the right to
acquire beneficial ownership within 60 days of December 10, 1999.

<TABLE>
<CAPTION>
NUMBER OF COMMON SHARES APPROXIMATE PERCENTAGE OF
NAME AND SHARE EQUIVALENTS OUTSTANDING COMMON SHARES
- --------------------------- ----------------------- --------------------------
<S> <C> <C>
Marc P. Shore(1)........... 4,750,485 17.38%
Leonard J. Verebay(2)...... 500,180 1.83%
Charles Kreussling(3)...... 322,377 1.18%
R. Timothy O'Donnell(4).... 326,118 1.19%
Howard M. Liebman(5)....... 233,269 (6)
Kenneth M. Rosenblum(7).... 124,629 (6)
William P. Weidner(8)...... 57,000 (6)
Kevin J. Bannon(9)......... 33,000 (6)
Virginia A. Kamsky......... 4,500 (6)
Andrew N. Shore(10)........ 169,052 (6)
William H. Hogan(11)...... 30,500 (6)
Sharon R. Fairley.......... 0 (6)
All directors and executive officers
as a group (12 persons)(12)(13).... 6,529,610 23.88%

</TABLE>

- ----------

(1) See "Security Ownership of Other Beneficial Owners-Footnote (1)."

(2) Includes 500,000 Shares held in grantor retained annuity trust. Under
the terms of the Stockholders' Agreement, these shares are subject to
contractual restrictions on transfer until October 30, 2000, with
limited exceptions for certain types of inter-family, estate planning
and affiliate transactions. These restrictions terminate in various
circumstances, including the occurrence of certain types of capital
events and "change of control" transaction.

(3) Includes 90,000 shares owned by Charles Kreussling's wife, as to
which Mr. Kreussling disclaims beneficial ownership. The table does
not include 750 shares owned by one of Mr. Kreussling's adult
children who shares the same household.

(4) Includes: (i) 450 Shares owned by Mr. O'Donnell's wife as custodian
for their three minor children; (ii) 22,231 Shares owned by Jefferson
Capital (of which Mr. O'Donnell is the President and a principal
stockholder); (iii) 87,500 Shares which could be acquired on or
within 60 days after December 10, 1999 upon the exercise of warrants
granted to Jefferson Capital and (iv) 18,000 shares which could be
acquired on or within 60 days after December 10, 1999 upon the
exercise of director options granted to Mr. O'Donnell under
Shorewood's Incentive Plans.

(5) Includes: (i) 67,432 Shares which could be acquired on or within
sixty (60) days after December 10, 1999 upon the exercise of stock
options granted under Shorewood's Incentive Plans; (ii) 79,101 shares
of restricted stock awarded under Shorewood's Long-Term Incentive
Program ("LTIP") , all of which are subject to forfeiture and (iii)
55,977 Shares that are held by Shorewood as collateral for a $657,521
loan in connection with the exercise of options.

(6) Less than 1% of the outstanding Shares.

(7) Includes: (i) 35,347 Shares which could be acquired on or within
sixty (60) days after December 10, 1999 upon the exercise of stock
options granted under Shorewood's Incentive Plans; and (ii) 5,178
shares of restricted stock awarded under the LTIP, all of which are
subject to forfeiture.

(8) Includes: (i) 18,000 Shares which could be acquired on or within
sixty (60) days after December 10, 1999 upon the exercise of director
options granted under Shorewood's Incentive Plans and (ii) 39,000
Shares owned by William P. Weidner's wife, as to which Mr. Weidner
disclaims beneficial ownership.

(9) Includes 18,000 Shares which could be acquired on or within sixty
(60) days after December 10, 1999 upon the exercise of director
options granted under Shorewood's Incentive Plans.

(10) Includes: (i) 5,000 Shares which could be acquired on or within sixty
(60) days after December 10, 1999 upon exercise of stock options
granted under Shorewood's Incentive Plans; (ii) 6,000 shares of
restricted stock awarded under the LTIP, all of which are subject to
forfeiture; and (iii) 650 Shares owned by Andrew N. Shore's wife, as
to which Mr. Shore disclaims beneficial ownership.

(11) Includes: (i) 9,000 Shares of restricted stock awarded under the
LTIP, all of which are subject to forfeiture and (ii) 21,500 Shares
which could be acquired on or within sixty (60) days after December
10, 1999 upon the exercise of director options granted under
Shorewood's Incentive Plans.

(12) The total number of directors and executive officers of Shorewood
includes two executive officers who were not included in the above
table.

(13) Includes 695,181 Shares subject to stock options or warrants which
could be acquired on or within sixty (60) days after December 10,
1999 and 184,929 shares of restricted stock awarded pursuant to the
LTIP, all of which are subject to forfeiture. Does not include the
shares held by Messrs. Melvin L. Braun and Floyd G. Glinert, who,
until recently, were directors of Shorewood. Where more than one
person is deemed to be a beneficial owner of any particular shares,
such Shares have been counted toward the total listed only once.

SECURITY OWNERSHIP OF OTHER BENEFICIAL OWNERS

The following table sets forth information with respect to the
persons known to Shorewood to beneficially own more than five percent (5%)
of the Shares, as of December 10, 1999:

NAME AND ADDRESS OF AMOUNT AND NATURE OF PERCENTAGE OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ---------------------------------- ------------------------ ---------------
Marc P. Shore(1).................. 4,750,485 17.38%
c/o Shorewood Packaging
Corporation
277 Park Avenue
New York, New York 10172-0124

Ariel Capital Management, Inc.(2). 5,615,882 20.54%
307 North Michigan Avenue
Chicago, Illinois 60601

Chesapeake Corporation (3)........ 4,106,440 15.02%
1021 East Cary Street
Richmond, Virginia 23218-2350

Brinson Partners, Inc.(4)......... 1,548,722 5.66%
209 South LaSalle
Chicago, Illinois 60604-1295

T. Rowe Price Associates, Inc. (5) 1,421,500 5.20%
100 E. Pratt Street
Baltimore, Maryland 21202

- ----------

(1) Marc P. Shore is the Chairman and Chief Executive Officer of Shorewood.

The Shares reflected include: (1) 1,007,687 Shares owned outright by
Marc P. Shore, of which (a) 85,650 Shares are restricted shares awarded
pursuant to the LTIP and are subject to forfeiture and (b) 44,562
Shares are held by Shorewood as collateral for a $527,316 loan in
connection with the exercise of options; (2) 348,478 Shares which
could be acquired on or within sixty (60) days after December 10,
1999 upon the exercise of stock options granted under Shorewood's
incentive and stock option plans (collectively, the "Incentive
Plans"); (3) 586,062 Shares held by a marital trust created under the
will of Paul B. Shore for the benefit of his wife (the "Marital
Trust") (see discussion below); (4) 2,700,000 Shares held by the
Shore Family Partnership, L.P., a California limited partnership (the
"Family Partnership") (see discussion below); and (5) 108,258 Shares
held by a marital trust created for the benefit of the wife of Paul
B. Shore.

The Marital Trusts are testamentary trusts for the benefit of Paul B.
Shore's wife created under the terms of his will. By the terms of the
will, Marc P. Shore has sole voting power with respect to all Shares
owned by the Marital Trust. Dispositive power over these Shares is
shared with the co-trustees. The Marital Trust also held 3,900 Shares
as of December 1, 1999. Marc P. Shore disclaims beneficial ownership
with respect to 3,900 of such Shares.

The Family Partnership is an investment partnership for the
benefit of Marc P. Shore and the other children of Paul B. Shore
and Ellen Shore. The Family Partnership terminates on January 1,
2030, subject to earlier termination by operation of law or under
the terms of the Limited Partnership Agreement. By virtue of his
control over the Shore Family LLC, which is the sole general
partner of the Family Partnership, Marc P. Shore has effective
decision-making power with respect to all Shares owned by the
Family Partnership. The Family Partnership owned 2,700,000 Shares
as of December 10, 1999. Marc P. Shore disclaims beneficial
ownership as to 2,459,970 of such Shares.

(2) Represents shares held by investment advisory clients of Ariel. On
November 26, 1999, Chesapeake entered into the Purchase Agreement
with Ariel pursuant to which Chesapeake agreed to purchase 4,106,440
shares of Shorewood Common Stock (the "Purchased Shares"), or
approximately 14.9% of Shorewood's outstanding shares, at a purchase
price of $17.25 per share. Pursuant to the Purchase Agreement, Ariel
agreed to use its best efforts to exercise its discretionary
authority to cause its clients (i) to tender the Purchased Shares in
the Chesapeake Offer and (ii) to execute written consents in the form
solicited by Chesapeake in the Consent Solicitation. This information
is based solely upon the contents of filings made pursuant to Section
13 of the Exchange Act by Ariel. See "CERTAIN LITIGATION."

(3) See (2) above. This information is based solely upon the contents of
filings made pursuant to Section 13 of the Exchange Act by Chesapeake.
See "CERTAIN LITIGATION."

(4) Represents Shares held in managed discretionary accounts for advisory
clients which are advised by Brinson Partners, Inc. and/or its
parent, UBS AG, Inc. This information is based solely upon the
contents of filings made pursuant to Section 13 of the Exchange Act
by Brinson Partners, Inc.

(5) Represents Shares held in managed discretionary accounts for advisory
clients which are advised by T. Rowe Price Associates, Inc. This
information is based solely upon the contents of filings made
pursuant to Section 13 of the Exchange Act by T. Rowe Price
Associates, Inc.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires Shorewood's executive
officers and directors, and persons who own more than ten percent of the
Common Stock of Shorewood to file reports of ownership and changes in
ownership with the SEC and the exchange on which the Common Stock is listed
for trading. Executive officers, directors and more than ten percent
stockholders are required by regulations promulgated under the Exchange Act
to furnish Shorewood with copies of all Section 16(a) reports filed. Based
solely on Shorewood's review of copies of the Section 16(a) reports filed
for the fiscal year 1999, Shorewood believes that all reporting
requirements applicable to its executive officers, directors, and more than
ten percent stockholders were complied with for the fiscal year 1999,
except that (i) Jefferson Capital, of which R. Timothy O'Donnell, a member
of the Shorewood Board, is the President and a principal stockholder,
failed to timely file a report in respect of the grant by Shorewood to
Jefferson Capital of a warrant to purchase 50,000 shares of Common Stock in
October 1998, (ii) Marc P. Shore failed to timely file a report in respect
of distributions by the Estate of Paul B. Shore (the "Estate") under Paul
B. Shore's will of an aggregate of 11,700 shares of Common Stock in
December 1998, and (iii) Andrew N. Shore failed to timely file a report in
respect of the transfer of 650 shares of Common Stock by the Estate to Mr.
Shore's wife in December 1998.

SOLICITATION OF CONSENT REVOCATIONS

Consent revocations may be solicited by mail, telephone, facsimile
transmission or other electronic media and in person. Solicitation of
consent revocations may be made by directors, officers and regular
employees of Shorewood for which they will receive no additional
compensation.

In addition, Shorewood has retained Innisfree to assist in the
solicitation of the consent revocations, for which Innisfree will receive a
fee of $300,000 plus reasonable out-of-pocket expenses. Shorewood has also
agreed to indemnify Innisfree for certain liabilities in connection with
this solicitation. Approximately 100 persons will be employed by Innisfree
to solicit stockholders.

Banks, brokers, custodians, nominees and fiduciaries will be
requested to forward solicitation material to beneficial owners of shares
of Shorewood common stock. Shorewood will reimburse banks, brokers,
custodians, nominees and fiduciaries for their reasonable expenses for
sending solicitation material to the beneficial owners.

The entire cost of soliciting the consent revocations, including,
without limitation, costs, if any, relating to advertising, printing, fees
of attorneys, financial advisors, proxy solicitors, accountants, public
relations, transportation, litigation and related expenses and filing fees,
will be borne by Shorewood. Shorewood estimates that total expenditures
relating to the Shorewood Board's solicitation of the consent revocations
will be approximately $850,000. Such costs do not include the amount
normally expended for a solicitation for an uncontested election of
directors or costs represented by salaries and wages of regular employees
and officers. Nor do such costs include the fees payable to Bear Stearns or
Jefferson Capital which fees are described in Annex B hereto. To date, no
fees have been paid by Shorewood in connection with its solicitation of
revocations of consents.

ABSENCE OF APPRAISAL RIGHTS

Under Delaware law, the stockholders of Shorewood are not entitled to
appraisal rights in connection with the solicitation of consents with
respect to the Proposals.

PARTICIPANTS IN THE SOLICITATION

Under applicable regulations of the SEC, each member of the Shorewood
Board, certain executive officers and other employees of Shorewood and
certain other persons may be deemed to be a "participant" as defined in the
instructions to Item 4 of Schedule 14A promulgated under the Exchange Act
in Shorewood's solicitation of revocations of consent. The principal
occupations and business addresses of each such person are set forth in
Annex B. Information about the present ownership by directors and certain
executive officers of Shorewood Common Stock is provided in this Consent
Revocation Statement and the present ownership of Shorewood's Common Stock
by other persons who may be deemed to be participants is listed on Annex B.

STOCKHOLDER PROPOSALS

If a stockholder intends to present a proposal at Shorewood's 2000
Annual Meeting of Stockholders and seeks to have the proposal included in
Shorewood's proxy statement and form of proxy relating to that meeting,
pursuant to Rule 14a-8 of the Exchange Act, the proposal must be received
by Shorewood no later than the close of business on April 29, 2000. Any
such proposal must also comply with the other requirements of the proxy
solicitation rules of the SEC. Any proposals, as well as any related
questions, should be directed to the Secretary of Shorewood. In order for
stockholder proposals which are made outside of Rule 14a-8 under the
Exchange Act to be considered "timely" within the meaning of Rule 14a-4(c)
under the Exchange Act, such proposals must be received by Shorewood at its
principal executive offices by July 12, 2000. The Amended By-laws require
that proposals made outside of Rule 14a-8 under the Exchange Act must be
submitted, in accordance with the requirements of the Amended By-laws, not
later than July 12, 2000 and not earlier than June 12, 2000.

SHOREWOOD PACKAGING CORPORATION

December [ ], 1999

IMPORTANT

1. If your shares are registered in your name, please sign, date and mail
the enclosed BLUE Consent Revocation Card to Innisfree in the
postage-paid envelope provided.

2. If you have previously signed and returned a white consent card to
Chesapeake, you have every right to change your vote. Only your latest
dated card will count. You may revoke any white consent card already
sent to Chesapeake by signing, dating and mailing the enclosed BLUE
Consent Revocation Card in the postage-paid envelope provided.

3. If your shares are held in the name of a brokerage firm, bank nominee
or other institution, only it can sign a BLUE Consent Revocation Card
with respect to your shares and only after receiving your specific
instructions. Accordingly, please sign, date and mail the enclosed
BLUE Consent Revocation Card in the postage-paid envelope provided. To
ensure that your shares are voted, you should also contact the person
responsible for your account and give instructions for a BLUE Consent
Revocation Card to be issued representing your shares.

4. After signing the enclosed BLUE Consent Revocation Card, do not sign
or return the white consent card. Do not even use Chesapeake's white
consent card to indicate your opposition to the Chesapeake Proposals.

If you have any questions above giving your revocation of consent or
require assistance, please call:

INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
CALL TOLL FREE: (888) 750-5834
BANKS & BROKERS CALL COLLECT: (212) 750-5833

ANNEX A

EXECUTIVE COMPENSATION

The following summary compensation table sets forth certain
information concerning the compensation of the Named Executive Officers for
each of the three fiscal years during the period ended May 1, 1999.

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG TERM
COMPENSATION(1) COMPENSATION AWARDS
----------------- -------------------

RESTRICTED OPTIONS TO ALL OTHER
SALARY STOCK PURCHASE COMPEN-
------ AWARDS SHARES(4) SATIONS(5)
NAME AND PRINCIPAL POSITION YEAR* ($) BONUS($) ($)(3) (#) ($)
- --------------------------- ----- --- ------- --------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Marc P. Shore.............. Fiscal 1999 800,000 1,093,000 825,000 350,000 149,625
Chairman of the Board, Fiscal 1998 800,000 302,000 - - 149,125(6)
Chief Executive Officer Fiscal 1997 815,385 450,000(2) - 269,565 155,520(2)

Howard M. Liebman.......... Fiscal 1999 450,000 150,000 481,250 150,000 107,875(7)(8)
Executive Vice President, Fiscal 1998 325,000 100,000 497,490 - 214,970(7)(8)
Chief Financial Officer Fiscal 1997 331,250 100,000 - 26,737 142,043(7)(8)
and Director

Floyd S. Glinert**......... Fiscal 1999 299,988 - - - 4,950
Executive Vice Fiscal 1998 299,988 - - - 5,950
President - Marketing Fiscal 1997 305,757 - - - 16,938
and Director

Charles Kreussling......... Fiscal 1999 250,000 125,000 - - 19,090
Executive Vice Fiscal 1998 250,000 125,000 - - 15,964
President - Manufacturing Fiscal 1997 215,385 125,000 - - 18,449

Kenneth M. Rosenblum...... Fiscal 1999 175,692 100,000 - 40,000 6,072
Senior Vice President -
Sales Fiscal 1998 163,366 125,000 - - 6,179
Fiscal 1997 154,903 100,000 - 43,507 5,895
</TABLE>
- ---------

* 1997 was a 53-week year.

** Mr. Glinert resigned as an Executive Officer of Shorewood effective at
the end of fiscal year 1999.

(1) The aggregate amount of perquisites and other personal benefits for
each of the Named Executive Officers did not equal or exceed the
lesser of either $50,000 or 10% of the total of such individual's
base salary and bonus, as reported herein for the applicable fiscal
years, and is not reflected in the table.

(2) In fiscal 1997, Marc P. Shore received a $450,000 bonus. Mr. Shore
was entitled to receive a cash bonus in excess of $1.2 million in
fiscal 1997 under a bonus plan of Shorewood (the "Bonus Plan") (see
"Employment and Consulting Agreements"); however, Mr. Shore waived
such bonus and accepted the $450,000 bonus.

(3) Represents the dollar value on the date of grant of shares of
restricted stock awarded by the Compensation Committee to the named
recipients under the LTIP. The value of the restricted shares
reported in this column was calculated by multiplying the closing
market price of the Common Stock as reported on the New York Stock
Exchange (the "NYSE") on the date of grant by the number of
restricted shares, without any adjustment for forfeiture or
termination contingencies. The restricted stock awards identified in
this column consist of the following stock grants: (i) 30,000 shares
to Howard M. Liebman on October 30, 1997, (ii) 35,000 shares to
Howard M. Liebman on June 8, 1998 and (iii) 60,000 shares to Marc P.
Shore on June 8, 1998. These awards are subject to three or four year
vesting requirements based on the performance of Shorewood's Common
Stock or, alternatively, an eight year employment vesting
requirement. Under the terms of the awards, if the grantee's
employment terminates prior to vesting, there restricted shares
awarded to him will be forfeited. During the vesting period, the
grantee may not dispose of, but may vote, the restricted shares and
is entitled to receive any dividends paid on such shares.

In addition, in July 1994 the Compensation Committee awarded
restricted stock to certain executives pursuant to the LTIP. Set
forth below are the number and value of the aggregate restricted
share holdings of each Named Executive Officer as of May 1, 1999.
Values were calculated by multiplying the closing price of the Common
Stock as reported on the NYSE on April 30, 1999 (the last trading day
in this fiscal year) by the respective number of shares.

NAME EXECUTIVE OFFICER SHARES(#) VALUE($)
---------------------- --------- --------
Marc P. Shore............... 85,650 1,691,588
Howard M. Liebman........... 79,101 1,562,245
Kenneth M. Rosenblum....... 5,178 102,266

(4) Stock options are granted under the terms and provisions of
Shorewood's Incentive Plans.

(5) Amounts reported under this column include the dollar value of the
following:

VALUE OF LIFE CONTRIBUTIONS TO
INSURANCE 401(K) EMPLOYEE
NAME YEAR PREMIUMS (A)($) SAVINGS PLAN (B)($)
- ---- ---- --------------- -------------------
Marc P. Shore.......... Fiscal 1999 14,120 6,500
Fiscal 1998 15,170 6,500
Fiscal 1997 19,070 8,395

Howard M. Liebman...... Fiscal 1999 12,121 6,975
Fiscal 1998 13,501 4,371
Fiscal 1997 13,281 8,449

Floyd S. Glinert...... Fiscal 1999 - 4,950
Fiscal 1998 - 5,950
Fiscal 1997 10,538 6,400

Charles Kreussling..... Fiscal 1999 14,965 4,125
Fiscal 1998 12,214 3,750
Fiscal 1997 11,841 6,608

Kenneth M. Rosenblum... Fiscal 1999 - 6,072
Fiscal 1998 1,800 4,379
Fiscal 1997 1,800 4,095

- ----------

(a) Reflects life-insurance premiums paid by Shorewood on behalf of
the Named Executive Officer.

(b) Reflects contributions to Shorewood's tax-qualified 401(k)
Employee Savings Plan that covers all employees who have
completed 1,000 hours of service and one year of employment.

(6) Includes (i) $122,367 paid in fiscal 1999, $120,817 paid in fiscal
1998 and $121,417 paid in fiscal 1997, which represent Shorewood's
share of premiums paid in the respective years under a Split Dollar
Life Insurance Arrangement for the benefit of Marc P. Shore whereby
Shorewood will generally recover in full its share of the
premiums upon the cancellation, or purchase by Mr. Shore, of the
life insurance policy or the payment of death benefits under the
life insurance policy and (ii) $6,638 paid in fiscal 1999, $6,638
paid in fiscal 1998 and in fiscal 1997, which represent
disability premiums paid by Shorewood in the respective years on
behalf of Marc P. Shore.

(7) Includes ($1,585) lost in fiscal 1999, $108,114 earned in fiscal
1998, and $30,959 earned in fiscal 1997 by a trust established by
Shorewood for Mr. Liebman's benefit, pursuant to which income earned
on the trust principal is accumulated for payment to Mr. Liebman upon
his retirement from Shorewood. For a description of the trust, see
"Employment and Consulting Agreements."

(8) Includes $90,364 paid in fiscal 1999, $88,984 paid in fiscal 1998 and
$89,354 paid in fiscal 1997, which represent Shorewood's share of
premiums paid in the respective years under a Split Dollar Life
Insurance Arrangement for the benefit of Howard M. Liebman whereby
Shorewood will generally recover in full its share of the premiums
upon the cancellation, or purchase by Mr. Liebman, of the life
insurance policy or the payment of death benefits under the life
insurance policy.

OPTION GRANTS TABLE

The following table provides certain summary information concerning
individual grants of stock options made to Named Executive Officers during
the fiscal year ended May 1, 1999 under Shorewood's Incentive Plans. Except
as set forth in the table below, during fiscal year 1999, Shorewood did not
grant any stock options under Shorewood's Incentive Plans to any of the
Named Executive Officers.

INDIVIDUAL GRANTS
-----------------------------------------
POTENTIAL REALIZABLE VALUE AT
ASSUMED RATES OF STOCK PRICE
NUMBER OF PERCENT OF TOTAL EXER- APPRECIATION FOR OPTION
SHARE OPTIONS GRANTED CISE TERM (1)
UNDERLYING TO EMPLOYEES IN PRICE EXPIRA- -----------------------------
GRANT(#) FISCAL YEAR(%) ($) TION DATE 5%($) 10%($)
----------- ---------------- ------ ----------
<S> <C> <C> <C> <C> <C> <C>
Marc P. Shore...... 350,000 42.4% 13.75 6/08/08 3,026,555 7,669,886
Howard M. Liebman.. 150,000 18.2% 13.75 6/08/08 1,297,095 3,287,094
Kenneth M. Rosenblum.. 40,000 4.8% 13.75 6/08/08 345,892 876,558
</TABLE>

- -------------

(1) Amounts represent hypothetical gains that could be achieved from the
exercise of the respective stock options and the subsequent sale of
the Common Stock underlying such options if the options were exercised
at the end of the option terms. The gains are based upon assumed rates
of stock price appreciation of 5% and 10% compounded annually from the
date the respective options were granted. The rates of appreciation
are mandated by the rules of the Exchange Act and do not represent
Shorewood's estimate or projection of the future Common Stock price.

(2) The stock options reported were awarded pursuant to the 1993 Program
at exercise prices equal to the fair market value of the Common Stock
on the date of grant. The options vest in specified installments over
a five- year period after the grant date and terminate ten years after
the grant date, subject to early termination in the event of death or
termination of the optionee's employment for any reason. Payment for
options exercised may be in cash or shares of Common Stock, the fair
market value of which is determined under the 1993 Program.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

The following table provides certain summary information concerning
stock option exercises during the fiscal year ended May 1, 1999 by the
Named Executive Officers and the value of unexercised stock options held by
the Named Executive Officers as of May 1, 1999.

<TABLE>
<CAPTION>
NUMBER NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OF OPTIONS AT FISCAL YEAR END(1) "IN THE MONEY" OPTIONS AT
SHARES (#) FISCAL YEAR END (2) ($)
ACQUIRED ----------------------------- --------------------------
ON VALUE
EXERCISE REALIZED
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------- ------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Marc P. Shore...... - - 331,953 376,739 2,626,682 2,330,996

Howard M. Liebman.. - - 124,168 166,042 1,025,973 1,038,585

Floyd S. Glinert.. - - -0- -0- -0- -0-

Charles Kreussling. - - -0- -0- -0- -0-

Kenneth M. Rosenblum. 10,856 87,271 18,560 66,104 162,801 468,009
</TABLE>

- ------------

(1) Represents the aggregate number of stock options held as of May 1,
1999 which could and could not be exercised on that date pursuant to
the terms of the stock option agreements related thereto and the
Incentive Plans.

(2) Values were calculated by multiplying (i) the respective number of
shares by (ii) the closing market price of the Common Stock as
reported on the NYSE on April 30, 1999 (the last trading day of the
fiscal year) less the exercise price per share, without any adjustment
for any termination or vesting contingencies.

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

Overall Policy

Shorewood's executive compensation program is designed to be closely
linked to corporate performance and the total return to stockholders over
the long-term. To that end, Shorewood has developed an overall compensation
strategy and specific compensation plans which tie executive compensation
to Shorewood's success in meeting specified objectives and to appreciation
in Shorewood's stock price. The overall objectives are to attract and
retain the best possible executive talent, motivate key executives to
achieve the goals inherent in Shorewood's business strategy, link executive
and stockholder interests through participation in the LTIP and provide a
compensation package that recognizes individual contributions as well as
overall business results.

Each year the Compensation Committee conducts a review of Shorewood's
executive compensation program. The review includes a comparison of
Shorewood's executive compensation, corporate performance, stock price
appreciation and total return to stockholders with a peer group of public
corporations that represent Shorewood's direct competitors for executive
talent. The annual compensation reviews permit an ongoing evaluation of the
link between Shorewood's performance and its executive compensation in the
context of the compensation programs of other companies. The peer group
presently utilized by the Compensation Committee is the Peer Group. See
"Stock Performance Graph."

The Compensation Committee approves the compensation of executive
officers of Shorewood, including the individuals whose compensation is
detailed in this Proxy Statement. In reviewing the individual performance
of the executive officers of Shorewood whose compensation is detailed in
this Proxy Statement, the Compensation Committee takes into account the
views of Marc P. Shore, the Chairman and Chief Executive Officer of
Shorewood, and the other members of the Shorewood Board.

The key elements of Shorewood's executive compensation during the
last fiscal year consisted of base salary, an annual bonus and grants of
stock options and restricted stock under the LTIP. The Compensation
Committee's policies with respect to each of these elements, are discussed
below. In addition, while the elements of compensation described below are
considered separately, the Compensation Committee takes into account the
full compensation package afforded by Shorewood to each individual.

Tax Deductibility of Executive Compensation Plans

It is the policy of the Compensation Committee to have the executive
compensation plans of Shorewood treated as fully tax deductible under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") whenever, in the judgment of the Committee, to do so would be
consistent with the business objectives of those plans. All compensation
paid during fiscal year 1999 was, in fact, fully tax deductible. The
Compensation Committee, however, has granted awards which may not be fully
tax deductible, and reserves the right to grant future compensation awards
in such amounts as it may deem appropriate in the exercise of its business
judgement, notwithstanding whether those awards are fully tax deductible.

Base Salaries and Annual Bonuses

Base salaries and annual bonuses for executive officers are
determined by evaluating the responsibilities of the position held and the
experience of the individual, and by reference to the competitive
marketplace for executive talent, including a comparison of base salaries
for comparable positions at other companies in the Peer Group. Annual
salary adjustments and bonuses, if any, are determined by evaluating the
performance of Shorewood and of each executive officer, and by taking into
account added responsibilities. The Compensation Committee, where
appropriate, also considers non-financial performance measures. These
include increases in market share, manufacturing efficiency gains,
improvements in product quality and improvements in relations with
customers, suppliers and employees. These factors are afforded varying
levels of significance by the Committee depending upon the circumstances.
All final determinations are subjective.

In establishing the annual base salary of Marc P. Shore, Shorewood's
Chairman and Chief Executive Officer, the Committee also took into account
a comparison of base salaries of chief executive officers of the Peer
Group, Shorewood's results of operations, the performance of Shorewood's
Common Stock and the subjective assessment by the members of the Committee
of Mr. Shore's individual performance.

The Committee has established, with the approval of the Shorewood
Board and the Stockholders, a performance Bonus Plan for the benefit of
Marc P. Shore, which is effective through fiscal year 2003. The Bonus Plan
provides for the grant of graduated performance bonuses, up to $2.0 million
per annum, to Mr. Shore based upon yearly comparisons of Shorewood's
earnings from operations plus depreciation and amortization. Bonuses
pursuant to the Bonus Plan are payable only if certain pre-established
thresholds are met. The Bonus Plan is based solely upon the performance
criteria described above. Mr. Shore earned a bonus in the amount of
$1,093,000 in respect of fiscal year 1999 under the Bonus Plan. See
"Executive Compensation -- Summary Compensation Table." Pursuant to the new
five year employment agreement which Shorewood and Mr. Shore entered into
on June 8, 1998, Mr. Shore was granted a signing bonus in the aggregate
amount of $1,000,000, payable immediately in full but earned ratably over
his five year employment period, provided that Mr. Shore continues to be
employed with Shorewood at the end of each such year. The full amount of
the signing bonus was paid to Mr. Shore in fiscal year 1999. Because Mr.
Shore was employed with Shorewood at the end of the first year of his
employment term, the ratable portion of the signing bonus for the first
year has been earned. See "Employment and Consulting Agreements."

The Committee may also grant, and has in the past granted, Mr. Shore
discretionary bonuses outside of the Bonus Plan and his employment
agreement.

Long Term Incentive Plans

Pursuant to the 1993 Program, approved by the Stockholders in 1993,
the Committee adopted the LTIP which allows various types of awards keyed
to corporate performance, including stock options (focus on absolute growth
in stockholder value) and restricted shares (focus on relative growth in
stockholder value), subject to performance-based contingencies, which are
made available in amounts which the Committee determines to be competitive
based on the competitive market analyses described above.

Stock Options

Under the LTIP and Shorewood's other Incentive Plans, stock options
are periodically granted to Shorewood's employees, including executive
officers. The Compensation Committee sets guidelines for the size of the
stock option awards based on similar factors, including competitive
compensation data, as are used to determine base salaries and bonuses, if
any. In the event of poor corporate performance, the Compensation Committee
can elect not to award stock options. Final determinations are subjective.

Stock options are designed to align the interests of executives with
those of the stockholders. Stock options are granted with an exercise price
equal to the market price of the Common Stock on the date of grant and
generally vest in increments over a period of four or five years. This
approach is designed to incentivize the creation of stockholder value over
the long term since the full benefit of the compensation package cannot be
realized by the option recipients unless stock price appreciation occurs
over a number of years.

Performance Based Restricted Stock

Under the LTIP, awards of restricted stock are made preceding a
three-year or four-year performance period. The Committee, together with
Shorewood's Chief Executive Officer, determine the size of the awards based
on the same competitive compensation data as are used to determine base
salaries and bonuses. Final determinations are subjective. At the end of
the three-year or four-year performance period, some or all of the shares
of restricted stock may vest depending upon Shorewood's relative
stockholder growth compared to that of the peer group over the same period.
The peer group for grants of restricted stock through fiscal year 1998
consisted of the same companies that make up the Peer Group for the stock
performance graph. The peer group for grants of restricted stock in fiscal
year 1999 consists both of the companies that make up the Peer Group for
the stock performance graph plus certain other public companies. The
Committee chose to expand the peer group for grants of restricted stock in
order to have reference to a wider pool of companies including certain
companies not directly competitive with Shorewood. The Committee believes
that the expanded peer group for such purposes is more meaningful and
instructive. See "Stock Performance Graph." Shares that do not vest, due to
relative stockholder performance, will vest at the end of eight years
assuming continued employment. Initial grants of restricted stock were made
during fiscal year 1995, of which the first performance based vesting
opportunity arose in April 1997 and the remaining shares are due to vest in
April 2002. Additional grants of restricted stock were made during fiscal
years 1998 and 1999 to certain key employees and executives. See "Executive
Compensation -- Summary Compensation Table -- Footnote (3)."

In connection with the extension of Marc P. Shore's employment
agreement for a period of five years, and in order to adequately
incentivize Mr. Shore for the duration of the employment term extension,
the Committee granted Mr. Shore 60,000 restricted Shares and stock options
to acquire 350,000 Shares.

Bonus Plan

In July 1995, the Shorewood Board approved the Bonus Plan, applicable
to the Chief Executive Officer Marc P. Shore. Under the Bonus Plan, for
each fiscal year of Shorewood through fiscal year 2003, Mr. Shore will be
entitled to a graduated bonus (the "Performance Bonus") based upon a
comparison of Shorewood's earnings from operations plus depreciation and
amortization (the "Performance Measure") in that award year with the
immediately preceding fiscal year. The size of the Performance Bonus, if
any, is tied to the level of Shorewood's performance, as measured by the
Performance Measure. The maximum Performance Bonus payable in respect of
any award year under the Bonus Plan is $2.0 million. No bonus was payable
under the terms of the Bonus Plan for 1996. For fiscal 1997, a bonus of
approximately $1.2 million would have been earned, had Mr. Shore not
voluntarily agreed to accept $450,000. For fiscal 1998, a bonus of $302,000
was earned by Mr. Shore. For fiscal 1999, a bonus of approximately $1.1
million was earned by Mr. Shore.

EMPLOYMENT AND CONSULTING AGREEMENTS

Marc P. Shore

Marc P. Shore, Shorewood's Chairman and Chief Executive Officer, and
Shorewood entered into a new five-year employment agreement, effective as
of May 3, 1998. The agreement granted Mr. Shore a signing bonus in the
aggregate amount of $1.0 million, payable immediately in full but earned
ratably over his five- year employment period, provided that Mr. Shore
continues to be employed with Shorewood at the end of each such year. If a
"change in control" of Shorewood, as defined in the agreement, occurs at
any time during the last two years of the agreement, the term of the
agreement will be automatically extended for an additional two years. If
Mr. Shore's employment is terminated by Shorewood or Mr. Shore within two
years after the occurrence of a "change in control" of Shorewood, as
defined in the agreement, Mr. Shore would be entitled to a lump sum payment
equal to 2.99 times his average annual compensation during the five
calendar years preceding the year of the change in control. The agreement
grants Mr. Shore an annual base salary of $800,000 per annum, subject to
periodic increases at the discretion of the Shorewood Board. Mr. Shore's
annual base salary is currently $800,000. Mr. Shore is also entitled to
participate in the Bonus Plan, effective until 2003, pursuant to which he
is eligible to receive performance bonuses of up to $2.0 million per
covered year if certain pre-established thresholds are met. Mr. Shore
earned a bonus of $1,093,000 under the Bonus Plan on account of fiscal year
1999. See "Executive Compensation -- Summary Compensation Table" and
"Report of the Compensation Committee." The agreement also authorizes
Shorewood to grant Mr. Shore discretionary bonuses outside of the scope of
the Bonus Plan. The agreement requires Shorewood to maintain term life
insurance on the life of Mr. Shore and to carry supplemental disability
insurance for his benefit. Simultaneously with the authorization of Mr.
Shore's employment agreement by the Shorewood Board, Shorewood granted to
Mr. Shore 60,000 shares of restricted stock and options to acquire 350,000
Shares.

Howard M. Liebman

Shorewood and Howard M. Liebman entered into a new five-year
employment agreement, effective as of May 3, 1998. If a "change in control"
of Shorewood, as defined in the agreement, occurs at any time during the
last two years of the agreement, the term of the agreement will be
automatically extended for an additional two years. Pursuant to the
employment agreement, Mr. Liebman is entitled to receive an annual base
salary of $450,000, subject to periodic increases at the discretion of the
Shorewood Board. Mr. Liebman's annual base salary is currently $450,000.
The agreement provides that if Mr. Liebman's employment is terminated by
Shorewood or Mr. Liebman within two years after the occurrence of a "change
in control" of Shorewood, as defined in the agreement, Mr. Liebman would be
entitled to receive a lump sum payment equal to 2.99 times his average
annual compensation during the five calendar years preceding the year of
the change of control. Simultaneously with the authorization of Mr.
Liebman's employment agreement by the Shorewood Board, Shorewood granted to
Mr. Liebman 35,000 shares of restricted stock and options to purchase
150,000 Shares. Shorewood has also established a trust, pursuant to which
income earned on the trust principal fund of $300,000 is accumulated for
payment to Mr. Liebman upon his retirement from Shorewood, with the
principal fund then being returned to Shorewood. However, the assets of the
trust are subject to claims of creditors of Shorewood in the event of its
insolvency. The trust declined in value by $1,585 in fiscal year 1999.

Leonard J. Verebay

In connection with the Queens Transaction, Leonard J. Verebay entered
into a three-year employment agreement with Shorewood, expiring on December
31, 2001. The Agreement provides for a five-year consulting period
following the expiration of the initial employment term. Under the
agreement, Mr. Verebay is to be employed by Shorewood as an Executive Vice
President at a salary of $500,000 per annum, subject to annual increases at
the discretion of the Shorewood Board. Mr. Verebay is also entitled to
participate, to the extent eligible, in Shorewood sponsored benefit plans
to the same extent as similarly situated executives. During any consultancy
period, Mr. Verebay would be entitled to receive a fee of $10,000 per annum
and an automobile allowance as well as participation, to the extent
eligible, in Shorewood's group family medical insurance plan. The agreement
contains customary confidentiality, work-for-hire and non-competition
covenants applicable for the duration of all applicable employment and
consultancy periods. The agreement is subject to early termination by
Shorewood in the case of the death or disability of Mr. Verebay or if he
engages in certain types of "objectionable conduct" specified in the
agreement. Mr. Verebay may terminate the agreement upon the occurrence of
certain types of capital events and "change of control" transactions
specified in the agreement.

Eric Kaltman

In connection with the Queens Transaction, Eric Kaltman entered into
a three-year employment agreement with Shorewood to be employed as an
Executive Vice President of Shorewood, which agreement is substantially
identical to the agreement between Shorewood and Mr. Verebay, as described
above.

Virginia A. Kamsky

KAI, of which Virginia A. Kamsky, a member of the Shorewood Board, is
the founder, chief executive officer, chairman and principal stockholder,
has been advising Shorewood for approximately three years in connection
with the establishment of a manufacturing facility for paperboard folding
carton packages in Guangzhou, Guandong Province, China (the "China
Business"), pursuant to the terms of a consulting agreement dated effective
January 1, 1996 (the "KAI Consulting Agreement"). Shorewood pays KAI a
consulting fee of $25,000 per month. Additionally, under the terms of a
Profit Participation Agreement between KAI and Shorewood (the "Profit
Participation Agreement"), KAI is entitled to receive up to 5% of
Shorewood's allocable share (presently 55%) of any "net profits" -- as
defined in the agreement --generated from the operation of the China
Business or from any sale of the China Business or Shorewood's interest in
the China Business (the "Profit Participation"). Transfer of the Profit
Participation is subject to a right of first refusal in favor of Shorewood.
KAI may put its Profit Participation rights to Shorewood at any time after
three years from the production of the China Business' first commercial
product at the then fair market value of such interest, as determined by a
mutually agreeable third party appraiser. Under the terms of the Profit
Participation, Shorewood is required to exert its reasonable best efforts
to cause Ms. Kamsky to be elected to the Board of Directors or other
governing body of the operating entity which manages the China Business.

R. Timothy O'Donnell

From time to time, Jefferson Capital serves as a compensated
financial advisor to Shorewood in connection with various matters.
Jefferson Capital is presently serving as a co-financial advisor
to Shorewood in connection with the Chesapeake Offer. R. Timothy O'Donnell,
a member of the Shorewood Board, is the President and principal stockholder
of Jefferson Capital. Additional information concerning Jefferson Capital
and its relationship with Shorewood is set forth in Annex B.

EMPLOYEE SEVERANCE PLAN

On December 15, 1999, the Shorewood Board, upon the recommendation of
the Compensation Committee, adopted a cash-based employee severance plan.
Tier 1 employees comprising Messrs. M. Shore and Liebman, as well as eleven
(11) Tier 2 employees, including Messrs. Rosenblum, Hogan and A. Shore, and
twenty six (26) Tier 3 employees are eligible to receive severance benefits
in the event of a qualifying termination of their employment on or within
two years following a "change in control" (as defined in the severance
plan) of Shorewood.

A qualifying termination of employment under the severance plan means
(1) a termination by the employer on or within two years following the date
of the change in control by the employer other than for "cause" (as defined
in the severance plan) or (2) a termination by the employee for "good
reason". A termination for good reason under the severance plan for a Tier
1 employee includes any reason. A termination for good reason under the
severance plan for a Tier 2 employee means:

o a reduction in the Tier 2 employee's base salary or annual
incentive compensation opportunity in effect immediately prior to
the change in control,

o the assignment to the Tier 2 employee of duties that in the
aggregate are inconsistent with the Tier 2 employee's level of
responsibility immediately before the change in control or any
decline in the nature or status of the Tier 2 employee's
responsibilities from those in effect immediately before the
change in control, or

o the relocation of the Tier 2 employee's principal place of
employment to a location more than 50 miles from the employee's
principal place of employment immediately before the change in
control.

A termination for good reason under the severance plan for a Tier 3
employee means:

o a reduction in the Tier 3 employee's base salary or annual
incentive compensation opportunity in effect immediately prior to
the change in control, or

o the relocation of the Tier 3 employee's principal place of
employment to a location more than 50 miles from the employee's
principal place of employment immediately before the change in
control.

A Tier 1, 2 or 3 employee who incurs a qualifying termination of employment
will be entitled to receive a cash lump sum severance payment equal to:

o the sum of his or her annual salary, plus the highest annual
bonus received in the three years immediately preceding the
change in control, plus the value of contributions made by
Shorewood to Shorewood's 401(k) plan on the employee's behalf,

o multiplied by 3, 2, and 1 for a Tier 1 employee, Tier 2 employee
and Tier 3 employee, respectively.

In addition, any payment made to a Tier 1 employee will be fully offset by
the amount payable to the employee under his employment agreement upon
termination of employment after a change in control.

A Tier 1, 2 or 3 employee who incurs a qualifying termination of
employment will also be provided with welfare and fringe benefits as if
such employee had continued to be employed by Shorewood for 3, 2 and 1
years for a Tier 1 employee, Tier 2 employee and Tier 3 employee,
respectively; provided that, however, benefit continuation shall cease if
the employee obtains employment providing substantially similar benefits.

Under the severance plan, Shorewood is required, if necessary, to
make an additional "gross-up payment" to any Tier 1 employee to offset
fully the effect of any excise tax imposed on any payments or benefits
under Section 4999 of the Code, whether made to such employee under the
severance plan or otherwise. The severance plan supersedes the provision in
the employment agreement of Messrs. M. Shore and Liebman which reduced any
payment thereunder so as to avoid an excess parachute payment and the
resulting excise tax. In addition, Shorewood will reduce any payment made
to a Tier 2 employee if such employee's after tax position is improved by
the reduction of the payment so as to avoid an excess parachute payment and
the resulting excise tax.

In general, Section 4999 of the Code imposes an excise tax on the
recipient of any excess parachute payment equal to 20% of that payment. A
parachute payment is any payment that is contingent on a change in control.
Excess parachute payments consist of the excess of parachute payments over
an individual's average taxable compensation received by him from the
employer during the five taxable years preceding the year in which the
change in control occurs. If the individual has been employed for fewer
than five taxable years, the individual's entire period of employment will
be used to calculate the excess parachute payment.

If a change in control of Shorewood were to occur on December 31,
1999, and if each of Messrs. M. Shore, Liebman, Hogan, Rosenblum and A.
Shore were to incur a qualifying termination of employment immediately
following that date, the approximate amount of the cash severance payment
payable to each of these individuals would be $5,689,801 to Mr. M. Shore;
$1,810,824 to Mr. Liebman; $537,212 to Mr. Hogan; $575,200 to Mr.
Rosenblum; and $407,165 to Mr. A. Shore and the approximate gross-up
payment payable to each of Mr. M. Shore and Mr. Liebman would not be
expected to exceed $3,612,890 and $1,691,476, respectively.

RABBI TRUST

On December 15, 1999, the Shorewood Board authorized Shorewood to
enter into a "rabbi trust" agreement to fully secure benefits under the
severance plan. The trust agreement provides that Shorewood must contribute
to the trust the funds sufficient to fund all of the obligations under the
severance plan immediately prior to a change in control. Funds contributed
to the trustee in respect of any employee who does not incur a qualifying
termination within 2 years following a change in control of Shorewood will
be returned to Shorewood.

EQUITY-BASED AWARDS

On December 15, 1999, the Shorewood Board resolved that all
equity-based awards granted to employees, directors and independent
contractors of Shorewood or any subsidiary of Shorewood which are
outstanding immediately prior to a change in control of Shorewood shall
become fully vested and, if applicable, exercisable upon a change in
control of Shorewood.

STOCK PERFORMANCE GRAPH

Set forth below is a line graph comparing the yearly percentage
change in Shorewood's cumulative stockholder return on the Common Stock for
the last five fiscal years with the cumulative total return during the same
period of (i) the Russell 2000 Index and (ii) a peer group selected by the
Compensation Committee consisting of: R.R. Donnelley & Sons Co.,
International Paper Co., Gibraltar Packaging Group, Graphic Industries (and
Wallace Computer Services Inc. as successor to Graphic Industries as a
result of its acquisition of Graphic Industries on February 13, 1998),
Sonoco Products, Co., Union Camp Corporation and Westvaco Corporation (the
"Peer Group"). Shorewood has a 52-53 week fiscal year ending on the
Saturday closest to April 30th of each fiscal year. Accordingly, for
purposes of the line graph, Shorewood has selected as the "measurement
period" the period beginning on May 1, 1994 and ending on May 1, 1999.
Cumulative total returns are calculated assuming that $100 was invested on
May 1, 1994 in each of the Common Stock, the Russell 2000 Index and the
Peer Group, and that all dividends were reinvested.

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN

COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG SHOREWOOD PACKAGING CORPORATION, RUSSELL 2000 INDEX
AND SELECTED PEER GROUP

INDEXED RETURNS FOR THE FIVE-YEAR PERIOD ENDED MAY 1, 1999

SHOREWOOD
PACKAGING RUSSELL 2000
CORPORATION INDEX PEER GROUP
1994 100 100 100
1995 108.62 107.21 123.62
1996 118.96 142.58 134.78
1997 131.02 142.65 139.83
1998 178.86 200.83 179.27
1999 204.29 180 177.14

Company Name / Index 1994 1995 1996 1997 1998 1999
- -------------------------------------------------------------------------------
Shorewood Packaging 100.00 108.62 118.96 131.02 178.86 204.29
Russell 2000 Index 100.00 107.21 142.58 142.65 200.83 180.00
Peer Group Index 100.00 123.62 134.78 139.83 179.27 177.14

ANNEX B

INFORMATION CONCERNING THE DIRECTORS AND
CERTAIN EXECUTIVE OFFICERS AND EMPLOYEES
OF SHOREWOOD AND OTHER PERSONS WHO MAY
ALSO SOLICIT REVOCATIONS OF CONSENTS

In connection with Shorewood's solicitation of revocations of
consents from its stockholders, certain persons may be deemed to be
participants in the solicitation.

DIRECTORS AND EXECUTIVE OFFICERS OF SHOREWOOD

The following table sets forth the name, principal business address
and the present employment or other principal occupation, and the name,
principal business and the address of any corporation or other organization
in which such employment is carried on, of the directors and executive
officers of Shorewood who may be deemed to be participants in the
solicitation of revocations of consents. Unless otherwise indicated, the
principal occupation refers to such person's position with Shorewood.

NAME BUSINESS ADDRESS PRINCIPAL OCCUPATION AND
- ---- ---------------- ------------------------
BUSINESS
--------
<S> <C> <C>
Marc P. Shore Shorewood Packaging Corporation Chairman and Chief Executive
277 Park Avenue, 30th Floor Officer.
New York, New York 10172

Howard M. Liebman Shorewood Packaging Corporation President and Chief Financial
277 Park Avenue, 30th Floor Officer.
New York, New York 10172

Leonard J. Verebay Shorewood Packaging Corporation Executive Vice President.
277 Park Avenue, 30th Floor
New York, New York 10172

Sharon R. Fairley Pharmacia & UpJohn, Inc. Director of Direct to Consumer
100 Route 206 North Communications, Pharmacia & UpJohn,
Peapack, New Jersey 07977 Inc. Pharmacia & UpJohn is engaged
in the research, development,
manufacture and sale of pharmaceuticals
and other related health care
products.

William P. Weidner Las Vegas Sands, Inc. President and Chief Operating
3355 Las Vegas Blvd., South Officer, Las Vegas Sands, Inc.
Las Vegas, Nevada 89109 Las Vegas Sands manages
hotel and casino properties.

R. Timothy O'Donnell Jefferson Capital Group, Ltd. President, Jefferson Capital
One James Center Group, Ltd. Jefferson Capital
901 East Cary Street is an investment banking
Richmond, Virginia 23219 firm.

Kevin J. Bannon The Bank of New York Executive Vice President and
One Wall Street Chief Investment Officer. The
New York, New York 10286 Bank of New York provides
financial services to individuals,
businesses, corporations,
financial institutions, governments
and public agencies.

Andrew N. Shore Shorewood Packaging Corporation Vice President, Secretary and
277 Park Avenue, 30th Floor General Counsel.
New York, New York 10172

Virginia A. Kamsky Kamsky Associates, Inc. Chairman and Chief Executive
563 Park Avenue Officer, Kamsky Associates,
New York, New York 10021 Inc. Kamsky Associates
is a consulting firm.

William H. Hogan Shorewood Packaging Corporation Senior Vice President, Finance.
277 Park Avenue, 30th Floor
New York, New York 10172
</TABLE>

INFORMATION REGARDING OWNERSHIP OF SHOREWOOD'S SECURITIES BY PARTICIPANTS

Except as otherwise provided in the Consent Solicitation Statement,
none of the persons listed in this Annex B owns any of Shorewood's
securities of record but not beneficially. The number of shares of Common
Stock held by directors and certain executive officers of Shorewood is set
forth in "Security Ownership" on pages __ and __ of this Consent Revocation
Statement.

INFORMATION REGARDING TRANSACTIONS IN SHOREWOOD'S COMMON STOCK BY
PARTICIPANTS

The following table sets forth purchases and sales of Shorewood's
Common Stock by the participants listed below during the past two years.
Unless otherwise indicated, all transactions were
consummated in the public market.

NUMBER OF SHARES
NAME TRANSACTION DATE ACQUIRED OR (SOLD) FOOTNOTE
---- ---------------- ------------------ --------
Kevin J. Bannon............ 9/23/99 5,250
William P. Weidner......... 3/24/99 (4,100) (1)
3/24/99 (1,900) (1)
3/24/99 (1,500) (1)
Andrew N. Shore 1/4/99 (4,500)
1/5/99 (5,600)
1/6/99 (2,600)
1/14/99 (2,300)
11/30/99 10,102 (3)
Howard M. Liebman 1/28/98 150
6/23/99 60,000 (4)
6//23/99 (20,253) (5)
7/26/99 26,736 (4)
Leonard J. Verebay 10/30/98 500,000 (6)
Marc P. Shore 12/10/97 (100,000)
12/31/97 (10,000)
02/03/98 (15,000)
01/15/99 (200,000)
07/06/99 44,562 (4)
11/30/99 7,524 (2)

- ------------

(1) Transferred to spouse pursuant to Post-Nuptial Agreement dated June 1,
1999.

(2) Transferred to Marc P. Shore from the Estate.

(3) Transferred to Andrew N. Shore from the Estate.

(4) Exercised options to purchase shares.

(5) Sold shares to the Company to pay for the exercise of options.

(6) Acquired shares as part of the Queens Transaction.

INFORMATION REGARDING OTHER PERSONS THAT MAY BE DEEMED TO BE PARTICIPANTS

Bear Stearns

Shorewood has engaged Bear Stearns to act as its co-financial advisor
in connection with the Chesapeake Offer pursuant to the terms of a letter
agreement dated as of December 2, 1999 (the "Bear Stearns Letter Agreement").

Pursuant to the Bear Stearns Letter Agreement, Shorewood has agreed to
pay Bear Stearns the following compensation:

(a) if Bear Stearns renders any opinion relating to any proposed
"acquisition transaction" or "restructuring" (as such terms are
defined below), a fee of $750,000 for the first such opinion,
$500,000 for the second such opinion and $250,000 for each
additional opinion up to a maximum total of $1,500,000;

(b) if Shorewood has not terminated Bear Stearns' engagement under
the Bear Stearns Letter Agreement prior to February 28, 2000, a
fee equal to $2,500,000 minus any fees paid pursuant to clause
(a) above and minus the aggregate retainer fees (up to a maximum
of $500,000) paid to Bear Stearns under the December 1, 1999
engagement letter pursuant to which Bear Stearns is acting as
financial advisor to Shorewood in connection with its proposed
acquisition of Chesapeake (the "December 1 Retainer Fee");

(c) if an acquisition transaction is consummated involving the sale
of less than 50% of Shorewood's capital stock, a fee of
$1,500,000;

(d) if an acquisition transaction (other than the sale of less than
50% of Shorewood's capital stock) is consummated, a fee equal to
0.66% of Shorewood's total enterprise value (against which fee
there will be credited (i) any fees paid to Bear Stearns pursuant
to clauses (a), (b) and (c) above and (ii) the December 1
Retainer Fee); and

(e) if a restructuring is consummated, a fee to be mutually agreed
upon by Shorewood and Bear Stearns.

The foregoing fees will be payable upon the occurrence, during the
term of the Bear Stearns Letter Agreement or within one year of its
termination, of any event specified above, or upon the occurrence of any
event specified above with respect to which an agreement was executed by
Shorewood during the term of the Bear Stearns Letter Agreement or within
one year of its termination.

The term "acquisition transaction" in the Bear Stearns Letter
Agreement means: (i) any merger, consolidation, reorganization,
recapitalization, business combination or other transaction pursuant to
which Shorewood is acquired by, or combined with, any person, group,
corporation, partnership or other entity, or (ii) the acquisition, directly
or indirectly, by any acquiror of (A) any of Shorewood's assets or
operations or (B) any outstanding or newly issued shares of Shorewood's
capital stock (or securities convertible into or options or other rights to
acquire such capital stock). The term "restructuring" in the Bear Stearns
Letter Agreement includes (x) any extraordinary dividend or distribution
paid by Shorewood to its stockholders, (y) a purchase by Shorewood of 25%
or more of its Common Stock, and (z) a sale or spin-off of all or
substantially all of the assets of, or 25% or more of the capital stock of,
any subsidiary or division of Shorewood.

Under the Bear Stearns Letter Agreement, Shorewood has also agreed to
reimburse Bear Stearns for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel and other consultants and
advisors) and to indemnify Bear Stearns and certain related parties against
certain liabilities, including liabilities under the federal securities
laws, relating to or arising out of Bear Stearns' engagement.

Certain employees of Bear Stearns may also assist in the solicitation
of consent revocations, including by communicating in person, by telephone
or otherwise with a limited number of institutions, brokers or other
persons who are stockholders of Shorewood. However, Bear Stearns does not
admit that it or any of its directors, officers, employees or affiliates is
a "participant," as defined in Schedule 14A promulgated under the Exchange
Act, or that Schedule 14A requires the disclosure of certain information
concerning Bear Stearns. Bear Stearns will not receive separate fees for
its solicitation activities. Bear Stearns is an investment banking firm.

In the normal course of 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. As of the date of this Consent Revocation Statement, Bear
Stearns held a net long position of no shares of Common Stock. In the
normal course of business, Bear Stearns may finance its securities
positions by bank and other borrowings and repurchase and securities
borrowing transactions. 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.

Information with respect to the employees of Bear Stearns who may be
deemed "participants" is set forth below. Except as set forth in this
Consent Revocation Statement, none of the individuals named below owns any
shares of Common Stock or has engaged in any transaction involving such
shares during the past two years. The principal business address of Bear
Stearns and each of the persons listed below is Bear, Stearns & Co. Inc.,
245 Park Avenue, New York, New York 10167.

NAME TITLE
- ---- -----

Terence Cryan.......................... Senior Managing Director

Charles Edelman........................ Senior Managing Director

Mark A. Van Lith....................... Managing Director

Karen Duffy............................ Vice President

Pursuant to its engagement letter with Bear Stearns, Shorewood has
also agreed to reimburse Bear Stearns for certain reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of legal counsel,
and to indemnify Bear Stearns and certain related parties from and against
certain liabilities, including liabilities under the federal securities
laws, arising out of its engagement by Shorewood.

Jefferson Capital

Shorewood has engaged Jefferson Capital to act as its co-financial
advisor in connection with the Chesapeake Offer. R. Timothy O'Donnell, a
member of the Shorewood Board, is the President and principal stockholder
of Jefferson Capital. In addition, Jefferson Capital has served as a
financial advisor to Shorewood in connection with other matters. In
connection with Jefferson Capital's role as Shorewood's financial advisor
with respect to the Queens Transaction, Shorewood, in November 1998, paid
Jefferson Capital a fee of approximately $1,300,000 and granted Jefferson
Capital, effective as of October 30, 1998, a warrant to purchase 50,000
Shares at an exercise price of $16 per Share. The warrant was exercisable
in full upon grant and may be exercised by Jefferson Capital for
a period of five years from grant. In connection with Jefferson Capital's
role as a financial advisor to Shorewood with respect to the purchase of a
51% interest in CD CartonDruck and the commitment of (pound)5 million to
Shorewood EPC Europe, Ltd. ("EPC") (each, a "Europe Transaction"),
Shorewood entered into a letter agreement, dated October 18, 1999, with
Jefferson Capital pursuant to which Shorewood agreed to compensate
Jefferson Capital, as follows: (i) a retainer fee of $100,000, payable upon
execution of such agreement, (ii) a warrant to purchase 50,000 Shares at an
exercise price of $13 1/2 per share that is exercisable in full for a
period of five years from the date of issuance, (iii) $250,000 upon closing
of a Europe Transaction, in the case of CD CartonDruck, and $100,000 upon
closing of a Europe Transaction, in the case of EPC ( 1/2 of the $100,000
retainer fee to be offset against each such additional cash fee) and (iv)
reasonable out-of-pocket expenses (including the reasonable fees and
expenses of Jefferson Capital's counsel) incurred by Jefferson Capital.
Shorewood has also agreed to indemnify Jefferson Capital for certain
liabilities arising in connection with the Europe Transactions, including
liabilities under the federal securities laws.

Shorewood has also retained Jefferson Capital to act as its
co-financial advisor in connection with Shorewood's previously announced
proposal to acquire Chesapeake (the "Jefferson Capital Letter Agreement
I"). Pursuant to the terms of such engagement, Shorewood has agreed to pay
Jefferson Capital the following compensation: (i) if an acquisition
transaction is consummated, a fee of 0.20% of Shorewood's total enterprise
value and (ii) if an acquisition transaction is not consummated, but
Shorewood receives a break-up fee, a break-up fee equal to 6% of the
break-up fee received by Shorewood. The foregoing fees will be payable upon
the occurrence, during the term of the Jefferson Capital Letter Agreement I
or within two years of its termination, of any event specified above, or
upon the occurrence of any event specified above with respect to which an
agreement was executed by Shorewood during the term of the Jefferson
Capital Letter Agreement I or within two years of its termination. The term
"acquisition transaction" in the Jefferson Capital Letter Agreement I
means: (i) any merger, consolidation, reorganization, recapitalization,
business combination or other transaction pursuant to which Chesapeake is
acquired by, or combined with Shorewood, or (ii) the acquisition, directly,
by Shorewood, in a single transaction or a series of transactions, of (A)
any of Chesapeake's assets or operations or (B) any outstanding or newly
issued shares of Chesapeake's capital stock (or securities convertible into
or options or other rights to acquire such capital stock). Under the
Jefferson Capital Letter Agreement I, Shorewood has also agreed to
reimburse Jefferson Capital for all reasonable out-of-pocket expenses
(including reasonable fees and disbursements of its counsel and other
consultants and advisors) and to indemnify Jefferson Capital and certain
related parties against certain liabilities, including liabilities under
the federal securities laws, relating to or arising out of Jefferson
Capital's engagement by Shorewood.

Shorewood has also engaged Jefferson Capital to act as its
co-financial advisor in connection with the Chesapeake Offer pursuant to
the terms of a letter agreement dated as of December 14, 1999 (the
"Jefferson Capital Letter Agreement II").

Pursuant to the Jefferson Capital Letter Agreement II, Shorewood has
agreed to pay Jefferson Capital the following compensation:

(a) if an acquisition transaction is consummated involving the sale
of less than 50% of Shorewood's capital stock, a fee of
$546,000; and

(b) if an acquisition transaction (other than the sale of less than
50% of Shorewood's capital stock) is consummated, a fee equal
to 0.24% of Shorewood's total enterprise value.

The foregoing fees will be payable upon the occurrence, during the
term of the Jefferson Capital Letter Agreement II or within one year of its
termination, of any event specified above, or upon the occurrence of any
event specified above with respect to which an agreement was executed by
Shorewood during the term of the Jefferson Capital Letter Agreement II or
within one year of its termination.

The term "acquisition transaction" in the Jefferson Capital Letter
Agreement II means: (i) any merger, consolidation, reorganization,
recapitalization, business combination or other transaction pursuant to
which Shorewood is acquired by, or combined with any person, group,
corporation, partnership or other entity, or (ii)the acquisition, directly,
by any acquiror of (A) any of Shorewood's assets or operations or (B) any
outstanding or newly issued shares of Shorewood's capital stock (or
securities convertible into or options or other rights to acquire such
capital stock). The term "restructuring" in the Jefferson Capital Letter
Agreement includes (x) any extraordinary dividend or distribution paid by
Shorewood to its stockholders, (y) a purchase by Shorewood of 25% or more
of its Common Stock, and (z) a sale or spin-off of all or substantially all
of the assets of, or 25% or more of the capital stock of, any subsidiary or
division of Shorewood.

Under the Jefferson Capital Letter Agreement II, Shorewood has also
agreed to reimburse Jefferson Capital for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel and other
consultants and advisors) and to indemnify Jefferson Capital and certain
related parties against certain liabilities, including liabilities under
the federal securities laws, relating to or arising out of Jefferson
Capital's engagement by Shorewood.

Certain employees of Jefferson Capital may also assist in the
solicitation of consent revocations, including by communicating in person,
by telephone or otherwise with a limited number of institutions, brokers or
other persons who are stockholders of Shorewood. However, Jefferson Capital
does not admit that it or any of its directors, officers, employees or
affiliates is a "participant," as defined in Schedule 14A promulgated under
the Exchange Act, or that Schedule 14A requires the disclosure of certain
information concerning Jefferson Capital. Jefferson Capital will not
receive separate fees for its solicitation activities. Jefferson Capital is
an investment banking firm.

As of the date of this Consent Revocation Statement, Jefferson
Capital held in its investment account 22,231 shares of Common Stock.

Information with respect to the employees of Jefferson Capital who
may be deemed "participants" is set forth below. Except as set forth in
this Consent Revocation Statement, none of the individuals named below owns
any shares of Common Stock or has engaged in any transaction involving such
shares during the past two years. The principal business address of
Jefferson Capital and each of the persons listed below is Jefferson Capital
Group, Ltd., One James Center, 901 East Cary Street, Suite 1600, Richmond,
Virginia 23219.

NAME TITLE
- ---- -----

R. Timothy O'Donnell...................... President

Louis W. Moelchert........................ Vice President

R. Timothy O'Donnell is the beneficial owner of 276,118 shares of
Common Stock. See "Security Ownership--Security Ownership of Officers and
Directors." Louis W. Moelchert is the beneficial owner of 1,500 shares of
Common Stock.

MISCELLANEOUS INFORMATION CONCERNING PARTICIPANTS

Except as described in this Annex B or in the Consent Revocation
Statement or in Annex A thereto, none of the persons who may be deemed
"participants" as defined in Schedule 14A promulgated under the Exchange
Act nor any of their respective affiliates or associates (together, the
"Participant Affiliates"), (1) directly or indirectly beneficially owns any
shares of Shorewood Common Stock or any securities of any subsidiary of
Shorewood or (2) has had any relationship with Shorewood in any capacity
other than as a stockholder, employee, officer or director. Furthermore,
except as described in this Annex B or in the Consent Revocation Statement
or in Annex A thereto, no Participant Affiliate is either a party to any
transaction or series of transactions since January 1, 1998, or has
knowledge of any currently proposed transaction or series of transactions,
(1) to which Shorewood or any of its subsidiaries was or is to be a party,
(2) in which the amount involved exceeds $60,000, and (3) in which any
Participant Affiliate had, or will have, a direct or indirect material
interest.

Except for the employment agreements described in the Consent
Revocation Statement or as otherwise described therein or in Annex A
thereto or in this Annex B, no Participant Affiliate has entered into any
agreement or understanding with any person respecting any future employment
by Shorewood or its affiliates or any future transactions to which
Shorewood or any of its affiliates will or may be a party. Except as
described in this Annex B or in the Consent Revocation Statement or in
Annex A thereto, there are no contracts, arrangements or understandings by
any Participant Affiliate within the past year with any person with respect
to Shorewood's securities.

REVISED PRELIMINARY COPY

SUBJECT TO COMPLETION, DATED DECEMBER 28, 1999

SHOREWOOD PACKAGING CORPORATION

THIS REVOCATION OF CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF SHOREWOOD PACKAGING CORPORATION ("SHOREWOOD") IN OPPOSITION TO THE
CONSENT SOLICITATION BY CHESAPEAKE CORPORATION ("CHESAPEAKE").

The undersigned, a holder of shares of common stock, par value $0.01
per share, of Shorewood, is acting with respect to all the shares of common
stock of Shorewood held by the undersigned, and hereby revokes any and all
consents that the undersigned may have given in respect of the following
proposals:

[X] PLEASE MARK VOTE AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS OF SHOREWOOD UNANIMOUSLY RECOMMENDS A
"REVOKE CONSENT" ON EACH PROPOSAL SET FORTH BELOW. PLEASE SIGN, DATE
AND MAIL THIS CONSENT REVOCATION CARD TODAY.

1. Proposal made by Chesapeake to amend Shorewood's By-laws to require all
directors to be elected annually.